Intangible asset value of employee satisfaction in high-contact services
Publication Type
Journal Article
Publication Date
4-2021
Abstract
In this study, we utilize the employee online review data from Glassdoor to examine whether stock market capitalizes the intangible asset value of employee satisfaction for high-contact service firms. We hypothesize that in the hospitality and tourism industry, employee satisfaction can efficiently motivate employees to deliver high-quality service and improve the employee retention, thereby leading to greater shareholder value. Our finding is consistent with this prediction that stock market investors indeed incorporate the intangible value of employee satisfaction into the valuation models. In addition, we find that the value of such intangible asset manifests in firm's subsequent profitability, resulting in improved return on asset (ROA). We further decompose ROA into profit margin and asset turnover to explore the pathways by which employee satisfaction affects shareholder value. We find that employee satisfaction can improve both profit margin and asset turnover for high-contact service firms. Overall, our study suggests that employee satisfaction can be an important intangible asset that contributes to the service firms' long-term value.
Keywords
Employee online review, Employee satisfaction, Intangible asset, Stock market valuation, Firm performance
Discipline
Databases and Information Systems | Organizational Behavior and Theory | Portfolio and Security Analysis
Research Areas
Information Systems and Management
Publication
International Journal of Hospitality Management
Volume
94
First Page
1
Last Page
12
ISSN
0278-4319
Identifier
10.1016/j.ijhm.2020.102810
Publisher
Elsevier
Citation
FANG, Ruirui; GAO, Baojun; and HU, Nan.
Intangible asset value of employee satisfaction in high-contact services. (2021). International Journal of Hospitality Management. 94, 1-12.
Available at: https://ink.library.smu.edu.sg/sis_research/8041
Copyright Owner and License
Authors
Additional URL
https://doi.org/10.1016/j.ijhm.2020.102810