Macroeconomics

Engineering

Stock (firearms)

Accounting

Economics

Enterprise value

Computer science

Business

Coronavirus disease 2019 (COVID-19)

Corporate governance

Mechanical engineering

Job satisfaction

Shareholder value

Management

Value (mathematics)

Productivity

Infectious disease (medical specialty)

Medicine

Finance

Disease

Machine learning

Shareholder

Pathology

Review of Finance

Employee treatment is an important but challenging element of corporate environmental, social, and governance policies. Satisfying employee needs can increase corporate productivity, but is also costly to shareholders. Using unique data of Chinese publicly listed firms, we show that having satisfied employees is valuable to the firm. Specifically, firms with higher employee satisfaction scores withstand COVID-19 better, in terms of stock market performance. Such an effect is more pronounced for firms with more intangible assets and in knowledge-based industries. Moreover, higher employee satisfaction scores predict better operating performance. While not fully revealed in tranquil times, the effect of employee satisfaction is materialized when the firms experience negative shocks, such as COVID-19. Our findings suggest that firms can do well in crisis periods by doing good in normal times.

The Value of Employee Satisfaction in Disastrous Times: Evidence from COVID-19