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Examining the Relationship between Employee Attitudes and a Firm's Financial Performance: A Theoretical Framework and Causal Investigation

Diane E. Johnson, Stan B. Davis and Thomas L. Albright
Journal of Managerial Issues
Vol. 21, No. 3 (Fall 2009), pp. 367-382
Stable URL: http://www.jstor.org/stable/40604655
Page Count: 16
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Examining the Relationship between Employee Attitudes and a Firm's Financial Performance: A Theoretical Framework and Causal Investigation
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Abstract

Numerous studies have addressed the relationship of nonfinancial performance measures and financial outcomes. We investigated the causal relationship between employee attitudes and a firm's financial performance using 14 banking centers from one bank, over a two and one-half year period. Data revealed that when banking centers experienced a positive change in financial performance, employees were more satisfied and committed to that center, and perceived that center as more fair. In contrast, if a banking center did poorly, its employees were less satisfied and committed, and had lower perceptions of fairness. These findings support the model that financial performance leads to employee attitudes rather than the reverse.

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