Wharton Professor Uncovers Link between Employee Satisfaction and Shareholder Value
Dr. Alex Edmans, an assistant professor at the Wharton School at the Univ. of Pennsylvania, just released a new analysis demonstrating that companies with high employee satisfaction and recognized by Fortune magazine’s “Best Companies to Work For” list, tend to have higher long-term shareholder value.
In addition, these “intangibles” appear not to be priced into the short-term valuations of equities (along with other environmental, social and governance issues). This gives investors applying a HIP framework an advantage to buy in at a discount and later benefit if they hold for the longer term.
This study reinforces the tenets of the HIP methodology and approach – that focusing on Human Impact leads to Profit and shareholder value. Since employees are the core engine of a company, the developers of its intellectual capital, the face to the customer, and the managers of its assets, the focus of keeping them satisfied (like Southwest Airlines – NYSE: LUV) will typically result in investor benefits over the long term.
Read the insightful abstract and download the full fascinating paper here.
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