We explore the key determinants of job satisfaction and employee turnover in high contact services studying employees’ electronic word of mouth expressed through online reviews. We analyze a novel dataset of 297,933 employee online reviews for 11,975 US tourism and hospitality firms, taking advantage of both review valence and text. Our results exhibit that firms with high scores in leadership and cultural values yield higher employee satisfaction. Moreover, we show that career progression is a critical factor of employee turnover, with a unit increase in the career progression rating being accompanied with 14.87% reduction in the likelihood of an employee to leave the company. Most importantly, we quantify the effect of job satisfaction on firm profitability. In particular, an increase in job satisfaction by one unit is associated with an increase in Return on Assets between 1.2% and 1.4%. This finding is extremely important since we do not find evidence supporting the reverse relationship, that profitable firms increase employee’s satisfaction. Overall, our empirical analysis indicates that the feedback to management provided through online employee reviews holds information value which can be enacted with specific managerial implications.
- Norwich Business School - Professor of Sustainable Energy Business
- Vice-Chancellor's Office - Academic Chair Climate@UEA
- Centre for Competition Policy - Member
- Tyndall Centre for Climate Change Research - Member
- Innovation, Technology and Operations Management - Member
Person: Research Group Member, Academic, Teaching & Research