Employee Satisfaction Leads To Better Stock Returns, With A Caveat

As The Coca-Cola Company (NYSE:KO) management company compensation program comes into focus recently, the question of employee satisfaction in delivering stock market returns becomes more relevant, and raises an age old question.

Employee satisfaction lead to better job performance

Does fear of unemployment and cracking the whip motivate employees better than creating an environment with satisfied employees through above average compensation, benefits and a supportive workplace experience?

Using stock price as a metric for employee performance, a new study from Wharton finance professor Alex Edmans and University of Warwick professors Lucius Li and Chendi Zhang reveals that employees who are satisfied with their job perform better – but the conclusion comes with an exemption.