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Firm Performance, Worker Commitment and Loyalty

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Author Info
Sarah Brown () (Department of Economics, The University of Sheffield)
Robert McNabb
Karl Taylor () (Department of Economics, The University of Sheffield)

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Abstract

Using matched employer-employee level data drawn from the UK Workplace and Employee Relations Survey, we explore the influence of worker commitment and loyalty on firm level labour productivity and financial performance. Our empirical findings suggest that worker commitment and loyalty enhance both labour productivity and financial performance at the firm level thereby highlighting a hitherto neglected conduit for improved firm performance. Using employee level data, we also explore the determinants of worker commitment and loyalty in order to ascertain how such attachments to the firm may be engendered. In general, our employee level analysis suggests that it is firm level characteristics (such as appraisal schemes, supervision, suspensions and redundancies) that influence attachments to the firm. Such findings suggest that firms may be able to exert some influence over the loyalty and commitment of its workforce, which, in turn, may affect firm performance.

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File URL: http://www.shef.ac.uk/content/1/c6/05/53/54/SERP2006005.pdf
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File URL: http://www.shef.ac.uk/content/1/c6/05/53/54/SERP2006005.pdf
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Publisher Info
Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2006005.

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Length: 24 pages
Date of creation: Apr 2006
Date of revision: Apr 2006
Handle: RePEc:shf:wpaper:2006005

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Related research
Keywords: Commitment Financial Performance Labour Productivity Loyalty.

Find related papers by JEL classification:
J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Leigh, J. Paul, 1985. "The effects of unemployment and the business cycle on absenteeism," Journal of Economics and Business, Elsevier, vol. 37(2), pages 159-170, May. [Downloadable!] (restricted)
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  3. Magnus Allgulin & Tore Ellingsen, 2002. "Monitoring and Pay," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 201-216, Part. [Downloadable!]
    Other versions:
  4. Mohammed Chaudhury & Ignace Ng, 1992. "Absenteeism Predictors: Least Squares, Rank Regression, and Model Selection Results," Canadian Journal of Economics, Canadian Economics Association, vol. 25(3), pages 615-35, August. [Downloadable!] (restricted)
  5. McNabb, Robert & Whitfield, Keith, 1998. "The Impact of Financial Participation and Employee Involvement on Financial Performance," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(2), pages 171-87, May. [Downloadable!] (restricted)
  6. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 255-83, May. [Downloadable!] (restricted)
  7. Max Munday & Michael J. Peel & Karl Taylor, 2003. "The Performance of the Foreign-Owned Sector of UK Manufacturing: Some Evidence and Implications for UK Inward Investment Policy," Fiscal Studies, Institute for Fiscal Studies, vol. 24(4), pages 501-521, December.
  8. Rebitzer, James B., 1995. "Is there a trade-off between supervision and wages? An empirical test of efficiency wage theory," Journal of Economic Behavior & Organization, Elsevier, vol. 28(1), pages 107-129, September. [Downloadable!] (restricted)
  9. Oulton, Nicholas, 1998. "Competition and the Dispersion of Labour Productivity amongst UK Companies," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 23-38, January.
    Other versions:
  10. Machin, Stephen J & Stewart, Mark B, 1990. "Unions and the Financial Performance of British Private Sector Establishments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(4), pages 327-50, Oct.-Dec.. [Downloadable!] (restricted)
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