SSRN Electronic Journal · 2019 · 16 citations · 59 references
ManagementHuman Resource ManagementOrganizational BehaviorBusiness EthicsCorporate AccountabilityExecutive CompensationFraud DetectionPersonnel EconomicsReputationReputation ManagementCorporate Reputation HarmEmployee Misconduct PreventionEmployee ReputationPrivate Information RevelationReputational DamageWorkplace Misconduct Prevention
The study uses Glassdoor data to examine how public announcements of financial misconduct affect employee perceptions of firms and managers and to assess whether employee ratings can predict misconduct. The authors analyze Glassdoor employee ratings before and after misconduct announcements, using these ratings to model firm perception changes and to predict future misconduct. Employees’ overall company ratings fell by 0.32 SD and ratings of career opportunity, compensation, senior leadership, work‑life balance, culture, and recommendation dropped 0.14–0.40 SD after misconduct announcements, with long‑term reputation damage as the main driver, and ratings from employees likely privy to insider information both decline during misconduct periods and help predict future misconduct.
We use Glassdoor data to study the effects of the public announcement of financial misconduct on employees' perceptions of firms and managers. We find a 0.32 standard deviation decline in employees' overall company ratings and 0.14 to 0.40 standard deviation declines in ratings of career opportunity, compensation benefit, senior leadership, work-life balance, culture value, and recommendation. Additional analysis shows that long-term reputation damage is likely to be the main economic channel behind the findings. Moreover, we further assess whether employee ratings are helpful in predicting misconduct. During the years of the misconduct period, employees who are more likely to have private information lowered their ratings. Such employees' ratings help predict misconduct.
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