The theoretical benefits of job satisfaction are reasonably clear. HRM theories suggest several channels through which job satisfaction can improve firm value. One is recruiting and retaining key employees. The resource-based view (RBV) of the firm (Barney, 1986; Wernerfelt, 1984) argues that firms develop sustainable competitive advantage by building resources that are both valuable and hard for competitors to poach. HRM theories assert that employees are indeed valuable. They are the key source of value creation in the modern firm, particularly in knowledge-based industries such as pharmaceuticals and software. However, satisfying the latter requirement— being hard to poach—is difficult because talented employees can walk out of the door. This is where the role of job satisfaction lies. A satisfying workplace can foster job embeddedness and ensure that talented employees stay with the firm. Relatedly, job satisfaction can provide a valuable recruitment tool.
Posted on: Sun, 01 Sep 2013 04:50:00 +0000
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