Title

Characteristics of US Firms with Best Employee Commitment: An Empirical Analysis

Document Type

Article

Publication Date

2009

Keywords

Employee commitment; market power; risk; best companies; logistic regression

Disciplines

Accounting | Business Administration, Management, and Operations | Finance and Financial Management

Abstract

Fortune magazine publishes an annual ranking of “Best 100 companies to work for in America.” We refer to these as the Best Employee Commitment group (BEC firms). We investigate whether these companies differ from a control group of firms, in underlying aspects such as risk, market power, size etc by studying underlying financial ratios. We find significant differences between the ranked firms and the control group, in performance and structure. We also find market recognition of the performance differences. The better performance by the BEC firms also seems to be rewarded by the market in that these firms had significantly higher Market to Book value ratios, reflecting that investments in making the firm a better place to work pays off for shareholders. BEC firms have larger cash flow to sales ratios when compared to control firms indicating their superior profitability. Only a limited number of individuals can aspire to work for the best 100 firms. By identifying significant differentiators between the BEC firms and other firms, we may be able to come up with a method of assessing whether an unrated firm has characteristics that could support “best companies to work for” aspirations.

Publication Title

A.T. Business Management Review

Volume

5

Issue

2

First Page

1

Last Page

6

ISSN

1813-0534

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