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Does Job Satisfaction Increase Sales and Customer Satisfaction? Evidence from Retail Banking in South Korea

Ricard Gil , Myongjin Kim EMAIL logo and Inhyouk Koo

Abstract

This paper estimates the causal relationship between job satisfaction and worker productivity. Using personnel records from a retail bank in South Korea, we show that branch productivity is positively associated to average job satisfaction, but negatively to its standard deviation. We address endogeneity concerns using IV strategies and find that while higher job satisfaction may increase short term productivity through sales to existing customers, excessive sales to existing customers may hurt customer satisfaction and willingness to recommend in the long run. Our findings suggest that average job satisfaction and its dispersion are equally important to understand worker productivity.

JEL Classification: J24; J28; M50

Acknowledgements

We would like to thank Daniel Hicks, Gregory Burge, Le Wang, Timothy Bond, the brown bag attendants at the University of Oklahoma, the editor and two anonymous reviewers for their constructive comments. The usual disclaimer applies.

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Published Online: 2017-7-25

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