Does employee happiness create value for firm performance?

Does employee happiness create value for firm performance?

This study examines the impact of employee happiness on firm performance in the UK using data from the “Best 100 British Companies to Work For” list (2001–2020). Applying the Carhart four-factor model to monthly data, we find that happier firms outperform the market, generating a monthly alpha of 32 basis points (3.86% annualized), which increases further to 34 basis points when weighted by ranking. Newly listed firms experience significant abno…