Events

Prof. Forrest Briscoe
Professor of Management
Smeal College of Business
The Pennsylvania State University

Employees are attracted to firms with socially responsible records, but are they willing to leave when their employer violates environmental or social norms? We theorize that stakeholder violations cause employees to revise how they see their employer such that they disassociate and become more willing to leave their employer after stakeholder violations. We further suggest that an employee’s existing association with their organization and the employer’s record for social responsibility moderate this relationship, as both shape how employees process their employer’s stakeholder violations. Finally, we posit that employees who leave their employer after stakeholder violations will join organizations with records of fewer stakeholder violations. We test our ideas using data on employee departures in 761 of the largest U.S. public companies from 2013 to 2020, constructed from detailed employee job history records. We find considerable support for our theory, showing that violations equivalent to 5% of annual revenues translate into a 4.7% increase in employee departures. This study extends research on the human capital consequences of corporate social (ir)responsibility.