Unpacking the relationship between overall ESG performance and employee satisfaction: evidence of differentiated effects

Purpose This study aims to examine whether overall environmental, social and governance (ESG) performance is uniformly associated with employee satisfaction or produces differentiated effects across distinct satisfaction facets. It further investigates whether organizational consensus conditions these relationships, thereby clarifying when objective ESG performance translates into more favorable employee evaluations. Design/methodology/approach The study combines firm-level ESG ratings from the Korea Corporate Governance Service with 26,072 employee reviews from JobPlanet across 117 South Korean listed firms from 2018 to 2022. Multilevel models examine the association between overall ESG performance and six employee satisfaction facets. Additional analyses test organizational consensus and visibility as firm-level moderators, together with lagged models, firm-size analyses and an alternative consensus measure based on former-employee reviews. Findings Overall ESG performance is positively associated with overall satisfaction, compensation and benefits and career advancement, but shows no average association with work-life balance, company culture or management quality. However, these relationships are contingent on organizational consensus. The ESG–satisfaction association becomes more favorable when employees hold more convergent organizational evaluations, while several relationships become negative under low consensus. Thus, the apparent null effects for some satisfaction facets conceal opposing conditional relationships. Originality/value This study moves beyond the assumption that ESG uniformly improves employee attitudes by demonstrating both facet specificity and perceptual contingency in the ESG–employee satisfaction relationship. It refines social exchange theory by showing that reciprocal responses depend on the type of employee outcome considered and the organizational perceptual context. By distinguishing the interpretive role of signaling theory from the reciprocity mechanism of social exchange theory, the study provides a more nuanced explanation of how objective ESG performance translates into employee outcomes.

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Publication Details

Journal
Society and Business Review
Published
2026-11-09
DOI
https://doi.org/10.1108/sbr-05-2025-0138
Primary Topic
Corporate Social Responsibility Reporting
Type
article
Field-Weighted Citation Impact
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article

Unpacking the relationship between overall ESG performance and employee satisfaction: evidence of differentiated effects

Yunhye Lee, Jungwon Lee, Soon Jong Kim
Society and Business Review
Corporate Social Responsibility Reporting
article

Unpacking the relationship between overall ESG performance and employee satisfaction: evidence of differentiated effects

Yunhye Lee, Jungwon Lee, Soon Jong Kim
article en

Abstract

Purpose This study aims to examine whether overall environmental, social and governance (ESG) performance is uniformly associated with employee satisfaction or produces differentiated effects across distinct satisfaction facets. It further investigates whether organizational consensus conditions these relationships, thereby clarifying when objective ESG performance translates into more favorable employee evaluations. Design/methodology/approach The study combines firm-level ESG ratings from the Korea Corporate Governance Service with 26,072 employee reviews from JobPlanet across 117 South Korean listed firms from 2018 to 2022. Multilevel models examine the association between overall ESG performance and six employee satisfaction facets. Additional analyses test organizational consensus and visibility as firm-level moderators, together with lagged models, firm-size analyses and an alternative consensus measure based on former-employee reviews. Findings Overall ESG performance is positively associated with overall satisfaction, compensation and benefits and career advancement, but shows no average association with work-life balance, company culture or management quality. However, these relationships are contingent on organizational consensus. The ESG–satisfaction association becomes more favorable when employees hold more convergent organizational evaluations, while several relationships become negative under low consensus. Thus, the apparent null effects for some satisfaction facets conceal opposing conditional relationships. Originality/value This study moves beyond the assumption that ESG uniformly improves employee attitudes by demonstrating both facet specificity and perceptual contingency in the ESG–employee satisfaction relationship. It refines social exchange theory by showing that reciprocal responses depend on the type of employee outcome considered and the organizational perceptual context. By distinguishing the interpretive role of signaling theory from the reciprocity mechanism of social exchange theory, the study provides a more nuanced explanation of how objective ESG performance translates into employee outcomes.

Society and Business Review
Korea University (KR), Dongyang University (KR)
Corporate Social Responsibility Reporting
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