Abstract:
The financial performance of an organization has long been a major focus in business management.
However, a growing body of research suggests that factors related to employee happiness and satisfaction
also play an important role in achieving better financial performance. In this paper, we will discuss how
factors such as job satisfaction, social factors, and work environment can have a positive and significant
effect on an organization's financial performance. The purpose of this paper is to explore the relationship
between factors such as job satisfaction, social factors, and work environment, and their impact on an
organization's financial performance. This paper is based on a review of existing literature on the
relationship between employee happiness and satisfaction and financial performance. Various theories,
such as Expectancy Theory, Locke and Latham's Job Satisfaction Theory, and Fredrick Herzberg's Job
Satisfaction Theory, are used to support our findings and analyze based quantitative with SMART-PLS to
answer the hypothesis. The study results show that Job satisfaction has a positive impact on financial
performance. Increased job satisfaction can reduce employee turnover, increase productivity, and reduce
recruitment and training costs. Social factors, such as a positive organizational culture, effective
communication, social support, and team diversity, also affect financial performance by creating a more
dedicated and motivated workforce. Social factors also have a positive and significant effect on job
satisfaction. Positive relationships with coworkers and superiors, good communication, and social support
contribute to higher job satisfaction. A good work environment, including a comfortable physical
environment, a positive work atmosphere, healthy employee relations, supportive company policies, and
a positive work culture, contributes to employee motivation and company performance. This paper
highlights the importance of factors related to employee happiness and satisfaction in achieving better
financial performance. It provides managers with insights on how to improve employee satisfaction, build
a positive organizational culture, improve communication, and create a supportive work environment.
The findings also contribute to the existing organizational and management theories by emphasizing the
significance of psychological and social factors in predicting financial performance.
