Close relationship between employee Perception and the Financial Performance and Growth of the Startups in India

Abstract

It has been an interesting topic of discussion among scholars and corporate alike on whether the employee perception and ratings towards their company have a relationship with the overall financial performance and growth of the companies. This report deals with precisely the startup sector and aims to understand the relationship between employee perception reflected from the Glassdoor ratings and the companies' overall financial performance and growth. The analysis states the importance of employee perception in a startup ecosystem. It proves that there is a strong but only indirect relationship between the growth of a company and the employee morale. However, there is not a very strong direct relationship between financial performance and employee perception. Further, it finds that the internal and external events have a very clear impact on the overall employee ratings towards the company. Such external events include both factors specific to the company like fundraising and larger macroeconomic factors like COVID and such internal events include appraisal cycle and the drives initiated by the company to boost the employee reviews. This report also concludes a strong correlation between the quality of reviews and the overall quantum of reviews for successful companies, reflecting the improving employee perception with overall growth. Finally, this report provides significant conclusions for the Human Resources professionals in the startup companies to understand the impact of different factors on the overall employee perception and ratings and the steps that can be taken to further boost the employee perception and morale towards the company.