Identification with the Organization: The Contribution to Organizational Financial Performance

This research sheds light on the role of organizational identification in organization-level performance by investigating how employees' global perceptions of the organization (i.e., perceived organizational competence (POC) and perceived organizational warmth (POW)) influence organizational identification and in turn improve organizational financial performance. In a sample of 277 organizations representing 943 employees in South Korea, we found that the interaction effect of POC and POW increased organizational identification. We also found that organizational identification improved subsequent organizational performance, controlling for past firm performance. A one-unit increase in organizational identification leads to a 5.1 percent increase in organizational financial performance. These findings begin to address the lack of empirical research on the causal relationship between organizational identification and organizational performance. The theoretical and practical implications of the findings are discussed.