ChapterPDF Available

Customer service

January 2010

DOI:10.1037/12171-009

In book: APA handbook of industrial and organizational psychology, Vol 3: Maintaining, expanding, and contracting the organization. (pp.329-357)
Publisher: American Psychological Association

Authors:

Markus Groth

UNSW Sydney

Content uploaded by Markus Groth

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329

CHAPTER 9

CUSTOMER SERVICE

Markus Groth and Robyn E. Goodwin

Over the past several decades, the emergence and

signiﬁcant growth of the service industry, which

now dominates the economy of the developed world

in terms of employment and gross domestic prod-

uct, has sparked an interest in research into services.

Up until the late 1970s and early 1980s, the manage-

ment and marketing literatures were framed by a

mindset reliant on the workings of manufacturing

organizations (e.g., Schneider, 1985). However,

growing recognition that goods and services may

be inherently different has encouraged researchers

to investigate whether these fundamental dis-

similarities have wider implications for customers,

employees, and managers (Bowen & Schneider, 1988;

Mills & Morris, 1986; Schneider & Bowen, 1992;

Shostack, 1977).

Interest in research on customer service has

steadily increased over the past several decades and

has evolved, and continues to evolve, as a vibrant

multidisciplinary ﬁeld, drawing from literatures

such as marketing, management, organizational

behavior, industrial and organizational psychology,

human resource management, sociology, and opera-

tions management. This development has led to a

dynamic, but often fragmented, ﬁeld of study that

increasingly draws on multiple perspectives to bet-

ter understand the functioning of service organiza-

tions. The purpose of this chapter is to provide an

overview of current streams of research within this

ﬁeld and to provide an agenda for future service

research. While acknowledging the multidiscipli-

nary nature of this field, we provide our review

mostly from the perspective of organizational behav-

ior and industrial and organizational psychology.

The sheer volume and diversity of research on cus-

tomer service issues, with topics including consumer

behavior, relationship marketing, customer-equity

management, and service blueprinting (to name just

a few), makes it an impossible undertaking to ade-

quately cover the whole ﬁeld in sufﬁcient breadth in

a single book chapter. Therefore, we primarily focus

on research examining the management of service

employee behavior, performance, and attitudes as a

means of achieving service excellence while drawing

primarily on research in psychology, organizational

behavior, and human resource management. Readers

interested in a more consumer-based approach to

studying customer service are referred to many

available reviews in related disciplines (e.g., Zeithaml

& Bitner, 2003). Nevertheless, we start with a short

overview of the evolution of services as an academic

field of study and very briefly discuss the signifi-

cant contributions made by related fields, espe-

cially marketing and operations management, in

order to provide an historical context for the cur-

rent state of the field.

We begin with a review and discussion of the

emergence of services as an area of study within the

past 25 years, identifying the core characteristics that

distinguish services from goods as well as placing an

emphasis on understanding the concepts of customer

satisfaction and service quality. Subsequently, we

provide a review of current service-management lit-

erature by identifying four key topics of research

that are currently at the forefront of customer ser-

vice research: linkage research, service climate, the

role of affect in service delivery, and justice in ser-

vice delivery. Finally, we close by discussing issues

11890-09_Ch09-rev2.qxd 5/3/10 9:59 AM Page 329

that remain unaddressed and suggesting potential

avenues for future research.

INTRODUCTION TO SERVICE RESEARCH

In its early stages, the service literature focused mainly

on the differences between goods and services

(Shostack, 1977) and the classiﬁcation of services

(Lovelock, 1980, 1984; Zeithaml, Parasuraman, &

Berry, 1985). Because these differences have funda-

mental implications for managing service organiza-

tions, this initial stream of research served as a

catalyst for the interest in service management. This

literature generally established ﬁve core characteris-

tics by which services differ from products. Services,

as opposed to products, are generally more intangi-

ble, heterogeneous, and perishable; are often pro-

duced and consumed simultaneously; and often

require customer participation during the service

delivery (Bowen, 1986; Bowen & Schneider, 1988;

Shostack, 1977). Intangibility, the most basic and

universally cited difference between goods and ser-

vices, refers to the fact that services, unlike tangible

products, often involve intangible performances

that cannot be seen, touched, or smelled and are

therefore more difﬁcult for customers to evaluate.

Heterogeneity of services, on the other hand,

acknowledges that services are frequently produced

by humans and therefore introduce a certain degree

of variance of quality, in that no two service perfor-

mances are exactly alike. Even with an increasing

use of self-service technology (Bitner, Ostrom, &

Meuter, 2002), humans often remain an integral,

and variable, part of the transaction. Unlike prod-

ucts that can be mass-produced with near-identical

precision, human interactions are not replicable to

the same degree, resulting in less reliability across

services. Perishability of services, the third core dif-

ference between products and services, recognizes

that services often cannot be inventoried and stored

for later consumption. For example, whereas goods

not sold can be kept on the shelves to be sold the

following day, one cannot “store” a haircut. A theatre

ticket not sold for a specific performance will be

lost forever. The simultaneous production and con-

sumption of services refers to the fact that whereas

most products are produced ﬁrst and sold at a later

stage, many services are consumed at the same time

that they are produced (e.g., a dining experience in a

restaurant or during an airline ﬂight), thus blurring

the distinction between these two processes. Finally,

services are also characterized by a more active and

frequent customer participation in the service expe-

rience; customers play an active part in service

delivery and partly determine its success or failure

by their presence and input during the delivery

process. For example, whereas customers will gener-

ally have limited input in the design of a car that

they purchase, a successful service delivery at a doc-

tor’s ofﬁce is dependent on the active participation

of a patient through his or her accurate description

of symptoms and medical history.

Because each of these core differences between

products and services has unique implications for

effective management of service employees and

organizations, there has been an increasing interest

within the management literature in understanding

the nature of services. Bowen and Schneider (1988)

pointed out that the intangibility and heterogeneity

of services make it difﬁcult to measure employee

performance and service quality and limit objective

reference points for customers to evaluate the qual-

ity of service. Therefore, the service experience—

the subjective perception of service delivery—often

becomes a crucial reference point (Bitner, Booms,

& Tetreault, 1990). In the absence of objective crite-

ria for judging service quality and employee perfor-

mance, customers often use tangible cues of the

service delivery, such as the physical environment

and employees’ uniforms, behavior, and appearance

for their evaluation.

The simultaneous nature of production and

consumption, on the other hand, makes it difficult

to buffer production functions from the customer’s

view, therefore involving customers in the experi-

ence of the service delivery. It also makes it diffi-

cult to balance supply and demand, which often

leads to idle time of employees or customer wait-

ing. These factors can have an important influence

on customer reactions, as waiting has been shown

to be a significant factor in customers’ assessment

of service quality, fairness, and satisfaction

(Clemmer & Schneider, 1993; Groth & Gilliland,

2001; Maister, 1985).

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It should be noted that much of the initial

research on the differences between goods and ser-

vices appeared in the marketing literature, with a

primary concern about how these differences affect

consumer behavior. It was not until later that orga-

nizational behavior scholars started to pay attention

to how issues surrounding customer service impact

on aspects of management and work design and

thus how service organizations themselves might be

constructed differently from manufacturing ones.

As discussed earlier, the academic study of ser-

vices has its roots in a multidisciplinary approach.

The discipline of marketing, arguably the pioneer of

services research, has undoubtedly had the most sig-

niﬁcant impact in shaping the early thinking in this

ﬁeld. The services marketing literature was initially

driven by a consumer-based approach and focused

on understanding customer satisfaction and service

quality as two core concepts of customer service

(Rust & Oliver, 1994). Although a more detailed

discussion of the theoretical distinction between

customer satisfaction and service quality is beyond

the scope of this chapter, it can be said that cus-

tomer satisfaction and service quality have generally

been conceptualized as related but different constructs

(Iacobucci, Grayson, & Ostrom, 1994). Whereas

service quality is a customer’s judgment about

more factual, cognitively assessed aspects of the

service delivery in relation to one’s initial expecta-

tions (Bitner & Hubbert, 1994), customer satisfac-

tion is a summary judgment of the overall service

delivery that has a more affective component, assess-

ing how service affects a customer emotionally.

Although there is still an ongoing debate about

causality of these two constructs, it is generally

believed that service quality is an antecedent of

customer satisfaction.

As one of the most researched constructs in the

marketing literature, service quality bridges front-

line employees’ performance with customers’ loyalty

to a service (Heskett, Jones, Loveman, Sasser, &

Schlesinger, 1994; Zeithaml, Berry, & Parasuraman,

1996). SERVQUAL, developed by Parasuraman,

Zeithaml, and Berry (1988), is one of the earliest

and still most widely used models and measures of

service quality. This model proposes ﬁve key dimen-

sions of service quality: reliability (i.e., employees

provide consistent service), empathy (i.e., employees

show a sincere interest), responsiveness (i.e., employ-

ees are willing to help), assurance (i.e., employees

instill confidence), and tangibles (i.e., physical

aspects of the service environment; Parasuraman,

Berry, & Zeithaml, 1991; Parasuraman et al., 1988).

Although this factor structure has not always been

replicated by researchers, the authors themselves

had suggested that these dimensions may not be

applicable to all types of services.

In light of the focus on service quality and cus-

tomer satisfaction within the marketing literature,

results consistently highlighted customer satisfaction

as a weak predictor of other outcomes, such as prof-

itability, service success, and customer retention. For

example, in a recent meta-analysis, Szymanski and

Henard (2001) reported correlations between

outcomes (such as repeat purchasing) and cus-

tomer satisfaction ranging from .11 to .91. This

has increasingly led to a focus on customer loyalty—

a customer’s willingness to revisit a particular

firm because of his or her positive emotions and

cognitions (Oliver, 1999)—as an ultimate out-

come variable in studies of services marketing.

In addition to the contributions to service

research by the marketing ﬁeld, operations manage-

ment research also continues to signiﬁcantly con-

tribute to our understanding of customer service

(Larsson & Bowen, 1989). This literature primarily

focuses on the choices organizations make regarding

the trade-off between service efﬁciency (e.g., con-

trolling service-delivery costs, designing efﬁcient

service-delivery processes) and meeting customer

expectations. A central concern from an operations

management perspective has been about the role

that customers play in the service-delivery process.

Contrary to much marketing wisdom suggesting

that the role of customers as active participants

in the service-delivery process is beneficial to the

organization (e.g., in terms of saving labor costs

and emotionally involving them in the creation of

the service outcome; Bettencourt, 1997; Bettencourt,

Ostrom, Brown, & Roundtree, 2002; Bitner, Faranda,

Hubbert, & Zeithaml, 1997; Cermak, File, & Prince,

1994; Kelley, Donnelly, & Skinner, 1990; Lengnick-

Hall, 1996; Mills & Morris, 1986), some researchers

have argued that customers’ physical presence and

Customer Service

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participation in the delivery process is a source of

uncertainty and inefﬁciency and thus should be min-

imized as much as possible (Chase & Tansik, 1983).

These research streams in marketing and opera-

tions management have signiﬁcantly contributed to

current thinking in the ﬁeld of service research. In

the following sections, we discuss four topics that

we believe are at the forefront of customer service

research within the domains of industrial and orga-

nizational psychology, management, and organiza-

tional behavior on the basis of a comprehensive

review of the literature.

LINKAGE RESEARCH

One of the foremost streams of research in the service-

management literature continues to be what has

been referred to as linkage research (Wiley, 1996).

At its most basic level, linkage research refers to the

relationship between service operations, employee

assessments, and customer assessments to a ﬁrm’s

proﬁtability. In order to maximize the positive out-

comes for service organizations and their employees,

researchers have sought to understand the contextual

issues of the work environment and management

practices in service organizations and to translate this

understanding into conceptual frameworks about

how customer service employees and their managers

might best perform in their roles in order to deliver

excellent customer service. This, in turn, is believed

to positively impact customer loyalty and bottom-

line profits for the organization. So, the broad

agenda of linkage research is to examine the causal

relationship between the internal functioning of an

organization and desirable external outcomes. It is

worth commenting that research on service climate

(Schneider, Gunnarson, & Niles-Jolly, 1994) consti-

tutes a particular type of linkage research in that it

speciﬁcally looks at the enabling climate of service

employees in driving organizational outcomes at a

unit level. Schneider and colleagues’ measure of ser-

vice climate, discussed later in this chapter, is one

of the most frequently used measures to examine

such types of service linkages and has propelled

service climate to the forefront of service research.

However, linkage research is generally considered a

more broadly encompassing term to describe link-

ages not just with an organization’s climate but also

with (among others) employee satisfaction and

engagement, management practices, and personal

characteristics of frontline employees. In addition,

whereas service-climate research by its nature has

been conducted at the organizational unit level, link-

age research more broadly encompasses research

at other levels as well, such as the individual-level

relationship between employee satisfaction and

customer satisfaction within a service transaction or

organizational-level ﬁnancial performance (Bates,

Bates, & Johnston, 2003; Harter, Schmidt, & Hayes,

2002; Ittner & Larcker, 2003; Loveman, 1998).

The Service-Profit Chain

Linkage research is based on the service-proﬁt chain,

a framework for linking service operations, employee

assessments, and customer assessments to a ﬁrm’s

proﬁtability (Heskett, Jones, Loveman, Sasser, &

Schlesinger, 1994; Heskett, Sasser, & Schlesinger,

1997). The service-proﬁt chain proposes that there

is a direct and strong relationship between proﬁt;

growth; customer loyalty; customer satisfaction; the

value of goods and services delivered to customers;

and employee capability, satisfaction, loyalty, and

productivity (Loveman, 1998; Schneider, Ehrhart,

Mayer, Saltz, & Niles-Jolly, 2005). Speciﬁcally, the

way that an organization enables its service employ-

ees to be willing and able to deliver good service is

believed to directly impact employee satisfaction and

loyalty and, subsequently, their productivity and

quality output. This, in turn, is believed to directly

impact the service value customers perceive, which

is linked to their satisfaction and loyalty. Customer

loyalty, as one of the key variables in the service-

proﬁt chain framework, is then thought to impact a

firm’s revenue and profits. Empirical results have

supported many of these proposed links, such as

service quality and business proﬁt (with a reported

71% increase of proﬁt per employee in organizations

providing high service quality; Bates et al., 2003),

aspects of customer relationship maintenance and

proﬁtability (with a long-term proﬁtability increase

of 1% reported by Reinartz, Thomas, & Kumar,

2005), as well as employee behavior and customer

impressions (Rucci, Kirn, & Quinn, 1998). These

and similar studies have suggested that both man-

agement and frontline employees must embrace and

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“own” the company’s strategies (Rucci et al., 1998)

and that one of the foremost concerns of senior level

management ought to be frontline workers and cus-

tomers (Heskett et al., 1994).

Building on the service-proﬁt chain as a concep-

tual framework, linkage research has provided a

signiﬁcant contribution to the service-management

literature. Frequent contact with customers means

that service organizations are highly permeable enti-

ties, and customers are therefore often exposed to

internal working processes of a business. Bowen

(1986) suggested that customers may need to be

treated as partial employees (thus the organization

must work at ensuring role clarity, ability, and moti-

vation) and, conversely, that employees may also

benefit from being treated as partial customers

(attending to what makes them satisﬁed with, and

loyal to, the organization). As a consequence, an

orientation toward service should be emphasized

throughout the entire organization (Schneider &

Bowen, 1993), which is one of the core implications

of the service-proﬁt chain framework.

Translating Internal Organizational

Functioning of Organizations

to Service Outcomes

Empirical studies have examined a wide variety of

linkages between organizations and customer out-

comes. Liao and Chuang (2004) used hierarchical

linear modeling to conduct a multilevel analysis of

employee service performance predictors. They col-

lected data from restaurant employees, managers, and

customers and found both individual-level factors

(conscientiousness [γs =.51] and extraversion

[γs =.39]) and organizational-level factors (service

climate [γs =.45] and employee involvement [γs =

.28]) to be positively associated with employee service

performance. Service performance was in turn related

to store-level performance, which was then related to

positive customer outcomes. Their study highlights

the importance of employee involvement—how

much inﬂuence employees have over decisions made

at work—in customer service roles. A study by

Hartline and Ferrell (1996) investigated this idea in

more detail by speciﬁcally attending to facets of the

interfaces between managers, employees, and cus-

tomers. They found that employee self-efﬁcacy and

job satisfaction were positively related to customer

perceptions of service quality and that a main pre-

dictor of these employee variables was manager

commitment to service quality (through empower-

ment for employee self-efﬁcacy).

Expanding this idea to the group level, bank

employee team efﬁcacy was found to be a predictor

of service revenues and customer-rated service qual-

ity measured 7 months later (de Jong, de Ruyter, &

Wetzels, 2006), explaining roughly 10% of variance

of the outcome variables. In a perpetuating effect,

service revenues and ratings of customer service

quality at Time 1 had a positive impact on team

efﬁcacy at Time 2.

Similarly, Ahearne, Mathieu, and Rapp (2005)

looked at how managers empowered pharmaceutical

sales representatives. They found that empowering

leadership behaviors, such as providing autonomy

from bureaucratic restraints and fostering partici-

pative decision making, had a positive effect on

employee self-efﬁcacy and adaptability and that

these were in turn related to job performance and

customer service satisfaction. Needless to say,

addressing issues of empowerment by helping ser-

vice employees to understand how their own work

objectives ﬁt with organizational outcomes and

plans and letting them take initiatives in dealing

with customer complaints has been suggested as

an important strategy for service organizations.

Other management strategies have also been

examined as potentially important drivers for utiliz-

ing the link that exists between employees and cus-

tomers and maximizing the beneﬁts to all involved.

Human resource practices that increase employees’

knowledge, skills, and abilities, such as customer

service training and interpersonal skill development,

have received increasing attention from scholars and

practitioners alike. One meta-analysis of such types of

practices revealed that they are generally positively

related to organizational performance but that the

effect size is substantially greater for manufacturing

than for service ﬁrms, with effect sizes of .24 and .13,

respectively (Combs, Liu, Hall, & Ketchen, 2006).

These authors suggested that because of the central

role of the customer in determining service outcomes,

customers inﬂuence how effective these human

resource initiatives can be. In another meta-analysis,

Customer Service

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Harter et al. (2002) found a consistent and sizable

relationship between employee satisfaction and

engagement with business-unit outcomes in a sam-

ple mostly consisting of service ﬁrms (with effect

sizes of .37 and .38, respectively), thus providing

empirical support for one of the key premises of link-

age research and the service-proﬁt chain framework.

Thus, research has suggested that service organi-

zations are likely to reap beneﬁts from implement-

ing procedures that emphasize high-quality service

performance among employees and help to mini-

mize the negative outcomes of work with customers

(such as stress and burnout). Indeed, Batt (2002)

analyzed a nationally representative sample of call

centers and found that employee retention rates

partially mediated the relationship between high-

involvement human resource practices and sales

growth. Specifically, high-involvement human

resource practices—measured as an index of skill,

work design, and team participation—was signiﬁ-

cantly related to sales growth (unstandardized Tobit

estimate =−6.34) and quit rates (β=.17), and sales

growth was related to quit rates (β=−.17). Workman

and Bommer (2004) conducted employee interven-

tions within a computer company’s call center and

similarly found that high-involvement work processes

increased employee job satisfaction and commitment.

These management practices can include increas-

ing employee resources such as autonomy, social

support, supervisor relationship quality, and perfor-

mance feedback (Bakker, Demerouti, & Euwema,

2005), enabling employees to perform high-level

customer service through work and career facilita-

tion, induction, and socialization programs as well

as beneﬁcial supervisory behaviors like giving posi-

tive feedback and sharing information (Schneider &

Bowen, 1993). A move away from simply providing

job-speciﬁc training toward more organizationally

focused employee training and socialization in order

to address shared values and norms has been sug-

gested as an important strategy for service success

(Schneider & Bowen, 1992).

The research results further suggested that human

resource management practices not only need to be of

high quality, but also need to be embraced and held

in high esteem by an organization and its individual

members in order for them to translate into customer

service quality. Organizational citizenship behavior

(OCB) has been proposed as a major indicator of

customer outcomes (Morrison, 1996). (See also

Vol. 2, chap. 10, this handbook.) Although few

studies have directly tested this claim, several studies

have supported the idea. One such study found

a link between OCB and customer satisfaction and

proﬁtability measured 1 year apart (Koys, 2001). In

another study, unit-level service climate was linked

to customer satisfaction through customer-focused

OCBs (Schneider et al., 2005). A meta-analysis by

Podsakoff and colleagues (2000) further suggested

that OCBs are related to a number of employee vari-

ables (e.g., positive attitudes, conscientiousness),

task characteristics (e.g., task feedback, task varia-

tion), leader behaviors (e.g., transformational style,

contingent reward behaviors), and organizational

characteristics (e.g., group cohesion, perceived

organizational support; Podsakoff, MacKenzie,

Paine, & Bachrach, 2000).

Although there is some ambiguity about the exact

deﬁnition of the OCB construct, it is generally con-

sidered to tap into the notion of employees taking ini-

tiative and responsibility beyond what they are paid

to do (Organ, 1997). The variables described above

give some insight into how they can be encouraged,

such as through different task design and job charac-

teristics or speciﬁc leader behaviors.

In summary, the key issues identiﬁed in our dis-

cussion of linkage research so far are that service

organizations may beneﬁt from implementing high-

performance work practices, that these practices can

lead to better customer service and employee out-

comes, and that these practices need to be supported

within the fabric of the organization itself.

On a ﬁnal note, work done by Gutek and col-

leagues (Gutek, Bhappu, Liao-Troth, & Cherry, 1999;

Gutek, Groth, & Cherry, 2002), also not explicitly

conducted in the context of linkage research, sheds

some additional light on how the different types of

linkages between organizations, employees, and cus-

tomers may develop. In her framework, Gutek distin-

guishes between service relationships and service

encounters as two different bonds that organizations

may choose to develop. Service relationships entail a

close bond between employee and customer and

involve repeated contact over time, a shared history

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of interactions, and a personal connection, whereas

service encounters are interactions between employ-

ees and customers with no shared history and no

expectations of future interactions and during which

the customer interacts with the employee as a result

of functional necessity and may view the employee as

largely interchangeable with other employees (Gutek

et al., 1999). Each of these relationships is suited for a

different context and can play a role in theoretical

and empirical linkage research thinking. For exam-

ple, customers visiting a fast food restaurant will be

pleased when employees serving them do not waste

time with personal interactions and provide prompt

service, whereas customers might prefer to develop

personal rapport and relationships with employees in

a service context such as ﬁnancial planning advice.

Gutek et al. (2002) suggested that each service orga-

nization must decide what kind of interaction is ideal

for the services they provide and make sure employ-

ees are positioned to deliver that kind of service.

Following our discussion of a large body of empir-

ical support for the notion of linkages with service

organizations, we note that most studies that demon-

strate a relationship between the treatment of employ-

ees and the treatment of customers are cross-sectional

and thus inferences about causality are difﬁcult to

make. To address this concern, Schneider, White,

and Paul (1998) tested the causal relationship

between concern for employees and concern for

customers by analyzing a number of cross-sectional

data sets collected at different points in time from

customers and employees. A bidirectional relation-

ship of inﬂuence was observed between internal

organizational functioning and customer percep-

tions of service quality, suggesting that the impact

most likely ﬂows both ways.

Current Challenges in Linkage Research

A central concern surrounding the state of linkage

research is that it is not comprehensive enough to

fully grasp the potentially far-reaching issues that

affect the implementation of human resource man-

agement practices. Wright and Boswell (2002) dif-

ferentiated between “macro” (strategic, integrated,

and more holistic human resource management sys-

tems) and “micro” (functional, isolated practices

that are traditionally included in linkage research to

demonstrate relationships with outcomes) and human

resource management practices. Their work sug-

gested that these aspects are largely treated as sepa-

rate by researchers and that different levels of analysis

used within the research of each leads to fragmented,

often independent approaches.

Gibson, Porath, Benson, and Lawler (2007) took

an integrative perspective to this issue and looked at

concepts surrounding service employee empower-

ment and high-performance human resource man-

agement practices in Fortune 1000 companies over

a 3-year period. They found that the percentage of

employees involved in information-sharing practices

was related to the subsequent year’s ﬁrm-level ﬁnan-

cial performance (B=0.12). In addition, they found

that increased boundary-setting procedures (e.g.,

supporting group cohesion, co-ordination, and the

establishment and integration of the company’s

strategic objectives into employee behavior) led to

better customer service at the organization level and

that the more employees were involved in team-

enabling practices, the higher the ﬁrm-level quality

of services observed. This study suggested that future

research may benefit from integrating different

human resource perspectives and levels of analysis

over time that would allow practitioners to more

fully understand the issues involved in employee–

customer linkages and how to go about effectively

implementing change in their companies.

A ﬁnal challenge faced by linkage research is that

many links are based on perceptual measures. For

example, perceptions of management having stan-

dards for service delivery are related to coworker

support, which is then related to employee–customer

orientation (Susskind, Macmar, & Borchgrevink,

2003). Job satisfaction and affective organizational

commitment are related to turnover intentions;

however, what can inﬂuence these intentions are

perceived management concern for employees and

concern for customers (Alexandrov, Babakus, &

Yavas, 2007). Studies that use perceptually based

measures certainly yield valuable ﬁndings on many

levels and thus aid understanding of how service

organizations can provide effective customer ser-

vice. However, what is also interesting—but often

underresearched—is the question of what shapes

these perceptions and how agreement of perceptions

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can be modified in the quest to shift a service

organization’s position toward providing excellent

customer service. For example, research on the

affect-as-information model from social psychology

(Schwarz & Clore, 1983, 1988) has suggested that

people rely on their moods as information clues when

making evaluative judgments. Another stream of

research on information processing in consumer

behavior has shown that customers’ perceptions of

service quality are often inﬂuenced by the valence

customers place on information derived by others or

information about a product or ﬁrm that they may

have held prior to the service interaction (Folkes &

Patrick, 2003). This leads us to our discussion of

climate for service as the most prevalent theme in

linkage research in the psychology and management

literatures.

SERVICE CLIMATE

A second identiﬁable stream of research within the

service-management literature focuses on issues of

service climate. At the most general level, organiza-

tional climate refers to employees’ shared perceptions

of what is important in their organization ( J. W.

Johnson, 1996) and the patterns or themes that

employees perceive within their organization (Weick,

1995). Thus, climate research concerns the percep-

tions that employees have about their immediate

work environment. Whereas early climate research

seemed to have limited consensus as to the deﬁni-

tion and precise conceptualization of organizational

climate as covering a broad conceptual space by

including some aspects of leadership and group

dynamics, more recently a research approach to

climate has emerged that uses a more targeted

approach to organizational climate. (See also Vol. 1,

chap. 12, this handbook.)

Speciﬁcally, Schneider and colleagues’ (Schneider,

1990; Schneider et al., 1994) operationalization of

organizational climate as the policies, practices,

and procedures that are rewarded, supported, and

expected in an organization in regard to a specific

organizational domain has become a predominant

conceptualization of the climate construct. As such,

these practices, policies, and procedures collectively

send a message to employees about “what behaviors

are important around here,” that is, what behaviors

are encouraged, expected, and rewarded. However,

it is important to note that conceptualizations of

climate generally focus on what employees perceive

and experience within an organization and thus

attempt to measure a shared collective perception

rather than an objective organizational reality.

One important issue of climate research—and one

that has been frequently debated in the literature—is

the organizational level at which climate should be

assessed. As mentioned above, climate is generally

conceptualized as a shared, subjective perception of

individuals. This raises the question of whether it

should be measured at the individual level (i.e., at the

employee level) or an aggregated level (e.g., at a unit,

departmental, or organizational level) by combin-

ing and averaging the views of individuals. James

and Jones (1974) distinguished between these two

approaches by referring to individuals’ perceptions of

their organizational environment as psychological cli-

mate and the aggregated responses at a higher organi-

zational level as organizational climate. Service climate

tends to follow the latter, thus following a composi-

tion model (Tax, Brown, & Chandrashekaran, 1998),

which argues for delineating functional connections

that capture the same content area but are located

at different levels of analysis. Thus, climate service

research within an organizational context generally

aggregates individual responses in determining mea-

sures of agreement across individuals. If sufﬁcient

statistical agreement exists on the basis of the cen-

tral premise of deﬁnitions and conceptualizations

of climate, which presumes a certain level of shared

agreement among individuals, aggregation is then

considered to be justiﬁable in order to conceptualize

and measure a climate construct at group or organi-

zational level. As brieﬂy mentioned earlier, this dif-

ferentiates service-climate research from more broad

conceptualizations of linkage research, which exam-

ine links between various organizational levels.

Research on organizational climate has focused

on a number of specific types of climate, such as a

climate for safety (Hoffman & Ingram, 1992),

climate for trust (Butler et al., 2003), ethical cli-

mate (Wimbush & Shepard, 1994), justice climate

(Mayer, Nishii, Schneider, & Goldstein, 2007), or

climate for service (Schneider et al., 1998; for an

overview, see Mattila & Patterson, 2004). This is

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based on suggestions that organizations have not

one but multiple climates and that organizational

researchers should try to measure a specific “cli-

mate for something” rather than a generic organi-

zational climate (Schneider, 1975). The particular

focal premise of a particular climate will obviously

depend on the organizational context as well as a

researcher’s particular interests. For example, mea-

suring a climate for innovation may be most appro-

priate in a high-tech organization in which rapid

product development and innovation is a key driver

of organizational success or survival. A climate of

safety may be of relevance and interest in a medical

context in which the focus is on a cautious approach

by “doing things right rather than fast” because key

decisions and potential mistakes may directly threaten

people’s health or even lives. Within the context of

service organizations and customer service, a climate

for service is the most dominant type of service cli-

mate for obvious reasons and has therefore been the

primary focus of service-management research.

Thus, in the following section, we focus our discus-

sion on current developments in regards to research

on a climate for service. That being said, it is impor-

tant to reiterate that every organization has multiple

different climates at play, and a focus on service cli-

mate will sometimes be most effective when consid-

ered in combination with one or more additional

climates (e.g., a climate for safety in combination

with a climate for trust), depending on the organiza-

tional context.

Climate for Service

Although deﬁnitions have varied somewhat in the

past, service climate can be broadly understood as

an organizational environment in which managers

make it clear to employees that delivering excellent

customer service is a high priority. Creating such

an organizational environment in which delivering

service excellence is supported, rewarded, and

encouraged can occur through a number of different

means, such as by clearly communicating service

standards to employees; by providing employees

with the right tools, training, and technology to be

able to meet customer needs; or by rewarding excel-

lent customer service (Schneider & White, 2004).

Thus, at its most basic level, service climate repre-

sents the degree to which the internal functioning of

an organization is experienced by employees as one

focused on service excellence (Schneider, 1994).

Early service-climate research has been particu-

larly concerned with measurement issues, a debate

that continues today. How does one best capture

and measure an organization’s service climate and

what are its speciﬁc facets? Schneider, Parkington,

and Buxton (1980) were the ﬁrst to develop a mea-

sure based on a multistage process using a sample

of bank employees and customers. Their analyses

initially identiﬁed 10 dimensions of service climate

that were reduced to 7: managerial functions, effort

rewarded, retain customers, personnel support, cen-

tral processing support, marketing support, and

equipment/supply support. In a later replication also

using bank employees and customers, this scale was

reﬁned and reduced to 4 dimensions: namely, branch

management (the efforts to plan, coordinate, set

goals, and establish routines for giving good ser-

vice), customer attention/retention (the extent to

which attempts to retain customers were taken),

systems support (the extent to which employees

agree that other staff support them in their service-

delivery efforts), and logistic support (the extent to

which employees feel that equipment and supplies

are sufﬁcient and reliable enough to support them in

their service-delivery efforts). In a further effort,

Schneider et al. (1998) condensed their previous

measures to create a single-factor measure of global

service climate, consisting of 7 items (with internal

consistency estimates ranging from .88 to .91). The

brevity and ease of use of the scale as well as its

satisfactory convergent and discriminant validity

has led the measure to be one frequently used by

researchers.

An equally comprehensive and also somewhat

less frequently adopted scale in the management lit-

erature is a service-climate scale developed by Lytle,

Hom, and Mokwa (1998). These authors identiﬁed

four higher order dimensions of service climate and,

within these four dimensions, identiﬁed nine facets

that collectively assess the content domain of service

climate: service leadership practices (service leader-

ship and service vision), service encounter practices

(customer treatment and employee empowerment),

human resource management practices (service

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training and service rewards), and service system

practices (service failure prevention, service failure

recovery, service technology, and service standards

communication). Whereas Lytle et al.’s (1998) focus

is more explicitly on the service-delivery process

and customer involvement in this process, concep-

tually it nevertheless overlaps substantially with

Schneider and colleagues’ measures. However, at

least in the management literature, it appears that

the Schneider measures are more widely adapted,

with far fewer researchers using Lytle et al.’s

service-climate scale.

Service Climate as a Link Between Work

Practices and Customer Service Outcomes

Apart from efforts to deﬁne the construct of service

climate and identify its dimensionality, research to

date has attempted to identify a nomological net-

work of its antecedents and consequences, particu-

larly in regards to service climate as a predictor of

employee-related and customer-related outcomes.

For example, Salanova, Agut, and Piero (2005)

found a measure of global service climate as a signif-

icant predictor of employee task performance as

well as customer loyalty. Paulin, Ferguson, and

Bergeron (2006) found support for service climate

as a signiﬁcant predictor of employee job satisfaction

and customer linkage, which ultimately predicted

organizational commitment and citizenship behav-

iors, although data in their study were collected at

the individual level and not aggregated to the team

or unit level. These studies yielded substantial effect

sizes between service climate and outcome variables,

ranging from .32 to .58.

Some research has also focused on the antecedents,

as opposed to the consequences of service climate.

For example, Salvaggio et al. (2007) found that

managerial service orientation and manager per-

sonality play a role in creating service climate.

Managers with positive core self-evaluations ( Judge,

Erez, Bono, & Thoresen, 2003) were more likely to

have a positive service quality orientation (β=.20),

which in turn was positively related to global service

climate.

Given its theoretical role in linkage research dis-

cussed earlier, it is probably not surprising that much

of the research on service climate has conceptual-

ized it as a mediator between organization- and job-

speciﬁc variables and employee and customer out-

comes. For example, Schneider, Ehrhart, Mayer,

Saltz, and Niles-Jolly (2005) proposed and tested a

mediated model in which a unit manager’s service

leadership behaviors are linked to unit sales through

a mediating chain of service climate, customer-

focused organizational citizenship behavior, and

customer satisfaction. That is, within the context of

departments of a supermarket chain, their results

suggested that positive leadership behaviors of

department heads translate into a more conducive

climate for service within that department, which

in turn impacts customer-focused organizational

citizenship behaviors. These, in turn, impact

departmental customer satisfaction scores, which

ultimately translate into departmental sales ﬁgures.

Thus, Schneider et al.’s (2005) study provided rare

support for several linkages within a multifaceted

service-proﬁt chain.

Liao and Chuang (2007) found similar support

for the role of leadership by examining and ﬁnding

support for service climate as a mediator of the rela-

tionship between transformational leadership style

and employee service performance. Service climate

has further been examined as a mediator between

organizational resources and engagement and per-

formance and customer loyalty (Salanova et al.,

2005). Dietz, Pugh, and Wiley (2004) examined the

link between service climate and customer attitudes

at a branch level of a retail bank and showed that

such link exists and that it becomes stronger the

more frequently customers and employees are in

contact with each other and the more proximal and

relevant the target of a service climate is to customers

(i.e., a subunit vs. an organization as a whole).

These and similar studies illustrated that service

climate consistently emerges as an important vari-

able in understanding the inﬂuence of work prac-

tices in service organizations and employee and

customer outcomes in a variety of service contexts.

Although this line of research is clearly still in its

infancy and the number of studies examining service

climate is relatively small, a nomological network of

predictors and outcomes of service climate is starting

to emerge. Apart from leadership (C. H. Hui, Chiu,

Yu, Cheng, & Tse, 2007; Liao & Chuang, 2007;

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Schneider et al., 2005), service training and job design

(Steinke, 2008), team norms and communication (de

Jong, de Ruyter, & Lemmink, 2005), as well various

group design characteristics such as intrateam support

and ﬂexibility of team members (de Jong, de Ruyter,

& Lemmink, 2004) have been identiﬁed as important

predictors of service climate. On the outcome side,

customer satisfaction and loyalty have clearly been the

most frequently examined dependent variables (Liao

& Chuang, 2004; Salanova et al., 2005; Steinke, 2008)

with conceptually linked constructs, such as share of

customer (de Jong et al., 2004), sales (Schneider et al.,

2005), customer attitudes (Dietz, Pugh, & Wiley,

2004), and service productivity (de Jong et al., 2005)

also receiving attention in recent research.

Climate Strength

A noteworthy development in the recent climate lit-

erature is a focus on climate strength as a unique

aspect of an organization’s climate (Schneider,

Salvaggio, & Subirats, 2002). On the basis of similar

conceptualizations in the organizational culture lit-

erature that have focused on the variability of indi-

viduals’ perceptions within an organization (e.g.,

Martin, 1992; Trice & Beyer, 1993), Schneider and

colleagues operationalized climate strength in terms

of within-group variability within climate percep-

tions of bank employees. As agreement among service

employees about the nature of the service climate

within their organization increases, so the argument

goes, the within-group variation decreases, and

therefore climate strength increases. Schneider et al.

(2002) theoretically proposed that the shared con-

sensus, or lack thereof, of service employees about

their organizational climate is a focal construct of

interest in itself and plays a critical role in shaping

organizational outcomes for both employees and

customers. An examination of this proposal in a

bank context provided some support for the notion

that climate strength had a moderating effect on

the relationship between service climate and orga-

nizational outcomes. Although the concept of cli-

mate strength has gained some traction within the

organizational literature, research on this topic has

been emerging gradually and mostly outside the

domain of customer service (e.g., justice climate,

Colquitt, Conlon, Wesson, Porter, & Ng, 2001;

and ethical climate, Dickson, Smith, Grojean, &

Ehrhart, 2001).

Challenges in Shaping Service Climates

Despite the fact that the research on service climate

is still in its infancy, emerging empirical results

have suggested that this stream of research has

several important implications for service managers

and organizations. One critical implication is that

although service climate can be divided into more

speciﬁc facets for measurement purposes, evidence

has suggested that these various dimensions inter-

play with each other and form a “gestalt,” in that a

successful service climate relies on all dimensions to

work smoothly. If one part of a service climate fails

to enable its frontline employees to deliver service

excellence, other aspects of the climate will often

not be able to make up for these deﬁciencies. For

example, even if service leadership within an organi-

zation is strong and employees are empowered to

“do what it takes” in their service delivery, an inade-

quate delivery system, lacking the tools and technol-

ogy for employees to meet customer demands, will

likely impede effective customer service and leave

both employees and customers frustrated. Similarly,

the most sophisticated technology and delivery sys-

tem will not be able to create an enabling service

climate if employees are inadequately trained on

necessary service standards. This may explain why

it seems so difﬁcult for organizations to create an

effective climate for service, even when organiza-

tions invest substantial resources in the task and

are truly dedicated. Thus, a delicate balance of all

aspects of service delivery needs to work “seam-

lessly” (Schneider & Bowen, 1995).

AFFECT IN SERVICE DELIVERY

A third signiﬁcant identiﬁable stream of research

within the service-management literature focuses on

the role of affect in the service-delivery process.

Interestingly, but perhaps not surprisingly, this

coincides with organizational behavior research

undergoing what has been labeled an “affective rev-

olution” in recent years (Barsade, Brief, & Spataro,

2003). Within the domain of organizational behav-

ior, there has been a noticeable increase in attention

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to mood, affective traits, and emotions in order to

highlight and investigate the social aspects of job

roles and performance. This recognizes that in addi-

tion to their internal and individualized effects,

emotions also serve a substantially interpersonal

function (Hatfield, Cacioppo, & Rapson, 1994).

These broader social effects of emotions have been of

particular interest to organizational scholars, as they

highlight the communal nature of the workplace.

Interesting parallels appear in the service-

management literature in what could similarly be

viewed as an affective revolution. The concomitant

emancipation of service research from a manufac-

turing framework has meant a gradual move away

from purely cognitive approaches to research and

toward integrating affective theories and models.

As discussed earlier, in its early phases, the service

marketing literature was particularly dominated by

a focus on examining and measuring service quality

(Parasuraman et al., 1988). Drawing on the gaps

model of service quality (Brown & Swartz, 1989;

Zeithaml, Parasuraman, & Berry, 1990), which pos-

tulates that customers have clear expectations about

service-delivery standards that they compare to

actual service delivery in order to determine their

levels of satisfaction, this research approach has an

implicit cognitive focus. That is, it assumes that cus-

tomers make rational decisions on the basis of their

perceptions of service delivery, but it is mute as to

the role that moods and emotions may potentially

play in this process.

In light of the drastic increase in emotions

research in the management literature (Ashkanasy,

Härtel, & Daus, 2002; Brief & Weiss, 2002), research

on the role of affect in customer service has emerged

on a number of different fronts. Considering the

inherently social and interpersonal nature of cus-

tomer service, emotions research is of particular

interest within a context of service transactions

because of the centrality of emotions to the process

of customer service transactions and to subjective

judgments made about them on the basis of intangi-

ble reference points (Giardini & Frese, 2008; Mattila

& Enz, 2002). In light of the rapid emergence and

continuous growth of the service industry, adopting

an emotions agenda in service research has been of

interest to both academics as well as practitioners.

Affective measurement techniques continue to be

developed and are increasingly included as part of

organizational research agendas (Barsade et al., 2003).

However, as noted by Elfenbein (2007), there

exists wide variation of theories and methods used in

such research. The combination of these research

programs has not yet produced a well-established

and widely integrated pool of research. Nevertheless,

there are a number of research approaches in the

area of emotions that contribute to our understand-

ing of service delivery and how affective characteris-

tics of either employees or customers inﬂuence

potential outcomes for the individual employee, the

organization, as well as the customer. It should be

noted that some of this research has been conducted

in the context of linkage research discussed earlier.

That is, it aims to address how employees, and their

performance, are affected by their emotional experi-

ences as well as how their emotions impact on orga-

nizational performance. In the following sections,

we brieﬂy review three areas of research that to date

have had the most signiﬁcant impact on examining

the unique role affect plays in service encounters:

emotional labor, emotional contagion, and customer

delight. Each of these issues will be addressed in turn.

Emotional Labor

A consistent theme in the service literature since its

beginning has been that delivering superior service

quality and courteous frontline employees deliver-

ing “service with a smile” constitutes a competitive

advantage for service ﬁrms. What has received far less

attention is the fact that doing so requires employees

to consistently display emotions that at times are

not genuinely felt by them. Only more recently has

service-management research focused on the role of

emotional labor performed by service employees.

Frontline workers are often expected to display and

amplify certain emotions (e.g., friendliness) and

suppress others (e.g., anger) in their interactions

with customers in order to comply with organiza-

tional or occupational expectations. Emotional labor

refers to the “process of regulating both feelings and

expressions for the organizational goals” (Grandey,

2000, p. 97). It conceptually emerged through the

work of sociologist Arlie Hochschild (1979, 1983).

In her analysis of ﬂight attendants and debt collec-

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tors, she recognized the possibility that the emotions

required of employees during their work, and espe-

cially in their interaction with customers, may not

always be congruent with the emotions that they are

experiencing. Hochschild suggested that organiza-

tional manipulation of employees’ emotional display

in the workplace was not only possible but a com-

monplace reality, and that such organizational con-

trol over emotional display expectations and likely

resulting emotional regulation processes may be

detrimental to employees—ﬁrst, because reduced

control over their self-regulation means that employ-

ees may become objectified by managers and cus-

tomers and, second, because employees may lose

touch with their real emotions (Hochschild, 1983).

Since this formative work, many scholars have

explored the concept of emotional labor and its poten-

tial antecedents and consequences. Hochschild (1983)

initially proposed what are now commonly regarded

as the two main strategies of performing emotional

labor—surface acting, in which an employee masks

an emotional display to appear emotionally consis-

tent with organizational requirements, usually

through faking or amplifying emotions not actually

felt, and deep acting, which entails attempts to

actually change one’s felt emotions in order to bring

about the organizationally desired emotional display.

Initial research on emotional labor focused on

the concept’s dimensionality as well as on its effects

on employee well-being. Specifically, Hochschild

(1983) noted a number of negative consequences of

emotional labor, primarily psychological ill health,

such as stress and burnout. Empirical evidence has

conﬁrmed links between emotional labor and emo-

tional exhaustion (Brotheridge & Grandey, 2002),

job dissatisfaction (Grandey, 2003; Morris &

Feldman, 1997), and lack of organizational identiﬁ-

cation (Ashforth & Humphrey, 1993; Schaubroeck

& Jones, 2000). For example, in an investigation

of the relationship between emotional labor and

burnout, Brotheridge and Grandey (2002) found

that surface acting was positively related to employee

emotional exhaustion and depersonalization.

Conversely, deep acting was not related to emotional

exhaustion but was positively related to personal

accomplishment. In the context of administrative

assistants, Grandey (2003) found that employee job

satisfaction had a negative relationship with the

enactment of both deep and surface acting as part

of employee interactions with customers. Frontline

service employees were more likely to be rated by

coworkers as breaking character and having lower

ratings of affective delivery in their service inter-

actions as their level of surface acting increased

(Grandey, 2003). In acknowledging that surface act-

ing strategies may be more likely to be construed by

both employee and customer as less authentic than

deep acting, perceived realism of emotional displays

can be just as important as the production of emo-

tional displays themselves.

In order to account for the sometimes differential

effects of surface and deep acting on these employee

outcomes, several theoretical explanations have

emerged. Ashforth and Humphrey (1993) drew on

social identity theory to examine the inﬂuence of a

person’s social and personal identities, speciﬁcally

in relation to the experience of pressure to identify

with one’s service role. Social identity theory pro-

poses that the stronger an employee’s identiﬁcation

with his or her service role, the weaker the negative

effects of emotional labor on well-being and the

stronger the positive effects on task performance

and perceived successes. Accordingly, both deep

and surface acting are expected to be positively

correlated with internalization of—or identifying

with—an employee’s service role. Theories of

resource depletion, on the other hand, suggest that

engaging in emotional labor requires effort, which

uses up cognitive resources that cannot be regained

(Gross, 1998). Generally, surface acting is believed

to require greater cognitive effort and is, therefore,

more strongly related to strain (e.g., Côté, 2005),

although empirical evidence has not been entirely

consistent, and some research has suggested that

deep acting may indeed be linked to greater use of

resources (e.g., Liu, Prati, Perrewé, & Ferris, 2008).

Alternatively, a process-oriented approach to emo-

tional labor that utilizes control theory and motiva-

tion theories emphasizes the incongruence between

goals in a person’s work and personal goal hierarchies

(Diefendorff & Gosserand, 2003). Diefendorff and

Gosserand (2003) suggested that different emotional

regulation strategies will be performed in accordance

with how much value frontline employees place on

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their personal identity and how congruent their per-

sonal and work goal hierarchies are. For example, a

person who believes that it is important to be genuine

will be more likely to engage in deep acting than sur-

face acting, and employees who have similar work

and personal goals will ﬁnd that they do not have to

engage in deep or surface acting to the extent and fre-

quency that others do.

Individual differences as potential predictors of

employee emotional labor have also been the subject

of enquiry in recent research and have contributed

to our knowledge of the role of emotional labor in

service encounters. Results have generally demon-

strated a relationship between stable individual

characteristics of frontline employees and the degree

and frequency of emotions in service transactions.

In a study of bank tellers, Pugh (2001) found that

employees’ emotional expressiveness was positively

related to their display of emotions to customers.

Similarly, in a call center environment, employee

conscientiousness was shown to interact with emo-

tional exhaustion in predicting call volume (Witt,

Andrews, & Carlson, 2004). Speciﬁcally, those

employees who were lower in conscientiousness

did not differ markedly in their ability to

handle call volume as a function of emotional

exhaustion. On the other hand, employees who

were higher in conscientiousness demonstrated a

marked decrease in the number of calls they were

able to handle as burnout increased. Interestingly,

there was no decrease in the service quality ratings

by customers as rated in random callback inter-

views. Finally, although not focusing on emotional

labor speciﬁcally, Tan, Foo, and Kwek (2004)

observed fast food cashiers in Singapore in order to

examine the relationship between customer traits,

employee positive emotional display in customer

interactions, and customer satisfaction. A positive

mediated relationship was observed between customer

agreeableness, display of positive emotions by service

providers, and customer satisfaction. Conversely, cus-

tomer negative affectivity was negatively related to

employees’ display of positive emotions.

Overall, these studies provide evidence of indi-

vidual differences as signiﬁcant predictors of emo-

tional labor processes and help to explain the scope

of impact emotional labor has on customer service

employees. In a quantitative review of the literature,

Bono and Vey (2005) reported average relationships

of rcorr =.13 and rcorr =.19 for relationships between

positive and negative affectivity, respectively, and

emotional labor across a number of independent

samples. These effect sizes are largely similar to

those of commonly studied job characteristics (rcorr

ranging from .13 to .20) and demonstrate the signiﬁ-

cant impact of these antecedents on emotional labor.

These findings are consistent with research on

person–job ﬁt (Edwards, 1991), suggesting that

individual characteristics of employees may inﬂuence

the effects that emotional labor has on them, which in

turn affects their job performance and well-being.

Another aspect of emotional labor research that

is particularly relevant to customer service is the

study of display rules. Display rules refer to explicit

or implied requirements by service organizations

regarding emotional displays by their frontline

employees, that is, norms and standards of behavior

that indicate which emotions are appropriate and

should be publicly displayed toward customers and

which emotions should be suppressed (Hochschild,

1983; Rafaeli & Sutton, 1987). As an example,

employees at Ritz-Carlton hotels need to follow the

“The Ritz Carlton Basics” service rules, which are

spelled out on pocket-sized service credo cards

issued to employees, in dealing with customers. As

an example, one such service rule reads: “Smile—

We are on stage. Always maintain positive eye con-

tact.” It is generally assumed that display rules

operate as a function of occupation. That is, profes-

sions recognized to be more interpersonally demand-

ing will have the highest levels of emotional labor

and thus emotional exhaustion (Wharton, 1993).

However, variation in emotional demands may be

attributable to speciﬁc jobs and even differ across

time within the same job.

Display rules have received increased empirical

support in recent years as a means by which service

organizations can more tightly control the service-

delivery process (Cropanzano, Weiss, & Elias, 2004;

Diefendorff & Richard, 2003; Diefendorff, Richard,

& Croyle, 2006; Gosserand & Diefendorff, 2005).

For example, Goldberg and Grandey (2007) used

customer service simulations and found that employ-

ees who were required to follow positive display

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rules experienced higher levels of emotional exhaus-

tion and greater reductions in task accuracy com-

pared with employees who experienced autonomy

in relation to their display to the customer. They

also found that surface acting mediated a positive

relationship between display rules and exhaustion,

whereas this relationship did not hold for deep act-

ing. Diefendorff and Richard (2003), on the other

hand, found that employee perceptions of display

rules to express positive emotions were positively

related to perceived interpersonal demands of their

job. Interestingly, results showed that perceptions

of demands to express either positive or negative

emotions on the job had a direct impact on employ-

ees’ emotional display behaviors as well as job satis-

faction. Wilk and Moynihan (2005) looked at call

center workers and found that supervisor ratings of

importance of display rules were signiﬁcantly posi-

tively related to emotional exhaustion of subordinates.

Furthermore, an interaction effect was found such

that service workers with stronger career identity

displayed a weaker relationship, such that they were

less emotionally exhausted. Overall, Bono and Vey

(2005) concluded the relationship between display

rules and emotional labor to be rcorr =.15 across a sam-

ple of 23 studies. These results suggest that much vari-

ation in emotional exhaustion exists within jobs and

could be attributed to the demands of supervisors.

Although emotional labor and service research

have examined the effects of emotional labor on

employee health and well-being, the effects of emo-

tional labor on other organizational outcomes, such

as customer reactions and service success, have

remained largely unexplored. This is surprising

because linkage research discussed earlier would sug-

gest that the emotional display of employees is likely

to impact customer emotions, behaviors, and atti-

tudes, thereby directly impacting customer service

outcomes. In fact, Bitner (1990) suggested that the

display of emotions by both customers and employ-

ees is an integral part of the service delivery itself.

Research on the direct impact of emotional labor

on customers is rare, although some research has

examined the role of displayed emotions on service-

delivery outcomes (Hennig-Thurau, Groth, Paul, &

Gremler, 2006; Mattila & Enz, 2002; Pugh, 2001;

Tsai, 2001; Tsai & Huang, 2002). For example, in a

study of bank tellers, Pugh (2001) found that employ-

ees’ display of positive emotion (such as smiling, eye

contact, and thanking) was significantly positively

related to customer positive affect, which was in

turn signiﬁcantly positively related to customer per-

ceptions of service quality. Similarly, Tsai (2001)

and Tsai and Huang (2002) found a link between

employee affective delivery and self-reported cus-

tomer mood and loyalty intentions. Mattila and Enz

(2002) found a link between employee emotional

display and customers’ service encounter evalua-

tions and positive mood after the encounter. Tan

et al. (2004) reported a link between the extent of

employee positive emotions (measured in terms of

greeting, eye contact, etc.) and customer satisfaction.

As mentioned earlier, Grandey (2003) examined the

interface of emotional labor and customer outcomes.

She found that coworker-rated affective delivery was

positively related to self-reported deep (β=.18) and

surface (β=−.27) acting.

Collectively, these studies demonstrate the

importance of emotional display and emotional

labor as an important aspect of customer service. A

growing body of evidence strongly indicates that

service organization’s emotional display demands

may indeed have negative impact on their frontline

employee’s well-being, potentially resulting in

higher burnout and turnover. On the other hand,

“service with a smile,” if done correctly, neverthe-

less has a positive inﬂuence on customers, often

resulting in a more positive service experience and

thus increasing the likelihood of customer loyalty

and other desirable outcomes. The challenge for ser-

vice managers lies in correctly recognizing this bal-

ancing act of potentially competing demands and

managing it effectively in order to satisfy and retain

both employees and customers.

Emotional Contagion

Emotional contagion is deﬁned as a convergence of

emotion between two individuals as a result of the

largely automatic tendency of one to imitate the

expressive behaviors of the other (Hatfield et al.,

1994). It refers to how people “catch” the emotions

of another person, just like people sometimes feel

an urge to yawn when they observe somebody else

yawning. Because emotions are transmitted between

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people in social interactions, emotional contagion

plays a particularly important role in service deliver-

ies, given the social and dynamic nature of the inter-

action between a frontline employee and a customer.

It is generally believed that emotional contagion can

occur through conscious processes, on the basis of

social comparison processes (Barsade, 2002), as well

as unconscious processes, often referred to as primi-

tive contagion, in which people are generally not

aware that they are catching the emotions of another

person, such as an infectious smile.

Despite its obvious applicability in customer ser-

vice and theoretical models advocating the transfer

of emotions from employees to customers through

contagion processes, emotional contagion has only

received limited attention in the context of cus-

tomer service to date. The importance of contagion

processes should be readily apparent; the dynamic

interaction between an employee and a customer

suggests that an employee’s positive emotional dis-

play, moods, and affective behaviors directly impact

customer assessments and most likely determine the

perceived service quality in the customers’ mind.

Indeed, customer satisfaction is widely regarded as

the cognitive assessment of an emotional experience

of a customer (Hunt, 1993), thus the emotions

transferred from an employee to a customer will

likely play a signiﬁcant part in the assessment of

service outcomes.

The few available empirical studies on emotional

cognition in the management and marketing litera-

tures have generally examined the context of sales-

related topics. For example, McBane (1995) proposed

emotional contagion as a dimension of empathy of

salespeople, whereas Verbeke (1997) examined

salespeople’s ability to infect, and be sensitive to,

emotions of others on their job performance. In the

context of customer interactions, some studies have

shown a positive relationship between employee dis-

play of emotions and various customer variables and

attributed these correlations to the process of emo-

tional contagion (Mattila & Enz, 2002; Pugh, 2001;

Tsai, 2001; Tsai & Huang, 2002) but did not examine

emotional contagion processes per se. Direct evidence

of actual contagion processes has only emerged

recently. Pugh (2001) provided some support for

customers potentially catching the positive moods of

employees. In addition, Hennig-Thurau et al. (2006)

recently showed in a simulated service encounter that

positive, authentic emotions displayed by service

employees did indeed flow on to customers and

impacted their assessment of the service delivery and

customer loyalty.

In sum, the available evidence to date suggests

that emotional contagion indeed provides a useful

framework for studying customer service in that

conscious and unconscious processes appear to

be in play by affecting how emotions and moods

are transferred between social actors in a service

environment.

Customer Delight

Another emerging topic of research that highlights

the increased interest in affective aspects of cus-

tomer service is the concept of customer delight.

Customer delight generally refers to “a profoundly

positive emotional state generally resulting from

having one’s expectations exceeded to a surprising

degree” (Rust & Oliver, 2000, p. 86). The concept

of customer delight has been of particular interest

to practitioners as a desirable goal for service orga-

nizations (Schlossberg, 1990) but has only recently

begun to receive attention from academics. The core

premise of the research suggests that measures of

customer satisfaction are not necessarily linearly

correlated with outcomes of value to the organiza-

tion, such as customer loyalty (Schneider & Bowen,

1999) and that an organization should strive to

exceed customers’ expectations in a way that they

are highly satisﬁed and experience strong positive

emotions, such as joy and delight.

Unfortunately, empirical evidence relating to the

existence and usefulness of the concept of customer

delight has been typically limited to the marketing

literature and is only slowly emerging and clearly

still in its infancy. However, such evidence suggests

that customer satisfaction and customer delight are

distinct constructs and seem to have differential

effects of customer outcomes (Finn, 2005; McNeilly

& Barr, 2006; Oliver, Rust, & Varki, 1997). For exam-

ple, in a scenario study using undergraduate students,

Chitturi, Raghunathan and Mahajan (2008) found

that customer delight consistently predicted cus-

tomer repurchase intentions and word-of-mouth

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intentions over and above the effects of satisfaction.

In addition, the hedonic (i.e., aesthetic and enjoy-

ment) features of the product elicited promotion

emotions, such as excitement and cheerfulness,

resulting in delight. On the other hand, utilitarian

(i.e., functional, practical) product features elicited

prevention emotions, such as conﬁdence and secu-

rity, which were then related to satisfaction.

This and similar studies highlighted the emotive,

arousal-related distinction between satisfaction and

delight. From a theoretical perspective, this is con-

sistent with the met-expectations model, which

describes customer satisfaction as a result of a ser-

vice provider meeting or slightly exceeding a cus-

tomer’s expectations. Customer delight, on the other

hand, is a function of the surprise and joy that fol-

lows from signiﬁcantly exceeding certain expecta-

tions (Schneider & Bowen, 1999). Further support

for the theoretical relevance of customer delight is

provided by the needs-based model, which takes a

more internal perspective of customers within the

service context and assumes a continuum between

human needs and speciﬁc expectations (Schneider

& Bowen, 1999). Understanding people’s needs and

how they combine with their expectations will allow

a multidimensional approach to customer service

more likely to elicit desired emotions, thus leading

to more favorable responses from customers. Some

empirical evidence exists to support a model that

stipulates positive affect as a major determinant of

customer delight. This model relies on a surprise–

arousal–pleasure–delight process that is largely dis-

tinct from the satisfaction process (Oliver et al., 1997).

Overall, although the concept of customer delight

is intriguing to both academics and practitioners

alike, more theoretical and empirical work is required

to address important questions about the usefulness

of the delight construct. For example, is customer

delight a viable and desirable goal for organizations

to pursue? What are the long-term effects of delight

experiences on customer behavior? And in what

ways are delight and satisfaction really distinct? In

addition, the precise measurement has posed a chal-

lenge to researchers, as it is unclear to what extent

customer delight is conceptually and empirically

different from simply high customer satisfaction.

Nevertheless, this line of inquiry is symptomatic of

the amalgamation of emotions and emotive constructs

as an integral part of customer service research.

JUSTICE IN SERVICE DELIVERY

A ﬁnal research stream within the service-manage-

ment literature that has emerged over recent years

considers organizational justice as applied to the

context of service delivery. (See also chap. 8, this vol-

ume.) Within the management and organizational

psychology literature, justice has became a main-

stream topic of inquiry and has been consistently

linked to outcomes such as job satisfaction, organi-

zational commitment, organizational citizenship

behaviors, and job performance (Colquitt, 2001).

Organizational justice research has identiﬁed three

major dimensions of justice: distributive justice—

people’s perceptions of the justice of outcomes,

procedural justice—the perceived justice of the pro-

cedures used to make decisions, and interactional

justice—the justice of the decision makers’ behavior.

Building on a large body of marketing literature

regarding issues surrounding customer dissatisfac-

tion and complaints (Bearden & Teel, 1983; Folkes,

1984), applications of justice research to customer

service issues has spanned a variety of service-related

issues (e.g., Clemmer & Schneider, 1993; Seiders &

Berry, 1998), although a core interest has been on

processes surrounding service recovery.

Service Recovery

Service recovery—the attempts by employees and

organizations to recover from service failures that

inevitably happen because of mishaps and unforeseen

circumstances—has the potential to strongly impact

the service experience of customers and elicit a range

of possible reactions from them (McColl-Kennedy &

Sparks, 2003). There has long been an interest in

examining negative aspects of customer appraisal,

which are usually related to service failure and

recovery processes (Schneider & Bowen, 1999).

Interest in issues of service recovery is consistent

with claims that the service recovery process

impacts on the service-profit chain discussed ear-

lier (Tax et al., 1998). If recovery processes are

managed in the right way, service recovery can not

only lead to customer satisfaction but can also

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induce improvements in the organizational service

processes and systems. Hart, Heskett, and Sasser

(1990) also argued that recovering from service fail-

ures is extremely important for service organizations

and has potential to create and sustain customer

loyalty.

In a review of the literature, Liao (2007) identi-

ﬁed key service recovery behaviors and arrived at a

ﬁve-factor structure of service-recovery behaviors of

frontline employees: apologies, problem solving, being

courteous, providing an explanation, and prompt han-

dling. Her empirical results further demonstrated that

customer perceptions of justice are vital to service

recovery and, subsequently, customer satisfaction

and loyalty. Perceived justice (including measures

of distributive, procedural, informational, and inter-

personal justice) was positively related to satisfaction

with service recovery, which in turn was associated

with repurchase intent. An additional vignette study

showed that the severity of service failure interacted

negatively with courtesy in predicting customer sat-

isfaction. Beyond an isolated instance of service fail-

ure, repeated failures seem to have a particularly

strong negative impact on customer satisfaction

(Liao, 2007).

One difﬁcult aspect of service recovery in regards

to customer service management is that effective

service recovery often requires frontline employees

to engage in autonomous decision making and rule

breaking, that is, breaking with scripted verbal or

behavioral procedures. However, instances of posi-

tive, prosocial rule breaking occur when an employee

does not act in accordance with either formal or

informal organizational policies in order to beneﬁt

the organization and/or a customer (Morrison, 2006),

thus illustrating the heterogeneous nature of services

discussed at the beginning of this chapter. On the

basis of the assertion that sometimes rule breaking

can be beneficial and appropriate in a person’s

work, Morrison (2006) conducted several studies to

explore the possible implications. Results revealed

that people do indeed engage in rule breaking for

reasons other than self-interest or ill-intent and that

these reasons fell into three categories: namely, for

efﬁciency, for helping a colleague or subordinate,

and for the purposes of effective customer service.

Results of a scenario study further revealed that

autonomy, risk-taking propensity, and informa-

tion that a coworker may also have engaged in the

rule-breaking behavior of interest were all signifi-

cantly positively related to reports that partici-

pants would engage in the rule-breaking behavior

(Morrison, 2006).

Explanations for service failures provided by

employees or organizations have also been exam-

ined in the context of customer justice perceptions

and resulting customer service perceptions. Conlon

and Murray (1996) investigated the customer-

complaint process by examining the type of expla-

nation given for service failure in the context of pro-

cedural and distributive justice, that is, whether the

employee admitted organizational fault or not, the

presence of compensation, the severity of the prob-

lem, and the speed of the organization’s reply to

complaints. Results suggested that explanations

accepting responsibility, satisfaction with the speed

of reply, and receiving coupons or gifts produced

greater justice perceptions and higher satisfaction

and loyalty intentions. This is consistent with Groth

and Gilliland (2006), who examined explanations

for service delays as a form of service failure and

found that not-at-fault explanations were more

effective in predicting positive customer reactions

than no explanation or blame explanations.

Customers’ perceptions of justice during service

recovery can impact their emotional response to the

recovery process. Kim, Moon, Han, and Tikoo (2004)

demonstrated that the presence of high interactional,

procedural, and distributive justice is associated with

higher levels of positive emotions and lower levels of

negative emotions. Emotions arising from service-

recovery evaluations, such as anger, are related to

customer ratings of satisfaction with the recovery

(Casado-Díaz, Más-Ruiz, & Kasper, 2007). A number

of studies exist that support the notion that customer

perceptions of justice are related to their satisfaction

(Maxham & Netemeyer, 2002), loyalty and purchase

behaviors (Leung, Li, & Au, 1998), and trust in ser-

vice provider (Turel, Yuan, & Connelly, 2008).

Consistent with emotional labor research dis-

cussed earlier, Rupp and Spencer (2006) conducted

a call-center simulation with participants exposed to

either interactionally just or unjust customers.

Results show that unfairly treated participants

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engaged in more emotional labor and found it more

difﬁcult to comply with display rules than those in

the just condition. In addition, raters’ judgments

of the emotional labor performed by participants

were significantly higher for those interacting

with unfair customers. Anger partially mediated

the relationship between customer interactional

injustice and emotional labor, thus the experience

of anger may increase the effort required to perform

emotional labor.

The Role of Justice Perceptions

Within Employee–Customer Linkages

Consistent with frameworks on linkage research dis-

cussed earlier, it has been suggested that employee

and customer perceptions of organizational justice

are linked, because employees may treat customers

in the same way as the organization treats them

(Schneider, 1994). This is consistent with the pro-

posed link between employee attitudes and behaviors

and customer attitudes and reactions, in that the way

customers are treated by employees is likely to reﬂect

the way employees are treated by their organizations

(Schneider, 1994). Empirical evidence has generally

provided support for this relationship (e.g., Maxham

& Netemeyer, 2002). Maxham and Netemeyer

(2003) found that customer-directed extra-role

behaviors were related to customer perceptions of

justice (β=.52 to .69). These justice perceptions

were related to outcomes such as customer overall

ﬁrm satisfaction (β=.18 to .41) and likelihood of

positive word-of-mouth intentions (β=.15 to .37).

These results illustrate that when it comes to justice,

internal organizational practices can be just as impor-

tant to employees as they are to customers.

Similarly, Masterson (2001) proposed a “trickle-

down” model of justice between university teachers’

perceptions of fairness, attitudes toward the organiza-

tion, behaviors toward students, and reactions toward

employees and the organization. Data revealed that

employees’ perceptions of distributive and procedural

justice were directly related to their affective organi-

zational commitment and that this commitment had

a direct and positive relationship with student ratings

of employee effort as well as prosocial behaviors.

Each of these constructs had a direct positive associa-

tion with the students’ perceptions of the employee’s

fairness. In addition, student perceptions of employee

fairness had a direct, positive relationship with their

affective reactions and behavioral intentions toward

the employee.

Justice Perceptions and Unfair Practices

in Customer Service

One other emerging stream of research worth men-

tioning pertains to issues of customer and employee

unfairness and how they relate to justice issues and

customer service outcomes. In regards to employees,

Bonache (2004) examined types of contract-based

employment in the context of a typology of work

arrangements proposed by Lepak and Snell (1998,

1999, 2002). Bonache suggested that employees in

these roles, in which employees are low skilled,

undertaking narrow tasks, and easily exchangeable—

all deﬁning characteristics of many customer-service

roles (Sprigg & Jackson, 2006)—are at a greater dis-

advantage than those in other types of work in terms

of basic labor rights because their employment is so

contingent on external factors. Bonache (2004)

admitted that although discrimination against these

employees is not predetermined as such, they are

more vulnerable to discriminatory treatment than

those in other work arrangements because of their

conditional position within the organization.

Not only are temporary service employees per-

haps more vulnerable to discrimination, they may

not perform as well as their more securely employed

counterparts. Consistent with the idea that treating

employees as “disposable” human assets, an investi-

gation of service staff and their supervisors revealed

that temporary employment status was signiﬁcantly

negatively associated with customer-oriented ser-

vice behavior compared with permanent employees,

and that this relationship is mediated by organiza-

tional identification and customer identification

(S. A. Johnson & Ashforth, 2008).

On the customer side, much of the marketing

literature has examined customer segmentation and

customer loyalty schemes as a legitimized way to

differentially treat customers on the basis of their

expected proﬁtability. This leads to service treatment

increasingly becoming a function of customer wealth

(Brady, 2000) and customer divestment. Strategies of

intentionally targeting niche demographics while

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actively ignoring others (Mittal, Sarkees, & Murshed,

2008) have become a norm in many industries.

These practices can be profitable, but they are not

without ethical and even legal implications. It is

beyond the scope of this chapter to review this liter-

ature in detail. However, it is noteworthy that

research on other forms of customer divestment has

recently emerged in the service literature. For exam-

ple, King, Shapiro, Hebl, Singletary, and Turner

(2006) looked at possible covert discrimination dis-

played by retail service employees toward obese cus-

tomers. Results indicated that discrimination was

higher for obese than for average-weight shoppers

and that discrimination was greater for less time

spent in store, less money spent, and an indication of

less likelihood to return to the store in the future.

More research is clearly needed in order to better

understand factors that may potentially lead to unfair

employee and customer treatment in order to iden-

tify ways to avoid them.

DIRECTIONS FOR FUTURE RESEARCH

The purpose of this chapter was to provide an

overview of current research areas within the ﬁeld of

service management. Given the sheer volume and

partly fragmented literature of this interdisciplinary

ﬁeld, we did so by primarily focusing on research

from an organizational psychology and management

perspective, particularly examining the role that ser-

vice organizations and managers of frontline employ-

ees play in shaping the delivery of excellent customer

service. While acknowledging and brieﬂy reviewing

the signiﬁcant contributions that have been made to

service research by other disciplines such as market-

ing, operations management, and sociology, we refer

interested readers to the relevant literatures in those

disciplines for further study.

Our review of the current state of the literature

identiﬁed several streams of research that appear to

be at the forefront of customer service research in

the management and psychology ﬁelds: linkage

research, service climate, and affect and justice in

service delivery. There are clearly other important

topics and research agendas not included in this

chapter, and we make no claims to having provided

a complete and full coverage of all ongoing research

in the customer service domain. However, we

believe that our review of these four core research

streams reﬂects a signiﬁcant and important part of

current thinking within the ﬁeld, and the ﬁndings

from research in management and psychology cer-

tainly have the potential to inform marketing

research. Especially the focus of emotional aspects

of service delivery, as seen through the lens of the

service employee, is a topic that is only recently

attracting the attention of marketing scholars.

We close this chapter with a brief discussion of

looking ahead and identifying opportunities for future

research. Our literature review identiﬁed two avenues

for future research on customer service on topics

either that are only currently emerging or that we

believe have not been studied sufﬁciently but would

beneﬁt the ﬁeld if they received increased attention

from academic researchers and service practitioners

alike. In the following sections, we discuss two of

what we believe are the most pressing challenges and

opportunities for future customer service research.

Establishing Causal Links

One of the underlying assumptions of much of the

research on linkages and the service-proﬁt chain

discussed earlier is that the causal direction is

assumed to be from organization practices to

employee attitudes and behaviors to customer atti-

tudes and behaviors. This makes intuitive sense and is

based on the theoretical frameworks that posit that the

way an organization treats its employees will directly

impact their well-being and engagement, which in

turn will “trickle down” to customers, impacting their

satisfaction and loyalty (Bowen, 1986; Heskett et al.,

1997; Masterson, 2001). However, few studies have

actually tested this assumption. Indeed, March and

Sutton (1997) discussed a number of alternative

models allowing for reciprocal effects and suggesting

that organizational performance may indeed be a

signiﬁcant predictor of workplace behaviors and atti-

tudes, rather than just a dependent outcome variable.

Emotional contagion research (Hatﬁeld et al., 1994;

Hennig-Thurau et al., 2006) discussed earlier also

provides a point in case of research that suggests that

relationships in service interactions may indeed be

reciprocal. After all, emotional contagion suggests

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that two social actors may catch emotions from each

other in a reciprocal manner. Thus, customer moods

and attitudes may be just as much of a driver of

employee moods and attitudes as the reverse direc-

tion from employees to customers.

Few empirical studies are available to explicitly test

many of the explicitly assumed causal relationships of

customer service discussed in this chapter. This may

be partly a function of the difﬁculty of obtaining such

data, given that even data from two different time

points allow for very weak inferences about causal

directions at best. The study by Schneider et al. (1998)

discussed earlier provided at least some evidence, as

these authors showed that employee perceptions of

service climate had a reciprocal relationship with

customer satisfaction. Nevertheless, unless data is

collected at multiple points in time, it will be difﬁcult

to truly examine causal links.

One notable exception to the lack of empirical

evidence is a study by Schneider and colleagues. In a

study of a large consortium of different organizations,

Schneider, Hanges, Smith, and Salvaggio (2003) col-

lected both employee attitude and organizational

performance data at multiple points in time over an

8-year period. Results provide some support for a

causal link between employee attitudes and organiza-

tional performance and for reciprocal relationships in

that some organizational performance predicted job

satisfaction more strongly than vice versa.

Thus, further research is clearly needed in order

to better understand causal relationships within cur-

rent theoretical frameworks of linkage research and

the service-proﬁt chain. Although the idea that an

organization’s design of service systems and proce-

dures leads to more motivated and able frontline

staff, which in turn lead to better customer service

and thus higher proﬁts and organizational perfor-

mance, is intuitively appealing, other models need

to be considered and tested. For example, it does

not seem unreasonable to assume that people are

attracted to successful organizations and are more

likely to be motivated to work hard if an organiza-

tion is successful, thus implying that organizational

success may indeed be a driver of, instead of—or in

addition to—a consequence of service success. In

short, current models that present arrows from

employee attitudes to performance may be too sim-

plistic, and possibly even wrong. Given the increasing

interest in issues of linkage research, especially by

service managers and practitioners looking for guid-

ance on how to design their service systems most

effectively in order deliver excellent customer service,

it seems like an important next step in the service-

management literature to examine the causal links in

current customer service models more thoroughly.

Examining Multilevel Models

of Customer Service

Another critical area of research that would clearly

beneﬁt the service-management literature is a more

extended focus on multilevel issues of customer ser-

vice. Calls for more attention to multiple organiza-

tional levels are certainly not new (e.g., Klein &

Kozlowski, 2000), and in some of the service research

streams reviewed in this chapter a number of issues

and empirical ﬁndings utilizing multiple levels have

been identiﬁed. For example, much of the service-

climate research is based on the conceptual idea that

service climate is a shared perception and thus needs

to be measured at the aggregated level (e.g., teams,

departments, store locations). Within the service-

climate literature, the debate about the appropriate

level of analysis has been ongoing (Schneider &

White, 2004). In addition, much of the recent linkage

research has been done at the organizational level and

focused on organizational performance variables,

thus enhancing much of the organizational psychol-

ogy literature, which has often primarily focused on

the individual in the past.

However, in some of the other research streams

reviewed within this chapter, such as the roles of

affect and justice in service delivery, the use of multi-

level models is not as prevalent. Although some

theoretical research on the role of emotions at multi-

ple levels in organizations has recently surfaced

(Ashkanasy, 2003), empirical evidence is still rare.

However, several studies have attempted to integrate

ﬁndings about emotions in organizations by linking

different levels of analysis. For example, Giardini

and Frese (2008) differentiate between the service-

employee level and the service-encounter level, and

used multilevel path analyses of data obtained from

service encounters involving bank consultants to ﬁnd

positive relationships between employee emotional

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competence and employee positive affect, which was

positively correlated with customer positive affect.

Customer positive affect was also positively associ-

ated with their evaluation of the service encounter.

Liao & Chuang (2004) used hierarchical linear

modeling to investigate the association between

individual-level factors of employee conscientious-

ness and extraversion and organization-level factors

employee involvement with employee service per-

formance. They found that employee service perfor-

mance at the store level explained between-store

variance in customer satisfaction and loyalty, and

they also found links between management prac-

tices, service climate, and employee performance.

Overall, theseﬁndings provide some support for the

importance of investigating customer service issues at

many organizational levels. However, it appears that

most multilevel research within the context of cus-

tomer service has only examined effects at a particular

level, such as individual or organizational level, with

very little evidence of potential cross-level effects that

may show how predictors at a higher level affect out-

comes at a lower level. Theoretical and empirical work

utilizing multiple levels of service organizations simul-

taneously could signiﬁcantly increase understanding

of customer service. Within any given context, model-

ing the hierarchical nature of data explores the possi-

bility that social context matters (Klein & Kozlowski,

2000). Contextual factors are clearly relevant in the

context of service organizations. Unfortunately, orga-

nizational research in the past has often implicitly

assumed that group membership does not matter and

analyses have treated individuals as though they are

unaffected by social context. Multilevel research is one

way of overcoming these limitations and will signiﬁ-

cantly increase understanding of how service organi-

zations function and how managers can enable

employees to deliver service excellence.

CONCLUSION

The ﬁeld of service management is exciting, vibrant,

and constantly evolving. Although some existing

frameworks discussed here are receiving the neces-

sary empirical support in order to become generally

accepted, other fundamental models are still being

tested and reﬁned. For example, the previously

widely accepted framework of differences between

goods and services discussed in the beginning of the

chapter has recently been called into question, with

repeated calls for a new paradigm that goes beyond

intangibility, heterogeneity, perishability, simultane-

ity of production and consumption, and customer

participation as deﬁning characteristics of services

(Lovelock & Gummesson, 2004; Vargo & Lusch,

2004). Only time will tell whether this stream of

research will challenge and reﬁne current frame-

works. In addition, an increasing number of studies

are being conducted in a cross-cultural context and

with a cross-cultural focus, and currently accepted

wisdom about customer service may have to be

revised pending new research highlighting cross-

cultural differences. Unfortunately, to date little

research has systematically examined the role of cul-

ture in regards to service-delivery processes (for a

review, see Zhang, Beatty & Walsh, 2008). Although

some cross-cultural differences have been established

(M. K. Hui, Au, & Fock, 2004; Ueltschy, Laroche,

Eggert, & Bindl, 2007), this research is clearly still in

its infancy and few cultural “truisms” have been reli-

ably established when it comes to customer service.

Despite its uncertain future, the inherently rela-

tional dynamic of customer service, the increased

availability of rapidly evolving technologies and the

unavoidable changes in market share and competi-

tiveness are both a strength and a weakness of service

research. In the past, the fragmentation of customer

service issues across many disciplines has some-

times led to several clusters of discipline-speciﬁc

researchers working on similar streams of research in

isolation from each other. Obviously this led to some

duplication of effort as well as inefﬁciency and unnec-

essary complication through the use of different and

overlapping terminologies. Fortunately, in recent

research there have been increasing efforts to engage

in interdisciplinary and cross-cultural research efforts

in order to further understanding of how organiza-

tions can best create and deliver high-quality service

(Bowen, 1990; Zeithaml & Bitner, 2003). Thus, the

multidisciplinary approach may well turn out to be a

signiﬁcant strength, as it allows for a greater multi-

tude of theoretical and empirical approaches to what

is a complex and multilayered topic. Although far

from being a comprehensive literature review, this

Groth and Goodwin

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chapter has reviewed some of the key research

streams within this dynamic ﬁeld and has hopefully

illustrated that the customer service environment is a

fertile ground for innovative and potentially enlight-

ening organizational research.

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