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Managing Service Employees: Literature Review, Expert Opinions, and Research Directions

January 2017
The Service Industries Journal

DOI:10.1080/02642069.2016.1278432

Authors:

Jochen Wirtz

National University of Singapore

Christina Jerger

Katholische Universität Eichstätt-Ingolstadt (KU)

This article reviews the service management and marketing literature on managing people with a particular emphasis on managerial relevance. This review explores the market and financial results of managing people effectively, emphasizing that it is probably harder to duplicate high-performing human assets than any other corporate resource. The challenges inherent in boundary-spanning frontline jobs are discussed, including role conflict and emotional labor. Next, recommended HR strategies and practices related to recruitment, training, empowerment, service delivery teams, and employee motivation are reviewed. The literature review concludes with a section on service culture, climate, and leadership. Each section is complemented with further research suggestions that emerged from interviews with eight academic and practitioner experts. The last section outlines six themes for new research opportunities with high potential managerial relevance; they relate to (1) the financial impact of HR practices and strategies, (2) motivating service employees, (3) training, (4) emotional labor, (5) dealing with rude customers, and (6) the impact of technology on managing service employees.

The service talent cycle. Source: Adapted from Wirtz and Lovelock (2016, p. 416).

…

The Service Talent Cycel

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Figures - uploaded by Jochen Wirtz

Content may be subject to copyright.

Content uploaded by Jochen Wirtz

Content may be subject to copyright.

Managing service employees: literature review, expert

opinions, and research directions

Jochen Wirtz

and Christina Jerger

Department of Marketing, National University of Singapore, Singapore;

Ingolstadt School of Management,

Catholic University of Eichstaett-Ingolstadt, Ingolstadt, Germany

ABSTRACT

This article reviews the service management and marketing

literature on managing people with a particular emphasis on

managerial relevance. This review explores the market and

financial results of managing people effectively, emphasizing that

it is probably harder to duplicate high-performing human assets

than any other corporate resource. The challenges inherent in

boundary-spanning frontline jobs are discussed, including role

conflict and emotional labor. Next, recommended human

resources (HR) strategies and practices related to recruitment,

training, empowerment, service delivery teams, and employee

motivation are reviewed. The literature review concludes with a

section on service culture, climate, and leadership. Each section is

complemented with further research suggestions that emerged

from interviews with eight academic and practitioner experts. The

last section outlines six themes for new research opportunities

with high potential managerial relevance; they relate to (1) the

financial impact of HR practices and strategies, (2) motivating

service employees, (3) training, (4) emotional labor, (5) dealing

with rude customers, and (6) the impact of technology on

managing service employees.

ARTICLE HISTORY

Received 24 August 2016

Accepted 27 December 2016

KEYWORDS

Service employees; employee

engagement; service

excellence; service

leadership; human resources

Introduction and method

The quality of a service organization’s frontline employees plays a critical role in determin-

ing market success and financial performance (Heskett, Sasser, & Schlesinger, 2015).

Behind most successful service organizations stands a firm commitment to effective man-

agement of human resources (HR), including the recruitment, selection, training, motiv-

ation, and retention of employees (Schneider, 1994). To succeed in the increasingly

competitive service economy, service organizations have to pursue competitive advan-

tage (Aragón-Sanchez, Barba-Aragón, & Sanz-Valle, 2003), which frequently is related to

the management of frontline employees who are a key component of delivering service

excellence (Altinay, Altinay, & Gannon, 2008; Berry, 2009; Salanova, Agut, & Peiró, 2005).

In fact, proven HR strategies allied with strong management leadership at all levels

often lead to a sustainable competitive advantage (Heskett et al., 2015; Hong, Liao, Hu,

CONTACT Jochen Wirtz jochen@nus.edu.sg Department of Marketing, National University of Singapore, 119245

Singapore, Singapore

THE SERVICE INDUSTRIES JOURNAL, 2016

VOL. 36, NOS. 15–16, 757–788

http://dx.doi.org/10.1080/02642069.2016.1278432

& Jiang, 2013). It is probably harder for competitors to duplicate high-performance human

assets than any other corporate resource (Wirtz & Lovelock, 2016, p. 443), and the market,

financial, and business results of managing people effectively for service advantage can be

phenomenal (Chahal, Jyoti, & Rani, 2016; Heskett et al., 2015).

This article reviews and synthesizes the extant academic literature on managing service

employees through a lens of managerial relevance. To do this, we first reviewed the past

15 volumes of key service journals (including Journal of Service Management,Journal of

Service Research, and Service Industries Journal) and supplemented those with relevant

research from key management, marketing, and psychology journals. Second, we

reviewed the research from prominent academics who have made important contri-

butions to the service employee literature (including Leonard Berry, David Bowen, Alicia

Grandey, Anat Rafaeli, and Benjamin Schneider). Third, we reviewed key trade books on

managerial practice (e.g. Heskett et al., 2015; Heskett, Jones, Loveman, Sasser, & Schle-

singer, 1994; Heskett, Sasser, & Schlesinger, 1997; Hsieh, 2010; Schneider & Bowen,

1993). Finally, to gain insights into future research opportunities with potentially high

impact on management practice, we identified key themes highlighted in the literature

and complemented this with email and telephone interviews with eight academic and

practitioner experts on organizational behavior and human resource management

(HRM) in service organizations.

The eight experts interviewed are (in alphabetical order): Leonard L. Berry (Professor of

Marketing, Texas A&M University), Niels Feldmann (Researcher, Karlsruhe Service Research

Institute), Alicia A. Grandey (Professor of Psychology, Pennsylvania State University), Ron

Kaufman (CEO of UP! Your Service, practitioner expert and author on service culture and

training), Anat Rafaeli (Professor, Technion-Israel Institute of Technology), Benjamin Schnei-

der (Professor Emeritus of Psychology, University of Maryland), Heather Yurko (Senior

Manager Service Logistics and Operations Systems, Cisco Systems Inc.), and Kelly Wolske

(Trainer, Zappos.com). We thank all experts for their time and valuable contributions.

The interviewees were selected based on their prominence in service research and

practice. We approached experts who have had a distinguished career in research and

can arguably be considered as the most prominent researchers in this field (e.g. Schnei-

der), have vast experience in driving change in service culture (e.g. Kaufman), are execu-

tives from highly innovative organizations that experiment with their HR (e.g. Wolske), or

are experienced consultants and practitioners whom we were referred to by knowledge-

able academics. We ensured that the experts covered key areas from different disciplines

ranging from organizational psychology to service culture, and training and change man-

agement to new organizational designs.

The interviews were conducted via email (except in the case of Wolske who requested a

phone interview). The literature review was presented as a backdrop, and a form was pre-

sented that listed key topics from the literature review on the left and open fields for

respondents to enter their suggested research topics on the right. The experts were

asked where they see the most significant research opportunities, specifically with a

view on managerial relevance. We asked at each main section whether there are other

promising topics for further research beyond what is covered in the literature review.

That is, we adapted a soft positivism approach in our interviews and analysis (Kirsch,

2004; Ravishankar, Pan, & Leidner, 2011), whereby experts were guided to reflect on the

literature review while they were also explicitly prompted to think beyond the topics

758 J. WIRTZ AND C. JERGER

covered so that additional and unexpected research opportunities could emerge. The

expert answers were analyzed using the content analysis and coding approach (Bitner,

Booms, & Tetreault, 1990). Findings from both the literature review and the expert inter-

views were synthesized into managerially relevant recommendations for future service

research directions. Throughout the manuscript, the names of experts who raised any par-

ticular point are provided in brackets.

The remainder of this article is organized around key topics and related research oppor-

tunities in the following order: (1) the role of frontline employees for organizational

success, (2) HR challenges in service organizations, (3) HRM in service organizations, includ-

ing recruitment, enabling employees, training and internal communications, empower-

ment, service delivery teams, and motivation, and (4) service culture, climate, and

leadership. The article ends with key themes of potentially impactful managerially relevant

research opportunities.

Service employees are critical for organizational success

Service employees are important for an organization’s competitiveness for a number of

reasons. First, the service employees are a highly visible service element for customers

and a core part of the service product (Hennig-Thurau, 2004). Second, service employees

represent the service organization from a customer’s point-of-view (Berry, 2009), signifi-

cantly shape the customers’service experience (Hausknecht & Langevin, 2010; Verhoef

et al., 2009), and determine customer value and the brand promise (Sirianni, Bitner,

Brown, & Mandel, 2013; Zhang, Liu, Wang, & Shen, 2011). Third, frontline employees

tend to have a good understanding of customer needs and wants, and can adapt the

service delivery accordingly, and thereby frequently help to establish personalized

relationships with customers and build loyalty (Bove & Johnson, 2001; Rafaeli, Ziklik, &

Doucet, 2008; Söderlund & Rosengren, 2008). Fourth, service personnel affects the firms’

revenue as they often are tasked with generating sales in addition to their regular

service work (Jasmand, Blazevic, & de Ruyter, 2012; Yu, Patterson, & de Ruyter, 2012).

Finally, service employees impact operational productivity (Heskett et al., 2015).

Highly motivated employees showing discretionary effort are at the core of service

excellence (Heracelous & Wirtz, 2010). Over 20 years ago, Heskett and colleagues provided

ample case evidence regarding the strong relationship between employee and customer

satisfaction, which they termed the service-profit chain (Heskett et al., 1994) and later called

its basic prescriptions ‘a way of life’for leading service organizations (Heskett et al., 2015).

Their research demonstrates the chain of relationships among (1) employee satisfaction,

retention, and productivity; (2) service value; (3) customer satisfaction and loyalty; and

(4) revenue growth and profitability for the firm (Heskett et al., 1994).

‘So-called shop-floor workers’in services (i.e. frontline staff) are in constant contact with

customers while serving, and there is clear evidence showing that employee experiences

of the service climate in which they work and customer satisfaction are significantly cor-

related (Schneider & Bowen, 1993). Satisfied, loyal, and productive service employees who

demonstrate care toward customers are frequently viewed as a key opportunity for service

differentiation (Heskett et al., 2015). A recent meta-analysis (Hong et al., 2013) and integra-

tive literature reviews (Gabriel, Cheshin, Moran, & van Kleef, 2016; Subramony & Pugh,

2015) confirm these relationships.

THE SERVICE INDUSTRIES JOURNAL 759

Similarly, Barroso Castro, Armario, and Ruiz (2004) established the link between extra-

role effort and customer satisfaction. There are many studies that have documented

how and why employees have such a strong impact on customer satisfaction and custo-

mer loyalty (e.g. Delcourt, Gremmler, van Riel, & van Birgelen, 2013; Evanschitzky, Groen-

ing, Mittal, & Wunderlich, 2011; Gazzoli, Hancer, & Kim, 2013; Ranjan, Sugathan, &

Rossmann, 2014). Interestingly, Grandey, Goldberg, and Pugh (2011) found that satisfied

employees lead to satisfied customers even via affective transfer (i.e. emotional contagion)

and performance motivation (i.e. extra-effort service behaviors).

We had not explicitly asked in our expert interviews on the financial impact of HR prac-

tices and strategies in service organizations, but this topic was highlighted by Yurko and

Bridges (editor of SIJ) as an interesting area for quantitative research. Notwithstanding a

large body of existing research, both felt that more large-scale quantitative research is

needed on the financial implications and return on investment (ROI) for service organiz-

ations that invest in best HRM practices versus those that do not. Such research could

follow the customer satisfaction literature that has already established such linkages

through large-scale empirical studies and has shown that increasing customer satisfaction

is linked to improved business performance (Anderson, Fornell, & Mazvancheryl, 2004;

Anderson, Fornell, & Rust, 1997) and increased risk-adjusted equity returns (Aksoy, Cooil,

Groening, Keiningham, & Yalcin, 2008; Fornell, Mithas, Morgeson III, & Krishnan, 2006),

largely through the positive effects that customer satisfaction has on repeat purchase,

cross-buying, and referrals. We need similar studies that link key HR strategies to improved

customer satisfaction, loyalty, and subsequent financial returns.

HRM challenges in service organizations

The literature on organizational behavior entitles frontline service employees as boundary

spanners. Service employees link the inside of an organization to the outside world, oper-

ating at the boundary of the organization and being responsible to both internal and

external stakeholders (Agnihotri, Rapp, Andzulis, & Gabler, 2014). These roles frequently

entail that frontline employees externally represent the firm to customers, conduct the

service delivery, and internally represent customers and communicate their requests

and needs. Because of their position in an organization, boundary spanners often

have conflicting roles with a negative impact on their performance and well-being (Bet-

tencourt & Brown, 2003). This multiplicity of roles in their service job frequently leads

employees to experience role conflicts and role stress (Boles & Babin, 1996; Bowen &

Schneider, 1985).

Sources of role conflicts and role stress

Role conflicts and role stress have three main sources. They are organization/client,

person/role, and inter-client conflicts. Organization/client conflict is caused by frontline

employees having to attend to frequently conflicting goals (e.g. Chan & Wan, 2012;

Chung & Schneider, 2002), which include marketing (e.g. customer satisfaction, sales,

cross- and up-sales; Jasmand et al., 2012) and operations goals (e.g. productivity and effi-

ciency). Further, employees can even be responsible for enforcing rate integrity and

pricing schedules that might be in direct conflict with achieving customer satisfaction.

760 J. WIRTZ AND C. JERGER

Role conflicts are especially acute in organizations that are not customer-oriented as the

integration of conflicting goals is pushed to the frontline (Wirtz & Lovelock, 2016,

pp. 406–408).

Person/role conflict is caused when service employees perceive conflicts between what

their job requires them to do, and their own personality, self-perceptions, and beliefs. For

example, employees might be expected to smile and be friendly even to rude customers

as part of the ‘service with a smile’premise (Grandey, Rafaeli, Ravid, Wirtz, & Steiner, 2010).

Mahesh and Kasturi (2006) note from their consulting engagements with service organ-

izations from around the globe that frontline employees consistently describe customers

with negative attributes using phrases such as arrogant, overdemanding, and unreason-

able. Providing high-quality service requires serving personnel to have an independent,

warm, and friendly personality, and such personality traits are more likely to be found

in staff with higher self-esteem. However, many service jobs are seen as low level and

are associated with low education, low pay, and limited advancement opportunities

(Wirtz & Lovelock, 2016, p. 407).

Inter-client conflicts are caused by clashes between customers, as it is usually the

service employees who have to mediate misbehaving customers during service encoun-

ters (e.g. Bougie, Pieters, & Zeelenberg, 2003; Grandey, Dickter, & Sin, 2004). For

example, conflicts between passengers have become increasingly common and are fre-

quently triggered by crowded planes, small seats, and limited legroom (McCartney,

2016), and personality traits such as low self-control (Meldrum, 2016). Dealing with such

situations can be stressful and unpleasant for service employees.

In summary, service employees may perform triple roles: satisfying customers,

delivering productivity, and generating sales, which frequently results in role conflict

and stress. Conflicting goals are a key cause of burnout (Ellway, 2014; Jasmand et al.,

2012; Rod & Ashill, 2013), job dissatisfaction, and employee absenteeism (Chung &

Schneider, 2002).

Emotional labor

Emotional labor, first introduced by Hochschild (1983) in her book The managed heart,

emerges when way frontline employees’feelings differ from the emotions they are

asked to display toward customers (also referred to as emotional dissonance) (Grandey,

2003; Van Dijk & Brown, 2006; Zapf, Vogt, Seifert, Mertini, & Isic, 1999). Frontline employees

are expected to be cheerful, compassionate, genial, sincere, or even self-effacing –all

emotions that can be conveyed to customers through facial expressions, gestures, and

tone of voice (Mattila & Enz, 2002). Although some service organizations make an effort

to recruit employees with a positive outlook and low levels of neuroticism (Hopp, Rohr-

mann, Zapf, & Hodapp, 2010), frequently enabled by psychometric testing (Bateson,

Wirtz, Burke, & Vaughan, 2014), there will inevitably be situations when service employees

do not feel positive emotions themselves, yet they are required to suppress their true feel-

ings in interactions with customers in order to fulfill customer expectations of a nice and

friendly employee (Grandey et al., 2010).

Making this even more difficult is that it is the authentic display of positive emotions

rather than surface acting with faked emotions which affects customer satisfaction (Hur,

Moon, & Jung, 2015; Wang & Groth, 2014). Emotional contagion for both positive and

THE SERVICE INDUSTRIES JOURNAL 761

negative emotions from service employees to customers (Rafaeli & Sutton, 1989), and how

frontline employees physically display their handling of stress is important for the custo-

mer experience (Du, Fan, & Feng, 2011; Grandey et al., 2011). Furthermore, Biron and van

Veldhoven (2012) found employees’psychological flexibility (i.e. handling emotions by

accepting them) to mitigate the relationship between emotional demands and employee

daily exhaustion, whereas surface acting worsened it, and deep acting had no significant

impact. As Constanti and Gibbs (2005, p. 109) point out, ‘the power axis for emotional labor

tends to favor both the management and the customer, with the frontline employee

[needs] …being subordinate,’thus creating a potentially exploitative situation for

service employees.

It is clear that employees will experience ongoing stress and that service organizations

should train their employees in dealing with emotional stress, cope with pressure from

customers, and further get support from their team leaders. Here, high job autonomy

buffers the impact of emotional regulation on emotional exhaustion (Grandey, Fisk, &

Steiner, 2005). Emotional support seems particularly important when employees have to

deal with unreasonable and dysfunctional customers (Gong, Yi, & Choi, 2014), of which

service employees commonly encounter 7–10 abusive customers per day (Grandey

et al., 2004). If little or no support is provided, employees will use various ways to resist

the stress caused by emotional labor (Crosno, Rinaldo, Black, & Kelley, 2009; Hollander &

Einwohner, 2004; Rod & Ashill, 2009; Seymour, 2000), which include avoiding contact

with customers (Sandiford & Seymour, 2011), and developing intentions of leaving the

organization (Kraemer & Gouthier, 2014). Improving self-efficacy (e.g. through training)

is one way to reduce the negative effects of customer aggression on employee emotional

exhaustion (Goussinsky, 2012). The service providers’mood can even be enhanced by a

nicer service environment, which in turn translated into improved customer perceptions

(Fowler & Bridges, 2012).

A number of research opportunities were mentioned by the experts related to the chal-

lenges discussed in this section and are summarized in Table 1.

HRM in service organizations

It is widely accepted that satisfied and engaged employees deliver better service quality,

and foster more satisfying customer relationships (Heskett et al., 2015), and through

increased customer loyalty, these strategies also pay off financially (Rust, Moorman, &

Dickson, 2002). Therefore, pursuing good HRM strategies and practices is considered

crucial so that organizations can hire, motivate, and retain engaged service employees

who are willing and able to deliver quality service, productivity, and sales. Figure 1

shows the Service Talent Cycle which is used as the guiding framework for successful HR

practices in service organizations, and is used as the organizing framework for the follow-

ing sections.

Recruitment

Jim Collins (2001a) advocates that ‘The old adage “People are the most important asset”is

wrong. The right people are your most important asset.’To this Wirtz and Lovelock (2016,

p. 417) added: ‘… and the wrong people are a liability that is often difficult to get rid of.’

762 J. WIRTZ AND C. JERGER

Table 1. Research opportunities related to HR challenges.

Topics Expert comments

Role

conflict

.How do service providers respond (and how do they personally feel) when customers make reasonable

requests that violate company policy? (Berry)

.What happens when management/supervisor actions are inconsistent with their stated values? What are

the consequences of asking people to both sell and serve customers? What kind of training do people

need in how to deal with difficult customers? What are the consequences of failure to support service

employees’task performance with sufficient resources and/or asking service employees to violate ethical

or fairness rules of interpersonal behavior? (Schneider)

.Measure a baseline of frontline employees and conduct daily checkpoints on stress, productivity, and

outcomes. I postulate that even if employees do not identify as being ‘stressed’or consciously sense

conflict and simply say they are ‘having a bad day’, it is often tied to role conflict. Also, I postulate that the

higher the conflict, the lower the productivity, and the worse the outcomes for the organization and its

customers. (Yurko)

.The most pressing research opportunity is for me to dig deeper into how to resolve conflicts at the

frontline, especially role conflicts relating to customer service (i.e. customer satisfaction) versus sales and

versus productivity. At Zappos, we side-stepped the service-sales-productivity conflicts. We have a

separate sales team, service staff is not required to sell, and we don’t have KPIs regarding productivity (i.e.

call duration). We address the person-role conflict by hiring people who are aligned with Zappos.

However, we’d like to know more on how to reduce these conflicts further. At Zappos, we train empathy,

and thereby hope to minimize frontline employee conflict. We adapted Brené Brown’s work on empathy

from a mental health context to service, and base a lot of our training on her work. I don’t see empathy

featured much in the services literature and feel that it should be integrated and explored with rigorous

academic research on how empathy and training (and hiring) for empathy can help frontline employees.

(Wolske)

Emotional

labor

.What are the dimensions of emotional labor, and how do they differ in intensity in low-emotion services

compared to high-emotion services? (Berry)

.We could be asking about the emotional labor involved for employees performing services via ‘chat’,to

learn more about how ‘faking it’via written text is different than via face-to-face or voice. (Grandey)

.For which kinds of people (what personality attributes) permit some employees to experience more or

less stress in emotionally demanding jobs? Thus, being thoughtful, kind, interpersonally sensitive, and

agreeable comes more naturally to some people than others; situations requiring such behaviors may not

be emotional-labor for all people. (Schneider)

.How can managers better prepare frontline service providers to respond to rude or offensive customer

behavior? (Berry)

.Measure the long term effects of working in an environment that requires high emotional labor. Because

employees have to ‘act’for most of the day in this environment, do they stop caring ‘for real’over time?

How long does it take? Does this behavior transfer into their personal lives? That is, do they act all of the

time and forget their own beliefs and feelings? (Yurko)

.This literature review assumes that positive emotions are critical to customer service. But then we know

from available research that when times are busy emotions are less critical. We also know that customers

want bottom line results over and above emotion. And research in psychology suggests some effects of

positive and negative emotions that can challenge this assumption. So maybe investing in positive

customer emotions and employee emotions when service is automated is less critical than might appear?

(Rafaeli)

Other topics related to motivating

service employees

.How important are pay-based incentive systems in motivating service quality

in service jobs? (Schneider)

.Research is needed on which metric(s) to use (e.g. NPS, customer satisfaction),

and when and how to use them to align and motivate (as well as observe and

assess) service teams? (Kaufman)

.How do we best reward to enhance the service-profit chain? How can we

better tie individual and team rewards to profitability? (Yurko)

.What are the consequences on service quality of rewarding people with high

sales but poor service in sales and service teams? (Schneider)

.Jobs provide both demands on staff and resources needed to do the job, but

we do not yet know which kinds of resources are required to compensate for

which kinds of demands across service delivery jobs (e.g. high versus low

personal contact; routinized versus non-routinized; tangible versus less

tangible). (Schneider)

.The service-profit chain, even in the new version, makes too much of employee

satisfaction and not enough of the importance of the situation, on the one

hand, and personal service orientation and training on the other hand. People

who are service-oriented and well-trained and well-resourced and supported

will do a good job and be happy because of that. (Schneider)

.How can firms help their service employees to align their personal career goals

with business needs? How much does this alignment improve motivation and

productivity? (Yurko)

.Motivating Millennials in a service environment is not well understood (i.e. for

people who expect to be rewarded regularly and do not stay in a job for a long

period of time). How does this impact rewards and recognition within a

services-based industry, especially one which requires deeper knowledge and

more time in role? (Yurko)

.Are we rewarding managers who reward the right behaviors –both in their

teams and through their own actions/behaviors? Consistency in rewards –

what kind of role conflict does it create when one team rewards and another

does not within the same organization? (Yurko)

.Does investing in new skills adequately motivate employees? (Yurko)

774 J. WIRTZ AND C. JERGER

Service climate

While culture is more holistic and value-focused, organizational climate is the part of the

organization’s culture that can be clearly felt and seen by employees. As a climate gener-

ally relates to something specific (e.g. to service, innovation, or safety), multiple climates

often coexist within an organization. A climate for service includes clear goals and a

strong drive and support to deliver superior customer value and service quality (Clark,

Hartline, & Jones, 2009; Kasper, 2002). A service climate represents employees’shared per-

ceptions about the practices, procedures, and types of behaviors that get supported and

rewarded in a particular setting (Bowen & Schneider, 2014).

What employees perceive as important is what their organization and its leaders do.

Therefore, employees gain their understanding concerning importance through their

daily experiences with the policies, practices, and procedures of key departments such

as HR, operations, marketing, and IT (cf. Heskett et al., 1994). As advocated by Chung

and Schneider (2002), it is crucial to align all subsystems (e.g. HRM, marketing, operations,

and IT) by establishing a strong climate for service. For example, a number of studies linked

service climate to service innovation, customer loyalty (Kao, Pai, Lin, & Zhong, 2015; Sala-

nova et al., 2005; Wang, 2015; Zhang et al., 2011), and financial performance (Schneider,

Macey, Lee, & Young, 2009).

Service leadership

Service leaders are responsible for creating a supportive culture and climate for service.

Sam Walton, the founder of Wal-Mart, highlighted the role of managers as servant

leaders (Heskett et al., 1997, p. 236). Leaders do not require a larger-than-life personality;

rather, leaders who aspire to take a company to greatness need to have personal humility

blended with intensive professional will, ferocious resolve, and a willingness to give credit

to others while taking the blame themselves (Collins, 2001b). Moreover, a service-oriented

leadership has been shown to have a strong impact on service climate and implies appre-

ciating high-quality service performances and setting high service standards (Hong et al.,

2013; Schneider, Ehrhart, Mayer, Saltz, & Niles-Jolly, 2005).

Service climate research has contrasted two leadership styles: management of the

basics versus transformational leadership that sets strategy and drives change (Bowen &

Schneider, 2014). The persistent management of the basics and their endless details

creates a strong climate for service. Furthermore, leaders who create a strong climate

for service generally demonstrate a commitment to service quality, set high standards,

recognize and remove obstacles, and ensure the availability of resources required to do

it. This basic leadership style seems mundane compared to transformational leadership,

but both are needed for a recognition of the importance of the mundane and providing

a strong service vision that inspires and motivates everyone in the organization (Heskett

et al., 1994).

Successful leadership often is aligned with the ability to model behavior and thereby

focus the organization on the basics. One approach to achieve this is known as ‘manage-

ment-by-walking-around’(Peters & Waterman, 1982, p. 122), which involves regular visits

by leaders, often unannounced, to various parts of the organization. This approach pro-

vides leaders with insights into both backstage and frontstage operations, gives

THE SERVICE INDUSTRIES JOURNAL 775

opportunities to observe and meet employees and customers, and allows to see how cor-

porate strategy is implemented at the customer interface. For example, Disney World’s

management spends two weeks every year in frontline staff job such as sweeping

streets, selling ice-cream, and working as the ride attendant, to gain a better appreciation

and understanding of what happens on the ground (DeVrye, 2000). Furthermore, it can be

motivating for employees when encountering senior leaders on such visits and it provides

leaders with an opportunity to model service excellence.

Finally, empirical research has shown why it is so important for management to ‘walk

the talk.’Simons (2002) showed that behavioral integrity of a hotel’s manager was

highly correlated to employees’trust, commitment, and willingness to go the extra

mile. In fact, of all manager behaviors measured, it was the single most important factor

driving profitability.

Organizational focus on the frontline

A strong service culture implies that an organization is firmly focused on the frontline, truly

acknowledging that it is the lifeline of its business and that revenues are largely driven by

what happens at the customer interface. Top management shows by their actions that

what happens at the frontline is crucially important to them (Mascarenhas, Kesavan, & Ber-

nacchi, 2006).

Effective service leaders are not only interested in the big picture, but also in the details;

they see opportunities in service nuances which competitors might consider trivial, and

they believe that the way the service organization handles little things sets the tone for

how it handles everything else. According to Hsieh, CEO of Zappos, ‘this goes back to

our belief that customer service shouldn’t just be a department, it should be the entire

company’(2010, p. 153).

Our experts mentioned a few interesting research opportunities related to service

culture, climate, and leadership as presented in Table 7.

Directions for impactful managerially relevant research

The expert interviews allowed us to derive a number of exciting ideas and directions for

future research with high managerial relevance which were presented at the end of

Table 7. Research opportunities related to service culture, climate, and leadership.

Topics Expert comments

Service culture .How do the highest-performing service organizations use middle managers to help

build and sustain a strong service culture? (Berry)

Service climate .What level of the organization needs to set a ‘services-based’climate for the

organization to be successful at meeting customer needs? (Yurko)

Service leadership .Can you transition leadership to a ‘servant-based’mindset –can it be learned, or must

it be inherent in the people you hire? If it is inherent, what is the best instrument to

detect servant leadership? (Yurko)

Organizational focus on the

frontline

.Differentiation of organizations that do shadowing, learning, asking management to

periodically work in frontline jobs versus those that do not. (Yurko)

.How important is organizational design, alignment, and accountability to services

success? Can an organization be successfully leveraging various designs, or is there a

‘best fit’? How does one determine ‘best fit’? (Yurko)

776 J. WIRTZ AND C. JERGER

each main section of the literature review. In addition, a number of new, emerging topics

were highlighted that were not covered in our review; they related mostly to the interfaces

between new technologies, employees, and customers, and learning from the frontline

(see Table 8). Finally, we highlight six key themes we find particularly promising and

relate to comments from several experts.

Theme 1: financial impact of HR practices and strategies

There is a lot of anecdotal evidence on the market and financial outcomes of strategies

following the service-profit chain. However, the large-scale financial impact of HRM prac-

tices and strategies is underresearched. The ROI on investing in employees and best prac-

tice HR is not well-established for service organizations (Yurko). For example, future

research could contrast the financial and market impact of alternative HR strategies,

such as comparing a strategy based on high employee retention through investments

in best practices, compared to HR strategies that do not make these investments

(Yurko). Similarly, though emotional labor is assumed to benefit the bottom line

through customer loyalty and sales, the limited evidence that exists does not support

this (Grandey). More research is needed for how the emotional culture of an organization

or store affects the bottom line.

Theme 2: motivating service employees

The service-profit chain puts a lot of emphasis on employee satisfaction but not enough on

the situation on the one hand, and personal service orientation and training on the other

hand. As suggested in our expert interviews, service employees who are service-oriented,

well-trained, well-resourced, and supported will do a good job and be happy because of

that (Schneider). Research exploring intrinsic motivation would be of value.

Theme 3: training

The broader availability of information to customers is changing demands on employees,

which then will likely lead to a stronger focus on employees’cognitive skills and training

(Grandey). In addition, employees need all-round training to better respond to the great

variety of different and potentially difficult situations in service encounters. Research is

required in specific settings to determine the different training foci required (Schneider).

Training related to new technologies (Rafaeli) and the usage of new technologies in train-

ing also offer interesting research opportunities.

Services are often provided by teams (e.g. consulting projects and restaurant services).

That means, for service teams, hiring, training, monitoring, and feedback should focus on

the team as well as individual mindset, and research on these team mindset issues is

needed (Schneider). Furthermore, differences between the kinds of teams required for

different kinds of services requires study (Berry). For example, high-performing teams

are often those that include members with rotation experience through industries and

include members who train new team members themselves (Yurko).

THE SERVICE INDUSTRIES JOURNAL 777

Table 8. Research opportunities related to emerging topics.

Topics Expert comments

Employee and customer

interfaces with new

technologies (e.g. Robots

and Artificial Intelligence)

.Much of the current research is based on face-to-face service or maybe call

center service. However, service is increasingly delivered through Internet

channels, through chat, Twitter, and Facebook. Employees are still a part of

the story. But the contact between employees and customer is mediated

through technology. This complicates things for employees, because the

ability to fully understand customers is challenged. And it is threatening to

employees because technology makes it easy to monitor everything about

employees, so service work can easily turn into a modern sweatshop.

(Rafaeli)

.In a sense the employee now has to handle three managers: The formal

manager, the customer, and the technology. This also means other issues

will require new tools for assessments. Like employee effort –so what is

effort in a phone or chat or twitter service? How can it be assessed? And how

can it be communicated? When employees try to understand how to solve a

customer problem in chat or twitter or even phone, they put a customer on

hold. And this is annoying and alienating to customers, who have no

knowledge of the employee effort. Effort can become a double edged sword.

The remoteness makes the work of employees much more challenging and

research is needed to better understand these dynamics. (Rafaeli)

.Automated service raises a number of interesting and complicated issues,

including what are the right things for an automated service agent to

express; should a robot express emotions or not, and assuming so, what

emotions? (Rafaeli)

.The idea of hiring the right people also become challenging, because do we

know who the right people are? What are their qualities, abilities, or traits?

The ability to manage the technology becomes a central tenant. And it can

also be a double edged sword, for employers and for customers. In general

service employees can pose a risk to customers because of their access to

personal information. Savvy employees with good technology skills can

become a real risk. I suppose this relates to the issues of empowerment.

Clearly, there are new challenges that need to be researched and managed.

(Rafaeli)

.A broadly stated research question would be ‘how do the patterns and

effects identified in previous research manifest in technology-mediated

service?’For example, what do we know about the dynamics of busyness, or

of stress in technology mediated service? And what do we know about

employees expressing emotions or recognizing customer emotion in

technology mediated service? We currently know very little. And it is critical

to develop knowledge about this for effective management of modern day

customer service. (Rafaeli)

Closing the feedback loop and

innovation management

.Closing the feedback loop; that is, how can service organizations leverage

the knowledge and experiences their service employees more effectively? In

fact, building on the notion of service co-creation, we can say that, in many

cases, service employees gain a solid understanding of their customers’

needs, circumstances, organizational requirements, resources, etc. (e.g.,

Wirtz, Tambyah, & Mattila 2010). Hence, service employees can function as

‘proxies for their customers’and as such be involved in management tasks,

in particular in the area of service innovation (trend scouting, generating

ideas for new services, idea selection, etc.). Frontline employees can be an

incredible source of knowledge and a huge potential for innovation

management that is rarely tapped in a structured way. Hence, identifying

possibilities for opening up this source of knowledge and innovation, while

at the same time not overloading frontline employees with yet another

burden, is an interesting topic for further research. So far, we have seen a

couple of approaches in the area of Enterprise 2.0 (e.g. forums, crowd voting,

wikis, and idea contests). However, their success and sustainable adoption

has been moderate. Recently, new approaches have been tested such as

enterprise crowdsourcing (SAP, LEGO), or enterprise crowdfunding (IBM),

serious games, and participatory budgeting. It would be interesting to

conduct rigorous research on the contexts in which these different

approaches are effective. (Feldmann)

778 J. WIRTZ AND C. JERGER

Theme 4: emotional labor

Being emotional, sensitive, and thoughtful is a natural behavior for some service employ-

ees and not for others –not all employees feel the same way when operating at the front-

line, and further research should explore this more deeply (Schneider). Regarding the

customer service experience, research has not yet explored the different dimensions of

emotional labor that can be distinguished, and how these dimensions differ in their inten-

sity in different services (e.g. low- versus high-emotion services (Berry); one-time and

ongoing service encounters, and online versus offline interactions (Grandey)). Employees

are likely to deal differently with emotional labor in, for example, providing service via chat

functions, whereby ‘faking emotions’might feel very different compared to personal

service contexts (Grandey). Future research should also examine the long-term effects

of employees serving in a high emotional labor context. In particular, how does emotional

labor take over from time to time at work, and does this perhaps transfer to the employees’

personal life as well and affect their overall well-being (Yurko)?

Theme 5: dealing with rude customers

Managers need to better prepare their frontline employees to respond to offensive custo-

mers, and research needs to focus on helping to develop effective strategies (Berry),

including employee training (Schneider). The ‘service with a smile’premise should get

questioned in such situations, as it is important not to tolerate customer mistreatment

directed at employees and to take care of frontline employees’job satisfaction and

health (Grandey). More research is needed to better understand how managers can

encourage positive and discourage negative customer behaviors in service encounters

(Grandey). Moreover, service encounters usually include dyads or triads between employ-

ees and customers, and require a more dynamic or cyclical research approach than used in

the majority of past studies (Grandey).

One example is Zappos which trains its employees in empathy to help resolve conflicts

with customers at the frontline before they escalate (Wolske). Zappos feels that empathy is

critical, and more research should focus on the empathy in hiring and training of employ-

ees (Wolske). Furthermore, future work should explore deeper how negative employee

experiences with one rude customer carry over to the next service interaction (Grandey).

Theme 6: impact of technology

Interactions between employees and customers are increasingly mediated by technology.

The role of technology complicates service work for employees, as it is more difficult for

them to fully understand their customers’needs, and customers can easier monitor the

work of employees due to greater transparency (Rafaeli). Furthermore, future research

could focus on how to integrate service employees and robots and other technologies

such as the Internet of Things, and where service delivery will happen in a largely auto-

mated world (Yurko). These changes may mean that customer demands on employees

increase, and the status of service jobs might change (Grandey). In addition, service

employees increasingly have to handle three parties: their manager, customers, and tech-

nology, which will change the job requirements, skills for hiring, and training (Rafaeli).

THE SERVICE INDUSTRIES JOURNAL 779

Research is needed to better understand the effects technology will have on frontline

employees.

Conclusions

This literature review shows that the quality of a service organization’s people is crucial for

its market success and financial performance. However, boundary-spanning frontline jobs

are challenging, they often come with role conflict and emotional labor. Successful service

organizations address those challenges and are committed to the effective management

of HR, including best practices related to recruitment, training, empowerment, service

delivery teams, employee motivation, and creating a strong service culture, climate, and

effective service leadership. Excellent HR strategies with strong service leadership often

result in a sustainable competitive advantage as it seems harder to duplicate high-per-

forming human assets than any other corporate resource (Wirtz & Lovelock, 2016, p. 443).

For each main section we presented expert opinions on new research opportunities

with high potential managerial relevance and we highlighted six main themes in the

last section. We hope that this literature review combined with the expert interviews

will encourage further research on the effective management of service employees. It is

a fascinating and important topic that warrants the sustained emphasis of academic

service research.

Acknowledgements

The literature review section of this article was adapted and updated from Jochen Wirtz and Chris-

topher Lovelock (2016), Services Marketing: People, Technology, Strategy. 8th edition, World Scien-

tific. The authors gratefully acknowledge the valuable feedback provided by Eileen Bridges, Editor of

Service Industries Journal and Professor at Kent State University, Michael Frese, Amy Yi Ou and Sam

K.C. Yam, from the National University of Singapore, David Bowen from Thunderbird School of Global

Management, Richard Chase from USC Marshall School of Business, and Heather Yurko from Cisco.

Disclosure statement

No potential conflict of interest was reported by the authors.

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The roles of employee-employee collaboration and employee- customer collaboration in fitness service innovation: a comparison of frontline and non-frontline employees

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Jun 2023

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Full-text available

Aug 2023

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High-involvement work practices, work engagement and their effects on bank employees’ turnover intentions: The moderating role of functional competence

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May 2023
Int J Bank Market

Purpose- This study proposes and examines a research model where work engagement mediates the impacts of high-involvement work practices (HIWPs) on bank employees’ turnover intentions. Specifically, the paper assesses: (a) the effects of empowerment, information sharing, rewards, and training on work engagement and turnover intention, (b) work engagement as a mediator of the effects of these HIWPs on turnover intention (c) and functional competence as a moderator of the effects of these HIWPs on work engagement. Design/methodology/approach- An online survey was employed to gather data from 343 employees working in commercial banks in Bangladesh. We applied partial least squares structural equation modeling to assess the aforesaid linkages. Findings- Empowerment and information sharing increase bank employees’ work engagement, while training and rewards reduce their proclivity to leave. Work engagement partly mediates the relationships of empowerment and information sharing to turnover intention. Functional competence moderates the relationship between three HIWPs (empowerment, information sharing and rewards) on work engagement. Originality/value- The paper examines the association between HIWPs and turnover intention, which has been subjected to little empirical inquiry among bank employees during a crisis (e.g., Covid-19 pandemic). The paper provides new insights into the underlying mechanism linking HIWPs and turnover intention and highlights the moderating effect of functional competence. Additionally, the study offers new knowledge on the impact of the pandemic on bank employees’ HIWPs. Finally, our paper used data gathered from bank employees in Bangladesh, which is an underrepresented Asian country in the extant service research. Keywords High-involvement work practices, Turnover intention, Job demands-resources theory, Work engagement, Functional competence. Paper type Research paper

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Jul 2023

Intelligent Automation in form of robots, smart self-service technologies, wearable technologies, software and systems such as machine learning (ML), generative artificial intelligence (AI) such as ChatGPT, and the metaverse are increasingly adopted in a wide range of customer-facing service settings. The shift toward robot-and AI-powered services will lead to improved customer experiences, service quality, and productivity all at the same time. However, these also carry ethical, fairness, and privacy risks for customers and society. In this opinion piece, we discuss the implications of the service revolution for service firms, their marketing, and their customers, and provide avenues for future research opportunities.

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Mar 2023

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Feb 2023

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Full-text available

Jan 2023

Individuals with a high school education represent the largest subset of the U.S. workforce. However, little is known about the employer expectations of these individuals, particularly in the area of soft skills—also known as 21st‐century skills. Online job advertisements offer useful data for examining these expectations, as they may supplement employer survey data and reflect actual recruitment practices. Our analysis of 68,505 online job advertisements suggests that employers hold generally lower expectations for the soft skills of high school–educated individuals than they do for postsecondary‐educated individuals. However, employer expectations for two soft skills—professionalism and customer service skills—appear to be substantially higher for high school–educated individuals than for postsecondary‐educated individuals. Additional results highlight similarities and differences within the high school–educated workforce across nine workplace industries. We discuss the implications of these results not only for high school–educated individuals and the organizations that employ them but also for practitioners and educators charged with assessing and providing training for these skills.

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Jul 2023

Abdullah AKGÜN

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Article

Feb 2023
J SERV MANAGE

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Feb 2023

Technology has been expanding the service encounter concept. Avatars, including virtual and robotic avatars, have been gaining popularity as an emerging technology to generate more human-like and even enhanced remote interactions in technology-mediated service encounters. However, service researchers have paid lesser attention to human-controlled avatar technologies compared to service robots as autonomous avatars. In response to the emerging business and research interests, the technology-mediated service encounter model needs to be updated by integrating avatar technologies. To address this gap, this study develops a conceptual framework of avatar-mediated service encounters. This concept amalgamates features of traditional technology-mediated service encounters and service robots from the aspects of service flexibility and interaction modality. The applications of avatar technologies are categorized based on two axes – user type and avatar embodiment type – and the impacts and research agenda are outlined for each category. The proposed framework contributes to improving remote service experiences and realizing resilient service workplaces.

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Full-text available

Dec 2012

The book consists of nine chapters explaining the concept of Good to Great. Starting from emphasizing that “good is the enemy of great”, Jim Collins provides great explanations as well as arguments of why his concept is very important for leaders who want to be successful in their efforts of building “enduring results” of their companies, organizations, or institutions. He in detail explains four principles underlining the framework of good to great. There are disciplined people (level 5 leadership and first who, then what concepts), disciplined thought (confront the brutal facts and the Hedgehog concepts), disciplined action (culture of discipline and the flywheel concepts), and building greatness to last (clock building, not the time telling and preserve the core/stimulate progress concepts). For further analysis of the Good to Great, I will shortly summarize the concept of how to make something good to be great explained in the book in the following section. I will also conclude this paper by commenting on the concept as my critique toward the theory of Good to Great.

Low self-control takes flight: The association between indicators of low self-control and imprudent airline passenger behavior

Article

Full-text available

Dec 2016

Ryan Charles Meldrum

A large body of research finds that low self-control is associated with a variety of antisocial behaviors and undesirable outcomes. Yet, several behavioral domains remain unexplored. The purpose of the current study is to expand the boundaries of the literature concerning the behavioral outcomes of low self-control by examining its association with the likelihood that individuals will engage in imprudent behavior when flying on airplanes. To consider this, survey data was collected from a U.S. sample of 750 adults. Results indicate that, controlling for a host of demographic characteristics and one's frequency of flying, individuals who are lower in self-control are more likely to report they would engage in a range of imprudent behaviors when flying. This association was particularly evident when the analysis was focused on the self-centeredness dimension of low self-control. Implications of this study and directions for future research are discussed with regard to the potential for low self-control to account for a very wide variety of behaviors not directly associated with crime. Note: This study was crowdfunded through the platform gofundme.com.

The Effect of Perceived High performance Human Resource Practices on Business Performance: Role of Organizational Learning

Article

Full-text available

May 2016

The primary purpose of this study is to examine the effect of high-performance human resource (HR) practices, that is, extensive training, performance management, performance appraisal, performance based compensation, empowerment and competency development, on business performance of employees in telecommunication sector. Further, the role of the organizational learning as a mediator between high-performance HR practices and business performance has also been explored. Census method has been used for data collection from employees working in telecommunication sector in Jammu and Kashmir (North India). Reliability and validity have been proved with the help of confirmatory factor analysis (CFA). Structural equation modelling (SEM) has been used for hypotheses testing. Results indicate that HR practices positively affect business performance. Further, organizational learning act as a mediating variable between high-performance HR practices and business performance. The managerial implications have also been discussed.

Conceptualizing resistance

Conference Paper

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Dec 2004

Recently, there has been a rapid proliferation of scholarship on resistance but little consensus on its definition. In this paper, we review and synthesize the diverse literatures that invoke the concept of resistance. This review illuminates both core elements common to most uses of the concept and two central dimensions on which these uses vary: the questions of whether resistance must be recognized by others and whether it must be intentional. We use these two dimensions to develop a typology of resistance, thereby clarifying both the meaning and sociological utility of this concept.

Developing customer-conscious employees at every level — internal marketing

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