Managing service employees: literature review, expert
opinions, and research directions
and Christina Jerger
Department of Marketing, National University of Singapore, Singapore;
Ingolstadt School of Management,
Catholic University of Eichstaett-Ingolstadt, Ingolstadt, Germany
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.
Received 24 August 2016
Accepted 27 December 2016
Service employees; employee
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,
© 2017 Informa UK Limited, trading as Taylor & Francis Group
CONTACT Jochen Wirtz email@example.com Department of Marketing, National University of Singapore, 119245
THE SERVICE INDUSTRIES JOURNAL, 2016
VOL. 36, NOS. 15–16, 757–788
& 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
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 &
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,
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 &
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
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-
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
.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
.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.
.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
.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?
.To help managers make better decisions, we might question the expectation that employees always
provide ‘service with a smile’, and instead set expectations to show value for both customers and
employees. This means compensating employees better for effortfully maintaining positive interactions
with customers, which makes such labor less dissatisfying, and having no tolerance for customer
mistreatment of employees. Taking care of the financial and social experience of the high proportion of
workers in service is also likely to improve their health and home lives. (Grandey)
.What is required in different types of service jobs to prevent burnout? (Berry)
.One of the challenges in conducting service research is that there are dyads (customer-employee) and
triads (customer-employee-supervisor/coworker) that are constantly changing. Although a few studies
have been successful in obtaining both employee and customer perceptions of the same interaction,
obtaining customer reactions to the same employee (and vice versa) repeatedly over time is challenging.
But this would provide insights about some recent theoretical models that take a dynamic and cyclical
approach to service interactions. How does experiencing a friendly (or rude) service interaction affect the
customer after they leave the store –do they ‘pay it forward’? To what extent do experiences from one
customer carry over to the next for employees? (Grandey)
.We know quite a bit about employees’perception that customers mistreat them, but very little about (a)
how that matches objective behaviors by customers, (b) how positive customer behaviors affect the
reactions, and (c) how managers can encourage positive and discourage negative behaviors from
customers. Attending to customers as co-producers of service interactions seems fruitful, but I have seen
little work on this. (Grandey)
.The increasing availability of information and services online may increase the complexity of demands on
service employees, such that cognitive skills and training are even more necessary; and perhaps the status
of these jobs will similarly increase. More research is needed on this topic as the existing evidence is
scenario-based or perceptual, and mostly negative in focus. (Grandey)
THE SERVICE INDUSTRIES JOURNAL 763
Getting HR right definitely starts with recruiting the right people, which includes compet-
ing for applications from the most suitable candidates in the labor market and then select-
ing the best candidates from this pool for the specific jobs at hand.
Service organizations have a brand in the labor market, and potential candidates prefer
organizations that are known to be good to work for and that have an image that fits
their own values and beliefs (Andreassen & Lanseng, 2010). Job seekers regularly approach
current and former employees of an organization to learn about the working climate, sal-
aries, benefits, and even interview questions (Keeling, McGoldrick, & Sadhu, 2013). All of
this means that an organization has to first compete for talent market share (O’Reilly III
& Pfeffer, 2000, p. 1).
To effectively compete in the labor market requires an attractive value proposition for
potential employees. This includes having a positive image as an employer, being seen as
delivering high-quality products and services, being seen as good corporate citizens and
engaging in relevant corporate social responsibility (Korschun, Bhattavharya, & Swain,
2014), and having a reputation of the best employees already working in the firm
(McCord, 2014), which together make employees feel proud to be part of the organization
(Wirtz, Heracleous, & Pangarkar, 2008). Finally, reasonable compensation is another cri-
terion needed to be perceived as a preferred employer (Heskett et al., 2015, p. 82). The
offered compensation packages cannot be below average because it would violate appli-
cants’fairness perceptions; it takes a salary in the range of the 60th to 80th percentile of
the market to attract top performers to top organizations, less well-known organizations
will have to pay higher salaries (Wirtz & Lovelock, 2016, p. 417).
Figure 1. The service talent cycle. Source: Adapted from Wirtz and Lovelock (2016, p. 416).
764 J. WIRTZ AND C. JERGER
Outstanding service employees tend to have qualities that cannot be taught. That is, these
qualities, such as energy, charm, and work ethics, are intrinsic which makes these employ-
ees so valuable to hire (Fromm & Schlesinger, 1994). Furthermore, recruiters should favor
candidates who are customer-oriented by nature (Rafaeli et al., 2008). As emphasized by
Collins (1999, p. 77) ‘the right people are those who would exhibit the desired behaviors
anyway, as a natural extension of their character and attitude, regardless of any control
and incentive system.’Typically, this would include hiring people with a high level of extro-
version, conscientiousness, and agreeableness, and a low level of neuroticism (e.g. Barrick
& Mount, 2000; Ekinci & Dawes, 2009; Hopp et al., 2010; Judge, Woolf, & Hurst, 2009). Fur-
thermore, service organizations might want to hire employees who are high on personal
control as they experience ‘service with a smile’and emotional labor as less stressful
(Grandey et al., 2005).
However, there are no ‘perfect employees.’Different positions in different organizations
are typically best filled by employees with different skills, serving styles, and personalities.
Brands have their own values and beliefs, and a good employee-brand fit should be
ensured. That is, it should be natural for frontline employees to deliver the service in a
way that is congruent with the organization’s image, and the customer should perceive
the employee’s behavior as authentic (Löhndorf & Diamantopoulos, 2014; Sirianni et al.,
2013). Furthermore, employees have mental models regarding the meaning of customer
service, which can include satisfying customers’needs efficiently, filling the designated
sales quota, and forming a mutually beneficial relationship with customers. The mental
model of employees should further fit the organization’s marketing strategy and position-
ing (Di Mascio, 2010).
Ideally, the recruitment and selection processes are explicitly designed to encourage a
good fit between employees, the brand and the marketing strategy, which leads to
employees having better identification with the brand and smaller skills gaps (Hurrell &
Scholarios, 2014), and lower employee turnover intentions (Jung & Yoon, 2013). A good
employee fit can be achieved by presenting key brand attributes in recruitment advertise-
ment, encouraging potential candidates to reflect on their fit with the brand and market-
ing strategy in job interviews, designing selection tests that convey brand values and
marketing strategy, further encouraging employees to make a self-assessment of their
fit, and ensuring that recruiters are proactively looking out for fit and potential misfit
when selecting employees (Hurrell & Scholarios, 2014; Wirtz & Lovelock, 2016, p. 419).
Tools to identify the best suited candidates
A number of tools are available to identify the candidates with the best fit; widely used
approaches include interviews, personality tests, observations, and realistic job previews
(Bateson et al., 2014; Schneider & Bowen, 1995).
First, successful recruiters like to use more than one interviewer and build structured
interviews around job requirements to enhance their reliability and validity (Chapman &
Zweig, 2005). Using more than one interviewer leads to interviewers being more careful
in their assessments and it reduces the ‘similar to me’bias of interviewers (Lin, Dobbins,
& Farh, 1992; Wirtz & Lovelock, 2016, p. 420).
THE SERVICE INDUSTRIES JOURNAL 765
Next, personality tests help to assess how a candidate’s traits fit the ones required for a
particular position. There is a large body of literature on how to select employees based on
their personality and personality traits. For example, willingness to treat customers with
consideration, courtesy and tact, perceptiveness of customer service needs, and ability
to communicate effectively with customers can be measured and used for selection
(e.g. Brown, Mowen, Donovan, & Licata, 2002; Kusluvan, Kusluvan, Ilhan, & Buyruk, 2010;
Liao & Chuang, 2004; Papadopoulou-Bayliss, Ineson, & Wilkie, 2001; Tews, Stafford, &
Tracey, 2011). Usually, hiring decisions based on personality tests tend to be accurate,
especially regarding the identification and rejection of unsuitable candidates (Bateson
et al., 2014), and analytics are increasingly used to identify the characteristics of top per-
formers in any given position (Davenport, Harris, & Shapiro, 2010).
Furthermore, good hiring decisions are often based on the observed behavior of can-
didates rather than the words recruiters hear in job interviews. As expressed by Wooden
(1997, p. 66), ‘Too often, the big talkers are the little doers.’Behavior can be observed by
using behavioral simulations and assessment center tests using standardized service situ-
ations. Some service organizations let candidates know the realities of the job during the
recruitment process by asking them to ‘try on the job.’This allows candidates develop rea-
listic expectations of their potential new job (Schlesinger & Heskett, 1991) and recruiters
can observe how candidates respond to the job’s realities and assess their fit to job
requirements (Berry, 1995). Unsuitable candidates often withdraw their application if
the job does not fit.
Finally, if behavior cannot be observed, past behavior and performance tend to be
good predictors of future performance. For example, applicants who have won service
excellence awards, received many compliment letters, and have great references from
past employers are likely to be excellent candidates for a similar position as these are
good predictors of the future performance of service employees (Wirtz & Lovelock,
2016, p. 420).
Recruitment-related research opportunities with a high potential impact on managerial
practice suggested by the experts are provided in Table 2.
After recruiting the right employees it is critical to enable them which requires training and
development, internal communications, empowerment, and team building (Schneider &
Training and internal communications
Excellent service organizations show a strong commitment to training and internal com-
munications, which lead to better-skilled employees that deliver higher quality, customer
satisfaction, and sales (Aragón-Sanchez et al., 2003). As Schneider and Bowen expressed it,
‘the combination of attracting a diverse and competent applicant pool, utilizing effective
techniques for hiring the most appropriate people from that pool, and then training the
heck out of them would be gangbusters in any market’(1995, p. 131). Key aspects gener-
ally covered in training include (1) organizational culture, purpose, and strategy, (2) inter-
personal and technical skills, (3) coping mechanisms, and (4) product knowledge.
766 J. WIRTZ AND C. JERGER
Organizational culture, purpose, and strategy
Common recommendations include: (1) start strong and focus on getting emotional com-
mitment from new hires to the service firm’s core strategy; (2) promote and communicate
core values such as commitment to service excellence, responsiveness, team spirit, mutual
respect, honesty, and integrity; (3) use managers to teach, and focus on ‘why,’‘how,’and
‘what,’rather than on the specifics of the job (Berry, 1999, p. 161; Simo, Enache, Sallan, &
Interpersonal and technical skills
Interpersonal skills tend to be generic across service jobs, and include reading customers’
needs, attentive listening, effective communications, understanding body language, and
visual communications skills such as making eye contact and displaying appropriate facial
expressions. Technical skills include the knowledge related to processes (e.g. how to handle
a return), equipment (e.g. how to operate a cash machine), and rules and guidelines related
to service processes (e.g. how to recover from a service failure). Both interpersonal and tech-
nical skills are necessary for high job performance(Tansik, 1990; Wilder, Collier, & Barnes, 2014).
In addition to interpersonal and technical skills, training should include coping mechan-
isms. These include on how to take complaining customers professionally, not personally,
and to help employees toward engaging in deep acting (Huelsheger & Schewe, 2011).
Table 2. Research opportunities related to recruitment.
Topics Expert Comments
Candidate pool .How do the characteristics of a preferred employer vary depending upon type of service
organization (e.g. healthcare versus leisure, or profit versus non-profit organizations)?
.Knowledge that a company is an excellent service provider will make a company a
preferred employer. The logic is that if a company does well by its customers it will do
well by its employees too, but research is required to understand the nuances here. For
example, which kinds of service settings attract which kinds of recruits, and what role
does company advertising play in attracting potential employees? (Schneider)
.Studying connections between S&P500 companies and how they use their brand to
recruit –how does the brand resonate with newly hired employees? (Yurko)
Selection criteria .How do the personal success predictors vary for service providers in different types of
service organizations? (Berry)
.It is a myth that getting people with the right attitude is all it takes. People who have
the required skills, knowledge and ability to do the job is definitely required. Abilities
are difficult to teach so you have to hire for those. Customer orientation is a valid
personality trait and can be used to get close to the attitude piece, but attitude will be
helped by the environment (see service climate). Most service businesses have bought
the Southwest mantra uncritically, but research is definitely required to establish how
much ability matters relative to attitude in delivering service quality. (Schneider)
.Re-defining what is ‘right’for the services industry –servant leadership, team-focused/
highly collaborative employees, boundary spanners, T-shaped people. How do we move
education in this direction? How can we measure how critical these skills are for
profitability and differentiation …tying back into ‘be the preferred employer’? (Yurko)
Selection tools .It is likely that job simulations where behavior can be observed work better than paper
and pencil tests, but research is required to clarify how well each tactic works relative to
the other. (Schneider)
Other topics related to
.Is it better to hire family and friends, or to keep this element out of the workforce?
.How does positive onboarding/socialization experiences interact with the positive
effects of hiring the right people? (Schneider)
THE SERVICE INDUSTRIES JOURNAL 767
To deliver excellent service, employees need to be able to explain goods and services to
customers effectively. For example, at service outlets of a mobile operator, employees
need to be able to answer questions about subscription plans, value added services, con-
tract details, phone features, and many other aspects of the operators’services including
maintenance and repair, and payment options.
In addition to an effective training platform, culture has to be shaped by strong communi-
cation efforts. Internal marketing and communications play a vital role in maintaining and
nurturing a corporate culture founded on specific service values, and establishing a strong
service orientation for the entire organization (George, 1990; Rafiq & Ahmed, 2000).
Leading service organizations use multiple tools to build their service cultures, including
internal marketing and training, creating and sharing core principles, company events
Objectives and outcomes of training and internal communications
The aim of training and communications is to achieve observable changes in employee
behavior and decision making. If employees do not apply what they learn, the investment
will not yield returns. Here, supervisors play a crucial role by following up regularly on
learning objectives and reinforcing key training lessons (e.g. on how to handle complaints
and service recovery).
The outcomes of training and communications are to make service employees feel
more professional, helps overcome their (self)-image of working in low-end jobs and
enhance the customer’s service experience (Bettencourt & Gwinner, 1996). For example,
waiters who know about food, ingredients, cooking, wines, dining etiquette, and how to
effectively interact with satisfied and dissatisfied customers, feel professional, have a
higher self-esteem and are respected by their customers (Wirtz & Lovelock, 2016,
p. 428). As such, training and internal communications can be highly effective in reducing
person/role stress, and in enabling and energizing frontline employees to deliver service
excellence and high productivity (Aragón-Sanchez et al., 2003). Finally, training and devel-
opment combined with a good career development program has been shown to make
employees feel that they are valued and taken care of, and in turn motivated them to
meet customers’needs (Garlick, 2010; Hinkin & Tracey, 2010; Jackson & Sirianni, 2009).
The research opportunities related to training and internal communications are listed in
After being seen as a preferred employer, having selected the right candidates, and having
trained them well, the next logical step is empowering employees to make appropriate
decisions about customizing service delivery and finding solutions to service problems
(Chebat & Kollias, 2000; Lashley, 2001). It is important that frontline employees are self-
directed as they operate frequently on their own and face-to-face with their customers,
and it is difficult for supervisors to closely monitor them (Yagil, 2002). Furthermore,
many legendary stories of employees who walked the extra mile for a customer, recovered
768 J. WIRTZ AND C. JERGER
from a service failure, or avoided some kind of disaster for a customer would not have
been possible without empowerment. Research has linked high empowerment to
enhanced customer satisfaction (Bowen & Lawler III, 1992; Bradley & Sparks, 2000; Raub
& Liao, 2012; Schepers, Falk, de Ruyter, de Jong, & Hammerschmidt, 2012). Further,
empowerment was positively associated with employee service-sales ambidexterity (Yu
et al., 2012) and found to drive growth in small firms (Altinay et al., 2008).
Levels of empowerment
High levels of empowerment are likely to be important when: (1) The service is personal-
ized and customized; (2) when the organization differentiates on service; (3) when there
are extended relationships with customers; (4) when complex and non-routine technol-
ogies are used; and (5) when service failures tend to be non-routine (Bowen & Lawler III,
1992). However, when there is low heterogeneity of services, employee empowerment
can be counterproductive and lead to lower productivity (Chebat & Kollias, 2000). Further-
more, good judgment is important as it is a fine line between going the extra mile for a
customer and service sweethearting, such as, unnecessarily giving freebies to boost a
unit’s satisfaction rating, or to avoid a confrontation with a customer who is in the
wrong (Brady, Voorhees, & Brusco, 2012).
Requirements for empowerment
Empowerment is based on the involvement (or commitment) model which assumes that
employees will generate ideas and make good decisions if they are properly socialized,
trained, and informed. The model also suggests that employees are capable of self-
control and self-direction, and can be intrinsically motivated to perform. Specifically,
Schneider and Bowen (1995, p. 250) emphasize that ‘empowerment isn’t just “setting
the frontline free”or “throwing away the policy manuals”. It requires systematically redis-
tributing four key ingredients from the top downwards throughout the organization.’
These four ingredients are: (1) Information about the performance of the organizational,
team, and individual (e.g. operating results and measures of competitive performance);
(2) Knowledge that enables employees to understand and contribute to organizational,
team, and individual performance (e.g. problem-solving skills); (3) Power to make decisions
Table 3. Research opportunities related to training and internal communications.
Topics Expert comments
Training .Service employees must be equipped with the skills necessary to perform the job right the
first time, especially if they are in constant interaction with customers. Constant interaction
does not permit for do-overs, so they must be behaviorally equipped to handle a wide variety
of difficult situations. The training must be behaviorally-based and not just lectures. However,
what kind of behaviorally-based training is best for which kinds of situations requires
.The efficacy of ethnomethodological studies in improving service delivery warrants research.
For example, how much does observation and shadowing customers improve the
performance of service employees? (Yurko)
.What are the opportunities to do ‘internal’branding of the service to shape service providers’
.Research is needed to establish which modes of communication (e.g. emails versus face-to-
face meetings; one-on-one meetings versus team meetings) are superior. (Schneider)
.Does it matter who communicates (level of executive/team member) regarding a team’s
culture, foundational beliefs, and behaviors that will be rewarded? (Yurko)
THE SERVICE INDUSTRIES JOURNAL 769
that influence work procedures and organizational direction at the higher level (e.g.
through self-managing teams and quality circles), and transaction-specific decisions at
the micro level (e.g. decisions regarding customization for a customer and service recov-
ery); and (4) Rewards based on organizational, team, and individual performance, such as
bonuses and profit sharing.
Pushing these four features to the frontline empowers and rewards high performers,
fosters a culture of performance, and makes service firms more profitable overall
(Girotra & Netessine, 2014; Netessine & Yakubovich, 2012). Furthermore, empowered
employees can become an important source of organizational learning and innovation
(Ye, Marionova, & Singh, 2012), especially when employees get involved in the design
and implementation of new services (Cadwallader, Jarvis, Bitner, & Ostrom, 2010).
The research opportunities related to empowerment are shown in Table 4.
Service delivery teams
To provide customers seamless service, employees are often required to operate in teams,
usually across functions. Effective teams, and especially the team leaders, support com-
munication among their team members, share their knowledge, and drive team align-
ment. As many service teams are set up as small, self-managed units, they typically take
on more responsibility for their activities, which in turn, requires less supervision compared
to more traditional functionally organized customer service units (de Jong, de Ruyter, &
Lemmink, 2004). Furthermore, self-managed teams have been shown to set higher per-
formance targets for themselves than their supervisors would; within a well-functioning
team, the pressure to perform tends to be high (Berry, 1995). Finally, a positive team
environment has been shown to result in more positive service outcomes (Lin & Lin,
2011) and in higher sales growth (Batt, 2002).
Generally, too little attention is placed on hiring employees who work well in service
teams. This is often as important as how good people work on their own, and individual
stars can be outperformed by others through superior teamwork (O’Reilly III & Pfeffer,
2000, p. 9).
It is important to make teams successful, especially so if employees are not well prepared
to work in teams. The skills needed for teamwork include, for example, listening to others,
cooperation, coaching and encouraging one another, an understanding of how to air
differences, tell one another hard truths, and ask tough questions. All of these skills
require training (Berry, 1995, p. 225; Schneider & Bowen, 1995, p. 141).
Table 4. Research opportunities related to empowerment.
Topics Expert comments
Empowerment .What is the relationship between empowerment levels and role conflict intensity? (Berry)
.Research must establish the degree to which companies, by their policies, permit staff to earn
autonomy/become empowered in their service behavior. Is it possible that people need to earn
empowerment by their own behavior and that empowerment is a reward, not a right? (Schneider)
.The difference between empowering new versus seasoned employees (those with more knowledge
know how to best wield their power) has not been researched yet. (Yurko)
.How can experience and training tie into empowerment under ‘do the right thing for our customers
and our company’? (Yurko)
770 J. WIRTZ AND C. JERGER
Furthermore, a team structure needs to be established that helps teams to succeed,
which includes identifying what the team should achieve, selecting members with
care based on required skills, monitoring the team and providing feedback, keeping
team members informed of goal progress and achievement, rewarding them for effort
and performance, and coordinating and integrating them with other teams, depart-
ments, and functions to achieve the overall organizational objectives (Osheroff, 2007,
p. 25/61). Finally, it is necessary to achieve congruent perceptions between service
teams and their leaders regarding on aspects, including service leadership, service com-
mitment, and service systems, to strengthen the overall team performance (Benlian,
Integration across departments and functional areas
Service employees report lacking interdepartmental support as a crucial barrier for
them for delivering satisfaction to their customers (Sergeant & Frenkel, 2000). To reduce
this barrier, cross-functional teams with responsibility to serve their customers from
end-to-end can be deployed as kind of self-managing teams (de Jong et al., 2004), and
frequently hold a coordinating role for communication and interaction (Melton & Hartline,
Other ways to reduce conflicts between departments, break down potential barriers,
and enhance cooperation include: (1) job rotation and transfers to other departments
to support the development of a more holistic, organization-wide perspective, and
achieve better integration across departments (Ortega, 2001); (2) establishment of
cross-departmental and -functional project teams to foster interdepartmental
cooperation; (3) creation of cross-departmental or -functional service delivery teams; (4)
appointment of individual employees to integrate specific objectives, activities, and pro-
cesses between departments, or even from a department in charge of service experience
management that integrates marketing and operations (Kwortnik & Thompson, 2009); (5)
use internal marketing and training, and integration programs; and (6) top management
commitment to ensure that the overarching objectives of all departments are integrated
(Wirtz & Lovelock, 2016, pp. 433–434).
Research opportunities highlighted by our experts that relate to teamwork are provided
in Table 5.
Motivation of service employees
Employee performance is a function of ability and motivation. Effective hiring, training,
empowerment, and teamwork attains able people for an organization; performance
appraisal and reward systems are key to motivating them (Schneider & Bowen, 1995).
Service employees must get the message that performing high-quality service is the
key to getting rewarded (Bowen & Johnston, 1999). Motivating and rewarding for
service performance retains well-performing employees and also reduces their job
stress (Bowen & Johnston, 1999; Chung & Schneider, 2002). If done well, employees
quickly understand that promoted colleagues are great service performers and that
those who do not deliver good services will not advance or even be let go (Wirtz & Love-
lock, 2016, p. 434).
THE SERVICE INDUSTRIES JOURNAL 771
Basic pay and performance bonuses
Basic pay generally is not a sustained and effective motivator for service employees, and
tends to provide mere short-term motivating (Hansen, Smith, & Hansen, 2002). However,
bonuses that are contingent on performance and have to be re-earned in every assess-
ment period tend to be more lasting in their effectiveness. Hansen et al. (2002) suggest
a differentiation between rewards and recognitions as they represent different employee
motivation mechanisms. Other, more lasting rewards include the job content itself, goal
accomplishment, and recognition and feedback.
Service employees are often satisfied and motivated simply by knowing that they are
doing a good job, and they feel good about themselves and like to reinforce that
feeling. This applies especially if a job includes a variety of activities, allows the completion
of whole and identifiable pieces of work, is seen as important in that it is seen as having an
impact on the lives of others, allows autonomy and flexibility, and provides direct feedback
about how well employees do their work (Frey, Bayón, & Totzek, 2013; Heskett et al., 2015;
Schneider & Bowen, 1995).
Feedback and recognition
Employees derive a sense of identity and belonging from the recognition and feedback
they receive from their customers, colleagues, and managers. If employees receive
acknowledgment for good work in addition to periodic formal performance appraisals,
they will be motivated to continue to deliver it. If done well, ‘service employee of the
month’–type of awards recognize excellent employee performance and can be highly
motivating (Wirtz & Lovelock, 2016, p. 435).
Furthermore, it can be motivating for service employees when they are in direct
touch with end-users and receive positive feedback from them (Nasr, Burton, Gruber,
& Kitshoff, 2014). Positive effects were observed even if employees just saw pictures
of customers or read stories of ‘wow’experiences customers had with their service
Table 5. Research opportunities related to service delivery teams.
Topics Expert comments
Service delivery teams .What are the characteristics of services that require high-performance teamwork? (Berry)
.Differences between teams with members that have rotated across departments and/or
through industries –will they perform better than those that have been in a position for
extended periods of time? (Yurko)
.If teams are required to serve customers, then the hiring of people who can work well
together, and training them as a team are required; there is no short-cut to teamwork
and research is needed to identify the parameters surrounding which kinds of people
require what kinds of training and feedback to produce superior teamwork. (Schneider)
Other topics related to
.The whole issue of ‘work from home’and ‘telecommute’as it relates to building service
teams requires research. What are the success factors for virtual service teams? (Kaufman)
.There are questions that need answers with regard to the relative merits of rewarding
individuals versus the teams of which they are a part when service is delivered by teams
and/or in team settings (e.g. call centers). So, do you reward the call center team or just
the individuals who work in the call center? (Schneider)
772 J. WIRTZ AND C. JERGER
Goals focus employee’s energy, and if well-communicated and mutually accepted, they
are effective and strong motivators, especially if they are specific, difficult but attainable,
and accepted by employees. Specific goals result in higher performance than no goals, or
vague goals (e.g. ‘do your best’), or goals that are impossible to achieve (Locke & Latham,
For effective goal setting, a number of issues should be considered (for a review see
Locke & Latham, 2002). When seen as important, achieving a goal is in itself a reward
and still can be used as a basis for providing rewards, including bonuses, feedback, and
recognition. Feedback and recognition from peers can be given faster and more
cheaply than financial rewards, and they provide the added benefit of gratifying employ-
ee’s self-esteem. Furthermore, progress reports about goal accomplishment (i.e. feedback),
and goal accomplishment itself ideally should be public (i.e. recognition) if they are to
satisfy employees’esteem needs. As long as the goal is specific, perceived as difficult
but achievable, and accepted by employees, goal pursuit will result in goal accomplish-
ment, even in the absence of other rewards. Finally, although goals should be specific,
they can be intangible (e.g. improved employee courtesy ratings) (Wirtz & Lovelock,
2016, p. 436).
To measure performance, Heskett et al. (2015) suggest a mixture of both financial and
non-financial measures –a balanced scorecard approach that includes employee, custo-
mer, and financial metrics. Here, the authors consider the employee portion of these
metrics (e.g. employee engagement, loyalty, and productivity) as the most important as
employees constitute the core part of service production and delivery (Heskett et al.,
2015, p. 95).
Research opportunities highlighted by our experts that relate to the motivation of
service employees are shown in Table 6.
Service culture, climate, and leadership
To deliver service excellence and achieve a competitive advantage, service organizations
have to build a strong service culture and climate, and the supporting leadership struc-
tures (cf. Hong et al., 2013).
Service organizations that strive toward delivering service excellence need to establish a
strong service culture that is continuously reinforced and developed by management to
achieve alignment with the firm’s strategy. A service culture concerns the basic assump-
tions and values that govern an organization related to customer service (Bowen & Schnei-
der, 2014; Schneider & Bowen, 1995). It includes the shared perceptions in the
organization, shared values about what is right and wrong, a shared understanding of
what works and what does not, and shared beliefs and assumptions about why these
beliefs are important, and shared styles of working and relating to others (Bowen & Schnei-
THE SERVICE INDUSTRIES JOURNAL 773
Essential of a strong service culture is the employees’belief that delivering service
excellence and outstanding customer value is important, and effective leadership
should bring out the employees’passion for delivering both. Some of the core values
Berry (1995) found in superior service organizations include excellence, innovation, joy,
teamwork, respect, integrity, and social profit. As such, it is the responsibility of the
leaders of these organizations to create a service culture with values that inspire, energize,
and guide service employees (Berry, 1995; Berry & Seltman, 2008).
Table 6. Research opportunities related to motivating service employees.
Topics Expert comments
Job content .Can routinized jobs be made more motivating, and if so, by what means?
Feedback and recognition .How should team accomplishments be recognized and celebrated? Is it better
to give informal feedback to staff or formal feedback, and how often should it
be done? (Schneider)
.When should we recognize service providers for excellent service individually,
and when as a team? Where is the payoff greatest? (Kaufman)
.At what point does feedback/recognition become meaningless? Whose
feedback provides the most meaning and motivation? (Yurko)
.If my workforce is global with different cultural preferences (e.g. individualistic
Americans and collective Asians) how do I implement an effective feedback
and recognition program across cultures? (Kaufman)
Goal achievement .How specific and challenging should service quality goals be and how should
accomplishment of those goals be recognized? Is money the best reward for
goal accomplishment? (Schneider)
.Does an achievement need to be publicly recognized in order to bring ‘closure’
to the goal? What kind of recognition is needed for short-, medium- and long-
term goals? (Yurko)
Other topics related to motivating
.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
.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
.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
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 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
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-
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
.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.
.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
.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.
.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
.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
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
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.
No potential conflict of interest was reported by the authors.
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