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Does employee satisfaction influence customer satisfaction? Assessing coffee shops through the service profit chain model

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Abstract

This study examines the interrelations between service climate, organizational identification, employee job satisfaction, and customer perceived value and satisfaction. To achieve this, we apply the service profit chain model to South Korea’s coffee shop industry. Data were collected from 263 employees and 973 customers in Daegu. The hypotheses were tested by conducting a path analysis to investigate the relationship between the variables. Organizational identification and job satisfaction were found to be positively correlated with each other. Additionally, job satisfaction was correlated with customer perceived value, which, in turn, was correlated with customer satisfaction. The findings suggest that a good work environment and service-related training can create a positive service climate for employees, which can subsequently improve customer satisfaction. This study is unique in its application of the service profit chain model on the coffee shop industry in Korea.

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... Agarwal & Gupta (2021) stated that an organization's success is threatened if its employees fail to accept its missions, goals, and objectives and fail to believe in what it stands for. Also, (Jiménez, 2018) stated that perceived organizational support affects employee engagement positively and employee engagement (Son et al., 2021). Kamaruddin et al. (2021) showed a positive effect on affective commitment and employee performance. ...
... (Pavithra & Deepak, 2021) added that performance is a result achieved by a person in carrying out the tasks assigned to him. Work performance is defined as the fulfillment of work-related tasks or skills by an employee (Son et al., 2021). Mulyasana et al., (2020) stated that performance is influenced by the quality and ability of employees, namely matters related to education/training, work ethic, work motivation, mental attitude, and physical condition of employees. ...
... The non-physical work environment includes the relationship between superiors and subordinates and relationships between co-workers. Indicators of the relationship between superiors and subordinates are the close relationship with superiors and transparency (Son et al., 2021). Laras et al. (2021) revealed that superiors do not give respect to subordinates, and superiors show rude behavior to subordinates. ...
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... So, a company needs to work on customer satisfaction. The coffee shop managers should conduct regular surveys to assess service quality and necessary improvements wherever required (son et al., 2021) [35] . Customer service and its quality are significant accomplishments in terms of business administration. ...
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Zaposleni imaju važnu ulogu u hotelijerstvu, imajući u vidu da se hotelske usluge pružaju direktno i lično, kao i da između zaposlenih i gostiju postoji visok nivo interakcija koje se u značajnoj meri odražavaju na percepciju kvaliteta usluga. Da bi se osiguralo pružanje kvalitetnih usluga, hotelske organizacije moraju imati zadovolјne zaposlene. Zadovolјstvo zaposlenih i kvalitet usluga opsežno su istraživani u uslužnim delatnostima, ali je svega nekoliko studija razmatrano u kontekstu hotelijerstva, koje su uglavnom bazirane na konceptu zadovolјstva gostiju, dok su izostala istraživanja o konceptu kvaliteta usluga kao višedimenzionalnog konstrukta. Kao rezultat toga, cilј istraživanja doktorske disertacije je da se na osnovu teorijsko-metodološkog i empirijskog istraživanja identifikuje uticaj zadovolјstva zaposlenih na kvalitet usluga u hotelijerstvu i to, pre svega, na neopoplјive komponente kvaliteta usluga koje su najvažnije u oceni kvaliteta, imajući u vidu da se zaposleni nameću kao klјučna odrednica kvaliteta usluga. Empirijsko istraživanje je sprovedeno u periodu od januara 2020. godine do juna 2021. godine u 93 hotela u Republici Srbiji. Prikuplјanje primarnih podataka vršeno je anketiranjem, a zbog ispitivanja uticaja zadovolјstva zaposlenih na percipirani kvalitet usluga, istraživanje je sprovedeno na dva uzorka, zaposlene i goste hotela. U istraživanju je učestvovalo 481 zaposlenih i 478 gostiju. Rezultati deskriptivne statističke analize pokazuju ambivalentnost po pitanju zadovolјstva zaposlenih i visoku percepciju gostiju o kvalitetu usluga koje zaposleni pružaju. Sa druge strane, rezultati testiranja hipoteza potvrdili su značajan i pozitivan uticaj zadovolјstva zaposlenih na percipirani kvalitet usluga u hotelijerstvu i pojedinačne neopiplјive komponente kvaliteta usluga kao što su pouzdanost, odgovornost i sigurnost. Na osnovu rezultata potvrđene su statistički značajne razlike u zadovolјstvu zaposlenih u zavisnosti od nivoa njihovog obrazovanja. Predstavlјena su ograničenja istraživanja koja treba uzeti u obzir prilikom tumačenja rezultata doktorske disertacije. Teorijski doprinos doktorske disertacije ogleda se u empirijskoj verifikaciji efekata zadovolјstva zaposlenih na percipirani kvalitet usluga u hotelijerstvu i pojedinačne neopiplјive komponente kvaliteta usluga kao što su pouzdanost, odgovornost i sigurnost. Rezultati doktorske disetacije pružaju i brojne praktične implikacije za menadžere u hotelijerstvu.
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This paper deals with services provided within an organization, outlining a model to measure internal customer satisfaction and perceptions of internal quality. Adapting the concept of the service profit chain which is used still frequently to illustrate the relationship between external customer satisfaction and economic success, this article proposes that the external service quality can be attained only after internal performance prerequisites have been investigated and optimized. Additionally, it introduces the concept of an internal service barometer, and presents the results of an empirical study to evaluate the relationships between internal service quality, internal customer satisfaction and internal customer retention.
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Relationships among 2 measures of job satisfaction, 1 measure of organizational climate, and 7 production and turnover indexes of organizational effectiveness were investigated in 50 life insurance agencies (N = 522). It was shown that (a) climate and satisfaction measures were correlated for people in some positions in the agencies but not for others; (b) people agreed more on the climate of their agency than they did on their satisfaction; (c) neither satisfaction nor climate were strongly correlated with production data; and (d) satisfaction but not climate, was correlated with turnover data. Implications of these data for research on climate and satisfaction as well as organizational change are discussed. (28 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Factor analysis, path analysis, structural equation modeling, and related multivariate statistical methods are based on maximum likelihood or generalized least squares estimation developed for covariance structure models (CSMs). Large-sample theory provides a chi-square goodness-of-fit test for comparing a model (M) against a general alternative M based on correlated variables. It is suggested that this comparison is insufficient for M evaluation. A general null M based on modified independence among variables is proposed as an additional reference point for the statistical and scientific evaluation of CSMs. Use of the null M in the context of a procedure that sequentially evaluates the statistical necessity of various sets of parameters places statistical methods in covariance structure analysis into a more complete framework. The concepts of ideal Ms and pseudo chi-square tests are introduced, and their roles in hypothesis testing are developed. The importance of supplementing statistical evaluation with incremental fit indices associated with the comparison of hierarchical Ms is also emphasized. Normed and nonnormed fit indices are developed and illustrated. (43 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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Organizational identification is defined as a perceived oneness with an organization and the experience of the organization's successes and failures as one's own. While identification is considered important to the organization, it has not been clearly operationalized. The current study tests a proposed model of organizational identification. Self-report data from 297 alumni of an all-male religious college indicate that identification with the alma mater was associated with: (1) the hypothesized organizational antecedents of organizational distinctiveness, organizational prestige, and (absence of) intraorganizational competition, but not with interorganizational competition, (2) the hypothesized individual antecedents of satisfaction with the organization, tenure as students, and sentimentality, but not with recency of attendance, number of schools attended, or the existence of a mentor, and (3) the hypothesized outcomes of making financial contributions, willingness to advise one's offspring and others to attend the college, and participating in various school functions. The findings provide direction for academic administrators seeking to increase alumni support, as well as for corporate managers concerned about the loyalty of workers in an era of mergers and takeovers.
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Purpose - to investigate the relationships between organizational identification, job satisfaction and turnover intention. Design/methodology/approach - extends social identity theory to employee identification with their organization, discusses the effect of organizational identity on job satisfaction, suggests that strong identification with the organization enhances motivation and positively influences job satisfaction, and depicts a model that links organizational aims and identity, employee organizational identification, job satisfaction, and job and task characteristics, to turnover intention and actual turnover. Validates the model by questionnaire survey of 358 German bank employees, 107 employees of a second German bank, 211 call-centre employees and 459 hospital employees. Findings - confirms that strong organizational identification does positively influence job satisfaction, finds this relationship in all four samples, and reports that employees who had left their organizations registered higher turnover intentions, lower identification and lower job satisfaction than colleagues remaining with the organization. Originality/value - demonstrates that managers need to create a sense of belonging.
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Past research has focused on the differential relationships of organizational and work group identification with attitudes and behavior. However, no systematic effort has been undertaken yet to explore interactive effects between these foci of identification. We predicted that in cases of positive overlap of identifications (i.e. high work group and organizational identification) identifications are more strongly associated with employee job satisfaction and extra-role behavior than when only one of the identifications is high—that is, the one identification augments the influence of the other. These hypotheses were tested and supported with data from two samples of bank employees (N = 358) and travel agency employees (N = 308).
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Purpose – The purpose of this paper is to identify the factors which determine the level of public employees' job satisfaction and as result help to have effective and efficient management system in the public sector, in developing countries such as Turkey. Design/methodology/approach – Based on theoretical considerations, a model was proposed linking the employee satisfaction and loyalty (ESL) constructs. The paper exhibits the findings of a satisfaction and loyalty survey of employment factors within the Turkish public sector. The survey was conducted in 2009 and covered 220 employees within the Istanbul Branch of a Social Security Institution in Turkey. A model was developed by including effecting factors of employee satisfaction, their relations and effects of employee satisfaction on employee loyalty. Partial least squares structural equation model was employed to test the model in the public insurance sector in Turkey. Findings – Data analysis reveals that there is a strong relationship between ESL in a branch of a public sector Social Security Institution in Turkey. Training and personal development was found the most effecting factor of customer satisfaction. The study also finds a positive relationship between working conditions and satisfaction. Originality/value – The paper reveals the relationship between the employee satisfaction and affecting factors in the public sector in Turkey. These factors are developed only incidentally in the public sector in Turkey. Human resource management (HRM) applications such as measuring employee satisfaction, performance development are widely used in private sector. Specifically, in developing countries such as Turkey, these applications are rarely used in the public sector. Therefore, the paper advocates the use of HRM applications in the public sector in a developing country.
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This article develops a model of how customers with prior experiences and expectations assess service performance levels, overall service quality, and service value. The model is applied to residential customers' assessments of local telephone service. The model is estimated with a two-stage least squares procedure through survey data. Results indicate that residential customers' assessments of quality and value are primarily a function of disconfirmation arising from discrepancies between anticipated and perceived performance levels. However, perceived performance levels also were found to have an important direct effect on quality and value assessments. Copyright 1991 by the University of Chicago.
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A set of foundation issues that support employee work and service quality is conceptualized as a necessary but not sufficient cause of a climate for service, which in turn is proposed to be reflected in customer experiences. Climate for service rests on the foundation issues, but in addition it requires policies and practices that focus attention directly on service quality. Data were collected at multiple points in time from employees and customers of 134 branches of a bank and analyzed via structural equation modeling. Results indicated that the model in which the foundation issues yielded a climate for service, and climate for service in turn led to customer perceptions of service quality, fit the data well. However, subsequent cross-lagged analyses revealed the presence of a reciprocal effect for climate and customer perceptions. Implications of these results for theory and research are offered.
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The authors develop and test a model of service employee management that examines constructs simultaneously across three interfaces of the service delivery process: manager-employee, employee-role, and employee-customer. The authors examine the attitudinal and behavioral responses of customer-contact employees that can influence customers’ perceptions of service quality, the relationships among these responses, and three formal managerial control mechanisms (empowerment, behavior-based employee evaluation, and management commitment to service quality). The findings indicate that managers who are committed to service quality are more likely to empower their employees and use behavior-based evaluation. However, the use of empowerment has both positive and negative consequences in the management of contact employees. Some of the negative consequences are mitigated by the positive effects of behavior-based employee evaluation. To increase customers’ perceptions of service quality, managers must increase employees’ self-efficacy and job satisfaction, and reduce employees’ role conflict and ambiguity. Implications for the management of customer-contact service employees and directions for further research are discussed.
Purpose The purpose of this paper is to empirically test the validity of the service-profit chain (SPC) in a restaurant company context to comprehensively explicate the relationship between organizational practices, employee attitudes with customer and financial outcomes. Design/methodology/approach The method used both questionnaire and company proprietary data to measure the predicted SPC outcomes through structural equation modeling. The research data were obtained from employees, customers and management at five restaurants in one casual theme restaurant chain in Australia. Findings The findings indicate that revenue may be a more appropriate outcome than profit in the SPC, that context and individual unit circumstances matter and that there may be a time lag between organizational actions, employee behavior, customer satisfaction and financial outcomes. Research limitations/implications Because of the nature of field research, there are limitations. As restaurants were added during the study, data per unit were impacted. Moreover, budgetary constraints limited the number of customer surveys. Nonetheless, the data set includes management, customer, employee and proprietary financial measures which are rarely available in the research literature. These data allow a thorough study of the SPC that provides both important findings and a model for future investigations into the SPC. Practical implications As the SPC is a widely cited model used to explain the linkages between managerial and organizational actions and financial outcomes as they work through employee interactions with customers, the findings suggest that the chain may have a more direct impact on revenue than profit. Moreover, the data strongly suggest that context matters as the unique context of the restaurants had important influences on financial outcomes. The findings also indicate that a time lag exists between managerial and organizational actions and financial outcomes, suggesting that it can take time for such actions to ripple through the SPC. Originality/value Structural equation modeling and standardized measures allowed the authors to overcome prior limitations in SPC research. Moreover, SPC researchers seldom have access to the proprietary data that enabled a test of the entire SPC. Consequently, this study contributes new insights into this classic model’s value in predicting and explaining financial outcomes resulting from the actions of an organization’s leadership influencing employee behavior toward customers in the restaurant industry.
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The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
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Some concerns why is it important to satisfy customers are discussed. A three-phase approach to increasing customer satisfaction is developed which has important implications. Different actions are required to raise the satisfaction of customers of a family of products or services whose level of satisfaction differs. The company that will survive and flourish over the long term is the one that continually works to understand the relationship between satisfaction and loyalty for each of its customers, for each of its business units, and for each of the industries in which its competes.
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The purpose of this study is to empirically determine the relationship between employees’ constructs such as internal service quality, service ability, employee satisfaction, and organizational commitment, and customers’ constructs such as perceived value, customer satisfaction, customer trust, and loyalty. This relationship was studied by applying the Service Profit Chain model to the Korean restaurant industry. Results show that internal service quality has a significant effect on service ability, and teamwork/communication has a significant effect on employee satisfaction. Employees’ organizational commitment has a significant direct effect on the value perceived by customers. Ultimately, there is an indirect influential relationship between employees’ and customers’ constructs. Implications of these results are discussed, and possible limitations of the study are addressed.
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During the past decade, an increasing number of coffee-shop customers in Korea prefer to patronize name-brand coffee shops. This study applied image congruity theory to explain the Korean preference phenomena. The authors investigated the impacts of image congruities (self-congruity and functional congruity) on customer attitude and repurchase intention, and identified the moderating effect of prior visit experience. The survey sample is 401 customers who visited the 13 name-brand coffee shops in the city of Seoul's Myeong-dong commercial district. Structural Equation Modeling was used to test the validity of the conceptual model. The results revealed that both self-congruity and functional congruity are the antecedents of customer attitude and repurchase intention. Furthermore, functional congruity has more impact on customer attitude among experienced customers than among those with less visit experience. The marketers of name-brand coffee shops in Korea are advised to design the strategies of brand positioning and marketing segmentation from a new angle. Further studies can be further conducted among customers in boarder geographical areas, including small cities and rural areas in Korea.
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In exemplary service organizations, executives understand that they need to put customers and frontline workers at the center of their focus. Those managers heed the factors that drive profitability in this service paradigm: investment in people, technology that supports frontline workers, revamped recruiting and training practices, and compensation linked to performance. They also express a vision of leadership in somewhat unconventional terms, referring to an organization's "patina of spirituality" and the "importance of the mundane." In this article, Heskett, Jones, Loveman, Sasser, and Schtesinger take a close look at the links in the service-profit chain, which puts hard values on soft measures so that managers can calibrate the impact of employee satisfaction, loyalty, and productivity on the value of products and services delivered. Managers can then use this information to build customer satisfaction and loyalty and assess the corresponding impact on profitability and growth. Describing the links in the service-profit chain, the authors explain that profit and growth are stimulated by customer loyalty; loyalty is a direct result of customer satisfaction; satisfaction is largely influenced by the value of services provided to customers; value is created by satisfied, loyal, and productive employees; and employee satisfaction, in turn, results from high-quality support services and policies that enable employees to deliver results to customers. By completing the authors' service-profit chain audit, companies can determine not only what drives their profit but how they can sustain it in the long term.
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The service profit chain is a simple conceptual framework linking employee satisfaction and loyalty, customer satisfaction and loyalty, and financial performance. Although widely used by practitioners, the service profit chain's series of hypothesized relationships between employee, customer, and financial outcomes has not been rigorously tested using data that span all components of the model. Panel data from the branches of a large regional bank are used to test individually each of the service profit chain's constituent hypotheses. The results generally support the model, but there are some exceptions. Further work is needed to refine and simplify several critical measures and to enhance the analysis to test the service profit chain as a complete system of related hypotheses.
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Through qualitative and empirical research, the authors find that the service quality construct conforms to the structure of a third-order factor model that ties service quality perceptions to distinct and actionable dimensions: outcome, interaction, and environmental quality. In turn, each has three subdimensions that define the basis of service quality perceptions. The authors further suggest that for each of these subdimensions to contribute to improved service quality perceptions, the quality received by consumers must be perceived to be reliable, responsive, and empathetic. The authors test and support this conceptualization across four service industries. They consider the research and managerial implications of the study and its limitations.
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Two experimental studies (a lab experiment and a study involving a real usage experience over time) reveal the existence of a strong, positive impact of customer satisfaction on willingness to pay, and they provide support for a nonlinear, functional structure based on disappointment theory (i.e., an inverse S-shaped form). In addition, the second study examines dynamic aspects of the relationship and provides evidence for the stronger impact of cumulative satisfaction rather than of transaction-specific satisfaction on willingness to pay.
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Along with variables like the service process, perceived service value and customer satisfaction, job satisfaction of service employees plays a vital role in customer evaluation of service result. However, there has been little in-depth research into the nature of this relation, in particular in the context of B2B relations. In the sphere of an organization providing financial intermediation services to the banking sector and on the basis of a literature review, hypotheses are developed which establish the mediator role of service value and the moderator role of job satisfaction of service employees when delimiting customer satisfaction. Reliability and validity analysis give satisfactory results and our conclusions establish firstly that service encounter directly and significantly affects perceived service value which is the final antecedent to customer satisfaction and secondly, that the level of employment satisfaction moderates its effect on service value.
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In this article, the authors extend prior research on employees'perception of service climate by testing the impact of employees'perception of organizational trust on service climate and employee satisfaction. Multidimensional constructs of trust and service climate were developed using the literature in the trust and service management domains. Results support the hypothesized relationships between the constructs, in that trust affects service climate and employee satisfaction, whereas service climate affects employee satisfaction in a significant way. Implications for practitioners and future research ensue, which underscores the importance of building trust and service climate to ensure employee satisfaction in hotel firms.
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This paper examines the visitor experience of heritage tourism and investigates the relationships between the quality of those experiences, perceived value, satisfaction, and behavioral intentions. A total of 447 respondents completed a survey conducted at four main heritage sites in Tainan, Taiwan. Using structural equation modeling (SEM) technique, the results reveal the direct effects of the quality of experience on perceived value and satisfaction. However, it is the indirect and not direct effects of the quality of experience that impact on behavioral intentions when mediated by perceived value and satisfaction. Overall, the relationship “experience quality→perceived value→satisfaction→behavioral intentions” appears to be evident.
Article
Purpose Studies have demonstrated that the service climate in an organisation, as perceived by employees, is positively related to service quality, as perceived by customers. However, no studies appear to have tested the link to service quality from an employee perspective. Hence, the major aim of this study was to investigate the relationships between service climate, employee commitment and employees' service quality capability (SQC). Design/methodology/approach Data were collected by a cross‐sectional field study of frontline employees in a telecommunications call centre ( n =167; 58 percent). A call centre was chosen because of the perceived poor service climate and the high levels of employee turnover. Findings Global service climate (GSC) in the call centre was found to be positively related to employees' SQC, with partial mediation by employee commitment. Regression analysis showed that three factors: managerial practices, customer feedback and human resource management contributed to GSC but, unexpectedly, customer orientation did not. Research limitations/implications The findings indicate that the service climate in a call centre affects employees, both in terms of their commitment, and their self‐reported feelings about the delivery of service quality to customers. Unexpected findings suggest that further work on service climate in call centres is warranted. Practical implications This study demonstrates the important effects of service climate in general, and HRM in particular, on frontline employees in call centres. Managers should benefit from noting the links and the likely service quality outcome for customers. Originality/value This paper applies and extends theory developed in other contexts to call centres.
Article
This paper addresses the issue of service design, specifically that of designing the service encounter for improved quality. We introduce a framework based on the three T's of task, treatment, and tangibles as a means of organizing the application of the diverse and growing body of service quality literature to encounter design. The framework is consistent with how successful service managers disaggregate the design problem. More importantly, we show that mutually supportive interrelationships between the three T's produce an opportunity for designing in a robustness to service failure. The framework is supported by case based evidence.
Article
Earlier studies have shown that perceived external prestige and communication climate influence organizational identification. In this paper we present the results of a study of the influence of communication climate and perceived external prestige on organizational identification at various organizational levels of a regional police organization. In total, 314 respondents filled out a questionnaire on communication climate, perceived external prestige and organizational identification. The results of this study show that communication climate has the strongest link with employee identification when it concerns the identification with the daily work group and a weaker one with the organization as a whole. It also appears that perceived external prestige has a stronger influence on the identification with the organization as a whole than on the identification at the more concrete organizational levels (such as department or work group). This research offers reasons to presuppose that organizational identification and communication climate are multiple constructs. If management wishes to influence organizational identification through a bottom-up process, it is wise to pay particular attention to the communication climate in the work groups. Influencing organizational identification with the organization as a whole is better conducted through perceived external prestige. Copyright © 2006 John Wiley & Sons, Ltd.
Article
This study examined how an ethical work climate influences salespersons' organizational identification, supervisory trust, organizational commitment, turnover intentions, and turnover. Using a sample of 393 salespeople, the results found that facets of an ethical work climate are related directly to supervisory trust and organizational identification. One aspect of an ethical work climate, ethical norms, was related directly to turnover. These results indicate that an ethical work climate can directly affect salespersons' job attitudes and outcomes. The results indicate the importance of measuring ethical work climate from a multi-dimensional perspective.
Article
Criteria for evaluating structural equation models with latent variables are defined, critiqued, and illustrated. An overall program for model evaluation is proposed based upon an interpretation of converging and diverging evidence. Model assessment is considered to be a complex process mixing statistical criteria with philosophical, historical, and theoretical elements. Inevitably the process entails some attempt at a reconcilation between so-called objective and subjective norms.
Article
Using the loss aversion concept, this paper attempts to investigate the relationship between service quality and customers’ post-dining behavioral intentions in the restaurant sector. Incorporating the DINESERV instrument, the results gained from a Chinese chain restaurant indicate that a decrease in service quality from the reference point (customer's expectation) will decrease the perceived service value and customer satisfaction, but that an increase in service quality may not have significant effects on these two behavioral constructs. Moreover, the behavior-related causal relationships underlying service quality suggest that perceived service value and attitudinal loyalty succeed in acting as mediating variables within the model.
Article
The purpose of this study is to examine the relationship between employee satisfaction and customer satisfaction, and to examine the impact of both on a hospitality company’s financial performance utilizing service-profit-chain framework as the theoretical base. Specifically, this study explores four major relationships: (1) the direct relationship between customer satisfaction and financial performance; (2) the direct relationship between employee satisfaction and financial performance; (3) the direct relationship between customer satisfaction and employee satisfaction; and (4) the indirect relationship between employee satisfaction and financial performance. Furthermore, this study examines the mediating role of customer satisfaction on the indirect relationship between employee satisfaction and financial performance. Data for this study was collected from employees, customers and managers of three- and four-star hotels. Structural equation modeling (SEM) with a two-step approach was utilized to empirically test the proposed hypotheses and the relationships between the constructs. Findings suggest that while customer satisfaction has positive significant impact on financial performance, employee satisfaction has no direct significant impact on financial performance. Instead, there is an indirect relationship between employee satisfaction and financial performance, which is mediated by customer satisfaction.
Article
Both marketing practitioners and academic researchers have traditionally recognised the major influence that perceived value has on consumer behaviour. Tourism and hospitality research have recently shown an interest in value; especially, when investigated with quality and/or satisfaction. The present study has two primary objectives. First, to investigate the dimensionality of consumer value in a travel-related context (students’ travel behaviour), adopting Holbrook's typology, and combining it with negative inputs of value. Second, to explore the relations between consumer perceptual constructs such as perceived value, satisfaction and loyalty. This dual objective is undertaken by providing an LISREL model. The results confirm the existence of a quality–value–satisfaction–loyalty chain and illustrate the complexity of value dimensions that have been shown to be highly sensitive to the tourism experience.
The effects of organizational climate on job performance and satisfaction as well as the effects of interactions between climate and individual needs on performance and satisfaction were examined for 76 managers from two organizations. It was found that climate was influenced by both the overall organization and by subunits within the organization. Climate was fairly strongly related to subunit performance and to individual job satisfaction. There was some limited evidence for climate and individual needs interacting to influence performance and satisfaction.
Article
The following study both synthesizes and builds on the efforts to conceptualize the effects of quality, satisfaction, and value on consumers’ behavioral intentions. Specifically, it reports an empirical assessment of a model of service encounters that simultaneously considers the direct effects of these variables on behavioral intentions. The study builds on recent advances in services marketing theory and assesses the relationships between the identified constructs across multiple service industries. Several competing theories are also considered and compared to the research model. A number of notable findings are reported including the empirical verification that service quality, service value, and satisfaction may all be directly related to behavioral intentions when all of these variables are considered collectively. The results further suggest that the indirect effects of the service quality and value constructs enhanced their impact on behavioral intentions.
Article
Research has shown that organizational subunits where employee perceptions are favourable enjoy superior business performance. The service profit chain model of business performance (Heskett, Sasser, & Schlesinger, 1997) has identified customer satisfaction as a critical intervening variable in this relationship. This paper examines the relationships between organizational climate, employee attitudes, customer satisfaction, and sales performance in the retail-banking sector. The role of customer satisfaction as a mediator between employee attitudes and sales performance is examined in a large sample of bank branches, spanning multiple organizations. Mediation effects are found, which border on significance when the sample size is large, but the effects seem to be too small to be of practical importance. It is argued that alternative formulations of the service profit chain model may provide more powerful explanations of the link between employee attitudes and business performance. [ABSTRACT FROM AUTHOR] Copyright of Journal of Occupational & Organizational Psychology is the property of British Psychological Society and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Article
For more than 40 years, service companies like McDonald's prospered with organizations designed according to the principles of traditional mass-production manufacturing. Today that model is obsolete. It inevitably degrades the quality of service a company can provide by setting in motion a cycle of failure that produces dissatisfied customers, unhappy employees, high turnover among both--and so lower profits and lower productivity overall. The cycle starts with human resource policies that minimize the contributions frontline workers can make: jobs are designed to be idiot-proof. Technology is used largely for monitoring and control. Pay is poor. Training is minimal. Performance expectations are abysmally low. Today companies like Taco Bell, Dayton Hudson, and ServiceMaster are reversing the cycle of failure by putting workers with customer contact first and designing the business system around them. As a result, they are developing a model that replaces the logic of industrialization with a new service-driven logic. This logic: Values investments in people as much as investments in technology--and sometimes more. Uses technology to support the efforts of workers on the front lines, not just to monitor or replace them. Makes recruitment and training crucial for everyone. Links compensation to performance for employees at every level. To justify these investments, the new logic draws on innovative data such as the incremental profits of loyal customers and the total costs of lost employees. Its benefits are becoming clear in higher profits and higher pay--results that competitors bound to the old industrial model will not be able to match.
Article
We make two points about the number, $B$ of bootstrap simulations needed to construct a percentile-$t$ confidence interval based on an $n$ sample from a continuous distribution: (i) The bootstrap's reduction of error of coverage probability, from $O(n^{-1/2})$ to $O(n^{-1})$, is available uniformly in $B$, provided nominal coverage probability is a multiple of $(B + 1)^{-1}$. In fact, this improvement is available even if the number of simulations is held fixed as $n$ increases. However, smaller values of $B$ can result in longer confidence intervals. (ii) In a large sample, the simulated statistic values behave like random observations from a continuous distribution, unless $B$ increases faster than any power of sample size. Only if $B$ increases exponentially quickly with $n$ is there a detectable effect due to discreteness of the bootstrap statistic.
Article
DOI:10.1016/j.jom.2008.01.001 The extant operations management literature has extensively investigated the associations among quality, customer satisfaction, and firm profitability. However, the influence of employee attributes on these performance dimensions has rarely been examined. In this study we investigate the impact of employee satisfaction on operational performance in high-contact service industries. Based on an empirical study of 206 service shops in Hong Kong, we examined the hypothesized relationships among employee satisfaction, service quality, customer satisfaction, and firm profitability. Using structural equations modeling, we found that employee satisfaction is significantly related to service quality and to customer satisfaction, while the latter in turn influences firm profitability. We also found that firm profitability has a moderate non-recursive effect on employee satisfaction, leading to a “satisfaction-quality-profit cycle”. Our empirical investigation suggests that employee satisfaction is an important consideration for operations managers to boost service quality and customer satisfaction. We provide empirical evidence that employee satisfaction plays a significant role in enhancing the operational performance of organizations in the high-contact service sector.
Article
This article examines three alternative procedures for analyzing multitrait-multimethod matrices: the Campbell-Fiske procedure, confirmatory factor analysis, and the direct product model. The implicit assumptions, as well as the strengths and weaknesses, of each approach are presented and their implications discussed. It is proposed that one should carefully examine model assumptions, individual parameters, and various diagnostic indicators, as well as overall model fits. The implications of these recommendations are illustrated through reanalyses of data from earlier studies of consumer behavior. Potentially misleading conclusions in these studies are corrected in demonstrations of the three procedures. The results show that methods often have multiplicative effects, a finding that supports the direct product model, which has not been previously used in consumer research. The need for multiple-method, multiple-measure approaches to research is highlighted by examining the limitations of single-method, single-measure approaches to theory testing. Copyright 1991 by the University of Chicago.
Article
Companies that want to improve their service quality should take a cue from manufacturing and focus on their own kind of scrap heap: customers who won't come back. Because that scrap heap can be every bit as costly as broken parts and misfit components, service company managers should strive to reduce it. They should aim for "zero defections"--keeping every customer they can profitably serve. As companies reduce customer defection rates, amazing things happen to their financials. Although the magnitude of the change varies by company and industry, the pattern holds: profits rise sharply. Reducing the defection rate just 5% generates 85% more profits in one bank's branch system, 50% more in an insurance brokerage, and 30% more in an auto-service chain. And when MBNA America, a Delaware-based credit card company, cut its 10% defection rate in half, profits rose a whopping 125%. But defection rates are not just a measure of service quality; they are also a guide for achieving it. By listening to the reasons why customers defect, managers learn exactly where the company is falling short and where to direct their resources. Staples, the stationery supplies retailer, uses feedback from customers to pinpoint products that are priced too high. That way, the company avoids expensive broad-brush promotions that pitch everything to everyone. Like any important change, managing for zero defections requires training and reinforcement. Great-West Life Assurance Company pays a 50% premium to group health-insurance brokers that hit customer-retention targets, and MBNA America gives bonuses to departments that hit theirs.
Article
Despite a flurry of activities aimed at serving customers better, few companies have systematically revamped their operations with customer loyalty in mind. Instead, most have adopted improvement programs ad hoc, and paybacks haven't materialized. Building a highly loyal customer base must be integral to a company's basic business strategy. Loyalty leaders like MBNA credit cards are successful because they have designed their entire business systems around customer loyalty--a self-reinforcing system in which the company delivers superior value consistently and reinvents cash flows to find and keep high-quality customers and employees. The economic benefits of high customer loyalty are measurable. When a company consistently delivers superior value and wins customer loyalty, market share and revenues go up, and the cost of acquiring new customers goes down. The better economics mean the company can pay workers better, which sets off a whole chain of events. Increased pay boosts employee moral and commitment; as employees stay longer, their productivity goes up and training costs fall; employees' overall job satisfaction, combined with their experience, helps them serve customers better; and customers are then more inclined to stay loyal to the company. Finally, as the best customers and employees become part of the loyalty-based system, competitors are left to survive with less desirable customers and less talented employees. To compete on loyalty, a company must understand the relationships between customer retention and the other parts of the business--and be able to quantify the linkages between loyalty and profits. It involves rethinking and aligning four important aspects of the business: customers, product/service offering, employees, and measurement systems.