Identification and analysis of moderator variables:investigating the customer satisfaction-loyalty link

Purpose – Research on the relationship between customer satisfaction and customer loyalty has advanced to a stage that requires a more thorough examination of moderator variables. Limited research shows how moderators influence the relationship between customer satisfaction and customer loyalty in a service context; this article aims to present empirical evidence of the conditions in which the satisfaction-loyalty relationship becomes stronger or weaker. Design/methodology/approach – Using a sample of more than 700 customers of DIY retailers and multi-group structural equation modelling, the authors examine moderating effects of several firm-related variables, variables that result from firm/employee-customer interactions and individual-level variables (i.e. loyalty cards, critical incidents, customer age, gender, income, expertise). Findings – The empirical results suggest that not all of the moderators considered influence the satisfaction-loyalty link. Specifically, critical incidents and income are important moderators of the relationship between customer satisfaction and customer loyalty. Practical implications – Several of the moderator variables considered in this study are manageable variables. Originality/value – This study should prove valuable to academic researchers as well as service and retailing managers. It systematically analyses the moderating effect of firm-related and individual-level variables on the relationship between customer satisfaction and loyalty. It shows the differential effect of different types of moderator variables on the satisfaction-loyalty link.

Does the employee–customer satisfaction link hold for all employee groups?

Increasingly, retailers nowadays have to focus on service marketing strategies and tactics to differentiate themselves from their competitors. Delivering high levels of service quality becomes crucial for long-term success. Since customers' perception of service quality depends very much on the interaction between the customer and the employee, this study analyzes the link between employee and customer satisfaction in more detail. Moreover, based on three different theories that prior research has used, it investigates whether or not the level of customer contact is a determinant of the existence or the intensity of the employee–customer satisfaction link. Analysis of dyadic data from 53,645 customers and 1659 employees across 99 outlets of a large German Do-It-Yourself (DIY)-retailer shows that employee job satisfaction affects customer satisfaction even for employee groups that are not in direct interaction with customers, although effects seem to be slightly stronger for high interaction groups. Implications for research and management are discussed.

How employer and employee satisfaction affect customer satisfaction:an application to franchise services

In small-service settings, how do owner satisfaction, front-line employee satisfaction, and customer satisfaction relate to one another? The authors use generalized exchange theory (GET) to examine how satisfaction levels of these three constituents are reciprocated. The authors examine a European franchise system comprising 50 outlets, 933 employees, and 20,742 customers. Their results show two important findings. First, the effect of owner-franchisee's satisfaction on customer satisfaction is fully mediated by front-line employee satisfaction. Thus, managers of a service outlet can strongly impact the satisfaction and behavioral intentions of their customer base, even without direct contact with them. Second, the link between customer satisfaction and purchase intention is moderated by employee satisfaction at an outlet. The link between customer satisfaction and customer purchase intentions is almost twice as strong when employees are satisfied than when they are not. Thus, there is a "doublepositive effect:" not only does higher employee satisfaction at an outlet directly lead to higher customer satisfaction but it also indirectly strengthens the association between customer satisfaction and their repurchase intentions.

Dimensions of satisfaction in retail settings:a research note

Taking issue with the prevalent practice of measuring customer satisfaction with a single global measurement item, this article stresses the importance of measuring customer satisfaction through its underlying dimensions, especially in retail settings. Empirical results of a survey of 351 consumers demonstrate that (a) consumer satisfaction with retail stores has 6 key dimensions, (b) the suggested dimensions of retail satisfaction predict overall satisfaction, and (c) the dimensions of retail satisfaction have a greater effect on overall satisfaction than SERVQUAL dimensions. However, the predictive power of the dimensions of retail satisfaction is still fairly low. Implications for retail management as well as academic research are outlined.

Satisfaction with knowledge and competencies:a multi-country study of employers and business graduates

This study critically discusses findings from a research project involving four European countries. The project had two main aims. The first was to develop a systematic procedure for assessing the balance between knowledge and competencies acquired in higher, further and vocational education and the specific needs of the labor market. The second aim was to develop and test a set of meta-level quality indicators aimed at evaluating the linkages between education and employment. The project was designed to address the lack of employer input concerning the requirements of business graduates for successful workplace performance and the need for more specific industry-driven feedback to guide administrative heads at universities and personnel at quality assurance agencies in curriculum development and revision. Approach: The project was distinctive in that it combined different partners from higher education, vocational training, industry and quality assurance. Project partners designed and implemented an innovative approach, based on literature review, qualitative interviews and surveys in the four countries, in order to identify and confirm key knowledge and competency requirements. This study presents this step-by-step approach, as well as survey findings from a sample of 900 business graduates and employers. In addition, it introduces two Partial Least Squares (PLS) path models for predicting satisfaction with work performance and satisfaction with business education. Results: Survey findings revealed that employers were not very confident regarding business graduates’ abilities in key knowledge areas and in key generic competencies. In subsequent analysis, these graduate abilities were tested and identified as important predictors of employers’ satisfaction with graduates’ work performance. Conclusion: The industry-driven approach introduced in this study can serve as a guide to assist different types of educational institutions to better align study programs with changing labor market requirements. Recommendations for curriculum improvement are discussed.

The relative influence of organisational commitment and job-satisfaction on service quality of customer-contact employees in banking call centres

An inter-disciplinary approach is adopted to provide a deeper understanding of the human resource-service quality relationship. The paper tests the relationships organisational commitment and job satisfaction have with service quality of customer-contact employees. Hypotheses are constructed by reviewing literature in the areas of human resource management and services marketing. A study comprising 342 employees was conducted in four telephone call centres of a major UK retail bank. Investigates how different forms of organisational commitment and job satisfaction influence the service quality delivered by contact employees. Findings indicate that job satisfaction and organisational commitment of employees have a significant impact on service quality delivered. The affective component of commitment was found to be more important than job satisfaction in determining service quality of customer-contact employees.

Satisfaction with complaint handling:a replication study on its determinants in a business-to-business context

Research on the drivers of satisfaction with complaint handling (SATCOM) underlines the importance of procedural, relational, and interactional justice (Orsingher, Valentini, & de Angelis, 2010). Since these SATCOM-studies are largely conducted in business-to-consumer (B2C) markets, it is unclear what drives SATCOM in business-to-business (B2B) markets. Therefore, we replicate the justice model in an industrial context and find significant differences for procedural justice and interactional justice but not for distributive justice. While distributive justice is equally important in both contexts, procedural justice is more important in B2B markets whereas interactional justice drives SATCOM only in B2C markets. © 2013 Elsevier B.V.

Professional standards research:job satisfaction and innovation

Job satisfaction is a significant predictor of organisational innovation – especially where employees (including shop-floor workers) experience variety in their jobs and work in a single-status environment. The relationship between job satisfaction and performance has long intrigued work psychologists. The idea that "happy workers are productive workers" underpins many theories of performance, leadership, reward and job design. But contrary to popular belief, the relationship between job satisfaction and performance at individual level has been shown to be relatively weak. Research investigating the link between job satisfaction and creativity (the antecedent to innovation) shows that job dissatisfaction promotes creative outcomes. The logic is that those who are dissatisfied (and have decided to stay with the organisation) are determined to change things and have little to lose in doing so (see JM George & J Zhou, 2002). We were therefore surprised to find in the course of our own research into managerial practices and employee attitudes in manufacturing organisations that job satisfaction was a highly significant predictor of product and technological innovation. These results held even though the research was conducted longitudinally, over two years, while controlling for prior innovation. In other words, job satisfaction was a stronger predictor of innovation than any pre-existing orientation organisations had towards working innovatively. Using prior innovation as a control variable, as well as a longitudinal research design, strengthened our case against the argument that people are satisfied because they belong to a highly innovative organisation. We found that the relationship between job satisfaction and innovation was stronger still where organisations showed that they were committed to promoting job variety, especially at shop-floor level. We developed precise instruments to measure innovation, taking into account the magnitude of the innovation both in terms of the number of people involved in its implementation, and how new and different it was. Using this instrument, we are able to give each organisation in our sample a "score" from one to seven for innovation in areas ranging from administration to production technology. We found that much innovation is incremental, involving relatively minor improvements, rather than major change. To achieve sustained innovation, organisations have to draw on the skills and knowledge of employees at all levels. We also measured job satisfaction at organisational level, constructing a mean "job satisfaction" score for all organisations in our sample, and drawing only on those companies whose employees tended to respond in a similar manner to the questions they were asked. We argue that where most of the workforce experience job satisfaction, employees are more likely to collaborate, to share ideas and aim for high standards because people are keen to sustain their positive feelings. Job variety and single-status arrangements further strengthen the relationship between satisfaction and performance. This makes sense; where employees experience variety, they are exposed to new and different ideas and, provided they feel positive about their jobs, are likely to be willing to try to apply these ideas to improve their jobs. Similarly, staff working in single-status environments where hierarchical barriers are reduced are likely to feel trusted and valued by management and there is evidence (see G Jones & J George, 1998) that people work collaboratively and constructively with those they trust. Our study suggests that there is a strong business case for promoting employee job satisfaction. Managers and HR practitioners need to ensure their strategies and practices support and sustain job satisfaction among their workforces to encourage constructive, collaborative and creative working. It is more important than ever for organisations to respond rapidly to demands of the external environment. This study shows the positive association between organisational-level job satisfaction and innovation. So if a happy workforce is the key to unlocking innovation and organisations want to thrive in the global economy, it is vital that managers and HR practitioners pay close attention to employee perceptions of the work environment. In a world where the most innovative survive it could make all the difference.

The link between job satisfaction and organizational commitment:differences between public and private sector employees

Employees in the public and private sectors experience different working conditions and employment relationships. Therefore, it can be assumed that their attitudes toward their job and organizations, and relationships between them, are different. The existing literature has identified the relationship between organizational commitment and job satisfaction as interesting in this context. The present field study examines the satisfaction–commitment link with respect to differences between private and public sector employees. A sample of 617 Greek employees (257 from the private sector and 360 from the public sector) completed standardized questionnaires. Results confirmed the hypothesized relationship differences: Extrinsic satisfaction and intrinsic satisfaction are more strongly related to affective commitment and normative commitment for public sector employees than for private sector ones. The results are discussed, limitations are considered, and directions for future research are proposed.

The personality correlates of job-satisfaction among school teachers

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A multilevel study of the relationships between diversity training, ethnic discrimination and satisfaction in organizations

The prevalence of diversity training has not been matched by empirical research on its effectiveness. Among the most notable gaps are an absence of attention to its impact on discrimination and limited consideration of organizational-level factors. Results from employee surveys across 395 healthcare organizations reveal an effect of the extent of diversity training in organizations on ethnic minorities' experiences of discrimination. In addition, the results demonstrate that the consequences of ethnic discrimination for individuals' job attitudes are influenced by organizational-level phenomenon. These findings highlight the importance of attending to ethnic discrimination as an outcome of diversity training with implications for employee attitudes. © 2010 John Wiley & Sons, Ltd.

Satisfaction as a predictor of future performance:a replication

Since the introduction of the Net Promoter concept there has been a vivid and ongoing debate among academics and practitioners about the performance of the Net Promoter Score (NPS) in comparison to other customer metrics, such as customer satisfaction, to predict company growth rates. We report results from a study using data from customers and firms in the Netherlands on the relationship between different satisfaction and loyalty metrics as well as the NPS with sales revenue growth, gross margins and net operating cash flows. We find that all metrics perform equally well in predicting current gross margins and current sales revenue growth and equally poor for predicting future sales growth and gross margins as well as current and future net cash flows. The NPS is neither superior nor inferior to other metrics. Taken together, our study suggests that the predictive capability of customer metrics, such as NPS, for future company growth rates is limited. © 2013 Elsevier B.V.