VOL 4, NO 11
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
Employee Satisfaction - Customer Satisfaction Link: A Literature Review of Theoretical Explanations Ms.Shilpa Sharma Bhaskar(Corresponding author) Affiliation: Research Scholar (Management), Delhi Technological University (DTU), India Address: Apeejay School of Management Sector VIII, Institutional Area, Dwarka, Delhi- 110077, India Dr.Shikha N Khera Affiliation: Asst. Professor (OB & HRM), Delhi School of Management, Delhi Technological University, (Formerly Delhi College of Engineering), India Address: Delhi School of Management Delhi Technological University, Formerly Delhi College of Engineering, ShahbadDaulatpur, Main Bawana Road, Delhi-110042, India Abstract The aim of this paper is to provide a literature review of all theories supporting employee satisfaction-customer satisfaction link undertaken in the research in the field of behaviour, psychology, neurology, and service management. The purpose especially is to provide comprehensive theoretical underpinnings of the employee satisfaction-customer satisfaction linkage as being relevant to the service industry. This paper concludes with recommendations for the future research to strengthen the theories through empirical research in the said area. This paper contributes with the literature review for theories, a discussion on each theory, and future research questions/directions for achieving a more profound understanding of the nature of employee satisfaction-customer satisfaction linkage. Keywords: Employee satisfaction; Customer satisfaction;Linkage; Theory; Service industry
Over the last decade, service management literature has acknowledged the impact of employee satisfaction and customer satisfaction on critical business outcomes. Employee satisfaction customer satisfaction link has been widely studied and the results of numerous past empirical researches on relationship between the two have been positive (e.g. Yoo and Park, 2007; Hurley and Estelami, 2007; Payne and Webber 2006; XuYingzi, 2005; Homburg and Stock, 2004;Hennig-Thurau, 2004; Kamakura et al. 2002; Johnson, 1996; Schmitt &Allscheid, 1995). Most of the meta-analytical investigations conducted have also shown positive relationship between the two variables (Gerpott et al 2011; Brown and Lam, 2008; Harter et al. 2002). Most of the studies conducted in the area are crosssectional with a few longitudinal studies (Keiningham et al, 2006; Bernhardt et al., 2000) showing that, although the effects of employee satisfaction and customer satisfaction on business profit at a given point in time might not be detectable, they become visible and prominent over time. Many researchers reviewed the relationship between financial success and either of customer and employee variables (Bernhardt et al. 2000;Heskett et al. 1999; Hallowell 1996) and found a positive relationship. A robust literature has developed regarding interactions between employees (specifically frontline sales personnel and service personnel) and customers and as suggested by this wealth of findings, positive changes in employee attitudes lead to positive changes in customer satisfaction. In particular there are studies that have used data from customers only (Hennig-Thurau, 2004; Kamakura et al 2002; Vilares and Coelho, 2003) or employees only (Hurley and Estelami 2007) and some studies are based on a dyadic data set (Johnson 1996; Brown and Mitchell, 1993; Brown and Wynee, 2004; Homburg and Stock 2005; Jeon and Choi 2012) that is, involving judgments by employees and their corresponding customers, an approach that rules out the risk of a common method bias.Furthermore, recursive effects of customer satisfaction and loyalty, as well as business performance, on
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VOL 4, NO 11
INTERDISCIPLINARY JOURNAL OF...
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