Linking Organizational Resources and Work Engagement to Employee Performance and Customer Loyalty: The Mediation of Service Climate.

TLDR

This study examined the mediating role of service climate in predicting employee performance and customer loyalty. The authors surveyed 342 employees across 114 hotel and restaurant units and 1,140 customers to assess organizational resources, engagement, service climate, employee performance, and customer loyalty. Structural equation modeling revealed that organizational resources and work engagement affect employee performance and customer loyalty only through service climate, with evidence of a reciprocal relationship between service climate and loyalty.

Abstract

This study examined the mediating role of service climate in the prediction of employee performance and customer loyalty. Contact employees (N=342) from 114 service units (58 hotel front desks and 56 restaurants) provided information about organizational resources, engagement, and service climate. Furthermore, customers (N=1,140) from these units provided information on employee performance and customer loyalty. Structural equation modeling analyses were consistent with a full mediation model in which organizational resources and work engagement predict service climate, which in turn predicts employee performance and then customer loyalty. Further analyses revealed a potential reciprocal effect between service climate and customer loyalty. Implications of the study are discussed, together with limitations and suggestions for future research.