In a service business, customer satisfaction Is a critical performance Indicator along with measures of unit productivity and administrative effectiveness. This study examines the relationships between productivity, administrative effectiveness, customer satisfaction, and employee attitudes over time. Three streams of research are relevant to the study: survey feedback as an organization development tool, upward and customer ratings as a guide to manager development, and relationships between employee attitudes, departmental performance and customer satisfaction with service quality.
Survey feedback Survey feedback refers to reporting attitude survey results to employees[l Survey feedback results may be calculated to determine the average responses within a ark group and then reported to the manager of the group. Topics include boss/ subordinate relationships as well as a variety of facets such as pay, working conditions, career opportunities and job challenge. Summaries of survey results may be reported to all employees in special company bulletins.
Work groups might meet with their supervisors to discuss the meaning of the results for the organization as a whole and the work group in particular[4]. According to Lawyer[2], possible positive outcomes from survey feedback Include improvements in work methods and procedures, attraction and retention of employees, higher quantity and quality of output, enhanced decision making (resulting from better communication), and smoother group processes and problem solving (from enhanced attention to group dynamics).
Potential negative effects include costs to communicate and facilitate interpretation of results, need for support personnel to run the survey programmer, unrealistic expectations for Development, Volvo. 15 No. 1, 1996, up. 62-75. MAC university press, 0262-1711 Relationships between employee attitudes results or based on making issues salient by merely asking the questions, middle management resistance to being evaluated, and time lost from group meetings in completing the survey and later discussing the results. The effects of the survey feedback process rely on principles of participative management.
Employees supposedly feel more involved in the organization when their input is requested[l]. The process also increases the salience of managerial behavior towards subordinates to organizational effectiveness and productivity. Employee participation throughout the survey feedback process is important for acceptance of the results. Upward and customer feedback Another body of related research focuses on upward feedback (subordinates rating their managers) and 3600 feedback (ratings from subordinates, peers, supervisors, and internal or external customers/clients).
The survey results are fed back to managers as a means of suggesting directions for development. The results may also be used to evaluate managers’ performances and make pay or placement decisions about the managers. Ratings capture multiple dimensions of the managers’ Jobs – dimensions that are not available from any one source alone[5,6]. The results are provided in confidence, thereby avoiding inaccuracies that may result from low interpersonal trust or the desire to avoid negative situations.
Such problems are typical of supervisor ratings[7]. This is not to say, however, that upward ratings or customer satisfaction ratings are free from bias. Raters may try to create impressions of themselves through their ratings, or they may be biased by non-performance- related factors such as gender[8]. Alternatively, they use their ratings to defend themselves against negative feedback or blame the supervisor for unrealistic expectations[9]. Information from multiple sources when aggregated within source (e. G. E average of all subordinate ratings or the average of all customer ratings) should provide reliable information. Data on the range or variance within source should provide an indication of agreement among raters and the extent to which the manager is consistent in his/her behavior in relation to each source. Furthermore, the ratings reflect elements of unit performance. As such, these feedback techniques should contribute to enhancing unit performance over time if they are used by managers as a guide to development and behavioral change.
Therefore, the ratings should enhance both individual and organizational development[10-1 5]. Several studies have investigated the effects of upward feedback and reactions to the feedback on changes in managerial performance. Hegiras[16] found that upward feedback leads to subordinates perceiving positive changes in the boss’s subsequent behavior. In another study, Bernardino et al. [17] asked first-line managers for their that the managers were generally supportive of the subordinate appraisal. London et al. 12] found that managers reported positive reactions to the process six months after receiving feedback. Smother et al. [18] discovered that affordability towards the upward feedback Journal of recess was not related to supervisors’ later reactions. London and Hollers[19] found that self/subordinate agreement increased for one year after the first upward feedback process was administered, suggesting that managers learn about how others see them. Huzzah et al. [20] reported that 3600 feedback resulted in skill increases and higher self/other agreement two years later.
Smother et al. [21] found that managers who received feedback following an initial administration of an upward feedback survey improved their performance six months later, whereas managers who did not receive feedback initially did not improve their performance ever time. Also, the managers who received feedback had agreed more highly with subordinate ratings on the second administration than had managers who did not receive feedback initially. Addis et al. [22] studied relationships between subordinate ratings and managers’ supervisor ratings.
They found that managers who supported subordinates’ career development (and subordinates agreed on this) tended to be those who were viewed by their supervisors as excellent performers. On the other hand, managers who provided less support for subordinates’ career development (and subordinates disagreed on this) were viewed by their supervisors as poorer reformers. Studies of upward and customer feedback have not related the survey results to objective performance measures to determine whether perceptions of managerial performance are associated with other indexes of unit performance.
This is a major goal of the present study. Relationships between attitudes, performance and customer satisfaction with service quality Past research has found positive but weak relationships between employees’ Job- related attitudes and performance (for reviews see [2324]). Recent research has included customer satisfaction as a correlate of employee attitudes and performance, dressing the importance of quality service to organizational achievement[25,26]. Providing quality service energize employees because it requires “… Alluding an organizational culture in which people are challenged to perform to their potential and are recognized and rewarded when they ad'[27, p. 32]. In today’s competitive marketplace, organization effectiveness depends on understanding what customers value and communicating this understanding to employees in the form of employee- performance goals and expectations[28,29]. In research on bank branches, employee ND customer attitudes about service quality were highly related[30-33].
Specifically, significant positive relationships occurred between employee attitudes about the organization’s human-resource practices and customer attitudes about the service service quality to customers also affect how employees are treated. Subsequent research supported and extended the above finding. In a study of 147 branch offices of a credit corporation, Ryan and Schmitt[34] found that customer satisfaction was positively related to employee perceptions of a Relationships 65 manageable workload, lower stress, and opportunities for training and development.
Branch morale was positively related to performance measures (higher market share, lower delinquent loan rates, and higher volume of activity). Furthermore there was a significant negative relationship between customer satisfaction and employee turnover. Toronto and Wiley[35] studied relationships between customer satisfaction, employee attitudes, and organizational performance in a large, multinational computer organization. They found that employees’ perceptions of their organization’s culture for success consistently showed positive relationships with organizational performance measures.
Interestingly, employee satisfaction with pay and benefits consistently showed negative relationships with organizational performance indicators, suggesting that these elements of Job satisfaction were less reflective of management practices that deal with organizational success. This finding replicated Schneider et al. ‘s[33] failure to find a significant relationship between employees’ general feelings of Job satisfaction and customer perceptions of service. Another finding in the Toronto and Wiley[35] study was that employee perceptions of an organization’s “culture for success” showed substantial relationships to customer distraction.
Culture for success was measured by such items as: “adequate resources are provided for developing the technology of my business unit’s future products”, “My business unit plans future product and service offerings based on customer needs”, and “My business unit’s products and services are competitive in the marketplace”. Another employee attitude dimension highly related to measures of customer satisfaction was personal responsibility, which included such items as “Commitment to helping my business unit succeed” and “l protect the company’s property and business information as if it were my own”.
In another study of relationships between organizational performance, customer satisfaction, and employee attitudes, Wiley[25] studied data from over 200 retail stores. He found that, overall, those stores most favorably described by employees were those most favorably described by customers. In particular, customer satisfaction ratings were strongly and positively related to employees’ descriptions of key aspects of their working environment, especially working conditions, minimum obstacles to accomplishing their work, and a strong sense that supervisors and co- workers stress customer service.
A number of employee attitude dimensions were related to customer satisfaction. One such employee attitudinal dimension was effective communication, which included items such as “my work group is told about upcoming changes in time to prepare for them” and “l get enough information about supervisory practices, which included items such as “My supervisor/manager makes it clear what I am expected to do”. Interestingly, Wiley[25] found that conditions conducive to effective financial performance, such as size and volume of business, were less likely to be related to dimensions of customer satisfaction, such as friendliness.
This suggests that reference relationships to employee and customer attitudes depend on the nature of the organization and the measures used. Measuring financial performance as an aggregate accounting index of the profitability of transactions (e. G. Sales during a period of time) may not adequately reflect the profitability of an organization’s relationships with its customers. In a sample of 30 banks, Paradise-Toronto[36] examined relationships between employee perceptions of management leadership and measures of financial performance and efficiency.
The measures of managerial behavior were tied to a leadership/management model which focused on behaviors believed to be important in establishing a competitive sales and service- oriented culture. Such a culture should be a foundation for maintaining high organizational performance[37]. Managers (bank presidents in this case) were responsible for the management culture in the organization. The management role included setting standards and expectations and providing feedback, evaluation and coaching.
Effective communication was part of the management culture. Employee- attitude items reflecting communication included: “manager effectively communicates rationale for our goals”, “manager regularly requests input when aging decisions/solving problems”; and “manager provides clear expectations/ standards regarding quality service”. Communication was strongly positively related to productivity (the ratio of revenue divided by personnel expense).
Overall, the study found that leadership factors of communication downwards, sales goals and teamwork showed the strongest relationships to organizational efficiency measures. The research suggested that leaders have control over achieving objectives because they take customer requirements into consideration. The current study extends previous research by examining relationships between employee attitudes, performance, and customer satisfaction over time.
The goal is to determine the extent to which employee attitudes distinguish between departments and the extent to which these differences are associated with productivity, administrative effectiveness, and customer satisfaction. In general, we hypothesize that work groups differ in employee attitudes and that these differences relate to recently achieved performance and customer satisfaction and also predict future performance and customer satisfaction.
Method Respondents Data were collected from the US customer-service division of a large Europeanheadquartered computer hardware firm. Employee attitude surveys were per cent. Comparisons were made for the same managers at both points in time, although the composition of their departments changed over time. Group performance, customer satisfaction and administrative effectiveness were available at the time of the initial attitude survey and one year later. Measures Employee attitudes.
There were 48 employee attitude items. The items concentrated on employee attitudes towards their immediate manager, their Relationships 67 manager’s manager, and top leadership (with emphasis on confidence in leadership), purport for employee development, and directions for organizational and departmental change. The items also reflected general areas of satisfaction (e. G. Satisfaction with pay and benefits). Customer satisfaction. The customer satisfaction measure consisted of attitudinal and objective components.
Specifically, it was a weighted sum of the following five components in order of weight (with weights determined by maximum scores for each component): the average satisfaction with service score from the firm’s customer satisfaction survey (36 per cent of score); percentage of service calls met thin response time specified in the client’s contract (21 per cent); percentage of service calls completed the same day of contractual response date (20 per cent), percentage of repeat calls (inversely coded, 16 per cent), and percentage of service calls falling within the estimated time of arrival (7 per cent).
Total scores could range from 0-70. Department productivity. This was the sum of two equally weighted components: site labor utilization (an index of deployment of service employees in the district); and maintenance work load (the work hours used for equipment maintenance, inversely scored). Total scores could range from 0-30. Administrative effectiveness.
This was the weighted sum of five components, (with higher negative numbers equaling lower effectiveness): database accuracy based on monthly audit results (17 per cent of score), customer survey list accuracy (20 per cent), repairable parts returned (30 per cent), receivable balance under 60 days (13 per cent), and installation report timeliness (20 per cent). Total scores could range from O to -30.
These achievement measures (customer satisfaction, district productivity, and administrative effectiveness) were designed to recognize departmental personnel for period contribution towards the overall performance of customer-service operations. The goal was to provide a fair and equitable measurement of performance which could be used to identify top-performing departments. The programmer produced financial and customer satisfaction pay-offs by promoting competition among the work groups that would sustain and improve performance to achieve the desired results.
Therefore, employees were aware of the programmer and its components, and they had a chance to track their results over time in comparison with other departments. Analyses The attitude items were collected from each employee, and the performance and customer satisfaction measures were derived for departments. Our goal was to determine whether the departmental differences on the items were associated with customer satisfaction and performance. This was accomplished by discriminate analysis on the time-I employee-attitude items.
The results identified discriminate functions that maximally distinguished between departments. Function group means derived from the attitude items were then correlated with the customer satisfaction and performance measures across departments. Regression analyses determined the extent to which the set Journal of of group means on the discriminate functions derived from the attitude items’ predicted customer satisfaction and the two performance measures. Correlations and regression analyses examined relationships between attitudes at time 1 and customer satisfaction and performance at time 2.
Results Table I presents the means, standard deviations and interrelations for the three performance indices at each point in time and between times. Customer satisfaction and productivity decreased over time while administrative effectiveness increased. At time 1, the three performance measures were independent of one another. At time 2, customer satisfaction increased with administrative effectiveness (r = -(). 36; recall that administrative effectiveness was an inverse scale). Time 2 measures of productivity and administrative effectiveness were higher when customer satisfaction was higher at time.
