Commitment-Based Human Resource Practices: Through Creating

Service Climate to Enhance Market Performance in the Service

Industry
Ming-Tien Tsai, Ph.D., Shuang-Shii Chuang, Ph.D., and Chao-Wei Chin, Ph.D. Candidate
National Cheng Kung University, Taiwan

ABSTRACT

Strategic human research management researchers have often suggested that individual human resource
practices can be regarded as a set of commitment-base human resource (HR) practices, affecting business
performance via a black box. The purpose of this study is to establish a framework that provides a better
understanding of how commitment-based HR practices affect market performance via service climate in the service
industry. A sample of 134 front-line employees were surveyed and the data analyzed using structural equation
modeling. Results show that commitment-based HR practices not have a direct effect on market performance, but
will create a positive service climate, which in turn affects market performance. Thus, this study suggests that
service organizations should foster excellence in service climate through commitment-based HR practice for
improved market performance.

INTRODUCTION

Research into strategic human resource management and business performance relationship has moved
from a focus on individual HRM practices to investigation of the overall set of HRM practices from the macro-level
viewpoint (Arthur, 1992, 1994; Bowen & Ostroff, 2004; Delery & Doty; 1996; MacDuffie, 1995). Hence, in recent
years the study of the commitment and control approach to strategic resource management has become an important
issue (Huselid, 1995; Collins & Smith, 2006), especially in commitment-based human resource practices (
Heinsman, Hoogh, Koopman & Muijen, 2006).

Recent reviews, nevertheless, have identified several gaps in this research literature (Batt, 2002; Lopez,
Peon & Ordas, 2005). First, studies that have examined the relationship between commitment-based human resource
practices and organizational performance in the manufacturing industry have found a positive relationship (Arthur,
1992,1994; Collins & Smith, 2006; Huselid,1995; Way, 2002), but few studies about commitment-based human
resource practices have been done in this field of service industry (Bou & Beltra, 2005), in fact, the fastest growing
services economy, and most workers work in the service industry (Batt, 2002). However, the service industry and
manufacturing industry differ in many important ways, such as the interaction between the employee and customer
(Salanova, Agut & Peir, 2005). Therefore, study of the service industry is necessary. Second, prior studies have
largely focused on organizational performance (Collins & Clark, 2003; Youndt, Snell & Lepak, 1996). However,
market performance, not organizational performance, represents the ultimate success or failure of business. Third,
scholars have noted that the relationship between commitment-based human resource practices and organizational
performance is a black box (Guest, 1997), that is to say, the relationship between commitment-based human
resource practices and business performance is not obvious and direct. In recent years, there has been a rapid
proliferation of research concerned with related elements of the black box in non-service industries, such as social
climate (trust and cooperation) (Collins & Smith, 2006), organizational learning (Lopez et al, 2005), knowledge
management capacity (Chen & Huang, 2008), attitude, subject norm, and perceived behavior control (Heinsman, et
al., 2006), employee commitment, job strain, and management relation (Ramsay, Scholarios & Harley, 2000).
Because the service industry has different fundamental structures where service is the product, the service climate
focus should be on employee effort and competency in delivering service quality for the customer (Salanova et al.,
2005; Schneider, White & Paul, 1998). This is a key element in higher profit for the organization (Storbacks,
Strandvik & Grnroos, 1994). However, little research evidence supports a mediator role for service climate
between commitment-based human resource practices and market performance.

Thus, the main purpose of this study is to establish a framework that provides a better understanding of
how commitment-based human resource practices affect market performance via service climate. We extend
previous research in this field in several ways. First, we develop a set of commitment-based human resource
practices as a single indicator. Second, this study draws on a national representative sample of the service industry.

The Business Review, Cambridge * Vol. 11 * Num. 1 * December * 2008 144

Finally, we develop a model and hypotheses that represents the relationships between commitment-based human
resource practices, key elements of the service climate, and market performance.

LITERATURE REVIEW AND HYPOTHESES

Commitment-based human resource practices

The strategic human resource perspective can be divided into several different typologies (Arthur, 1992,
1994; Delery & Doty, 1996; Walton, 1985). Walton (1985) sorted it into control HR strategy and commitment HR
strategy. Arthur (1994) divided it into control systems and commitment systems, while Delery and Doty (1996)
classify it into internal systems and market-type systems. Using these typologies it should be noted that businesses
differ in their basic approaches and goals in managing human assets (Arthur, 1994). For example, firms use their
strategic human resource system to understand employee thinking, attitudes, and behavior (Collins & Clark, 2003;
Schuler, 1992). This research will consider all these different typologies, but focus on the commitment human
resource approach.

The control and commitment approaches represent two different human resource practices (Collins &
Smith, 2006) to shaping distinct behaviors and attitudes at work. Control-based human resource practices are aimed
at reducing direct labor costs or improving business efficiency, utilizing specified rules and procedures to intensify
employee compliance, while erecting output standards to measure the employee rewards (Arthur, 1994), in which
little policy definition concerns itself with the employee voice. Business information distribution is limited to a
need-to-know basis.

Walton (1985) proposed commitment-based human resource practices. In this new approach to the
employee, job design is broader than before, individual responsibility is expanded to upgrading performance,
compensation policies emphasize sacrificing individual pay equality and instead link to skills. Further, the company
must give employees some assurance of security, such as priority training for exiting work force, at the same time,
must have policies to encourage employee participation on wide range of issues, and share business information
widely. More specifically, commitment-based human resource practices act as a psychological contract between
the employee and the firm (MacDuffie, 1995), by creating psychological links between organizational and employee
goals, shaping employee attitudes and behaviors that the organization desires (Arthur, 1994).

Delery and Doty(1996) argue that Commitment-based human resource practices belong to the
configurational approach. Based on this foundation, scholars have attempted to develop effective combinations of
human resource practices (Arthur, 1992; Collins & Smith, 2006; Heinsman et al., 2006; Lin, & Hsieh, 2007;
Sanders, Dorenbosch & De Reuver, 2008) or bundles of interrelated, overlapping human resource practices
(MacDuffie, 1995). These scholars emphasizes the implementation of a combination of HR practices that work
together to motivate employees to contribute high levels of discretionary behavior by aligning their interests with
those of the organizations and creating a mutually reinforcing high-investment employer-employee relationship
(Tsui, Pearce & Tripoli, 1997). At the same time, Delery and Doty (1996) proposed a similar human resource system
(the internal system) using commitment-based human resource practices characterized by by higher levels of
employee involvement in managerial decisions, a high degree of employment security, extensive socialization
activities, general training to solve problems, appraisal feedback about average wage rates and benefits, and formal
participation to facilitate communication (Arthur, 1992, 1994).

Measurement methodologies for the concept of commitment-based human resource have been developed
by several researchers (Arthur,1992, 1994; Collins & Smith, 2006; Delery & Doty, 1996; MacDuffie, 1995). They
are based on theoretical rationales and prior research about strategic human resource management (Youndt et al.,
1996), and combine specific human resource practices into an index a set of commitment-based human resource
practices in different ways (Sanders et al., 2008). To examine the impacts of high commitment polices on
manufacturing performance, MacDuffie(1995) uses decentralization, participation, and general training to assemble
the construct of bundles of human resource practices. Collins and Smith (2006), investigating the performance effect
on human resource practices, used three measures, selection, training and development, and incentive policies, to
represent commitment-based human resource practices. Numerous scholars have adopted different measures of high
commitment-based or high performance human resource practices, including recruitment and selection, job
description, training, compensation, employee security, participation, communication, incentive pay, internal career
opportunities, and teamwork(Akhtar, Ding & Ge, 2008; Heinsman et al., 2006; Way, 2002). However, the content of
commitment-based human resource practices lacks a consensus definition.

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 As mentioned above, in this study commitment-based human resource practices are defined as combination
a set of HR practices that motivate employees to contribute high levels of discretionary behavior by linking their
interests with those of the organization to win the hearts and minds of the employee, and create a mutually
reinforcing high-investment employee-employee relationship. This study uses training, communication,
participation, compensation, and internal career opportunity to as its definition of the overall system of commitment-
based human resource practices.

Commitment-based human resource practices, service climate

Service climate in this study refers to employees enjoying HR practices together with regard to customer
service and customer service quality (Salanova et al., 2005). Numerous scholars believe that organizations must
create and maintain a climate for service, thus organizations must create set of foundational work conditions for
employees to develop the service climate (Johnson, 1996; Schneider, et al., 1998). The service climate can be
fostered via HR practices or internal service (Schneider, Macey & Young, 2006).

Schneider and Bowen (1993) found that human resource management practices are the key means in
creating the type of organization that can establish sustainable competitive advantage. That is, human resource
practices are related to service climate. Accordingly, this research hypothesizes:
Hypothesis 1: Commitment-based human resource practices are positively related to an organizations service climate.

Service climate and business performance

In the service marketing literature, performance is often defined by three kinds of criteria: (1) quality of
work measures, indicated by employee perceptions; (2) customer parameters, such as customer perceptions of
quality; and (3) productivity criteria, reflected in financial metrics. Many service organizations assess productivity
by quantifiable standards of services outcomes (e.g. sales, share of customer)(Singh, 2000).

Previously research has found that the service climate determines employee service behavior, consequently
creating customer satisfaction (Johnson, 1996), thus affecting financial performance (Schneider et al., 2006).
Further, Borucki and Burk (1999), in a study of retail stores, found a relationship between organizational service
climate and financial performance. To put it in another way, when the organization attaches importance to service
climate, the employee will consider customer evaluations of organizational service. Accordingly, this research
hypothesizes:
Hypothesis 2: There is a positive relationship between organizational service climate and market performance.

Commitment-based human resource practices, service climate and business performance

Over the past 20 years the issue of the effect of individual human resource practices on business
performance has become dominant in the human resource management field (Lopez et al, 2005). The effect of high
commitment human resource practices on performance has also assumed greater importance in recent years
(Heinsman et al. 2006). Bou and Beltra, (2005) and Batt (2002) found that High Performance HR practices affect
organizational financial results in the service industry. Similarly, Collins and Clark (2003), in an investigation of the
high technology industry, showed a positive relationship between a set of HR practices and financial performance
sales growth and stock growth. In exploring this issue, most studies have used organizational performance, and
several studies found that High Performance HRM leads to better organizational performance, including more
productive employees (Huselid,1995; Way, 2002; Youndt et al., 1996), lower turnover rate (Arthur, 1994; Way,
2002), and positive innovation performance (Chen & Huang, 2008).

Nevertheless, in statistical terms the relationships tend to be relatively small, raising the problem of
whether human resource systems have the capacity to generate better performance by themselves or whether they
must be reinforced by other elements (Lopez, et al., 2005). For example, Walton (1985) argued that a commitment-
oriented strategy eliciting employee commitment will lead to potential leverage on performance. Several empirical
studies of manufacturing organizations (Arthur, 1992,1994; Collons & Smith, 2006; Huselid, 1995) have noted that
human resource practices affect business performance by attracting or developing higher levels of employee
motivation. In service organizations commitment-based human resource practices also have positive effects on
business performance via the employee quit rate (Batt, 2002).

While the above discussion appears to show that the relationship between high-commitment human
resource practices and organizational performance is well established, the intermediate elements are still not clear,

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leading scholars to describe it as a black box (Guest, 1997; Ramsay, et al., 2000). Bowen and Ostroff (2004)
provide a framework suggesting that a set of human resource practices influences organizational performance
through employee interpretation of the work climate. Schneider et al. (2006) argue that positive human resource
practices provide a foundation to create the service climate, yielding behavior that in turn creates customer
satisfaction and desirable financial performance.

Given the above, in this research we assume that the service climate is a black box. Our research model is
displayed graphically in Figure 1. Accordingly, this research hypothesizes:
Hypothesis 3: Commitment-based human resource practices partially affect market performance through the
organizations service climate.

Service climate H2
H1

H3

Commitment- Market
based HR practices performance

Figure 1. The research model

RESEARCH METHDOLOGY

Sample and data collection

This research was conducted in the service industry in Taiwan. Since this research targets performance, for-
profit organizations must be used. The sample population and classification of service organization followed the
classification used by Top 5000 Business Organizations 2006 published by the China Credit Information Service
Ltd. A random sampling was made of 1,000 service organizations and the data were collected via mailed
questionnaire survey. First, we mailed the survey to the manager of each organization, and ask him to transfer it to a
first-line employee to fill it. Then, one month after the initial mailing, we sent a follow-up mailing that used the
same material as the first. The questionnaire was supposed to be completed during work time. A total of 134 usable
questionnaires were returned, for a response rate of 13.4%. By service classification, the represented the wholesale
and retail trade (11%), transportation and storage (13.6%), accommodation and food services (11.9%), finance and
insurance (20.2%), real estate (3.7%), information and communication (10.5%), professional, scientific and
technical services (19.3%), and human health and social work services (9.8%). In tenure with their respective
organizations, 29.1% of respondents had less than three years, 43.3% had more than three years but less than nine
years, and 27.6% had more than nine years. Finally, 83.5% of the organizations responding had been in existence
more than 9 years.

Measurement instruments
A seven-point Likert scale (1= disagree very much to 7= agree very much) was used to measure all variables,
except basic information about the firm and the respondents.

As discussed above, this study used 18 items representing five subdimensions to measure commitment-based
human resource practices. We constructed the questionnaire based on the literature and previous research. Training was
measured by 4 items based on Batt (2002), Akhtar et al. (2008), MacDuffie (1995), for example this organization will
offer the chance to participate in on-the-job training. Communication was measured by 4 items based on Lopez et al.
(2005) and Way (2002), for examples I regularly receive performance feedback from this organization and I will
receive plans and information about our department in a timely fashion. Participation was measured by 3 items based on
Akhtar et al. (2008) and Arthur (1992), for example this organization trusts employees to exercise good judgment to solve
problems. Compensation was measured by 4 items based on Arthur (1992), Collin and Smith (2003), and Walton (1985),
for examples Welfare for employees in this organization is better than our competitors and pay of employees fairly
reflects outcomes. Finally, Internal career opportunities is examined by 3 items based on Akhtar et al. (2008) and Collin
and Smith (2003), for examples Employees have an appropriate career path within this organization and After serving a
certain period, this organization will make career plans based on employee interests. Although in this research the 18
items reflect five subdimensions of commitment-based human resource practices, according prior research (Collin &
Smith, 2003 ; MacDuffie, 1995) these subdimensions can be regarded as a single higher-order dimension. Hence, in this
study we will take the average of each subdimensions and transform it into a single indicator.

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 The dimensions of service climate in this study were measured from the existing Global Service Scale developed
by Schneider et al. (1998), which has four scales. We reduced and modified the original questionnaire items. First, the
employee perceptions of the organizations global service climate is measured by 5 items, for example Do you think the
overall quality of service provided by your organization is excellent. Second, the customer orientation scale contains 2
items providing a measure of employee perceptions of the degree to which the organization pays attention to satisfying
customer needs. An example item is The supervisor in my organization has a plan to improve the quality of our work and
service. Third, the managerial practices scale contains 2 items that reflect manager support and reward for delivery of
high service quality. An example item is My manager recognizes and appreciates high quality work and service. Fourth,
the customer feedback scale contains 2 items that assess the solicitation and use of feedback from external customers. An
example item is We are informed of external customer evaluation of the quality of service delivered by my organization.

Market performance was measured using an existing final performance scale constructed by Delaney and
Huselid (1996), with reference to Lopez et al.(2005), measured by 4 items, including profitability, sales growth,
profit/sales margin and market share. In order to acquire sensitive market performance data, this research utilized the
indirect approach. We used reported performance measures, asking respondents to report their perceptions of the
organizations market performance better than market competitors, for instance compared with other organizations in this
industry our organization with a higher profitability.

ANALYSIS AND RESULTS

Following data collection, structural equation modeling (SEM) using AMOS 7.0 (Wu, 2007) was used to perform
the analysis in this study. A two-stage approach was used (Anderson & Gerbing, 1998) involving duplicate filtering and
estimating the measurement model, followed by estimating the structural model.

Measurement model
The measurement quality was assessed using several confirmatory factor analyses (CFA)(Anderson & Gerbing,
1998). Convergent and discriminant validity was also tested (Table 1). First, we used a first-order model to examine the
dimension of market performance, and used two sets of statistics to assess it. Results are shown in Table 2. All factor
loadings exceed 0.5, and each indicator t-value exceeds 4.8 (p < 0.001).

Overall goodness-of-fit indices should be as follows: chi-square/degrees of freedom ratio smaller than 3.0, RMR
smaller 0.05, GFI, AGFI and CFI greater than 0.9. Such outcomes indicate that the fit of the model is satisfactory (Bentler
& Bonett, 1980). In order to confirm dimensionality of commitment-based HRM practices, we ran a second-order
confirmatory factor analysis based on a hierarchical structure in which the commitment-based HRM practices are assumed
to affect more specific HRM practices (training, communication, participation, compensation, internal career
opportunities), which in turn are measured by specific items. The results show that for the factor loadings of the
measurement items on the first-order CFA, and the loadings of the first-order CFA on the second-order CFA, all t-values
exceeds 4.8 (p < 0.001)(Table 3). A chi-square/degrees of freedom ratio smaller than 3.0, RMSEA smaller 0.08, GFI, a CFI
greater than 0.9, and AGFI are slightly lower than 0.9, overall goodness-of-fit indices would then be acceptable.
Table 1. Means, standard deviations and correlation estimate
Mean S.D. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
(1)training 5.04 1.14 1
(2)communication 4.38 1.30 0.55* 1
(3)participation 5.07 1.12 0.51* 0.51* 1
(4)compensation 3.88 1.27 0.53* 0.65* 0.50* 1
(5)internal CO 3.89 1.42 0.48* 0.59* 0.45* 0.57* 1
(6)global SC 5.12 1.12 0.52* 0.63* 0.55* 0.61* 0.55* 1
(7)customer O 4.75 1.40 0.53* 0.65* 0.49* 0.63* 0.57* 0.74* 1
(8)managerial P 5.04 1.18 0.52* 0.63* 0.48* 0.61* 0.56* 0.72* 0.74* 1
(9)customer F 4.57 1.28 0.45* 0.56* 0.42* 0.54* 0.49* 0.63* 0.65* 0.63* 1
(10) performance 4.67 1.27 0.50* 0.61* 0.46* 0.59* 0.54* 0.66* 0.68* 0.56* 0.58* 1
* Correlation is significant at the 0.01 level

Finally, we use second-order confirmatory factor analysis to confirm the dimensionality of the service climate. This is
based on the assumption that service climate to affect more specific climate (global service climate, customer orientation,
managerial practices, customer feedback), which in turn are measured by specific items. The results show that for the factor
loadings of the measurement items on the first-order CFA, and the loadings of the first-order CFA on the second-order CFA, the t-
values all exceed 4.8 (p < 0.001)(Table 3). The chi-square/degrees of freedom ratio is smaller than 3.0, the RMSEA smaller 0.08,
the GFI and CFI are both greater than 0.9, and the AGFI are slightly lower than 0.9, indicating that most of indices are
satisfactory.

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 Table 2. Construct and measure: one-order confirmatory factor analysis
Dimension Indicators Standardized loading Cronbanchs construct convergent
reliability validity
Market performance V1 0.95(t=13.78) 0.88 0.87 0.64
V2 0.93(t=13.38)
V3 0.62(t=7.77)
V4 0.65(t=8.20)
2=4.13, DF=2, p=0.124, 2/df=0.12, RMR=0.037, GFI=0.99, AGFI=0.92, CFI=0.99

Table 3. Construct and measure: two-order confirmatory factor analysis

Dimension Subdimension Standardized Cronbanchs construct convergent
loading reliability validity
Commitment- Training 0.77(t=5.80) 0.85 0.90 0.65
based Communication 0.90(t=9.14)
HRM practices Participation 0.70(t=7.30)
Compensation 0.83(t=8.90)
Internal career opportunity 0.82(t=6.77)
2=155.23; DF=129; p=0.058; 2/df=1.203; RMSEA=0.04; GFI=0.90; AGFI=0.85; CFI=0.90
Service climate Global service climate 0.83(t=9.41) 0.89 0.94 0.80
Customer orientation 0.96(t=12.30)
Managerial practices 0.95(t=11.61)
Customer feedback 0.80(t=9.17)
2=55.354; DF=36; p=0.016; 2/df=1.582; RMSEA=0.07; GFI=0.932; AGFI=0.87; CFI=0.98
Note. Browne and Cudeck(1989) suggest that RMSEA was well within the limits of less than 0.08.

To assess scale reliability, based on the recommendation of scholars, we computed Cronbachs alpha
(Churchill, 1979) and the composite reliability (Fornell & Larcker, 1981). As shown in Tables 2 and 3, all measures
exceed the preferred level of 0.7, and were deemed to have good reliability (Anderson and Gerbing, 1988).
Convergent validity wasestablished using the average variance extracted for each dimension, which accounts for
0.50 or more of the total variance (Fornell &Larcker, 1981). Andersen and Gerbing (1988) suggest that convergent
validity may also be demonstrated statistically using the path coefficient. According to Tables 2 and 3, in this study
average variance extracted exceeded 0.50 for each dimension, and all coefficients are significant at p < 0.001.

Discriminant validity was assessed using the chi-square difference test between a constrained confirmatory
factor model (where the interfactor correlation is set to 1) and an unconstrained model (where the interfactor
correlation was free) using the same constructs. The chi-square test 2 (1, 0.05) = 3.84 is the critical value to estimate
the result. In this study chi-square difference statistics range from 4.49 to 87.79, all exceeding 3.84 (showing that
they are significant). Discriminant validity is thus supported.

Hypothesized model
The hypothesized model was tested using AMOS 7.0 structural equation modeling software (Wu, 2007), using
the mixed model to examine the hypothesis. The resulting 2 is 44.50 with 31 degrees of freedom (2/df=1.435; p=0.06;
GFI=0.94; AGFI=0.90; RMR=0.50; RMSEA=0.06), thus suggesting that the hypothesis model fit the data. We present the
resulting standardized parameter estimates in Table 4. The expected relationship between commitment-based HR practices
and service climate is supported by the positive path coefficient ( =0.91, p < 0.001), thus hypothesis 1 is supported.
Further, the empirical observation service climate is positively associated with market performance ( =0.59, p < 0.01),
also supporting hypothesis 2.

The hypotheses were tested and the mediating effect investigated using competing model analysis, adopting the
approach used by Lopez et al. (2005). Adopting the approach used by Singh, Goolsby, and Rhoads (1994), we checked for the
presence of a mediating effect by performing a competing model analysis to estimate and evaluate the significant difference
between two substantive models. The first model (direct effects) examined the direct relationship between commitment-based HR
practices and market performance, whereas the second model (partial mediation) examined the same relationship via a mediator,
service climate. Table 4 shows the results of the competing model analysis, and the fit indices for each model indicate good
overall fit. Compared with the direct effect model, the partial mediation model explains more variance in market performance
(0.62 compared to 0.56). Positive relationships exist between commitment-based HR practices and service climate (H1: p <
0.001), and service climate and market performance (H2: p < 0.01). A significant relationship between commitment-based HR
practices and market performance was indicated in the direct effects model ( = 0.75, p < 0.001) but becomes non-significant in
the partial mediation model ( = 0.21, p > 0.1). Taken together, the mediating effect of service climate on commitment-based HR
practices and market performance is significant, supporting hypothesis 3( = 0.53). In other words, commitment-based HR
practices forward the growth of market performance by creating a strong service climate between organization and employee.

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 Table 4. Analysis of hypothesized paths (direct and partial mediation effect)
Parameter Direct effects model a Partial mediation model b
Hypothesized paths
Commitment HR Market performance 0.75 (t=7.64***) 0.21 (t=0.92)
Commitment HR Service climate 0.91 (t=7.90***)
Service climate Market performance 0.59 (t=2.56**)
Measurement coefficient
Commitment HR Training 0.68 a 0.67 a
Commitment HR Communication 0.83 (t=8.28***) 0.82 (t=8.29***)
Commitment HR Participation 0.61 (t=6.31***) 0.62 (t=6.53***)
Commitment HR Compensation 0.79 (t=8.00***) 0.80 (t=8.08***)
Commitment HR Internal career opportunity 0.72 (t=7.33***) 0.72 (t=7.43***)
Service climate Global service climate 0.84 a
Service climate Customer orientation 0.87 (t=12.84***)
Service climate Managerial practices 0.85 (t=12.15***)
Service climate Customer feedback 0.74 (t=10.02***)
Goodness-of-fit statistics
2 6.82 (p=0.656 > 0.05) 44.50 (p=0.06 > 0.05)
d.f. 9 31
NFI 0.98 0.95
TLI(NNFI) 1.01 0.98
CFI 1.00 0.98
R2 for PERFORMANCE 0.56 0.62
a Indicant loading fixed at 1 to set the scale *** p < 0.001, ** p < 0.01

CONCLUSIONS AND FURTHER RESEARCH

In this research have several findings are worth summarizing. Previous study of development commitment-based
(high commitment) HR practices using questionnaires has generally included training, participation, compensation and
internal career opportunity (Arthur, 1994; Collins & Smith, 2003), but less likely to have communication. We found that
communication is a very important index of a set of commitment-based HR practices. Its key role stems from the fact that
commitment-based HR practice means winning the hearts and minds of employees (Heinsman et al., 2006), putting a
premium on the role of communication. Therefore, we suggest that further research on communication in commitment-
based HR practice. Moreover, we observed that there is a high correlation among global service climate, customer
orientation and managerial practices based on the statistics, but more research should be done to explore the correlations
among these constructs.

This study shows that commitment-based HR practices shape the service climate. Based on prior studies of
service organizations, a good service climate will earn many benefits for the firm, such as employees who are committed
to delivering higher service quality to satisfy customers (Johnson, 1996). If employees in a service organization can
perceive a superior service climate, then they more likely to show the service behavior that the organization desires. For
this reason we believe that commitment-based HR practices affect how employees develop their sense of the service
climate for their organizations. Thus, managers of service firms should exercise caution in thinking about how to design
commitment-based HR practices to employee that foster the organizations service climate. In our research also found that
the service climate leads to better market performance. This finding is consistent with previous studies, which were largely
focused on human performance (Salanova et al., 2005). We explore market performance, but find results similar to
previous studies.

Finally, the most important evidence is that commitment-based HR practices forward the growth of market
performance by creating a strong service climate between organization and employee. Several scholars have found that
commitment-based HR practices do not affect market performance directly, and we have found the same results. We
found, however, that the service climate mediates the relationship between commitment-based HR practices and market
performances, that is service firms can implementing commitment-based HR practices to creating service climate, and
service climate will bring good market performance. We propose that future research should be consider commitment-
based HR practices in different types of service environments, and continue to explore the black box that contains the
structure of the relationship between service and performance in the service industry.

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