EMPLOYEE SATISFACTION IN

SERVICE BASED
ORGANIZATIONS AND ITS
EFFECT ON THE CUSTOMER
SATISFACTION
A Literature Survey
Abstract
The literature survey aims to analyze the role of
employee satisfaction in any service based
industry. This parameter is analyzed in multiple
dimensions to explain its necessity in a service
sector. Importantly, the research aims to
convince that employee satisfaction is of utmost
importance since it directly influences the
primary factor customer satisfaction in any
service industry.
Benefits of Employee
Satisfaction
Employee satisfaction enhances productivity, and
increases the quality of work. It is necessary for a
company to perceive as to what employees feel,
think, desire along with discovering how the
workforce devotion and commitment can be
increased. With employee devotion, business
outcomes can be improved, productivity can be
enhanced, commitment can get intensified and
attrition rate can take a dip.
A. Naseem, S. Ejaz Sheikh and P. Malik GPHR (2011), Impact of Employee
Satisfaction on Success of Organization: Relation between Customer Experience
and Employee Satisfaction - International Journal of Multidisciplinary Sciences
and Engineering
Benefits of Employee
Satisfaction
Individual service employees are the last people to
implement the firms marketing efforts and the first
people to directly interact with the customer. In
other words, service employees actualize the
firms customer orientation at the front line and at
the same time acquire feedback from customers
and provide it to the management as market
intelligence. As such, the service firms ability to be
customer-oriented primarily depends on individual
service employees customer orientation.
Brown, T.J., Mowen, J.C., Donavan, T.D., & Licata, J.W. (2002). The customer
orientation of service workers: Personality trait effects on self- and supervisor
performance ratings. Journal of Market Research
Satisfaction connection
The perceived employee satisfaction, perceived
employee loyalty, and perceived employee
commitment had a sizable impact on perceived
product quality and on perceived service quality

M. Vilares and P. Coelho (2000) .The Employee Customer Satisfaction chain in
the European Customer Service Index Model , European Marketing Journal
Satisfaction Connection
The customer can reach or exceed the expected
satisfaction. Then he or she becomes a loyal
customer. But it always depends on the personal
experience and the perception of the quality of
service. A negative word of mouth leads to a
reduced customer satisfaction, while satisfied
customers spreading positive word of mouth might
create new customers to the business.
Yu, Lei-Yu, Yu-Ching & Tai (2005), Perceived quality, customer satisfaction and
customer loyalty: the case of lexus in Taiwan. Total Quality Management and
Business Excellence
The Service Profit Chain Or
Employee-Customer Profit Chain
Framework
According to this framework, the elements of the chain are
interdependent and complex and the size and strength of
their influence varies by industry, market segment and
even organizational function. The framework consists of,
Employee variables like employee satisfaction,
commitment and loyalty influence customer perception
of the value of the product and service, which in turn
influences customer satisfaction;
Customer satisfaction influences customer loyalty; and
Corporate financial results are directly influenced by
customer loyalty.
Heskett, J.L., Sasser, W.E. and Schlesinger, L.A. (1997), The Service Profit
Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction
and Value, Free Press, New York, NY.
Job Satisfaction
Employee satisfaction is in fact job satisfaction. It is
necessary to maintain job satisfaction so that
employees can be motivated. In studying job
satisfaction, job rotation, work method, problem
solving and goal setting are important factors to
consider and job satisfaction is also influenced by
employees age, marital status and work
experience
S.Z. Dawal, Z. Taha, Z. Ismail.,(2009). Effect of job organization on job
satisfaction among shop floor employees in automotive industries in Malaysia.-
International Journal of
Industrial Ergonomics
Management and Satisfaction
A managers emotional intelligence is related to the
use of supportive leadership behaviours. Managers
who have higher emotional intelligence engage in
leadership behaviours such listening, praising,
information sharing, asking for input and providing
rationale, and that the employees that work for such
managers will be more satisfied.
John D. Benson ( 2009)- The Relationship Between Emotional Intelligence And
Managers Use Of Specific Directive And Supportive Behaviours
Employees Management
Relationship
Managers are believed to develop a role
relationship in which actions and decisions should
promote the interest of organization. Employee
involvement and contributions in organization is
outcome of the interest. The quality of employee
organization relationship requires fulfilment of
needs, quality of interaction, adaptability and
identification
Jacqueline A-M. Coyle-Shapiro, Lynn M. Shore., (2007). The employee
organization relationship: Where do we go from here?- Human Resource
Management Review
Employees Empowerment
Employee empowerment is also an effective way
of satisfying them. When employees are given
employee empowerment, then it leads to job
satisfaction. Employee empowerment also causes
customer satisfaction. Similarly job satisfaction
also leads to customer satisfaction which leads to
organizational success
Isaiah O. Ugboro, Kofi Obeng., (2000). Top management leadership, employee
empowerment, job satisfaction, and customer satisfaction in TQM organizations:
an empirical study.- Journal of Quality Management 5 (2000)
Employee Loyalty
Employee loyalty is the important factor to improve
service quality which is interconnected to customer
satisfaction and customer loyalty and it gives
progress to profitability in industries.
Rachel W.Y. Yee, Andy C.L. Yeung*, T.C. Edwin Cheng (2008). The impact of
employee satisfaction on quality and protability in high-contact service industries
- Journal Of Operations Management
Revenue connection
By reviewing the relationship between financial
success and customer and employee variables
(e.g., customer satisfaction, employee satisfaction,
etc.) it is found that, depending on the market
segment and industry, between 40 and 80 percent
of customer satisfaction and customer loyalty was
accounted for by the relationship between
employee attitudes and customer-related variables.
Wiley, J. W., & Brooks, S. (2000)- "The high performance organizational climate.-
Handbook of Organizational Culture and Climate.