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Title: The impact of employee satisfaction on quality and profitability in high-contact service industries
Authors: Yee, RWY
Yeung, ACL 
Cheng, TCE 
Keywords: Employee satisfaction
Service quality
Customer satisfaction
Firm profitability
Empirical research
Issue Date: Sep-2008
Publisher: Elsevier B.V.
Source: Journal of operations management, Sept. 2008, v. 26, no. 5, p. 651-668 How to cite?
Journal: Journal of operations management 
Abstract: The extant operations management literature has extensively investigated the associations among quality, customer satisfaction, and firm profitability. However, the influence of employee attributes on these performance dimensions has rarely been examined. In this study we investigate the impact of employee satisfaction on operational performance in high-contact service industries. Based on an empirical study of 206 service shops in Hong Kong, we examined the hypothesized relationships among employee satisfaction, service quality, customer satisfaction, and firm profitability. Using structural equations modeling, we found that employee satisfaction is significantly related to service quality and to customer satisfaction, while the latter in turn influences firm profitability. We also found that firm profitability has a moderate non-recursive effect on employee satisfaction, leading to a “satisfaction-quality-profit cycle”. Our empirical investigation suggests that employee satisfaction is an important consideration for operations managers to boost service quality and customer satisfaction. We provide empirical evidence that employee satisfaction plays a significant role in enhancing the operational performance of organizations in the high-contact service sector.
ISSN: 0272-6963
DOI: 10.1016/j.jom.2008.01.001
Rights: Journal of Operations Management © 2008 Elsevier B.V. The journal web site is located at
Appears in Collections:Journal/Magazine Article

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