Human resources practices influence customer satisfaction

Human picks practices influence guest cheerThe reduce of this seek is on examining the cover by which world option practices influences node joy in depositing sector of Pakistan. Drawing on literature from strategical merciful election management, presidential termal manner, and marketing, a model of HRP-CS is proposed with employee committal as its central flump down. It is argued that such(prenominal) committal is influenced by organisational pityingity pick practices and in turn it influences employee behavior towards organisational guests which is because translated into client happiness. disrespect heavily documented consummation link in the midst of mankind re fountain practices and organisational, the term HR practices has r arly been adequately delineate in the literature. In fact searchers begin tested for link mingled with HR practices and self-colored performance with different HR practices as input and different performance outcomes as output. Boselie and his colleagues con nominate very rightly tell that, Still no consensus has emerged on what employee management activities should be in a comprehensive HRM checklist, since no wide accepted theoretical rationale pull rounds for selecting practices as definitively essential to HRM. option of HR practices for this dissertation is ground on the examine of relevant studies. Liao and Chuang noned that involvement, training and performance incentives be among the most relevant for employee performance in proceeds settings. Similarly, Boselie and his colleagues have determine training, performance based rewards and performance estimate as the top three researched human resource practices. They argue that this politeness be because these practices reflect the main objectives of most conceptualisations of a strategic HRM programme. conduce lie appraisals, employment tribute, and mesh persist sharing have also been report to be inexpugnablely colligate to organisational performance .In the legerity of the above discussion, I selected human resource practices that adequately cover the argonas identified by the strategic HR researchers as being Copernican in improving constitutional performance. The practices include internal aider opportunities, training, result oriented appraisals, employment security, corporation, and compensation. All these practices be supposed to enhance musical arrangemental human capital which get out accordingly serve as a militant advantage for the firm. Nevertheless, a group of researchers including Jackson and Schuler , Ferris and his colleagues and Uhl- Bien et al called for more than(prenominal) stress on social context of the kinds deep down the presidential term. These researchers argue that employee interaction within establishment comprises social capital, and no firm can effectively procure its goals until it actively utilizes its social capital a extensive with its human capi tal.The central hint of social capital theory is that nedeucerk of family births constitute valuable resource for the conduct of social affairs. As supervisor-employee interaction is among the most frequent experiences in organisational life, the importance of this kin in social capital fundamental law is very much understandable. Additionally, as supervisors are viewed as agents of organization, who are liable for placeing and facilitating employees job responsibilities, their attitude and behavior is viewed as indicative of organisational orientation towards their employees . Although, supervisor maintenance or supervisor behavior whitethorn non qualify itself as firms HR practice, I have added it to the list of HR practices in my dissertation due to its importance in eliciting employee responses towards organization and its nodes. Thus the list of HR practices which provide be the subject of teach in this dissertation are as following executive program reinforc ing stimulus (SS)Internal travel opportunities (ICO) training (Trg)Result-oriented appraisal (ROA)Employment security (ES) mesh in determination fashioning (Part)Compensation (Comp)3.2 Human mental imagery direction Practices and Customer SatisfactionIn one of the early studies on kindred among employees comprehension of organizational practices and customers apprehension of service prime(prenominal), Schneider, Parkington, and Buxton storied that two are significantly cor colligate. They conducted a instruction of twenty three bank branches of a climb service bank and observed a strong correlation (r = 0.67) among employees wisdom of branch service and customers perception of quality of service at the branch. Although, this area did not survey the fictitious character of organizational human resource practices on customers perception of service quality or customer mirth, it laid down the frameation for studying the consumption of employee attitudes and behavi or in connection with customer satisfaction. In order to yield let out perceptions of service quality from customers, the study emphasized to focus attention on the component of boundary personnel in retail service organizations very(prenominal)(p) the branch banks .Rogg, Schmidt, Shull, and Schmitt conducted a study of 351 franchise dealerships of an automobile company to come across the impact of human resource practices on customer satisfaction. They run aground that HR practices effects customer satisfaction through its influence on organizational climate. This is to say that they tested for a mediating role of climate in HR-CS race. Their information analysis declareed the hypothesis that human resource practices are significantly related to customer satisfaction, though most of the correlations were less than 0.20. While this study adds to our legal opinion that firms human resource practices are related to its customers satisfaction, it is not without its problems. First, the entropy on HR practices and climate variables were collected using private instrument, consequently increasing the chance of same source bias. Secondly, the data on, human resource practices and climate, variables were collected from single respondent in the organization. While the data of human resource practices were factual, the data on climate were attitudinal and is highly prone to single rater error. Both these problems (same source bias and single rater error) have been taken care of in this study.In another study of 137 BDG (Branch Director Group) of a full service bank, Gelade and Ivery documented that BDGs HRM practices are overconfidently associated with customer satisfaction. They hit the booksd the relationship between HRM indicators (staffing train, over cadence, and professional development) and organizational performance indicators (sales against targets, customer satisfaction, staff retention, and clerical accuracy) and free-base that almost all the three HRM indicators are positively associated with organizational performance indicators including customer satisfaction and that such association is moderated by organizational climate.Whereas most of the studies which examined the relationship between human resource practices and customer satisfaction were conducted on organizational or DMU take of analysis , Liao and Chaung analysed the factors influencing customer satisfaction using a multi-level conceptual framework. There data comprised responses of 257 employees, 44 managers, and 1993 customers from 25 franchised restaurants. The human resource practices data were collected from restaurant manager go employee performance and customer satisfaction data were based on self-reports of employees and customers respectively. The data gathered thus gathered from employees and customers were aggregated to restaurant level to analyze the HR practices customer outcome relationship at unit level. The results of the study showed that of the human resource practices provided employee involvement was significantly related to the service performance, dapple other two HR practices (service training, and performance incentives) did not have any significant relationship with employee performance. The study did not examine the direct effect of human resource practices on customer satisfaction except the relationship between restaurant-level service performance and customer satisfaction was found significant. Although, this study provided a better understanding of how employees actions and perceptions influences organizational context, still it did not explicitly examines the role of employees perception of human resource practices in eliciting customer perception of service quality and customer satisfaction.While most of studies conducted on human resource management customer satisfaction relationship have focused on organizational climate as mediating variable between the two, Nishii, et al is the first one to examines the role of employees perceptions, attitudes and behaviors as the central plank of such relationship. There sample included 95 stores each with or so 18 departments. Data was collected from 4208 employees from 362 departments across these 95 stores. Nishii and her colleagues in a multilevel analysis investigated the role of employee perceptions of why organization adopted definite human resource policies (HR attribution) in shaping their work attitudes and behaviors and the relationship between such attitudes/behaviors and customer satisfaction. The data regarding employee HR attributions, commission and satisfaction were collected from employees at individual level, while data regarding employee behavior and customer satisfaction were collected from store managers and customers respectively at store-level. The individual level data were than aggregated to store level in order to analyze the relationship at store level unit of analysis. The results of this study revea led that employees attributions of human resource practices (HR attributions) are positively related to employee attitudes. They further found that unit-level attitudes were positively related to two aspects of employee behavior, measured in terms of OCB (organizational citizenship behavior). One dimension of OCB (OCB-helping) was found significantly associated with customer satisfaction. The most important finding of the study was, that the same set of HR practices may not even exhibit connatural effects within a single organization. The implication is that it is not mediocre the HR practices themselves but rather also employees perceptions of those HR practices that are important for achieving desired organizational outcomes. italics added .In fact focus on employee (or member) perception is not a new phenomenon in organizational studies. Almost cardinal years ago Schneider, et al based on Heider , Miller, Galanter, and Pribram and Bowers tickd that, phallus perceptions of or ganizational practices and procedures are the critical data in understanding organizational behavior. No behavior in, or of, organizations occurs in the absence of perceptions. To conceptualize an organization requires a consideration of human behavior, and human behavior does not exist without perception.Similarly, drawing on Endler and Magnusson and Drazin, Glynn, and Kazanjian Bowen and Ostroff argued that individual behavior potential are not based on . . . actual situation per se, rather, the situation individuals see based on their perceptions, . Finally, Nishii and her colleagues emphasized the need for focusing more future SHRM research on the way that HR practices are enacted in organizations, as revealed in human perception .Though the study undertaken by Nishi and her colleagues is among the first to through empirical observation test the role of employees perception of HR practices in influencing customer satisfaction, it did not actually measured the employees perceptio n of HR practices per se, rather, it took a different shape up and examined the employees perception of why extra HR practices exists and the effect of this why on customer satisfaction. Thus, the important and frequently sought after question regarding the role of employees perception of human resource practices in influencing their attitude, behavior and customer satisfaction is still unanswered in the existing literature.Based on last(prenominal) literature, which demonstrates a positive link between organizational HR practices and customer satisfaction, and to answer a very important, but still unanswered, question in strategic human resource management literature, I hypothesized the relationship between employees perception of HR practices and customer satisfaction as followsH1 There will be a positive relationship between perceptions ofSupervisor tin (SS)Internal Career Opportunities (ICO) OrganizationalTraining (Trg) HumanResult orientated Appraisal (ROA) ResourceEmploym ent trade protection (ES) Practices (HRP)Participation in Decision Making (Part), andCompensationand customer satisfaction such that the customers interacting with employees who more positively perceive HR practices will be more satisfied and vice-versa.3.3 explore Model The Process through which HR Practices Influences Customer SatisfactionAs earlier noted in the introduction, the primary aim of this research is to investigate the process/path through which human resource practices influence customer satisfaction, as this is the dynamics of such process which is of immense importance to the owners and managers of the organizations. It is only through the take a shit and proper understanding of mediating mechanisms between HR practices and customer satisfaction that managers can avoid engaging in conflicting, and at time counter-productive, HR policies.The proposed model indicating the mediating process between perceptions of human resource practices and customer satisfaction is shown in figure 3-1.HR PracticesEmployee PerceptionsEmployee consequentOrganizational OutcomeInternal Career OpportunitiesResult Oriented AppraisalParticipation in Decision MakingEmployment SecuritySupervisor SupportTrainingCompensationPerceived Organizational SupportCustomer Satisfactionemotive CommitmentCustomer Oriented BehaviorTheoretical Framework investigate ModelFigure 3-1 Research Model The Influence of HR Practices on Employee Commitment and Customer SatisfactionAn examination of the figure 3-1 depicts the relationship of various variables in the model. It is proposed that for human resource practices to influence customer satisfaction they are to be first comprehend by the organizational employees in kindly or unfavorable manner. The cumulative employee perception nearly HR practices is accordingly translated into perceived organizational support (POS), a concept which indicates the organizational commitment towards employee wellbeing. It is further proposed that th is POS is compensated by the employees in the form of their commitment to organization, which then forms the terra firma for customer-oriented behavior on their part. The final part of the model deals with the boundary spanning role of the employees and hypothesizes that employee behavior influences the customers perception of service quality in organizations which ultimately leads to customer satisfaction with the organization.In what follows each of the relationships proposed in the model is examined in greater detail in the light of relevant literature. Research hypotheses based on such relationships are formulated within each section.3.4 Human Resource Practices and Perceived Organizational SupportPerceived organizational support is defined as employees perceptions about the degree to which the organization cares about their well-being and value their contribution . Studies have shown that human resource practices signaling investments in employees are positively related to pe rceived organizational support . Organization support theory argues that employees assign human standardised characteristics to organizations. This tendency to personify organizations is encouraged by the organizational norms, practices and policies that prescribe employee role behaviors . This personification leads employees to believe that treatment met to them by their organizations is its indication of favor or disfavor to them . The treatment met to employees signal organizations readiness to reward change magnituded work performance and to meet its employees call for for flattery and recognition. As the organization treat its employees through the implementation of various human resource practices, I argue that the development of employees global belief regarding the accomplishment to which organizations value its members contribution and care about their wellbeing (perceived organizational support) is the interchange of such HR practices. Further, Eisenberger and his col leagues noted that perceived organizational support depends on attribution processes and is based on employees judgments, among other things, of organizational sincerity. Similarly, Whitener , while identifying the possible causes of different employee outcomes towards same HR practice, stressed upon the future researchers to . . . measure employees perceptions of the characteristics of human resource practices as an intervening variable between managers comments of human resource practices and employees perceptions of support. . In fact more and more researchers today are realizing the important role of employees perceptions in HR practices employee outcomes relationship. In a very recent publication Nishii et al have argued that, . . . in order for HR practices to exert their desired effect on employee attitudes and behaviors, they first have to be perceived and interpreted subjectively by employees . . . . Thus I belt down my earlier argument regarding the relationship between HR practices and POS by fit the role of employees perception in HR-POS relationship I hypothesize that it is employees perceptions of organizational human resource practices, instead of practices themselves, which leads to development of employees POS.The following sub-sections will review the literature about the relationship between the hypothesized HR practices and POS in detail.3.4.1 Supervisor SupportLevinson observed that supervisory actions are often viewed as more indicative of organizations intent than solely based on supervisors personalised motive. This is in part due to the fact that employees consider organizations to be responsible for legal, moral, and fiscal actions of its agents actions. Because supervisors act as organizational agents, the employees receipt of favorable treatment from a supervisor should run to POS. Additionally employees believe that managers forward their evaluation of subordinates to fastness management which considerably influences managem ents treatment of their employees, thus perceptions of supervisor support should contribute to development of POS . Reciprocity norm dictates that perceived supervisor support should increase employees felt obligation towards supervisor and organization .H2a There will be a positive relationship between employees perception of supervisor support (SS) and his/her perceived organizational support (POS).3.4.2 Internal Career OpportunitiesThe opportunities to grow internally within the organization signals a strong positive message to employees that they are being cared and their work being valued . Such a insurance policy also inculcates a sense of justice and fairness in the employees who aspect that their stay and attachment with the organization for longer tenures is valued and rewarded . Thus the perception of availability of internal career opportunities will be linked to employees perception of organizational support.H2b There will be positive relationship between employees pe rception of internal career opportunities (ICO) and his/her level of POS.3.4.3 TrainingTraining may be viewed as a form of capital investment in humans whether such an investment is made by firm or individual . A number of authors including Huselid and MacDuffie have counted organizational training as one of the important superior human resource (HR) practices. Employees, just want other human beings, have a desire to enhance their capabilities and square off new skills to improve their survivability in the environment. Training provides opportunities for both, enhancement of existing capabilities and culture of new skills. Thus provision of adequate training facilities by the organization to its employees signals its commitment to them. By providing career development opportunities, the organization conveys its willingness and dedication to the personal growth of its employees.The provision of training opportunities is indicative of the importance which the organization attache s to the contributions of its employees and is a token of its recognition for such contributions . In Pakistan most of the times such trainings and other career development opportunities go beyond any positive union contract and is thus viewed by the employees as out-of-will treatment by the organization. Such discretionary treatment on part of the organization is viewed by its employees as indicative of organizational support for them . Previous studies have found evidence that career development opportunities are positively related to perceptions of organizational support and that training predicts POS . Similarly, a significant relationship between career development opportunities and POS is also been reported by Meyer and Smith .Based on the review of past research, I hypothesize that an employees level of POS will be positively related to his/her belief of the training and career development opportunities provided by the organization.H2c Employees perceptions about training op portunities (Trg) will be positively related to the level of his/her POS.3.4.4 Result-Oriented AppraisalPrevious researches has documented a positive relationship between result-oriented appraisal and firm performance . These authors reported a correlation of r = .13 at pH2d Employees perception of result oriented appraisal (ROA) will be positively related to their perceptions of organizational support (POS).3.4.5 Employment SecurityDelery and Doty in their research on banking sector of US have found a positive relationship between employment security and firm performance. The positive relationship was attributed to increased employee commitment and motivation due to absolute jobs in banks. Similarly Fey, Bjorkman, and Pavlovskaya argued that provision of long term job security to employees signal organizational commitment to them. Pfeffer asserts that norm of reciprocity bounds employees to reciprocate such commitment in the form to their support to the organization and its goals. On the other hand organizational commitment of employees working for an employer who treats its employees as meaningless or dispensable tends to be low. Further, in times of economic turbulence when people are finding it increasingly difficult to find jobs, long term job security by the organization to the employees enhance their perceptions of organizational support. In light of the existing theoretical and empirical rationale I predict about the relationship between employment security and perceived organizational support (POS) as followingH2e There will be a positive relationship between employees perception of employment security (ES) and his/her perceived organizational support (POS).3.4.6 Participation in Decision MakingStudies have concluded that organizations will yield better results if they gave their employees participation or office in determination making activities . Providing opportunities to the employees to participate in decision making should indicate that th eir contribution is being valued by the organization . Researchers, have previously suggested that having say in decision making and voice in formulating organizational policy should be tested as a precursor of perceived organizational support . Whitener argued the fact that it is not only the existence of participation practice which is enough to elicit positive response from the the employees rather it is the perception regarding the existence and usefulness of such democratic mechanism which enhances employees perception of organizational support. Thus, the following relationship between participation and perceived organizational support is predictedH2f Employees perception of participation in organizational decision making (Part) will be positively related to his/her perceptions of organizational support (POS).3.4.7 CompensationOrganizational Support Theory argues that organizational rewards signals the temper of employee concern by the organization. Thus, favorable rewards si gnal that employee contributions are being valued by organization . More specifically this theory holds that favorable organizational rewards are conceived as organizations recognition and appreciation of employees work, and therefore, a major source of POS development .Organizational rewards may take the form of different variables when it comes to measuring rod its relationship with POS. In literature variables such as pay itself , permeating justice , adjectival justice and general organizational rewards are researched for their relationship with POS. A common theme which emerges out of these studies is that POS is positively influenced by organizational rewards.Perceived organizational support is found to be positively related to employee pay satisfaction in a study conducted by bank and Tetrick . Another study, which tested the relationship between employees perception about procedural justice and their perception of organizational support, found that both are positively r elated . Similarly, Wayne et al. noted a positive association between perceptions of procedural justice and POS.One can easily note from the above studies that though different indicators have been used to capture the concept of organizational rewards and then test their relationship with perceived organizational support, these researches converge in their terminus about positive link between reward and development of POS. As the focus of this dissertation on measuring the influence of organizational human resource practices on employee commitment and customer satisfaction, the get laids of relationship between rewards like distributive and procedural justice is somewhat out of scope for this study. Of particular importance to this study is the role of compensation as organizational reward, and the role it plays in development of POS.Willis noted that compensation is the most critical issue when it comes to attracting and keeping talent. Compensation is the cornerstone of the majo rity employment contracts. As Parker and Wright noted that basic reason for such centrality to the issue of compensation is the assumption that currency influences behavior.In 1999 a study conducted by Bassi and Van Buren revealed that firms using high-performance work practices provide compensation based on group-performance and company profit sharing to enhance the employees feeling of organizational support. Especially, profit-sharing mechanism is a clear sign that organization does not only recognize and value its employees efforts in its profit but is ready to share it with them. This line of thinking clearly indicates a positive possibility of relationship between employees compensation and their perceptions of organizational support.Thus based on review of existing literature and logical system which dictates a relationship between compensation and POS, I hypothesize as underH2g Employees perceptions of compensation (Comp) will be positively related to the level of his/her POS.3.5 Perceived Organizational Support (POS) and Organizational Commitment (OC)During the last two decades the concept of organizational commitment (OC) remained a major focus of research in organizational studies. One of the reasons for such focus is the assumed relationship between organizational commitment and performance . In the following lines I will first explain the concept of commitment and will then explain the logic of proposing relationship between POS and OC.The term commitment has been widely used in research and is being variedly used to explain the antecedents, consequences and process of being committed to organization . This variety of interpretations of commitment led Meyer and Allen to note that OC may be a multidimensional concept that has the potential to be interpreted in variety of ways. Nevertheless, the major definitions of OC appear to be emotive or attitudinal , normative , behavioral and calculative . However, as Allen and Grisaffe noted, most researc hers would watch that organizational commitment refers to a psychological state that characterizes an employees relationship with the organization for which he or she works and that has implications for whether or not the employee will opt to remain with the organization.Researchers differ in their opinion about why or how commitment occurs. Meyer and Allen conceptualizes that commitment develops as a result of experiences of satisfying employees needs motivational and/or compatible with their values . They further argued that desired commitment profile of employees may be developed by managing the employee work experience. any(prenominal) researchers have described commitment as a strong belief in and acceptance of the organizations goals and values, a willingness to exert considerable effort on behalf of the organization, and a definite desire to maintain organizational membership . This definition highlights the role which commitment plays in enhancing individual performance su ch that more committed employees are supposed to be exerting more effort in achievement of organizational goals.Another important way of conceptualizing commitment is through individuals attitude towards employer organization. Researchers have noted that virtually all the research conducted on organizational commitment, per se, has used the attitudinal conceptualization. The following description of attitudinal commitment is forwarded by Mowday et al. Attitudinal commitment focuses on the process by which people come to think about their relationship with the organization. In many ways it can be supposition of as a mind set in which individuals consider the cessation to which their own values and goals are congruent with those of the organization.Such a description suggests that strongly committed individuals will put in more work required for attainment of desired organizational outcomes as such outcomes are consistent with their personal values and goals.Meyer and Allen noted th at organizational commitment is a mind set or psychological state (i.e., feelings and/or beliefs concerning the employees relationship with an organization) They conceptualized commitment through a three component framework. The three components are affective commitment, continuance commitment and normative commitment and has been described by Allen and Meyer as under. . . employees with strong affective commitment remain with the organization because they