Employee engagement and the service profit chain in a quick-service restaurant organization

Purpose This paper aims to explore how artificial intelligence (AI) technologies have redefined the hospitality industry. It develops a theoretical framework to evaluate its impact on employee engagement, retention and productivity levels, stemming from its potential implications for service quality and customer satisfaction. Design/methodology/approach Based on the exploration of relevant literature, role theory and service-profit chain were used to develop – role-service-profit chain. Findings Role-service-profit chain is an analytical tool which has strong implications for investment and deployment analysis of the new technologies in hospitality and tourism businesses. It proposes how managers can evaluate how the role expectation of technological innovations relate to service quality and customer satisfaction through its impact on employee-related outcomes (such as employee engagement, retention and productivity), and assess the corresponding impact on profitability and growth, in the context of their own unique internal environment and position in the market. Research limitations/implications Although an empirical assessment of the hypothesised relationships in the model is required to evaluate and validate it in the hospitality industry, role-service-profit chain presents promising implications for tourism and hospitality practice and future research. Practical implications Role-service-profit chain is an analytical tool from which managers can make improvements on talent and talent management practices and adjust expectations and behaviours in ways that facilitate improvements in service quality and customer satisfaction. Originality/value This paper makes an important contribution to hospitality and tourism literature, as it explores how AI technologies implemented to improve on talent and talent management practices impact on service quality and customer satisfaction, and develops analytical tools by which this may be evaluated.

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Transformational Leadership in The Hotel Industry: A New Look at The Service-Profit-Chain Concept

Petra International Journal of Business Studies ◽

10.9744/ijbs.3.2.98-109 ◽

2020 ◽

Vol 3 (2) ◽

pp. 98-109

Author(s):

Evelyn Devina Teguh ◽

Devie Devie ◽

Serli Wijaya

Keyword(s):

Transformational Leadership ◽

Service Quality ◽

Financial Performance ◽

Employee Engagement ◽

Business Strategy ◽

Hotel Industry ◽

Partial Least Square ◽

Least Square ◽

Hotel Managers ◽

Service Profit Chain

Employee engagement is essential to the Service-Profit-Chain concept as the factor to produce high quality service that would meet or exceed customer expectations. However, despite its suggested advantages, limited knowledge is known about what causes employee engagement. This study attempts to understand the Service-Profit-Chain concept more comprehensively, by encompassing transformational leadership as the preceding factor to employee engagement. It aimed to examine the role of transformational leadership in shaping employee engagement and service quality which lead to financial performance. The sample groups taken were among the star-rated hotels located in Surabaya, Indonesia. Each hotel was represented by three groups namely: hotel managers, staff, and hotel customers. The Partial Least Square-SEM method was applied to evaluate the hypothesized model. The results revealed that the effect of transformational leadership on financial performance is mediated by employee engagement. However, service quality cannot mediate the effect of transformational leadership on financial performance. It is interesting to note that Service-Profit-Chain has some limitations in practice, depending on the organization’s strategy. This study is among a few attempts to contribute to a better understanding of the Service-Profit-Chain concept application, with transformational leadership as the factor preceding employee engagement specifically in the hotel industry. It founds that the application of Service-Profit-Chain concept in the hotels have some constraints related to the business strategy that hotels select to penetrate the market.

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Leading to customer loyalty: a daily test of the service-profit chain

Journal of Services Marketing ◽

10.1108/jsm-01-2015-0058 ◽

2015 ◽

Vol 29 (6/7) ◽

pp. 585-598 ◽

Cited By ~ 20

Author(s):

Susan E. Myrden ◽

E. Kevin Kelloway

Keyword(s):

Job Satisfaction ◽

Employee Engagement ◽

Leadership Behaviors ◽

Employee Attitudes ◽

Bottom Line ◽

Content Type ◽

Daily Diary Study ◽

The Relationship ◽

Customer Outcomes ◽

Service Profit Chain

Purpose – The purpose of this paper is to explore a dynamic version of the service-profit chain. The paper examines the relationship between daily leadership behaviors, daily job satisfaction and daily employee engagement on customer outcomes in a service-based context. Design/methodology/approach – Using multi-level, dyadic data from employees and customers, the paper used a diary (within-person) approach to investigate the proposed relationships on a daily basis. Data from employees (n = 29) collected over five days were matched specifically to customer data (n = 592) during the same time period. Findings – The findings suggest that daily transformational leadership behaviors positively affect daily job satisfaction and employee engagement, which subsequently affect beneficial customer outcomes (i.e. perceptions of quality, satisfaction and loyalty). Research limitations/implications – The relationship between employee attitudes and performance may have been underestimated in the past due to the way the relationship has been studied and that the inclusion of additional predictors better defines this relationship. Methodologically, the use of a daily diary study suggests that it may be much more advantageous to study the theorized relationship in its transient form (i.e. daily, weekly, etc.) versus as stable and enduring attitudes as leaders’ behaviors and employees’ level of engagement will change from day to day in most service-based contexts due to its dynamic nature. Practical implications – The results equip organizations with a clearer picture in delivering high-quality service and its associated beneficial customer outcomes (i.e. perceptions of quality, satisfaction and loyalty). Such insight may be used to influence leadership training that aims to create and maintain an engaged and productive workforce, ultimately providing increased bottom-line performance for the organization. Originality/value – By including additional linkages into a model that aids in predicting important customer outcomes allows us to better understand the relationship. In addition, by studying the relationships from a transient perspective, it provides important information to service organizations that operate in extremely dynamic environments.

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