THE ROLE AND EFFECT OF JOB SATISFACTION AND …

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Journal of Hospitality & Tourism Research, Vol. 34, No. 1, February 2010, 56-77DOI: 10.1177/1096348009344235© 2010 International Council on Hotel, Restaurant and Institutional Education

THE ROLE AND EFFECT OF JOB SATISFACTION AND

EMPOWERMENT ON CUSTOMERS’ PERCEPTION OF SERVICE QUALITY: A

STUDY IN THE RESTAURANT INDUSTRY

Gabriel GazzoliCésar Ritz Colleges Switzerland

Murat HancerYumi Park

Oklahoma State University

Empowerment, job satisfaction, and customer’s perception of service quality have been extensively researched in a multitude of industries. Although the service quality literature points out the importance of managing service quality from both customers’ and employees’ views, only a few studies have jointly considered an employee–customer research design. This study examined the answers from 474 restaurant contact employees and their 1,259 customers to determine the effects of empowerment and job satisfaction on customers’ perception of service quality. The uniqueness of this study is in its service quality variable used in the structural model. Whereas previous research based the service quality variable on the SERVQUAL conceptualization and measurement, this study conceptualized customers’ perceived service quality variable according to the “hierarchical approach” model and used the performanceonly index for its measurement. Findings suggest that empowerment and job satisfaction have a significant impact on customers’ perception of service quality. Implications of the findings are discussed in detail.

KEYWORDS: employee empowerment; employee job satisfaction; customer satisfaction; service quality; HRM–service quality link; restaurant services management

The restaurant industry plays a crucial role in the overall economy of the United States. In 2009, the total economic impact generated by this industry will exceed $1.5 trillion and sales are expected to reach $566 billion, an increase of 2.5% from 2008 (National Restaurant Association, 2009). Moreover, forecasts predict that 12.8 million people will be working within the restaurant industry and that 2 million new job opportunities will be created in the next decade (National Restaurant Association, 2006).

With 935,000 restaurants in the U.S. market (National Restaurant Association, 2006) competing for every consumer dollar, organizations are more than ever

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Gazzoli et al. / CUSTOMERS’ PERCEPTION OF SERVICE QUALITY 57

putting their employees and customers as the centerpiece of their management practices (Sirdeshmukh, Singh, & Sabol, 2002; Tsaur & Lin, 2004). To gain competitive advantage and increase organizational effectiveness, companies are focusing their attention on improving service quality. Two major factors influ-encing service quality are job satisfaction and empowerment of employees (Geralis & Terziovski, 2003; Snipes, Oswald, LaTour, & Armenakis, 2005).

Heskett, Jones, Loveman, Sasser, and Schlesinger (1994) proposed a theory called the service–profit chain. In their proposed theory, the authors suggest that profit and growth are derived from customer loyalty, which is derived from customer satisfaction, which is a result of service value. The authors also sug-gest that delivering service value is achieved by satisfied, loyal, and productive employees. A similar model, “the cycle of success,” proposed by Schlesinger and Heskett (1991) suggests that employee satisfaction leads to high quality of service and customer satisfaction. According to Wilson and Frimpong (2004), the “Cycle of Success”, also expressed as “the job satisfaction–service performance/quality thesis” is based on theories such as attitude–behavior (Fishbein & Ajzen, 1975), equity (Adams, 1965), and social exchange theories (Blau, 1964), and it relies on the logic that satisfied workers deliver better qual-ity of service to both workmates and customers than employees who have low satisfaction with their jobs.

In addition to job satisfaction, researchers propose that empowerment is an important factor of the managerial practices used in the service industry (Bowen & Lawler, 1992, 1995; Fulford & Enz, 1995; Hancer & George, 2003b). Brymer (1991) suggests that empowering employees will lead to cus-tomers’ satisfaction, which in turn will result in increased profitability. In the same line of thought, Leslie, Holzhalb, and Holland (1998) noted that empow-ering workers is believed to improve organizations’ productivity and perfor-mance. Although empowerment, job satisfaction, and perceived service quality have been extensively researched in a multitude of industries, including the hospitality and restaurant sector, the literature shows very little evidence of research testing the effect that empowerment and job satisfaction have on ser-vice quality (Geralis & Terziovski, 2003; Karatepe, Avci, & Arasli, 2004; Snipes et al., 2005). Previous research investigating the effect of empowerment and job satisfaction on perceived service quality used hotels, banks, and other service industries as their research settings. Therefore, the purpose of this study was to examine the role of empowerment and job satisfaction on customers’ perception of service quality within a restaurant context.

RESEARCH BACKGROUND

Research on Employee Empowerment

Although empowerment has been extensively practiced in the business world, academics have only started to discuss the meaning and nature of empowerment (Lee & Koh, 2001; Spreitzer, 1996). The term empowerment has been defined in many different ways. According to Lee and Koh (2001), the management



58 JOURNAL OF HOSPITALITY & TOURISM RESEARCH

literature presents two views of empowerment: (1) the view “behavior of super-visor” that empowers their employees and (2) the “psychological state of a subordinate” view. Scholars adopting the first view defined empowerment as sharing power with or moving power (Kanter, 1979), participative management (Lawler, 1988), and job enrichment (Hackman & Oldham, 1980). Researchers adopting the second view, commonly known as psychological empowerment, defined it as the experience of being empowered (Barnes, 2006) and as “a process of enhancing feelings of self-efficacy among organizational members through the identification of conditions that foster powerlessness and through their removal by formal organizational and informal techniques of providing efficacy information” (Conger & Kanungo, 1988). For the purpose of this study, we adopt the definition of Lee and Koh (2001) who based their definition on the two different views and defined empowerment as “the psychological state of a subordinate perceiving four dimensions of meaningfulness, competence, self-determination and impact, which is affected by empowering behaviors of the supervisor,” p. 686.

Several studies also found that empowerment is significantly correlated with job satisfaction (Hechanova, Alampay, & Franco, 2006; Laschinger, Spencer, Finegan, & Shamian, 2001; McDonald & Siegall, 1993; Riggs & Knight, 1994; Seibert, Silver, & Randolph, 2004; Snipes et al., 2005; Spreitzer, Kizilos, & Nason, 1997). However, to the best of our knowledge, only a few studies have attempted to assess the relationship between empowerment and customers’ per-ception of service quality. In a research conducted on an educational setting using professors (employees) and students (customers), Snipes et al. (2005) found that the direct path connecting feelings of empowerment and customers’ perceived service quality was not significant. However, their study revealed through a post hoc analysis that feelings of empowerment had a significant and indirect effect on customers’ perception of service quality through job satisfac-tion. Using hotel employees and their respective customers in the research design, Hartline and Ferrell (1996) found that empowerment, under suitable conditions, plays a significant role on job satisfaction and customers’ perception of service quality.

Linking the above findings to the “Cycle of Success” model proposed by Schlesinger and Heskett (1991), it is found that if employees feel a high level of empowerment they would be more satisfied with their jobs, have a better sense of task control, thus facilitating employees’ work actions that are required to make changes to improve the quality of service of their respective restaurants. Therefore, based on the previous literature on empowerment and service qual-ity, this study predicts the following two hypotheses:

Hypothesis 1: Empowerment will have a direct and positive effect on job satisfaction.Hypothesis 2a: Empowerment will have a direct and positive effect on customers’

perception of service quality.Hypothesis 2b: Empowerment will have an indirect and positive effect on customers’

perception of service quality through job satisfaction.




Job Satisfaction and Service Quality

Within the organizational behavior literature, job satisfaction is one of the most researched areas (Snipes et al., 2005). Cranny, Smith, and Stone (1992) proposed that more than 5,000 studies of job satisfaction have been published. Job satisfaction has been defined as “a pleasurable of positive emotional state, resulting from the appraisal of one’s job experience” (Locke, 1976, p. 1300). Previous studies suggested the need for service organizations to pay special attention to employee satisfaction (Berry, 1981; Boshoff & Tait, 1996; Hancer & George, 2003a; Hartline & Ferrell, 1996; Heskett et al., 1994; Heskett, Sasser, & Hart, 1990; Rust, Miller, & Pielack, 1996; Schlesinger & Zornitsky, 1991; Schneider, Parkington, & Buxton, 1980; Tornow & Wiley, 1991; Wilson & Frimpong, 2004). Schneider and Bowen (1985, 1993) found that employees’ perception of service climate, together with a number of organization and human resources management (HRM) practices have a positive effect on customers’ attitudes toward service.

The relationship between job satisfaction and service quality has been sug-gested by the “Cycle of Success” model (Schlesinger & Heskett, 1991). This model proposes that employee satisfaction, which is influenced by internal service quality, leads to increased employee performance, which in turn leads to customer satisfaction, customer loyalty, and increased financial performance of a firm. Job satisfaction has also been empirically tested and positively related to customers’ perception of service quality in several service industries such as (1) banking (Reynierse & Harker, 1991; Yoon, Beatty, & Suh, 2001), (2) hotels (Hartline & Ferrell, 1996), and (3) education (Snipes et al., 2005). The uniqueness of Snipes et al. (2005) study was that it investigated the effect of Spector’ s (1997) 10 job satisfaction facets on customer’s perception of service quality, whereas the others used one-item global job satisfaction measures. Snipes et al.’s (2005) results show that only 3 of the initial 10 facets (customers, benefits, work itself) had a direct and positive effect in predicting customers’ perceived service quality. Additional studies have also found a positive relation-ship between employees’ job satisfaction and employees’ perception of service quality (Karatepe et al., 2004; Schlesinger & Zornitsky, 1991).

Based on a review of previous research on job satisfaction and service qual-ity, this study predicts the following hypothesis:

Hypothesis 3: Job satisfaction will have a direct and positive effect on customers’ perceived service quality.

METHOD

Sample and Data Collection

Because of the nature of the study, which applies a conceptual integration between employees and customers perceptions, a two-sample research design and two survey instruments were developed to measure employees’ empower-ment and job satisfaction and customers’ perceived service quality. The sample




was initiated through a contact with a restaurant owner and market partner of a U.S. steakhouse chain, who in turn contacted the managers of his 14 restaurants requesting them to support our research. Before data collection started, three conference calls, including the restaurants’ managers, the researchers, and the restaurants’ owner took place to clarify the goals and objectives of the research, specifically the data collection stage. The sample of this study consisted of contact employees and customers of 14 restaurants located in central United States. Because of a large number of Hispanic workers (21.5% of total employee sample), the questionnaires were translated into Spanish by a professional and accredited translation company located in Brazil, South America. The transla-tion was then presented to Spanish-speaking hospitality students at a major university in central United States for verification purposes. The researchers then mailed several packets to the restaurants’ managers, who in turn made them available to 553 service contact employees. Each packet contained 1 employee survey, 15 customer surveys (the number of total customers = 8,295), and a 1-page instruction informing the contact employees on how to proceed with the data collection. In addition, the managers of each restaurant reiterated the instructions contained in the packets during their preshift briefing. The workers were instructed to complete the employees’ survey (job satisfaction and empow-erment) and distribute the service quality questionnaire to their respective cus-tomers (every second table) at the end of the meal experience; thus, allowing customers to have a better and overall analysis of the service quality being delivered. The data were collected during 2 weeks in the month of June 2007. In total, the restaurants returned 474 employees’ surveys and 1,289 customer’s questionnaires representing an employee response rate of 85.7% and customer response rate of 15.5%.

Data Aggregation

The unit of analysis in this research was the service contact employee. Therefore, the service quality delivered by the service employee is an aggregate of his or her customers’ responses. Customers evaluated the service quality of the employees they had encountered, and their responses were aggregated (aver-aged) and matched to the encounter level of analysis. According to previous research, there are two types of data aggregation methods for this kind of study: (1) data are aggregated at the individual level (George & Bettenhausen, 1990; Schneider & Bowen, 1985; Snipes et al., 2005; Yoon et al., 2001) and (2) data are aggregated at the group level in which the cases represented company units instead of persons (Hartline & Ferrell, 1996). Our data aggregation follows the suggestion from previous research that data should be collected at the level at which they will be analyzed (individual). In total, our aggregation represents an average of 2.7 customers per employee.

Measures

The empowerment and service quality scales used in the study have been widely used by researchers from the management and marketing fields. However,




some of the items used in the perceived service quality scale were modified and deleted to reflect the restaurant setting and goals of our research.

Empowerment. A 12-item scale developed by Fulford and Enz (1995) adapted from Spreitzer’s (1992) work was used in this study. Employees were asked to rate each of the 12-items on a 7-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). Examples of the items used in the scale included “My work is important to me,” “My job is well within the scope of my abilities,” “I have freedom in determining how to do my job,” “I have a great deal of control over my job,” and so on.

Job satisfaction. A lot of debate has been raised in the management litera-ture as to whether or not researchers should use a single-item or multiple-items scales to measure job satisfaction. Scarpello and Campbell (1983) concluded that single-item scales were better measurements than scales that are based on a sum of specific job satisfaction facets. In addition, a meta-analysis study of Wanous, Reichers, and Hudy (1997) concluded that single-item measures of job satisfaction are correlated with scales using overall job satisfaction, and there-fore, they suggest that a single-item scale measuring overall job satisfaction is acceptable. Because our study is measuring employees’ overall job satisfaction, a single-item measure was developed. Employees were asked to answer on a 5-point Likert-type scale ranging from 1 (very dissatisfied) to 5 (very satisfied), “how satisfied or dissatisfied are you with your job overall.”

Perceived service quality. Research on service quality during the past20 years reviews that the measurement and conceptualization of service qual-ity is a topic of much disagreement among scholars (Brady & Cronin, 2001). Some researchers such as Parasuraman, Zeithaml, and Berry (1985) support the view that service quality should be measured as the difference between customers’ expectations and customers’ perception of service quality as con-ceptualized in their SERVQUAL model. However, some studies have raised concerns about the specification of service quality as the gap between cus-tomer’s expectations and perceptions suggesting that the expectation portion of SERVQUAL should be discarded (Babakus & Boller, 1992; Brady, Cronin, & Brand., 2002; Brown, Churchill, & Peter, 1993; Cronin & Taylor, 1992). Cronin and Taylor (1992) suggested that service quality is an attitude-based conceptualization, and therefore, the measurement of service quality should reflect a performance-only index as proposed in their SERVPERF construct. A few studies have compared the effectiveness of SERVQUAL versus SERVPERF and found that the “attitude-based/performance-only index” is superior to the SERVQUAL (Brady et al., 2002; Crompton & Love, 1995; Cronin & Taylor, 1992). Another confounding issue in the conceptualization of service quality refers to the number and content of the dimensions of service quality. Past studies have proposed a service quality construct with 2 dimensions (Gronroos, 1984), 3 dimensions (Rust & Oliver, 1994), 5 dimensions (Parasuraman,




Zeithaml, & Berry, 1988), and even 10 dimensions (Parasuraman et al., 1985). Other studies have proposed service quality as a multilevel model with pri-mary dimensions and subdimensions (Brady & Cronin, 2001; Dabholkar, Thorpe, & Rentz, 1996).

The service quality measurement used in this study was adapted from the hierarchical approach conceptualization proposed by Brady and Cronin (2001) using the performance-only index. The hierarchical model proposed by Brady and Cronin is an empirically tested service quality conceptualization that blends the American and Nordic approaches. Their model proposes a new solution to the issues encountered on previous models such as the SERVQUAL and SERVPERF. Our service quality measurement is different from those used in similar research such as in Hartline and Ferrell (1996), Snipes et al. (2005), and Yoon et al. (2001), all of whom opted to base their measurement from the SERVQUAL construct. Since our objective was to measure the service qual-ity delivered directly from contact employees, our scale comprised 18 items representing the subdimensions of interaction quality (attitude, behavior, and expertise) and outcome quality (waiting time, tangibles, and valence) and 2 items measuring overall service quality. The physical environment quality dimension and its three subdimensions (ambient conditions, design, and social factors) were discarded from our service quality measure because service employees have little or no control over these subdimensions. Our approach is consistent with previous research such as Hartline and Ferrell (1996), Snipes et al. (2005), and Yoon et al. (2001), all of whom used items from the SERVQUAL construct that only represented employee-related aspects of service quality. Customers were asked to rate their perception on a scale rang-ing from 1 (strongly disagree) to 7 (strongly agree) based on the service quality delivered by the restaurant service/contact employees. Examples of the items used in the scale included “The attitude of this restaurant’s employee demon-strates his/her willingness to help me,” “I can count on this employee taking actions to address my needs,” and “You can count on this employee knowing his/her job.” The 20 statements used in our perceived service quality construct and their mean and standard deviation values are presented in Appendix A.

Data Analysis

Descriptive statistics and reliability analysis were analyzed using SPSS 15.0. Descriptive statistics was used to disclose the characteristics of employees and customers. The variables in this study were analyzed using structural equation modeling (SEM) via AMOS 7.0. The relationships among empowerment, job satisfaction, and perceived service quality were examined using SEM, which estimates the relationships between latent variables and indicators simultane-ously as well as determines the validity and reliability of the measures (Bagozzi & Yi, 1988; Joreskog & Sorbom, 1982). Before an evaluation of the structural part of the model, we performed a confirmatory factor analysis (CFA) as it is recommended by Anderson and Gerbing (1988).




RESULTS

Descriptive Statistics

Descriptive statistics was used to describe the sample of this study as shown in Table 1. In total, 474 employees participated in this study, of which 43.7% were male respondents and 55.9% of the sample was represented by female customers. Concerning the age of the respondents, 32.7% were 19 years old or less, 54% were between 20 and 29 years old, and 11.4% employees were older than 30 years. The majority of the respondents (40.9%) had college/technical degrees or high schools completion (27%). Regarding the tenure of employees in the restaurants, it is found that 57.8% of the respondents have been working with their respective restaurant for less than 12 months, whereas 17.7% have between 1 and 2 years tenure and 24% have been with the company for more than 2 years.

White Americans represents 67.7% of the sample, whereas African Americans accounted for 4.6%, Hispanic 21.5%, and the rest of the respondents fell in the category of Native Americans and others. Whereas 53.4% of the workers were part-time employees, 44.1% reported to be employed full-time. The position/post question revealed that 89.7% of the respondents have a line-level position, whereas 6.8% reported to be at least in a supervisory post.

Table 2 indicates the customers’ demographics who were divided into 40.2% male and 59.7% female customers. The numbers are based on 1,289 customers who responded to the questionnaires given by the service contact employee. As far as age is concerned, 29.9% of respondents were 50 years old or more, and only 5.7% of the sample represented those 19 years old or less. The age groups 20-29, 30-39, and 40-49 years accounted approximately 21% each of the total customer sample. The majority of the respondents have an income of 60,000 or more whereas the other five income-level groups share approximately the same percentage in the sample. A total of 82% of respondents reported that they had already visited the same restaurant before, and 41.5% of those indicated that the number of their visits during the past 6 months was between 1 and 3 times.

Reliability and Validity

The three constructs—empowerment, job satisfaction, and perceived service quality—and all measurement items in these three scales were analyzed for reli-ability and validity. The empowerment construct consisted of 12 items, but after testing the scale for reliability and consistency, 2 items were deleted due to their low factor loadings. An exploratory factor analysis also indicated two factors: (1) EMP Factor 1, which was named “Task meaningfulness” (α = .861); and (2) EMP Factor 2, which was named “Freedom to perform” (α = .838). For the second construct, job satisfaction, we fixed the measurement error of its single item to 0 prior to estimating the measurement model due to potential identifica-tion problems. This procedure is consistent with Yoon et al. (2001). The third construct, perceived service quality, consists of seven subfactors such as attitude (n = 3; α = .928), behavior (n = 3; α = .947), expertise (n = 3; α = .918), waiting




(n = 3; α = .891), tangibles (n = 3; α = .902), valence (n = 3; α = .944), and overall service quality (n = 2; α = .958). A reliability test was used to examine the measurements for internal consistency of the scales. The Cronbach’s coef-ficient alpha of all factors ranged from .838 to .958 (see Appendix B).

Employee empowerment. In terms of “model fit test,” the empowerment construct fits the data well because its χ2 statistic for the model was 23.403 (df = 16; p < .103). According to Carmines and McIver (1981), the χ2 relative value to degree of freedom (χ2/df) should not exceed 3. Other indicators of model fit such as goodness-of-fit index (GFI) and the adjusted goodness-of-fit index (AGFI), were .990, and .967. The normed fit index (NFI) was .990, the increased fit index (IFI) value was .997, and the comparative fit index (CFI) equaled

Table 1Employee Demographics

Employees (N = 474)

Frequency Percentage (%)

Gender Male 206 43.7Female 265 55.9

Age (years) Less than 19 155 32.720-29 258 54.4More than 30 54 11.4

Educational level Elementary school 19 4High school 86 18.1High school graduates 128 27College/technical 194 40.9College graduate 35 7.4Graduate degree 6 1.3Others 5 1.1

Restaurant tenure Less than 1 year 274 57.8Between 1 and 2 years 84 17.7More than 2 years 114 24

Ethnicity White American 321 67.7African American 22 4.6Hispanic 102 21.5Asian 4 0.8Native American 10 2.1

Workload Part-time 253 53.4Full-time 209 44.1

Position Management 32 6.8Line level 425 89.7




.997. In addition, the root mean square residual (RMR) was .029, and the root mean square error of approximation (RMSEA) was .031. On the basis of studies such as Joreskog and Sorbom (1982), Bagozzi and Yi (1988), Bentler (1986, 1990), and Joreskog (1989), if the GFI, AGFI, NFI, IFI, and CFI are greater than .9 and the RMR and RMSEA are less than .05 (Bentler, 1986, 1990), the mea-surement model of employee empowerment is considered to be excellent.

Service quality. After an item purification process for the service quality fac-tor, the measurement model shows an acceptable fit in which the χ2 statistic was 765.416 (df = 63; p < .000). The study results show that the p value in χ2 test is less than .001. It didn’t verify the model fit on the basis of Carmines and McIver’s (1981) suggestion in which the χ2 relative value to degree of freedom (χ2/df) should not exceed 3. However, such test is influenced by the sample size, and if the sample size is large and the data severely deviate from a normal dis-tribution, it will cause an increase in the χ2 value. Thus, Bagozzi and Yi (1988) suggested that the number of samples should be taken into consideration when using χ2 test to test model fit. Also, our results show other reliable fit indices

Table 2Demographic Characteristics of Customers

Customers (N = 1,289)

Frequency Percentage (%)

Gender Male 506 40.2Female 751 59.7

Age (years) 19 and below 72 5.720-29 271 21.530-39 270 21.540-49 262 20.850 and above 377 29.9

Income Under 20,000 108 8.620,000-29,000 90 7.130,000-39,000 136 10.840,000-49,000 133 10.650,000-59,000 156 12.460,000 and above 515 40.9

First visit Yes 225 17.9No 1,033 82.1

Number of visits in the past 6 months

1-3 times 523 41.54-5 times 208 16.56-7 times 112 8.9More than 8 times 192 15.3




such as GFI, AGFI, NFI, IFI, and CFI, which had a score of .860, .820, .935, .948, and .948, respectively, RMR was .037, and the RMSEA was .088.

Table 3 illustrates the cross-construct correlations of the latent constructs with the addition of two other indices of construct reliability, namely, (1) composite reliability (CR) proposed by Bagozzi (1980), which is a measure of the propor-tion of the shared variance to the error variance in the construct; and (2) average variance explained (AVE) proposed by Fornell and Larcker’s (1981). The AVE measures the average variance extracted from the items of each construct. Our results show that both the significant Cronbach’s alpha (see Appendix B) and the high CRs proved evidence of internal consistency. In addition, all estimates achieved CRs of more than 0.70, such as empowerment (CR = 0.90) and service quality (CR = 0.95) and AVEs of more than 0.45, such as empowerment (AVE = 0.47) and service quality (AVE = 0.74). All the factor loading estimates were significant (p < .01) and ranged from 0.503 to 0.738 for empowerment and from 0.720 to 0.987 for service quality (Appendix B). Thus, the significant loading estimates and high composite reliabilities proved evidence of convergent validity (Anderson & Gerbing, 1988; Bagozzi & Yi, 1988). Our measures achieved dis-criminant validity by means of Fornell and Larcker’s (1981) and Anderson and Gerbing’s (1988) criteria. Fornell and Larcker’s (1981) criteria indicates dis-criminant validity because the average variance extracted by each of the scales was greater than the shared variance, which means the square of the Φ coeffi-cients representing its correlation with other constructs, between the constructs and all other variables. Anderson and Gerbing’s (1988) criterion is the 95% con-fidence interval to see that cross-construct correlation plus or minus two standard errors includes the value 1.00.

Table 3Measurement Model Results and Model Fit

Cross-Construct Correlations

Measure Scale Meana SD 1 2 3

1. Job satisfactionb 4.1 0.8 1 2. Empowermentc 5.83 0.89 0.458** 1 3. Service qualityd 6.35 0.59 0.122* 0.008 1Construct reliability (CR) — 0.90 0.95Average variance extracted (AVE) — 0.47 0.74

a. The items of the empowerment and the perceived service quality were on a 1 to 7 scale. The item of the job satisfaction was on a 1 to 5 scale.b. Single-item indicator for global job satisfaction, and its measurement error was set to 0 because of identification problem.c. Empowerment: χ2 = 23.403 (df = 16; p < .103), GFI = .990, AGFI = .967, NFI = .990,IFI = .997, CFI = .997, RMR = .029, RMSEA = .031.d. Service quality: χ2 = 765.416 (df = 163; p < .000), GFI = .860, AGFI = .820, NFI = .935, IFI = .948, CFI = .948, RMR = .037, RMSEA = .088.*p < .05. ** p < .001.




Structural Model Results and Hypothesis Testing

SEM was used in verifying cause and effect relationships among job satisfac-tion, empowerment, and perceived service quality. The CFA showed that the overall measurement model produced an acceptable fit to the data. Figure 1 illustrates the hypothetical model structure corresponding to the hypotheses and each structural path estimates.

The model indicates that the χ2 is 534.340 with 379 dfs (p < .000). As men-tioned in the validity analysis, the χ2 relative value to degree of freedom (χ2/df) should not exceed 3 (Carmines & McIver, 1981). Thus, this model verify the model fit on the basis of Carmines and McIver’s (1981) study. Other indicators are GFI of .933, AGFI of .913, NFI of .963, IFI of .989, CFI of .989, RMR of .031, and RMSEA of .029. The results of SEM show that the hypothesized model fits the empirical data well; the indices of GFI, AGFI, NFI, IFI, and CFI were all greater than 0.9, whereas the indices of RMR and RMSEA were less than 0.05 (Bagozzi & Yi, 1988; Bentler, 1986, 1990; Joreskog, 1989; Joreskog & Sorbom, 1982). Therefore, the proposed model has an acceptable fit.

As a result of the presentation in the literature review, the verification of our hypotheses is presented as follow: The relationship between “Empowerment”

Figure 1A Path Diagram of Structural Estimates of Proposed Model

Significant RelationshipNon-significant Relationship

Attitude

Behavior

Waiting

Valence

Expertise

OverallQuality

Tangibles

EMP 1

EMP 2

ServiceQuality

JobSatisfactionEmpowerment

H1

γ11=0.488(7.575**)

H3

β1=0.124(2.859*)

H2γ21=–0.081(–1.726)

Note: Service quality: χ2 = 534.340 (df = 379; p < .000), GFI = .933, AGFI = .913, NFI = .963, IFI = .989, CFI = .989, RMR = .031, RMSEA = .029. Critical coefficient (t value) <1.96 indicates nonsignificant relationships. *p < .05. **p < .001.




and “Job Satisfaction” is significant (γ11 = 7.575; p = .000**), and thus, Hypothesis 1 is supported. Our results indicate that empowerment does not have a direct and positive effect on customers’ perception of service quality (γ21 = −1.762; p = .084) at the p value <.001 and 0.05 level, and therefore, Hypotheses 2a is not supported. However, the relationship between “Job Satisfaction” and “Service Quality” is significant (β1 = 2.859; p = .004*), and this result sup-ports Hypothesis 3. Our study also tested the indirect path (H2b) between empowerment and service quality through job satisfaction and found a signifi-cant relationship (coefficient = .060; p = .000**). Therefore, besides exerting a direct and positive effect on customers’ perception of service quality, job satis-faction works as a mediator in the relationship between empowerment and customers’ perceived service quality, and therefore, Hypothesis 2b is supported. The hypotheses verification summary is shown in Table 4.

DISCUSSION AND IMPLICATIONS

This study investigated the effect that employee empowerment and employee job satisfaction have on customers’ perceived service quality. Although the ser-vice quality literature points out the importance of managing service quality from both a customer and employee view, only a few studies have jointly con-sidered an employee–customer, at the organizational or individual level, within the same evaluation context or research design. According to Schneider et al. (1980), service organizations separate their customer surveys from their employ-ees’ studies. By separating these studies, organizations miss the opportunity to investigate the possible relationships existent in the perceptions and attitudes between employees and customers. To the best of our knowledge, no such stud-ies have been conducted in a restaurant setting, thus making our research very unique to the restaurant industry in the United States. Another uniqueness of our research is that it incorporated a different measure of service quality. While

Table 4Hypotheses Verification

Hypothesis Coefficient CR (t Value) p Value Result

Direct effect 1: Empowerment → Job γ11 = 0.488 7.575 .000** Supported satisfaction2a: Empowerment → Service γ21 = −0.081 −1.762 .084 Not quality supported3: Job satisfaction → Service β1 = 0.124 2.859 .004* Supported quality

Indirect effect 2b: Empowerment → Service 0.060 9.030 .000** Supported quality

Note: Critical coefficient (t value) <1.96 indicates nonsignificant relationships.*p < .05, **p < .001.




previous research were based on the SERVQUAL conceptualization and mea-surement, we conceptualized our customers’ perceived service quality variable based on the “hierarchical approach” model developed by Brady and Cronin (2001) and used the performance-only index for its measurement. Our service quality variable consisted of several subdimensions, namely, employee attitude, behavior, expertise, waiting time, valence, tangibles, and overall quality.

Our study proposed that employee empowerment would have a significant effect on employee job satisfaction and that these two variables would sig-nificantly affect customers’ perceived service quality. To verify our model and hypotheses, we used both customers and employees of 14 steakhouse restau-rants in central United States, and the data were analyzed at the individual level (contact employee). Our empirical results showed a satisfactory model fit and confirm previous research that has shown that empowerment has a positive and direct effect on job satisfaction. In addition, job satisfaction not only plays an important role on customers’ perception of service quality (direct and positive impact) but also mediates the relationship between empowerment and service quality.

Our results also confirm part of the “Cycle of Success” theory, specifically the connection between HRM and service quality because service organiza-tions, such as hotels, restaurants, and banks, and their customer contact employ-ees have a very thin boundary between themselves and their customers. Since service contact employees and their customers work very close to each other, observe each other, and have a great deal of interaction between themselves, what employees experience in their work environment is transmitted to their customers.

The two empowerment dimensions found (task meaningfulness and free-dom to perform) are important factors affecting both job satisfaction and ser-vice quality, and these two factors pose several implications for restaurant managers, owners, and operators. First, restaurant managers must pay close attention on the recruitment process. When selecting applicants, managers must make sure that potential employees show ambition and career goals dur-ing the selection process as these traits illustrate that they care about the job as well as it shows that the job itself is an important factor that will eventually help employees achieve their career objectives. In addition, ensuring that the right person is placed in the right job becomes a crucial component when recruiting restaurant workers. By matching the applicants’ skills with the right job tasks, restaurant employees will likely perceive that the tasks they are per-forming is more meaningful to them. As a consequence, employees may feel more confident when carrying out their job duties. The empowerment factor (freedom to perform) also presents some implications for restaurants, and these are discussed as follows: Management must include service contact employees in the decision-making process. For example, when changing or adding dishes in the restaurant’s menu, managers should work closely with their contact emp-loyees and listen to their opinions about the issue on hand. Since restaurant employees are in constant contact with guests, they may bring new and valuable




ideas on the discussion table that will ultimately benefit the customers. Man-agement should also give their employees a good level of freedom, so they can decide how to go about their jobs, such as encouraging them to use their per-sonal initiative when resolving customer complaints or dealing with special customer requests. Restaurant workers should be free to “own” the special requests (e.g., inclusion of food items that do not belong to a particular dish) or the complaints (e.g., compensating customers for service delays or poor quality/taste of food and beverage). Therefore, formal and informal training is needed to give customer-contact employees a better sense of direction on what manage-ment expects them to do when such situations (requests or complaints) arise.

The two factors presented above are closely related to the four dimensions (meaningfulness, competence, self-determination, and impact) used earlier in our definition of empowerment. Employees who have a sense of caring about the job (meaning), who believe in his or her abilities (competence), who display a sense of choice in initiating behavior (self-determination), and who believe that he or she can offer input and influence actions (work environment) will likely be satis-fied with his or her job as empowerment shows a direct and positive effect on job satisfaction. Ultimately, empowered and satisfied employees significantly influ-ence how customers perceive the service quality of the restaurant they are eating at. Therefore, restaurants must establish excellent HRM practices (from recruit-ing to training to rewarding) to empower and satisfy their employees, who in turn will deliver what the customer wants—a high quality of service. Past research has shown that high service quality has a direct and positive effect on customer satisfaction, value, and loyalty, and these three variables are major boosters of customer lifetime value. Finally, we close our discussion by urging companies to follow the following quote from the book The Value Profit Chain from Heskett, Sasser, and Schlesinger (2003) in which the front cover page states, “Treat employees like customers and customers like employees.”

Limitations and Future Research

Our research is not free from limitations. First, since the restaurants were located in several states in central United States, we had to rely on the managers and employees to execute the data collection stage. Therefore, if the employees did not randomly distribute the surveys to their respective customers, there is a potential for increased bias in this study. Second, the employees knew in advance that they were being evaluated, and as a result, they could have changed their behavior or performance on purpose in response to the temporary change in their work environment conditions. Third, although data were collected in several restaurants, our analysis and results are based on only one service industry—the restaurant sector. In addition, the restaurants involved in this study are owned by the same person who operates the restaurants under one chain. By focusing only on restaurants operated by the same owner under the same brand, it is unclear whether the results of this study can be generalized across all service industries and other types of restaurant operations. Therefore, future research should incor-porate other types of service industries in its research design as the relationship




between the customer and the employee may vary from one industry to another. Last, although this study targeted 8,259 customers, the response rate was only 15.1%, and a low percentage of responses may bring some bias to our results. However, we believe that 1,289 customer responses are adequate to support the statistical analyses conducted in this research.

Further research may also replicate this study using different constructs to compare the results. In addition, other independent variables such as work cli-mate, job standardization, and customer orientation may be added in the analysis as it may present very interesting “HRM–service quality relationship” results. In the same line of thought, further research should explore the role of job satisfac-tion and empowerment on the subdimensions of service quality instead of “over-all service quality”. The multilevel conceptualization of service quality proposed by Brady and Cronin (2001) allows analysis at several levels of thought. For example, further research may want to explore whether job satisfaction and empowerment have the same effect on different service quality variables such as attitude, expertise, behavior, waiting time, tangibles, and valence.

APPENDIX AFinal Measurement Items and Summary

of Study Variable Characteristics (N = 474)a

Construct Measure Mean SD

Employee empowerment EMP Factor 1 (task meaningfulness)

EMP1: My work is important to me 6.26 1.11EMP2: My job activities are meaningful to me 5.88 1.3EMP3: I care about what I do on my job 6.31 1.04EMP4: My job is well within my scope of abilities 6.5 1.03EMP5: I am confident about my ability to do my job 6.63 0.89

EMP Factor 2 (freedom to perform) EMP7: My opinion counts in group decision making 5.16 1.6EMP8: I have freedom to determine how to do my job 5.21 1.58EMP9: I have a chance to use personal initiative in my work 5.8 1.29EMP10: I have an influence over what happens in my work 5.2 1.55EMP11: I decide on how to go about doing my job 5.4 1.47

Employee job satisfactionb Overall job satisfaction 4.1 0.8

Perceived service qualityc Attitude

You can count on this restaurant’s service employee 6.45 0.64 being friendlyThe attitude of this service employee demonstrates 6.42 0.66 his or her ability to help meThe attitude of this service employee shows that he or she 6.35 0.74 understands my need

Behavior I can count on this service employee taking actions 6.33 0.77 to address my needs

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APPENDIX A (continued)

Construct Measure Mean SD

This service employee responds quickly to my needs 6.32 0.82The behavior of this service employee indicates that 6.33 0.76 he or she understands my needs

Expertise You can count on this service employee knowing 6.42 0.65 his or her jobThis service employee is able to answer my questions quickly 6.47 0.64This service employee understands that I rely on 6.35 0.75 his or her knowledge to meet my needs

Waiting time When being serviced by this employee 5.98 0.92 the waiting time is predictableThis service employee tries to keep my waiting time 6.12 0.86 to a minimumThis service employee understands that waiting time 6.1 0.86 is important to me

Tangibles I am pleased with the whole service provided 6.44 0.69 at this restaurantI like this restaurant because it has the service employees 6.47 0.62 that I wantThis service employee knows the kind of services its 6.44 0.67 customers are looking for

Valence When I leave this restaurant, I usually feel I had a 6.46 0.69 good experienceI believe that this service employee tries to give me 6.46 0.69 a good experienceI believe that this service employee knows the type of 6.52 0.6 experience his or her customers want

Overall quality I would say that this restaurant provides superior service 6.35 0.79I believe that this restaurant offers excellent service 6.39 0.79

a. Total number of employee respondents = 474.b. Single-item indicator for global job satisfaction, and its measurement error was set to 0 because of identification problem.c. Total number of customer respondents = 1,289 (represents an average of approximate 3 customers per employee).

APPENDIX BSummary of Factor Loading and Internal Reliability (N = 474)a

Factor Cronbach’s Construct Measure Loading αb

Employee empowerment EMP Factor 1 (task meaningfulness) 0.861

EMP1: My work is important to me 0.738 EMP2: My job activities are meaningful to me 0.691

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APPENDIX B (continued)

Factor Cronbach’s Construct Measure Loading αb

EMP2: My job activities are meaningful to me 0.691 EMP3: I care about what I do on my job 0.857 EMP4: My job is well within my scope of abilities 0.539 EMP5: I am confident about my ability to do my job 0.564

EMP Factor 2 (freedom to perform) 0.838EMP7: My opinion counts in group decision making 0.568 EMP8: I have freedom to determine how to do my job 0.628 EMP9: I have a chance to use personal initiative in my work 0.704 EMP10: I have an influence over what happens in my work 0.504 EMP11: I decide on how to go about doing my job 0.503

Employee job satisfactionc Overall job satisfaction 1

Perceived service qualityd Attitude 0.987 0.928Behavior 0.976 0.947Expertise 0.925 0.918Waiting 0.720 0.891Tangibles 0.751 0.902Valence 0.808 0.944Overall quality 0.834 0.958

a. Total number of employee respondents = 474.b. All factors are reliable (above 0.6 is acceptable for the study; Nunnally, 1988).c. Single-item indicator for global job satisfaction, and its measurement error was set to 0 because of identification problem.d. Total number of customer respondents = 1,289 (represents an average of approximate 3 customers per employee).

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Submitted January 29, 2008Final Revision Submitted May 28, 2008Accepted June 11, 2008Refereed Anonymously

Gabriel Gazzoli (e-mail: [email protected]) is an instructor at Cesar Ritz Colleges, Le Bouveret, Switzerland. Murat Hancer, PhD (e-mail: [email protected]), is an associate professor in the School of Hotel and Restaurant Administration at Oklahoma State University, Stillwater, Oklahoma. Yumi Park (e-mail: [email protected]) is a doctoral student in the School of Hotel and Restaurant Administration at Oklahoma State University, Stillwater, Oklahoma.



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