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The Utility of Employee Flows as a Driver of Marketing Productivity

The movement or flow of employees into, around and out of organisations
(‘employee flow’) has long been a central issue in human resource
management and industrial psychology. This is especially so for the specific
element of employee turnover, but also applies to staffing and internal talent
development. Employee flow is especially salient in a South African context
characterised by scarce skills.
The voluminous literature on employee flow has tended to view each element
such as recruitment or turnover separately, and has generally focused on
internal outcomes (e.g. commitment or satisfaction). This thesis attempts to
add two crucial features, namely EF as a whole system (i.e. inflows, intraorganisation
flows and outflows of staff in conjunction), and customer-based
outcomes. Something of a synthesis is thus sought between EF and ideas of
marketing productivity.
Marketing productivity has been proposed as one of the most important foci
of the marketing discipline (Rust, Ambler, Carpenter, Kumar, & Srivastava,
2004; Sheth & Sisodia, 2002). It refers to links between marketing and
organisational performance or value. Models such as the ‘service profit chain’
(Heskett, Sasser & Schlesinger, 1997) identify the antecedents of marketing
productivity to be internal organisation characteristics such as staff
satisfaction or loyalty. This thesis seeks to expand such models in the context
of a system of EFs. Advanced decision theoretic utility theories of EF (e.g.
Boudreau & Berger, 1985) allow for the complete, integrated value of
employee movements over time to be modelled. Such a model is constructed
and links to marketing metrics, notably service perceptions, investigated.
Organisational value arising via the outcomes for customers are further
investigated. Thus increased value of employee movements is proposed to
generate organisational value, mediated by improved customer equity (e.g.
Gelade & Young, 2005).
An empirical, survey-based study was conducted to assess the model. EF was
assessed in business-to-business relationships from the perspective of the
customer using conceptions of decision theoretic utility analysis, and both
intermediate and outcome-based customer perceptions of service quality used
as dependent variables. Moderation effects from frequency of interaction and
integration of the customer into the supply chain were also tested, as well as
controls for characteristics of the transaction, organisation and industry.
Results suggest that EF does significantly affect various stages of service
quality provision, notably ‘potential quality’, which it appears mediates links
to other aspects of service provision, especially final service outcomes. In
addition, EF was also found to affect outcomes through the intermediate
relational element of 'soft process quality', possibly highlighting the
importance of relationship management and soft skills in B2B relationships.
Employee outflows in particular showed evidence of relatively strong effects,
possibly highlighting the ongoing salience of turnover, in particular effective
identification and management of functional versus dysfunctional turnover
instead of a sole focus on retention. Results were significantly stronger for
service industries than others (presumably as service is the outcome), and
when there were relatively few supplier contact staff (perhaps due to social
networking, bonding, exchange or emotional contagion).
This thesis adds substantially to the methodologies underlying service profit
chain models. It explicitly included new constructs (EF utility). Contextually,
it was the first proper test of this model in South Africa. Theoretical
contributions arose from new inter-disciplinary syntheses of utility models,
finally linking employee and customer utilities to the organisation.
Ultimately, practical significance may arise for managerial models, estimating
and justifying human resource interventions.
Key words: Service-profit chain, marketing metrics, decision theoretic utility
analysis, employee movement, employee flow, employee turnover, employee
acquisition, employee separation, customer equity, customer satisfaction,
customer retention, organisational performance, organisational value.
Date20 March 2009
CreatorsLee, Gregory
Source SetsSouth African National ETD Portal
Detected LanguageEnglish

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