Influence of customer participation from the employee perspective

Purpose - To reduce costs, many banks have increased customer involvement during the creation and delivery of their products and services. Based on a job demands-resources (JD-R) model, this study tests an inverted U-shaped curvilinear relationship between perceived customer participation and employee work engagement. Customer orientation (CO) and service employee perceived fit with customers (PCF) moderate this relationship, which eventually affect both the internal and external benefits of service-employee work engagement. Design/methodology/approach - The authors collected survey data from 518 service employees in the South Korean banking and insurance industries and analyzed the data using structural equation modeling (SEM). Findings - The results indicate that perceived customer participation (PCP) has a significant inverted U-shape effect on work engagement. Results also suggest that CO and PCF have positive relationships with work engagement. In addition, they moderate the inverted U-shaped relationship between service employee PCP and work engagement, while work engagement positively affects organizational citizenship, job satisfaction and commitment. Research limitations/implications - The authors empirically identify a curvilinear effect of PCP on work engagement. In doing so, the authors introduce and operationalize the new construct: PCF and suggest PCF and CO as unique job resources for service employees. The authors also examine these constructs as predictors based on a motivational process and as moderators based on a strain (energetic) process. Practical implications - From a managerial perspective, examining the curvilinear relationships of customer participation and work engagement suggests that front-line employees' (FLEs') PCP does not necessarily enhance the economic benefits of productivity gains by using customers as substitutes for portions of employee labor. Another finding with managerial relevance indicates that service employees, who have more CO and PCF, showed more tolerant attitudes toward unnecessary and excessive levels of customer participation and regarded it as a job resource. Originality/value - This study explains that researchers must consider the positive and negative sides of customer participation simultaneously because frontline employee PCP can be changed depending on the level of participation provided by customers. This study also shows that CO can be assumed as a personal resource and PCF as an environmental resource in the work engagement process.