The Neglected Role of Collective Customer Perceptions in Shaping Collective Employee Satisfaction, Service Climate, Voluntary Turnover, and Involuntary Turnover: A Cautionary Note

Although the service-profit chain posits that employees and customers are interrelated at the unit level (Heskett, Sasser, & Schlesinger, 1997), most theory and practice give primary emphasis to the employee. In this study, we sought to draw attention to the relatively neglected influence that customers may collectively have on employees. Specifically, we examined how collective customer perceptions of service quality relate to collective employee job satisfaction, service climate, and collective turnover (voluntary and involuntary). Using a sample of 294 bank branches, 1,975 employees, and 52,920 customers, modeled at the branch level over 2 years, we found that collective customer perceptions of service quality produced a stronger effect on collective employee job satisfaction and service climate than vice versa. We also provided the first tests demonstrating that collective customer perceptions of service quality significantly and independently influence collective voluntary turnover, even while simultaneously modeling collective employee job satisfaction and service climate. Further, we showed that the effects of collective turnover (voluntary and involuntary) are primarily related to collective customer perceptions and service climate, but through different paths. Although the turnover base rates are modest, these empirical findings highlight the role that collective customer perceptions can have in shaping collective employee attitudes, climate, and turnover and, thus, should be considered and replicated in future theory and research.