attitudes on the relationship between staff and external cus-
tomers.19, 20 This is particularly true where employees occupy
boundary-spanning positions in the organization, which can result
in them being as close psychologically and physically to the organi-
zation’s customers as they are to other employees within the
company, or perhaps even closer. The skills and customer orienta-
tion of these employees are, therefore, critical to the customers’ per-
ception of the organization and their future loyalty to the
organization.
The link between employee satisfaction and employee perform-
ance has been challenged in the literature.^21 However, a meta-analy-
sis conducted by Petty, McGee and Canender concluded that job
satisfaction and performance are indeed correlated.^22 Moreover, job
satisfaction has been shown to relate positively with specific facets
of performance such as organizational citizenship behaviour,^23
which is employee behaviour that is not formally required in a job
description but is nevertheless critical for organizational success
(e.g. helping co-workers, volunteering for extra work and so forth).
Schneider, Parkington and Buxton and Schlesinger and Heskett
have also found support for linkages between employee satisfaction
and retention and customer satisfaction and retention.19, 20 The
work undertaken by Bain & Company also suggests a strong link
between these two variables.^24 They maintain that high customer
retention will lead to higher employee satisfaction, as employees
will find their job much easier dealing with satisfied customers
rather than dissatisfied customers. As a result, employees create a
stable and experienced work force that delivers higher service
quality at lower cost. This in turn leads to higher customer retention
and increased profitability.
The advantages of long-term employees are that they are often able
to form personal relationships with customers, understand their
needs and may be able to pre-empt dissatisfied customers leaving the
company. Schneider and Bowen have found that when employees
identify with the norms and values of an organization, they are less
inclined to leave and, furthermore, customers are likely to be more
satisfied with the service.^25 In addition to this, when employee
turnover is reduced, service values and norms are transmitted to new
employees and successive generations of service employees.
Employee satisfaction in internal markets is, therefore, a prerequisite
to customer satisfaction in external markets. The basic philosophy is
that if management wants its employees to do a great job with cus-
314 Relationship Marketing