Saudi Telecom Company (STC) is the largest telecommunication services provider in the Middle East. Its services include “fixed line, data & internet and mobile services” in the Kingdom of Saudi Arabia (Saudi Telecom Company 2007). STC has adopted its FORWARD Strategy as part of its commitment to its customers. This strategy aims to deliver tailor-fitted services that would add value to the customers’ businesses and to broaden their customer base by exploring potential service areas.
As a result of this strategy, STC has ventured into international markets by establishing business and investments in a number of Gulf Cooperative Council (GCC) countries, Asia & Africa. With a huge potential to penetrate more of the telecom market in Saudi Arabia and other neighbouring countries, STC is poised to increase its revenue base which stands at almost USD9 billion in 2006. Recently, the company has undergone a major restructuring programme to align its organisational structure with new strategies it has adapted recently. These are in light of their thrust to cross their local borders.
Given this backdrop, this research proposes to establish a relationship between employee satisfaction and customers’ satisfaction. Particularly, the study will determine whether contented employees translate to satisfied customers, and at the same time whether positive responses from customers is an antecedent to a more satisfied workforce (Yoon and Yoon 2000). Moreover, this area of study was selected in the light of the currently highly active job market which gives rise to employee retention issues (Shaw, Duffy, Johnson, & Lockhart 2005).
At the same time, now, more than ever competitiveness in the current market has forced customer retention as critical performance indicator for most companies’ Marketing Departments. The study will make use of the responses of the employees and customers of Saudi Telecom Company to determine if there are significant relationships that exist between these two constructs as well as to ascertain the factors which positively influence them. Academic Context Employee Satisfaction In pursuit of greater productivity, organisations invest substantially in recruiting high-quality employees (Schmitt & Chan, 1998).
However, with a very active job market these days, hiring and retaining employees is an issue. Creating innovative ways to manage employee turnover are ongoing challenges that employers and human resource professionals deal with everyday (Griffeth & Hom 2001). In order to retain the right employees and to get value out of the significant amount of recruitment resources that they have expended, employee satisfaction is a main consideration in the agenda of a lot of organisations (Wright & Bonnet 2007).
Employees’ job satisfaction has been defined as a “pleasurable or positive emotional state, resulting from the appraisal of one’s job experiences” (Locke 1976, p. 1300) and it plays a vital role in building a motivated workforce with enhanced performance levels (Danielsson & Bodin 2008). Service Quality Satisfaction Business organisations have turned to attention in recent years to customer satisfaction in the wake of the paradigm shift from transactional marketing to relationship marketing (Sheth & Parvatiyar 1994).
Customer satisfaction with a company’s quality of services is often viewed as a determinant of a company’s competitiveness and overall success (Hennig-Thurau & Klee 1997). Delivering quality in services has been shown to be an important strategy for marketers who are trying to differentiate their service offerings by establishing customer value and satisfying customer needs (Ozment and Morash 1994). Obtaining new customers tend to entail very high costs, and the profitability of a consumer grows as the duration of the relationship with the organisation increases.
Understanding customer retention is thus crucial to long-term profitability (Bolton and Verhoef 2004). Service quality satisfaction has been considered as an antecedent for the retention of customers, and therefore has become a main concern of relational marketing approaches (Rust & Zahorik 1993). Empirical Studies on the Relationship between Employee Satisfaction and Service Quality Satisfaction Several empirical studies suggest that positive changes in employee attitudes towards their work lead to positive changes in customer satisfaction, thus showing a positive relationship between employee satisfaction and quality service satisfaction.
One study reviewed the link between an organisation’s financial success and customer and employee variables, and found that a high percentage of customer satisfaction and retention was accounted for by positive employee satisfaction (Brooks 2000). The relationship between employee satisfaction and quality service or customer satisfaction has received further empirical confirmation from the studies of Harter, Schmidt & Hayes (2002).
This study was based on almost 8,000 business units and found that employee satisfaction has a direct effect on certain business unit outcomes including customer satisfaction. Another study which confirmed this relationship was by Berhardt, Donthu, and Kennett (2000). The research appraised employee satisfaction, customer satisfaction and resulting profits of an organisation. It concluded that over time, employee satisfaction and customer satisfaction translate to prominent effects in the company’s bottomline.
Available literature suggests rationalisation as to why quality satisfaction is affected by employee satisfaction. Employees who are able to interact with customers are in a position to become more conscious of what the customers want and need. Satisfied employees are motivated and empowered employees. Thus, they are able to address customers’ wants and needs. Further, satisfied employees are enthusiastic and willing to provide good service and they can deliver a more positive perception of the service they provide.
In cases of undesirable outcomes, satisfied employees are able to provide adequate explanations and solutions that would still leave a customer satisfied with the service, rather than being aggravated by negative behaviour of dissatisfied employees. Satisfied employees have enough emotional resources to show empathy, understanding, respect, and concern. Other empirical studies in the relationship between employee and customer satisfaction consider the forerunners of employee satisfaction and service quality satisfaction. A study by Hyun Seo and Seog Yoon (2004) considers three precursors to customer satisfaction and employee satisfaction.
The first is the extent to which employees sense that the organisation values their inputs and cares about their well-being. If an employee fees that the organisation values his contributions and feels that the company is able to reciprocate this contribution, the employee feels contented and is willing and able to perform well – giving quality services which customers appreciate. Another antecedent is the extent to which the employee’s superiors create a work environment that fosters trust, helpfulness and friendliness.
Employees who feel that socio-emotional resources are offered in their work environment perform with an optimistic outlook which reflects on the quality of service they provide. Lastly, customer participation also plays a vital role in the quality of service he gets. The kind of service that employees extend depends on the degree to which the customer is involved in the delivery of the service he requires. A customer who is able to convey exactly what he needs influences the service provider and is more likely to be given a service that matches his requirements.
Another empirical study by Hee Yoon and Beatty (2001) agrees with two of the three precursors previously presented, which are organisational support in terms of valuing the employees’ contributions and the kind of work environment the employees are exposed to. Two of the most important elements in a service organisation are its employees and customers. For an organisation to be able to sustain its operations, it must be able to retain its valuable employees who are able to render the kind of service that the organisation wants its customers to get, and at the same time, the quality of service that is acceptable to the customers.
To retain customer loyalty to their products and services, organisations should be able to keep their customers happy. Satisfied customers are the best marketing tools to promote a certain product or service. The empirical literature cited in this report highlights the crucial link between employee satisfaction and customer satisfaction on service quality. Employees can robustly contribute to an organisation’s success by having a customer-centred attitude in the way they render services to customers. However, this is only more likely if the employees are satisfied with their jobs.
Research Objectives The following are the objectives of the present study: 1) To determine the level of satisfaction of employees of STC; 2) To ascertain the degree of service quality satisfaction of customers of STC; 3) To determine the variables that are significantly correlated with overall employee satisfaction; 4) To ascertain variables that are significantly correlated with overall service quality satisfaction; and 5) To determine if there is a significant relationship between employee satisfaction of STC employees and service quality satisfaction of STC customers.
Methods The current study adopts a positivistic research paradigm, which upholds the use of observation and empirical data for garnering true knowledge (Giddens 1974). This is in stark contrast with anti-positivist paradigms which attaches premium to the individual’s experience to attain knowledge. Moreover, the research approach is mainly quantitative. The research shall primarily use survey methodology to address the foregoing objectives. Survey questionnaires have several advantages. First, it allows for cost efficiency compared to interviews which entail more cost.
This is particularly applicable for researches that involve many respondents or studies that inquire through numerous survey items. Yet another advantage of survey questionnaire is the relatively easier data analysis that it necessitates. Unlike qualitative methodologies, there are readily available software which can analyse survey data statistically. Surveys also make bias less likely since the items are standardized and there is nothing that intervenes between the respondent and the survey sheet. There are no cues that may impact the answers of the respondent. Finally, distractions and intrusion are less probable (Allan & Skinner 1991).
The research is a descriptive-correlational research. It aims to describe the levels of employee satisfaction and service quality satisfaction on one hand; and to ascertain the predictors of these variables, making it correlational as well (Saunders, Lewis & Thornhill 2007). The study will thus involve deploying a survey questionnaire to two samples. The first sample will be composed of employees of STC; on the other hand, the second sample will consist of customers of the company. Since there is an attempt to determine the relationship between employee satisfaction and customer satisfaction, it is imperative to match these two variables.
That is, the employees who shall be surveyed for employee satisfaction shall be requested to hand out a sealed envelope containing one customer satisfaction questionnaire, to an STC customer. The latter will be asked to rate the service which they have just experienced with the employee. The researcher shall ensure that the employee respondents are keenly aware of the objectives of the research. They shall also be assured of confidentiality and anonymity, and of their right to cease participation from the study at any time (Shamoo & Resnik 2009).
Following the accomplishment of the questionnaire, they shall not be given incentives, but instead will be thanked by the researcher for their participation. The instruments will be based on the framework of Zeithaml, Berry & Parasuraman (1993), which measures empathy, assurance, responsiveness, and reliability. The tangibles subscale shall not be included because this is not influenced by employee satisfaction. On the other hand, employee satisfaction shall be measured through a self-constructed questionnaire with subscales based on Herzberg’s (1969) motivators and hygiene factors.
Since both subscales will be dovetailed to the employee and service contexts of STC, there is a need to compute for its reliability indices. This shall be made possible through the conduct of a pilot study among at least 30 employees for the employee questionnaire; and 30 customers for the customer survey. The pilot data shall be encoded into the Statistical Package for the Social Sciences (SPSS) version 16. 0, and analysed for Cronbach’s alpha of the subscales and the overall tool.
Depending on the number of questions that the survey questionnaire will be composed of, the present study shall adopt the sample size protocol of Tabachnik & Fidell (1989), who recommends a 1: 5 ratio of survey items to number of respondents. They shall be chosen using purposive sampling, selecting only employees who have direct interface with customers. This is necessary so that they can pair up with at least one customer for gathering data on service quality satisfaction. Once the employee and customer surveys have been gathered, these will be encoded onto SPSS version 16.
0 to compute for descriptive statistics and Pearson correlation coefficient. This statistic is used to determine if the magnitude and the direction of the relationship between two variables. Substantive conclusions will be derived from the statistical results, and analysed side by side with outcomes of previous empirical studies. References Allan, G & Skinner, C (eds. ) 1991, Handbook for research students in the social sciences. The Falmer Press, London. Bernhardt, KL, Donthu, N, & Kennett, PA 2000, ‘A longitudinal analysis of satisfaction and profitability’, Journal of Business Research, vol. 47, pp.