Relationships Between Employee Productivity and Sales Revenue

Summary

The study meant to investigate the type and extent of the relationship that exist between the service profit chain strategies on sales revenue centering on Probe market. The main thrust of the study was to ascertain the direction and extent of the relationships between employee productivity and sales revenue, customer value and sales revenue and customer satisfaction and sales revenue as operationalized in the conceptual framework. After developing the conceptual framework, objectives and hypotheses, the study discussed justification of the study, assumptions, delimitations and limitations.

Literature review based on the overabundance of researchers who discussed both the negative and positive relationships between service profit strategies and other various dependent concepts. However, there was limited literature that looked at the causal relationship between service profit chain and sales revenue. The scholar conducted a thorough review on literature. which helped in gaining insight into the research concepts, developing the conceptual framework and crafting of objectives and hypotheses. It also aided in revealing ways to define sample size and sampling methods appropriate to select respondents.

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Causal research design aided in unpacking the direction and extent which service profit chain strategies were related to sales revenue.

The researcher adopted purposive sampling for employees. Convenience sampling technique was used to sample managerial staff. Kerjcie and Morgan (1970) sample size statistical formula of 95% confidence level and 5% margin of error was adopted to come up with the 21 employees sample size from a target population of 22 and 19 corporate companies from a target population of 20. Furthermore, structured questionnaires were used to gather data.

The raw data gathered was inputted and tabulated into frequency tables and pie charts for interpretation with aid of the computer software SPSS 20.

Reliability of the Likert scale was measured using Cronbach`s alpha test and the internal consistency Cronbach`s alpha coefficients ranged from 0.717 to 0.955 certifying the research instrument reliable. Spearman correlation analysis proved that there is a strong linear monotonic relationship between independent and dependent variables. Lastly, the regression analysis confirmed a positive linear relationship between the six variables.

Conclusions

The conclusions are based on results generated by SPSS 20 and the three research objectives. The direction and extent of the relationship between employee productivity and sales revenue.

According to the results produced and analysed using SPSS 20, there is a strong positive monotonic linear relationship that exist between employee productivity and repeat purchase. This is supported by the Spearman correlation coefficient of 0.581 and regression coefficient of 0.647 between the two variables. The significant value of 0.015 in table 4.7 confirm that there is a significant positive relationship between employee productivity and repeat purchase which prompted adaptation of hypothesis H1 and dropping the null hypothesis. Additionally, the predictor variable predicts the response variable by 41.4% as depicted by the adjusted R square value of 0.414 in table 4.7. Therefore, employee productivity has a strong significant relationship with repeat purchase and also employee productivity influenced repeat purchase by 41.4% only.

The direction and extent of the relationship between customer value and sales revenue

Tables 4.6 and 4.7 in chapter 4 show that the Spearman coefficient is 0.576 and the regression coefficient is 0.591 between customer value and increased purchases. The two statistical coefficients complement one another in confirming a strong positive linear association between customer value and increased sales. The significant value of 0.000 in table 4.7 certifies that the relationship between customer value and increased purchases is not insignificant and therefore, hypothesis H2 was adopted and H0 was rejected. The adjusted R square value of 0.344 in table 4.7 affirms that the value for customers influences an increase in purchases by 34.4% only. Conclusively, customer value has a strong significant positive linear association with increased purchases

The significance of the association between customer satisfaction and sales revenue

Results in table 4.6 and 4.7 confirm that there is existence of a strong positive linear relationship between customer satisfaction and continued business evidenced by Spearman coefficient and regression coefficient of 0.715 and 0.840 respectively. There is also a significant positive relationship between customer satisfaction and continuity shown by the significant value of 0.001 in table 4.7. Hence, the alternative hypothesis H3 was accepted and the null hypothesis H0 was rejected. The adjusted R square value of 0.704 in table 4.7 attests that customer satisfaction hugely influences business continuity by 70.4% only.

Recommendations

It can be noted from the results that service profit chain significantly and positively influences Probe market's sales revenue. The researcher recommends to management that service profit chain strategies alone can entirely influence sales revenue for the company and that individual service profit chain strategies have to be used to promote sales revenue independently.

The researcher recommends that Probe management to improve their investment in internal marketing to continuously educate its employees and management in service profit chain strategies. Training of company staff will enhance product knowledge, boost motivation levels, improve employee's confidence levels, eagerness to assist customers and increase customer complain handling response rate. Improved customer value and employee productivity will positively and directly induce more sales revenue. Sinclair and Curry (2014) asserts that motivated employees render excellent quality service to both the internal and external customers which supports increase in sales revenue.

Lastly, Probe management should invest relatively more in enhancing service profit chain strategies as evidenced and supported by the highest standardized coefficient (beta) of 0.840. The relatively high beta value signal that employee productivity mostly influence sales revenue for Probe.

Area of further study

The current research centered on the relationship between service profit chain strategies and sales revenue focusing on Probe Market Research Company. Based on the results, the researcher recommends future research on

The other factors that influence probe sales revenue besides service profit chain strategies as it was evidenced that employee productivity did not influence repeat purchase by 58.6%, customer value failed to influence increased purchases by 65% and customer satisfaction did not influence business continuity by 29.4%.