Employee Emotional Influences on the Service-Profit Chain

Abstract

The purpose of this paper is to integrate research on emotional labor and emotional exhaustion, with research on the service-profit chain (i.e., employee attitudes lead to turnover which leads to customer perceptions), to identify how employee emotional and attitudinal reactions are related to employee and customer outcomes in a service context. In contrast to prior research, we also theorize that emotional labor and emotional exhaustion manifest as unit-level constructs. Utilizing data from a large retail bank (2,966 employees nested within 410 branches), we perform a path analysis on temporally-lagged variables. The results find that emotional exhaustion and labor aggregate to the branch level, and these constructs negatively influence employee attitudes. In turn, employee attitudes negatively contribute to collective turnover, although turnover did not relate to customer perceptions. Thus, unit-level emotional labor and exhaustion have important influences on the service-profit chain.