Is Seeing Eye to Eye Always Beneficial? How and When (Dis)agreement on Service Climate Influences Store Turnover and Sales Performance

Abstract

This study examines the effect of (dis)agreement between the employees and their store manager regarding service climate on store-level turnover and subsequently sales performance. In addition, we test the moderating effect of perceived employee fit with customers on these relationships. Using polynomial regression and response surface methodology with data from 753 frontline employees and 125 managers nested in 125 stores, we found that collective turnover is lower when the store manager and the employees both perceive (vertical agreement) that customer service is prioritized at moderate levels. However, turnover is higher when managers and employees do not agree on the level of the service climate (vertical disagreement). The results indicate that the beneficial effect of vertical service climate agreement on turnover was higher when perceived employee-customer fit was high. The detrimental effect of vertical service climate disagreement on turnover was reduced when the strength of employees’ service climate was strong (high horizontal agreement). Furthermore, our examination found that the level of turnover in stores was negatively related to sales performance and that the effect of vertical service climate agreement on sales performance was conditional on the degree of perceived employee-customer fit.