Abstract
Purpose The purpose of this paper is to offer a better understanding of managing engagement in an emerging economy service. It explores the role of organisational climates for initiative and psychological safety as the key drivers of employee engagement (EE). It also examines the effects of EE on customer engagement (CE) and, in turn, on relationship commitment and switching intention. Design/methodology/approach Data were collected through a structured survey of service employees and customers of 69 bank branches in Bangladesh using two survey instruments. Responses were collected from 156 employees and 316 customers. A dyadic data set was created by matching customer data with the corresponding employee data collected from each bank branch. Structural equation modelling using AMOS (version 22.0) was employed for data analysis. Findings Organisational climates for initiative and psychological safety positively influence EE. In turn, EE significantly influences CE which has a significant impact on customer relationship commitment and switching intention. Research limitations/implications Future research could consider actual customer behaviour, such as repeat purchase, as the key outcome variable. Practical implications The findings emphasise that investment by service managers in organisational resources to facilitate favourable climates for initiative and psychological safety would engage employees at work, which would ultimately help to attain CE and commitment, and reduce switching intention. Originality/value This research extends the existing engagement literature with empirical evidence supporting two new EE drivers and two new CE outcomes. It offers a better understanding of managing engagement in the financial services industry of an emerging economy, focussing on the relationship chain from organisational climate to EE, CE and customer-based outcomes.
Highlights
Engagement has received considerable academic interest from different streams in the literature including marketing (e.g., Kumar, 2013; Kumar et al, 2017) and management (e.g., Catteeuw et al, 2007)
In the context of financial services, the current study argues that enabling favourable climates for initiative and psychological safety is a precursor for EE as it leads to greater interdependence and interaction between employees and customers (Auh et al, 2007)
Understanding the above relationships in the context of financial services is important as the industry is characterised by high customer switching, low EE, high employee turnover and absenteeism (LMA, 2018)
Summary
Engagement has received considerable academic interest from different streams in the literature including marketing (e.g., Kumar, 2013; Kumar et al, 2017) and management (e.g., Catteeuw et al, 2007). The reason is that firms with highly engaged employees have been found to enjoy an increase of more than 5% in operating margin and of 3% in net margin, compared to firms with highly disengaged employees (Menguc et al, 2013). 72% of highly engaged employees (compared to 27% of disengaged employees) believe they can positively affect customer service (Seijts and Crim, 2006), with this leading to obtaining customer satisfaction, loyalty, and firm profitability (Harter et al, 2002). This study investigates how to manage EE and CE together in an emerging economy service by offering a conceptual framework reflecting drivers of EE, the relationship between EE and CE, and their simultaneous effect on customer-based outcomes.
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