How to develop a customer satisfaction scale with optimal construct validity

In this article, we investigate how to construct a customer satisfaction (CS) scale which yields optimally valid measurements of the construct of interest. For this purpose we compare three alternative methodologies for scale development and construct validation. Furthermore, we discuss a satisfaction measurement application which is consistent with Messick’s (in: Linn (ed.) Educational measurement, 1989) construct validity theory. Following the deductive design for test development and construct validation, a multi-item measure for CS with a retail bank was developed. The measure was applied in survey research ( \(N\)  = 1,689) within a Dutch retail bank. The items constituted a unidimensional scale, allowing the computation of scale scores. The tests of 11 hypotheses about scale-score characteristics demonstrated that the scale score represented the construct of CS well. Furthermore, the one-factor theory (e.g. Yi, in: Zeithaml (ed.) Review of marketing, 1990) of satisfaction/dissatisfaction was confirmed. An implication of this result is that satisfaction/dissatisfaction can be measured on one scale instead of two scales, one for satisfaction and one for dissatisfaction. The results demonstrate that the deductive design is an appropriate methodology for measure development and construct validation in applied psychological research. The article concludes that the multi-item measure is well-suited for CS measurement in retail banking and that customized satisfaction scales have advantages but also disadvantages compared to standardized scales.     

Outsourcing HR: The Impact of Organizational Characteristics

This study investigates the relationship between a number of organizational characteristics and the decision to outsource HR. Determinants of the outsourcing of four categories of HR are examined: HR generalists activities (e.g., performance appraisal), transactional activities (e.g., payroll), human capital activities (e.g., training), and recruiting and selection. HR executives in 432 organizations provided data on outsourcing levels and organizational characteristics. Reliance on HR outsourcing was associated with idiosyncratic HR practices, strategic HR involvement, positive HR outcomes, promotional opportunities, demand uncertainty, and pay level. As predicted, however, the impact of organizational characteristics varied among the different types of HR activities outsourced. © 2001 John Wiley & Sons, Inc.     

The Term Structure of Interest Differentials in a Target Zone with Time-varying Devaluation Risk

We extend Svensson's (1991b) analysis of the term structure of interest rate differentials in a target zone. First, the model includes a time-varying devaluation risk, and second, we analyse the term structure of interest differentials vis-a-vis Germany in five countries: Belgium, Denmark, France, Italy and the Netherlands. In our sample, 1983–1993, we differentiate between stable and unstable periods. The findings for Denmark and the Netherlands, and for Belgium in the relatively stable period are broadly in line with Svensson's theory, whereas the other results are more in accordance with the model that allows for a time-varying devaluation risk.
(J.E.L. E43, F31).     

Verteilungswirkungen des Erneuerbare-Energien-Gesetzes

The ongoing economic criticism of the German Renewable Energy Act (EEG) recently started focusing on distributional effects, too. A team of authors at the Cologne Institute for Economic Research is worried about high costs for electricity consumers. They argue since electric power consumption is only slightly correlated with income, the fi nancial burden of the EEG is substantially higher for low-income households than for high-income households. This regressive effect is even increased since particularly high-income households have installed photovoltaic systems and thereby gain from green power subsidies. In contrast, other authors argue that this debate on distributional effects, while desirable, often scandalizes rather common issues of everyday economic events while ignoring the real EEG-induced redistribution effects, that is to say the EEG reallocation charge privilege for energy-intensive industries. These authors advise against drawing on partial analysis when discussing distribution-related issues of the EEG. A team of authors at the ZEW are concerned about the cost-effi ciency of the EEG which is the underlying reason for the recent discussions on distributional effects. The energy transition will entail large additional cost which will have to be carried. Increasing the effi ciency of governmental energy and climate policies will increase acceptance and attenuate distributional effects.     

Virtual and Composite Fundamentals in the ERM

A latent-variable approach is applied to identify the appropriate driving process for fundamental exchange rates in the ERM. From the time-series characteristics of so-called "virtual fundamentals" and "composite fundamentals", a significant degree of mean reversion can be asserted. The relative degree of mean reversion across countries closely corresponds to often assumed degrees of economic integration vis-a-vis Germany as well as documented degrees of credibility of the exchange rate policies pursued. Convergence in fundamentals appears to be larger under the "new" EMS than in the previous years, but has again diminished after German unification and the subsequent widening of the ERM bands in 1993.     

The Determinants of Disciplinary System Effectiveness: A Line-Management Perspective

This study examines how characteristics of an organization and its disciplinary system affect line-management perceptions of disciplinary system effectiveness. Using responses from 418 organizations, we found a curvilinear relationship between disciplinary system restrictiveness and perceptions of disciplinary system effectiveness. Results also indicate that monitoring costs, investment in training, grievance systems, unionization, and pressure to perform are significantly related to perceptions of disciplinary system effectiveness.     

Temporary workers: Employee rights and employer responsibilities

As the number of temporary workers in the U.S. has increased dramatically over the past ten years, so, too, has social policy concent over the rights of temporary employees in the workplace and the responsibilities of employing organizations to them. This article first reviews the extent to which temporary workers can be considered “employees” of organizations and thereby be extended the same rights and protections as permanent, full-time employees. Then, the article reviews the current state of case law on the most salient legal issues pertaining to the treatment of temporary workers: discrimination, pay and fringe benefits, worker’s compensation, occupational safety and health, and union activity. The article concludes with the managerial implications of current labor law for compliance with legislative and judicial mandates.     

On the determination of real interest rates in Europe

In this paper a loanable funds model is estimated over the period 1959–1990 for the determination of after-tax expected real interest rates using aggregated data for four European countries under the assumption that high capital mobility in Europe implies a common capital market. It is concluded that real interest rates in the European Community were mainly driven by movements in temporary income, expected inflation, lagged investment, money growth, and the oil price. Moreover, our aggregate, model appears to be reasonably stable. Finally, individual country rates are shown to depend on the European rate as well as some country-specific variables, suggesting a limited degree of isolation from international financial markets for the countries concerned.At the time of writing the author was still affiliated with the Department of Economics at the University of Groningen. Hence, any views expressed here are those of the author and do not necessarily represent those of De Nederlandsche Bank. This paper benefitted very much from stimulating comments made by Willem Buiter, Kanhaya Gupta, Jakob de Haan, Flip de Kam, Kees Koedijk, and an anonymous referee. The author would like to thank Jan-Egbert Sturm for technical assistence. Of course, the usual disclaimer applies.     

The credibility of the European exchange rate mechanism

Using a panel data approach and three different credibilitymeasures, we argue that unemployment, inflation, and budgetdeficits in participating countries have affected the credibilityof the Exchange Rate Mechanism of the EMS. In contrast to mostprevious research, which focuses upon the credibility of exchangerate policies of individual member states, the analysis focusesupon the credibility of the system. The credibility indicatorsused are short- and long-term interest differentials vis-à-visGermany and short-term interest differentials which have beenadjusted for expected exchange rate movements within the band.Both long-term and error-correction models are estimated.