Employee satisfaction trajectories and their effect on customer satisfaction and repatronage intentions

Does improving employee happiness affect customer outcomes? The current study attempts to answer this question by examining the impact of employee satisfaction trajectories (i.e., systematic changes in employee satisfaction) on customer outcomes. After accounting for employees’ initial satisfaction levels, the analyses demonstrate the importance of employee satisfaction trajectories for customer satisfaction and repatronage intentions, as well as identify customer-employee contact as a necessary conduit for their effect. From a macro perspective, employee satisfaction trajectories strongly impact customer satisfaction for companies with significant employee–customer interaction, but not for companies without such interaction. From a micro perspective, employee satisfaction trajectories influence customer repatronage intentions for frequent customers, but not for infrequent customers. These effects are robust to controlling for previous customer evaluations and recent employee evaluations. Overall, these findings extend the dominant view of examining static, employee satisfaction levels and offer important implications for the management of the organizational frontline.

     

The role of peer-to-peer voice in severe work environments: organisational facilitators and barriers

Encouraging and facilitating employee voice among frontline employees is important in organisations to draw out problems and issues that can potentially be addressed and mitigated by organisational policies and practices. Using Conservation of Resources theory, this study focuses on paramedics and the formal and informal voice mechanisms used to safeguard their well-being. We observe that paramedics are often unwilling to use formal support mechanisms, at least in the first instance immediately following exposure to a traumatic event, but they see informal peer-to-peer voice as critical in preventing resource loss and regaining resources for subsequent call-outs. We also found that without an awareness of the importance of this support mechanism, changes in work organisation can unintentionally and unknowingly limit their capacity to engage in this form of support. Losing peer-to-peer voice can lead to the build-up of stress that could otherwise be mitigated, resulting in diminished well-being.     

Viewpoint: Estimating the causal effects of policies and programs

Estimation, inference and interpretation of the causal effects of programs and policies have all advanced dramatically over the past 25 years. We highlight three particularly important intellectual trends: an improved appreciation of the substantive importance of heterogeneous responses and of their methodological implications, a stronger focus on internal validity brought about by the “credibility revolution,” and the scientific value that follows from grounding estimation and interpretation in economic theory. We discuss a menu of commonly employed partial equilibrium approaches to the identification of causal effects, emphasizing that the researcher's central intellectual contribution always consists of making an explicit case for a specific causal interpretation given the relevant economic theory, the data, the institutional context and the economic question of interest. We also touch on the importance of general equilibrium effects and full cost–benefit analyses.     

The Use and Abuse of Environmental Knowledge: A Bloomington School Interpretation of the Canadian Fisheries Act of 1868

This paper will focus on the ambitious plan for regulation embodied in the Dominion Fisheries Act of 1868, a law passed by the Canadian federal parliament in its very first year of existence. The 1868 law was intended to bring the nation's fisheries firmly under the control of officials employed by the new federal government. The paper argues that 1868 law, which was designed to address what would today be called Tragedy of the Commons problems, was a product of the hubris identified by Hayek as "the fatal conceit." The centralized and bureaucratic approach to governing fisheries represented by the 1868 Fisheries Act did not work well because the knowledge that would have been required for successful management of fisheries was highly dispersed. Drawing on Hayek and the Bloomington School, this paper argues that the experience of Canada's fisheries sector in the generation after 1868 illustrates the problems with centralized management Common-Pool Resources. In the 1890s, the centralized approach represented by the Fisheries Act of 1868 was replaced by a more flexible and decentralized system Hayek's theory of knowledge would suggest the reversal of centralization over environmental policy in the 1890s was a positive development that helped Canadians to reconcile the goals of economic development and the protection of the environment. The Hayekian paradigm suggests that control over environmental policy should be devolved downwards to the levels of government closest to resource users.     

An expected utility analysis of k-majority rules

Buchanan and Tullok (The calculus of consent: logical foundations of constitutional democracy. University of Michigan Press, Ann Arbor, 1962) argued that the optimal k-majority rule should minimize the sum of external costs and decision costs. Dougherty et al. (Public Choice, 163(1–2):31–52, 2015) formalized their approach using various groups of voters. In this study, we analyze the optimal k-majority rule in terms of expected utility and compare our results to Dougherty et al. (2015), which focuses on costs alone. Specifically, we replace Buchanan and Tullock’s external cost function with an external utility function that accounts for both the benefits and costs of enacting proposals. We find that analyzing k-majority rules in terms of utility, rather than costs, affects the optima. Furthermore, in terms of utility, the optimal k-majority rule can vary depending on the group one expects to be in during a vote. With some interesting exceptions, individuals from groups that favor the proposal often find small k-majority rules optimal. Individuals from groups that oppose the proposal often find large k-majority rules optimal.     

Earnings management by the early adopters of SFAS No. 106

Statement of Financial Accounting Standard (SFAS) No. 106 on Nonpension Postretirement Benefits (NPB) provides managers with a relatively long adoption window and choice of transition methods which can be used by affected companies to manage earnings. This paper examines whether management's choice of adoption timing is motivated by the desire to manage earnings. Fisher's [1934] exact probability analysis is used to test the hypothesis regarding profitability of a sample of 200 early and late adopters of SFAS No. 106. The results indicate that the profitability of adopting the income-reducing accounting standard (SFAS No. 106) early is significantly higher for more profitable firms than for less profitable firms.     

TRENDS IN THE CONCENTRATION OF PERSONAL WEALTH IN THE UNITED STATES, 1958 TO 1976

The trend in the concentration of U.S. wealth from 1958 through 1976 is examined in some detail and summary data are used to extend the period over which the trend is observed back to 1922. The data suggests a long-run secular decline in the concentration of U.S. wealth with a rather sharp decline in 1976, the last year for which measurements were made. Although the secular decline in wealth concentration is supported by numerous observations across 50 years, the precipitous decline measured between 1972 and 1976 should be interpreted with caution because it undoubtedly reflects the substantial downward revaluation which occurred in the stock market from 1972 (most recent previous observation) to 1976. This is not to argue that wealth holders at the top of the distribution were not made significantly less affluent by the revaluation, but that the 1976 observation includes a large cyclical component. Future observations which include the subsequent upward revaluation in the stock market are expected to show levels of concentration comparable to or only slightly below those for 1958 through 1972.     

Winners, Losers, and the Nuclear-Waste Dilemma

This paper explores how property-right assignment affects social efficiency when a public program has both “public good” and “public bad” components. We show that when willingness to accept a public bad exceeds the willingness to pay, the net benefit is unambiguously lower when the property right supports the status quo institutional structure. Thus, Kaldor–Hicks efficiency tests tend to favor public programs and mitigation over the status quo even when mitigation negatively affects another group. To illustrate the result, we develop social-cost estimates for moving nuclear waste from current temporary-storage facilities to a permanent central repository at Yucca Mountain, NV, USA. For a representative city with a population of 226,195, the present value of the external cost of shipping waste is $1.42 billion when those living near temporary nuclear-waste storage facilities are assigned the property right to “health and safety.” That number swells to $5.95 billion when those living near the transport route are assigned the property right. Thus, property-right assignment affects the efficient level of nuclear-waste, and thus nuclear energy, produced.     

The effect of customers' emotional responses to service failures on their recovery effort evaluations and satisfaction judgments

This study examines the role of customer emotions in the context of service failure and recovery encounters. It investigates how customers' emotional responses to service failures influence their satisfaction judgments after accounting for cognitive antecedents of satisfaction. The study also considers how customers' emotional responses to service failures influence how they evaluate an organization's recovery efforts. The research is conducted by surveying customers about their satisfaction judgments in two service settings, restaurants and hotels. The results suggest that customers' emotional responses to service failures will influence their recovery effort evaluations and satisfaction judgments in some circumstances and that the effects of emotion vary across industry settings. This study identifies the types of efforts that are most effective in helping customers “recover” from the negative emotions caused by service failures. Amy K. Smith (Ph.D., University of Maryland) is currently an assistant professor of marketing at George Washington University. Her research focuses on customer assessments of services, customer satisfaction and retention, customer service, serice failure and recovery, and customer-service provider relationships in both business-to-consumer and business-to-business markets. Her research has been published in the Journal of Marketing Research and the Journal of Service Research. Ruth N. Bolton is currently a Ruby K. Powell Professor of Marketing in the Michael F. Price College of Business at the University of Oklahoma. Her research focuses on how organizations can growth the value of their customer base through customer service and support. Her research has been published in the Journal of Retailing, the Journal of Marketing, Marketing Science, Marketing Letters, the Journal of Marketing Research, and the Journal of Service Research.