UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ LE HA THU INFLUENCE OF PROBLEMATIC CUSTOMERS ON EMPLOYEE’S EMOTIONAL EXHAUSTION AND TURNOVER INTENTIONS MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com 2 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ LE HA THU INFLUENCE OF PROBLEMATIC CUSTOMERS ON EMPLOYEE’S EMOTIONAL EXHAUSTION AND TURNOVER INTENTIONS ID: 22120032 MASTER OF BUSINESS (Honours) SUPERVISORS: PROF. NGUYEN DONG PHONG Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com 3 ABSTRACT Basically, the research not only examines the effect of problematic customers verbally and non- verbally on employees, which can lead to job dissatisfaction and turnover intention, but also to see if perceived organizational justice moderates the influence and to what extent. By utilizing a sample of 369 customer service officers in Ho Chi Minh City, Cronbach’s alpha reliability analysis, EFA and multiple regression analysis function was used to have the most accurate data. The study results illustrate strong interactions of both abusive and unreasonably demanding customers with employees’ emotional exhaustion.
It also proves that affecting emotional side of staffs could lead to job satisfaction and turnover intention simultaneously. Fortunately, perceived organizational justice negatively moderates the relationship between unreasonably demanding customers and emotional exhaustion of employees. Overall, the results help managers to view the organizational dynamic from perspective of staffs. Furthermore, Vietnamese enterprises should start to apply more training sections on client service in general and fair and sensible working procedure in specific to balance customer-employee relationship.
Although there are some limitations in the paper, valuable directions for future and further researches are available. Key words: problematic customers, emotional exhaustion, job satisfaction, turnover intention, perceived organizational justice. TIEU LUAN MOI download : skknchat@gmail.com 4 TABLE OF CONTENTS Chapter 1 .5 Research contributions and implications .6 Structure of the thesis. 13 LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT .2 Problematic customers and Emotional exhaustion .3 Emotional exhaustion and Turnover intentions for customer-related activities .4 Emotional exhaustion and Job satisfaction for customer-related activities .5 Job satisfaction and Turnover intentions for customer-related activities .6 Perceived organizational justice (POJ) .1 Research design process .5 Data collection method .6 Data analysis method.
28 TIEU LUAN MOI download : skknchat@gmail.1 Sample description and data clearance .2 Demographics of respondents.2 Measurement reliability and validity.1 Cronbach’s alpha analysis .2 Exploratory factor analysis (EFA) .4 Final model and Chapter summary. 46 Chapter 5 CONCLUSION AND RECOMMENDATIONS .1 Findings and discussion.2 Implications and recommendations .3 Limitations and future research direction. 60 APPRENDIX 1 – DESCRIPTIVE INFORMATION. 70 APPRENDIX 2 – CRONBACH’S ALPHA.
71 APPRENDIX 3 - RESULTS OF MULTIPLE LINEAR REGRESSION. 89 TIEU LUAN MOI download : skknchat@gmail.com 6 LIST OF TABLES Table 1. Survey item summary. Cronbach's alpha reliability test result.
EFA results – Scales without modification. KMO and Bartlett’s Test for all variables. The result of multiple linear regressions of all independent variables and Emotional exhaustion. The result of simple linear regressions of Emotional exhaustion and Job satisfaction 42 Table 8.
The result of multiple linear regressions of Emotional exhaustion and Job satisfaction as independent variables and Occupational turnover as dependent variable. 44 TIEU LUAN MOI download : skknchat@gmail.com 7 LIST OF FIGURES Figure 1. The proposed research model. Research design process.
22 TIEU LUAN MOI download : skknchat@gmail.com 8 Chapter 1 INTRODUCTION The chapter contains five sections. The first part introduces the background of research, where and why this research takes place. Secondly, the purposes of this thesis and the research scope are informed in the chapter. Next, some contributions and implications are mentioned.
And finally, the research structure is addressed at the end of this chapter.1 Research background Since 1909, the famous motto of Harry Gordon Selfridge about customer satisfaction “Customer is always right” has been widely used by every business in customer service sector or department. Started from the basic idea that customer complaints should be taken seriously, customer satisfaction has become a critical element for a successful organization. Many researchers have explored the link between customer satisfaction and business performance in both firm-level and macro-level analysis (Williams & Naumann, 2011). Employees are coached and trained to be fully aware of meeting customers’ requirements.
However, the pressure of satisfying these needs sometimes can be stressful, for example in Vietnam, the level of employee intent to stay in the organization is lower than those of other countries in the Asia Pacific Region, although the employee engagement level of Vietnamese companies is much higher (Ruge, 2011). According to Ruge in the presentation to the America Chamber of Commerce in February of 2011, the most possible cause for this can be excessive workload and job pressure. Moreover, the highest rates of employee turnover go to Business, Technical support and Production, Operation support with average 12% and 17% in the report for Vietnam Labor Market Overview and Trends (Lu, 2012), which are positions have the most interactions with customers. This is beyond common job satisfaction.
Basically, it is not only about job security, benefits and opportunities for development but also about the feeling that TIEU LUAN MOI download : skknchat@gmail.com 9 they are respected and protected from verbally abused, threatened with violence or even physically attacked. The significance of employee engagement, nevertheless, is not usually considered as an objective for organizations. Achieving customer satisfaction, on the other hand, is often the ultimate goal for managers, particularly those in service industries as evidenced by the emphasis on customer satisfaction survey. Meeting the demands of customers as much as possible is one of the solutions since satisfaction is based on a customer’s experience of the extent to which a provider fulfills his or her expectations (Gerpott et al, 2001).
Nonetheless, not every requirement can be met immediately and be the reason to have unpleasant or problematic customers (Grandey et al, 2004). There is a claim that the bigger customers are the more demanding they become and sometimes, the more unreasonable they can be. This happens due to the unequal power between customer-employee relationships as “the customer is always right” and occurs aggression from customers (Allen and Gilbert, 2002, p.Unfortunately, most studies, such as Chinh and Anh (2008), Burrows et al. (2009), Hau and Thuy (2012), on customer-employee relationship in Vietnam have disregarded the mental side of employees while overestimating the customers’ behaviors and opinions.
Therefore, these factors can cause emotional exhaustion for customer service officers, who have to deal face-to-face with this problem every day. The employee commitment to customer-oriented activities can be negatively affected, which potentially leads to employee turnover. Although they want to stay in the company, will they be still willing to do customer-related tasks, or will they just leave and find another career path which can be less stressful? In such cases, the role of managers and companies in handling complaints and solving customer-related issues is extremely critical. There are possibilities that organizational considerations can moderate these problems by perceived organizational support or justice, which have been demonstrated in various studies about perceived organization justice and work-related attitudes (Elamin, 2012; Howard and Cordes, 2010).
TIEU LUAN MOI download : skknchat@gmail.com 10 Another problem that managers have to overcome as a consequence of emotional exhaustion is low organizational performance. As there are several evidences for the positive effects of employee engagement on business performance (Schneider, Macy, Barbera and Martin, 2009), it is said that engaged employees produce ROA, profits and market value that exceeds the replacement costs of assets. Starting from high employee retention, businesses will have to spend more cost and time for training new employees who may not be up to par the old ones. Since the service quality is unstable, productivity will get worse and customers cannot be happy with bad service.
In China, there are few studies have been processed based on the interactions of customer behaviors and employee emotional response to observe their influences on the service quality and business performance. However, to be the best of our knowledge, in Vietnam nowadays, the problem has not been investigated seriously and been found in not many papers.2 Research problem Nowadays, every business is aware of the essentiality of customers to their operations and existence. And Vietnamese organizations also acknowledge this matter. This requires full researches from various aspects of the firms, which include the interactions between customers and the ones who directly provide the care and service – customer service officers.
Unfortunately, as mentioned previously in the last session, for Vietnam market, there are a large number of local studies from clients’ perspective but not so many from employees’ side. It is extremely significant to understand the effect of customers, especially over demanding ones, on staffs and how to deal with them. Will it actually relate to employee’s emotions and to what extend? Will it cause a more serious problem for a business – turnover intention? Therefore, it is indispensable to investigate influence of problematic customers on employee’s emotional exhaustion and turnover intentions. TIEU LUAN MOI download : skknchat@gmail.3 Research objectives With the competition of customer service factor in Vietnam and the essentiality of employee engagement, the general goal of the research is to identify and test the main factors affecting employees’ emotional exhaustion and of employee commitment related to customer- oriented activities.
To achieve this goal, it requires meeting the following main point: To determine factors of problematic customers and their influences To examine the possible outcomes of customers on employees emotionally and physically.4 Research scope As the informants is employees who deal directly with customers in daily operations, every worker who is in customer service sector or has constant interactions with clients are invited to participate in the research. Due to the time limit which is around six months, the scope of this study is limited to people working in Ho Chi Minh City as it is the biggest and the most dynamic city in Vietnam.5 Research contributions and implications This paper is an attempt to understand the influence of problematic customers to employee emotional response and to what extends. Moreover, moderated aspects from organizations in solving customer-related issues will be examined to address the impact level on employee satisfaction. Basically, these findings might be helpful for business practice to maximize both employee commitment and customer satisfaction.6 Structure of the thesis The paper includes five chapters.
Firstly, it presents the research topic in general. Next, the literature review for all related theories and opinions is discussed. At third, it shows the TIEU LUAN MOI download : skknchat@gmail.com 12 methodology as well as constructs validity and reliability applied in the research. Then data analysis and results are explained and delivered.
Finally, chapter 5 sums up and gives recommendations as well as possibilities for future studies in related topics. - Chapter 1: Introduction - Chapter 2: Literature review and hypotheses development - Chapter 3: Research methodology - Chapter 4: Data analysis - Chapter 5: Conclusions and recommendations TIEU LUAN MOI download : skknchat@gmail.com 13 Chapter 2 LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT 2.1 Problematic customers In the business world these days, all organizations try their best to gain the most competitive edge to have advantages over the competitors. They can have advanced technologies, superior products or lower costs to create gaps with the others. However, since these spaces can easily be filled out in such a short time, companies started to focus on serving customers better as the belief that this could grow a long-term profit (Hartline et al.
Many researchers such as Bitner et al. (1990) and Keaveney (1995) have mentioned the essential role of customer satisfaction through service interactions. However, every coin has two sides and so does the service jobs. Customers usually take advantages of their privileges as the first priority to be ruder, more difficult to handle, even intentionally attack both employees and organizations (Yagil, 2008; Grandey et at., 2004) defined them as problematic customers.