Role of Internal Marketing Practices in the Service Recovery Performance of Call Center Employees

Received 28 Jan, 2020

Accepted 28 Feb, 2021

Published 30 Jun, 2021

The purpose of this study was to investigate whether the internal marketing philosophy is applicable to call centers operating in Pakistan. This study attempted to investigate the role of internal marketing practices assess through internal communication (Huang & Rundle-Thiele, 2014), employee rewards (Boshoff & Allen, 2000), employee training (Boshoff & Allen, 2000), and employee empowerment (Yavas, Karatepe, Avci, & Tekinkus, 2003) on the service recovery performance (Boshoff & Allen, 2000) of call center employees working in inbound telecom call centers. Primary data were collected through a self-administered questionnaire from 15 telecom call centers located in three major cities namely Karachi, Lahore, and Islamabad. A simple random sampling technique was implemented to collect data from 318 male and female respondents. Results showed that internal communication, employee rewards and employee training were positively linked with service recovery performance, while a nonsignificant relationship was found between employee empowerment and service recovery performance. Results revealed that internal marketing practices influence toward frontline employee’s service recovery performance. Findings suggested that the call centers operating in the Asian region, especially, in Pakistan, should focus on internal marketing practices to enhance the service recovery performance of the frontline employees.

In an era of intense competition, it is realized by the service providing firms that their survival and growth is highly dependent on customer satisfaction and loyalty (Hudson, González-Gómez, & Rychalski, 2017). Service delivery and strategies related to service delivery, developed by the service firms are particularly delivered through face - to - face or voice to voice interactions among customer and employee, which generally based on the customer requests throughout the interactive service encounters (Ahmad, Ahmad, & Zakaria, 2018a; Kiran & Diljit, 2017). In the services setting, most of the consumer interactions occur directly with the frontline employees (FLEs) who represent the whole organization while interacting with customer. FLE’s are the service employees who are not only playing a significant role to deliver an effective service delivery but also building along-term relationship with the customer. The efforts of the FLE’s toward customer service delivery or service failure plays an essential role to develop customer’s negative or positive opinion about the service quality of the firm (Masdek, Aziz, & Awang, 2011). However, in the high contact service context, FLE’s are playing a role as the first port to receives customer complaints, also, they are the first ones who receive information regarding service failure (Yavas, Karatepe, & Babakus, 2010). At this point service employee hold the responsibility to handle the service failure effectively. Once the service encounter is occurring it totally depends on the employee skills and their motivation that how well they interact with the customer, in this regard, it is, therefore, essential to managing properly particularly FLE’s in the service firms (Rod & Ashill, 2010).

In the services literature, it has been proposed that the implementation of management strategies which help FLE’s to adopt customer-oriented culture significantly increase the quality of services delivered to the customers (Ardahan, 2007; Munawar et al., 2013; Wirtz, Heracleous, & Pangarkar, 2008). Researchers, however, have long neglected the internal marketing practices implementation embedded in service providing firms (Wieseke, Ahearne, Lam, & Dick, 2009). This study explores management's role in helping frontline employees to understand their company's internal marketing philosophy and investigates how this contribute to enhance their SRP. Internal marketing practices have been proposed in the literature as a viewpoint which focuses on firm’s employees as internal customers aiming to render them superior customer services in more effective ways (Huang & Rundle-Thiele, 2014; Lings & Greenley, 2009).

In the context of Pakistan, it is evident that telecom companies are lacking to deliver excellent service quality to customers (Danish, Ahmad, Ateeq, Ali, & Humayon, 2015). Pakistan Telecommunication Authority (PTA) has witnessed a rising number of customer complaints registered on the portals or through call centers in the last five years (PTA, 2017). For instance, since 2013, PTA received complaints of poor services from customers against telecom service providers (PTA, 2017). Since the service providers failed to resolve these complaints effectively through their customer service representatives, customers had to go to the higher authority such as PTA to complain (PTA, 2017). The above discussed complaints shows that telecom companies are not only facing a fierce competition locally and globally in pricing and provision of new technology but also in providing high-quality services (Khan, Abbasi, Waseem, Ayaz, & Ijaz, 2016). The statistics on complaints also indicate a service failure in terms of poor service recovery, resulting in companies losing a constant stream of revenues from their customers through their lifetime usage value (Ahmad, Hussain, & Rajput, 2015). Consequently, customers are likely to be dissatisfied with the product/service and less loyal to the company (Masdek, Rozana, Abdul-Aziz, & Awang, 2011).

Thus, this study objective is to uncover whether telecom call centers management’s implementation of internal marketing practices affects SRP, by doing so call centers management can learn the wide range understanding regarding the importance of implementation of IM practices within the organization. However, some previously established outcomes of IM practices are investigated in the past literature for example, motivation, organizational identification and empowerment on customer perceptions of service quality is also assessed (Tortosa, Moliner, & Sánchez, 2009), as scarce evidence identifies internal customer outcomes for example, SRP deriving from IM practices. The link between IM practices and internal customers (employee) outcomes will provide a clear idea to the policy-makers about their strategies whether their objectives are attained or not by implementation of an IM philosophy within the organization (Huang & Rundle-Thiele, 2014; Peltier, Schibrowsky, & Nill, 2013; Yang & Coates, 2010). Therefore, the role of IM practices on the SRP will be investigated in the context of developing countries in Asia such as Pakistan, acknowledging that the number of past researchers investigated the IM constructs in the Asian context, but a review of the IM literature shows that little is known particularly on the relationship between IM practices and SRP in Asian context. Thus, the study in hand, is expected to provide an empirically based understanding to researchers and practitioners regarding the routes through which IM practices contributes to the achievement of employee-related outcomes which consequently lead firms toward success.

In this study, the establishment of an association between the management and their workers, based on the equity theory which is the principal argument of the IM philosophy has been focused. As Adams (1965) stressed that employees’ perceptions about the reciprocal relationship between management and their employees based on the equity theory, which explains that the evaluation of employees about their work-related inputs by comparing with associated outputs should be balanced (Huseman & Hatfield, 1990). By doing so, currently, the services firms are facing the challenge to balance the perceptions of employees regarding inputs and their outputs as for work environment is concerned. Also, to develop their positive perception regarding input and outputs to enhance the work-related value, which in return boost their work-related outcomes such as SRP (Boukis & Gounaris, 2014). Boukis, Kaminakis, Siampos, and Kostopoulos (2015), further argued that fort the constitution of the theoretical background based on the paybacks driven by the IM practices, where employee perceives that the organization admit the employee efforts and understand the needs of the employee, consequently, leads employee toward the positive perceptions of job-related value. Which ultimately will result to enhance the inclination to reciprocate the relationship with the firm by improving motivation and SRP of the call center employees will produce more satisfactory customer-related outcomes. Thus, the principal argument of this study is the proper execution of the IM practices can enhance the perceptions of the internal customer regarding the job-related value, which helps employee for positively reciprocate the relationship in terms of providing positive SRP.

Service Recovery Performance
Although the service firms in all over the globe continuously improving their strategies regarding service delivery and post-service delivery (service recovery), but most of the service encounters are not successful, because in the current competitive environment customers are more demanding and expectations of the customers regarding service recovery are very high (Ahmad, Ahmad, & Zakaria, 2018; Bitner, Booms, & Mohr, 1994). In the context of the services, service recovery and service failure are still under discussion because it remains a critical issue for marketing practitioners and researchers. However, perceptions of the frontline employee are strongly influenced by the work environment and the policies implemented by the management to improve the performance of the service employees. In this regard, it is witnessed that in the context of high customer contact environment IM practices contribute to improving call center employee performance such as SRP which links to customer satisfaction and ultimately with the firm success (Dean, 2004). Therefore, in this study, the role of IM practices will be investigated toward employee SRP. IM practices discussed one by one in detail below.

Internal Marketing Practices
Internal marketing (IM) concept was initially developed as an internally focused marketing theory which constitutes on the base of the argument that the needs of the internal customer (employee) should be satisfied, which ultimately enable employees to achieve the firm’s objectives by satisfying the external customers (Shabbir & Salaria, 2014). IM practices enhance the intra-communication effectiveness and help to increase the motivation which leads toward employee satisfaction (Vaseer & Shahzad, 2016). The past literature revealed the link between IM practices and some employee outcomes, for instance, employee commitment (Caruana & Calleya, 1998; Vaseer & Shahzad, 2016), satisfaction, and empowerment (Gounaris, 2006). To, Martin, and Billy (2015) stated that in the contact-intensive environment, where frequent interaction (face to face or voice to voice) of customer with FLE’s, firms necessarily implement the IM practices to create value and develop the positive relationship with the internal customers simultaneously as organization focus on the external customers. As IM philosophy explains firm employees are internal customers, internal customers should be satisfied first to deliver excellent services toward external customers (Tag-Eldeen & El-Said, 2011). However, in this study, the role of IM practices will be investigated toward the employee SRP working in the telecom call centers Pakistan, as the little investigation is done in the past, and the role of IM practices was less explored toward SRP particularly, among telecom call center employees. Following are IM practices.

Internal Communication
Internal communication refers to the dissemination of information flows within the organization among employees and the organization and among different layers of the organization vertically or horizontally (Huang & Rundle-Thiele, 2014; Verčič, Verčič, & Sriramesh, 2012). Past studies found that if organizations implement the communication strategies which leads employee toward self-efficacy, can enhance internal service quality, which ultimately leads employee toward job satisfaction (Back, Lee, & Abbott, 2011; Subari & Riady, 2015). In relation to the employee performance, several studies have been done to investigate the role of effective internal communication practices toward employee outcomes such as work attitudes and employee performance (e.g., Billy & To, 2013; Olson-Buchanan & Boswell, 2006). In the same vein Lahap, Said, Rose, Sumarjan, and Mohi (2014) found that effective communication practices contribute to improving service quality. Similar findings concluded by the Gounaris (2008) training and the effective communication system has an influence on the quality of frontline employee’s service delivery and the satisfaction of employees. The relationship of internal communication with other employee outcomes are also established in the past literature, (e.g., Carriere & Bourque, 2009; Ng, Butts, Vandenberg, DeJoy, & Wilson, 2006; Subari & Riady, 2015) which identified that internal communication contributes to enhancing employee positive outcomes.

Employee rewards. Rewards refer to the amount of compensation which employee receives from the organization in exchange of their achievements which employee receives in tangible and intangible forms such as, social identity and position, appreciation, compensation, esteem (Yavas & Babakus, 2010). Rewards are also witnessed in the past literature as the positive influencer of the service quality to handle the customer complaints in the service firms (Ahmad et al., 2018; Yavas & Babakus, 2010).Also, rewards are found positively correlated with SRP in the context of service firms, for instance, health care, baking and insurance firms (Ashill, Baron, Carruthers, & Krisjanous, 2005; Boshoff & Allen, 2000; Piaralal et al., 2016a). Additionally, it is stressed by the researchers it is still indispensable for the service organizations to superior service delivery to the customers which cannot be possible without the superior service performance of the front-line employee who is dealing directly with the customers, and these employees should be rewarded by the firms, it will help employees to deliver high-quality services to customers (Ahmad, Danish, Ali, Ali, & Humayon, 2019; Piaralal, Mat, Piaralal, & Bhatti, 2014).

Employee training. Employee training is a planned organizational effort to enable employees to get certain competencies regarding their job, such as skills, knowledge, and behaviour that are essential toward effective job performance (Piaralal et al., 2016). Training is not only contributing to improve expertise and creative thinking of employees but also make a positive perception of the employee regarding their firm’s commitment toward service quality (Babakus et al., 2003). Marketing and management experts together have acknowledged that training is an essential factor which contributes to enhancing the service employees’ skills and expertise which indirectly enhance the organizational performance and its survival (Masoud & Hmeidan, 2013). To achieve overall objectives, it is necessary for the firms to provide training programs for the development of their employees by doing so organizations get desired results in terms of employee performance and organization’s performance as well (Piaralal et al., 2014).

Employee empowerment. Employee empowerment involves liberty and willingness to take decisions and make commitments (Forrester, 2000). When employees are empowered, they are likely to use creative gut feelings to take fast and fair actions toward the complaints (Namasivayam, Guchait, & Lei, 2014; Yavas & Babakus, 2010). Yavas et al. (2010) further defined that empowerment as the process. Studies have been conducted on the relationship between empowerment and SRP which found a positive significant link between empowerment and SRP in the health care sector (Ashill et al., 2005), in the hospitality industry (Yavas et al., 2010), and insurance industry (Piaralal et al., 2016a). Slåtten (2010)also found that the front liners in the service context show that empowerment influence the SRP of the frontline employee. It also signifiesthe role of empowerment on the SRP in the banking sector studies (Babakus et al., 2003; Yavas et al., 2003). Hence, literature established that in the services setting, more empowered employees who have the liberty to help the customer by making decisions by their own will enhance the SRP while dealing with service encounters (Kirkbir & Cengiz, 2007).Therefore, according to the past literature it is expected that employee empowerment might have an influence on the SRP.

Hypotheses

Based on above discussed literature, this study proposes the following hypotheses:

1.	Internal communication is positively related with SRP
2.	Rewards are positively related with SRP
3.	Employee training is positively related with SRP
4.	Employee empowerment is positively related with SRP

METHOD

Population and Sample
The participants (N = 318) of this study were the customer service representatives working in telecom call centers in Lahore, Islamabad, and Karachi. Simple random sampling technique was employed to distribute the questionnaires to respondents for the ease of generalizability. The target respondents of this study were full-time customer service FLE’s working in15 telecom call centers operating in three metropolitan cities Pakistan. Demographic variables of the respondents including gender, marital status, age group, education, salary, and experience are shown in Table 1 below.

Table 1:	Demographic Profile of the Participants (N =318)

The respondent’s profile shows in Table 1 that male participants dominated the response rate as compared to female counterparts. Concerning marital status, most participants were married. Most of the participants fell within the age 25-30 years. Most of participants’ master’s degree holders, on job tenure, majority of the participants had between 3 years to 5 years of work experience in the organization.

Measures
Service recovery performance. It was measured using five items, adopted from Boshoff and Allen (2000). A five-point Likert scale from strongly disagree to strongly agree was used. Total scores were computed by adding the responses on all items. This instrument had reported reliability of .70.

Internal communication. It was measured by five items, adopted from Huang and Rundle-Thiele (2014) every item is rated on a five-point scale from strongly disagree to strongly agree was used. Over-all scores were calculated by adding the responses on all items. This instrument had reported reliability of .89.

Employee rewards. This construct was measured using five items, adopted from Boshoff and Allen (2000). A five-point Likert scale from strongly disagree to strongly agree was used. Total scores were computed by adding the responses on all items. This instrument had reported reliability of .83.

Employee training. It has been measured using six items, adopted from Boshoff and Allen (2000). Every item is rated on a five-point scale from strongly disagree to strongly agree was used. Total scores were computed by adding the responses on all items. This instrument had reported reliability of .87.

Employee empowerment. This construct was measured using four items, adopted from Yavas et al. (2003). A five-point Likert scale from strongly disagree to strongly agree was used. Total scores were computed by adding the responses on all items. This instrument had reported reliability of .78.

Procedure
Data was obtained from the call center agents who spend time answering customer questions, concerns, and issues. In relation to the ethical concerns, a cover letter was attached with all questionnaires mentioning that data will only be used for the educational purpose. Questionnaires were personally distributed to call center employees. Additionally, telecommunications call center workers were grouped together as a homogenous group because of their similar jobs and tasks, which have minor variations.

RESULTS
Before assessment of measurement model of this study the preliminary data analysis was done to ensure the correctness of the data, for instance, missing value analysis, normality of the data, outlier’s assessment, and the common method variance test was conducted and the results revealed that data is free from the above mentioned issues.

Measurement Model
The main purpose of holding a measurement model in the PLS-SEM is to assess the reliability and validity of the model. Since this study adopted established scales, confirmatory factor analysis was performed to confirm the use of all these constructs. To be considered reliable, the constructs of this study fulfilled the specified thresholds of different criteria, that is, Cronbach’s alpha (CA), composite reliability (CR), and average variance extracted (AVE) for instance, CA of internal communication is 0.78, employee rewards 0.86, employee training .89, employee empowerment 0.85, and service recovery performance .86. The CR values of each latent construct also within the range of .90 to .85 and the AVE values are not less than the 0.50.All of the item’s outer loadings are more than .60, and only one factor with an outer loading of less than .60, which is removed due to lower outer loading. However, to permit further analysis, the removal percentage must be limited to 20%. Table 2 reports the Discriminant Validity Matrix (Fornell-Larcker Criterion) of latent variables in its matrix diagonal.

Table 2:	Discriminant Validity Matrix (Fornell-Larcker Criterion)
Note. EE = Employee Empowerment; ER = Employee Rewards; ET = Employee Training IC = Internal Communication; SR = Service Recovery Performance

The correlation values among the latent constructs are lower than the average variance shared between indicators and their constructs, so it is established that all latent variables investigated in this study, complies with the established criteria.

Structural Model
Until the analysis of the first step (measurement model) had been completed, the structural model of the study that describes the correlation between independent and dependent variables was studied. The results shows that H1 (β = .10, SE = .041, t = 2.64), H2 (β = .41, SE = .05, t = 8.13), and H3 (β = .40, SE = .05, t = 7.18) are accepted which shows that internal communication, employee rewards, and employee training have significant positive influence on the SRP of call center employee. However, H4 (β = .04, SE = .04, t = .32) did not found significant correlation with SRP (Table 3). To conclude that the results of the proposed model in this study show that three hypothesis H1, H2, H3 are accepted, which shows that the IM practices for example, IC, ER, and ET are significantly and positively affect the SRP of call center employees working in telecom call centers.

Table 3:	Structural Model Results (PLS-Bootstrapping)
Note. EE=Employee Empowerment, ER=Employee Rewards, ET=Employee Training, IC=Internal Communication, SRP=Service Recovery Performance

Predictive Relevance (Q²)
For the further validation of the structural model, this study employed the Stone-Geisser’s predictive relevance method (Geisser, as cited in Henseler et al., 2014) by implementing the PLS-SEM approach that explains the model fit by a combination of R2 values, (coefficient of determination), and Stone-Geisser’s predictive relevance (Q2). R2 explains the percentage of dependent variable variation explained by independent variables, and Q2 explains the overall predictive power of the research model. It is suggested that to make a meaningful interpretation, the value of R2 should be at least 10 per cent that demonstrated substantive explanatory power, which is 0.626 and Q2 explains predictive relevance of the endogenous variable considering Q2 values larger than 0, which is .38 assessed by Stone-Geisser’s predictive relevance using by blindfolding procedure.

DISCUSSION

Findings from this study have reinforced past studies’ outcome that demonstrated that IM practices are significantly correlated with the service recovery performance. The results of hypothesis one confirm the past research results that internal communication has a relationship with service recovery performance as demonstrated by the past studies (Opoku, Atuobi, Chong, & Abratt, 2009). The results of this study supported by the argument given by the (Back, Lee, & Abbott, 2011) those organizations which give importance to communication can enhance their employee’s self-efficacy and improve internal service quality, leading to superior employee performance. The results of this study indicated that frontline employees working in telecom call centers are more likely to perform service recovery duties when they experience more clearer communication practices within the telecom call centers.

Results shows that hypothesis two also aligned with the previous findings (Babakus et al., 2003; Boshoff & Allen, 2000; Daskin & Yilmaz, 2015; Rod & Ashill, 2010) that employee rewards significantly and positively correlated with the service recovery performance. The result suggests that call center employees working telecom call centers in Pakistan prefer a fair and standardized rewarding system. When call center employees perceived they are rewarded in a fair and standardized manner, they are likely to respond more effectively to the customer in delivering service recovery. Also, such finding supported the equity theory. According to Masdek et al. (2011), employees most often, in any workplace, expect a reward for the work or job they perform. Once a job or activity backed with appropriate and expected reward, only then will an employee feel contended and motivated to give a high-level performance. Additionally, the possible reason of the positive nexus between rewards and employee performance is might be that all are the respondents are working against the nominal wage rate as mentioned above in demographic section and they value monetary reward because of their low wage to meet their living expenses. On the basis of above argument, it can be concluded that in the call center industry where wage rates are not too good employees more likely to perform better when they perceive that their effective performance leads them toward monetary or not monetary rewards.

Finding shows that hypothesis three also aligned with the previous finding (Karatepe & Vatankhah, 2015; Piaralal et al., 2016a; Yavas & Babakus, 2010) that employee training has a positive significant relationship with service recovery performance. Khan et al. (2016) emphasized that employee training and development programs could improve and develop the skills of staff for efficient and effective employee performance. In the case of service failure, employees have to be quick in handling the situation and recommending solutions. Such service, however, depends on the type and degree of training given by the organization (Piaralal et al., 2014). The possible reason of this positive association amongst the training and employee performance might be the day-to-day technological advancements in the call center industry and older employees considered that they need updated knowledge regarding technology and customer behavioral shift due to the technological advancement. Another reason might be the low experience employees as reported in the demographic section are perceived that if they got frequent training session their performance might increase as interact directly with the complainants. Interestingly the hypothesis four results are surprising, that there is no significant relationship exists between EE the SRP in the call center context in Pakistan. The hypothesis four results oppose the findings of past studies (e.g., Ardahan, 2007; Yavas et al., 2003). However similar to the findings of Rod and Ashill (2010).

LIMITATIONS AND SUGGESTIONS

The interpretation of the findings should consider some limitations of the study. In the first place, the current study used a survey questionnaire design by using cross-sectional data to determine the relationships of interest. Future research may look at a longitudinal study design to broaden the current findings. In addition, this study considered inbound call centers only. Future research may analyze outbound call centers and other sectors call centers such as hospitality, banking, and transportation. Another key limitation of this study was that it was performed in telecom call centers in Pakistan. There are some possible variations in culture and the characteristics of call centers in other countries, so these results may not be relevant to call centers outside of Pakistan. In future, researchers may explore this model in other regions.

IMPLICATIONS

This study is one of the few studies that will assist call centers management to look into the performance viewpoint and help managers to develop such upended operating measures which can offer some margin to customer service agents to accelerate their service recovery performance. Moreover, this study hopes to contribute to extending the understanding of the relationship between IM practices (IC, ER, ET, EE) toward SRP of call center agents at the individual level of analysis, within the Pakistan setting. On a practical basis, this study is important for the development of the telecom industry in the south Asia region in general and specifically in Pakistan. Additionally, this study could serve huge purpose to the management of the telecom industry to develop appropriate service recovery policies toward customer-driven strategies by addressing FLE’s attitude toward their SRP in the context of Pakistan.

CONCLUSION

The results of this study suggest that IM practices necessarily implemented by the service providing organizations, particularly in the call centers as this study shows that the perceptions regarding the implementation of IM practices influence the employee attitude toward the SRP. In service organizations, IM practices positively influence the performance of an employee which ultimately will impact on the client view of the service satisfaction (Boshoff & Allen, 2000). Based on the findings of this study, it can be concluded that IM activities have a great effect on organizations because they are designed to enable workers and managers to work in unison to achieve organizational goals by making use of appropriate communication channels and fostering a strong corporate culture (Chang & Chang, 2009; Kanyurhi & Bugandwa, 2016). Based on the results, it is recommended that the management of telecom call centers should implement IM practices and provide support in terms of IC, ER, ET, and EE to accommodate and train the employee’s workplace needs to enable the employees to improve their SRP.

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