Are performance appraisals and reward really a contributory factor to service quality?

The purpose of this research is to provide new empirical evidence with which to clarify the role of performance appraisals & reward, and how these techniques can support service quality in varied types of service business. A questionnaire survey and in-depth interviews were conducted. Analysis of the questionnaire data revealed that, although there was a moderate association between service quality and performance appraisals & reward in mass services, the relationship was not statistically significant in technological services. The interview data explained these results, highlighting important differences between mass and technological services. In technological services, partly due to the hybrid nature of the business, performance appraisals & reward did not seem to focus primarily on service quality. Hence, these techniques were not one of the absolute necessities in improving service quality. In mass services, the use of performance appraisals & rewards was identified as being very problematic due to difficulties in measurement of services, and in setting criteria for service performance of front-line staff, especially in the qualitative aspects. This research has identified that the actual contribution from performance appraisals & reward to service quality varied, and has explained the reasons behind the diverse contributions in each type of service business.

This is an Accepted Manuscript of an article published by Taylor & Francis in Services Marketing Quarterly on 21 Dec 2012, available at: http://www.tandfonline.com/10.1080/15332969.2013.739938