It has been quite a challenging task for the Human Resource Management people to design such strategies which will transform the workforce as motivated and retained for high performance work organization (Thompson, 2004). HRM makes continuous efforts to develop such policies which will motivate the human resource for sustained competitive advantage (Barney’s, 1991, Wright, et al., 1994). These efforts must include incentives, pay packages which makes an employee more comfortable and committed with the organization. HRM also needs to understand the implications of the different incentive plans for different organizational levels.
Employee satisfaction is the most frequently researched area in the management sciences (Schneider and Brief, 1992). Employees will stay longer with the company “Higher retention of the right caliber of employees creates a stable and experienced labor force that delivers higher service quality at lower cost (Guthrie, J.P. 2001), this leads to higher customer retention and of course increased productivity with profitability. Researchers have also tried to further this relationship that a satisfied employee will be instrumental in keeping the customers satisfied thus yielding increased profitability (Bain and Co, 1991).
Another way of understanding the importance of employee is that customer satisfaction can only be achieved through employee satisfaction. For example, Berry (1981) states that whether managing customers or employees “the central purpose remains the same; the attraction of patronage through the satisfaction of needs and wants”. In both cases individuals and organizations are involved in exchange. The nature of what is exchanged may vary, but the importance of satisfying needs and wants remains constant, meaning that the management of employees is often similar to the management of customers.
After realizing that employees may be viewed as customers, it seems important to know whether the field of...