The influence of leaderempowering behaviors andemployee psychological

empowerment on customersatisfactionKarthik Namasivayam

Ecole Hoteliere de Lausanne, Lausanne, Switzerland

Priyanko GuchaitConrad N. Hilton College of Hotel and Restaurant Management,

University of Houston, Houston, Texas, USA, and

Puiwa LeiThe Pennsylvania State University, University Park, Pennsylvania, USA

Abstract

Purpose – This study aims to examine the role that psychological empowerment (PE) and employeesatisfaction (ES) play in the relationship between leader empowering behaviors (LEB) and customersatisfaction (CS) and employees’ organizational commitment (OC).

Design/methodology/approach – Data were collected from 365 frontline employees and 2,915customers at 40 units of a chain restaurant in the USA.

Findings – Structural equation modeling (SEM) results indicated that LEB influences PE, and PE inturn influences employee satisfaction, which consequently results in higher employees’ OC levels andhigher customer satisfaction.

Originality/value – Although recent hospitality research recognizes the importance of employeeempowerment and leadership, few studies have focused on leader empowering behaviors and itsinfluence on organizational outcomes. Moreover, potential mediating processes have not receivedresearch attention. Addressing this, the current study tests a conceptual model that shows how leaderempowering behaviors ultimately lead to customer satisfaction through employee psychologicalempowerment and job satisfaction. Although, some of these relationships have been studiedseparately in different contexts, the current work shows the complete process of how leadership islinked to organizational outcomes, which has not been previously studied.

Keywords Organizational commitment, Customer satisfaction, Employee satisfaction,Leader empowering behaviors, Psychological empowerment

Paper type Research paper

IntroductionResearchers and practitioners have recognized the importance of employeeempowerment at the frontline level in the hospitality industry where prompt actionis often required to deliver high quality service to customers (Kim et al., 2012;Ottenbacher and Gnoth, 2005; Hartline and Ferrell, 1996; Heskett et al., 1997; Sergeantand Frenkel, 2000). Researchers have also shown that empowered employees are more

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Received 15 November 2012Revised 16 March 2013

27 May 2013Accepted 1 June 2013

International Journal ofContemporary Hospitality

ManagementVol. 26 No. 1, 2014

pp. 69-84q Emerald Group Publishing Limited

0959-6119DOI 10.1108/IJCHM-11-2012-0218

likely to report higher job satisfaction and organizational commitment (Kim et al., 2012;Bhatnagar, 2007; Liden et al., 2000). Customer evaluative judgments, such as perceivedservice quality or satisfaction, are often used as indicators of organizationaleffectiveness (Schneider et al., 1998; Anderson and Mittal, 2000). Despite abundanttheoretical evidence, there is a lack of research linking employee empowerment andcustomer satisfaction, since integrating employee and customer data can bechallenging (de Jong et al., 2008).

Apart from methodological issues, the paucity of research in this area can also bedue to the cross-disciplinary theoretical foundations required to justify therelationships. An important outcome of coproduction, where service customersparticipate in the production of their own services, is customer satisfaction, a constructthat is often more relevant to consumer behavior and marketing research (Schneiderand White, 2004). Consequently, few researchers have explicitly linked organizationalpractices, such as leadership behaviors and empowerment, to customer satisfaction.

A recent stream of research called “linkage research” focuses on connecting theinternal functioning of service organizations to customer satisfaction (Schneider et al.,2005; Wiley, 1996). This research suggests that employees’ work experiences directlyaffect customers’ experiences of the service and thereby customer satisfaction (Oliver,1997). The “service-profit chain” (Heskett et al., 1997) outlines the links between internalservice quality (workplace/job design, employee selection and development, rewards andrecognition, and tools for serving customers) and customer satisfaction through employeesatisfaction. Using this perspective, the current work investigated the effects of animportant organizational mechanism (i.e. empowering leadership) on customer outcomes.

Few studies have considered a leader’s role in employee empowerment processes(Konczak et al., 2000). However, diverse leadership behaviors have been examined; forexample, transformational leadership has been shown to improve employee outcomesincluding satisfaction and to reduce job stress (Gill and Mathur, 2007; Gill et al., 2010a,b). Hospitality researchers have examined the relationship between transformationalleadership and employees’ desire for empowerment (Gill et al., 2010a, b), leadershipcompetency on firm performance (Asree et al., 2010), ethical leadership on managers’job satisfaction and organizational commitment (Kim and Brymer, 2011), andleadership roles on organizational learning and effectiveness (Yang, 2010). Mostresearch, including that cited above, examines leadership concepts in totality. A fewstudies have examined leader empowering behavior (Bennis and Townsend, 1997).Empowering leadership has been linked with enhancement of empowered behavioramong hospitality employees (Klidas et al., 2007), and has been positively associatedwith employee satisfaction, organizational commitment, and team-orientedperformance (Srivastava et al., 2006; Konczak et al., 2000). Most research focuses onleader empowering behaviors (LEB) or employee psychological empowerment (PE) aspredictors of outcomes such as job satisfaction. To our knowledge, a study by Konczaket al. (2000) is the only study to examine LEB as a predictor of PE. Konczak et al. (2000)found that leader behaviors impact employees’ experience of psychologicalempowerment. The current work builds on their conceptual framework. Muchextant research has sampled managers in manufacturing companies. However, it iscritical to test this relationship in a hospitality/service context with non-managerial(line-level) employees for three reasons:

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(1) increased autonomy of employees is important in providing excellent customerservice (Gill et al., 2010a, b);

(2) to ensure that employees act autonomously, it is critical that they feelpsychologically empowered (Ro and Chen, 2011); and

(3) LEB is recognized as important for enhancing employees’ PE (Brownell, 2010).

In the extant literature, LEB and PE have been studied from two perspectives:

(1) a structural approach focuses on leader actions which involve sharingresponsibility and power with employees (Kirkman and Rosen, 1997) andresulting outcomes; and

(2) a psychological perspective focusing on employees’ responses to empowermentemphasizing employee motivation (Conger and Kanungo, 1988).

The current work integrates these two research streams and traces the pathwaysthrough which managerial actions, here leadership behaviors (LEB), influenceemployee motivation (PE) and the consequent effects on organizational performance(customer satisfaction).

In summation, using the “linkage research” framework (Schneider et al., 2005), thecurrent work presents and empirically examines a theoretical framework (see Figure 1)modeling the role of LEB in PE, employee job satisfaction and commitment levels, andconsequent effects on customer satisfaction.

The following sections review the literature on LEB, PE, job satisfaction,organizational commitment, and customer satisfaction. Research hypotheses aredeveloped and presented based on this review. Next, research methodology andinterpretation of the results is followed by research implications and suggestions forhospitality practitioners.

Literature review and hypotheses developmentPsychological empowermentPsychological empowerment refers to a motivational process that enhances employees’self-efficacy (Kim et al., 2012; Conger and Kanungo, 1988). It is also conceptualized asintrinsic task motivation based on four task-related employee work role cognitionsresulting in a four-dimensional construct including meaning (the fit between values andjob), competence (self-efficacy), self-determination (autonomy over task), and impact(influence over job outcomes) (Thomas and Velthouse, 1990; Kim et al., 2012). Empiricalstudies show that empowerment enhances self-efficacy resulting in employee satisfactionand increased organizational commitment (OC) (Kim et al., 2012; Conger and Kanungo,

Figure 1.Conceptual model

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1988; Liden et al., 2000; Spreitzer et al., 1997; Bhatnagar, 2007). Hospitality research hasfound positive relationships between PE and job satisfaction among hotel workers(Chiang and Jang, 2008), restaurant workers (Gazzoli et al., 2010), and US hotel managers(Salazar et al., 2006) and between PE and OC among hotel employees (Chiang and Jang,2008) and upscale hotel restaurant employees (Kim et al., 2012). Therefore, there isadequate evidence showing that PE leads to employee satisfaction and OC.

Practitioners and service researchers agree that satisfied and committed frontlineemployees are likely to deliver the highest level of service quality (Singh, 2000; Hartlineet al., 2000). J.W. Marriott, the founder of Marriott Hotels, is quoted as saying “A happyemployee is a happy guest”. Hartline and Ferrell (1996) found that managers mustincrease employees’ self-efficacy and job satisfaction in order to increase customer’sperceptions of service quality. Malhotra and Mukherjee (2004) showed that jobsatisfaction and OC have a significant influence on service quality delivered by thecustomer-contact employees. Thus, anecdotal as well as empirical research shows thatsatisfied and committed employees provide higher quality customer service.

Building on past evidence, the current research argues that PE will improve jobsatisfaction of employees, which will result in high customer satisfaction. Therefore,the mediation effect of employee satisfaction on the relationship between PE andcustomer satisfaction is proposed.

H1. Employee satisfaction will mediate the relationship between PE and customersatisfaction.

The relationships between PE, OC, and the delivery of high quality services werediscussed earlier. The current work focuses on OC as a dependent variable. Whilestudies have shown the relationship between PE and OC (Konczak et al., 2000), somescholars suggest that PE directly influences employee satisfaction and only indirectlyinfluences OC (Conger and Kanungo, 1988; Kim et al., 2012). However, this relationshipneeds empirical investigation since some (e.g. Mowday et al., 1979) suggest that the twoconstructs are independent and operate at different levels: OC refers to organizationalattachment while job satisfaction refers to feelings about a specific job. However, moststudies consider satisfaction to be an antecedent of OC (e.g. Brown and Peterson, 1994).Accordingly, the current work examines the mediation of employee satisfaction on therelationship between PE and OC. The following hypothesis is proposed:

H2. Employee satisfaction will mediate the relationship between PE and OC.

Leader empowering behaviors (LEB)Researchers have examined a leader’s role in employee empowerment (Conger andKanungo, 1988; Konczak et al., 2000; Bartram and Casimir, 2007). Konczak et al. (2000)conceptualized LEB as a six-dimensional construct including:

(1) authority;

(2) accountability;

(3) self-directed decision-making;

(4) information sharing;

(5) skill development; and

(6) coaching for innovative performance.

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Empowerment implies granting necessary authority and autonomy enablingsubordinates to exercise control over workplace decisions (Clark et al., 2009). Fordand Fottler (1995) argued that empowerment is a mechanism by which individuals andteams are held accountable for outcomes. Leaders engaging in LEB encouragesubordinates to identify and correct problems in work processes (Wellins et al., 1991).Empowerment requires managers to share information and knowledge, therebyenhancing subordinates’ work performance (Ford and Fottler, 1995). Wellins et al.(1991) suggested that empowering leaders support employee skill development.Coaching refers to behaviors that encourage employees to engage in calculated risktaking and coming up with new ideas, and treats mistakes and setbacks as learningopportunities (Konczak et al., 2000). These LEB increase intrinsic motivation byinfluencing assessments related to meaning, competence, self-determination, andimpact (Konczak et al., 2000). Therefore, when leaders demonstrate these six behaviors,subordinates’ experience of PE will improve (Konczak et al., 2000). Additionally,Spreitzer (1996) argued that individuals who perceive high levels of supervisor socialsupport are likely to report higher levels of empowerment. Menon (1995) found thatleadership behaviors such as mentoring, consulting, recognizing, and inspiringresulted in greater perceived control and empowerment among subordinates.Therefore, the literature provides substantial evidence of the positive relationshipbetween LEB and PE. Further, since the relationship between PE and employeesatisfaction has been established, we anticipate that LEB will impact employeesatisfaction indirectly through its effect on PE. The following hypotheses are proposed:

H3. LEB will be positively related to PE.

H4. PE will mediate the relationship between LEB and employee job satisfaction.

MethodologySampleRestaurants were chosen for our study because:

. each restaurant unit’s success depends on customer satisfaction based on theservice quality level at a focal unit; and

. restaurant service demands interaction between managers and employees,creating an environment where managers’ leadership behaviors are likely tohave a high impact on employees (Clark et al., 2009).

Employees’ subjective interpretations of such organizational environments influencepsychological empowerment (Conger and Kanungo, 1988; Spreitzer, 1995; Kim et al.,2012). To obtain a sample, the human resources manager at a mid-sized familyrestaurant chain based in the Northeastern US was contacted. The first author hadtrained frontline associates and had access to the management team. The firmprovided research access to their associates and guests. In return, the company wasprovided aggregated analyses of customer satisfaction, employees’ job satisfaction,and commitment levels. Anonymity and confidentiality of the collected data wasensured – the organization only had access to summary reports.

Survey instruments were distributed to 365 frontline employees; usable data werecollected from 238 employees from 40 units of the restaurant company. The responserate was 65 percent. Eighty-six percent of the sample was female. Employee ages

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ranged from 18 years to 74 years; the average was 33 years (SD ¼ 14:69). Nine-twopercent of the respondents were Caucasian and 54 percent were single. Customersatisfaction data were collected from 2,915 customers mainly via printed surveys andonline responses. Unit managers distributed printed surveys to guests; in addition, thesame survey was also loaded on the company website and guests had a choice of eitherfilling out the paper survey or responding online. Sixty percent of the respondents werefemale. The average age was 48 years (SD ¼ 17:05).

ProcedureData were collected in three phases. In the first phase, LEB data were collected fromemployees. The second phase was conducted 15 days later and data on psychologicalempowerment, job satisfaction, and organizational commitment were collected from thesame employees. This temporal separation ensured a gap between the measurement ofthe predictor and criterion variables to control for common method biases (Podsakoff et al.,2003). To further strengthen the study, dependent variable data about the overallsatisfaction were collected separately from customers. Obtaining measures of predictorand criterion variables from different sources helped control for common method biases(Podsakoff et al., 2003). Customer data were collected at the same time as the second waveof data from employees using the method described above.

The survey questionnaires were distributed through company mail to all frontlineemployees in all units. Employees were provided with pre-stamped return envelopes toensure anonymity. The envelopes were returned directly to the investigators, whichassured confidentiality. Each unit was assigned a unique code, which was marked oneach envelope. Customer data were collected from each unit in a similar manner.

MeasuresKonczak et al. (2000) validated a six-dimensional scale measuring LEB. We adopted 16of the 17 items listed in Konczak et al. (2000). A sample item is “My manager gives methe authority I need to make decisions that improve work processes and procedures”.Items were measured on a seven-point Likert-type scale (1 ¼ strongly disagree,7 ¼ strongly agree). Using this scale, participants rated the degree to which theirmanagers engaged in empowering behaviors. A confirmatory factor analysis (CFA) forthe 16-item scale indicated a single second-order factor solution with an acceptable fit(x 2 ¼ 267:24, df ¼ 98, p , 0:01; CFI ¼ 0:98, RMSEA ¼ 0:08). All measurement itemsshowed statistically significant loadings at the a level of 0.01. Based on this, and in linewith prior research (Ahearne et al., 2005), we averaged the six scale scores to create asingle composite score. Cronbach’s a for the scale was 0.96.

As noted, the four-dimensional PE construct was assessed using a 12-item scale(Spreitzer, 1995). A sample item from the scale is “The work I do is very important to me”.Items were measured on a seven-point Likert-type scale (1 ¼ strongly disagree,7 ¼ strongly agree). Since we focused on overall empowerment, and in line with priorresearch (Chen et al., 2007; Chen and Klimoski, 2003), the four dimensions were collapsedinto an overall individual empowerment scale. Cronbach’s a for the scale was 0.90.

Employee satisfaction was measured with two items (Hirschfield, 2000). A sampleitem from the scale is “How satisfied are you with your job in general?”. Cronbach’s awas 0.95. While some suggest Cronbach’s a should be used to evaluate a two-itemscale, others argue that a correlation coefficient is appropriate (Cudeck, 2001).

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Following recommendations, reliabilities using the Spearman-Brown formula werealso calculated (Cudeck, 2001); the scale reliability was acceptable (0.94).

Organizational commitment was measured by a nine-item scale (Mowday et al.,1979). A sample item from the scale is “I am willing to put in a great deal of effortbeyond that normally expected in order to help this organization be successful”. Itemswere measured on a seven-point Likert-type scale (1 ¼ strongly disagree, 7 ¼ stronglyagree). Cronbach’s a was 0.95.

To verify whether the four dimensions of psychological empowerment, jobsatisfaction, and organizational commitment were distinct from each other, a CFA wasconducted by introducing all the items of the six scales. A six-factor solution,corresponding to the six scales, was found to have an acceptable fit (x 2 ¼ 488:45,df ¼ 215, p , 0:01; CFI ¼ 0:99, RMSEA ¼ 0:07), indicating the distinctiveness of themeasures.

This study included customer satisfaction as a dependent variable. The survey withthe customer satisfaction items was administered to guests as described above.Customer satisfaction was measured with a 6-item scale (Namasivayam and Mattila,2007). A sample item from the scale is “Overall, how satisfied were you with yourdining experience on this particular occasion?” Cronbach’s a was 0.97.

AnalysisStructural equation modeling (SEM) was used to test the hypotheses. All SEM modelswere estimated using MPlus (Version 6). Confirmatory factor analyses (CFA) were firstconducted to examine whether the hypothesized factor structure for customer satisfaction,Time 1 LEB measures, and Time 2 measures were supported by the sample data. Therobust weighted least squares (WLSMV) estimator was used to estimate the CFA models.The nested data structure (i.e. customers or employees nested within stores) was takeninto account in MPlus by declaring the existence of clusters. The six-variable one-factorsimple CFA model fit the customer satisfaction data quite well (x 2 ¼ 49:22, df ¼ 9,p , 0:01; CFI ¼ 0:99, RMSEA ¼ 0:04), indicating that the six items measured a commonfactor (standardized loadings ranged from 0.94 to 0.96). The 16-variable six-factor simpleCFA model fit the LEB item response data reasonably well (x 2 ¼ 225:77, df ¼ 89,p , 0:01; CFI ¼ 0:99, RMSEA ¼ 0:08). The LEB items loaded quite strongly on theirrespective factors (standardized loadings ranged from 0.77 to 0.99). The hierarchical CFAmodel with a second-order factor explaining the covariance among the LEB first-ordersubscale factors also fit the data acceptably well (x 2 ¼ 267:25, df ¼ 98, p , 0:01;CFI ¼ 0:98, RMSEA ¼ 0:08), suggesting that the LEB subscales measured ahigher-order common factor and that it might be reasonable to aggregate the LEBsubscales. Based on this, and in line with prior research (Ahearne et al., 2005), weaveraged the six scale scores to create a single composite score.

The 23-variable six-factor simple CFA model (four subscales of psychologicalempowerment, organizational commitment, and employee satisfaction) fit the Time 2 itemresponse data reasonably well (x 2 ¼ 488:45, df ¼ 215, p , 0:01; CFI ¼ 0:99,RMSEA ¼ 0:07). The items loaded reasonably strongly on their respective factors(standardized loadings ranged from 0.73 to 0.98). The hierarchical CFA model with anadditional second-order factor explaining the covariance among the four first-orderpsychological empowerment subscale factors also fit the data acceptably well(x 2 ¼ 543:23, df ¼ 222, p , 0:01; CFI ¼ 0:98, RMSEA ¼ 0:08), suggesting that the

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psychological empowerment subscales measured a higher-order common factor and thatit might be reasonable to aggregate these subscales. Given that we focused on overallempowerment, and in line with prior research (Chen et al., 2007; Chen and Klimoski, 2003),the four empowerment dimensions were collapsed into an overall individualempowerment scale. Additionally, the findings indicated the distinctiveness of themeasures of psychological empowerment, organizational commitment, and employeesatisfaction. The average variance extracted (AVE) of all constructs were greater than theminimum criterion of 0.50 and were also greater than the squared correlation betweenconstructs, ensuring convergent and discriminant validity (Hair et al., 2010).

ResultsTable I contains correlations and descriptive statistics for all study variables. Thehypothesized overall model showed a good fit (x2 ¼ 10:58, df ¼ 12, p . 0:01;CFI ¼ 0:99, RMSEA ¼ 0:01). H1 stated that employee satisfaction will mediate therelationship between psychological empowerment and customer satisfaction. Thedirect path from psychological empowerment to employee satisfaction (b ¼ 0:53,p , 0:01) and from employee satisfaction to customer satisfaction (b ¼ 0:42, p , 0:05)were significant (Figure 2). Additionally, the total indirect effect from psychologicalempowerment to customer satisfaction through employee satisfaction wassignificantly positive (b ¼ 0:22, p , 0:05). Therefore, H1 was supported.

H2 stated that employee satisfaction will mediate the relationship betweenpsychological empowerment and organizational commitment. The direct paths frompsychological empowerment to employee satisfaction (b ¼ 0:53, p , 0:01) and fromemployee satisfaction to organizational commitment (b ¼ 0:78, p , 0:01) weresignificant. Additionally, the total indirect effect from psychological empowerment to

M SD 1 2 3 4 5

1. Leader empowering behaviors 4.71 0.85 (0.96)2. Psychological empowerment 5.66 0.37 0.42 * (0.90)3. Employee satisfaction 5.36 0.79 0.30 * * 9.56 * (9.95)4. Organizational commitment 5.25 0.74 0.23 9.51 * 9.81 * (9.94)5. Customer satisfaction 6.57 0.16 20.12 9.15 9.57 * 9.58 * (0.97)

Notes: Cronbach’s a values are reported on the diagonal in parentheses; *p , 0:01; * * p , 0:06

Table I.Correlation matrix anddescriptive statistics

Figure 2.Structural pathcoefficients

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organizational commitment through employee satisfaction was significantly positive(b ¼ 0:41, p , 0:01). Therefore, H2 was supported.

H4 stated that psychological empowerment will mediate the relationship betweenLEB and employee satisfaction. The direct path from LEB to PE (b ¼ 0:42, p , 0:01)(also supporting H3) and from PE to employee satisfaction (b ¼ 0:53, p , 0:01) werefound to be significant (Figure 2). Additionally, the total indirect effect from LEB toemployee satisfaction through PE was significantly positive (b ¼ 0:20, p , 0:05).Therefore, H4 was supported.

DiscussionThe findings of this study suggest that leader empowering behaviors (LEB) has anindirect effect on customer satisfaction and employees’ organizational commitment.LEB was positively related to psychological empowerment (PE), which in turn wasrelated to employee satisfaction. Consequently, employee satisfaction was positivelyrelated to customer satisfaction and organizational commitment of employees. Theimplications of our findings and the limitations of our research are discussed below.

Theoretical implicationsOur findings extend previous research in three ways. First, we found that LEB influencedPE among non-managerial (line-level) employees in the hospitality industry. AlthoughKonczak et al. (2000) used subordinates as samples to validate the LEB scale, their actualstudy investigating the LEB to PE relationship employed a managerial sample. Incontrast, we examined non-managerial hospitality employees. To our knowledge, no priorresearch has assessed the LEB to PE relationship with line-level hospitality employees.The motives, attitudes (including PE), and behaviors of managers and line-levelemployees may be different and therefore the LEB-PE relationship may also be different.Further, Hechanova et al. (2006) showed that PE level varies by industry. Therefore, thisstudy confirms that the LEB to PE relationship is also supported among non-managerialservice employees, enhancing the generalizability of the theory. Future research canexamine potential differences between managerial and non-managerial employees withregards to LEB and PE perceptions and whether an employee’s rank moderates therelationship between LEB and PE.

Second, frontline hospitality employees were an important sample because of theimplications for organizational performance and the consequent relevance toempowering leadership theories. Employee empowerment is crucial to thehospitality industry since excellent customer service requires employees to beempowered in order for them to make service decisions independently (Gill et al.,2010a, b). Hospitality scholars note that employees must perceive psychologicalempowerment in order to engage in autonomous behaviors (Ro and Chen, 2011). It isimportant to investigate organizational factors, such as leadership, that influenceemployees’ PE (Ro and Chen, 2011; Gill et al., 2010a, b). Recent studies identified thenext step in leadership evolution as servant leadership, in which leaders support andempower subordinates (Brownell, 2010). Our study provides strong support for thesearguments since the findings indicate the influence of LEB on employees’ PE, attitudes,and organizational outcomes.

Third, to our knowledge, although previous studies have linked PE with employeeoutcomes such as job satisfaction (Konczak et al., 2000), organizational commitment

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(Kim et al., 2012), and employee performance (Seibert et al., 2004), PE has not beenlinked directly or indirectly to organizational outcomes (e.g. customer satisfaction). Aunique finding of our study is that employee satisfaction mediates the relationshipbetween PE and customer satisfaction. This finding is important because it suggeststhat when employees express higher job satisfaction due to PE, they are more likely todeliver excellent service quality, thereby resulting in higher customer satisfaction.Furthermore, the finding that LEB facilitates PE and employee satisfactionstrengthens the contribution of this paper.

In summation, the findings are consistent with studies that demonstrated linksbetween PE, job satisfaction, and organizational commitment. Further, results fromearlier studies linking job satisfaction and consumer satisfaction were supported.Building on these extant connections among constructs, this project modeled andtested the chain of causation from LEBs to customer satisfaction in one study, whichhas not been previously done. This has helped to advance our understanding of themechanisms through which organizational action affects customer satisfaction.Overall, the present study has provided empirical support to two key arguments madeby recent hospitality scholars:

(1) employee empowerment is an important predictor of employee andorganizational outcomes, especially in the hospitality industry (Ro and Chen,2011); and

(2) because psychological empowerment is crucial, there is a need to focusspecifically on organizational leadership (i.e. leader empowering behaviors) thatinfluences psychological empowerment (Brownell, 2010).

Until now, research has demonstrated the relationships between various organizationalfactors such as job characteristics, training, and job satisfaction and customersatisfaction. This project has shown that leadership behaviors are responsible forcustomer satisfaction and so opens up a stream of potential research directed atunderstanding which leader behaviors or actions result in customer satisfaction. Whilethis study focused on leader empowering behaviors, future research can examine otherbehaviors such as supportive and participative leadership (Yukl, 2012). It is alsoimportant to identify the conditions under which leadership behaviors influenceoutcomes. The boundary conditions such as age, educational level, job rank, and nature ofthe job can all be investigated. For example, does the relationship hold equally amonghotel front desk or among kitchen employees, among older or younger employees, or formore educated or less educated individuals? The research has refined our understandingof the relationships among the variables of interest in this study. Previous research hasmainly focused on the relationships among specific constructs; by tracing the pathwaysfrom leadership behaviors through employee reactions to consumers, this study hasextended this stream of theorizing.

Managerial implicationsThis study has shown that leadership behaviors are important to ensuring consumersatisfaction. A key finding of this study was that leadership behaviors have a direct effecton employee satisfaction and consequently customer satisfaction. These results directleaders (managers) to recognize that their own job-related behaviors have a relationship tocustomer satisfaction. Stated differently, the manner in which leaders relate to their

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front-line employees has an effect on both customer satisfaction and firm performance.This study focused on evaluating the impact of leadership behaviors that empoweremployees and found that there was a positive relationship. Hence, it is important forhospitality leaders to understand which of their behaviors directly impact theiremployees’ behaviors and consequently impact organizational outcomes such ascustomer satisfaction. This study has shown that LEBs including delegation of authority,ensuring accountability, enabling decision making, sharing appropriate information, andhelping subordinates to improve their skill levels greatly enhances the PE of employees.This in turn enhances employee satisfaction with their jobs and permits them thepsychological freedom to provide quality services. Accordingly, practicing managers andleaders should examine their empowering behaviors and perhaps modify them to enhancepositive organizational outcomes.

The results of this research are also useful in designing training programs formanagers and those in leadership positions within organizations. The results suggestthat organizations should ensure frontline managers are made aware of behaviors thatimpact customer satisfaction. Based on the study results, it is further suggested thatorganizations develop training programs to help frontline mangers understandappropriate behavior sets that will enhance customer satisfaction. Leaders should betrained in practicing the sets of behaviors that enhance the sense of autonomy amongemployees identified by this research. The six dimensions of the scale used in thispaper list the various behaviors that employees found important and empowering.Training programs designed to assist managers to empower their employees can bedeveloped based on the scale items.

Since the study has noted that employees perceive some degree of psychologicalempowerment on the basis of their managers’ actions, it is important for organizationsto continually measure the extent to which their managers engage in empoweringbehaviors. Setting up an appropriate reward system that encourages managers toadopt LEB will enhance organizational performance.

Finally, the results of this study also replicate earlier findings that employee jobsatisfaction is important in enhancing customer satisfaction. The study extends thisrelationship and provides evidence that employee job satisfaction depends to a greatextent on leader empowering behaviors. While a number of factors relate to employeesatisfaction, this study shows that LEB have an important effect. Therefore, it may beprudent to measure the level of employee satisfaction due to leadership behaviorsseparately and in addition to other factors during the periodic employee satisfactionsurveys that organizations conduct. The inclusion of this dimension in employee surveyswill add important information about a factor that influences employee satisfaction levels.Further, through appropriate analysis of the responses, necessary corrective action(e.g. manager training) can be taken.

Limitations and future researchThe findings, as with most cross-sectional research projects, should be interpreted withcaution. Data collection from one single organization helps to control for organizationalfactors; however, the results may not be generalizable. Further investigations in otherorganizations and other industry groups may be required before the conclusions drawnin this study can be fully accepted. Another limitation of the study was an unevendistribution of various demographic groups with respect to gender and ethnicity, thus

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preventing us from performing additional analyses to incorporate group differences inthe model. It is possible that different groups responded to the study variablesdifferently. Future research can take these factors into consideration and examinepotential moderating effects. Researchers need to ensure that the sample includes evendistribution of different demographic groups in order to make meaningful comparisonsand to incorporate group differences in the model.

Notwithstanding the study limitations, the results point to potential future research.LEB were examined in this study especially in the context of services; it is possible thatother leadership characteristics (other than empowering behaviors) may have moreinfluence in other organizational settings or at different levels of the organizations (forexample, managers may be differently influenced than front line associates). In this study,the mediation of job satisfaction and PE were examined, but it is possible that othercandidate variables such as organizational climate or justice concepts will providealternate explanations for organizational outcomes such as customer satisfaction. Recentresearch has suggested that cultural factors may also affect the relationship betweenleader and follower outcomes (Gill et al., 2010a, b). It will be interesting to investigate howculture affects the relationship between LEB and employee PE, job satisfaction,organizational commitment, and organizational outcomes.

Theoretically, it is important to understand the pathways by which certainorganizational actions cascade into outcomes of interest to the organization. It ispossible that leadership behaviors in and of themselves are inadequate and otherenabling conditions are required. For example, perhaps an individual employee’scapacity to assume responsibility and to be accountable also has an important role toplay and future research may need to control for individual personality differences.Organizational type and therefore, organizational systems such as recruiting andcompensation practices were controlled in this study. However, it is important toinvestigate the extent to which local unit operational variations, apart from leadershipstyle, influence the relationships reported in this study. It is important for managers tounderstand the extent to which their own behaviors, and more importantly, which oftheir behaviors, influence organizational outcomes. This study has identified one set ofbehaviors that have an important effect; future research should investigate othervariables. This elucidation will help managers to maximize desirable organizationaloutcomes through managing their own behaviors.

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About the authorsDr Karthik Namasivayam is Associate Dean at the Ecole Hoteliere, Lausanne. Prior to this hewas Director-Operations at Velan Hotels Ltd, Tirupur, India. Until 2011 he was an AssociateProfessor of Organizational Behavior at the School of Hospitality Management, PennsylvaniaState University. He received his Master’s and PhD from Cornell University. He has publishedpeer-reviewed articles in the areas of intellectual capital in service industry, servicesmanagement, consumer satisfaction, and human resources management.

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Dr Priyanko Guchait is an Assistant Professor in the College of Hotel and RestaurantManagement at the University of Houston. His research focuses on the application of thetheoretical frames from organizational behavior, and organizational psychology to the serviceindustry. He received his PhD in Hospitality Management and a Master’s in Human Resourcesand Employment Relations from Pennsylvania State University, and a Master’s in HospitalityManagement from the University of Missouri-Columbia. He has published peer-reviewed articlesin the areas of human resources management, services management/marketing, and customersatisfaction. Priyanko Guchait is the corresponding author and can be contacted at:pguchait@uh.edu

Dr Puiwa Lei is an Associate Professor at the Department of Educational and SchoolPsychology and Special Education, Pennsylvania State University. She received her PhD fromthe University of Iowa. Her research interests are in methodological issues of multivariatestatistical analyses, particularly structural equation modeling and multilevel modeling. Herresearch has been published in professional journals of measurement and statistics.

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