Research into the Impact of Employee Performance Recognition Techniques Essay Example

service (MacDonald, 2005). The success of a restaurant relies on the health and well-being of its employees, as this contributes to their excellent performance (MacDonald, 2005). Recognizing and acknowledging employees' small but positive contributions and accomplishments is crucial. Nothing motivates employees more than receiving recognition. This can be done through various means such as salary increases, appreciation letters, employee awards, physical and verbal support, and promotions (MacDonald, 2005).

Acknowledging employees in front of their peers is important for motivation and inspiration, according to many writers. This not only motivates the employees themselves but also inspires others to work harder to receive similar recognition. While monetary compensation is crucial, employees also desire acknowledgement. In his book "1001 Ways to Honor Employees," Nelson (2005) provides numerous examples and methods for acknowledging employees. It is widely understood that motivated employees tend to work harder and provide better customer service, ultimately leading to increased profits for the organization, which is the main objective of any business.

Research has shown that a person's initial visit to a restaurant often relies on recommendations from others. If the customer is satisfied with the services, they are more likely to revisit the restaurant in the future and recommend it to others. The restaurant industry is highly competitive, making it crucial for restaurant managers and operators to have a clear understanding of their customers' needs, desires, and perceptions in order to ensure the success of the establishment. Syed and Conway (2006) emphasize the importance of understanding clients' demands, wants, and external influences in order to effectively cater to their needs. This understanding enables restaurant directors and operators to create, design, develop, and offer appropriate products and

services that will result in higher customer satisfaction.

It is observed that if loyal clients increase by 5 to 10% that increase the net income up to 100%, and this is the ground for which many eating houses make restaurant client oriented and do eating house objective "client first" and for this ground eating houses are acquiring success and increasing net incomes.

Problem Statement:

To analyze the relationship between employee performance acknowledgment techniques and client satisfaction in eating house industry.

Hypothesis:

Relationship: The step of what sort of relation does employee performance acknowledgment techniques have with client satisfaction in eating house industry. H1: There is positive relationship between employee performance acknowledgment techniques and client satisfaction.

Outline of the Survey:

Restaurant industry is really fast growing industry in Pakistan which is partly service oriented and in service industry it is observed that if employee is recognized against its performance than clients are more satisfied from that employee's service.

This survey aimed to investigate employee recognition in the service industry and its relationship to customer satisfaction in Pakistan's restaurant industry.

Definitions:

Employee performance acknowledgment involves giving positive feedback to employees, letting them know that their efforts and performance are appreciated by coworkers and the organization.

Employee performance acknowledgment techniques refer to tools or rewards used for recognizing employee performance.

Customer satisfaction measures whether customer expectations have been met or exceeded regarding the company's product or service.

Chapter 2: LITERATURE REVIEW

Restaurant Industry:

For decades, it has been observed that the services sector has dominated the business world.

The merging of different cultures and international business practices has made the service industry in developing states the largest and most profitable. Despite recessions, dining out is still preferred over cooking meals,

allowing the restaurant industry to thrive. Both planned occasions and spontaneous outings now commonly involve dining out. In Pakistan, changing lifestyles have led to significant growth in the hotel and restaurant industry, making it highly popular among locals. Hotels, fast food chains, and restaurants not only provide sustenance but also play a crucial role in Pakistani food culture.

The hotel and restaurant industry in Pakistan is facing heightened competition due to the quality of services provided. Success and profitability in this industry are directly linked to the level of service offered. Local fast food chains and restaurants in Pakistan now compete with international fast food chains by providing high-quality services and unique regional flavors at affordable prices (Siddiqi, 2007, p. 15). The restaurant industry in Pakistan is experiencing rapid growth thanks to population growth, increased employment opportunities for women, and changing lifestyle patterns. In today's busy lifestyle, there is a growing demand for time-saving products, with fast food being a popular choice. Many organizations aim to enhance their service quality as they recognize its crucial role in attracting and retaining customers. Service also acts as a competitive advantage not only for service-based organizations but also for production-based industries that heavily rely on buyer-seller interactions known as "Service Encounters" (GroA?nroos, 1994).

In a restaurant setting, there is a combination of service and production involved. The clients are provided with meals that are primarily produced, while also having interactions with servers who handle various operational, procedural, and service-related aspects. To succeed in attracting and retaining customers, it is crucial for restaurant owners and managers to thoroughly understand their customers' needs, perceptions, and desires. The competition within the restaurant industry

is fierce as customers have the ultimate decision-making power in choosing which establishments to support (Gregoire et al., 1995). Differentiated services play a vital role in this intense competition among restaurants (Koo et al., 1999; Sundaram et al., 1997). Additionally, fast food spending has recently increased, impacting other sectors of the food market.

To fully express the value of employees, restaurants should change their current philosophy. This can be accomplished by understanding the relationship between competitive advantage and high-performing work practices (Murphy & Olsen, 2008).

Employee Performance Recognition Techniques:

In any business, striving for success and maintaining a healthy state is imperative. The contribution of employees to the organization's success cannot be overlooked (Economic & Social Research Council, 2006; MacDonald, 2005). It is observed that companies that aim to remain competitive in the market prioritize improving service quality (Stevens, Khutson & Patoon, 1995; Parasuraman, Berry & Zeithaml, 1991).

The procedures related to human resources are directly linked to the attitude of employees, which in turn leads to job satisfaction or dissatisfaction (Rainey, 1991). Job satisfaction leads to motivation, which impacts the efforts and productivity of employees, ultimately affecting customer satisfaction (Lawler, 1994). All employees have assigned responsibilities, and they also have ethical obligations to act in a responsible manner (Fisscher, Nijhof & H. Steensma, 2002). While there is an element of subjective morality involved in this, it is more focused on common sense, whereas true accountability goes beyond the scope of moral duties within a specific role.

The idea of function morality in an organization involves determining responsibilities and obligations for a specific role (Werhane; A; Freeman, 1999). Organizations use different tools, such as balanced scorecards, to evaluate and assess

employee performance and motivate them based on their achievements (Kaplan ; Norton, 1996). However, it has been observed that performance evaluation processes do not always provide definitive results when assessing factors like motivation, decision making, or goal-oriented behavior. Both positive and negative outcomes have been documented. While one performance measurement tool may produce favorable results in one situation, it may yield unfavorable results in another specific circumstance.

In the hospitality industry, obtaining feedback from customers or involving customers in evaluating employee performance is an easy and reliable method (Hopkins, 2005). It is not enough to assess employees solely based on their work role; their assessment should consider how they shape attitudes and desires in social contexts (Salancik & Pfeffer, 1978). Additionally, employees are evaluated based on the emotions they express within the organization (Rafaeli & Sutton, 1989). This approach to measuring employee attitudes has allowed for the study of various areas at the organizational level, such as depression, liking, positive and negative impact, happiness, and optimism (Staw, Sutton & Pelled, 1994).

Recognizing and appreciating the work of employees is essential for achieving desired results. Acknowledging employees plays a significant role in fostering their satisfaction, often referred to as the "thank you" category. For employees, receiving a simple expression of gratitude for their job well done is invaluable. It is crucial to acknowledge employees for their good work, positive contributions, and even small accomplishments.

Recognition comes in many forms, including promotions, company awards, salary increases, physical support, verbal guidance, and more. It is not just about saying thank you; it is about acknowledging employees in meaningful ways. Numerous studies suggest that public recognition is the most effective way to

motivate employees. Receiving an award or being honored in front of the entire company can be highly motivating. It also inspires other employees to strive for excellence and achieve positive results.

According to Hopkins (2005), it is noteworthy that no single factor can provide greater motivation than having an award. Sometimes, these rewards are perceived as psychological guidance, where employees working more effectively when they learn that customers are satisfied because their own egos are satisfied. Additionally, rewards can also serve as implicit motivators. Management holds the belief that a satisfied customer in the long run is more beneficial to the organization. By communicating this belief, management motivates employees to remain with the company and potentially earn greater rewards.

Some organizations tie employee wages/salaries directly to client satisfaction or quality measures (Hauser, Simester, & Wernerfelt, 1994). Clive Mettrick, an executive of the company, once said that it is important to recognize and reward positive employee outcomes in order to retain them. To retain qualified employees and engage them in enhancing client satisfaction, resource management, and performance improvement, organizations should maintain salary and recognition programs (Freed, 1999). Akerlof and Kranton (2005) argue that relying solely on monetary compensation strategies is not sufficient for an organization to succeed. Nelson (2005) provides ample evidence and numerous examples of awards used in companies in his book 1001 Ways to Reward Employees. Employees perceive awards as incentives and consider recognition an important source of motivation (e.g., receiving an award).

Employees make significant efforts to preserve the value of awards and the accompanying monetary reward. Awards hold great importance for employees as they symbolize appreciation and recognition from both colleagues and the general public.

Furthermore, receiving an award fosters a sense of dedication by establishing an emotional connection between the recipient and the organization (Bruno & Susanne, 2009). Reward and recognition serve as a way for organizations to communicate their appreciation for employees' contributions (Evans & Lindsay, 2003).

According to Spitzer (1996), employees do not value spending large sums of money on reward and recognition procedures. In fact, it can even result in demotivation among them. When designing a system for employee rewards and recognition, Covey's (1994) concept of "starting with the end in mind" should be considered. Before creating the system, it is important to think about the organization's key objectives that need to be achieved. McAdams (2000) suggests connecting rewards with business goals such as financial return, growth, customer satisfaction, and reducing operating costs. While organizations may offer various rewards, they can sometimes be ineffective due to creating a sense of control. The most effective solution is involving employees in the development of the organization's reward and recognition system (George & Weimerskirch, 1994).

According to Branham (2001), it is important for employers and directors to recognize employees in the way that employees want to be recognized. Customer feedback plays a critical role in evaluating employee performance, as waiters who provide good or bad service to customers often receive corresponding feedback. Therefore, the emphasis should be on the quality of employees' service in order to increase customer satisfaction (Johnson, 1996; Schneider & Bowen, 1985). It is essential to understand that if an organization provides employees with quality service, it is likely that customers will also receive higher quality service (Lukas & Maignan, 1996).

Some executives argue that frontline service employees play

a significant role in communicating with customers, thereby influencing the perceived service quality of the organization. The initial impression of a service company is formed through the interaction between the employee and the customer, which is typically how customers perceive the organization (Parasuraman, Zeithaml, & Berry, 1985). Therefore, it is crucial for frontline employees to prioritize and address the needs and preferences of customers (Kelley, 1992).

Customer Satisfaction:

For many years, researchers have focused on service quality and customer satisfaction due to their impact on organizational performance and customer behavior. Service quality not only enhances profitability but also leads to customer satisfaction, which in turn generates positive word-of-mouth (Soderlund, 1998).

A satisfaction based on result or procedure is also referred to as customer satisfaction. Customer satisfaction can simply be defined as the assessment of a consumer's consumption of a particular product or service (Gundersen, Heide ; Olsson, 1996). Some studies have also shown that customer satisfaction has a direct or indirect impact on organizational outcomes. Many researchers have also concluded that organizational profitability is directly influenced by customer satisfaction (Anderson, Fornell ; Lehmann, 1994; Yeung, Ging ; Ennew, 2002; ; Luo ; Homburg, 2007). Researchers have also found that customer satisfaction leads to customer loyalty, which increases repeat purchase intentions and positive word of mouth.

Knutson (1988) discussed the important factors for customer satisfaction, such as convenience of location, safety and security, prompt service, and friendliness of employees. Barsky and Labagh (1992) believe that location and employee attitude are easily influential factors for customer satisfaction. Service quality is seen as complex in nature and its significance varies for each customer. However, a common definition is the comparison between a

customer's perception and expectations of the service received (Parasuraman, Zeithaml & Berry, 1988; Gronroos, 1982). Some writers argue that customer satisfaction is an indicator of service quality (Carman, 1990; Bolton & Drew, 1991). On the other hand, other writers claim that service quality indicates customer satisfaction (Churchill & Suprenant, 1982; Anderson, Fornell & Lehmann, 1994; Oliver, 1997; Oh, 1999; Zeithaml & Bitner, 2003; Jamali, 2007). These writers unanimously agree that service quality involves cognitive evaluations that provide satisfaction to the customers.

In summary, the relationship between service quality and client satisfaction is evident. Evaluating customer satisfaction requires assessing the quality of service provided by products or services connected to the organization (Vavra, 1997). The significance of customer satisfaction in any type of organization is attributed to word-of-mouth recommendations and repeat purchase behavior (Berkman & Gilson, 1986). Owners and restaurant managers are compelled to develop and introduce appropriate offerings to enhance service quality and customer satisfaction.

Merely a portion of an offering of a eating house is service that is intangible and heterogeneous and success of all other parts is dependent on the quality of service that is provided to the clients (Syed & Conway, 2006). It has been observed that a satisfied client from service provided by eating house is likely to see once more in the eating house even recommend to other friends and relations (Kivela, Reece & Inbakaran, 1999; Pettijohn, Pettijohn & Luke, 1997). Restaurants' net net incomes can be doubled if a eating house loyal clients increases from 76 to 81% (Mattila, 2001). Social contacts play an important role in choice of a eating house; about 44% of clients visit a eating house first

time on recommendation of friends whereas only 10% visit eating house first time with former client (Smith, 1996; Stevens, Khutson, & Patoon, 1995). Most of the eating houses make services client oriented where eating houses have the belief that client and client's interest come first without disregarding other interest holders' like owners, managers and employees, to make organization long run profitable (Hartline, Michael D., Maxham III, James G.)

,; A; McKee, Daryl O. 2000). Because of the intangible, hetero and inseparable nature of service, the client orientation of service houses plays a critical function (Parasuraman, Zeithaml, ; A; Berry 1985). Firms that employ client orientation achieve higher profitability and deliver higher service quality compared to firms that apply other orientations in their business processes (Kelley, 1992).`` In a broader sense, satisfaction is generally perceived.

Service quality is an essential factor in satisfaction (Zeithaml ; Bitner, 2003, p. 85). Satisfaction cannot be derived from a single source but rather from multiple sources. Bitner and Hubbert (1994) describe satisfaction in two ways: service encounter satisfaction, which is based on specific service encounters, and overall satisfaction, which is based on multiple service encounters and experiences as perceived by the customer.

It demonstrates that satisfaction with service encounters contributes to overall service satisfaction. According to Oliver (1997), client satisfaction is defined as meeting a response. Low satisfaction over time can lead to negative attitudes from clients (Oliver, 1997). Based on this perspective, service quality can be compared to a family photo album, with client satisfaction being just one snapshot.

Chapter 3: Research Methods

RESEARCH METHODS

Method of Data Collection

A questionnaire study was conducted using two questionnaires: one for restaurant managers (consisting of 3 pages) and

another for restaurant customers (consisting of 2 pages) across Pakistan. This primary data collection method involved gathering responses from participants.

The personal meetings involved the directors of the eating houses. These meetings were with clients who were present at the eating house during that time.

Sampling Technique

Convenience sampling was used to carry out the research.

Sample Size

Researchers use two types of information for their research: primary and secondary. Primary research involves using questionnaires to gather qualitative or quantitative information. Since each organization uses different techniques to recognize their employees, questionnaires were needed to collect primary information. It was challenging to visit every single restaurant and gather information because many of them did not provide accurate data.

The entire sample size was 420, consisting of 20 eating house directors and 400 clients. There were 20 clients from each of the 20 eating houses.

Instrument for data collection

Two different questionnaires were created to collect the data. The first questionnaire focused on employee performance recognition techniques used in the eating house, while the other questionnaire focused on the service features and the service received by clients. Both questionnaires also included demographic questions. The data was analyzed using SPSS.

Validity and dependability trial

The purpose of the trial was to identify and address any design and instrument errors in the questionnaire. A pre-test was conducted on a small group of participants to identify and resolve any potential issues. This was done to evaluate the questionnaire's clarity, bias, vague wording, and relevance to the research. Additionally, reliability analysis was performed to assess the scales and their characteristics that were used to study and generate results.

Reliability analysis process is used in many instances

to calculate the level of dependability and the relationship between the points listed in the individual degree provides information about.

Research Model Developed

Restaurant industry is a combination of service industry and production industry, and if either one of them does not meet the standards or customers' perception, it directly affects restaurant business. Therefore, it is necessary for restaurants to produce and serve products according to the standards. The service aspect of the restaurant industry is very critical, and restaurants acknowledge employees by providing them with different rewards to motivate them. Motivated employees work more efficiently, which ultimately affects customer satisfaction. This study focused on how restaurants in Pakistan acknowledge front employees and how this recognition influences customer satisfaction. Each restaurant has different techniques for acknowledging employees, and this study aims to determine if these techniques have any relationship with customer satisfaction. The following model has been developed based on the model used by (Islam ; Ismail, 2004).