The effects of Internal Service Quality on Employee Satisfaction and Employee Loyalty : The internal assessment of the Service Profit Chain for Business-to-Business markets in IT services

The purpose of this research was to investigate ways to improve employee satisfaction, customer satisfaction and financial performance for a large IT service provider in the Netherlands. After a detailed comparison of different models it is concluded that the Service Profit Chain (SPC) model fits this research purpose best. This research explores the internal part of the SPC. More specifically, this research explores the (inter)relationships between internal service quality, employee satisfaction and employee loyalty. This research used an extensive survey measuring 18 constructs of internal service quality, 7 items of overall job satisfaction to measure employee satisfaction, and respectively 15 and 12 items of organizational commitment and organizational citizenship behaviors to measure employee loyalty. Data was collected from 202 employees within Business Unit XYZ from October 2010 till January 2011. This research applied the CB-SEM to empirically test the (inter)relationships between the constructs. The findings suggest that employee satisfaction is achieved through job design characteristics and supervisory support. In addition, colleagues and supervisory support is mediated through job design characteristics. Employee loyalty is best achieved through promotion. This finding suggests that the SPC model is interrelated. Further implications indicate that internal service quality as a separate construct does not hold.