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CHAPTER 1
BACKGROUND
1.0 Call Center Industry
Today the service industry has evolved in many folds compared to its early beginning.
Our ancestors who first provided and sold services would never have imagined the
challenges and innovation that the industry is facing and will experience in the next
generation. One of the most innovative methods of meeting and keeping up with
customers demanding better services in terms of management of information and
communication is the emergence of call centers in the early 1990s. This demand
attributes to the increased level of education amongst the public. There is also increased
awareness on consumer rights and the expectation on products and services paid.
Call centers facilitate flow of information and communication between firms and their
remote customers via the telephone (Malhotra & Mukerjee, 2004). According to
Prahabkar, Sheehan, and Coppett (1997), call centers “….allow a company to build,
maintain, and manage customer relationships by solving problems and resolving
complaints quickly.” Call centers are the focal point of the firm to answer questions by
customers every hour of the day throughout the 365 days in the year. Therefore, it would
appear that all quality organizations that place customer satisfaction and loyalty as their
prime focus would strategize on call centers to communicate with current and new
customers. This is so, as call centers offer convenient and personalized methods of
servicing customer’s request and queries. Some organizations offer toll free numbers
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where their customers can directly call centers without incurring any costs. The methods
of providing customers information and sales has evolved tremendously especially with
advancement in information technology in the highly competitive telecommunications
industry.
Based on the research done by Holman, Batt and Holtgrewe, (2007), the primary targets
of call centers are business customers and the mass market. About 75% of the call centers
in the study served the general mass market where the volume of service and sales
transaction are the highest. On the other hand, about 25% of the call centers serve
business-to-business customers.
Various industries now employ the call center strategy. Telecommunication firms were
the earliest to adopt the call center strategy to handle large volumes of customer enquiries
efficiently. However, today, the financial sector is the largest user of call center. In the
1990s, a major transformation occurred in the financial sector in the operations of
businesses. Other industries that currently use call centers include the
telecommunications industry, utility industry including water and electricity, government
agencies, municipal councils and various non-profitable organizations.
Holman et al. (2007) found that 49% of call centers focused on services, while 30% of
call centers focused on sales and services. The balance 21% focused on sales only.
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There are two types of call centers: They are (1) Inbound and (2) Outbound. At least 79%
of call centers are inbound - where they serve the organization’s own customers. Twenty-
one percent of call centers on the other hand serve outbound customers. Figure 1 below
shows the Armistead, Kiely, Hole and Prescott (2002), call center systems model.
Figure 1: Call Center Systems Model
Inbound Calls Outbound Calls
Enquiries
Help
Reservations
Appointment
Order
Payment
999
Sales
Help
Dispatch
Debt Collection
Appointment
Sales Lead
Customer Data
Medium
• Voice
• Fax
• Internet
People
• Customer Service
Support agents
• Center support
staff
• Selling agents
• Experts
• Internet/Intranet/
Extranets
Technology
• Call
Management
• Database
• Voice
Recognition
• Call
Distribution
Call Center
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The typical technologies used in most call centers are telephones, supplemented by fax
and email. Some organizations though use advanced technologies such as a voice, email,
fax, voice over internet protocol (VoIP), media blending, and electronic customer
relationship management in their call centers.
Today the call center industry offers employment in various countries in these industries.
In Holman et al.’s (2007) study of call centers in 17 countries alone the number of call
center employees stood at 450,000.
Why are there so many people employed in this sector? Call centers are typically
personalized remote services by call center agents in terms of business, information,
queries and others. It is undeniable that one of the key success factors of a call center is
the contact personal itself besides the technology. Since the customer contact employees
or popularly known as the call center agents are the link between the entire organization
and the external customer (Zeithml & Bitner, 2000), they are able to influence the service
quality perception of the customers.
Thus the ability of the organization in recognizing and adopting the right measures to
ensure the call center agents provide quality services in their interactions with customers
is essential. The external customers will identify the service provided by the call center
agents as the service provided by the organization.
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1.1 Asian call center industry including Malaysia
According to Computerworld (March 2008), Malaysia has shown the strongest growth
rate compared to all its ASEAN counterparts. Call center industry growth rate in
Malaysia is 17% compared to only 15% for the ASEAN region. The growth rate in
Singapore is 8%; India is 10% while Thailand is 15%.
According to the Call Center Industry Benchmark Report, in 2003 alone there were 250
organizations with 575 call centers throughout Malaysia. Total call center seats in
Malaysia in 2008, is about 33,000. The average seats per center in the year 2008, is
expected to be 167 compared to only 90 last year. Why the buzz for call centers? Well,
according to Callcenters.net, 67% of the total contact centers in Malaysia are serving
local consumers. At the same time, there is an increase in number of outsourced based
contact center work. In addition to that, the availability of locals in Malaysia who speak
numerous languages like Mandarin, Bahasa Melayu, Cantonese, Tamil and others is very
attractive for global companies. This feature has made Malaysia the potential Asia Pacific
Regional Hub for call centers.
The annual wage for a contact center agent in Malaysia is about RM15, 000 compared to
RM12, 000 in Philippines and only RM8, 400 in India. Therefore, the annual wage in
Malaysia is still higher compared to these two countries. Thus, there is a slight
disadvantage in attracting English Language work from the US and Europe.
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In terms of education level, 49% of those who work in call centers in Malaysia have only
a secondary education level. Based on the findings of the 2006 Asian Contact Center
Industry Benchmarking Report, it was found that 56% of the Asian contact centers are
established as customer service centers, 15% are dedicated to outbound sales, 14% for
technical support, 12% to inbound sales and 2% to collections.
Seventy three percent of customer interactions in Asian organizations are handled
through the contact centers. This constitutes 62% of contacts handled by the telephone
and 11% handled by the email or web. About 26% of all the organization’s contact is
handled by the branch or retail network.
The average number of both inbound and outbound calls handled by an agent per shift is
82 calls. According to this report, customer complains comprise of 11% of the total
transaction volume handled by Asian contact centers. The average sales conversion rates
from inbound calls that are an opportunity to sell is 28%, while the sales conversion for
outsourced center is 35%.
The average level of absenteeism in Asian Contact centers is 11 days sick leave per
annum. Malaysia and Singapore are found to have the lowest level of absenteeism with 8
days per annum compared to 15 days in India. Meanwhile the average turnover rate in
Asia is 22% per annum, with the highest in India (35%) and lowest in Philippines (17%).
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According to the statistics of agents who left the Asian Contact Center in 2006, only 38%
moved to work in other contact centers while the balance 62% left the contact center
industry completely.
Telecommunications, transport and freight, banking, finance and the insurance sector,
represent 67% of all call center seats from the principal industry sectors in Malaysia. The
government agencies and other private listed organizations are also beginning to place
importance on call center. Therefore, the employment rate in the industry is increasing
steadily. Labour, thus has been identified as the major expense in operating contact
centers in Malaysia, which comprises 53% of the total budget.
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1.2 Challenges in the Call Center Industry in Asia
According to the 2006 Asian Contact Center Industry Benchmark Report, there are
several key challenges in the Asian call center industry. Firstly, human resource is a
major concern, as the agent turnover rate is 22% per annum in Asia. Such a high turnover
rate poses high monetary and operational costs to the organization in terms of recruitment
and training of agents.
Secondly, the speed of technology developments in the world constantly pressures
organizations to upgrade their technological infrastructures. This is essential for call
centers to keep in pace with other call centers that are fast picking up the outbound calls
market.
The next challenge for Asian call centers is to improve customer satisfaction. Increase in
customer awareness and consumer rights is increasing pressuring in the service industry
to produce high levels of service quality. This is because the numbers of highly educated
Asian is in the increase. Furthermore, call centers provide the link between the
organization’s output and the customers. All customer dissatisfaction that arises from any
part of the organization may be directed to call center agents. Thus, the challenge of
linking the backroom activities of the organization and the call center itself arises.
The other challenges include increasing sales for business development, financial, budget
constraints and lastly restructuring of organizations.
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1.3 Objectives of the Study
Discussion on the statistics of the industry in Malaysia and Asia in the previous section,
mention that 53% of the total budget at call centers is attributed to labour costs.
Furthermore, the average call center turnover rate in Asia is about 22%. With that
account, the management human resource is important in every competitive call center.
Past researchers have found another important issue in call center involving deployment
of labour, which is the measurement of performance. The quality versus quantity issue
has been found critical in call centers. Another similar issue is the efficiency versus
productivity of call centers. The high technological advancement in the industry has
often, prompted call center agent’s productivity measures e correlated as quality outputs
of the call center. Measurements such as waiting time, number of calls attended number
of abandoned calls, time taken to attend each call and others are currently widely used as
key performance outputs of call centers.
These measurements put much negative pressures on call center agents. Constant
monitoring and repeated focus on efficiency of call center agents by managers in
organizations have resulted in creating a highly stressed environment. In fact, the
repeated focus on efficiency is often at the expense of the employee. Wallace, Eagleson
and Waldersee (2000), have termed this situation in the call center as the ‘sacrificial
human strategy’. It must be noted too that working in call centers has been found to be
one of the most stressful jobs (Wallace et al., 2000).
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Therefore, with the industry, fast growing in Malaysia, it is important that call center
managers fully understand their role in managing the human resource management of call
center agents. This would help them to maximize outputs and increase the quality of
service to their customers. It is with those objectives that this study was undertaken and
aimed to provide evidence to the following relationships:
1.3.1 The relationship between the internal service climate environment of the
organization and attitudes of the call center agents in terms of their intrinsic
motivation
1.3.2 The relationship between the internal service climate environment of the
organization and behaviours of the call center agents in terms of their
organizational commitment
1.3.3 The relationship between intrinsic motivation of call center agents with the
quality of service provided by them in call centers
1.3.4 The relationship between organizational commitment of call center agents with
the quality of service provided by them in call centers
1.3.5 The relationship between the internal service climate with the service quality
delivery in call centers due to attitudes and behaviour in terms of intrinsic
motivation and organizational commitment of call center agents
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1.4 The Importance of the Study
Call centers in Malaysia are growing at a steady rate especially in the service industry. In
fact, many utility and telecommunication companies are increasing their intake of agents
in a very positive trend. The high number of call center agents being employed poses a
concern especially to whether the service organizations would actually implement
positive organizational reforms and that will ensure quality service is delivered to
customers through their “ambassadors”.
At the end of the day, customer outcomes such as satisfaction and loyalty will be
determined by these call center agents. It is therefore important that service organizations
in Malaysia understand the importance of factors that would lead to service quality
delivered by the call center agents.
Many researches on call centers have been done in United Kingdom and India. In fact
many studies like Mukerjee and Malhotra (2006), Dean (2002), Schneider and Bowen
(1995) and others have linked organizational commitment, employee satisfaction with
service quality delivered by employees. Other research such as Schneider, White and
Paul (1998), have linked service climate to organizational commitment and satisfaction.
As mentioned earlier, labour costs is the highest contributor to call center budget.
Employee turnover rate has been found to be considerable high in Asia. This study was
aimed to relate past studies done in other countries with the Malaysian environment and
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to assist organizations to identify the key employee management factors that will
eventually lead to quality service to external customers.
Like most call centers all over the world, call centers in Malaysia are also placing much
attention on the efficiency and productivity measures. The difficulty in measuring the
qualitative measures of service provided by the call center agents has proven to create a
very unhealthy turnover rate in Asian call centers. Organizations spend a lot of money
annually on recruitment and training; therefore, it is important for them to improve on the
service climate at the call centers to reduce related labour costs in addition to creating
high service quality for customers.
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1.5 Scope of the Study
The scope of the study is to study the relationship between service climate, intrinsic
motivation, organizational commitment and service quality in Malaysian call centers. The
study is limited to two organizations from different industries.
Service quality in this study is limited to employee perception against the standard of
service quality outlined by the organization.
1.6 Organization of Chapters
Chapter 1 describes the overall background of the call center industry including in Asia
and Malaysia. The challenges and significance of the study is discussed. Chapter 2
explores the literature review on the research subject. Other relevant studies are also
discussed based on findings of previous researchers. In Chapter 3, the research
methodology is discussed in detail. The problem statement and theoretical framework
from the literature review is developed into testable hypothesis. In addition to that, the
survey method used in the research is discussed in depth including the development of
measures. In Chapter 4, the analysis of data and interpretation of the data including
demographic and variables is discussed. Finally, in Chapter 5, conclusions and
recommendations are made.
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1.7 Summary
The call center industry in Malaysia is growing at an extremely high rate. As discussed
earlier, the number of seats in Malaysia is expected to grow to 33,000 by the end of 2008.
In order for call centers in Malaysia to compete with other global call centers, it is
essential for call center managers and organizations to pursue the key success factors in
terms of call center human resource management. This research was aimed to study some
essential relationships that will assist call center managers to focus on interventions to
improve service quality at their call centers.
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CHAPTER 2
LITERATURE REVIEW
2.0 Introduction
Taylor and Bain’s (1999) definition of a call center is a dedicated operation in which
computer-utilizing employees receive inbound or make outbound telephone calls.
According to Taylor and Bain (1999), the calls are processed and controlled by either an
automatic call distribution (ACD) or predictive dialing system. Another research by
Robinson and Morley (2006) identified the characteristics of a call center as the
integration of telephone and visual display unit technologies. The most recent addition to
call center technology is to use inter-active voice response (IVR).
There have been numerous researches regarding call centers since the 1990s. Some of
the previous research done are regarding measures of quality and work quantity, factors
that affect call center management, organizational commitment, human resource
management, job satisfaction, service quality and service climate in call centers. These
issues have been found as the main success factors of call centers.
With the advancement in technology today, call centers are focusing on statistics such as
waiting time, number of abandoned calls, number of calls and time taken by call center
agents to attend each call. In fact, there is so much argument and discussion about the
dilemma that call centers face in balancing between quality and quantity outputs. Taylor
and Bain (1999) also argued that in their research on whether priority should be given to
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quantitative output or quality of services in call centers. It must be mentioned that further
confusion could also arise between quantitative and qualitative measures to draw the line
clearly on the difference between productivity and service quality. Frenkel and Donough
(1996), as well as Wallace et al. (2000), concurred with their findings. According to
Frenkel and Donough, the perceived focus on productivity in call center contradicts with
the management of employees as professionals in delivering quality customer service.
They further described the working routines in call centers as tightly structured where
agents just sat and attended to calls. The agents were also only allowed to take breaks at
predetermined times. Wallace et al. (2000) also found that efficiency and service in call
centers is more conspicuous than in most other service delivery channels.
Robinson and Morley (2005), found the mismatch between achieving excellent customer
service and the actual measurements of productivity at call centers. It was mentioned in
this research that many call center managers were managing aspects of the call center
operations that had nothing or little to do with customer service excellence. The metrics
employed concentrated on the call itself and not the outcome of the call from the
perspective of the customers.
Other authors such as Roth and Jackson (1995), Jack, Bedics and McCary (2006), as
well as Varca (2006) had identified four key resources to manage a successful call
center. The four resources are efficient labour deployment, effective technology
advantage, capacity management, and demand management
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On the other hand, service quality in call centers as described by Jack et al. (2006) is
based on inputs (human relations and individual psychological perspective), delivery (top
management perspective), and performance outcome (service marketing perspective).
High levels of service by the organizations will depend on ways it is able to leverage
labour, technology, capacity and demand management. The four resources must be
balanced to ensure that customers expectation of high service in terms of service quality,
convenience, speed, accuracy, and value are met (Berkeley, 2005).
Batt and Moynihan (2002) described the management of frontline employees as the
biggest challenge for call center managers. This was supported by Jack et al. (2006) who
said that labour is crucial in achieving high service quality in call centers. Therefore,
organizations that are able to hire, motivate, train, evaluate, and reward employees in call
centers will result in high productivity and customer satisfaction (Batt & Moynihan,
2002; Roth & Jackson, 1995). Call centers must also ensure that the employees are
knowledgeable, honest, polite, and empathetic (Jack et al., 2006).
Gupta, McDaniel and Herathet (2005), found that sustaining structures, which include
leadership involvement, organizational culture, and organizational commitment were
related to service quality delivery and customer satisfaction. Resources and systems that
support the service delivery process were defined to be part of the sustaining structures
suggested by Jack et al. (2006).
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Therefore, Wallace et al. (2000) had identified the strategy used in call centers to combat
the conflict between efficiency and service as the “sacrificial human resource strategy.” It
is considered sacrificial because the management sacrifices the enthusiasm and
motivation of call center agents. On the other hand, it is strategic because, it involves a
coherent set of management activities and attitudes. Call center agents are expected to
absorb emotional costs by sacrificing their enthusiasm to provide efficient service
without any cost to organization. Wallace et al. (2000) further described that this strategy
is a conscious misalignment between the task demands and call center agent’s intrinsic
motivation that results in stress, burnout as well as turnover intentions among the agents.
Wallace et al. (2000) concedes that to be successful in implementing the sacrificial
human resource strategy, call centers must be efficient in recruiting call center agents, as
the turnover rate in this industry is high. The organization must ensure that they are
skilled in selecting intrinsically motivated call agents. In addition, call center managers
should be able to design work tasks that will allow the newly recruited call agents to
adapt quickly to their work with minimum organizational specific knowledge. Lastly, a
good system of monitoring call center outputs and call center agents’ performance must
be in place.
With a strong focus on efficiency, the work environment of call centres can be very
stressful on employees. Therefore, the management must ensure that the work
environment does not create barriers to delivery of excellent service quality to customers.
Employee frustrations regarding the degree of decision-making, flexibility, and
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appropriateness of supervisor must be addressed to improve the satisfaction among
employees (Holdsworth & Cartwright, 2002). Thus, call centers should create a
supportive service climate at the workplace.
2.1 Service Climate, Intrinsic Motivation, Commitment and Service Quality
2.1.1 Service Climate
Before the definition for service climate is made, it is important to appreciate the
meaning of work climate. Work Climate is the perceptions of the environment in
the organization that is of personal value to its employees (Brown & Leigh,1996).
The authors further explain that in understanding work climate it is interpreted in
terms of individual meaning and value rather than the organization. An earlier
research by Burke, Borucki, and Hurley (1992) conceptualized work climate as an
environment with social and situational components like safety, innovation,
customer service, support, cost cutting, and others.
Therefore, work climate encompasses a wide area of management outcomes as
perceived by the employees. Work climate is important, as it is the perception that
will eventually shape the behavioral and attitudinal responses of employees (James
& Jones, 1974). Burke et al. (1992), further conceptualized work environment as
perceptions of organisations’ concern for customers, and employees. It is the
concern for customers that is known as the service climate.
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Other authors that found that service climate is the major components of work
climate are Yoon, Beatty, and Suh (2001). Schneider (1998), defined service
climate as the shared perceptions of employees concerning the practices,
procedures, and the kinds of employee behaviours that are rewarded and supported
with respect to customer service and service quality delivery. It is the message that
employees get regarding the importance of service in their organization everyday
(Schneider & Bowen, 1995). Schneider, Wheeler, and Cox, (1992) have also
suggested that service climate is built on the foundations of caring for both
customers and employees.
A positive service climate is likely to enhance employees’ effort and control in their
work. Therefore, these employees will tend to spend more time and energy at work
related activities (Brown & Leigh, 1996).
Variables used by Schmit and Allen (1995) to measure service climate are
management, supervisor, monetary and service support. These variables support the
statement that basic human capital and human resource management is critical in
the success of call centres.
Schneider and Bowen (1985) found that human resource management (HRM) to be
the most important factor involved in the success of service climate. Schneider and
Bowen (1985) described five dimensions of HRM in their research. The first
dimension was work facilitation, which is the organizational and job attributes that
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assist the employee to perform his or her job effectively. The second dimension is
supervision that includes constant feedback and communication with supervisors or
managers. According to the authors, supervision is the availability of reward
systems in the organisation that encourage good practices. Their next dimension
was, organizational career facilitation, which included employee development and
growth programmes. Besides, that the image that organisations projects to their
external stakeholders known as the organizational status of organisations is another
important dimension described by the authors. The last dimension is new employee
socialisation. It includes orientation programmes for new employees to familiarise
themselves with the organisation and the job.
2.1.2 Intrinsic Motivation
Another important issue in call centers is the level of job satisfaction among call
center agents. Locke (1976) defines job satisfaction as a pleasurable and positive
emotional feeling that is reflected by the appraisal of one’s job or job experience.
Frequently, job satisfaction is reflected when job values are achieved.
Kantsperger and Kunz (2005), discovered that a high level of employee satisfaction
is related to task orientation and high level of intrinsic motivation to foster customer
satisfaction. In addition to that, Saura, Contri, Taulet, and Vela´zquez (2005),
found that the measurement of job satisfaction could explain employee behaviour
including their loyalty, motivation and other company-related variables such as
service quality, efficiency, productivity, and consumer evaluation of the service.
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According to Mahesh and Kasturi (2006), intrinsic motivation is an important factor
of employee satisfaction of job performance. The difference between “satisfaction”
and “motivation” is clearly distinguished by Mahesh (1993). He suggested that
employees that are intrinsically motivated tend to have higher psychological needs.
These employees have a reduced threshold on their “lower-level” needs. Thus,
intrinsically motivated employees are able to be satisfied in situations that are risky,
and difficult. People who are intrinsically motivated are also motivated by high
targets and are not affected by negative feedback. Mahesh (1993) further conceded
that satisfaction is a part of intrinsic motivation, but intrinsic motivation goes
beyond satisfaction.
This is inline with Higgs (2004) who defined motivation as one of the constructs for
emotional intelligence. According to this author, motivation means that one has the
drive and energy to attain challenging goals or targets.
Besides that, McGregor’s (1960) theory Y and McClelland’s (1961) achievement
motivation theory each stressed on the importance of an internal desire to succeed
in undertaking challenging tasks and in seeking responsibility. Mahesh (1993)
found that agents in call centers who were intrinsically motivated were those who
were dissatisfied with extrinsic rewards provided by their organizations.
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Schneider and Bowen (1995), have identified three characteristics of intrinsically
satisfying jobs. They are the jobs that allow workers to feel personally responsible
for their work, the jobs that provide outcomes which are intrinsically meaningful or
otherwise experienced as worthwhile to the individuals; and finally the job that
provide feedback about what has been accomplished.
2.1.3 Organizational Commitment
According to Mowday, Porter and Steers (1982) organizational commitment is the
relative strength of an individual's identification with and involvement in a
particular organization. Generally, most authors have examined organisational
commitment with turnover intentions as reported by Griffeth, Hom, and Gaertner
(2000), in their meta analysis.
Allen and Meyer (1990) developed three different components of commitment.
Firstly, they defined affective commitment as the willingness of employees to
remain with their organisations because they want to. Secondly, they suggested that
continuance commitment as the willingness of employees to remain in the
organisation because they need or are obliged to. Normative commitment,
according to the authors, is the desire of employees to remain in the organisation
because they ought to do so, due to high opportunity costs of leaving their current
jobs or appointments.
Allen and Meyer (1990) explained that each employee experiences a psychological
state of each of these three components of commitment in various degrees and
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stages of their career. Mowday et al. (1982) found that each of the three
components of commitment developed independently as a function of different
antecedents. Affective commitment is developed in relation to personal
characteristics of employees, work experiences, job characteristics or structural
characteristics. According to Allen and Meyer (1990), work experience whereby,
the employees feel comfortable with their organisations and competent in the work
reflect the willingness to remain in the organisation. Continuance commitment is
concerned with the magnitude and number of investments employees have made in
their existing organisations. Employees who have invested a large amount of time
and energy in their organization would perceive that they lack alternatives to leave
the existing organisations. Normative commitment is highly influenced by the
individual’s experience before and after joining the organization. Normative
commitment is the feeling of being loyal to the organization because they are
obliged to do so. Allen and Meyer (1990) concluded in their research that
employees that are comfortable in their roles and job expressed greater affective
commitment than others did.
Other authors such as Bosshoff and Mels (1994) that suggested that committed
employees will dedicated more time, energy and talents to their organization
compared to those that were not. Dean (2000), concurred with Allen and Meyer that
organizational commitment is about how employees feel about their organisations
and their desire to remain in them.
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Interestingly out of the three components of commitment, only affective
commitment has been the most popular ( e.g., Boshoff & Mels, 1995; Sergeant &
Frenkel, 2000).
2.1.4 Service Quality
Quality of service cannot be separated by the quality of service provider (Lewis,
1989). Parasuraman, Zeithaml and Berry (1988), defined service quality as a
multidimensional construct that is able to assess the ability of the organization to
provide excellent services to their customers or clients. Other authors such as
Hesket et al. (1997) as well as Zeithaml, Parasuraman and Berry (1990) have
defined service quality as the outcome of internal organizational policies and
practices that are fundamental to the service provided by the organisation. This
outcome will in the long run influence customer value, satisfaction, and loyalty. In
the service industry, the customer-contact employees acting as ambassadors of the
organizations determine the outcome of the service quality delivered to customers.
Quality is defined by Parasuraman et al. (1988) as the difference between
customers’ expectation and their perception of the service delivered. The
SERVQUAL model (Parasuraman et al., 1988) which is also known as the Gaps
model is used to define quality.
In their model, Gap 3 is the relevant gap that measures service quality. This service
performance gap, is the difference between the actual services delivered to the
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customers compared to the firm’s service quality specification. The following
Figure 2 was adapted from Parasuraman et al.’s (1985) model.
Figure 2 : Service Performance Gap
Source : Bienstock, DeMoranville and Smith (2003)
Customer Gap 1
Expected Quality
Perceived Quality
SERVICE DELIVERY
SERVICE DESIGN &
STANDARDS
Provider Gap 3
Perceptions of Customer
Expectations
Provider Gap 2
External Communications
to Customers
Provider Gap 4
Provider
Gap 3
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2.2 Service Climate and Intrinsic Motivation
The focus on efficiency and productivity in call centers is found by authors to affect call
center agents psychologically. The work environment in most call centers is stressful to
call center agents. There are several findings about the stress at the workplace such as
those experienced by frontliners in the call centers. Stress has been found to relate in low
motivation, burnout and resistance among the call center agents (Houligan, 2000).
Wallace et al. (2000) suggested that to deliver service quality, call centers should
carefully select intrinsically motivated employees. This finding is in line with Higgs
(2004) concurred by establishing the relationship between emotional intelligence and
performance of call center agents. This study proposes that an individual’s motivation
level should be considered during the selection and recruitment of call center agents. The
selection of highly motivated individual in the organization would allow it to avoid
incurring additional expenses such as in conducting programmes for its employees.
Motivated employees are more likely to be able to absorb the pressures from burnout, and
stress and therefore reduce the rate of turnover intentions.
Thus, organizations may consider to implement this strategy in their call center
management. Obviously, this is not the only way to manage call centers. Call center
managers must focus on creating a positive service climate in their call centers that can
foster the intrinsic motivation of call center agents.
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Routhman and Joubert (2007), found in their research that positive employee outcomes
such as wellness, vigour and dedication are related to job resources, organizational
support and advancement opportunity. Meanwhile, Brown and Leigh (1996) found a
positive relationship between psychological climate and job involvement. According to
these authors, the characteristics of job involvement include autonomy, skill variety, task
identity, significance , supervisory behaviors such as consideration , participation and
individual differences such as internal motivation and work ethics. Therefore internal
motivation of employees has been found to be related to service climate by them.
In addition to that, Schneider and Bowen (1985) found a direct relationship between
service climate and the customer’s perception of service by an organization. However, in
a subsequent study ,Schneider and Bowen (1992) found a positive relationship between
job satisfaction and service climate. In another study, Yoon et al. (2001) argued that
service quality is related to employees’ attitudinal and behavioral responses. The
measurement for service quality used by Yoon et al. (2000) was the perception of
employees of a Korean retail bank. As discussed in the definition of service climate,
Yoon et al. (2001) found that both service climate and supportive management contribute
to employees’ job satisfaction and work effort, and they indirectly relate to on customers’
perceptions of employees’ service quality.
Other authors such as Deci and Ryan (1985) suggested that the control, freedom of
choice, and sense of security engendered by supportive management are likely to enhance
motivation and induce greater job involvement. Meanwhile, Little and Dean (2006) found
29
that service quality capability (SQC) which is the extent to which employees are satisfied
with their ability to deliver service quality to customers is related to service climate only
through dimensions of HRM.
The motivation behind employee behaviours and attitudes can be explained using the
social exchange theory. According to Lee and Peccei (2006), social exchanges in
organizations are determined by the extent to which employees perceive they are being
fairly in the organization. As the name social exchange suggests, there is a social contract
or commodity for an exchange in terms of organizational commitment. Lee and Peccei’s
(2006) study model is consistent with Allen and Meyer‘s (1990) study on organizational
commitment .
Service climate created in the organization is important to ensure that employees are able
to identify and feel responsible towards the organisations’ quality goals. The
organizations should value the contributions of their employees and the latter would
reciprocate with commitments towards delivering better service quality (Lee & Peccei,
2006).
2.3 Service Climate and Organizational Commitment
Some authors have suggested in the research, organizational commitment is linked very
closely with turnover intentions of employees in an organization. On the other hand,
Boshoff and Mels (1994) noted from their study that committed employees will dedicate
more time, energy and talents to the organization. Therefore, it is crucial for service
30
managers to look back at past research to whether creating the right service climate will
enhance organizational commitment and in turn result in a high level of service quality
output.
Mukerjee and Malhotra (2006) examined the relationship of role clarity and
organizational commitment by using role clarity dimensions that include organizational
support, facilitation and feedback. The results of their study showed positive relationships
between all the three dimensions and role clarity and also between role clarity with
organizational commitment. Since the three dimensions are also consistent with service
climate dimensions the finding by the author suggests that service climate is related to
organizational commitment.
Little and Dean (2006), studied some call centers in Australia and they used the three
factors of global service climate, such as managerial practices, customer feedback, and
human resource management. Surprisingly, Little and Dean (2006) found that customer
service orientation had no relationship with the global service climate. The authors found
that service climate is highly dependent to HRM practices but not customer orientation.
The outcome of the research by Little and Dean (2006) found that service quality climate
is positively related to organizational commitment in call centers.
The importance of HRM practices have also been highlighted by Schneider and Bowen
(1985). They suggested that the way employees feel about their organization acts as a
31
sustainable edge in a highly competitive industry. With highly committed employees,
competitors will find it impossible to imitate service delivered to customers.
Peccei and Rosanthal (2000) found a positive relationship between service climate and
individuals' commitment in the customer service. Service climate can be further enhanced
to increase organizational commitment by improving training opportunities, daily
appraisals including feedback between employer and employees, as well as improving
job designs that allow employee discretion (Bowen & Lawler, 1992).
As defined earlier too, commitment and work effort are closely related based on previous
studies. Yoon et al. (2001) found that both service climate and supportive management
contribute to employees’ job satisfaction and work effort. Since work effort and
organizational commitment are interrelated, this provides yet another support of the
relationship between service climate and organizational commitment. Another research
by Lux, Jex, and Hansen (1996), also found that service climate is related to
organizational commitment.
2.4 Intrinsic Motivation and Service Quality
Previous studies on the relationship between job satisfaction and performance have
examined the positive aspects of work satisfaction (e.g., Mahesh and Kasturi, 2006;
Schneider and Bowen, 1993) .
32
Dimensions of intrinsic motivation include negative sounding items like difficult,
challenging, risky and pressure. Several authors have found support the relationship
between intrinsic motivation and service quality. Mahesh and Kasturi (2006) found a
positive relationship between intrinsic motivation and the effectiveness of call center
agents. According to them, employees who are intrinsically motivated are able to perform
tasks in using a variety of behaviours and skills to manage their emotions and stress
levels. Therefore, call centre managers should consider employees’ intrinsic motivation
in order to obtain quality service outcomes.
Young, Worchel and Woehr (1998), noted that past research by Baard, Deci and Ryan
(2004) found employees that experience a sense of intrinsic satisfaction from their work
are more committed in their jobs and have increased work performance. Meanwhile
Travis (2006), found that increased work performance and high job commitments are
related to the service industry where the front liners are assumed to be intrinsically drawn
to their work.
From a public social management perspective, public service workers are intrinsically
motivated as they see their efforts positively affect a social service. Hence, it is expected
that the greater the sense of personal responsibility and perceived service quality, the
more likely employees are to report feelings of being intrinsically satisfied.
As mentioned earlier, most previous studies (e.g.,Malhotra & Mukherjee, 2004;
Mukherjee & Malhotra, 2006) have related the positive aspects of the job thus studying
33
the relationship between job satisfaction and service quality. Contrary to the relationships
above, one research that did not find any relationship between intrinsic motivation and
service quality is Travis (2006). On the other hand, he found that only extrinsic
motivation is related to service quality.
2.5 Organizational Commitment and Service Quality
According to Zeithaml et al.(1990), service quality would fail if employees are unwilling
or unable to perform services at the required levels. Therefore, the attitude and
behaviours of frontline employees are important to produce superior service quality
(Schneider & Bowen, 1995). The commitment of front line employees will determine the
service quality delivered by call centers (Sergeant & Frenkel, 2000).
As explained by Zeithaml et al. (1990), Boshoff and Mels (1995) and also Boshoff and
Tait (1996), the willingness of employees to accept and support goals and objectives of
organisations would be reflected in the manner they are committed, and the level of
service quality delivered.
Several other studies have found positive relationships between organizational
commitment and service quality (e.g., Bosshoff & Mels, 1994; Malhotra & Mukherjee,
2004; Mukerjee & Malhotra, 2006; ,Zeithaml et al., 1990; Bosshoff & Allen, 1998)
34
2.6 Conclusion
There are several studies in the past on service climate, service quality, and employee
attitudes such as job satisfaction, intrinsic motivation, and commitment. However, none
have been done in the Malaysian call centres. The next chapter would establish the
research framework and hypotheses . The research methodology are also described.
35
CHAPTER 3
DEVELOPMENT OF RESEARCH FRAMEWORK AND HYPOTHESES
3.0 Introduction
This study investigated the relationships of service climate, organizational commitment,
intrinsic motivation and service quality delivered by call center agents in Malaysia. This
chapter will discuss the development of the research framework and hypotheses based on
the literature review in Chapter 2.
3.1 Problem Statement
Chapter 2 highlights the stressful work environment faced by employees of call centers.
In Malaysia, many service organizations have started using call centres, to serve their
customers’ queries and concerns 24 hours a day, 7 days in a week. The number of people
employed in call centres for various service industries have increased in recent years.
The performance and efficiency of call centres seem to be related to customer
satisfaction. Some service organizations have found it challenging to balance their
backroom employee’s service delivery with the responses of their call center agents. Call
center agents act as front liners for the organizations. They represent the entire
organisations’ function when they face customers. Poor service delivery of call centre
agents can affect high customer complains and low customer satisfaction. Poor
36
communication within departments in the organization may also result in call center
agents to take the bulk of the pressure from both the management and customers.
Unless call center managers, foresee this issue, it would be difficult to ensure that the role
of the call center agents is understood especially in the way they fit to the whole
organization. Do call center managers have a role to play to ensure that organizations are
able to create a sufficiently positive service environment throughout the organization to
support call center agents? What is the outcome of this positive climate on the call center
agents ?
This research is thus, aimed at examining the relationships of service climate, employee
intrinsic motivation, organization commitment and service quality among call center
agents in Malaysia . The following relationships were investigated :
1. Between service climate and intrinsic motivation of call center agents.
2. Between service climate and organizational commitment of call center agents.
3. Between intrinsic motivation and service quality of call center agents.
4. Between organizational commitment and service quality of call center agents.
5. If intrinsic motivation mediates the relationship between service climate and
service quality.
6. If organizational commitment mediates the relationship between service climate
and service quality.
37
3.2 Definition of Primary Variables
3.2.1 Dependent Variable
The dependent variable in this study is service quality. Since service quality is a
measurable outcome of internal organizational practices and policies, it will
represent customer’s value and satisfaction regarding the organisation. In this
research, service quality is measured in terms of employee perspective and not
customer perspective similar to several previous studies (e.g., Boshoff & Mels,
1995; Boshoff & Tait, 1996; Hartline & Ferrell, 1996).
3.2.2 Independent Variable
The independent variable in this study is service climate. Schneider and Bowen’s
(1995) definition of service climate described in Chapter 2 is used as the basis of
this variable. Service climate should make employees feel that their organizations
value customers and the delivery of quality services.
3.2.3 Mediating Variables
Past studies have shown that job satisfaction and organizational commitment
mediate the relationships between service climate and service quality. However, in
this study, intrinsic motivation is used as a mediating variable to investigate the
mediating effect of intrinsic motivation which is a higher level of job satisfaction.
Organisational commitment is also used as another mediating variable to investigate
its mediation on the relationship between service climate and service quality in the
Malaysian context.
38
3.3 Research Framework
The aim of this study was to identify the relationship between creating a positive service
climate and service quality among call center agents in Malaysia. It also examined two
mediating variables, namely intrinsic motivation and organizational commitment are
mediating the relationhip between service quality and service climate. The research
framework developed is shown in Figure 3 below :
Figure 3 : Research Framework
Hypotheses H5 is the relationship between service climate and service quality mediated
by intrinsic motivation.
Hypotheses H6 is the relationship between service climate and service quality mediated
by organizational commitment.
INTRINSIC
MOTIVATION
ORGANIZATIONAL
COMMITMENT
SERVICE
QUALITY
SERVICE
CLIMATE
H1 H3
H2 H4
39
3.4 Hypotheses Development
From the research framework in the previous section, six (6) hypotheses were proposed.
They are :
3.4.1 Relationship between service climate and intrinsic motivation
As mentioned in Chapter 2, Routhman and Joubert (2007), found that positive
employee outcomes such as wellness, vigour and dedication are related to job
resources, organizational support and advancement opportunity. Brown and Leigh
(1996) also found a positive relationship between the psychological climate and job
involvement.
Other findings by Schneider and Bowen (1992), and Yoon et al. (2000) found a
positive relationship between job satisfaction and service climate. Yoon et al.
(2001), specifically found that both service climate and supportive management
contribute to employees’ job satisfaction and work effort, and indirectly to
customers’ perceptions of employee service quality. Organizations that value the
contributions of their employees are likely to be rewarded by intrinsic quality
commitments (Lee & Peccei, 2006).
Therefore, it is hypothesised that :
Hypothesis 1 (H1) : Service climate is positively related to call center agents’
intrinsic motivation.
40
3.4.2 Relationship between service climate and organizational commitment
Bosshoff and Mels (1994) suggested that committed employees will dedicate more
time, energy, and talents to the organization. Mukerjee and Malhotra (2006) found a
positive relationship between role clarity with organizational commitment. Role
clarity is an antecedent of service climate.
In a study of Australian call centers by Little and Dean (2006) found that three
factors related to Global Service Climate which such as managerial practices,
customer feedback, and human resource management are positively related to
organizational commitment in call centers.
Schneider and Bowen (1985) also found that service climate especially HRM
practices is positively related to organizational commitment. They noted that the
way employees feel about their organization is an advantage to the organization as
it acts as sustainable edge in highly competitive industry. Peccei and Rosanthal
(2000) found positive relationships between customer service climate and
individuals' attitudinal and behavioral commitment to customer service. Lux et al.,
(1996) also found that service climate is related to organizational commitment.
Therefore, in the context of call centre agents in Malaysia, it is proposed that :
Hypothesis 2 (H2) : Service Climate is positively related to the organizational
commitment of call center agents.
41
3.4.3 Relationship between Intrinsic Motivation and Service Quality
Several authors have found positive relationships between job satisfaction and
service quality (e.g.,Mahesh & Kasturi, 2006; Malhotra & Mukerjee, 2004;
Schneider & Bowen, 1993). Mahesh and Kasturi (2006), for example, found a
positive relationship between intrinsic motivation and effectiveness of call center
agents. They concluded that intrinsically motivated employees performed tasks by
using a variety of behaviours and skills to manage their emotions and stress levels.
Young et al. (1998) as well as Baard et al. (2004), found that employees with a
sense of intrinsic satisfaction from their work are more committed in their jobs and
have increased work performance than those that are not. According to Travis
(2006), these outcomes are related to the service industry where the front liners are
commonly assumed to be intrinsically drawn to their work. It is expected that the
greater the sense of personal responsibility and perceived service quality, the more
likely are employees to report feeling intrinsically satisfied (Crewson, 1997; Perry,
2000).
Thus, hypothesis 3 is proposed in this study :
Hypothesis 3 (H3) : Intrinsic motivation among call center agents is positively
related to the delivery of service quality.
42
3.4.4 Relationship between Organizational Commitment and Service Quality
Zeithaml et al. (1990) suggested that service quality would fail when employees
are unwilling or unable to perform services at the required levels. Schneider and
Bowen (1995) stressed the importance of frontline employees’ attitudes and
behaviours in order to create superior service quality. Other authors also agreed that
the commitment of frontline employees would determine the delivery of service
quality (e.g., Sergeant & Frenkel, 2000; Zeithaml et al., 1990 ; Boshoff & Mels,
1994 ; Boshoff & Tait, 1996; Malhotra & Mukerjee, 2004; Mukerjee & Malhotra,
2006; Boshoff & Allen, 1998).
Therefore, the fourth hypothesis proposed in this study was :
Hypothesis 4 (H4) : Organizational commitment among call center agents is
positively related to service quality
3.4.5 The mediating relationships between service climate and service quality
Hypothesis 5 and Hypothesis 6 below were developed to examine the relationship
between the independent variable and the dependent variable by using two
mediators, namely, intrinsic motivation and organizational commitment.
Hypothesis 5 (H5) : Intrinsic motivation of call center agents mediates the
relationship between service climate and service quality.
43
Hypothesis 6 (H6) : Organizational commitment of call center agents mediates the
relationship between service climate and service quality.
3.5 Conclusion
In this chapter, the problem statement of the research was explained. Past studies
was used as the basis of the problem statement and for the formulation of the
research framework in this study. Four variables in the study namely service
climate, intrinsic motivation, organizational commitment and service quality were
explained in this chapter. Finally, six (6) hypotheses were developed based on the
literature review.
In the next chapter, the methodology used in to examine the relationships
established in this chapter is explained.
44
CHAPTER 4
METHODOLOGY
4.0 Introduction
In this chapter, the methodology used to examine the relationships between service
climate, intrinsic motivation, organizational commitment and service quality is discussed
in depth. Since a quantitative method was used in this research, thus, a survey was
designed using reliable measures adopted from previous research. Data collection
procedures and the research instruments used in the survey is also detailed in this chapter.
In addition to that, data analysis techniques that was used to analyse the data obtained in
the survey is explained.
4.1 Sample Design
The sample for this research was constructed by selecting two large organizations in
Malaysia that provided call centre services. The two organizations were chosen as they
represented two different sectors, namely from the electricity sector and the
telecommunications sector.
Convenience sampling method was used in the survey as call centre agents that
participated in the survey were chosen from these two organizations that were agreeable
to participate in this research. A total of 125 surveys were distributed among call center
agents in each of the two organizations. Thus from a total of 250, only 196 surveys were
45
returned, recording a rate of return of 78.4%. Fifty-four questionnaires were not returned
by the call center supervisors and a few reasons were cited for non-willingness by call
center agents to participate in the survey. The reasons include not being comfortable with
the language used in the survey (English), fearing non-confidentiality and time
constraints between works.
Managers and call centre supervisors were not invited to participate in the survey as the
objective of the research was to examine the call center agents perceptions of the service
climate, intrinsic motivation, organizational commitment and service quality in their
organization.
For the purpose of convenience, the survey was conducted throughout call centres in the
two organizations located in Penang, Klang Valley , Johor and Kuantan .
4.2 Data Collection Procedures
Data was collected by first asking for permission to carry out the research in the two
organisations chosen to participate in the survey. The two organizations were chosen as
they were from two different sectors had a large customer base. As soon as approval was
obtained from the organizations to participate in the study, 125 questionnaires were
distributed to each organizations. Five call centre supervisors had assisted to distribute
the questionnaires to call centres agents at their call centres. Thus, these supervisors acted
as mediators to clarify questions regarding the survey and also to collect completed
forms.
46
During the data collection period, pens were offered as tokens to respondents who
returned completed questionnaire forms. The offering of the token, increased the
response rate.
The respondents were not required to state their names or their departments to protect
their confidentiality. In addition to that, the supervisors were only allowed to collect the
completed forms that were dropped by the respondents in a survey box. This was done to
reduce the biasness in the response. In total, the data collection period took over three
weeks.
4.3 Research Instrument
The questionnaire design was made up of two sections. The first section consisted of
forty-one items based on four constructs, namely service climate, intrinsic motivation,
organizational commitment and service quality. Meanwhile, the second section consisted
of ten demographic questions such as gender, age, ethnicity, education level, lengt in the
organization, employment type, job responsibility and others.
4.3.1 Research Measures
The measures used in this research were adopted from previous studies to ensure .
their validity and reliability. The following provides an overview of each of the
measures.
47
4.3.1.1 Service Climate
The service climate measure was adopted from Schneider and Bowen (1998).
Schneider and Bowen’s measure had seven items (α = .88). There were three
dimensions in their service climate measures namely, customer orientation,
managerial practices and customer feedback. In Schneider and Bowen’s measure
respondents were asked to state their perceptions of each items based on a five-
point Likert scale whereby, 1= never; 2 = slightly; 3 = sometimes; 4 =
considerable and 5 = always. All the items were positively worded.
In order to ensure a consistent survey response from respondents, a slight
modification was done on Schneider and Bowen’s (1998) measure in this survey,
The wordings were modified so that a responsed using a seven-point Likert scale
whereby 1 = strongly disagree; 2= moderately disagree; 3 = slightly disagree; 4 =
neither agree nor disagree; 5 = slightly agree ; 6= moderately agree; 7 = strongly
agree. Some examples of the items in the modified measures are : My
organization provides job knowledge and skills of employees to deliver superior
quality work and service; my organizaton measures and tracks work and service
quality; the managers in my organisation support service quality efforts.
4.3.1.2 Intrinsic motivation
Intrinsic motivation measures were adopted from Mahesh and Kasturi (2006). All
fifteen items in the original measures were used ( α = .91). They included items
describing various dimensions such as enjoyment, perceived competence,
48
importance, pressure, perceived choice, usefulness, and relateness. All the items
were positively worded. The original scales of measurements by Mahesh and
Kasturi (2006), respondents were asked to state their perceptions of each items on
a five-point Likert scale whereby, 5= strongly disagree ; 4 = disagree ; 3 =
Neutral ; 2 = Agree ; 1= Strongly Agree).
In order to ensure a consistent survey response from respondents, a slight
modification was done on Mahesh and Kasturi’s (2006) measure in this survey,
The five-point Likert scale was extended to a seven-point Likert scale whereby, 1
= strongly disagree; 2= moderately disagree; 3 = slightly disagree; 4 = neither
agree nor disagree; 5 = slightly agree ; 6= moderately agree; 7 = strongly agree.
Some examples of the items in intrinsic motivation measures are : I talk with
pride among my friends and acquaintances about my job; Working here is fun; I
take the difficulties on the job as a challenge; This job brings out the best in me; I
set high targets for myself.
4.3.1.3 Organizational commitment
Only the component of affective commitment was studied in this research. All
the eight items in this survey were adopted from Allen and Meyer’s (1990) study
(α = .87). Out of the eight items, four were positively worded and four were
negatively worded.The respondents were required to state their response using a 7
point Likert scale whereby, 1 = strongly Disagree; 2= Moderately Disagree; 3 =
49
Slightly Disagree; 4 = Neither Agree nor Disagree; 5 = Slightly Agree ; 6=
Moderately Agree; 7 = Strongly Agree). Some examples of the items in this
measure are : I would be happy to spend the rest of my career with this
organisation; I enjoy discussing my organisation with people outside it; I do not
feel a sense of “belonging” to this organisation; The organisation has a great deal
of personal meaning for me.
4.3.1.4 Service Quality
In this study, Malhotra and Mukherjee’s, (2004) eleven-items measure of service
quality that were adapted form the SERVQUAL instrument (Parasuraman et al.,
1988) were used. The dimensions included in the measures were reliability,
responsiveness, assurance and empathetic. The “tangibles” dimension was not
included as it was not applicable to the service delivered by call center agents.
Malhotra and Mukherjee (2004), modified these scale and used only the
“perceptions” items. This is supported by Cronin and Taylor (1992;1994).
The scale of measurement used by Malhotra and Mukherjee, (2004) for service
quality was based on a five-point, Likert scale ranging from “strongly agree” to
“strongly disagree”. All the items were positively worded. Some examples of the
items are : I can understand the specific needs of my customers; I perform the
service right the first time; I give prompt service to my customers; I treat all my
customers courteously.
50
In order to ensure a consistent survey response from respondents, a similiar modification
to the intrinsic motivation measure on this measure. The five-point Likert scale was also
extended to a seven-point Likert scale whereby, 1 = strongly disagree; 2= moderately
disagree; 3 = slightly disagree; 4 = neither agree nor disagree; 5 = slightly agree ; 6=
moderately agree; 7 = strongly agree.
4.4 Data Analysis Techniques
The data collected from the sample (n=196) were analysed by using the Statistical
Programme for Social Sciences (SPSS) version 14.0. The following data analysis
techniques was used :
4.4.1 Descriptive analysis
A descriptive report of the demographic characteristics of the respondents (n=196) were
analysed to assess the gender, age, ethnicity, education level, length of service in the
organization, number of companies worked for in the last 5 years, status of employment,
job responsibility, business core function of their organisation.
4.4.2 Preliminary analysis
Preliminary analysis for normality distributions of the data was obtained. The skewness
and kurtosis results described the data’s to the normality distribution. Skewness between
-2 and +2 was considered normal while kurtosis value between -3 and +3 was considered
normal.
51
4.4.3 Reliability analysis
The reliability of the measures were tested. The total Cronbach’s alpha values for each of
the four variables were found whereby, a score of .70 and above was considered reliable.
To increase the reliability of the scales, some items were deleted from measures when
their presence led to Cronbach's alpha values of less than .70 to increase the reliability of
the scales.
4.4.4 Correlation analysis
Correlation analysis was conducted as a preliminary test to check the strength and
direction of he relationship between constructs. A significance level of .05 was used in
this analysis.
4.4.5 Multiple Hierarchical Regression Analysis
Multiple hierarchical regression analysis was used to confirm the linearity, normality and
homoscedasticity of the data obtained from the survey. Testing of the hypotheses was
conducted using this technique. This technique would also assist to show the presence of
the mediating variable between constructs.
Baron and Kenny’s (1986) approach in investigating the presence of mediating variables
was used in this research.
52
4.5 Conclusion
In a summary, the respondents in this research were chosen from two large organizations
in Malaysia. The detailed sample design was discussed in the Section 4.1. Then, the data
collection procedure used in this survey was explained. The research instrument in the
survey were adopted from previous research and minor modifications were made to
ensure a consistent response scale for the respondents. These modifications have are
described in this chapter. The outline of techniques used for data analysis were presented
in the end of the chapter. The basis of these techniques was used to present the findings in
the next Chapter.
53
CHAPTER 5
Research Findings and Discussion
5.0 Introduction
In this chapter, the results of the data obtained from the survey was analyzed and
interpreted. The steps described in Chapter 4 namely section 4.4 are used. The 196
number of completed and returned questionnaires from the call centre agents is discussed
in this chapter.
5.1 Descriptives
Table 3 summarises the demographic characteristics of the respondents. About 81% of
the total respondents (n=196) were females. The respondents were mostly (94%) young
agents who were between 21 to 30 years of age. Majority (89%) of the respondents were
Malays. This is not surprising since the ethnic Malays form the majority of the Malaysian
population.
54
Table 3 : Demographic Characteristics of Respondents
Detail Characteristics Frequency Percent (%)
Gender Male
Female
Total
38
158
196
19.4
80.6
100%
Age < 20 years or below
21 – 30 yrs
31 – 40 yrs
Total
2
185
9
196
1.0
94.4
4.6
100
Ethnic Malay
Indian
Others
Total
175
19
2
196
89.3
9.7
1.0
100
Highest Education level SPM
STPM
Certificate
Diploma
Bachelor Degree
Total
92
7
7
55
35
196
46.9
3.6
3.6
28.1
17.9
100
Tenure in organization Less than 2 years
Between 2 to 4 years
Between 4 to 6 years
More than 6 years
Total
139
18
29
10
196
70.9
9.2
14.8
5.1
100
Number of Companies worked for in
the last 5 years
2 or less
3 - 4
5 and above
Total
167
26
15
196
85.2
13.2
1.5
100
Employment Type Permanent
Part Time
Temporary
Contract
Total
42
1
1
152
196
21.4
0.5
0.5
77.6
100
Job Responsibility Sales and Marketing
Handling Inquiry
Complain Handling
Others
Total
17
34
141
4
196
8.7
17.3
71.9
2.0
100
Core Business Function Telecommunications
Electricity
Others
Total
96
99
1
196
49.0
50.5
0.5
100
Income RM1500 or less
RM1501 – RM3000
Total
155
41
196
79.1
20.9
100
55
It is interesting to note that 46% of the total respondents have either a diploma or
bachelor’s degree compared to another 49% with “O” level qualifications. The level of
education of Malaysians is increasing, therefore, it is not surprising that there is a trend
towards the employment of young by call centres.
Most of the respondents (71%) have been working in the call centres for less than 2
years. This could be due to their young age among the respondents. The present job is
their first job. The survey showed that 69% of the respondents have only worked with
one organization (present) in the last five years. This could reflect back on the
demographics of the respondents, whereby women tend to avoid job hopping where
possible compared to men.
It was found that the majority (78%) of the respondents were contract employees. This is
in line with the global employment trend of call center agents whereby jobs are
outsourced to external service providers. The rest of the respondents (22%) were
permanent employees of the call centres.
The results of the demographic analysis showed that 72% of the total respondents’ main
job responsibility was to complain handling while the rest do more of sales or marketing,
or provide information on enquiries.
56
5.2 Data Screening
The data was screened for errors using simple descriptive table generated. Errors were
then corrected manuall .
5.3 Normality Test
The initial test of the data was to determined if its distribution for the sample (n=196) was
normal. Extreme values computed as outliers by SPSS were recoded. The overall total
scores and normality analysis of the measures for the four constructs were computed.
The skewness and kurtosis ratio, normality curve, normal Q-Q plot, detrended Normal Q-
Q plot and box plots were computed. The results of the analysis showed that the data was
normally distributed. Thus, parametric tests were used to analyse the research data.
5.4 Reliability Test
The group of measures in the previous section where then subjected to reliability
analysis. All the items for the constructs were found to be highly reliable with reliability
higher than .70 except for organizational commitment. Therefore, item, “Attached to
other organizations” was deleted from the Organizational Commitment measures from
further analysis.
A summary of the final reliability test results are shown in Table 4.
57
Table 4 : Summary of Reliability Analysis
Variable Cronbach’s Alpha No of Items
Service climate .90 7
Intrinsic motivation .86 15
Organizational commitment .82 7
Service quality .90 11
5.5 Hypothesis Testing
The average of the items was then computed for each of the four variables using SPSS.
The computed average of the items were then tested using Pearson R correlation and
Multiple hierarchical regression techniques.
4.5 .1 Pearson Correlations Results
Since the data for the sample (n=196) has been found to be normal, therefore, Pearson
R Correlation was used to confirm the strength and direction of the relationships
between constructs. As a preliminary measure, the basic assumptions for this test to
be conducted were checked. They were: scores were normally distributed; linearity
and homoscedasticity were met. Please refer to Appendix 2 for the scatterplots
obtained between the variables in the test.
58
The correlations between the variables were analyzed using Pearson R test. The result is
tabulated in Table 5 below.
Table 5 : Means, Standard Deviations, Reliability and Correlations of Service Climate,
Intrinsic Motivation, Organisational Commitment and Service Quality
Variable Mean Std D 1 2 3 4
Service Climate 6.03 .560 (.90)
Intrinsic Motivation 5.87 .498 .549** (.86)
Organizational Commitment 5.10 .856 .402** .486** (.82)
Service Quality 6.07 .511 .242** .565** .238** (.90)
Notes : n = 196; **. p < .01. Cronbach's alpha is in parentheses along the diagonal
The output in Table 5 confirms the results obtained in the scatter plot Appendix 2 that a
significant positive relationship exists between intrinsic motivation and service climate ( r
= .55, p < .05). This showed that a better service climate at call centres, call centre agents
are likely to be more intrinsically motivated.
A significant positive relationship is also found between organizational commitment and
service climate ( r = .40, p < .05). This means that a better service climate at call centres
likely fosters a higher organizational commitment among employees.
As for the relationship between service quality and intrinsic motivation, a significant and
positive relationship was also found ( r = .57, p < .05). The result showed that employees
with high intrinsic motivation are likely to deliver better quality of service.
59
Finally, a significant and positive relationship was also observed between service quality
and organizational commitment (r = .24, p < .05). This meant that employees with
organizational commitment are likely to deliver better quality of service.
5.5.2 Multiple Hierarchical Regression Analysis
The testing of the hypotheses were done using multiple hierarchical regression. This was
done concurrently with the testing for mediators in Hypothesis 5 and Hypothesis 6. To do
so, the basic assumptions for regression analysis were initially conducted. Normality,
linearity and homoscedasticity were confirmed prior to the analysis in the previous
section.
According to Baron and Kenny (1986), the following regression equations must be
established to determine the existence of intrinsic motivation as the mediator in the
relationship between service quality (dependent variable) and service climate
(independent variable) :
• Regression of intrinsic motivation on service climate.
• Regression of the service quality on service climate.
• Regression of service quality on service climate and intrinsic motivation.
Meanwhile the following regression equations were established to determine the
existence of organizational commitment as the mediator in the relationship between
service quality (dependent variable) and service climate (independent variable) :
• Regression of organizational commitment on service climate.
• Regression of the service quality on service climate.
60
• Regression of service quality on service climate and organizational commitment.
Therefore, in order to establish the presence of intrinsic motivation or organizational
commitment as mediators, service climate must be related to intrinsic motivation and
organizational commitment in the first equation. Secondly, Service climate must be
related to service quality in the second equation. In addition, intrinsic motivation and
organizational commitment must be related to service quality in the last equation.
Furthermore, the strength of the relationship between service climate and service quality
in the third equation must be less than in the second equation. According to Baron and
Kenny (1986) too, in a perfect mediation, service climate will have no relationship with
service quality when intrinsic motivation and organizational commitment is controlled.
4.5.2.1 Testing of Hypotheses
Results of from the regression models are presented in Table 6. Testing of direct
relationships in Hypotheses 1,2,3 and 4 sService climate The three variables were then
regressed to test for Hypothesis H5. Summarized results of the multiple regressions are
shown in Table 6.
Table 6 : Summary of the multiple regressions for AVSC, AVIM and AVSQ
Variables Model 1 Model 2 Model 3
Service climate AVSC AVSC AVSC
Intrinsic motivation AVSQ AVSQ
61
Organisational commitment AVIM AVIM
Service quality
Unstandardized Coefficient, β .488 .221 -.088
Beta .0549 .242 -.097
t value for IV 9.138 3.480 -1.367
R .549 .242 .571
R2 .301 .059 .326
∆R2 .301 .059 .267
∆F2 83.510 12.110 76.443
Significance of ∆F .000 .001 .000
Significance of Coefficient .000 .001 .173
Notes : n = 196; * p < 0.05, Only items for the Variable Service Climate are shown in
Model 3
62
As a preliminary discussion, it was found that the basic requirements of Baron and
Kenny’s (1986) findings on mediations were met. Service Climate was found to affect
Intrinsic Motivation in the first equation. Secondly, Service Climate was found to affect
Service Quality in the second equation while in the last equation, the Intrinsic Motivation
was found to affect Service Quality.
In reference to Table 6, a significant increase of ∆F is found in Model 3 compared to
Model 2. ∆F in Model 3 found to have increased from 12.11 to 76.443. AVSC on its
own is found to be a predictor of AVSQ , F (1,194)=12.110, p < .05. However, in the
presence of AVIM, the coefficient for AVSC in Model 3 becomes insignificant with p >
.05. According to Baron and Kenny (1986), this finding shows that Intrinsic Motivation
mediates the relationship between Service Climate and Service Quality.
To determine the presence of a full mediation or partial mediation the ∆R2
value was
inspected. The results in Table 6 indicate there is an increase of ∆R2
in Model 3
compared to Model 2. AVSC alone in equation only explains 5.9% of the variance but
with the presence of AVIM as the mediator, the variance explained is increased to
32.6%. This is confirmed with the value of change in ∆R2 from 5.49% to 26.7% in Table
6. The results clearly indicate that Intrinsic Motivation fully mediates the relationship
between Service Climate and Service Quality.
Hypothesis H5 is thus, supported.
63
4.5.2.2 Testing Hypothesis H6
The variables AVSC, AVOC and AVSQ were then regressed to test for Hypothesis H6.
As a preliminary discussion, it was found that the basic requirements of Baron and
Kenny’s (1986) findings on mediations were met. Service Climate was found to affect
Organizational Commitment in the first Model. Secondly, Service Climate was found to
affect Service Quality in the second model while in the last model, the Intrinsic
Motivation was found to affect Service Quality.
A summarized result of the multiple regressions is shown in Table 7 .
64
Table 7 : Summary of the multiple regressions for AVSC, AVOC and AVSQ
Variables Model 1 Model 2 Model 3
IV AVSC AVSC AVSC
DV AVSQ AVSQ
Mediator AVOC AVOC
Unstandardized Coefficient, β .614 .221 .159
Beta .402 .242 .175
t value for IV 6.110 3.480 2.322
R .402 .242 .287
R2 .161 .059 .083
∆R2 .161 .059 .024
∆F2 37.331 12.110 4.996
Significance of ∆F .000 .001 .027
Significance of Coefficient .000 .001 .021
Notes : n = 196; * p < 0.05, Only items for the Variable Service Climate are shown in
Model 3
65
In reference to Table 7, a significant reduction of ∆F is found in Model 3 compared to
Model 2. ∆F in Model 3 found to have reduced from 12.11 to 4.996. AVSC on its own is
found to be a predictor of AVSQ , F (1,194)=12.110, p < .05. In the presence of AVOC,
the coefficient for AVSC in Model 3 is still significant with p < .05. However, Beta
value in Model 2 is reduced from .242 to .175 in Model 3. According to Baron and
Kenny (1986), this finding shows that Organizational Commitment mediates the
relationship between Service Climate and Service Quality.
To determine the presence of a full mediation or partial mediation the ∆R2
value was
inspected. The results in Table 7 indicate there is a reduction of ∆R2
in Model 3
compared to Model 2. AVSC alone in equation explains 5.9% of the variance, while in
the presence of AVOC as the mediator, the variance explained is 8.3%. In reference to
Table 7, ∆R2 in Model 2 is found to be reduced from 5.49% to 2.4% in Model 3. The
results clearly indicate that Organizational Commitment partially mediates the
relationship between Service Climate and Service Quality.
Therefore, Hypothesis H6 is partially supported.
66
4.5 Discussion
The analysis of the data revealed that the level of service climate at call centers is
significantly related to intrinsic motivation. The r-value obtained from the correlation
analysis is .55. It signifies a moderate correlation between the two variables. Therefore,
higher levels of service climate are associated with higher feeling of intrinsic motivation
among call center agents in Malaysia. This result is consistent with the findings of
previous research (Yoon et al., 2001; Brown & Leigh, 1996).
It was also found that a organizational commitment among call centre agents are likely to
be present when the service climate in the organization is better. The r-value obtained
from the correlation analysis was .40. This outcome is similar to the findings of Little and
Dean (2006), Peccei and Rosanthal (2006) and Schneider and Bowen (1985).
By comparing the strength of the relationship between service climate with intrinsic
motivation and service climate with organizational commitment, it was found that the
strength of the relationship between service climate and intrinsic motivation was higher
than the strength of the relationship between service climate and organizational
commitment. This may be due to demographics of the respondents in the survey with a
77% of them being contract employees. Most organizations have reduced the provision of
benefits to contract employees. Thus the sense of belonging is somewhat lower when
compared to permanent employees. In addition, contract employees have fewer
obligations to stay with the organization compared to permanent employees. This could
67
perhaps explain the smaller correlation between service climate and organizational
commitment.
In line with the findings of previous researchers like Mahesh and Kasturi (2006), it was
found in this research employees that project higher levels of intrinsic motivation are
likely to deliver higher levels of service quality. Correlation analysis resulted in r-value
of .57 (p< .05).
It was found too that, employees with higher organizational commitment are also likely
to deliver higher levels of service quality. This findings is similar to the findings in
previous research like Mukerjee and Malhotra (2006), Boshoff and Allen (1998) and
others. The r-value obtained from the correlation analysis was found to be .24 (p< .05).
The strength of the relationship between service quality and intrinsic motivation was
found to be higher than the relationship between service quality and organizational
commitment. This result can also be attributed to the fact that most of the respondents
that participated in the survey are contract employees with less than 2 years of
experience.
It must be noted that another significant relationship has been observed in this research.
Higher levels of intrinsic motivation are found to be associated with higher levels of
organizational commitment. The r-value obtained was quite significant (r = .49 , p < .05).
With reference to the study by Wallace et al. (2000) the service quality can be increased
by employing highly intrinsically motivated call agents, this study proves this theory.
68
Furthermore, it has been found in this research that call center agent’s internal desire to
delight customers is associated higher with the quality of service delivered compared to
the ability to relate with their respective organizations.
Additionally, it was revealed in this research that intrinsic motivation mediates the
relationship between the service climate at the call center and the service quality
delivered by call center agents in Malaysia. Organizational commitment was also found
to mediate the relationship between the service climates at the call center with the service
quality delivered by the call center agents in Malaysia. This findings is consistent with
findings by Mukerjee and Malhotra (2006) and also Little and Dean (2006).
Therefore, it can be concluded that high levels of service quality delivered in call centers
can be attained in organizations by creating the right climate in organizations through
highly intrinsically motivated agents. Additionally, high levels of service quality can also
be attained in the same organization by creating the right climate through higher
commitment of the call center agents.
The service climate at the organizations encourages and motivates call agents to perform
quality service . The results of the research also indicate that without intrinsic motivation
of call center agents the relationship between service climate and service quality becomes
insignificant.
69
The service climate is also found to some extend encourage the commitment of call
agents in their work to increase service quality delivered to customers. The results
indicate that only partial mediation occurs in this relationship, so there are other more
relevant variables that are more significant to the relationship compared to organizational
commitment.
4.6 Conclusion
This chapter has discussed in detail the analysis of the data obtained from a sample of
196 respondents. Firstly, the discussion of the data screening and cleaning was done.
Next the test for normal distribution to confirm on the appropriate parametric tests to be
used to analyze the data was done. Reliability analysis was then conducted to test the
reliability of the measures used in the survey. Unreliable items were dropped from further
analysis. The following step conducted was testing Hypothesis H1, H2, H3 and H4. for
the correlation analysis between variables using Pearson R tests. Lastly, testing of
Hypothesis H5 and H6 was then done using Multiple Regression methods.
The results showed that five hypotheses formulated in Chapter 3 were fully supported
while hypothesis H6 was partially supported.
70
CHAPTER 6
Conclusion and Recommendations
6.0 Introduction
This chapter will discuss the findings of the analysis done in Chapter 5. Some of the
limitations involved in the study will be discussed in this chapter, so that the
practicality of the findings may be used in similar settings or studies. We will also
discuss the implication of the study for call center managers and suggest some
recommendations for future research.
6.1 Summary of Findings
As discussed in Section 4.6 , analysis of the data reveals that hypothesis H1, H2, H3, H4 ,
and H5 were accepted, while H6 was partially supported.
In a summary, service climate at call centers is positively related to intrinsic motivation
and consistent with several past findings (Yoon et al., 2001; Brown & Leigh, 1996).
Consistent with findings of other researchers (Little & Dean, 2006; Peccei & Rosanthal,
2006; Schneider & Bowen, 1985), service climate was also found to be positively related
to organizational commitment of call center agents in Malaysia .
71
As for Hypothesis H3, service quality was found to be positively related to call center
agent’s intrinsic motivation in the study. This finding is similar to the findings of Mahesh
and Kasturi (2006).
Service quality is also found to be positively related to organizational commitment of call
center agents and similar findings were also reported by previous researchers ( Mukerjee
& Malhotra, 2006 ; Boshoff & Allen, 1998).
As for Hypothesis 5, it was revealed in this research that intrinsic motivation fully
mediates the relationship between the service climate at the call center and the service
quality delivered by call center agents in Malaysia.
Organizational commitment, on the other hand only partially mediates the relationship
between the service climates at the call center with the service quality delivered by the
call center agents in Malaysia. This finding is consistent with previous findings by other
researchers (Mukerjee & Malhotra, 2006; Little & Dean, 2006).
The results of the hypothesis means that the way the organizations treats and emphasizes
on the service to customers affects the call center agents in terms of their intrinsic
motivation and organizational commitment to deliver quality service.
72
The results of the findings also indicate that the intrinsic motivation of call center agents
affects the relationship between the organizational service intentions with the outcome to
customers, which is service quality.
6.2 Implication of the Study
6.2.1 Theoretical implication
Service quality can bjIntrinsic motivation is an important construct that
6.2.2
Our empirical findings suggest a number of important managerial implications. Firstly,
the perceptions of employees on call center service climate not only affect the intrinsic
motivation and organizational commitment of call agents but also in turn affect the
service quality delivered to customers. Therefore, it is important that organizations design
and establish policies that facilitate service orientated environment and supportive
management. The first step for managers to take is to ensure that the Human Resource
Departments at their organizations are trained to select and recruit individuals with high
intrinsic motivation to work in call centers.
Next, programs and work designs must be developed to maintain and increase the
intrinsic motivation of these employees. This can be established by establishing a
periodic team building activities among call center agents, This action will be able to
increase the sense of belonging among call center agents and further foster agent’s
interest and enjoyment in their work, perceived choice, perceived competence and ability
to handle pressure.
73
Managers must also note that programs to increase employee’s ability to relate with the
organizations do not necessarily increase service quality outputs extensively. Therefore,
managers must be careful to invest into the right kind of programs and policies that will
induce organizational commitment among call agent within their intrinsically motivated
period. This will generate favorable outputs in terms of service quality. Eliminating and
reducing stressors would help to improve service quality in call centers. Redesigning of
work, provision of a more supportive management that encourages feedback should be
emphasized . Mentoring programs, empowerment , stress coping sessions and others
would help to prevent burnout in call centers that will eventually affect the service quality
delivered to customers.
As many researchers have found, most organizations in Malaysia still focus on traditional
issues like satisfaction, compensation and training. Human Resource practices and
programs that actually drive employee motivation and commitment are never in the
organizational master plan. This needs to be evaluated by managers as findings have
proven otherwise in terms of the service quality outputs. HR policies are still the main
drivers for achieving service quality through capitalization of employee behaviours and
attitudes.
6.3 Limitation of the Study
There are several limitations to this study. Firstly, the study was conducted in call
center from two organizations in Malaysia. Since this number is small compared to the
74
total number of organizations with call centers, generalization may be limited. In
addition to that, the study was conducted with respondents that deal mostly with
complain handling and inbound calls. Therefore, generalizations to the entire call center
industry may be limited.
Secondly, there may be response biases due to social desirability and leniency effect.
The accuracy of the data largely depends on the response of the respondents. In
addition to that, Malaysians are more controlled in giving their views of their
organization to researchers compared to Westerners. Most employees fear of being
caught for telling about negative aspects of their organization. Thus, there may be some
biasness in their responses.
Thirdly, the measures used in the research are one of the many instruments available.
Although the reliability of the scales were found to be extremely good but some
modifications to the original measures and its scales were done. This may have created
some method bias, such that the relationships were inflated.
75
6.4 Recommendations for Future Research
This research only covers call centers in Malaysia from two different organization and
industry. Future research can include more industries and organizations to be able to
generalize on the findings.
In addition to that, this research only studies one aspect of commitment, which is
affective commitment. Future research can explore two other aspects of commitment that
are normative commitment and continuance commitment. The affects of the total
commitment may produce significant changes in the results obtained.
Researchers may also study the effect of some moderating variable like work status and
tenure duration on the relationships between service climate and intrinsic motivation.
This would assist managers to design work designs that are productive and effective to
manage call centers.
76
6.5 Conclusion
In conclusion, this research has achieved its objectives that in Chapter 1. The six
hypothesis developed from the theoretical framework were tested using surveys and
analyzed using SPSS. The results of the research are summarized in Table 8 below.
Table 8 : Summary of Research Results
Item Hypothesis Results
H1 Service climate at call centers is positively related to call
center agents’ intrinsic motivation in Malaysia.
Supported
H2 Service Climate is positively related to the organizational
commitment among call center agents in Malaysia.
Supported
H3 Intrinsic Motivation among call center agents is positively
related to service quality delivered at the call centers.
Supported
H4 Organizational Commitment among call center agents is
positively related to service quality in Malaysian Call
Centers
Supported
H5 Intrinsic Motivation of call center agents mediates the
relationship between service climate and service quality at
call centers in Malaysia.
Supported
H6 Organizational Commitment of call center agents mediates
the relationship between service climate and service
quality at call centers in Malaysia
Partial Supported
77
The strength of the variables in relationship in study was also discussed and it will be
left to the practical managers to adopt the recommendations to improve the service
climate at organizations that will enhance employee intrinsic motivation and
organizational commitment for the delivery of quality service.
The implications of the results were discussed in the previous section and it will be
useful for managers to consider during HRM policies implementation.
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APPENDIX A
QUESTIONNAIRE
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