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Article
Publication date: 11 December 2019

Amin Nazifi, Dahlia El-Manstrly and Katja Gelbrich

This study aims to examine the effects of organizational tactics (e.g. explanation and monetary compensation) on customers’ reactions to service termination. The mediating…

Abstract

Purpose

This study aims to examine the effects of organizational tactics (e.g. explanation and monetary compensation) on customers’ reactions to service termination. The mediating role of anger and the moderating role of termination strategy on the effectiveness of organizational tactics are examined to enhance the understanding of customers’ reactions to service termination.

Design/methodology/approach

Three experimental studies are conducted with different contexts (telecom and banking) and samples (students and consumers).

Findings

Study 1 results show that explanation and high monetary compensation reduce negative word-of-mouth and enhance corporate image and anger mediates these effects. Study 2a results show that high monetary compensation becomes ineffective when firms use a soft termination approach. Study 2b results show that an explanation is equally effective in soft and hard termination approaches. Importantly, unlike high monetary compensation, the explanation can fully eliminate the negative consequences of service termination.

Practical implications

Managers can mitigate negative customers’ reactions to service termination by offering a truthful explanation. Further, they should provide high monetary compensation only if they do not help dismissed customers find an alternative provider.

Originality/value

This paper contributes to the service termination literature by shedding more light on the effectiveness of different organizational tactics following different termination strategies. The findings challenge existing wisdom on the overrated role of monetary compensation showing that in service termination, the explanation is the most effective remedy. Further, unlike justice, anger better explains customers’ reactions to service termination.

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European Journal of Marketing, vol. 54 no. 1
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 4 April 2020

Marjan Abbasi

The purpose of this paper is to investigate the effect of complete versus partial observations of service failure and recovery. This study also aims at investigating the…

Abstract

Purpose

The purpose of this paper is to investigate the effect of complete versus partial observations of service failure and recovery. This study also aims at investigating the effect of observing customers’ need for cognitive closure and types of compensation that a service provider offers.

Design/methodology/approach

Two experiments are conducted to test the research hypotheses. The authors use scenarios describing failure and recovery encounters that occur to a target customer at restaurant settings, and through manipulation of complete versus partial observations, they investigate observers’ attitudes and behavioral intentions.

Findings

The results suggest that customers with a partial observation are less forgiving than those with a complete observation. In particular, the former sympathized more with a target customer, blamed a service provider more and a target customer less and had lower repurchase intentions than the latter. The authors find that the need for cognitive closure heightens this tendency following a partial observation of service failure. They also find that following a complete (versus partial) observation, observers reacted more favorably to service recovery when it included (versus did not include) monetary compensation.

Research limitations/implications

This research studies the effect of locus of causality following a partial versus complete observation. Future research could further examine the effect of stability and controllability. Also, the authors examined the effect of the need for cognitive closure on evaluations of service failure following a partial versus complete observation. Future research could examine the effect of some other individual difference variables.

Practical implications

The results offer some measures to be taken by practitioners. In particular, practitioners are advised to not offer monetary compensation when majority of observers have had a partial observation. Moreover, they are advised to offer some explanation in a timely and effective manner to ensure observers who are under the negative impact of a partial observation have some information so that they revisit their service evaluations.

Originality/value

The literature assumes that in failure and recovery incidents, all observing customers would know the entire story. This research challenges this assumption and highlights the key role of observation type (partial versus complete observation). Further, this research examines the effect of the need for cognitive closure on service evaluations following a partial versus complete observation. The current research finds that supposedly favorable measures by a firm (i.e. monetary compensation) may in fact backfire when a partial observation is at play.

Details

European Journal of Marketing, vol. 54 no. 4
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 7 January 2014

Jason Aaron Gabisch and George R. Milne

The question over who “owns” and controls consumer data on the internet is emerging as an important issue as individuals increasingly share more of their personal…

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Abstract

Purpose

The question over who “owns” and controls consumer data on the internet is emerging as an important issue as individuals increasingly share more of their personal information with marketers in return for services and benefits. This paper aims to examine how compensating consumers for their personal information affects their expectations for data ownership and privacy control.

Design/methodology/approach

The authors conduct two online scenario-based experiments with a sample of adult consumers. The results were analyzed using multivariate and univariate analysis of variance.

Findings

The findings show that receiving compensation, especially when it is a monetary reward, reduces consumer expectations for privacy protection. These effects depend on whether the information provided to marketers is perceived to be sensitive in nature.

Originality/value

While a number of privacy studies have investigated the effects of compensation on encouraging self-disclosure on the internet, there is a lack of research that examines the effect of compensation on privacy expectations. To the authors' knowledge, this is the first paper to test empirically the construct of information ownership in the context of privacy exchanges.

Details

Journal of Consumer Marketing, vol. 31 no. 1
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 27 August 2020

Jun Liu, HengJin Zhang, JingJing Sun, NingXin Li and Anil Bilgihan

This paper aims to clarify the effects of motivations on negative online customer reviews (OCRs) behavior in an integrative framework and to identify the moderating role…

Abstract

Purpose

This paper aims to clarify the effects of motivations on negative online customer reviews (OCRs) behavior in an integrative framework and to identify the moderating role of monetary compensation and psychological compensation in the Chinese food and beverage industry.

Design/methodology/approach

Data were collected from 377 consumers who posted a negative review online. Hierarchical regression analyses were used to test the research hypotheses.

Findings

The authors identified some characteristics of the consumers who posted negative online reviews in the Chinese food and beverage industry and found evidence that reveals the positive effects of emotional venting motivation and altruism motivation on posting negative customer online reviews. Economic motivation and self-enhancement motivation were not significantly connected to negative OCRs behaviors. Service recovery strategies can moderate the relationship between certain motivations and behaviors. The absence of psychological compensation will aggravate the influence of emotion venting motivation on consumers’ negative online reviews, while monetary compensation can restrain the influence of altruism motivation on negative online rating behavior.

Research limitations/implications

This paper did not explore the effect of the fairness and timeliness of service recovery on negative OCRs behavior. This paper did not consider the different restaurant types and customers' characteristics, and future research can test similar models with different and more diverse samples.

Practical implications

When implementing service recovery strategies, it is important to consider the psychological component of recovery. The absence of psychological compensation aggravates the influence of high levels of emotion venting motivation on consumers’ negative OCRs, leading to a lower rating, more word comments and negative photos. High levels of monetary compensation can restrain the influence of altruism motivation on negative online rating behavior.

Originality/value

The current paper contributes to the hospitality management literature by investigating the motivations behind consumer decisions to post negative OCRs in a food and beverage context. In addition, the moderating effect that service recovery strategies have on this relationship was also explored in depth.

Details

International Journal of Contemporary Hospitality Management, vol. 32 no. 10
Type: Research Article
ISSN: 0959-6119

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Article
Publication date: 12 January 2021

Ke Ma and Xin Zhong

The purpose of this study is to examine the effect of perceived justice and consumer's moral judgment of a service failure on recovery outcomes.

Abstract

Purpose

The purpose of this study is to examine the effect of perceived justice and consumer's moral judgment of a service failure on recovery outcomes.

Design/methodology/approach

The research model is examined by adopting a field study approach followed by an experiment. The SPSS program with the PROCESS tool was used to analyze the simple moderation and moderated mediation effects.

Findings

The research findings show that consumer's moral judgment of a service failure moderates the relationship between service recovery (psychological compensation vs monetary compensation) and recovery outcomes (recovery satisfaction, negative word of mouth and repurchase intention). Moreover, the conditional indirect effect of service recovery on recovery outcomes through perceived justice is significant when service failure is seen as less moral. Specifically, consumers report lower perceived justice and react negatively to recovery measures when service failure is seen as less moral. In contrast, when consumers perceive a service failure as moral, a psychological compensation outperforms a monetary compensation, lessening negative word of mouth (NWOM).

Originality/value

These findings provide important insights into recovery measure development when considering consumer moral perspectives.

Details

Marketing Intelligence & Planning, vol. 39 no. 4
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 9 April 2018

Akintayo Opawole and Godwin Onajite Jagboro

The purpose of this paper is to develop compensation mechanisms against risks factors that impact private party’s costs in concession-based projects as a basis for…

Abstract

Purpose

The purpose of this paper is to develop compensation mechanisms against risks factors that impact private party’s costs in concession-based projects as a basis for minimizing failure rate of concession contracts.

Design/methodology/approach

The study extended earlier work on the factors that impact private party’s costs in concession-based projects by developing compensation mechanisms against the risks factors. It commenced with semi-structured face-to-face interviews which were launched with different stakeholders organizations that had been involved in PPP contracts in the Southwestern Nigeria. Responses from the interview were analyzed using interpretative phenomenal analysis via ATLAS.ti6/7. The mechanisms identified from literature review were assessed through structured questionnaire which were administered on professionals selected from governmental-based organizations (ministries, agencies, corporations/parastatals, etc.), private developers/concessionaires, law firms, banks among others, using the respondent-driven sampling technique. The robustness of the quantitative data was achieved by including the initial respondents to the interview in the questionnaire survey. The quantitative data were analyzed using percentile for better understanding of the flexibility between “most” and “more” preferred mechanisms. The criterion for the selection of appropriate mechanism(s) for the factors was based on minimum average of 20.0 percent (the ratio of maximum percentage (100 percent) of the respondents to total number of variables) suggesting the five identified mechanisms. The results in both cases of qualitative and quantitative assessments were compared. Based on the convergences of the findings, preferred compensation mechanisms were developed against concession contract risk factors.

Findings

Options of mechanisms were developed against specific investment risks that are consequent to the defaults of the public party in PPP contracts. The findings indicate that the mechanisms in extant literature with respect to administration of traditional models are relevant for PPPs. The study, however, identified new concepts, including “compensative” “zero compensation,” “equitable sharing” and “adjustment of concession period,” which are suitable in specific cases of PPP contracts.

Practical implications

The study contributes to the body of knowledge on mechanisms for improving PPP project performance. Moreover, insights were provided on mechanisms that satisfy private investor in case of specific risk factors investigated. The findings are therefore expected to guide private party in the preparation of concession contract package that minimizes investments risks and thereby attracting more private investors both from local and international environments. The findings of the study would also contribute to the body of information for documenting standard conditions of concession contract in Nigeria.

Originality/value

Studies on critical performance factors on PPP were extended by developing compensation mechanisms against the investment risks that impact private party’s cost.

Details

International Journal of Building Pathology and Adaptation, vol. 36 no. 1
Type: Research Article
ISSN: 2398-4708

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Article
Publication date: 28 August 2019

Ning Chai, Rob Stevens, Xiaozhen Fang, Chun Mao and Ding Wang

The purpose of the paper is to investigate compensation and related welfare issues in the case of the expropriation of land for urban redevelopment in China.

Abstract

Purpose

The purpose of the paper is to investigate compensation and related welfare issues in the case of the expropriation of land for urban redevelopment in China.

Design/methodology/approach

A mixed methods quantitative and qualitative approach was selected to undertake the research. This involved a wide ranging qualitative review of the academic and policy literature to explore the relevant arguments and issues, combined with a quantitative regression analysis of survey data collected from research subjects.

Findings

The research identified the complex and changeable phenomena of urban village redevelopment in China, and the variable compensation arrangements used. The research found that monthly family income before land expropriation, monthly family expense before expropriation, the location of the housing expropriation and family unit size are important determinants for the property holders chosen methods of compensation. It also found that an increase in family size leads to a decreasing probability that the expropriated farmers choose the single monetary compensation relative to the alternative option of housing compensation. The degree of satisfaction with compensation, changes in monthly family income and expense are found to be significant determinants for changes in life satisfaction.

Research limitations/implications

The research made the following four recommendations based upon the qualitative and quantitative analysis: that local governments should pay closer governance/ political attention to changes in the welfare of the farmers/ villagers whose property has been expropriated; that central and local government should aim to improve the compensation system for rural land and property expropriation, to make the compensation policy be perceived as fairer and more reasonable by citizens; that a broad National standard of compensation be used within a pragmatic locally focussed regime; that the Chinese Central, Provincial and Local governments can devise improved policy tools and make more effective policy interventions by learning from the experiences (both successes and failures) of other countries approaches to this topic. It also suggested that further research be undertaken investigating the multitude of local level policy experiments, as a way of developing better National compensation standards based upon those compensation standards that appear to be working – and have citizen support – at the local level.

Originality/value

The literature review identified recent developments in Chinese urban studies and originally synthesised both recent and longstanding work on the issue of urban villages in China. The research also suggested changes to the National and Local legal and policy framework for compensation cases in urban redevelopment expropriation scenarios.

Details

Journal of Property, Planning and Environmental Law, vol. 11 no. 3
Type: Research Article
ISSN: 2514-9407

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Article
Publication date: 10 September 2019

Valentine Weydert, Pierre Desmet and Caroline Lancelot-Miltgen

The purpose of this paper is to demonstrate how offering control on data usage and offering money can increase willingness to share private information with a data broker.

Abstract

Purpose

The purpose of this paper is to demonstrate how offering control on data usage and offering money can increase willingness to share private information with a data broker.

Design/methodology/approach

Personal data are collected for internet users with a Web questionnaire. In an experimental framework, compensations control money are manipulated and consumers’ data sharing is explained by sensitivity and regulatory focus.

Findings

Offering control increases willingness to disclose personal data, even sensitive one, but the effect is not moderated by regulatory focus. Offering monetary compensation has a negative, but small, effect on willingness to share personal data, and the effect is moderated by regulatory focus.

Originality/value

Offering a large amount of money is a double-edged offer, as it creates a signal that increases potential negative effect of disclosing personal data to unknown third party.

Details

Journal of Consumer Marketing, vol. 37 no. 1
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 1 November 2011

Gergana Markova and Cameron Ford

In this empirical study, the aim is to examine the relative effect of various rewards on performance of knowledge workers. It is predicted that non‐monetary rewards are…

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8460

Abstract

Purpose

In this empirical study, the aim is to examine the relative effect of various rewards on performance of knowledge workers. It is predicted that non‐monetary rewards are associated with enhanced intrinsic motivation, which in turn is related to better performance and innovation.

Design/methodology/approach

Data were collected from 288 research and development employees and their supervisors from 30 Fortune 500 companies. The authors tested the hypothesized relationships with mediated multiple regression.

Findings

The results revealed that receiving non‐monetary rewards is a stronger predictor of intrinsic motivation manifested by longer work time in comparison to either group or individual monetary rewards. Furthermore, intrinsic motivation was found to fully mediate the relationships between received non‐monetary rewards and performance and innovation.

Research limitations/implications

The paper offers a field test of the cognitive evaluation theory and the crowding theory that have been mainly applied in experimental research and suggests a potential limit to the efficiency wage models in the case of knowledge workers. However, causal conclusions are limited by the cross‐sectional nature of the data and the operationalization of intrinsic motivation is not without its critics.

Practical implications

The study findings suggest that incorporating non‐monetary rewards in reward systems is necessary to encourage productivity and creativity of knowledge workers. Organizations should critically evaluate all aspects of their reward systems to reflect the uniqueness of their employees.

Originality/value

The increased importance of innovation for business success mandates that organizations design their reward systems to stimulate creative behaviors. The study results show the importance of non‐monetary rewards over monetary for knowledge workers’ intrinsic motivation.

Details

International Journal of Productivity and Performance Management, vol. 60 no. 8
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 7 December 2021

Chenxuan Chen and Abeer Hassan

This paper aims to contribute to the discussion on the executives’ team and firm performance by investigating the relationships between executives’ compensation

Abstract

Purpose

This paper aims to contribute to the discussion on the executives’ team and firm performance by investigating the relationships between executives’ compensation, management gender diversity and firm financial performance in growth enterprises market (GEM) listed firms in China.

Design/methodology/approach

Data are collected from 461 companies listed on GEM boards during the period from the year 2016 to 2018. Specifically, executives’ compensation and female executives are set as the independent variables, and the proxy selected of corporate performance is Tobin’s Q ratio.

Findings

The results show that the correlation between corporate performance and executive cash payment is not significant, while executives’ equity-based compensation shows a significant positive correlation with firm performance. In addition, the participation of female executives is negatively associated with firm performance.

Research limitations/implications

The results have practical implications for governments, policymakers and regulatory authorities, by indicating the importance of women to corporate success. In particular, the findings of this paper emphasize the specific background of GEM in China and provide empirical support for the value of women’s participation in corporate governance. In addition, the finding on the relationship between executive compensation and corporate performance of GEM listed companies provides guidance for the establishment of a performance compensation system of GEM listed companies in China.

Originality/value

This paper provides new evidence for the current literature of executive team and corporate performance. This is the first paper to adopt triangulation in theories from different disciplines including optimal contractual approach, managerial power approach as new perspectives of agency theory, upper echelons theory, motivational-hygiene theory and women leadership style theory. The results will contribute to provide guidance for enterprises to formulate an efficient compensation system and build a reasonable senior management team structure.

Details

International Journal of Accounting & Information Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1834-7649

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