Incorporating human resource management initiatives into customer services: Empirical evidence from Chinese manufacturing firms Taiwen Feng a, ⁎, Dan Wang b,1 , Daniel Prajogo c,2 a School of Management, Northwestern Polytechnical University, Xi'an, China b School of Business and Economics, Gippsland, Monash University, Room 143 Building 5N, Northways road, Churchill, VIC 3842, Australia c Department of Management, Monash University, Room 7.28 Building N, Caulfield East, VIC 3145 Australia abstract article info Article history: Received 21 October 2012 Received in revised form 17 March 2013 Accepted 22 July 2013 Available online 27 August 2013 Keywords: Service reward Service training Employee satisfaction Customer service Customer satisfaction The existing operations management literature has extensively investigated the associations between customer satisfaction and firm performance. However, how to improve customer satisfaction through employee empowerment, service reward, and service training has rarely been investigated. In this research, we tied human resource and service operations management to each other and examined the relationships among employee empowerment, service reward, service training, employee satisfaction, customer service and customer satisfaction based on empirical study of 214 Chinese manufacturing companies. Using struc- tural equation modeling, we found that both employee empowerment and service training have significant impacts on employee satisfaction and customer service, while service reward only has significant impact on customer service. We also found that both employee satisfaction and customer service have significant im- pact on customer satisfaction. However, the impact of employee satisfaction on customer service is insignif- icant. The findings suggest that employee empowerment, service reward and service training are important considerations for operations managers to boost employee satisfaction and customer service, which in turn improve customer satisfaction. We provide empirical evidence that employee empowerment, service reward and service training play significant roles in increasing customer satisfaction in the context of manufacturing businesses. © 2013 Elsevier Inc. All rights reserved. 1. Introduction Due to the shrinking of product life cycles and increasing global com- petition, as well as volatile market dynamics, organizations have be- come more active in seeking ways of improving customer satisfaction to raise performance (Yee, Yeung, & Cheng, 2010). Service operations management (SOM) has emphasized providing excellent customer ser- vice as a means to improve customer satisfaction. In recent years, many manufacturing companies have made service transition a priority to maintain a long-term competitive advantage (Gebauer, Gustafsson, & Witell, 2011; Jacob & Ulaga, 2008). Substantial research has also been devoted to such topics as innovating, managing and optimizing service systems, in order to enhance customer service and operational perfor- mance (e.g., Kumar & Telang, 2011). However, many firms have enthu- siastically applied the operation-centric approach which focuses on the manufacturing process of optimization, sequencing and timing as an effective means for improving organizational performance, while the impact of human resource management (HRM) practices on opera- tional systems has often been overlooked (Boudreau, Hopp, McClain, & Thomas, 2003). The importance of HRM practices such as employee empowerment, service reward and service training and their impacts on employee satisfaction and customer satisfaction have largely been neglected in the existing SOM literature (Boudreau, 2004). On the other hand, issues related to HRM have been widely investi- gated in the fields of organizational behavior (OB) and psychology for many decades. The pervasive interest in HRM among OB researchers and practitioners is grounded on the premise that HRM practices are closely related to the cognitive, attitudinal and behavioral aspects of employees which are crucial to organizational effectiveness, and the ultimate profitability and growth of the firm (Jun, Cai, & Shin, 2006; Yee et al., 2010). Therefore, a great number of researches have been call- ing for studies to examine HRM practices, particularly to what extent these practices influence customer service, customer satisfaction and organizational performance (e.g., Batt, 2002; Guest, 2011; Rogg, Schmidt, Shull, & Schmitt, 2001). Yet, for a long time, HRM and SOM remained as separate fields with very few studies looked at the integration of those two areas in the context of service industries (Boudreau et al., 2003). We believe that the impact of HRM practices on service operations cannot be ignored and is particularly essential for the manufacturing industry because Industrial Marketing Management 43 (2014) 126–135 ⁎ Corresponding author at: School of Management, Northwestern Polytechnical University, No. 127 Youyi West Road, Xi'an, Shaanxi 710072, China. Tel.: +86 13572190964. E-mail addresses: typhoonfeng@gmail.com (T. Feng), stella8497@gmail.com (D. Wang), Daniel.Prajogo@monash.edu (D. Prajogo). 1 Tel.: +61 3 9902 6620. 2 Tel.: +61 3 9903 2030. 0019-8501/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.indmarman.2013.08.007 Contents lists available at ScienceDirect Industrial Marketing Management