Marketing scholars propose that service employees play a primary role in delivering service quality, especially for unstandardized services that feature personalized interactions, such as restaurant dining and travel planning. However, the question of how to motivate employees in such service contexts to enhance service production has received little research attention. The authors address this gap by advocating a control mechanism that, ironically, requires managers to give up control—namely, buyer monitoring. First discussed in the economics literature, buyer monitoring involves customers becoming de facto managers, who evaluate and compensate the workers who serve them. In theory, buyer monitoring works better than other control mechanisms by providing employees with the incentive to satisfy customers’ idiosyncratic needs.
The authors focus on a common form of buyer monitoring, voluntary tipping, a practice based on the social norm that buyers fairly reward employees for quality service. Notably, a substantial interdisciplinary literature finds only a small correlation between customer perceptions of service and their tipping behavior. Such a weak relationship should reduce the effectiveness of buyer monitoring as a service-incentive and quality-control mechanism. However, whether tipping actually improves service has never been empirically tested, despite the billions of dollars in tips given to a variety of service occupations worldwide.
The authors use a multimethod empirical approach to test the effectiveness of buyer monitoring on service, to explore how buyer monitoring works, and to examine potential boundary conditions for the mechanism. The authors conduct two quasi-experimental studies with secondary data sources and across two service contexts, leisure cruises and restaurants, to show that a policy of voluntary tipping has significantly stronger effects on customers’ perceptions of service than a policy of automatic service charges. In a third study using survey data, the authors show that restaurant servers perceive a meaningful contingency between the service they provide and the tips they receive (even if the actual contingency is weak), and this perception is correlated with their likelihood to engage in various service-enhancing behaviors. Finally, in a role-playing experiment with restaurant servers, the authors find that a voluntary tipping policy compared with a service charge policy significantly improves customer-oriented service motivation and behavior but not sales-oriented motivation and behavior—an important a boundary condition for buyer monitoring.
These findings call attention to buyer monitoring as both a topic for academic research in marketing and a practical mechanism for motivating service employees. The findings also call into question trends away from tipping in service contexts such as the cruise industry and suggest that many service businesses for which tipping is not viable could benefit from alternative forms of buyer monitoring. The authors present directions for future studies of the means and outcomes of buyer monitoring, as well as for implementing buyer monitoring in other service contexts to improve personalized service and firm performance.
Biography
Robert J. Kwortnik Jr. is Associate Professor of Marketing in the Cornell University School of Hotel Administration. He joined the faculty in 2003 after earning his PhD in Business Administration from Temple University’s Fox School of Business. Dr. Kwortnik’s research focuses on consumer behavior in service contexts, with special attention to customer experience management. His research has appeared in Journal of Service Research, International Journal of Research in Marketing, and Cornell Hospitality Quarterly, among others. Dr. Kwortnik is also a recognized expert on the leisure cruise industry. He has been honored five times as a Teacher of the Year by students at the Cornell Hotel School.
W. Michael Lynn is Professor of Consumer Behavior and Marketing at the Cornell University School of Hotel Administration. He received his PhD in Social Psychology from the Ohio State University in 1987 and has taught in the marketing departments of business and hospitality schools since 1988. Dr. Lynn paid his way through school by waiting tables and bartending. This experience sparked his interest in service gratuities (tipping), a topic on which he has more than 35 published academic articles. His other research focuses on consumer status and uniqueness seeking. Dr. Lynn is the past editor of Cornell Hotel and Restaurant Administration Quarterly and is currently on the editorial board of Journal of Academy of Marketing Science, which gave him an outstanding reviewer award in 2006.
William T. Ross Jr. is Professor of Marketing, Smeal Research Fellow in Marketing, and director of the PhD Program at the Smeal College of Business of Pennsylvania State University. He earned his BA in History from Wake Forest University, completed one year of an MBA at the Wharton School, and earned his PhD in Business from Duke University. His research specializes in the areas of sales force and channel management, ethical decision making, and buyer decision making. His publications have appeared in, among others, Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Marketing Science, Management Science, Marketing Letters, International Journal of Research in Marketing, Organizational Behavior and Human Decision Processes, Journal of Risk and Insurance, Journal of Business Ethics, and Business Ethics Quarterly. He currently serves on the editorial boards of Marketing Letters and International Journal of Research in Marketing.
Journal Marketing Research, Volume 46, Number 5, October 2009
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