Literature Review

Today’s marketplace is immensely competitive. Many companies provide products and services that offer solutions to customers’ specific problems (i.e., customer needs and wants) and create value for their customers (Lovelock, Patterson, and Wirtz 2011). Employee creativity significantly contributes to achieving organizational effectiveness, innovation, and performance (Amabile et al. 1996). This is particularly true for front line employees, who are required to demonstrate creativity to deliver excellent service and meet the expectations of customers with different needs and wants (Wilder, Collier, and Barnes 2014). Accordingly, service firms strive to enhance employee creativity to ensure sustainable growth in today’s volatile, complex, competitive, and dynamic marketplace (Oldham and Cummings 1996).

Research has suggested that such growth is possible by fostering an environment where both employee creativity and job engagement are stimulated and supported (Stanley 2016). Thus, in addition to employee creativity, job engagement is considered an important element to drive firms’ long-term success (Lawler 1986; Lockwood 2007). Anecdotal evidence shows that 32% of creatively engaged employees are more likely to increase job performance through creative problem solving and high innovation (Taylore 2017).

Although the constructs of employee creativity, job engagement, and performance have been extensively investigated in various disciplines, prior studies have examined how employee creativity and engagement impacts job performance in non-service study contexts (Amabile 1983, Stanley 2016; Shalley, Zhou, and Oldham 2004). Little is known about how these two constructs together affect employee performance in the context of services. In this sense, this investigation is timely and important for managers who strive to enhance frontline employees’ job performance.

Therefore, this study illustrates how frontline service employees’ work engagement relates to their creativity and job performance. Specifically, the present research tests the model highlighting the mediating role of employee creativity in the work engagement–performance relationship. This research further examines whether the relationships of these constructs are subject to job characteristics and nature (the levels of service encounter: high versus low customer contacts, autonomy/empowerment, and service climate). Previous researches have examined the simultaneous relationship between moderation and mediation and how it affects each other at the same (Fairchild and MacKinnon, 2010). The conceptual model in this paper is investigating the mediating and moderation effects together where the mediation effect is assumed to be moderated by some variables called moderated mediation effect (Edwards and Lambert, 2007). Likewise, this paper estimates the simultaneous relationship between creativity as a mediator between engagement and performance and the same time the effect of job characteristic and nature (service climate and empowerment) as moderators which effects creativity, engagement, and performance.

  Figure 1 illustrates the conceptual model of the current research. The model underscores that frontline employees’ engagement relates to their job performance through creativity. It also hypothesizes that job characteristics and nature (i.e., service levels, autonomy/empowerment, and service climate) influence the associations between the constructs of interest in this study.

The conceptual model of this study is understood as the componential theory of creativity proposed by Amabile (1983). This theory is based on the premises that organizations are motivated to innovate and have both the resources and management practices to achieve such innovation. It underscores important social and psychological domains that are essential for employees to solve business problems by generating new ideas that are feasible, correct, and valuable (Amabile 1988). According to Amabile (1988), the creative process is an important element for individuals in the organization to solve the problems, to deal more effectively and efficiently with work in order to avoid uncertainty, and achieve excellent outcomes. In this sense, the componential theory of creativity explains the hypothesized model that suggests the relationships of employee engagement, creativity, and performance in the workplace. This research posits that an engaged frontline employee is more likely to be creative in the service delivery process to meet organizational goals effectively and efficiently by delighting customers.

Conceptual Framework

The theory encompasses three domains: creativity-domain skills, social environments, and creativity-relevant skills. Creativity-domain skills are related to an individual employee’s knowledge and talent that enable him/her to perform the job. Surrounding social environments extrinsically motivate and challenge individuals to innovate. Negative external environmental factors include time pressure, political issues, and norms that criticize novel ideas. Such negative external motivators undermine individuals’ intrinsic creativity and affect the process of critical thinking (Amabile 2012). Individuals have different triggers to become motivated and use their creativity; those triggers can be due to extrinsic or intrinsic motivation. Thus, an individual’s degree of creativity is dependent on his/her motivations for the specific tasks (Amabile 1988).

Creativity-relevant skills refer to proper cognitive styles and clear knowledge of the heuristic for breeding novel ideas (Amabile 1988). Keeping options open, breaking existing cognitive sets, exploring new cognitive pathways, suspending judgments, storing information, and remembering accurately are some examples of cognitive perceptual styles that allow individuals to challenge the status quo mentality set and understand the complexities inherent in solving problems (Amabile 1983). In other words, individuals with creativity-relevant skills are technically good, adequate, or acceptable, which enables them to perform their work in a creative manner (Amabile 1988). The ability to be creative increases the chances of solving problems. Individuals who explore the possibilities of using these responses and information can solve the problem and carry out their jobs effectively (Amabile 1988). Various personality traits can influence creativity-relevant skills, such as risk orientation, varied experiences, social skills, team qualities, special cognitive abilities, and naiveté (Amabile, Hennessey, and Grossman 1986). This last domain is relevant to understanding the study’s model positing the moderating roles of job characteristics and nature.

Researchers have suggested that the characteristics of a job (e.g., task complexity) affect the employee’s performance and creative relationship (Coelho and Augusto 2010). Some job characteristics, such as clarity, variety, autonomy, and significance, can encourage employees to become more creative and engaged with their jobs and achieve higher performance (Coelho and Augusto 2010; Mugo, Wario, and Odhiambo 2014; Shalley Zhou, and Oldham 2004).

Moreover, service climate in the organization has been shown to influence employee creativity and performance. A work environment in which ideas can be exchanged, job engagement is encouraged, and organizational resources are available can enhance employees’ creativity (Hunter, Bedell, and Mumford 2007). Likewise, service climate?characterized by supporting each other, sharing information, accepting and respecting the shared values, norms, and beliefs, and empowering employees?facilitates individuals to become more engaged with their work, thereby boosting their creativity and performance (Stanley 2016).

The conceptual model below explains the direct effect explaining that the effect of engagement (x) is mediated by Creativity (m). This model explains the moderated mediation effect which is introduced by James and Brett (1984) “moderated mediation” for the condition where a moderator influences the mediational relationship. This study explains that job characteristic and nature of an independent variable role as the moderator affects the mediation relationship.

In the given moderate mediation model the employee creativity has been taken as the moderator which affects the employee engagement and overall relationship with other factors such as performance, job characteristics and nature (Albrech, 2011).  Considering the following model, the job characteristics and the nature of the job such as autonomy, and accountability and empowerment I (Schaufeli, & Salanova, 2007).  These job characteristics and nature such as work environment in terms of colleagues, work pressure, attitude of people, climate, all these things have an impact on the employee’s engagement in the company, for example, if an employee is not satisfied with the work culture, or if in case he is not content with the work pressure, the employee will experience his detachment from the company (Hui, et al. 2007).  The employee will be less engaged in social gatherings pertaining to business as well as will not be able to engage himself within the work culture given his job characteristics. Similarly, the employee engagement, then affects the overall employee performance and employee creativity (Zhang, and Bartol, 2010).  A less engaged employee will be less bothered with the company policies and work culture. He will fail to bring his creativity to surface which could help him come up with creative solutions and decision making capabilities. The lost creativity will also eventually impact the performance negatively. Therefore, with this model it can be understood that there is mediation effect of creativity and job characteristics on employee performance and employee engagement. 

Figure 1. Conceptual model

The concept of job engagement has been defined in many ways. According to Gallup (2013), engagement refers to individuals’ willingness to display a positive manner, a level of commitment, and enthusiasm in the organization. It has been suggested that an employee who is engaged with the organization will become loyal, satisfied, empowered, and passionate. The employee who expresses feelings in the work environment tends to achieve a higher level of efficiency, retention, and productivity (Silverthorn 2001; Truss et al. 2006). Engaged employees feel obligated to their organization, so they put more effort to do their work-related duty to accomplish their own professional improvement, commitment, teamwork, and superb quality of performance (Paulsen et al. 2013; Shantz et al. 2013).

Creativity has drawn the attention of many scholars and organizations. It is related to the generation of novel ideas focusing on individual attitudes towards the process, procedures, and services for effective organizational outcomes (Amabile 1988, 2012; Ellsworth 2002; Oldman and Cummings 1996; Zhang and Bartol 2010). The usefulness of the idea is important because, if novel ideas cannot be implemented and used for the purposes of achieving organizational goals, they are not beneficial for the organizations; thus, the idea must be novel and useful for the organization (Erez, and Nouri 2010). Creativity is individuals’ attitudes, through personality, and skills that can be used to solve problems (Darley, Glucksberg, and Kinchla 1986). To implement the marketing concept, frontline employees must successfully recognise and fulfil each specific customer need; therefore, frontline employees must develop a good understanding of “customer need knowledge” (CNK) (Homburg, Wieseke, and Torsten 2009). Providing knowledge to individual customers, generating customer satisfaction, and recognising customer needs and customer value rather than focusing on immediate sale are frontline employees’ responsibility (Homburg, Wieseke, and Torsten 2009).

In particular, employees in the services industry need to have superior knowledge of customers’ needs and increase their engagement with customers and firms to provide better service for customers and better outcomes for the company. Thus, they need to think more creatively and provide feasible options to help customers with purchase decisions and the ability to identify and react to customers’ needs—even before customers verbalize them (Homburg, Wieseke, and Torsten 2009; Wilder, Collier, and Barnes 2014). According to Mumford (2000) and Dudeck and Hall (1991) the need of knowledge method is essential for creativity, but employees must have required skills to apply the knowledge method to help customers, as employees with greater repertoire of skill helps them to come with solution faster.

 Creative employees must tolerate ambiguity, be interested in earning, have substantial self- confidence, and being open and flexible, be independent, follow their own ideas without being concerned about social judgement and expectations for stereotype behaviour (Barron and Harrington1981; Dudeck and Hall 1991).

Employee engagement can trigger and strengthen attitudes, behaviours, and outcomes (MacLeod and Clark 2009). Specifically, engaged employees have a greater tendency to find creative ways to do their job and be effective because they are willing to exhibit higher task performance and stay at the organization longer to achieve its goals (Al Mehrzi and Singh 2016). These employees are more likely to be involved in discretionary behaviours that can positively impact employee creativity and performance (Saks 2006; Shuck and Wollard 2010; Stanley 2016). Employees engaged in work activities may generate various creative ideas (Delery and Shaw 2001; Gilson and Shalley 2004; Hartel, Schmidt, and Keyes 2003). Engaged employees find meaningfulness in their creative work that increases their job satisfaction and job performance (Cohen, Carmeli, and Waldman 2009).

Frontline employees who need to be fully engaged with their tasks and improvise creativity in the service delivery processes tend to experience uncertainty and unexpected situations. For example, when customers experience product variety and acquire extensive information about products or services, they may become confused, frustrated, and stressed about their choice and the decision they need to make; the way frontline service employees react and present the information increases customer satisfaction and the possibility of purchasing the product (Huffman and Khan 1998). Consequently, frontline employees who have a high level of engagement and enthusiasm for their work are aware of the uncertainties, so they use their creativity to establish a better solution for customers to achieve organizational financial success (Schneider, Macey, and Barbera 2009). Engaged employees can improvise and use their creativity to find solutions for customers. They can then turn unsatisfied customer into satisfied ones (Huffman and Khan 1998). Research shows that the creativity of frontline employees influences customer satisfaction and loyalty as well as service quality (Benjamin and Sopadjieva 2017). Accordingly, the following hypothesis is constructed:

Hypothesis 1: Work engagement of frontline service employees is positively related to their creativity.

Job performance refers to employees’ behaviour towards the organization, customers, and co-workers to achieve organizational goals (Bettencourt and Brown 1997). Employee performance has two aspects: in-role and extra-role performance. In-role performance refers to all the formal roles that employees are required to accept and perform once they start working in the company. Therefore, it has significant impacts on the firm’s financial outcomes (Mackenzie, Podsakoff, and Ahearne 1998). Extra-role performance is related to not-prescribed job requirements that employees fulfil (Bettencourt and Brown 1997) and extends to the broader knowledge of the job, such as prosocial behaviour (Mackenzie, Podsakoff, and Ahearne 1998). Such behaviours, including cooperating with colleagues, protecting organizations from unexpected events or dangers, participating in organizational improvements, helping clients, and taking voluntary assignments (Brief and Motowidlo 1986), occur when employees are highly engaged with their job (Katz 1964). Employees’ extra-role performance can maximise full performance and achieve organizational goals (Ariani 2013) by creating a positive organizational image (Aldrich and Herker 1977). Borman and Motowidli’s (1997) taxonomy of the contextual performance model summarises organizational citizenship behaviour (OCB) and prosocial organizational behaviour (POB). They explain that the differences between OCB and POB are that POB can be in-role performance or extra-role performance while OCB is extra-role performance. POB can be negative for an organization; however, it can be positive for individuals. For example, helping colleagues with their personal problems benefits individuals, but individuals may fail to finish the task by the deadline. Borman and Motowidli’s taxonomy of the contextual performance scale is taken from other studies and was reworked for their studies.

Both in-role and extra-role performance are important for firms seeking to improve organizational effectiveness and financial success (Mackenzie, Podsakoff, and Ahearne 1998; Vandaele and Gemmel 2006). Researchers have indicated a positive effect of job engagement on employee performance (e.g., Chughati 2008; MacLeod and Clark 2009; Ibrahim and Falasi 2014; Shantz et al. 2013). Greater performance at work requires that employees not only perform their prescribed day-to-day roles, but also take further steps to be engaged with their job, going beyond their prescribed roles and out of their way to provide excellent service. Engaged employees display less deviant behaviour; instead, they tend to behave in a more positive way as they feel indebted to their organization. They are more obligated to do their duties and perform better (Shantz et al. 2013).

Evidently, the positive relationship between employee engagement and job performance has been well documented in the literature. Employees with a higher level of engagement and whose job is a central tenet of their life tend to be more motivated to exert their efforts to perform better (Chughati 2008; Mone et al. 2011; Truss et al. 2013). These employees display more care and concern about their job, feel satisfied and good about themselves and their job, and perform better (Kanungo 1982; Lodahl and Kenjer 1965). They have strong beliefs in organizational values and goals and exert efforts to act on behalf of their organization, which results in increasing job satisfaction and performance (Ibrahim and Falasi 2014). Organizational performance can reach the highest levels not only when employees perform their required tasks, but also when they are engaged in other behaviours that go beyond their prescribed role (Katz and Khan 1978).

Nonetheless, the constructs’ relationships have seldom been examined simultaneously in the service contexts. For example, Zhou and George (2001) chose 149 office employees from a company that manufactures petroleum drilling equipment. The employees engaged in all types of jobs (e.g., human resource generalist, product coordinator, marketing, engineer). The questionnaire was distributed through a company mailing, and data were collected from employees and supervisors. Zhou and George (2001) found that creativity is the result of job satisfaction when expressing voice as an element of dissatisfaction exist. They further found that dissatisfied employees who are committed to the organization do not leave the organization; rather, they remain and have the potential to use their creativity to express their dissatisfaction to get positive feedback. In addition, receiving positive feedback increases employees’ confidence that their creative ideas are supported and accepted by co-workers and supervisors.

Scott and Bruce (1997) examined a sample of engineers, statisticians, and technicians in a large centralized R&D facility of a major U.S. industrial corporation. Initially they conducted interviews with the vice president and directors of R&D. Questionnaires were conducted via company email to determine how employees view innovation and whether the organization plays a role in improving the innovation process. Initially, 22 employees were interviewed, but 189 questionnaires were received, which is an 85 percent response rate. The second questionnaire was completed by all 26 managers. In this study, the authors developed a model in which leadership, work group relations, and individual attributes would affect the innovative behaviour directly and indirectly via climate perception. They found that leadership, managerial role expectations, support for innovation, career stage, and systematic problem-solving style were significantly related to individuals’ innovative behaviour.

Gong et al. (2009) examined an insurance company in Taiwan. The authors stated that, although creativity was not related to one particular job, they examined only an insurance company because their sales function and marketing provide a real-world explanation of creative performance. Initially, they conducted a focus group to identify the creative aspects of the job. Their main study design involved selecting 277 insurance agents out of 554 on the list. The goal of this study was to identify the relationship between employee creativity and performance in a corporate setting, define the effect of leadership on employees’ learning orientation and creativity, and assess employees’ self-efficiency as a mediator or employee learning orientation on employee creativity. In Taiwan, the motivation for self-improvement is higher and stronger than in Western countries, which was why the authors focused on Taiwan. They have found that employees’ learning orientation is more likely to improve their creativity. They also found that the mediating role of creative self-efficacy will impact employees’ learning orientation and transformational leadership will impact employees’ creativity.

Zeithaml, Parasuraman, and Berry (1990) maintained that job performance mostly relies on frontline employees’ creative thinking and new idea generation to provide better service to meet customers’ needs. Creativity is considered an individual personality trait that an individual uses for problem-solving and that shapes the habit of thoughts and attitudes, which then influences the individual’s performance (Baer 1991). Job performance indicates individual and organizational success, and creative process engagement is the main component of achieving high performance (Gilson, Shalley 2004; Ng et al. 2005). Being engaged with work and the process of doing the task increases employees’ creativity because it allows employees to think about and deal with tasks creativity to create better solutions to the problem and novel ideas than can be useful for the organization (Zhang and Bartol 2010). Engagement with a job that requires creativity means that employees must use their knowledge and, skills; this will take more time and effort, which will lead to a higher level of in-role performance (Du, Zhang, and Chen 2016). Providing support for employees, such as giving them information, advise, and resources, increases employee job efficiency, which helps activate employees’ creative process engagement to achieve high performance (Du, Zhang, and Chen 2016). Job engagement is closely related to individual employees’ strong commitment and responsibility for their performance (Du, Zhang, and Chen 2016).

Referring to the moderated mediating effects, there must be a partial effect of creativity as mediator on the result or the partial effect of the creativity as mediator depends on job characteristic and nature as a moderator, so in this condition there should be a complete effect on creativity as mediator. Consequently, the moderated mediating effect explains the indirect effect of moderate between the constructs can change the outcome (Muller, Judd, and Yzerbyt 2005). The indirect effect of creativity on the job characteristics and performance is seen using an intrinsic motivation point of view. When an employee is internally motivated because of the job characteristics and job roles and nature, the employee will eventually be internally motivated to further improve performance and to bring creativity in decision making and application of processes (Oldham and Cummings 1996). The cognitive theory aspect argues that the environmental factors control an employee’s performance (Shalley, Zhou, and Oldham 2004). Out of all other job characteristics, autonomy has been studied extensively in order to understand the impact of autonomy on internal motivation and how the job characteristics can affect the creativity and performance indirectly. However, According to Amabile et al., (1996 ) in their study explains the autonomy has less importance in promoting employee creativity, though it largely impacts the performance.  However, the positive relationship of autonomous job role with creativity in work obtained in the study highlights the thought process that in order to be creative and to improve performance the employees need a significant amount of,  prudence on the implementation of their tasks for producing the innovative outcomes (Shalley and Gilson 2004). The front line employees need to stay updated to attract the quality guests for their services, they are the faces of any company and in order to channelize the people towards the company, they need to have a voice in how they can bring value by changing things around. They need to venture into bringing new, creative and innovative ideas (Coelho, Augusto, & Lages, 2011).  Furthermore, it seems possible that a job with variety of skills and roles might prove more inspiring which might allow the development of proficiencies, however, only if the diverse skills are exercised within the job role regardless of the autonomous role. Autonomy has an extensive impact on the identity. However, in case of low task identity, the relationship between autonomy and creativity is unidentified (Bakker, 2011).

The characteristic has important impact on employee creativity.

According to Oldman and Cummings (1996), employees achieve a higher level of creativity and performance when they have supportive supervisors and work on complicated tasks. In other words, job that are more complex, meaning they are rich in identity, variety, autonomy, and feedback, increase employee motivation and excitement for creativity (Shalley, Zhou, and Oldham 2004). Oldham and Cummings (1996) claim that Job complexity has significant effect on employee creativity. When employees have more complex and challenging job rather than simple routine task, they have greater tendency to develop creativity. For instance, frontline service employees have more chance of having direct contact with customers, so, their job require more variety and skill compare to employee who is working as a back office worker who has less interaction with customers (Oldham and Cummings, 1996). Wang and Chen (2010) stated that employees with more job complexity have higher level of creative role identity. Shally, Gilson, and Blum (2009) found in their study operating a survey of 1430 workers in the Unites State that job complexity increases employee creative performance.

Coelho and Augusto (2010) and Coelho, Augusto, and Lages (2011) also observed that other characteristics, such as management practice, role stressor, variety, and feedback, have moderating effects on the relationship between employee creativity and performance.

In particular, frontline service employees are often required to be creative to perform their jobs that are no routine and unstructured (Coelho and Augusto 2010). Frontline employees are involved in dealing with customers with different needs and wants. Therefore, they need to be able to discover customers’ needs better, and the job performance of such employees is highly dependent on their ability to deliver quality service creatively, which is a characteristic of frontline employees’ jobs (Coelho and Augusto 2010). As one of the work environment dimensions, contextual job characteristics (e.g., time deadline and goals, work setting configuration, relationships with co-workers, rewards, leaders, evaluation, and work setting) potentially influence employees’ creativity (Shalley, Zhou, and Oldham 2004). Job characteristics affect employees’ intrinsic motivation as individuals are excited about their work and become engaged in the task not only for the sake of doing the task (Utman 1997). For challenging work, employees need to invest more efforts into achieving self-satisfaction and meeting organizational goals by accomplishing their tasks successfully (Orpen 1994). When employees fulfil the difficult, complex job, they feel capable and valued. Therefore, they are more likely to be motivated to do more tasks for the organization, which in turn increases their identification, involvement with, and sense of belonging to the firm (Cohen, Carmeli, and Waldman 2009).

  Previous studies have shown that work characteristics are closely linked to employee creativity and job performance (Scott 1996; Sim, Szilagyi, and Keller 1976). Schneider and Bowen (1985) stated that delivering the service occurs when customers are in contact with employees; thus, employees’ attitudes (service encounter) influence customers’ perceptions. Employees’ attitudes towards customers are essential because if customers experience positive emotion they will be content, happy, impressed, and pleased; if they experience negative emotions with the poor service, they will be disgusted, frustrated, disappointed, and angry (Lovelock, Patterson, and Wirtz 2011). Thus, customers’ experience is important because consumers will remember any memorable experience, which can build or destroy the trust between the company and its customers (Lovelock, Patterson, and Wirtz 2011).

In the context of services, some jobs require more creativity and engagement than others, depending on the degree of customer contact. For example, high contact services (e.g., hairdressers, education, and medical services) include jobs in which customers are very involved with organizations and are in contact with service organizations in person (Lovelock, Patterson, and Wirtz 2011). On the other hand, low contact services such as home shopping through the internet requires employees to provide very limited physical contact. The greater the personal interaction and customization are in the service delivery, the greater engagement and creativity the job requires.

Therefore, it is presumable that the linkage of employee creativity to job performance is subject to the nature of the job. Employees may often use their creativity to perform their job and find a better solution to solve problems, thereby increasing the levels of effectiveness and efficiency (Reaves 2015; Shalley 2008). Although job performance and employee creativity are closely linked in many cases (Reaves 2015), some jobs require more creativity than others.

Hypothesis 3a: Job characteristics (the degree of customer contact) moderate the relationships between employees’ creativity and job performance.

Moderated mediation effect of employee engagement and performance In the study conducted by Saks and Robinson the findings show that employee engagement is closely linked to the innovative and creative behaviour of employees. According to the study is has been identified that the frontline employees being engaged to their work adds value to their performance and job role. Furthermore, the study demonstrates that the job role, job autonomy, and strategic attention are all significantly related to employee engagement. It has been studied from the literature review that it is the duty of the managers to create and manage an engaged workforce (Korschun, Bhattacharya, & Swain, 2014).  Therefore, it is crucial for the managers to note that engagement is a chief driver of innovative behaviour. For frontline managers to perform efficiently and effectively by engaging themselves in their job roles and characteristics and it has been said, that the employee engagement is the base for improved employee and organizational performance and creativity (Saks, 2006; Robinson et al., 2004). Another study reveals that there is a relationship between the employee engagement and employee creative and innovative behaviour. It was concluded that it has a significant percentage of impact that is 37.7 percent on the performance and creativity (Slåtten, & Mehmetoglu, 2011). The results of the study show and supports the theory of broadening and build. This theory states that if a person has a positive state of mind, it will broaden the person’s thoughts as well, which will have a mediatory impact on the performance (Miles, 2000; Wong and Ladkin, 2008).

Organizational culture is defined as the system, ensuring that individuals within the organization have mutual communication and understanding of its shared values, beliefs, and norms (Matins and Terblanche 2003). Every organization has a different culture, and its leaders are responsible for creating a work environment in which employees are engaged with their work (Taylor 2017). Organizational culture is a useful tool not only for learning and improve employees’ skills, but also valuing, trusting, and supporting employees (Levine 2017). Organizational culture has a positive influence on employee productivity (Martins and Terblanche 2003; Martin, and Siehl 1990) because trust, integrity, knowledge about work, the right people, better use of skills, good teamwork, and work orientation shared between individuals can be seen as the right organizational culture (Akin and Hopelain 1986; Jossy 2007).

Service climate is the organizational culture in which individuals share views and perceptions about organizational practices, policies, and procedures that are expected, supported, and rewarded and that impact employees’ involvement and commitment (Holt 1993; Patterson, Warr, and West 2004; Schneider, White, and Paul 1998). Employees’ shared values, norms, beliefs, and behaviours as well as a supportive and flexible team are some examples of service climate (Johnson 1996; Jong, Ruyter, and Lemmink 2004).

Service climate is critical for boosting creativity, engagement, and performance. To enhance creativity, it is important for the firm to have a service climate encouraging support, freedom, challenge, openness, and tolerance of uncertainty (Ekvall and Ryhammar 1999). Service climate also influences organizational outcomes (Amabile et al. 1996; Ekvall and Ryhammar 1996; Ismail 2005). Lin and Liu (2012) found that supervisory encouragement, work group support, sufficient resources, and challenging work are the stimulating factors supporting creativity and performance in a service climate.

Frontline service employees are responsible for the delivery of excellent services and engage in some discretionary behaviour as necessary, thereby representing organizational climate to their customers (Boshoff and Allen 2000). Some performance task-required deadlines and motivation give employee’s direction for drawing up a plan in a supportive service climate, where employees are empowered, rewarded, and inspired; as a result, frontline employee performance increases and they can give customers the best possible service (Hui et al. 2007). The service climate should assist employees by providing training and information to employees to display excellent performance (Schneider, White, and Paul 1998).

Employee Empowerment as an important factor in service climate

People usually desire to have control over the situations, their own physical, and social environment (Burger 1992). A strong service climate is more essential in service organizations than in manufacturing organizations because service organizations’ workers operate on their own, they have a face to face relation with customers, thus, it is impossible for managers to observe and correct the service workers (Schneider and Bowen 1995).

Bowen and Lawler (1992) claim that service climate of organization must allow service workers’ independence as the performance of their job increase. Organization to a higher level of service climate give authority to service workers to exercise self- direction and self- management in different situations (Yagil and Gal, 2002).   Kelly (1993) urges that a strong service climate or organizational culture conveys employees to the proper means of task performance while weak organizational culture manages service encounter through bureaucratic rules and decrease service encounter control (Bateson 1995). Service workers give better service, and satisfy customers more than they have some control (empowered) over service encounter and customers are more satisfied when their problems can be solved over service encounter and meet their needs (Bateson 1985). Stewart et al. (1996) states that service workers who were trained for self-direction have better results in performance of low consciousness.

Empowerment needs employees to engage in discretionary behaviour in an effort to help customers meet their expectations during routine and non-routine conditions (Klidas, Berg, and Wilderson 2007). Empowerment gives employees the authority to be independent when it comes to decision making, taking the initiative, and being creative (Klidas, Berg, and Wilderson 2007). Examples include taking immediate action to solve a customer’s complaint even when the complaint is not related to the area of employees’ responsibility, making financial decisions (e.g., giving customers a discount), using creativity, and doing whatever it takes to enhance customer satisfaction (Brymer 1991; Jones, Tylor, and Nickson 1997; Lashley 1997). According to Bowen and Lawler (1992), the benefit of empowering employees is that customers want quick responses to their issues and do not really want to hear that something is “against the rules”; therefore, empowering employees increases the chances of a situation in which spontaneous, creative rule-breaking occurs that can turn an angry and frustrated customer into a satisfied and content customer. Stander and Rothmann (2010) identified a significant relationship among employee empowerment, job security, and engagement. Empowering employees decreases stress and increases innovative behaviour, leading employees to believe in themselves and increasing their engagement at work. Yao, Chen, and Gouliang (2013) found that empowerment has a significant positive effect on employees’ task performance and loyalty, mediated by employees’ satisfaction.  

Hypothesis 3b: Service climate moderates the relationship between employee engagement and job performance.

Service employees or frontline employees are critical assets to the organization because they have a direct relationship with customers and can influence customers’ loyalty and perception about the organization. Frontline employees’ creativity and engagement are essential, especially if the job requires more creativity and engagement, because they have a significant impact on performance. Many jobs require creativity, whether they are small firms or big; they still need to use employees’ creativity to address any uncertainty that happens in the workplace. Thus, providing better employee training, encouraging and motivating them to be engaging and creative in their workplace, increases the chance of achieving organizational profit and goals. Employees’ opinions about the organization’s service climate influences consumers’ opinions about the quality of service, thus, customer behaviour for the quality of service and their purchase behaviour are related to employees’ opinion about the service climate (Soterious and Zenios 1999). Consequently, the service climate is important for tying the employees to the organization and enhancing employees’ engagement, creativity, and performance.

Conclusion

Employee creativity and engagement and their job performance are important for firms to survive in today’s volatile, complex, competitive, and dynamic marketplace. Successful firms tend to foster an environment in which creative behaviour and job engagement are stimulated and supported (Stanley 2016). Despite the importance of employee creativity and engagement in achieving job performance at a workplace, previous studies have overlooked how these two constructs together affect employee performance in the context of services. Nevertheless, little is known about whether their relationships are subject to the level of service encounter (high versus low customer contacts). In this sense, this investigation is timely and important for managers striving to enhance frontline employees’ job performance.

Engaged employees tend to have greater motivation to achieve organizational goals because their job is the center of their lives; if employees are satisfied, they are more willing to exert effort to perform on behalf of the organization. Being engaged, motivated psychologically, and encouraged, employees tend to become more creative and perform better to gain organizational profit and customer satisfaction. Employee engagement, performance, and creativity flourish under the right conditions, such as organizational culture and climate. In an appropriate and healthy culture and climate, empowered frontline employees will be better able to help customers, especially those having a harder time, than employees who are not empowered because they feel less responsible.

This paper is conceptual paper, therefore for future study, we recommend to test this model and investigate whether the hypotheses of this study are accepted or not. We believe culture of the company affects the relationship between employees and customers, how cultural differences can change the result of this study. In the study conducted through review research, the importance of creativity is discussed along with the mediating impact of creativity on the performance. If the company culture shifts to a more collaborative type, it will all be about the self expression, the leaders, however, will permit and appreciate their followers’ creativity and out of the box thinking (Mark, 2018). If the culture shifts to competitive organizational culture, for employees in this type of culture, winning becomes utmost important. The results such as bringing creativity for overall development will change to bringing creativity in their own work to achieve their own success than by using the creativity to improve the overall work culture and environment to help everyone improve upon their productivity and performance. The leaders, however, will focus on team achievements as well. If the organization has a controlled culture, it demands the right order and alignment of item basis the clear objectives and instruction, in this type of culture there is a lesser room for personal creativity the moderating effect of strictly abiding by the rules and stated goal sheets on the employee performance will be there (Branislav, 2017).

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