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

1
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.

2
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 Sales
Help Help
Reservations Dispatch
Appointment Call Center Debt Collection
Order Appointment
Payment Sales Lead
999 Customer Data

Medium People Technology

• Voice • Customer Service • Call
• Fax Support agents Management
• Email • Center support • Database
• Internet staff • Voice
• Mail • Selling agents Recognition
• Experts • Call
• Internet/Intranet/ Distribution
Extranets
• Mail

3
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.

5
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%).

6
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.

8
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

11
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

15
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

18
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

20
 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.

21
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

23
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

25
 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

Expected Quality

Customer Gap 1

Perceived Quality Provider Gap 4

External Communications
Provider SERVICE DELIVERY to Customers
Gap 3
Provider Gap 3

SERVICE DESIGN &

STANDARDS

Provider Gap 2

Perceptions of Customer
Expectations

Source : Bienstock, DeMoranville and Smith (2003)

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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.

27
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

28
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

29
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

30
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) .

31
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

32
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)

33
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.

34
 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

35
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.

36
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.

37
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

INTRINSIC
H1 MOTIVATION H3

SERVICE SERVICE
CLIMATE QUALITY
ORGANIZATIONAL
H2 COMMITMENT H4

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.

38
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.

39
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.

40
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.

41
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.

42
 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.

43
 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

44
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.

45
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.

46
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,

47
 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 =

48
 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.

49
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.

50
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.

51
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.

52
 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.

53
Table 3 : Demographic Characteristics of Respondents

Detail Characteristics Frequency Percent (%)

Gender Male 38 19.4
Female 158 80.6
Total 196 100%
Age < 20 years or below 2 1.0
21 – 30 yrs 185 94.4
31 – 40 yrs 9 4.6
Total 196 100
Ethnic Malay 175 89.3
Indian 19 9.7
Others 2 1.0
Total 196 100
Highest Education level SPM 92 46.9
STPM 7 3.6
Certificate 7 3.6
Diploma 55 28.1
Bachelor Degree 35 17.9
Total 196 100
Tenure in organization Less than 2 years 139 70.9
Between 2 to 4 years 18 9.2
Between 4 to 6 years 29 14.8
More than 6 years 10 5.1
Total 196 100
Number of Companies worked for in 2 or less 167 85.2
the last 5 years 3-4 26 13.2
5 and above 15 1.5
Total 196 100
Employment Type Permanent 42 21.4
Part Time 1 0.5
Temporary 1 0.5
Contract 152 77.6
Total 196 100
Job Responsibility Sales and Marketing 17 8.7
Handling Inquiry 34 17.3
Complain Handling 141 71.9
Others 4 2.0
Total 196 100
Core Business Function Telecommunications 96 49.0
Electricity 99 50.5
Others 1 0.5
Total 196 100
Income RM1500 or less 155 79.1
RM1501 – RM3000 41 20.9
Total 196 100

54
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.

55
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.

56
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.

57
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.

58
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.

59
 • 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

60
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

61
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.

62
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 .

63
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

64
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.

65
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

66
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.

67
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.

68
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.

69
 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 .

70
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.

71
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.

72
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

73
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.

74
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.

75
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 Supported

center agents’ intrinsic motivation in Malaysia.
H2 Service Climate is positively related to the organizational Supported
commitment among call center agents in Malaysia.
H3 Intrinsic Motivation among call center agents is positively Supported
related to service quality delivered at the call centers.
H4 Organizational Commitment among call center agents is Supported
positively related to service quality in Malaysian Call
Centers
H5 Intrinsic Motivation of call center agents mediates the Supported
relationship between service climate and service quality at
call centers in Malaysia.
H6 Organizational Commitment of call center agents mediates Partial Supported
the relationship between service climate and service
quality at call centers in Malaysia

76
 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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QUESTIONNAIRE

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