The influence of internal service quality and employee satisfaction on organizational commitment in travel agencies: The case of Serbia

Goran Perić^1* , Sandra Dramićanin², Nebojša Pavlović²

¹Academy of Professional Studies South Serbia, Blace, Serbia
²University of Kragujevac, Faculty of  Hotel Management and Tourism in Vrnjačka Banja, Serbia

Abstract: The aim of the research is to observe the influence of internal service quality and employee satisfaction on organizational commitment of employees in travel agencies. A sample of 150 respondents employed in travel agencies in Serbia was surveyed in April 2020, using the questionnaire technique and validated instruments: a modified SERVQAL model, Job Satisfaction Survey (JSS) and Organizational Commitment Questionnaire (OCQ). The influence of internal service quality and employee satisfaction on organizational commitment in travel agencies was tested using multiple regression. Research findings have indicated that the increase in internal service quality and employee satisfaction is accompanied by an increase in organizational commitment of employees in travel agencies. Finally, the results, implications and limitations are presented, and future research recommendations are specified.

Keywords: internal service quality, employee satisfaction, organizational commitment
JEL klasifikacija: D23, J28, Z32

Uticaj internog kvaliteta usluga i zadovoljstva zaposlenih na organizacionu posvećenost u turističkim agencijama: Primer Srbije

Sažetak: Svrha ove studije je da ispita uticaj internog kvaliteta usluga i zadovoljstva zaposlenih na organizacionu posvećenost zaposlenih u turističkim agencijama. Istraživanje je sprovedeno u aprilu mesecu 2020. godine na uzorku od 150 ispitanika zaposlenih u turističkim agencijama u Srbiji, tehnikom upitnika, primenom validiranih instrumenata: modifikovanog SERVQAL modela za merenje internog kvaliteta usluga, upitnika za merenje zadovoljstva poslom (JSS) i upitnika za merenje organizacione posvećenosti (OCQ). Uticaj internog kvaliteta usluga i zadovoljstva zaposlenih na posvećenost zaposlenih u turističkim agencijama testiran je pomoću višestruke regresije, a nalazi istraživanja ukazuju da porast internog kvaliteta usluga i zadovoljstva zaposlenih prati povećanje organizacione posvećenosti zaposlenih u turističkim agencijama. Na kraju su diskutovani rezultati, predočene implikacije, navedena ograničenja studije i smernice za buduća istraživanja.

Klјučne reči: interni kvalitet usluga, zadovoljstvo zaposlenih, organizaciona posvećenost
JEL klasifikacija: D23, J28, Z32

1. Introduction

Tourism is one of the few economic activities that largely depend on human resources (Milićević & Petrović, 2018). The specifics of human resources in hospitality and tourism are reflected in the fact that their role is crucial in every business segment, bearing in mind that almost no relationship in the value chain can be fully automated and function without human resources (Hady & Chible, 2018; Marinković Matović & Vemić Đurković, 2020). Bearing in mind that employees in tourism and hospitality have direct contact with final consumers, their treatment of consumers directly affects the perception of the quality of services provided ( Malhotra & Mukherjee, 2004 ). Travel agencies generally always use personal services and contacts when selling travel arrangements, create arrangements tailored to the needs and desires of consumers, and use their contacts with hotels, airlines and other complementary activities to create and deliver travel arrangements. Consequently, employees in travel agencies are considered the most crucial critical factors in the business of travel agencies. (Hady & Chible, 2018; Hefny, 2020; Pavlović & Simic, 2019). They are the most valuable resource, and the bearers of providing quality services, creating innovation and added value, and increasing business (Perić et al., 2018). Therefore, they represent a very important factor in creating a competitive advantage of a travel agency (Sandybayev & Houjeir, 2018; Vučetić, 2012). The success of a travel agency is not measured exclusively by the realized profit, but also by satisfying the interests of owners and employees, as well as customers (Gajić et al., 2014). In this sense, employees in travel agencies have a dual role, on one hand as service providers for end customers, and on the other hand as service providers for internal customers who receive services from other organizational units or employees (Maharani et al., 2020). Satisfying internal customers or employees is a prerequisite for the successful condition of quality services to end customers (Chen et al., 2012; Chiang & Wu, 2014). Highly satisfied and enthusiastic employees in travel agencies offer high level of service quality to final customers (Hefny, 2020). More precisely, understanding the correlation between internal service quality, employee satisfaction and organizational commitment is especially important in hospitality and tourism, which depends on employees, human resources and direct contact with customers (Bai et al., 2006; Dramićanin, 2019; Yeshanew & Kaur, 2018).
Providing internal services emphasizes the achievement of efficient internal exchange between the organization and its employees, which ultimately contributes to the positive results of the organization (Sharma et al., 2016 ). Therefore, the internal quality of services plays an important role in employee satisfaction, productivity and loyalty of final consumers (Akroush et al., 2013 ; Prakash & Srivastava, 2019 ), because the internal quality of services is related to the services provided within the organization and aims to provide quality services to final consumers (Brandon-Jones & Silvestro, 2010 ). Internal service quality, regardless of its growing importance, has been insufficiently researched in tourism. Empirical confirmation of the perception of employees about the internal service quality is limited. Namely, only  few studies have investigated the link among employee satisfaction, internal service quality and organizational commitment (Al-Ababneh et al., 2018; Bai et al., 2006). There are studies in tourism that have studied the link between employee satisfaction and organizational commitment (Blešić et al., 2017; Ozturk et al., 2014; Vujičić et al., 2015), but an insufficient number of them have studied the fundamental relationship, especially in travel agencies (Hefny, 2020). Specifically, the fact that one variable correlates with another does not mean that the first causes the other. In accordance with the above, the aim of the research is to observe the influence of internal service quality and employee satisfaction on organizational commitment of employees in travel agencies.

2. Theoretical background

2.1. Internal service quality

The concept of internal marketing began to develop in the early 70s of the last century, primarily as a way to achieve quality service (Joung et al., 2015). However, despite the growing popularity in science, the concept of internal marketing is not sufficiently applied in practice (Alhakimi & Alhariryb, 2014; Roknić & First Komen, 2015). Internal marketing is defined as “the application of marketing theory and practice in serving external consumers in a way that includes hiring and retaining the best staff and their willingness to do job in the best way” (Berry et al., 1976 as cited in Zdjelarić et al., 2017, p. 116). Attracting the right people, as well as maintaining good long-term relationships with them, is a cornerstone of the construction of internal marketing. Internal marketing is a constituent part of organization and is a most important trigger of internal service quality and external customer satisfaction (Akroush et al., 2013). Managers in the hospitality and tourism sector have an issue to offer internal service quality. Internal service quality is one of the basic preconditions for the understanding of organizational goals in the global hospitality and tourism market (Redžić, 2018).
Researchers Sasser and Arbeit (1976) use the term “internal service quality” to focus on employees they treated as internal consumers. Employees provide internal services to other employees working in th same organization (Stauss, 1995). The proposal of ​​internal services arose from an internal marketing perspective, which views staff as internal consumers and suggests to the organization that get-together their needs will help realize organizational goals (Sharma et al., 2016). Thus, internal service quality is decided as the professed service quality provided by particular organizational departments or employees working in them, other organizational departments, and employees in the organization (Back et al., 2011; Stauss, 1995). Dužević et al. (2014) point out that those employees in service organizations are internal customers in the service quality sequence and represent a very important connection. On the other hand, meeting the internal customers’ needs in a service sector, such as tourism, is a prerequisite for providing quality service to final consumers (Chen et al., 2012; Chiang & Wu, 2014). To be precise, the establishment of a philosophy that emphasizes the internal consumers or employees’ well-being can serve as a means of lure and retention of final consumers (Skarpeta et al., 2019). Service quality is incorporated into the quality and performance of employees (Bansal et al., 2001), however, Jun and Cai (2010) state that an organization cannot meet the final customers’ requirements devoid of taking into account the expectations of internal customers. It is compatible with the postulation of the “Service-Profit Chain” built by Harvard professors (Heskett et al., 1994).

2.2. Employee satisfaction

Researchers have different approaches to defining the concept of employee satisfaction. There is no general agreement and, therefore, there is a large number of definitions of employee satisfaction in the literature (Gautam et al., 2006). “Employee satisfaction is a combination of psychological or environmental factors that influence employees to be satisfied with their job” (Hoppock, 1935 as cited in Mirković & Čekrlija, 2015, p. 214). Also, Locke (1976) defines “employee satisfaction as a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences” (p. 1304), while according to Spector (1997) “employee satisfaction can be considered as a global feeling about the job or as a related constellation of attitudes about various aspects or facets of the job” (p. 2). The same author identifies nine aspects or facets of job important to employee satisfaction as follows: “pay and remuneration, promotion opportunities, supervision, monetary and nonmonetary benefits, contingent rewards, organization policies and procedures, co-workers, nature of work itself, and communication” (Spector, 1997, p. 8). An organization must understand the importance of both the satisfaction with certain facets of the job that engaged in the individual, but also their expectations from that job (Janićijević, 2008).
Employee satisfaction is mainly imperative in hospitality and tourism, primarily because customer retention and service quality depend on direct contact with employees (Vujičić et al., 2015). Employees have expectations about how to meet their needs and desires (Jevtić et al., 2020). An organization with a built organizational culture and identity affects employee satisfaction and the intention of employees to remain in the organization (Ognjanović, 2017) Consequently, employee satisfaction is the most important issue facing hospitality and tourism (Matzler & Renzl, 2007). This opinion is definite by some of the earlier studies that indicated that service organizations should pay special attention to employee satisfaction (Boshoff & Tait, 1996; Heskett et al., 1994; Rust et al., 1996). Numerous studies have found that employee satisfaction is connected with a diversity of positive outcomes, starting with organizational commitment and employee retention (De Sousa Sabbagha et al., 2018; Pavlović et al., 2020; Rose & Raja, 2016; Valaei & Rezaei, 2016), through service quality and satisfied consumers (Chi & Gursoy, 2009; Jung & Yoon, 2013; Perić et al., 2018), increased competitiveness and market share (Resurreccion, 2012; Sandhya & Kumar, 2014) all the way to profitability (Singh et al., 2016; Singh et al., 2017; Yee et al., 2008).

2.3. Organizational commitment

In management and organizational behavior, “organizational commitment is an influential variable in an organization and is conceived as a pattern of behavior, a set of behavioral intentions, a motivating force, or an attitude” (Chiu et al., 2020, p. 108). The particularly important form of attitudes in the organization is an organizational commitment; it determines the connection of employees with their organization, which can significantly affect their work performance (Abdullah et al., 2020; Atmojo, 2012; Sharma et al., 2016). Porter et al. (1974) describe organizational commitment as “a strong belief and acceptance of the goals of an organization, a willingness to make a significant effort for the benefit of the organization, and a definite desire to retain membership in the organization” (p. 604). Similarly, Bateman and Strasser (1984) view commitment as “multidimensional in nature that includes employee loyalty to the organization, willingness to make an effort, the degree to which goals and values ​​match the organization, and the desire to remain in the organization” (p. 95). Therefore, organizational commitment includes three main characteristics: employee’s identification with the purpose and standards of the organization, a powerful tendency to participate in the activities of the organization, and high aspiration to belong to the organization.
Research of organizational commitment has developed significantly in the last few decades (Suzuki & Hur, 2020). Organizational commitment creates positive impact on motivation, employee satisfaction, productivity, performance and service quality (Akasoy et al., 2018; Atmojo, 2012; Dhar, 2015; Kale & Shimpi, 2020; Loan, 2020; Nguyen et al., 2020).

3. Conceptual framework and hypotheses development

3.1. Relationship between internal service quality and organizational commitment

Boshoff and Mels (1995) examine the link together with supervision, stress, organizational commitment, and internal quality service between insurance vendors, where research findings indicate that commitment of employees has a significant positive effect on internal quality service. The findings of most studies have proven the positive impact of internal quality service on organizational commitment (Abdullah et al., 2020; Bai et al., 2006; Sharma et al., 2016), while there are studies that have not proven the relationship between the observed variables (Ching et al., 2020; Maharani et al., 2020). Although the importance of internal service quality for service organizations is enormous, there are few studies in the tourism and hospitality sector that actually examine the link between internal service quality and organizational commitment. Bai et al. (2006) conducted a study among employees in the hotel sector of Las Vegas, on a sample of 800 respondents, and the results of the research confirmed that the internal quality of services and employee satisfaction have a significant positive impact on organizational commitment. Back et al. (2011) in their study of employees in Korean casinos examined the relationship among internal service quality, employee satisfaction, self-efficacy, organizational commitment, and self-esteem. The analysis was performed on 328 respondents, and the research findings have indicated that the internal quality of services has a positive effect on employee satisfaction and self-efficacy, while through employee satisfaction it affects organizational commitment and self-respect.

3.2.Relationship between employee satisfaction and organizational commitment

The link between employee satisfaction and organizational commitment has been generally considered, as recorded by a large number of research, especially in the hospitality and tourism sector (Abdullah et al., 2020; Bai et al., 2006; Blešić et al., 2017 ; Gunlu et al., 2010; Hefny, 2020; López-Cabarcos et al., 2015; Ozturk et al., 2014; Valaei & Rezaei, 2016; Vujičić et al., 2015 ). Vujičić et al. (2015) carried out a study between employees in the hospitality and tourism sector (hotels, travel agencies, and restaurants) in Serbia on a sample of 149 respondents, and the research result indicated a high positive correlation between employee satisfaction and commitment of employees. Blešić et al. (2017) did similar research among employees in the hotel industry and there was  a significant and positive correlation between the observed variables. On the other hand, Ozturk et al. (2014) conducted a survey in 17 high-end hotels in Turkey and found that employee satisfaction positively affects affective commitment. In her study on travel agency employees, Hefny (2020) explored the link between employee satisfaction and organizational commitment on a sample of 174 respondents, and the results showed that employee satisfaction has a positive influence on organizational commitment, i.e., that an advanced level of employee satisfaction raises organizational commitment.
The conceptual framework of the research is based on the above theoretical and empirical concepts of research and is illustrated in the following figure.

Figure 1: Conceptual framework of research

              Source: Author’s research

In the line with conceptual framework of the research, the following research hypotheses will be tested:
Internal service quality (H1) and employee satisfaction (H2) has a positive influence on organizational commitment.

4. Research methodology

4.1. Data collection and sampling

The study was done in April 2020 and the questionnaire technique was used. It was administered online and distributed via the social network Facebook and the appropriate sample method was used. Owners and employees of travel agencies in Serbia use closed groups on Facebook to exchange information. The sample consisted of 150 respondents, among whom there was no missing data. The following table shows the sample basic characteristics.

Table 1: Basic characteristics of the sample

            Source: Author’s research

The largest number of respondents in the sample are women 85 (56.67%), and more than half respondents are between 26 and 35 years of age (54.67%). Regarding the educational structure, most of the respondents have completed higher education (professional and academic studies), while more than half of the respondents have currently been working in a travel agency for 2 to 10 years.

4.2. Measurement

Measurement of the perception of internal quality of services was performed using the SERVQUAL model (Parasuraman et al., 1985), modified to determine the internal service quality, and based on the research of Kang et al. (2002), who confirmed that the adapted SERVQUAL model could assess the internal service quality (see Appendix 1). The previous research that has applied a customized SERVQUAL assessment model indicates that the instrument has high reliability and consistency (El Samen & Alshurideh, 2012; Gunawardane, 2009; Latif, 2016).
AJSS scale (see Appendix 2) developed in 1984 by Paul Spector, which contains 36 questions, measured employee satisfaction (Spector, 1997). It is an instrument that was primarily developed for the service sector, and which has found wide application in all areas. The instrument has a high internal consistency and validity, as evidenced by numerous studies (Li & Huang, 2017; Ogunkuade & Ojiji, 2018; Tsounis & Sarafis, 2018; Yelboğa, 2009).
The OCQ consists of 15 questions (see Appendix 3) and measures organizational commitment (Mowday et al., 1979). It is the most commonly used instrument for measuring organizational commitment, that performs high reliability and consistency (Hidalgo-Fernández et al., 2020; Kanning & Hill, 2013; Yousef, 2003).
Respondents used the instruments to review the questions using Likert scale (five-point). The Cronbach’s alpha coefficient measured reliability of the instruments and the findings (Table 2) indicate that all three instruments have a reliability over 0.7, which is above the recommended values (DeVellis, 2016).

Table 2: Results of reliability statistics

        Source: Author’s research

5. Research results

The following table shows the results.

Table 3: Results of descriptive statistics

        Source: Author’s research

The results indicate a moderate level of commitment of employees in travel agencies (M=3.53; SD=0.36), a high level of satisfaction with internal service quality (M=4.13; SD=0.56). The results also show that employees are moderately fulfilled with their work (M=3.34; SD=0.30), the results are on the border between ambivalence and satisfaction.
Pearson’s correlation was applied in order to examine the relations among organizational commitment, internal service quality and employee satisfaction in travel agencies. Table 4 presents the results.

Table 4: Results of correlations

  Note: ** p<0.001
 Source: Author’s research

The results show a significant, moderate and positive correlation between organizational commitment and internal service quality (r=0.423; p=0.00), as well as between organizational commitment and employee satisfaction (r=0.397; p=0.00).  The presence of multicollinearity is not observed.
Multiple regression was used for the observation of the influence of internal service quality and employee satisfaction on organizational commitment. In addition to multicollinearity, preliminary analysis examined the assumptions of normality, linearity, homoscedasticity, and the presence of multivariate extreme values. No violation of the assumptions for the use of multiple regression was observed. The following table shows the results of multiple regressions to conclude the predictive effect of internal service quality and employee satisfaction on organizational commitment.

Table 5: Results of multiple regression

Source: Author’s research

The model is statistically significant (R2=0.305, F(2.147=32.32; p=0.00), which shows that the employee satisfaction and internal service quality explain 30.5% of the variance of organizational commitment. The increase in the internal service quality (β=0.39; p=0.00) and employee satisfaction (β=0.36; p=0.00) is accompanied by an increase in organizational commitment. The overall statistical results indicate that the internal service quality and employee satisfaction have a positive influence on organizational commitment.

6. Discussion and conclusions

The study has examined the internal service quality, employee satisfaction, and commitment of employees in travel agencies in Serbia. The results of descriptive statistics demonstrate a very positive perception of employees about the internal service quality, while employee satisfaction is on the border between ambivalence and satisfaction, and organizational commitment is moderate. These findings are in agreement with various studies conducted in hospitality and tourism sector (Al-Ababneh et al., 2018; Bai et al., 2006; Blešić et al., 2017; Dramićanin, 2019; Vujičić et al., 2015 ).
The quality issue is the main challenge for service organizations, especially in the hospitality and tourism sector. The research findings indicate that internal quality is an important predictor of employee commitment, which is in accordance with the results obtained by researchers examining the relationship between these two variables (Abdullah et al., 2020 ; Bai et al., 2006; Sharma et al., 2016 ). The first hypothesis (H1) has been proven i.e. the internal service quality has a positive influence on organizational commitment; the increase in internal service quality is accompanied by an increase in employee commitment to travel agencies.
Furthermore, in addition to previous research whose findings propose that organizational commitment leads to employee satisfaction (Vandenberg & Lance, 1992 ; Bateman & Strasser, 1984 ), this research clearly ensures evidence that employee satisfaction is a predictor of organizational commitment, as evidenced by numerous studies conducted in hospitality and tourism sector (Bai et al., 2006; Blešić et al., 2017; Gunlu et al., 2010; Hefny, 2020; López-Cabarcos et al., 2015 ; Ozturk et al., 2014; Vujičić et al., 2015 ). The second research hypothesis (H2) has alse been proven, i.e. employee satisfaction has a positive effect on the organizational commitment of employees in travel agencies in Serbia.
Although internal service quality is an essential component in realizing a high level of employee commitment (Bai et al., 2006 ), the results of internal service quality and employee satisfaction reflect moderate employee commitment in travel agencies. As already mentioned, the findings of multiple regression have confirmed the influence of internal service quality and employee satisfaction on organizational commitment.

6.1. Managerial implications

An important concept in hospitality and tourism organizations is internal service quality, bearing in mind that it affects the commitment of employees, as well as providing high quality services to internal customers. Employees have a critical role in interaction with final customers, which is a prerequisite for quality service and is the ultimate goal of organizational success. Therefore, managers and owners of travel agencies have to recognize the significance of internal service quality and to establish appropriate mechanisms for its measurement, where monitoring is emphasized. In addition, management needs to find a way to advance internal service quality, at the individual and organizational unit level, bearing in mind that internal service quality is a critical issue in achieving a competitive advantage in the hospitality and tourism sector.
The imperative of organizations in hospitality and tourism should be to recognize the requirements and desires of their workers in order to improve their satisfaction and commitment. Employee satisfaction is a significant predictor of organizational commitment. In order for managers and owners of travel agencies to increase the level of commitment of their employees, they must focus on all aspects of employee satisfaction, from pay, promotion opportunities, supervision, monetary and nonmonetary benefits, policies and procedures to co-worker relations, nature of work itself, and communication. Also, the need for continuous assessment of employee satisfaction, and commitment by management is emphasized. Working in a travel agency is in itself a challenging and dynamic job, having in mind that it implies continuous communication, both with internal and external customers. Management must build good relations with employees, encourage creativity, give a certain degree of autonomy, as well as the opportunity for further development and advancement. The fairness of the reward system should certainly be emphasized because the perception of unfair distribution can negatively affect the satisfaction and commitment of employees.

6.2. Limitations and future research

Finally, it is necessary to state the imperfection of the research. Firstly, the research has been conducted only in travel agencies and does not provide grounds for some more general conclusions. It is necessary to look for empirical evidence in other hospitality and tourism organizations, in order to confirm the findings from this research. Secondly, when it comes to internal service quality, this study has only measured employees’ perceptions of internal service quality through a modified SEVRQUAL model, but Parasuraman et al. (1985) emphasized the significance of studying the gap between expectations and perception, as helpful implications for managers. Therefore, future research needs to focus on studying expectations and perceptions of internal service quality, as well as how the dimensions of internal service quality individually contribute to organizational commitment. It is also necessary to investigate how different factors of employee satisfaction affect organizational commitment, as well as how these concepts affect the service quality that employees provide to external customers / final consumers.

Conflict of interest

The authors declare no conflict of interest.

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Appendix 1: Internal service quality battery (Kang et al., 2002)

Appendix 2: Job Satisfaction Survey (Spector, 1997)

  Note: ® = reverse-coded item

Appendix 3: Organizational Commitment Questionnaire (Mowday et al., 1979)
  Note: ® = reverse-coded item

Received: 4 February 2021; Sent for revision: 13 April 2021; Accepted: 29 May 2021