Front- and back-end employee satisfaction during service transition

Scholars studying servitization argue that manufacturers moving into services need to develop new job roles or modify existing ones, which must be enacted by employees with the right mentality, skill sets, attitudes and capabilities. However, there is a paucity of empirical research on how such changes affect employee-level outcomes.

The authors theorize that job enrichment and role stress act as countervailing forces during the manufacturer's service transition, with implications for employee satisfaction. The authors test the hypotheses using a sample of 21,869 employees from 201 American manufacturers that declared revenues from services over a 10-year period.

The authors find an inverted U-shaped relationship between the firm's level of service infusion and individual employee satisfaction, which is flatter for front-end staff. This relationship differs in shape and/or magnitude between firms, highlighting the role of unobserved firm-level idiosyncratic factors.

Servitized manufacturers, especially those in the later stage of their transition (i.e. when services start to account for more than 50% of annual revenues), should try to ameliorate their employees' role-induced stress to counter a drop in satisfaction.

This is one of the first studies to examine systematically the relationship between servitization and individual employee satisfaction. It shows that back-end employees in manufacturing firms are considerably affected by an increasing emphasis on services, while past literature has almost exclusively been concerned with front-end staff.