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2007 Annual International CHRIE Conference & Exposition
186
Table 2
Results of the structural equation model analysis
*
Significant at
p
<.05.
**
Significant at
p
<.01.
The magnitude of direct and indirect effect that perceived justice had on satisfaction appeared to be in
descending order of distributive justice (.654), interactional justice (.346), and procedural justice (.059), where the
indirect effects to satisfaction through trust, commitment, and loyalty were the same order. This implies that when a
service provider in hotels encounters the problem of service breakdown, building satisfaction, trust, and commitment
through fair and adequate service recovery is of the utmost importance in maintaining a continuous customer
relationship.
In this study, the effect of distributive justice on satisfaction was found to be stronger than those of
interactional and procedural justice, which in turn implies that hotel employees should pay attention to solve any
conflict by offering appropriate monetary compensation (e.g., room upgrade, refund, discounts, coupon, etc.) to
unsatisfied guests. To proceed appropriate interactional justice, hotel staffs may be alerted to respond with offering
an apology, empathy, attentiveness, or courtesy and respect. Regarding the procedural justice, hotel employees must
keep in mind that timeliness and quickness of resolving conflicts and high customer voice. It was also confirmed
that trust had a stronger effect on loyalty than commitment. In the hotel industry, appropriate relationship marketing
is important to form a sound business relationship with the customer. Once satisfaction with service recovery is met,
trust builds confidence in the customer, so future behavior of the customer can be voluntary and positively geared
towards the company through revisit intention, WOM references, and recommendations.
Some more practical implications are suggested herewith. First, hotel management should make efforts to
train both full- and part-time employees to quickly and properly react to various situations of service failures. A
comprehensive training program can facilitate the appropriate level of compensation (room discount versus refund),
improving the interactional justice practice (via demonstrating empathy and attentiveness, and offering a genuine
apology), and reacting to customer problems quickly and in a timely manner. Hotel managers should consider
suitable rewards and recognition for employees’ exemplary recovery efforts to stimulate their voluntary participation
(Karatepe, 2006). Second, guest contact employees should be empowered in such a way to provide a quick recovery
resolution for service breakdown. It is important for hotels to incorporate the empowerment and mentoring
procedure into their operating manual by clearly delineating the critical issues such as maximum monetary incentive
of contact employees without the supervisor’s approval, promptness of the responses, employees’ behavioral
Direct effects
Hypothesized Paths
Path
coefficients
t-value
Indirect
effects
Total
effects
Remarks
H1a Procedural
justice
→
Satisfaction (
γ
11
) .059 1.984* .059
Supported
H1b Interactional
justice
→
Satisfaction (
γ
12
) .346
11.948** .346
Supported
H1c Distributive
justice
→
Satisfaction (
γ
13
) .654
18.371** .654
Supported
H2 Satisfaction
→
Trust (
β
21
) .714
18.634**
.714
Supported
H3 Satisfaction
→
Commitment (
β
31
) .048
.731
.569
.617
Not-Supported
H4 Trust
→
Commitment (
β
32
) .797
10.119**
.797
Supported
H5 Satisfaction
→
Loyalty (
β
41
) .764
13.467**
.099
.863
Supported
H6 Trust
→
Loyalty (
β
42
) .407
7.885**
.268
.675
Supported
H7 Commitment
→
Loyalty (
β
43
) .336
6.433**
.336
Supported
Procedural justice
→
Trust
.042
.042
Interactional
justice
→
Trust
.247
.247
Distributive
→
Trust
.467
.467
Procedural
justice
→
Commitment
.031
.031
Interactional
justice
→
Commitment
.180
.180
Distributive
→
Commitment
.341
.341
Procedural
justice
→
Loyalty
.051
.051
Interactional
justice
→
Loyalty .298
.298
Distributive
→
Loyalty
.565
.656
R
2
(Satisfaction)
R
2
(Trust)
R
2
(Commitment)
R
2
(Loyalty)
.799
.624
.587
.730
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