Managing Customer Services: Human Resource Practices, Quit Rates, and Sales Growth

Abstract

This study examined the relationship between human resource practices, employee quit rates, and organizational performance in the service sector. Drawing on a unique, nationally representative sample of call centers, multivariate analyses showed that quit rates were lower and sales growth was higher in establishments that emphasized high skills, employee participation in decision making and in teams, and human resource incentives such as high relative pay and employment security. Quit rates partially mediated the relationship between human resource practices and sales growth. These relationships were also moderated by the customer segment served.