on

HRM practices

gese thourcr sa

of 52 hotels in Amman responded to the questionnaires pooling 52 HR managers, 52 sales managers, 236

sectorWith itnetsrespo

mance through human resource management (HRM) practices is aviable way for hotels to remain competitive (Lytras & Ordez dePablos, 2008a, 2008b). Several studies have been conducted toexamine the relationships between these factors. For example,Tortorella and Fogliatto (2014) presented a method for assessingthe impact of HRM practices in a company under lean implementa-tion in a case study fromthe automotivepartsmanufacturing sector.Zhai, Liu, and Fellows (2014) investigated the effect of HR practices

d the role of HRMRM climate per-

perceivedd on a sam

574 Slovenian employees from the manufacturing sectoYeung, & Cheng, 2010 examined the relationships among emloyalty, service quality, customer satisfaction, customer loyarm protability, and the contextual factors inuencing these rela-tionships in 210 high-contact service shops in Hong Kong usingStructural Equation Modeling (SEM). Chand (2010) investigatedtheeffects ofHRMpracticeson servicequality, customer satisfactionand performance in Indian hotels. Ouyang (2010) used conrmatoryfactor analysis (CFA) and SEM to analyze the casual relationshipsbetween service quality, customer trust, customer satisfaction, andE-mail address: abbas.alrefai@ju.edu.jo

Computers in Human Behavior 43 (2015) 293303

Contents lists availab

u

evifronted with considerable challenges imposed by turbulent andrapidly changing external environment that it operates in.

Increased service quality, customer satisfaction, customer loy-alty, employee satisfaction, employee loyalty, and hotel perfor-

requests. Sirca, Babnik, and Breznik (2013) studieclimate in employees attitudes through linking Hceptions to job satisfaction, job involvement andzational performance. The model was then testehttp://dx.doi.org/10.1016/j.chb.2014.11.0160747-5632/ 2014 Elsevier Ltd. All rights reserved.organi-ple ofr. Yee,ployeelty andpart of the tourism sector is the hotel industry, which is the largestand most rapidly growing industry, employing over 14,690 people.It directly and indirectly employs over 37% of the total force in thetourism sector. Despite that, the hotel industry in Jordan is con-

showed that the most important HR practices were paying salarieson time and accurately, the management of documentation, com-munication, HR staff showing that they respected and valued thedoctors, and reimbursement for conferences and special leavesignicant increase in foreign and domestic investment. A major questionnaire to gather data from 75 doctors in this setting. Results1. Introduction

Tourism is the main productiveover 17% of Gross National Product.ism is an ideal industry to diffuse being the past few years, it has beenemployees and311customers. Themodel is examinedusing structural equationmodeling. Themain resultsindicate thatHRMpractices, service quality, employee satisfaction, employee loyalty, customer satisfactionand customer loyalty have a positive inuence on the improvement of hotel performance in nancial andinnovation domains. In conclusion, themethodology applied tomeasure the performance of hotel industryprovides valuable information to top management and decision makers in Jordan regarding main factorsthat improve hotel performance and sharpen its competitive strength.

2014 Elsevier Ltd. All rights reserved.

in Jordan. It generatess regional spread, tour-across Jordan, and dur-nsible for generating a

and organizational learning on rms performance in Chinese con-struction industry using structural equation modeling. The resultssupport organizational learning as a mediating variable of the rela-tionship between HR practices and organizational performance.LongmoreandRonnie (2014) explored thekeyHRpractices affectingdoctors in a medical complex in South Africa using an open-endedStructural equation modelingHotel performanceSatisfaction

examines the relationships between these factors. A conceptual model is developed by proposing elevenhypotheses. Data are collected via a distributed survey to three-, four- and ve-star Jordanian hotels. A totalEffects of human resource managementstructural equation modeling

Abbas Al-RefaieDepartment of Industrial Engineering, The University of Jordan, Amman 11942, Jordan

a r t i c l e i n f o

Article history:Available online 25 November 2014

Keywords:

a b s t r a c t

The hotel industry is the larseeks directions that enablthe impact of human resemployee loyalty, custome

Computers in H

journal homepage: www.elshotel performance using

t andmost rapidly growing industry in Jordan. Hotel management regularlyem to sustain their competitive position. This study, therefore, investigatese management (HRM) practices, service quality, employee satisfaction,tisfaction and customer loyalty on hotel performance in Jordan and then

le at ScienceDirect

man Behavior

er .com/locate /comphumbeh

tiveness and exibility. Hartline and Ferrell (1996) suggested that

employees, provides better service, and improves the effectiveness

increase organizational revenue and protability (Pugh, Dietz,

ancustomer loyalty, and examined the mediator effects of customersatisfaction and trust. Chi and Gursoy (2009) investigated the rela-tionship between employee satisfaction and customer satisfaction,and their impact on the nancial performance of a hospitality com-pany utilizing service-prot-chain framework. Further, they exam-ined the mediating role of customer satisfaction on the indirectrelationship between employee satisfaction and nancial perfor-mance at three and four star hotels. Abdullah et al. (2009) examinedthe linkage between employee satisfaction and employee loyalty bydeveloping the service prot chain in hotels in the Klang Valley areain Malaysia. Som (2008) examined the effect of innovative HRMpractices on corporate performance during the change processthrough a multiple-respondent survey of 69 Indian organizations.Grzinic (2007) tested the importance of service quality in hotelindustry from both the conceptual standpoint and that of servicequalitymeasurement. Matzler and Renzl (2006) tested the relation-ships between trust in management and trust in peers, satisfactionand loyalty of employees of an Austrian company in the energy sec-tor using SEMwith Partial Least Squares.

In Jordan, examining the factors that affect business performancehas gained signicant research attention. For example, Al-Refaie,Al-Tahat, andBata (2014) examined effects of customer relationshipmanagement on banks performance and customerbank relation-ship quality. Al-Refaie and Hanayneh (2014) studied inuences oftotal productive maintenance, total quality management, and sixSigma practices on rms performance in Jordan. Al-Refaie, Li, andKo (2012) investigated the factors that affect customer linking capa-bilities and customer satisfaction in Jordanian Hotels. Al-Refaie,Ghnaimat, & Li, 2012 examined the effects of ISO 9001 certicationand KAAE on performance of Jordanian rms. Al-Refaie, Li, andJalham (2012) examined the factors that inuence repurchase andcustomer satisfaction in Jordanian Telecom Companies. Al-Refaie(2011) employed structural model to investigate factors that affectpatient satisfaction and revisit intention in Jordanian hospitals. Al-Refaie, Ghnaimat, and Ko (2011) investigated the effects of qualitymanagement practices on customer satisfaction and innovation.Still, little published research has been directed to examine the fac-tors thataffecthotel performance in Jordanianhotels and investigatethe relationship between them. Al-Rousan and Mohamed (2010)examined the impact of tourismservicequalitydimension in the Jor-danian ve star hotels. A self-administered questionnaire was usedtomeasure the perceived tourism service quality of the hotel guestsat three branches Marriott hotel in Jordan. Al-Refaie, Li, and Ko(2012) examined factors affect customer linking capabilities andcustomer satisfaction in customer relationship management in Jor-danian hotels. This research aims at examining the relationshipsbetween service quality, HRM practices, employee satisfaction,employee loyalty, customer loyalty and customer satisfaction andexamining their effects on hotel Jordanian performance. The resultsof this research are of prime importance to hotel managers in prior-itizing the main factors, determining their effects on hotel perfor-mance, and planning future improvements that leads to increasinghotel competitiveness. The remaining of this research is outlinedin the following sequence. Section 2 develops conceptual frame-work. Section 3 demonstrates the methodology of data collectionand analysis. Section 4 discusses the empirical results of the mea-surement and structural models. Section 5 summarizes the mainconclusions and recommendations.

2. Conceptual framework

2.1. Hypotheses development

294 A. Al-Refaie / Computers in Hum2.1.1. HRM practices and service qualityHuman resource management (HRM) practices are a distinctive

approach to employment management which aims to achieveWiley, & Brooks, 2002). On this basis, it is hypothesized that:

H12. Effective HRM practices are positively related to customersatisfaction in hotels.

H13. HRM practices are positively related to employee satisfactionin hotels.

2.1.3. Employee satisfaction, service quality, and customer satisfactionSatised employees are more likely to provide better services

through organizational citizenship behaviors (Yoon & Suh, 2003)and they tend to be more involved in their employing organiza-tions, and more dedicated to delivering high quality services. Thus,service quality is affected by employee satisfaction. Yee, Yeung,and Cheng (2008) revealed that job satisfaction perceived by cus-tomer-contact employees is associated with service quality. More-over, service employees with a high level of job satisfaction willappear to the customer more balanced and pleased with their envi-in service delivery. Hence, the following hypothesis is proposed:

H11. HRM practices are positively related to improvement ofservice quality in hotels.

2.1.2. HRM practices, employee satisfaction, and customer satisfactionSuccessful HRM results in employee satisfaction and loyalty.

Employee satisfaction is a pleasurable or positive emotional stateresulting from the appraisal of the job experiences of the employee(Grigoroudis & Siskos, 2010). Typically, satised employees areloyal and productive employees (Heskett, Sasser, & Schlesinger,1997). Employee loyalty means that employees are committed tothe organization success and believing that working for this orga-nization is the best option, planning to remain with the organiza-tion, does not actively search for an alternative employment, andis not responsive to offers. Employee loyalty increases as theseindividuals become more satised with their jobs and are allowedto take care of customers (Reichheld, 1996). Employees satisfac-tion and loyalty is considered to be one of the most important driv-ers of quality, customer satisfaction and productivity. Customersatisfaction is the emotional response of a customer to the per-ceived gap between prior experience and expectations of a productand organization, and the actual experienced performance as per-ceived after interacting with an organization and/or consuming itsproduct. Loyal customers are satised customers who are not eas-ily swayed by price inducement from competitors (Baldinger &Rubinson, 1996; Bowen & Shoemaker, 1998). In practice, satisedand motivated employees produce satised customers andhotel contract employees should receive the necessary training inorder to deliver high quality service. The relationship betweenHRM practices and service quality enhances the ability of hotelcompetitive advantage via the strategic deployment of a highlycommitted and capable workforce using an array of cultural, struc-tural and personnel techniques (Storey, 2001). The HRM functionincludes a variety of activities, including determining stafngneeds, recruiting and training the capable employees, performancemeasurement, managing ways of employee benets and compen-sation, and employee records.

Schneider, 1994 found that employee perception of HRM prac-tices signicantly related to customer perception of service quality,which is a key factor for increasing hotels competitiveness, effec-

Behavior 43 (2015) 293303ronment, which leads to positive inuence on the level of customersatisfaction. Consequently, the following two hypotheses areproposed:

H14. Employee satisfaction has a positive inuence on servicequality.

H15. Employee satisfaction has a positive inuence on customersatisfaction.

2.1.4. Service quality and customer satisfactionCustomer satisfaction is oneof themostdominant themes inhos-

pitality industry, which requires experience with the service, and isinuenced by the perceived service quality (Anderson, Fornell, &Lehmann, 1994). Typically, customer judgment of a product or ser-vice would lead to customer satisfaction (Oliver, 1999), and conse-quently directly affects behavioral intentions of repurchases (Yeeet al., 2008). Therefore, the following hypothesis is suggested:

H16. Service quality is positively associated with customer satis-faction in hotels.

2.1.5. Employee satisfaction and employee loyaltyHeskett et al. (1997) revealed a positive relationship between

employee satisfaction and employee loyalty. Increasing employeesatisfaction could actually result in an increase in employee partic-ipation and has the potential of making both the employee and

Customer satisfaction is considered to act as an antecedent to

H18. Customer satisfaction has a positive effect on customerloyalty.

2.1.7. Employee loyalty and customer loyaltyEmployee satisfaction and loyalty result in improved customer

retention (Bennett & Bove, 2002), which may leads to customerloyalty. Loyal customers build up good relationships with loyalemployees. Consequently, the following hypothesis is suggested:

H19. Employee loyalty is positively correlated with customerloyalty.

2.1.8. Customer loyalty and hotel performanceHotel industry is recognized as operating in a highly competi-

tive environment. Hence, it is important that business maximizescustomer satisfaction and loyalty. Customer satisfaction positivelyimpacts rm protability through higher levels of purchase,decreased price sensitivity, positive word of mouth and less likeli-hood of switching brands (Wilkins, 2010). Thus, the followinghypothesis will be tested:

H110. Customer loyalty is positively correlated with hotelperformance.

A. Al-Refaie / Computers in Human Behavior 43 (2015) 293303 295loyalty behavior. Satised customers have potential to becomeloyal customers, who not only repurchase service, but also spreadpositive word-of-mouth of the organization (Min, Min, & Chang,2002). In addition, they may be more tolerant for possible servicefailures. Hence, the following hypothesis is suggested:employer equally loyal to the organization. Therefore, the follow-ing hypothesis is established:

H17. Employee satisfaction is positively related with employeeloyalty.

2.1.6. Customer satisfaction and customer loyaltyFig. 1. The proposed cdissatisedones (Chi&Gursoy,2009).Hence, it ishypothesized that:

H111. The relationship between employee satisfaction and nan-cial performance is mediated by customer satisfaction.

2.2. Factor measures and hypothesized model

The conceptual model is constructed then shown in Fig. 1. Inthis model, appropriate factor measures should be established.2.1.9. Employee satisfaction and hotel performanceEmployee satisfaction plays a signicant role in helping hotels

achieve nancial goals. Customers tend to have a better experiencewithhotels attaininghigher levelsof employee satisfaction. Satisedemployees aremore likely to bemotivated and harderworking thanonceptual model.

Table 1Model factors and their related measures and questions.

Latent Measure Question

Customer satisfaction (CS) Degree of satisfaction (CS1) The price is suitable with the provided servicesThe service offered satises my needsThe services provided meet my expectationsBath amenities and air conditioning are appropriateHousekeeping services are timely and efcientFood quality is excellentThe room is clean, quiet and properly suppliedService on arrival and check in was suitable and courteousThe location of this hotel is ideal

Customer loyalty (CL) Attitude loyalty (CL1) This hotel is my rst priority for my next visitIn my future visits, I would prefer to use many services in this hotel (e.g., swimming pool, roomservice)

Behaviour loyalty (CL2) I would recommend this hotel to family and friendsComplaints are thoroughly analyzed and quickly resolved

Service quality (SQ) Tangibles (SQ1) Up-to-date equipment (e.g., business center equipment, hair dresser)Physical facilities are visually attractive (e.g., health club, spa)Employees are well-dressed and neat (e.g., uniform, personal hygiene)

Reliability (SQ2) When this hotel promises to do something by a certain time, it does so (e.g., ordering food, roomservice)Accurate records (e.g., customers passports, check in information)

Responsiveness (SQ3) Employees are always willing to help customersEmployees respond to customer requests immediately

Assurance (SQ4) Employees can be trusted with the items of guestsEmployees know well their jobs to help customers

Empathy (SQ5) Operating hours are convenient to all customers (e.g., room service, laundry)Employees know what my preferences are

Employee loyalty (EL) Sense of belonging (EL1) I believe nowadays employees move regularly from one hotel to another oneI consider it ethical to leave this hotel if I receive a better offer from elsewhereCommitment to the hotel is an important valueThis hotel deserves my loyaltyI would recommend others to work in this hotel

Hotel performance (HP) Financial issues (HP1) High sales growth compared to hotel industry averageHigh protability compared to hotel industry averageHigh market share compared to major competitor

Innovation (HP2) Frequent communication is encouraged among the hotels various work departmentsFinancial resources are available for the innovation processEmployees mistakes are treated as learning opportunitiesFormal training and development

Quality circle (HRM5) Staff involvement in objective settingsStaff responsibility for serviceAttitude surveys are regularly used

Pay system (HRM6) Staff informed about market conditions and hotel performanceMerit element in pay package and salaries determinationFinancial incentives

Human resources practices(HRM)

Recruitment and selection(HRM1)

The process of recruitment is controlled with harmonized conditionsAll the employees are treated equally during recruitmentSpecic rules are applied during promotionsUsing employment test criteria during recruitmentSelecting employees according to merit element, skills and experience

Manpower planning (HRM2) Existing of a conducive working cultureCareer planningInvolvement of all departments

Job design (HRM3) Clear and exible job descriptionEmployees are involved in improving their jobsEmployees work in a team work spirit

Training and development(HRM4)

Need based specic training

Employee satisfaction (ES) Working conditions (ES1) My job is secureOn special occasions, the hotel empathizes with employees (e.g., urgent situations)My job does not cause unreasonable amounts of stress in my life

Teamwork and cooperation(ES2)

Teamwork is encouraged and practicedFeeling part of a team working toward a shared goalDepartments cooperate with each other in rush hour

Relationship with supervisor(ES3)

I prefer to work with a specic supervisorSupervisor treats me with respectMy supervisor always takes disciplinary action when I make a mistake

Recognition and rewards (ES4) When I do a good job, I receive the praise and recognition I deserve (e.g., awards, recognition)Good work results in promotion and more benetsMy salary equals my responsibilities

296 A. Al-Refaie / Computers in Human Behavior 43 (2015) 293303

Based on expert experience and previous studies (Matzler & Renzl,2006; Ouyang, 2010; Som, 2008; Yee et al., 2010), each factor withits related measures and questions, respectively, are shown inTable 1.

3. Analysis and discussion

3.1. Sampling and data collection

Prior to data collection, a pilot study was conducted with differ-ent professional workers in the hotel industry, in addition to regu-lar customers in hotels. Upon completing the pilot study minormodications were made to the questionnaires in order to improvetheir validity and readability. The nal version of the question-naires was then distributed in person and via emails. Data werecollected from HR managers, sales managers, employees and cus-tomers in three-, four- and ve-star hotels in Amman. Question-naires were lled in each hotel and collected randomly asfollows: one human resources questionnaire, one hotel perfor-mance questionnaire, ve employee satisfaction questionnaires,and ve customer satisfaction questionnaires. A total of 60 hotelswere visited. A total of 52 hotels responded; which generates aresponse rate of 86.7%. Human resources and sales/general manag-ers were asked to ll human resources and hotel performancequestionnaires. While, service employees, staff members who aredirectly responsible for service in hotels, were responsible toanswer the employee satisfaction questionnaire. Customers stay-ing at the hotels were asked about their opinions by lling outthe customer satisfaction questionnaire.

3.2. Analysis of characteristics of respondents

The collected demographic information for four types ofrespondents is analyzed as shown in Fig. 2. It is noted that:

(i) The ages of the largest portion (33%) of responding custom-ers are within 1829 years old. About 51% of them arefemale. For visit duration, 60% stays for at most 3 days. Themain reasons for the visit are tourism (50%) followed bybusiness (34%).

(ii) The ages of the largest portion (33%) of responding employ-ees are within 2530 years old. About 79% of them arefemale. The salary amount (100299 JD) and years of expe-rience (04 years) constitute the largest proportions of cor-respond to 44% and 45%, respectively.

(iii) The ages of about 30% of HR managers falls within 1829and 4049 years. Whereas, 41% of the sales managers agesranges between 30 and 39 years. The largest portion of salesand HR managers are male of percentages 72% and 83%,respectively. Further, the salary of the largest portion ofHR managers (36%) is more than 700 JD, whereas the salaryof 90% of sales managers is more than 299 JD. Finally, 34% ofHR managers gained more 59 years of experience, whereas60% of sales managers gained more than 9 years ofexperience.

3.3. Data analysis for measurement and structural models

The items used to assess HRM practices, employee satisfaction,employee loyalty, customer satisfaction, customer loyalty, service

A. Al-Refaie / Computers in Human Behavior 43 (2015) 293303 297(a) Customers.(c) HR managers.

Fig. 2. Analysis of demographic in(b) Employees.(d) Sales managers.

formation about respondents.

quality and hotel performance latent were measured on a ve-point Likert scale ranging from 1 (Strongly disagree) to 5 (Stronglyagree) (Chi & Gursoy, 2009). Two tests were conducted, to ensurethe validity of the models content. The rst test is multicollinear-ity between the items, whereas the second is the test of the reli-ability of the measurement variables. The two tests are describedas follows.

(1) Multicollinearity test

Multicollinearity means that some predictors are correlatedwith other predictors. It can be assessed by calculating the correla-tion coefcient (Al-Refaie, Li, & Ko, 2012; Al-Refaie, Ghnaimat, & Li,2012; Al-Refaie, Li, & Jalham, 2012). The correlation coefcientmeasures the degree to which two things vary together or oppo-sitely. The correlation coefcient ranges is from 1 to 1. Zero cor-relation means that the two things vary separately. The correlationcoefcient was calculated between the questions of each latent.The correlation matrix for the hotel performance and service qual-ity are shown in Tables 2 and 3, respectively.

3.4. Empirical results for the measurement model

(Byrne, 2001). Fig. 3 shows the rst trial of the measurement

Q5 SQ6 SQ7 SQ8 SQ9 SQ10

.691

.649 0.841

.612 0.638 0.595

.643 0.729 0.711 0.673

Table 4Cronbachs a values.

Latent Cronbachs a

HRM 0.8757HP 0.7118CS 0.8893CL 0.8319SQ 0.9080ES 0.7570EL 0.8550

298 A. Al-Refaie / Computers in Human Behavior 43 (2015) 293303To analyze the proposed model, two evaluations should be per-formed. The rst evaluation is for the measurement model to testthe validity of indicators. The measurement model denes rela-tions between the observed and unobserved variables. The secondevaluation is for the structural model, which denes relationsamong unobserved variables. Accordingly, it species the mannerby which particular latent variables directly or indirectly causechanges in the values of certain other latent variables in the model

Table 2Hotel performance correlation matrix.

Question HP1 HP2 HP3 HP4 HP5

HP2 0.609HP3 0.735 0.471HP4 0.074 0.391 0.277HP5 0.323 0.260 0.336 0.438HP6 0.061 0.102 0.008 0.500 0.417

Table 3Service quality correlation matrix.

SQ1 SQ2 SQ3 SQ4 S

SQ2 0.591SQ3 0.351 0.381SQ4 0.269 0.259 0.624SQ5 0.275 0.238 0.680 0.618SQ6 0.300 0.267 0.704 0.591 0SQ7 0.177 0.156 0.602 0.598 0SQ8 0.151 0.152 0.604 0.589 0SQ9 0.216 0.201 0.627 0.615 0(2) Reliability test

The Cronbachs alpha (a) is a tool for the assessment of the reli-ability of scales. It is a measure of internal consistency, that is, howclosely a set of items are related as a group. The a value varies from0 to 1; the higher values suggest higher internal consistency. Thevalues of alpha was calculated then displayed in Table 4. All alphavalues are above the recommended value 0.70 which indicates reli-ability (Al-Refaie, 2011; Al-Refaie et al., 2011).SQ10 0.237 0.216 0.552 0.585 0.511SQ11 0.163 0.143 0.544 0.604 0.586model. The model was analyzed and the t results were shownin Table 5. A signicance level of 0.05 is adopted to test all hypoth-eses. A P-value (Probability Level) less than the recommendedvalue of 0.05 indicates a good t model. Three measures will beadopted to decide the tness of measurement and structural mod-els. The rst measure is the relative chi-square ratio over thedegrees of freedom (DF). Ratio of three or less indicates an accept-able t between hypothetical model and the sample data. The sec-ond measure is the Goodness of Fit Index (GFI), which can beclassied as an absolute index of t because it basically comparesthe hypothesized model with no model at all. The GFI ranges fromzero to one, with values close to one being 0 indicative of good t.Finally, the Root Mean Square Error Approximation (RMSEA) takesinto account the error approximation in the population, and it isrecognized as one of the most informative criteria in covariancestructure modeling, values less than 0.05 indicate a good t, andvalues as high as 0.08 represent reasonable errors of approxima-tion in the population (Al-Refaie, 2014; Al-Refaie & Al-Tahat,2014; Al-Refaie, Foud, & Eteiwi, 2013) (see Table 6).

In Table 5, the ratio (=1.826) is smaller the recommended value3, which indicates a good model t. However, the GFI (=0.694) indi-cates the need for modication in. An improvement can be madeby utilizing the Modication Index (MI) values for covariance andregression weights. The largest MI values for covariance of errorcovariance parameters are shown in Table 7. Thus, these parame-ters are freely estimated by indicating covariance between eacherror pairs.

A review of MI values for regression weights (i.e., factor load-ings) reveals ve parameters indicative of cross-loadings. Forexample, HR12 was repeated 16 times as shown in Table 7, henceit will be omitted. Five more parameters (ES3, ES10, EL4, SQ8, HR1)were also omitted due to cross-loading. Fig. 4 illustrates the nalmeasurement model. The values of t indices are listed in Table 8.These values indicate the overall t of the measurement model.

After completing the analysis of the measurement model, a con-vergent validity test is established from a review of the t-tests forthe factor loadings between each latent and its measures. A con-vergent validity test is used to prove if the constructs that theoret-ically should be related to each other are, in fact, observed to berelated to each other. Table 9 shows that t values are greater than0.567 0.530 0.560 0.5330.617 0.659 0.554 0.704 0.609

manA. Al-Refaie / Computers in Hu2.0 and signicant at P-value < 0.05. For illustration, when SQ goesup by one, SQ3 goes up by 0.90. The t-value equals 18.19 which issignicantly larger than 2.0. These results support the convergentvalidity of almost all measures for the corresponding latent.

After ensuring the validity of indicators in the measurementmodel, the structural model is evaluated by adding the hotel per-formance latent (model output) to the measurement model. Themodel is evaluated to draw conclusions regarding the researchhypotheses. The structural model is shown in Fig. 5. The maximumlikelihood estimates for the various parameters of the overall t in

Fig. 3. First trial of the m

Table 5Fit indices for the rst trial of the measurement model.

Model v2 DF P-value v2/DF GFI RMSEA

Default model 3094.715 1695 0.001 1.826 0.694 0.059

Table 6Covariance with large MI values.

Covariance MI

e20 M e21 68.877e34 M e35 58.723e44 M e45 51.158e25 M e26 45.862e35 M e36 27.827e37 M e38 26.387e8 M e14 21.995e6 M e15 16.674e9 M e16 15.231e5 M e16 15.116e38 M e39 15.030Behavior 43 (2015) 293303 299the structural model are given in Table 10. The t statistics indicatethat the hypothesized structural model achieves an acceptable tthat justify no further interpretation.

4. Research results

This study aims at investigating empirically the relationshipbetween the HRM practices, service quality, employee satisfaction,employee loyalty, customer satisfaction and customer loyalty, andexamining their effect on hotel performance using SEM. Fig. 6shows a sample of the obtained results. It illustrates the estimatedweight for both customer satisfaction and employee loyalty

easurement model.

Table 7Sample of full results of MI values for regression weights.

Regression MI

HR12 CS 5.624HR12 CL 5.478HR12 SQ 6.807HR12 CS7 9.113HR12 CS3 4.932HR12 CS2 4.330HR12 CL2 4.641HR12 SQ10 4.611HR12 SQ8 9.698HR12 SQ7 9.623HR12 SQ6 10.332HR12 HR17 6.804HR12 HR11 11.465HR12 HR10 8.274HR12 HR7 7.670HR12 HR1 7.642

300 A. Al-Refaie / Computers in Human Behavior 43 (2015) 293303relationships with customer loyalty. The estimated weight indi-cates that when customer satisfaction goes up by 1, customer loy-alty changes by 0.84. Also, the estimated weight implies that when

Fig. 4. Revised meas

Table 8Fit indices for the revised measurement model.

Model v2 DF P-value v2/DF GFI RMSEA

Default model 886.145 714 0.01 1.241 0.854 0.032

Table 9Estimates and t-values (in parentheses) from CFA.

HRM HP CS

HRM1 0.91(4.47)HRM2 0.93(4.25)HRM3 0.90(5.24)HRM4 0.93(2.57)HRM5 0.90(3.42)HRM6 0.67(1.71)HP1 0.73(6.20)HP2 0.29(1.70)CS1 0.69(13.48)CL1CL2SQ1SQ2SQ3SQ4SQ5ES1ES2ES3ES4EL1employee loyalty goes up by 1, the customer loyalty goes down by0.08.

The estimated path coefcients and t-value between the latentare shown in Table 11, where the following results are obtained:

The acceptance of the hypotheses H11, H12, and H13. Thus, thereare signicant direct relationships between HRM practices andservice quality (estimate = 0.97; t-value = 4.38; P-value < 0.05),

urement model.

CL SQ ES EL

0.85(14.50)0.79(14.94)

0.83(6.02)0.99(15.33)0.90(18.19)0.97(15.31)0.92(13.25)

0.92(9.34)0.65(7.36)0.60(3.95)0.69(8.85)

0.86(12.94)

manA. Al-Refaie / Computers in Hucustomer satisfaction (estimate = 0.75; t-value = 3.33;P-value < 0.05), and employee satisfaction (estimate = 0.98;t-value = 5.44; P-value < 0.05). Hence, in order to gain competi-tive advantage hotel managers should continually enhanceHRM practices by providing quality services and improving cus-tomer and employees satisfaction.

The H14 and H15 suggest that employee satisfaction positivelyaffects service quality (estimate = 0.99; t-value = 8.92;P-value < 0.05) and customer satisfaction (estimate = 0.82;t-value = 8.43; P-value < 0.05). This result highlights the impor-tance of employees satisfaction and its effect on customer sat-isfaction and service quality. Consequently, hotel managementis urged to adopt effective approaches and policies that guaran-tee a working environment that effectively results in satisedemployees. Importantly, employees should be trained on howto deliver high quality service that leads to customer satisfac-tion and improving hotels performance.

The service quality has a positive inuence on customer satis-faction (estimate = 0.84; t-value = 8.91; P-value < 0.05), sup-porting H16. That is, service quality is a key factor thatstrengthens hotels competitiveness. Therefore, managersshould regularly assess the service quality levels and evaluatescustomer feedback and reviews regarding the offered services.A customer relationship management system can provide greatassistance in identifying customer wants and providing servicesthat meet or exceed customer expectations.

Fig. 5. Structu

Table 10Overall t indices for the structural model.

Model v2 DF P-value v2/DF GFI RMSEA

Default model 1231.266 965 0.01 1.276 0.842 0.034Behavior 43 (2015) 293303 301 The H17, which proposes the direct relationship betweenemployee satisfaction and employee loyalty, is supported (esti-mate = 0.64; t-value = 5.47; P-value < 0.05). Moreover, there is asignicant direct relationship between customer satisfactionand customer loyalty exists, H18 is supported (estimate = 0.84;t-value = 10.29; P-value < 0.05). This result encourages manage-ment to maintain effective systems; such as, rewarding, train-ing, incentives systems, that extends employees satisfactionto loyalty. Doing this will surely lead to improving customersatisfaction.

H19 proposes that there is a signicant direct relationshipbetween employee loyalty and customer loyalty, but the results(estimate = 0.08; t-value = 1.53; P-value > 0.05) provide noevidence for a signicant relationship between these two fac-tors. That is, employees loyalty is not the only determinantfor customer loyalty. Other factors have great inuence on cus-tomer loyalty, for example service quality.

There is a positive effect of customer loyalty on hotel perfor-mance (estimate = 0.80; t-value = 6.46; P-value < 0.05). Hence,the hypothesis H110 is accepted. That is, hotels are managedadopt effective systems that achieves customer satisfaction.Nevertheless, the H111 which suggests that employee satisfac-tion has a positive inuence on hotel performance (esti-mate = 0.01; t-value = 0.14; P-value > 0.05) providesinsignicant relationship between employee satisfaction andhotel performance. Consequently, hotels management is founddecient in adopting real system to improve employees satis-faction and limited their focus on improving customer satisfac-tion and hotel performance. Consequently, managers shoulddirect more efforts on improving the efciency of their internalsystems.

ral model.

an302 A. Al-Refaie / Computers in Hum5. Conclusions

This research investigated the relationships between servicequality, HRM practices, employee satisfaction, employee loyalty,customer loyalty and customer satisfaction and in investigatingtheir effects on Jordanian hotel performance using SEM. The mainresults including: (1) HRM practices is positively related to servicequality, employee satisfaction, and customer satisfaction, (2)employee satisfaction has a positive effect on customer satisfactionand employee loyalty, and service quality, whereas it has insignif-icant impact hotel performance, (3) service quality has a positiveimpact on customer satisfaction, (4) customer satisfaction is posi-tively related to customer loyalty, which is signicantly affectshotel performance, nally and (5) employee loyalty has insigni-cant impact on customer loyalty. This study recommends thathotel managers should focus more on implementing efcient

Table 11Results of SEM hypotheses.

Hypothesis Est

H11: HRM practices and service quality 0H12: HRM practices and customer satisfaction 0H13: HRM practices and employee satisfaction 0H14: Employee satisfaction and service quality 0H15: Employee satisfaction and customer satisfaction 0H16: Service quality and customer satisfaction 0H17: Employee satisfaction and employee loyalty 0H18: Customer satisfaction and customer loyalty 0H19: Employee loyalty and customer loyalty 0H110: Customer loyalty and hotel performance 0H111: Employee satisfaction and hotel performance 0

Fig. 6. Estimates for the relationshiBehavior 43 (2015) 293303HRM practices by improving works skills, providing up-to-datetraining for employees, improving service quality, improvingemployee satisfaction and loyalty by proper rewarding systemand encouraging teamwork, serving customers requirements andexceed their expectations to increase customers satisfaction andloyalty through effective customer relationship management. Allthese factors will improve Jordanian hotel performance in nancialand innovation domains.

6. Managerial implications

In todays sharp competition in Jordanian hotels industry, man-agers should continually strengthen hotels performance by provid-ing better service quality, enhancing employee satisfaction, andestablishing effective HRM practices. The ndings of this researchindicate that enhancing customer satisfaction can be achieved

imate t-value Decision

.97 4.38 Supported

.75 3.33 Supported

.98 5.44 Supported

.99 8.92 Supported

.82 8.43 Supported

.84 8.91 Supported

.64 5.47 Supported

.84 10.29 Supported

.08 1.53 Rejected

.80 6.46 Supported

.01 0.14 Rejected

ps between CS and El with CL.

through improving perceived service quality. In order to meet orexceed tourist expectations, managers should continually enhancetheir service quality by focusing great attention on tangibles, reli-ability, responsiveness, empathy, and assurance. Moreover, HRMpractices are found positively related with customer satisfaction.

Bowen, J. T., & Shoemaker, S. (1998). Loyalty: A strategic commitment. Cornell Hoteland Restaurant Administration Quarterly, 2, 1225.

Byrne, B. (2001). In Structural equation modeling with AMOS: Basic concepts,applications and programming, pp. 173199). Lawrence Erlbaum AssociatesPublishers.

Chand, M. (2010). The impact of HRM practices on service quality, customer

A. Al-Refaie / Computers in Human Behavior 43 (2015) 293303 303This indicates that human resources managers should strengthenHRM practices mainly in recruitment and employee selection,manpower planning, job design, and training and development.Finally, employee satisfaction plays a signicant role in improvingcustomer satisfaction. Consequently, employees should be consid-ered valuable assets in hotels industry. To achieve employee satis-faction, managers should provide working conditions, encourageteamwork and cooperation, establish relationship with supervisor,and develop effective recognition and rewards system. Employeesatisfaction enhances employees sense of belonging to their hoteland hence they become committed to achieve hotels goals. Thisleads to better service quality and higher level of customer satis-faction. Typically, customer satisfaction leads to customer loyaltyrepresented by attitude and behavior loyalty. On the other hand,staff participation in setting hotels goals and procedure throughquality circles and by effective pay system can signicantlyimprove hotel performance.

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Effects of human resource management on hotel performance using structural equation modeling1 Introduction2 Conceptual framework2.1 Hypotheses development2.1.1 HRM practices and service quality2.1.2 HRM practices, employee satisfaction, and customer satisfaction2.1.3 Employee satisfaction, service quality, and customer satisfaction2.1.4 Service quality and customer satisfaction2.1.5 Employee satisfaction and employee loyalty2.1.6 Customer satisfaction and customer loyalty2.1.7 Employee loyalty and customer loyalty2.1.8 Customer loyalty and hotel performance2.1.9 Employee satisfaction and hotel performance

2.2 Factor measures and hypothesized model

3 Analysis and discussion3.1 Sampling and data collection3.2 Analysis of characteristics of respondents3.3 Data analysis for measurement and structural models3.4 Empirical results for the measurement model

4 Research results5 Conclusions6 Managerial implicationsReferences