Monetary or nonmonetary compensation for service failure? A study of customer preferences under various loci of causality

Hui Fu; Doris Chenguang Wu; Songshan Sam Huang; Haiyan Song; Jinhong Gong

doi:10.1016/j.ijhm.2015.01.006

Monetary or nonmonetary compensation for service failure? A study of customer preferences under various loci of causality

Hui Fu, Doris Chenguang Wu, Songshan Sam Huang, Haiyan Song, Jinhong Gong

Research output: Journal article publication › Journal article › Academic research › peer-review

31 Citations (Scopus)

Abstract

When service failures occur, hotels adopt various strategies to compensate guests in order to maintain their satisfaction. This study examines the effectiveness of different post-failure compensation strategies in scenarios presenting various loci of causality. The results indicate that across all scenarios, strategies combining monetary and nonmonetary compensation result in higher customer satisfaction than those which offer one or the other. In addition, nonmonetary compensation results in higher satisfaction than monetary redress when the service failure has been caused by the hotel. The study also identified a partial mediation of the interaction effect of service failure causality and compensation type on customer satisfaction by three kinds of justice.

Original language	English
Pages (from-to)	55-64
Number of pages	10
Journal	International Journal of Hospitality Management
Volume	46
DOIs	https://doi.org/10.1016/j.ijhm.2015.01.006
Publication status	Published - 1 Apr 2015

Keywords

Combined compensation
Monetary compensation
Nonmonetary compensation
Perceived justice
Post-recovery satisfaction

ASJC Scopus subject areas

Tourism, Leisure and Hospitality Management
Strategy and Management

More information

10.1016/j.ijhm.2015.01.006

Cite this

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title = "Monetary or nonmonetary compensation for service failure? A study of customer preferences under various loci of causality",

abstract = "When service failures occur, hotels adopt various strategies to compensate guests in order to maintain their satisfaction. This study examines the effectiveness of different post-failure compensation strategies in scenarios presenting various loci of causality. The results indicate that across all scenarios, strategies combining monetary and nonmonetary compensation result in higher customer satisfaction than those which offer one or the other. In addition, nonmonetary compensation results in higher satisfaction than monetary redress when the service failure has been caused by the hotel. The study also identified a partial mediation of the interaction effect of service failure causality and compensation type on customer satisfaction by three kinds of justice.",

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AU - Fu, Hui

AU - Wu, Doris Chenguang

AU - Huang, Songshan Sam

AU - Song, Haiyan

AU - Gong, Jinhong

PY - 2015/4/1

Y1 - 2015/4/1

N2 - When service failures occur, hotels adopt various strategies to compensate guests in order to maintain their satisfaction. This study examines the effectiveness of different post-failure compensation strategies in scenarios presenting various loci of causality. The results indicate that across all scenarios, strategies combining monetary and nonmonetary compensation result in higher customer satisfaction than those which offer one or the other. In addition, nonmonetary compensation results in higher satisfaction than monetary redress when the service failure has been caused by the hotel. The study also identified a partial mediation of the interaction effect of service failure causality and compensation type on customer satisfaction by three kinds of justice.

AB - When service failures occur, hotels adopt various strategies to compensate guests in order to maintain their satisfaction. This study examines the effectiveness of different post-failure compensation strategies in scenarios presenting various loci of causality. The results indicate that across all scenarios, strategies combining monetary and nonmonetary compensation result in higher customer satisfaction than those which offer one or the other. In addition, nonmonetary compensation results in higher satisfaction than monetary redress when the service failure has been caused by the hotel. The study also identified a partial mediation of the interaction effect of service failure causality and compensation type on customer satisfaction by three kinds of justice.

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KW - Nonmonetary compensation

KW - Perceived justice

KW - Post-recovery satisfaction

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DO - 10.1016/j.ijhm.2015.01.006

M3 - Journal article

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JO - International Journal of Hospitality Management

JF - International Journal of Hospitality Management

ER -

Monetary or nonmonetary compensation for service failure? A study of customer preferences under various loci of causality

Abstract

Keywords

ASJC Scopus subject areas

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