Testing a branch performance model in a New Zealand bank

This study aims to develop and test a comprehensive model that begins with management commitment/concern and progresses through intermediate links of service climate and in‐role frontline employee (FLE) performance to customer satisfaction and eventually to sales performance.

Branches of a major retail bank in New Zealand serve as the study setting. Data pertaining to management commitment/concern and service climate were collected using an intranet survey distributed to the branch employees, and customer satisfaction data were gathered via mail questionnaires from the branch customers. Objective measures of in‐role FLE performance and sales performance were provided by the bank from corporate records.

Results showed that management commitment/concern was significantly related to service climate; service climate to in‐role FLE performance; in‐role FLE performance to customer satisfaction; and customer satisfaction to branch sales.

Testing viability of the model in other service sectors would be fruitful.

Since service climate has a direct positive influence on FLEs' in‐role performance, branch management should focus on creating a positive service climate by taking the necessary actions to improve training, rewards and technological support.

The study uses an objective in‐role performance measure in measuring branch employees' performance.