Monetary or nonmonetary compensation for service failure? A study of customer preferences under various loci of causality. (April 2015)

• Record Type: Journal Article
• Authors: Fu, Hui; Wu, Doris Chenguang; Huang, Songshan (Sam); Song, Haiyan; Gong, Jinhong
• Is Part Of: International journal of hospitality management. Volume 46(2015)
• Page Start: 55
• Page End: 64
• Publication Date: 2015-04
• Subjects: Monetary compensation -- Nonmonetary compensation -- Combined compensation -- Post-recovery satisfaction -- Perceived justice; Hotel management -- Periodicals; Restaurant management -- Periodicals; Food service management -- Periodicals; Hôtels -- Gestion -- Périodiques; Restaurants -- Gestion -- Périodiques; Services alimentaires -- Gestion -- Périodiques; Food service management; Hotel management; Restaurant management; Periodicals; 647.94
• DOI: 10.1016/j.ijhm.2015.01.006
• Languages: English
• ISSNs: 0278-4319

Abstract

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.