The movement or flow of employees into, around and out of organisations(‘employee flow’) has long been a central issue in human resourcemanagement and industrial psychology. This is especially so for the specificelement of employee turnover, but also applies to staffing and internal talentdevelopment. Employee flow is especially salient in a South African contextcharacterised by scarce skills.The voluminous literature on employee flow has tended to view each elementsuch as recruitment or turnover separately, and has generally focused oninternal outcomes (e.g. commitment or satisfaction). This thesis attempts toadd two crucial features, namely EF as a whole system (i.e. inflows, intraorganisationflows and outflows of staff in conjunction), and customer-basedoutcomes. Something of a synthesis is thus sought between EF and ideas ofmarketing productivity.Marketing productivity has been proposed as one of the most important fociof the marketing discipline (Rust, Ambler, Carpenter, Kumar, & Srivastava,2004; Sheth & Sisodia, 2002). It refers to links between marketing andorganisational performance or value. Models such as the ‘service profit chain’(Heskett, Sasser & Schlesinger, 1997) identify the antecedents of marketingproductivity to be internal organisation characteristics such as staffsatisfaction or loyalty. This thesis seeks to expand such models in the contextof a system of EFs. Advanced decision theoretic utility theories of EF (e.g.Boudreau & Berger, 1985) allow for the complete, integrated value ofemployee movements over time to be modelled. Such a model is constructedand links to marketing metrics, notably service perceptions, investigated.Organisational value arising via the outcomes for customers are furtheriiiinvestigated. Thus increased value of employee movements is proposed togenerate organisational value, mediated by improved customer equity (e.g.Gelade & Young, 2005).An empirical, survey-based study was conducted to assess the model. EF wasassessed in business-to-business relationships from the perspective of thecustomer using conceptions of decision theoretic utility analysis, and bothintermediate and outcome-based customer perceptions of service quality usedas dependent variables. Moderation effects from frequency of interaction andintegration of the customer into the supply chain were also tested, as well ascontrols for characteristics of the transaction, organisation and industry.Results suggest that EF does significantly affect various stages of servicequality provision, notably ‘potential quality’, which it appears mediates linksto other aspects of service provision, especially final service outcomes. Inaddition, EF was also found to affect outcomes through the intermediaterelational element of 'soft process quality', possibly highlighting theimportance of relationship management and soft skills in B2B relationships.Employee outflows in particular showed evidence of relatively strong effects,possibly highlighting the ongoing salience of turnover, in particular effectiveidentification and management of functional versus dysfunctional turnoverinstead of a sole focus on retention. Results were significantly stronger forservice industries than others (presumably as service is the outcome), andwhen there were relatively few supplier contact staff (perhaps due to socialnetworking, bonding, exchange or emotional contagion).This thesis adds substantially to the methodologies underlying service profitchain models. It explicitly included new constructs (EF utility). Contextually,it was the first proper test of this model in South Africa. Theoreticalivcontributions arose from new inter-disciplinary syntheses of utility models,finally linking employee and customer utilities to the organisation.Ultimately, practical significance may arise for managerial models, estimatingand justifying human resource interventions.Key words: Service-profit chain, marketing metrics, decision theoretic utilityanalysis, employee movement, employee flow, employee turnover, employeeacquisition, employee separation, customer equity, customer satisfaction,customer retention, organisational performance, organisational value.
