Human Resource Management, Service Quality, and Economic Performance in Call Centers

Rosemary Batt, Cornell University
Lisa M. Moynihan, London Business School


This paper examines the applicability of total quality management theory to interactive service settings. We test whether quality service and labor efficiency may be jointly maximized through employee involvement in operational decision-making, and whether these operational outcomes, in turn, influence economic performance. The study draws on a sample of 64 call centers serving the mass market in a large telecommunications services company. Surveys of 1,243 employees in the 64 centers were aggregated to the call center level and matched to archival data on service quality, call handling efficiency, revenues per call, and net revenues per call. Our analysis shows that high involvement human resource practices emphasizing employee skills, discretion, and rewards lead to higher service quality, higher revenues per call,and higher net revenues per call. In addition, service quality mediates the relationship between human resource practices and the economic performance of call centers. There is no significant relationship between HR practices and labor efficiency, as measured by call handling time; and labor efficiency is inversely related to revenue generation.