A Customer Scorned

Abstract

This research examines the implications of manager reprimands of frontline employees following a service failure incident. Drawing upon social exchange theory and looking at both customer and employee reactions, three studies find that customers are more satisfied with failed service encounters when they are aware the employee was reprimanded. This effect is on par with other types of service recoveries, mediated by deontic justice perceptions and moderated by the customer’s just-world beliefs, such that high believers are more satisfied than low believers when they are told about an employee’s reprimand. Direct observation of the reprimand acts as a key boundary condition whereby customers become dissatisfied when they are present during the reprimand. Furthermore, we find that customer perceptions of frontline reprimands are tied to reprimand privacy, whereas employee perceptions are tied to reprimand civility. This research is the first to simultaneously examine the effects of workplace reprimands on customer and frontline employee satisfaction. For managers, our findings illuminate the usefulness of communicating employee reprimands to customers, thus representing a low-cost alternative to other types of recovery efforts.