Does the Squeaky Wheel Get Grease or Glue?

How do employees compensate angry customers? A lot has to do with the server’s cultural background.
customer is angry at a cafe

The essentials

  • A study looked into cultural factors that shape how service employees respond to angry customers. It focused on power distance (PD)—that is, one’s expectation of how power should be distributed within an organization or a group.
  • Service employees from high-PD cultures reward low-intensity customer anger with greater compensation. Those from low-PD cultures reward high-intensity anger with greater compensation.
  • To improve service experience, managers are advised to implement emotion management training, improve communication regarding issue management, and foster a climate of trust.

Customer service can be a deadly business. In August, a French waiter was shot dead by a customer who was furious that he was not served fast enough.

While this may be an extreme example of customer rage, service employees have to deal with unhappy patrons all the time. Complaints, name calling, and yelling are just a few of the challenges they face. The result: emotional exhaustion and greater absenteeism.

While past studies have examined what influences interactions between customers and employees from a customer perspective, Laura Rees and her fellow researchers were more interested in how service employees react to angry customers, including how they compensate customers when they complain. Which adage proves true: the “squeaky wheel gets the grease” or “the nail that stands out gets pounded down”?

Rees, assistant professor at Smith School of Business at Queen’s University, conducted a series of tests with colleagues Ella Glikson (Carnegie Mellon University), Jochen Wirtz (National University of Singapore), Shirli Kopelman (University of Michigan), and Anat Rafaeli (Technion-Israel Institute of Technology).

They figured that how service employees respond to angry customers is partly shaped by their cultural values. The researchers use the concept of “power distance” (PD) as a critical marker.

Putting the Power in Power Distance

Power distance is a well-established cultural value. It refers to one’s expectation of how power is and should be distributed within an organization or a group of people. Singapore and Russia, where there is a more inequitable power distribution, are considered high-PD cultures. Israel and Canada, with a more even power distribution, are considered low-PD cultures.

In a business setting, employees characterized as being “high PD” perceive power as being distributed based on a strong vertical hierarchy, with each person having a clearly defined place and role. In a high-PD culture, leaders and supervisors hold significantly more power than their subordinates.

On the other hand, employees defined as being “low PD” expect more equality and perceive far less hierarchy in their organization. In a low-PD culture, power is more equally shared.

For their studies, Rees and her colleagues recruited 160 business school students in Singapore and Israel to participate in a negotiation in a simulated customer service environment.

Participants were given background information including the role of the customer service representative and the company’s policy on managing complaints. They were also given information regarding the amount of compensation the company had recently paid out to unhappy customers. But they were not told the reasons for why customers were compensated.

Participants played the role of customer service employee and were given a brief customer complaint scenario. They were then asked to rate the customer’s emotional state, respond to the customer about the complaint, and decide how much compensation to award.

Linking Cultural Values and Service

 The studies showed how culture shapes customer service in intriguing ways.

Sales clerks from a high-PD culture, for example, gave more generous compensation to customers who displayed a lower intensity anger than to those who were intensely angry. In other words, when interacting with employees holding these values, it pays to keep your frustration in check.

It was a different outcome when sales clerks from a low-PD culture were involved. In these situations, it was customers displaying a higher intensity anger who received greater compensation. The squeaky wheel got more grease.

What drives this behaviour?

Researchers found that high-PD employees perceived the high-intensity anger as inappropriate. They were not willing to reward this behaviour by mollycoddling the challenging customer.

Low-PD employees, on the other hand, felt threatened by customer anger and were more generous in their compensation. When they didn’t feel threatened or the level of threat was mitigated, they responded more in line with their high-PD counterparts.

The Value of Training

Given the multicultural nature of the customer service workforce, these findings offer useful insights to managers, Rees says.

She says firms needing to up their game in customer service would benefit by providing employees with emotion management training. In their journal article, the researchers say that training “can reduce the degree to which employees perceive customer anger as threatening and help employees judge the inappropriateness of displayed anger in a nuanced manner.”

With this training, employees would be less likely to over- or under-compensate customers based on how they perceive customer anger. They would have more confidence interpreting the emotions directed their way, understanding their reactions based on the intensity of the anger displayed.

Further, the researchers say, training could be tailored to the PD level of the team. How might this work? “For low-PD service employees, managers might minimize perceptions of threat by fostering a climate of support and helping employees feel protected by the organization,” they write. Training for employees in cultures with high PD could emphasize the importance of customers to the organization and the need to avoid automatically punishing an emotional tone perceiving to be aggressive.

Finally, leaders can improve their communication regarding customer service issues. Clear service-recovery policies would make it a lot easier for front-line employees to respond appropriately.

By investing the time and energy into these initiatives, organizations can significantly improve the employee experience and deliver more a consistent and equitable response to dissatisfied customers.

— Kate Irwin

Smith School of Business

Goodes Hall, Queen's University
Kingston, Ontario
Canada K7L 3N6

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