An extended longitudinal study of the effects of a service guarantee

Julie M. Hays, Arthur V. Hill

Research output: Contribution to journalArticlepeer-review

19 Scopus citations


This paper examines the long-term effects of a service guarantee on employee motivation, learning through service failure, and customer intention to return. Service guarantees have been hypothesized to positively affect customer perception of service quality (and/or customer intention to return) through their positive effect on both learning through service failure and employee motivation. However, there has been no long-term study of these effects. A longitudinal, empirical study was conducted to investigate the question of whether a service guarantee program is a short-term fix or a long-term solution. The service guarantee was found to have a positive, long-term effect on both employee motivation and customer intention to return. However, the service guarantee did not have a significant direct effect on employee perceptions of improvement through learning from service failure. This research highlights the need for organizations to make better use of the information and knowledge gained from invocations of a service guarantee and strongly supports using a service guarantee to improve customer loyalty and increase employee motivation.

Original languageEnglish (US)
Pages (from-to)117-131
Number of pages15
JournalProduction and Operations Management
Issue number1
StatePublished - Mar 1 2006


  • Complaint management
  • Customer satisfaction
  • Empirical research
  • Service guarantees
  • Service recovery


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