Scholarly article on topic 'Role of Job Satisfaction in the relationship of Business Excellence and OCB: Iranian Hospitality Industry'

Role of Job Satisfaction in the relationship of Business Excellence and OCB: Iranian Hospitality Industry Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — Huseyin Araslı, Sarvnaz Baradarani

Abstract The main aim of the study was to evaluate the relationship between leadership, management by fact, continuous improvement, all work is process, people based management, teamwork with job satisfaction of the frontline employees of 3, 4 and 5 star hotels in Tehran, as well as the relationship of the job satisfaction with the organizational citizenship behavior. The study contained 314 questionnaires which were collected from the frontline employees of the hotels in Tehran. The data were analyzed using PLS in order to evaluate the relationships between the business excellence practices with job satisfaction and organizational citizenship behavior. Having adopted the questionnaires it has been investigated that only leadership and teamwork had non-significant effect on job satisfaction of the frontline employees working in three, four and five star hotels of Tehran that led to organizational citizenship behavior. The study suggests various implications for the hotel managers, politicians and policy makers of Iran, in order to achieve higher levels of job satisfaction as well as organizational citizenship behaviors in their hotels.

Academic research paper on topic "Role of Job Satisfaction in the relationship of Business Excellence and OCB: Iranian Hospitality Industry"

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Procedía - Social and Behavioral Sciences 109 (2014) 1406 - 1415

Role of Job Satisfaction in the relationship of Business Excellence and

OCB: Iranian Hospitality Industry

Huseyin Arasli, Sarvnaz Baradarani

*Eastern Mediterranean University School of Tourism & Hospitality Management Gazimagusa, North Cyprus Via Mersin 10, Turkey

Abstract

The main aim of the study was to evaluate the relationship between leadership, management by fact, continuous improvement, all work is process, people based management, teamwork with job satisfaction of the frontline employees of 3, 4 and 5 star hotels in Tehran, as well as the relationship of the job satisfaction with the organizational citizenship behavior. The study contained 314 questionnaires which were collected from the frontline employees of the hotels in Tehran. The data were analyzed using PLS in order to evaluate the relationships between the business excellence practices with job satisfaction and organizational citizenship behavior. Having adopted the questionnaires it has been investigated that only leadership and teamwork had non-significant effect on job satisfaction of the frontline employees working in three, four and five star hotels of Tehran that led to organizational citizenship behavior. The study suggests various implications for the hotel managers, politicians and policy makers of Iran, in order to achieve higher levels of job satisfaction as well as organizational citizenship behaviors in their hotels.

© 2014 The Authors. Published by Elsevier Ltd.

Selection and peer review under responsibility of Organizing Committee of BEM 2013.

Keywords: Business Excellence Practices, Job Satisfaction, Organizational Citizenship Behavior, Iran, Hotels.

1. Introduction

Organizations need to implement a proper quality management system in order to deal with the changes in today's fast growing industries. The tourism industry is known to be one of the fastest growing industries in the new millennium. Iran with its rich history is one of the gradually developing countries in terms of tourism. The main resource for revenue gain is the petroleum products of Iran; however tourism is also one of the earning industries for such a country. Iran is ranked 7th in the world in terms of its historical places and monuments, and it is known to be 70th in term of its tourism hosting capacity (WTTC, 2010). In terms of world tourism revenues, Iran's share is a meager 0.000%. In 2004, a total number of 1,411,500 tourists visited Iran, 431,500 of whom were foreigners and the rest were Iranian citizens (ICHTO, 2006).

The secretary of the Iran Hotel Owners Society (Iran Daily, 2006) of Iran declared that, there are 619 hotels in the country, with a total capacity of 27,034 rooms and 55,382 beds. These hotels include 17 five-star hotels, 27 four-star hotels, 60 three-star hotels, 203 two-star hotels, 212 one-star hotels, and 100 not graded hotels (Ministry of Culture and Islamic Guidance, 2000). These establishments have generated US$29.8 billion of economic activity in 2006, and it was estimated to grow toUS$71.4 billion by 2016. Total demand is expected to grow by 2.4% and by 4.0% per annum through 2016.

A rapid growth in the country's hotel industry is planned, so there are new hotels being constructed and old hotels are being renovated in order to be able to compete with other hotels in the hospitality sector. Iran's travel and tourism industry are expected to contribute 3.5% to the Gross Domestic Product (GDP) (US$8.4 billion), rising in

1877-0428 © 2014 The Authors. Published by Elsevier Ltd.

Selection and peer review under responsibility of Organizing Committee of BEM 2013. doi:10.1016/j.sbspro.2013.12.644

nominal terms to US $23.6 billion (4.0% of total) by 2016. The travel and tourism economy involvement should decline from 9.8% -US $23.4 billion- to 9.1% -US $53.6 billion- during this same period.

In terms of employment there are 1,712,000 jobs in the Iranian travel and tourism industry which contains 8.7% of the employment share of Iran. The industry is expected to generate 12.1% of total exports US $8.9 billion, growing to US $13.2 billion (19.4% of total) by 2016 (WTTC, 2006). Based on the aforesaid statistical results, the administrations in the industry should use necessary management tools in order to get better outcomes and avoid low levels of job satisfaction and organizational citizenship behaviors.

One of the most important contributions of this study to the hospitality literature is to mention the importance of business excellence practices and their relationships with job satisfaction and organizational citizenship behavior in the hospitality industry, since there are very limited studies that have taken the business excellence practices into consideration in the hotels, especially in a developing country like Iran (Oakland and Tanner, 2008; Arasli and Baradarani, 2010).

2.Literature Review

The fast growing changes in the organizations have resulted in the need for quality management systems which led to developing various quality models, since different awards were devoted to the best models many models developed. Deming Prize was one of the first models that was conducted in Japan (1951), which was developed by the board of Directors of the Japanese Union of Science and Engineering. Whereas the European Foundation for Quality Management (EFQM) model was developed in the western world in 1991 and the USA's Malcolm Baldrige Award (MBNQA) introduced in 1987 were the other famous models.

In addition there were different definitions for total quality management as well. For example Drucker (1964) defined total quality management as an organizational performance which means how well organizations do their job. Dale et al, (1994) defined it as "to extend the scope of the Business Excellence theory it is necessary to incorporate management theories into its development and that much remains to be done for Business Excellence to reach a stage of 'refine/extend' in the theory building process" (Dale et al, 1994).

Arasli (2002) is one other scholar who stated an expression for TQM; he defines total quality management as "the satisfaction of social-shareholders; customers, staff, owner/s and suppliers by implementing hard issues, such as effective planning, programmers, policies and strategies, as well as using soft issues, such as human and all other assets, efficiently and continually within an organization" (Arasli, 2002).

Enrique Claver-Cortes et al. (2007) mentioned that TQM and business excellence are management systems that influences the organizational performances in both manufacturing and service organizations. As the researches indicate; the numbers of business excellence studies made in the tourism sector are very few, while the numbers of business excellence studies in the hospitality industry are even more limited. Koc (2006) and Hudson's (2004) are two scholars who studied business excellence in the tourism industry, they evaluated the tourism product as a package of several products, including transportation, accommodation, food and various activities and the tourist consumption of a total experience, in which total quality management has been identified as the key subject in differentiating service products and building competitive advantage in tourism.

There are some other studies who have concentrated on the business excellence dimension in the hospitality industry which are conducted in Spain and Cyprus (Camison, 1996; Soriano, 1999; Arasli, 2002) and also in benchmarking national tourism Organizations and agencies (Holmes, 2007).

Kanji (2002) is also one other scholar who has a well-known model for the business excellence and he defined business excellence as a mean that measures the satisfaction level of the customers, employees and the stakeholders at the same time in the organization in order to obtain a comprehensive evaluation of the performance of the organization (Kanji, 2002). This study has taken some dimensions of Kanji's business excellence practices as well as the dimensions used in the business excellence practices of Arasli (2012).

Kanji has developed a practical business excellence model for the organizations; the model can be adapted to the organization's needs, with high flexibility. Kanji's easily adaptable model is an extremely cost and time efficient. It applies comprehensive statistical analysis and it has a strong focus on improvements rather than positioning the organization's quality management scheme (Kanji, 2002).

Leadership, management by fact, all work is process, teamwork, people based management and continuous improvement are the business excellence practices that are evaluated in this study by considering their relationships with the job satisfaction and organizational citizenship behaviors of the frontline employees in the hotels of Tehran.

Leadership

Leadership is a very important criterion in the quality models, especially in the business excellence model and Malcolm Baldrige model (Wong, 2001) and is defined as a quality culture that relates to the vision, mission, and goals of the organization. Leadership aims to establish shared values and launch systems to increase customer satisfaction. It also communicates, defines, and motivates continuous improvement (Kanji, 2002). Leadership skills are very essential for the hospitality industry considering its future competition, dynamic environment, service orientation, and labor-intensive nature (Gillet & Morda, 2003; Pine & Wong, 1998).

Management by Fact

Management by fact evaluates quality improvement procedures using the organization's performance measurement system. In addition, it distributes performance measurement throughout the whole organization in order to improve its products and processes (Kanji, 2002). Once discussed, the management should use the best knowledge available to make decisions as described by Juran et al. (1988).

All Work is Process

The organization must follow a process-oriented method that focuses on how the organization is working rather than the results of the work. The quality requirements should be assessed; this assessment should be used to enhance knowledge about the processes. Statistical methods are applied in order to control the processes (Kanji, 2002). However in order to be more effective, the quality control techniques are essential in having a better business excellence should not only be considered to be used by the specialists, but they should rather be used in everyday life of the employees (Kanji, 2008).

Teamwork

People in the organization should be provided with the opportunity to work together as a team and should be aware of the importance of co-dependent tasks and enhanced communication (Kanji, 2002). The effective teamwork in an organization leads to a common goal that can increase the motivational level of the employees as well as job satisfaction (Griffin, Patterson, & West, 2001). Teamwork is considered to be the source of employee autonomy, meaningfulness, bonding with team members, and satisfaction (Denison & Hart, 1996; Mitchell et al., 2001).

People-Based Management

In people-based management, employees should feel that they play an important role in the organization's success. Employee's contributions are valued by the organization and feedback is provided on their performance, which is directly reflected in the quality of the product or service provided by the organization (Kanji, 2002). The employees should be provided with the necessary resources as well as rewards when needed. The employees perform better if they work in a more friendly and cooperative environment (Kanji, 2008).

Continuous Improvement

Continuous improvement observes changes in customer orders. The organizations look for ways to improve. Quality improvement methods are used to improve all products, services, and processes; the organizations have to compare its current quality levels of service with competitors. Continuous improvement dimension is a conductive process to learn, and it requires an organizational culture in which all the employees constantly become innovative. Improvement is the result of learning from the previous mistakes and implementing corrective actions as well as trying new things from the feedback they have gained (Kanji, 2008).

Job Satisfaction

Job satisfaction has been defined by many scholars, and the main definition is the differences that exist between the expectations about the job, and the actual attribute of the job (Heslop et al, 2002). Locke (1969, p. 317) is one of the scholars who defined job satisfaction by mentioning that; job satisfaction is the pleasant feelings that results from the appraisal of the job or by the job facilities, whereas job dissatisfaction is the unpleasant feelings that results from the appraisal of job such as, frustration or blocking the achievement of the values (Schwepker, 2001, p. 41). Herzberg et al. (1959) was one other scholar who had submitted the main theory of job satisfaction (Herzberg et al., 1959). He divided the needs of the employees to two which were; hygiene and motivation. Hygiene factors satisfy the employees in certain conditions such as supervision, interpersonal relations, physical working conditions, salary, benefits, etc. However it has been mentioned that these factors not fully satisfy the employees, and they only reduce the dissatisfaction level (Furnham et al., 2002). Job satisfaction is formed by the intrinsic and extrinsic satisfaction factors. The intrinsic factors are related to the ability utilization, activity, achievement, authority, independence, moral values, responsibility, security, creativity, social service, social status, and variety. Whereas the extrinsic job satisfaction factors are advancement, company policy, compensation, recognition, supervision-human relations, and supervision-technical (Feinstein & Vondrasek, 2001). Organizational Citizenship Behaviour

Organizational citizenship behaviour (OCB) has become very popular in psychology and management, and it has been concentrated by many scholars (Bateman et al, 1983; Organ, 1988; Smith et al., 1983; Podsakoff et al., 2000; Tang et al., 2008). OCB refers to the flexible individual behavior that is not directly recognized by the formal reward system and combines the efficient and effective functioning of the organization (Organ, 1988). In the hotel environment, service-oriented OCB promotes a more effective service delivery procedure, provides better service quality, establishes a more friendly customer interaction, and offers more innovative thoughts about services for better serving the customers and scoring a greater customer satisfaction (Podsakoff et al., 2009; Raub, 2008; Stamper and Van Dyne, 2001; Yen and Niehoff, 2004). Therefore, hotels have started to seek useful means to enhance service-oriented behaviors of their customer contact employees, because this type of behaviors is beneficial for service delivery quality, competitive advantages, and financial performance of the hotels (Hartline & Ferrell, 1996; Karatepe et al., 2006; Walz & Niehoff, 2000). However, up till now only few studies have investigated antecedents that promote service-oriented OCB in the hotel industry (Kim et al., 2010; Ma & Qu, 2011; Tsaur & Lin, 2004).

3.Research method 3.1.Sample

The front office employees of three-, four- and five star hotels of Tehran - the capital city of Iran - are the main research environment that has been evaluated in the study. The total numbers of 3, 4 and 5 star hotels that are located in Tehran are 32, of which 6 of them are five-star hotels, 11 four-star and 15 three-star. From the total

number of 32 hotels only 25 hotels have been used in this study. The remaining 7 hotels did not accept the appointments made by the research team. The data were collected through questionnaires that were conducted through self-administered questionnaires by the research team. Among the 350 questionnaires distributed, 314 were collected individually in 3 weeks in January 2013. 3.2.Measurement

The business excellence quality culture improvement survey is a self-administered perception survey, a self-administered questionnaire addressed to the frontline employees of targeted hotels. The questionnaires were first prepared in English and then translated into Farsi, using back to back translation method. Respondents were asked to indicate their degree of agreement with each system on a five point Likert scale: 1 = strongly disagree, 2 = agree, 3 = somewhat agree / disagree, 4 = agree, and 5 = strongly agree.

All of the variables were measured as it has been covered in table II, that are captured indirectly with direct measurement items. Leadership was measured with the scales developed by Arasli and Baradarani (2010). Continuous Improvement, Management by Fact and All work is Process and Teamwork was measured by Kanji (2002). Job Satisfaction was measured by Hartline and Ferrell (1996). Organizational Citizenship Behavior was measured by Williams and Anderson (1991).

Table I: Demographic Characteristics of the Sample (n=314)

Demographic Variable Sample Composition

Gender Men 63.4%

Women 36.6%

Hotel Star 3- Star 33.1%

4- Star 44.9%

5- Star 22%

Education High School Diploma 16.6%

Two Year Diploma 32.8%

Bachelors 40.4%

Masters 10.2%

Work Experience Less than 1 year 10.2%

1-3 22.6%

4-6 28%

7-10 23.9%

More than 10 years 15.3%

Table II. Measurement

Constructs Items References

Leadership 5 Arasli, H. and Baradarani, S. (2011)

Continuous Improvement 5 Kanji, G. K. (2002)

Job Satisfaction 5 Hartline and Ferrell (1996)

Management by Fact 3 Kanji, G. K. (2002)

OCB 5 Williams and Anderson (1991)

People Based Management 3 Kanji, G. K. (2002)

All Work is Process 6 Kanji, G. K. (2002)

Teamwork 3 Kanji, G. K. (2002)

4.Data analysis and results

A structural equation modeling was used by Partial Least Squares (PLS) approach in order to analyze the relations between the constructs. The samples used in this study were 314, and the Smart PLS (Hansmann & Ringle, 2004) was used for the analysis. There are two steps that have to be conducted in the analysis done by PLS. In the

first step validity and reliability tests are submitted in order to test the measurement models. In the second step the structural model is examined by the paths between the constructs of the model. The second step results in the predictions made about the model to ensure the reliability and validity of the model before the conclusions have been made about the different constructs (Hulland, 1999).

4.1.Reliability and Convergent Validity

The reliability of the data was examined through composite reliability values, as it has been indicated in Table III, all the cronbach's alphas are between 0.94 and 0.86, which are all above the cut-off value of 0.70. The convergent validity was also analyzed through two criteria's stated by Fornell and Larcker (1981). First the indicator loadings were all above 0.70 and significant, and also the average variance extracted (AVE) of each construct exceeded the variance and were above 0.50. It is also observed that all 35 items loaded well above 0.50 which is an evidence for convergent validity (Nunally, 1978). Therefore, all the conditions were met for convergent validity.

Table III. Reliability and Convergent Validity

Constructs AVE Composite reliability R square Cronbach's Alpha

Leadership 0.77 0.94 - 0.92

Continuous Improvement 0.75 0.93 - 0.91

Job Satisfaction 0.77 0.94 0.87 0.92

Management by Fact 0.80 0.92 - 0.87

OCB 0.65 0.90 0.28 0.86

People Based Management 0.84 0.94 - 0.90

All work is Process 0.79 0.95 - 0.94

Teamwork 0.83 0.93 - 0.90

4.2.Path coefficients and predictive ability

The correlations between all the variables in the study were significant and above 0.50. Moreover, job satisfaction was highly correlated with organizational citizenship behavior (r=0.80).The PLS analysis results (Table IV) indicated that two of the hypotheses had a negative effect (Hpothesis2 and hypothesis7), however the rest of the hypotheses were supported. Thus, the fit of the overall model is good. Job satisfaction increases organizational citizenship behavior (t=5.42). Continuous improvement (t=2.40), management by fact (t=2.09), people based management (t=2.37) and all work is process (t=1.78) increase job satisfaction. However, leadership (t=0.82), and teamwork (t=0.53) has non-significant relationship with job satisfaction in this study.

Table IV. Summary of the Hypothesis Test Result

Association Hypothesis Casual Path Path Coefficient t-value Supported

OCB H1 JS -> OB 0.53 5.42 Yes

J. Satisfaction H2 LED -> JS 0.06 0.82 No

H3 CI -> JS 0.20 2.40 Yes

H4 MF -> JS 0.23 2.09 Yes

H5 PM -> JS 0.23 2.37 Yes

H6 AP -> JS 0.20 1.78 Yes

H7 T -> JS 0.05 0.53 No

5.Discussion

The results of this empirical study clearly present the effects of Business Excellence practices in the hospitality sector. The empirical findings also demonstrate that leadership, management by fact, processes, teamwork, employee orientation and continuing improvement are significantly and positively associated with job satisfaction.

The empirical research findings are consistent with prior empirical studies that employee satisfaction is positively related to OCB (organizational citizenship behavior), even though the sector is very challenging; salaries are not so high, the tasks require long hours working, turnover is very high and the sample consist of frontline employees in this study.

While several prior researches in the service quality management have examined the relationship between satisfaction and loyalty (Chang et al, 2010; Jun et al., 2006) in the HRM perspective, this study is the first to examine the role of Business Excellence practices in the hotel sector, by directly taking into consideration frontline employees in Tehran, Iran. The empirical results indicate both; BE practices acts indirectly on OCB through the mediating effect of job satisfaction; and leadership and teamwork have insignificant effect on employee satisfaction. Those results show that the hypotheses are supported except for two.

6.Implications

6.1.Theoretical implications

The outcomes of this empirical study are important to the quality literature on hotel quality management and hospitality organizational studies plus these links have never been studied previously. Since employee satisfaction significantly affects their organizational citizenship behavior within a hospitality organization, it may be an opportunity for hospitality managers to focus and increase the frontline employees or even they may be able to increase the overall employee satisfaction levels. The studied Business Excellence practices are proved to be significantly affective in frontline employee satisfaction. Therefore, the tourism and hospitality authorities can improve employee job satisfaction through Business Excellence practices.

6.2.Practical implications

The results indicate a positive significant relationship between job satisfaction and OCB in the hotels of the capital city of Iran, these results are in line with the findings of Allen and Rush, (1998), Bateman and Organ, (1983), Bishop et al. (2000) and Murphy et al. (2002), who also found positive relationships between the job satisfaction and OCB.

The research finding reported that the relationship between leadership and job satisfaction is not significant. However the other researchers found significant relationships between them (Chang et al, 2010). As the leaders take care to help and support the employees and they are concerned about the needs of their employees. The reason for having a non-significant result might be lack of trust and poor relationships between the Frontline employees and managers at the hotels of Iran.

The results indicate a positive significant relationship between continuous improvement and job satisfaction of frontline employees working in the hotel industry of Iran. Since the tourism activities in the hospitality industry are a never-ending journey, the continuous improvement should be in place, and the results indicate that the frontline employees in Iranian hotels are very good at learning from their mistakes and encouraging themselves by the feedbacks and corrective actions in the hotel industry. In addition this influences the job satisfaction level of the frontline employees which has resulted in a significant positive relationship.

Management by fact is also one other business excellence practice that has a significant positive relationship with the job satisfaction of the employees working in Iranian hotels. This indicates that the strong influence that has been made on the process management that led to the mapped, analyzed and streamlined work processes has highly influenced the job satisfaction level of the employees working in the hotel.

People base management is another business excellence practice that has a significant positive relationship with job satisfaction. The necessary resources and the reward system that is used by the managers of the hotels in the Iranian hotels have highly influenced the job satisfaction level of the employees, as this is in line with what Kanji (2008) mentioned in defining the people base management he added that it has been researched that they are highly correlated. The employees perform better if they like the environment that they work in.

All work is process which is having a better vision about the processes in the hotel is the main issue that people base management is based on, which has a significant positive relationship with job satisfaction of the frontline employees working in the hotel. This is the result of having a programmed everyday processes that has identified the customer requirements and also expectations and they are applied by all the frontline employees in the Iranian hotel industry.

Although teamwork had a significant effect on employee satisfaction in many researches (Valle et al., 2001; Chang et al, 2010), in this study the results indicate that teamwork was not supported in the hospitality industry of Iran. The non-significant relationship between job satisfaction and teamwork could result from lack of composition of the teams, the low level of trust between the employees working in the hotel industry in Iran. Various studies points out that lack of training in group work in the organizations might result in having negative results of this relationship.

To sum up it is worth mentioning that the problem of Iranian hotels with respect to their frontline employees' responses to the relationships between business excellence practices and job satisfaction that led to organizational citizenship behavior was lack of good leadership as well as good relationships between the frontline employees of the hotels and the leadership of the hotels, which might have been the result of lack of trust in today's world. The other dimension that was not significantly related to the job satisfaction of the frontline employees was the teamwork structure; this might also result from lack of trust between the employees of hotels, as it has been known to be the key mechanism in the involvement of employees in the quality improvement of the hotel. In addition, teamwork was one of the main issues that helped the employees in dealing with the complex problems that need multidisciplinary approaches (Kanji, 2008).

7.Limitations and future research

The limitations of the study are concerned with finding the up-to-date statistics for Iran, since the country has restrictions. The second limitation was being very hard to gather the data from the frontline employees of the hotels, since they were very busy and had no time, or they were not confident enough to answer the questions properly. The future research might take other dimensions and find their relationships with the business excellence practices in the hotel industry of Tehran, or in other industries, or worldwide.

There are serious implications in our findings for politicians and policy makers, the hotel managers are responsible for leading the hotel as well as achieving their objectives. The messages for formally chosen leaders are endorsing their role in a way that increases engagements no matter what their position in the hotel is. An engaging leader may be identified as someone who encourages and agrees to develop the hotel, and who is characterized by a culture based on honesty, openness and intelligibility, and the genuine valuing of others and of their contributions. Engaging leadership enables hotels to cope with change, and also to be practical in shaping their future. They should always be guided by ethical standards and the desire to co-create and co-own ways of working with others towards a shared vision.

Subsequently, hotel managers should also support, lead, coach and make efficient teamwork and give sufficient amount of empowerment to enhance participation and provide better training and education to back up these improvement efforts. Hotels need to look at strategies for improving performance in the light of increasingly competitive environment. Successful hotels are those which are open to internal change and persuade a culture that encourages innovation and market responsiveness. Team working is a strategy that has the potential to improve the performance of individuals and organizations in terms of co-operation and high performance, but it needs to be taken care of over time in order to obtain more competitive and innovative teams with higher quality, delivery precision and productivity. Hotel managers need to have the vision to introduce team working, the sensitivity to promote it and the courage to permit teams to play a proper part in decision making.

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