Engaged teams deliver better service performance in innovation climates

Building on the interactionist approach and the consideration of service organizations as open-systems, this study examines the moderating role of team climate for innovation on the relationship between team engagement and service performance. The sample consisted of 599 customers, 344 boundary employees, and 86 supervisors nested in 86 teams from 60 hotels. Multilevel analyses showed significant positive direct relationships between team engagement and service quality indicators. We also found a consistent moderating role of climate for innovation on the association between team engagement and different service performance indicators (functional and relational service quality, overall satisfaction, and loyalty), which means that the relationship between team engagement and service performance becomes stronger as climate for innovation increases. There is a crossover process from team engagement (internal facet) to customers' evaluations of service performance (critical external stakeholders) especially when the situational context stimulates innovation and the recognition of employees' ideas and suggestions to improve work methods and the service delivered. Thus, climate for innovation emerges as a facilitator of the connection between internal and external success components of organizational life.