INTERNAL MARKETING: A STUDY OF EMPLOYEE LOYALTY, ITS DETERMINANTS AND CONSEQUENCES

Relationship marketing and services marketing emphasize the importance of focusing on employees in creating and maintaining customer value and loyalty. It is commonly argued that there are links between employee loyalty, customer loyalty and profitability. Therefore, it is important to manage and improve job satisfaction and employee loyalty. Based on this view, the purpose of the paper is to develop and apply a model of employee loyalty. It presents a structural equation model with latent variables, linking employees’ job satisfaction, and loyalty to its determinants, and, in turn, to its consequences: perceived contribution to the company value. The paper reports the empirical results from a study among employees in a large international hotel chain. To estimate the model, the partial least square (PLS) method has been used. The determinants of employee loyalty are examined to identify relevant areas of improvement. Priority maps are developed and interpreted in a managerially useful way.