Internal service recovery: developing a new construct

Abstract

This paper introduces the concept of “internal service recovery” defined as what the organisation does to make internal customers (front‐line employees), who have recovered external customers from service failure, feel less frustrated and more confident of their ability to deal with dissatisfied customers in the future. Internal service recovery often requires reducing employees’ feelings of low perceived control and helplessness. The results from an exploratory study of staff and managers in four branches of a UK bank shows that although the concept and practice of external service recovery is well understood, internal reovery is not. It is suggested that the “traditional” ingredients of external recovery (response, information, action and compensation) may be appropriate for the internal customer. It is also suggested that the passive, alienated employee behaviour associated with “learned helplessness” may need to be addressed through additional interventions. The purpose of the paper is to encourage both researchers and managers to examine how the effectiveness of internal service recovery affects external service recovery and the satisfaction of both employees and customers.