European Journal of Marketing

A hierarchical model of the internal relationship marketing approach to nurse satisfaction and loyalty
James W. Peltier John A. Schibrowsky Alexander Nill

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James W. Peltier John A. Schibrowsky Alexander Nill, (2013),"A hierarchical model of the internal relationship marketing
approach to nurse satisfaction and loyalty", European Journal of Marketing, Vol. 47 Iss 5/6 pp. 899 - 916
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A hierarchical model of the

internal relationship marketing
approach to nurse satisfaction
and loyalty
James W. Peltier

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Department of Marketing, UWW Institute for Sales Excellence,

University of Wisconsin-Whitewater, Whitewater, Wisconsin, USA, and

John A. Schibrowsky and Alexander Nill

Nurse
satisfaction and
loyalty
899
Received 10 November 2009
Reviewed 10 August 2010
24 August 2010
6 January 2011
28 May 2011
Accepted 14 August 2011

Department of Marketing, University of Nevada-Las Vegas,

Las Vegas, Nevada, USA
Abstract
Purpose The purpose of this study is to empirically test a hierarchical model of the antecedents of
nurse job satisfaction and loyalty based on the internal marketing literature. Specifically, the study
aims to investigate the degree to which structural, social, and financial bonding activities influence
nurses job satisfaction and retention.
Design/methodology/approach Following a review of the literature, the model was tested via a
survey of 200 nurses from three US health care institutions.
Findings The study resulted in key findings pertaining to the hierarchical nature of structural,
social, and financial bonding activities and their impact on job satisfaction and loyalty.
Practical implications Service industries that depend on front-line employees to deliver high
quality services are provided with innovative suggestions to improve job satisfaction and loyalty of
their employees by employing an internal marketing approach. The study provides organizations with
empirical evidence regarding the synergistic effects of bonding activities.
Originality/value To the best of the authors knowledge, this is the first time a
hierarchical/sequential model of the impact that relationship bonds have on satisfaction and
retention of health care staff has been empirically tested. The findings that structural bonds have both
a direct and indirect impact on job satisfaction and loyalty are of value for interested academics
working in this area and are relevant for companies trying to improve job satisfaction and loyalty of
their employees.
Keywords Internal marketing, Nurses, Job satisfaction, Health care, Empirical research, Job loyalty
Paper type Research paper

1. Introduction
Employee retention is critical to the long-term success of any organization and a
committed employee base is especially relevant in the global health care community
where the retention of caregivers is increasingly important in light of a world-wide
shortage of nurses (World Health Organization, 2008). The global nursing gap is due in
part to a widening supply-and-demand chasm caused by a host of macro-level factors
including an increase in the total number of health care workers needed around the
world, the aging of the nursing population leading to an unprecedented number of

European Journal of Marketing

Vol. 47 No. 5/6, 2013
pp. 899-916
q Emerald Group Publishing Limited
0309-0566
DOI 10.1108/03090561311306967

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nurses retiring in the next ten years, and enrollment caps brought on by a deficiency in
the number of nursing school faculty (Buerhaus et al., 2009; Royal College of Nursing,
2009).
Beyond these structural supply-side issues, Aikens et al. (2001) study of nurses in
the US, Canada, England, Scotland and Germany put a spotlight on the high level of
job dissatisfaction and burnout that exist within the nursing profession. This trend has
continued over the past decade, causing nurses to leave the health care field at an
alarming rate (Poghosyan et al., 2010). As a result, the global nursing shortage is
approaching a crisis level, with expected shortfalls reaching approximately 260,000 in
the US by 2025 (Buerhaus et al., 2009), 60,000 positions in Canada by 2022 (Canadian
Nurses Association, 2009), 40,000 in the UK by 2012 (World Health Organization, 2009)
and massive shortages in other nations in the European Union and around the world
(van der Heijden et al., 2009).
The failure to fill vacant nursing positions triggers a host of negative consequences
for the nursing staff, the organization, and patients. First, inadequate staffing
contributes to job stress due to an increased workload, work schedule inflexibility, and
burnout (Lim et al., 2010) and leads to higher levels of nurse dissatisfaction with their
job. Second, an under-employed and over-worked nursing staff compromises patient
care and leads to more medical errors, increased hospital stays, increased visitations by
chronically ill patients, and greater patient mortality (Chaguturu and Vallabhaneni,
2005).
Given that it is hard to increase the supply of new nurses entering the profession,
the most logical approach to this crisis is to find ways to increase the job satisfaction
and retention of existing nurses (Laine et al., 2009). In response, research is emerging
that investigates how internal marketing can be utilized to create a loyal nursing
staff, one that is fully committed to meeting organizational goals and patient needs
(Chang and Chang, 2007; Peltier et al., 2008; Tsai and Tang, 2008).
In a recent European Journal of Marketing article, Vasconcelos (2008) noted that
broadening the internal marketing construct to investigate workplace satisfaction has
value for employers and customers and that the failure to do so could negatively
impact the organizations supply of human capital. To date, limited research exists that
has examined the use of internal marketing practices to identify the underlying
dimensions of nurse satisfaction and loyalty (Chang and Chang, 2009). Virtually
ignored is research that develops and tests comprehensive frameworks of the ordered
and sequential relationships between antecedent variables (Peltier et al., 2008). This
study is designed to help fill this gap by developing and empirically testing a
theoretical framework of the antecedents of nurse job satisfaction and loyalty, and
attempts to answer three questions:
(1) How do structural, social, and financial bonding activities impact nurses
satisfaction with their job and their commitment to the organization?
(2) Is there an ordered relationship between these internal bonding constructs and
nurse satisfaction/loyalty?
(3) Do these relationships hold in cross-cultural settings?

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2. Background literature: internal marketing, job satisfaction and loyalty

Internal marketing is based on the principle that organizations that treat their
employees as they would valued customers are likely to impact the satisfaction and
loyalty of this key organizational resource (Lings and Greenley, 2005; Mudie, 2003;
Bowers and Martin, 2007). Internal marketing is seen as a way to communicate
organizational values that can be leveraged to create a positive workplace atmosphere
(Naude et al., 2003), leading to organizational and marketing success (Lings and
Greenley, 2009, 2010). Within a health care context, internal marketing efforts have
been found to increase patient service quality (Tsai and Tang, 2008) and create a sense
of belongingness to the organization (Bellou and Thanopoulos, 2006).
2.1 Bonding activities
Developing relational bonds with employees is a primary way to impact employee job
satisfaction and customer service (Ballantyne, 2003). Structural, social and financial
bonds have been identified as antecedents to building long-term marketing
relationships with health care staff (Berry, 1995; Peltier et al., 2008). Commitment to
an organization is expected to be at highest when all three types of relationship bonds
exist (Peltier et al., 2008). Empirical support indicates that the strength of the relational
bonds of physicians (Goldstein and Ward, 2004), nurses (Peltier et al., 2003, 2004) and
other care givers have toward the organization impact their job satisfaction and loyalty
to the institution.
2.2 Job satisfaction and employee loyalty
Job satisfaction has been defined as an attitudinal reflection of how people like or
dislike their jobs (Spector, 1997). In their comprehensive review of the literature, Brown
and Peterson (1993) found that role perception and organizational variables were
highly correlated with job satisfaction. This is in line with Melten et al. (2005) who
proposed process integration as a way to raise employee satisfaction in the health care
industry. Job satisfaction among health care workers is of great interest since
numerous studies indicate that job satisfaction and retention are related to job
performance (Christen et al., 2006).
It is clear that nurses are key determinants of health care quality and patient
satisfaction. Compared to doctors, nurses and support staff are truly frontline service
providers with patients, supplying the overwhelming number of contacts with both
patients and their families (Choi et al., 2005). As such, nurses and support staff have
been regarded as the single most important determinant of perceived service quality
and customer (patient) satisfaction (Paswan et al., 2005).
3. Direct effects of internal marketing on satisfaction and loyalty
The nursing literature is increasingly investigating how job satisfaction and loyalty
are impacted by intra-organizational relationships (Peltier et al., 2008; Willem et al.,
2007). Underdeveloped is research that examines how bonding activities are
interrelated and how these antecedent variables directly and indirectly impact job
satisfaction and loyalty. Based on a review of the literature we next present our direct
and indirect hypotheses related to financial, social and structural bonds.

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3.1 Financial bonding activities and job satisfaction/loyalty

3.1.1 Financial package. One way to build employee relationships is through a
satisfactory financial package and is based on the belief that greater financial
incentives lead to greater job satisfaction and less turnover (Bowers and Martin, 2007).
The financial package includes salary, overtime pay, and fringe benefits in the form of
health insurance, retirement benefits, etc. (Murrells et al., 2005). As the financial
package improve, individuals are more likely to feel that the organization is committed
to them, values their contribution, and cares about their well being:

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H1a. Nurses perception of the financial package will be positively related to job
satisfaction and loyalty.
3.1.2 Job support. Job support has been defined in terms of organizational practices and
structures that provide opportunities for growth, learning, and movement within the
organization (Stewart et al., 2010). Laschinger et al. (2004) found workplace
environments with greater access to information, support, and opportunities to learn
and grow over time experienced higher levels of nurse satisfaction. Education and
training opportunities promote feelings of self-worth and professional growth (King
and Grace, 2006) and have been correlated with job satisfaction and loyalty (Cooper,
2009):
H1b. Nurses perception of job support will be positively related to job satisfaction
and loyalty.
3.2 Social bonding activities and job satisfaction/loyalty
Social bonds are developed through personal interactions with customers/employees.
The same types of activities are important for building social bonds with internal
customers. Horizontal communication structures within nursing units and
communication between nurses and physicians are expected to be key precursors to
workplace satisfaction (Willem et al., 2007). In this regard, internal marketing must be
viewed in terms of an emotional orientation, one that is based on empathic awareness
by employees and management that permeates across the organization (Ahmed et al.,
2003; Ahmed and Rafiq, 2003).
3.2.1 Communication with other nurses and care giver. Health care research
suggests that positive communications between nurses and other members of the
health care team lead to improved job performance, increased job satisfaction, and
better quality of care (Rosenstein and ODaniel, 2005; Peltier et al., 2003, 2004).
Teamwork, shared values, cooperation, friendliness, and a supportive work
environment are all important antecedents of nurse satisfaction and retention
(Miller, 2006). In our theoretical framework we distinguish between the
communications nurses have with other nurses and health care providers from
those that they have with physicians:
H2a. Nurses perception of the relationship they have with other nurses and
support staff will positively impact job satisfaction and loyalty.
3.2.2 Communications between nurses and physicians. Nurse-physician relationship
building is an essential in creating a positive work environment and is an important
antecedent to nurse satisfaction and loyalty (Peltier et al., 2003, 2004). Conversely,

negative interactions between nurses and physicians lead to lower satisfaction and a
greater propensity to leave the organization (Rosenstein and ODaniel, 2005):

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H2b. Nurses perception of the relationship they have with physicians will
positively impact job satisfaction and loyalty.
3.3 Structural bonds and job satisfaction/loyalty
Structural bonding activities create collaboration between organizational members. In
health care, collaboration in patient care decisions provides a sense of empowerment
and is linked to improved patient outcomes and an enhanced sense of accomplishment
at work (Patrick and Laschinger, 2006). Despite the benefits associated with
empowerment, nurses report high levels of dissatisfaction concerning the extent to
which they feel empowered in the care giving process (Nedd, 2006). Although
empowering structural bonding activities take multiple forms, we focused on control
over care and job flexibility.
3.3.1 Control over care. A major barrier to the recruitment of individuals into the
nursing profession is the perception that nurses play a subservient role and have little
input into health care decisions (Chaguturu and Vallabhaneni, 2005). Nurses
perception of the amount of input they have in the care of patients is correlated with
feelings of empowerment, and leads to job satisfaction and loyalty to the organization
(Laschinger and Finegan, 2004; Nedd, 2006). Aiken et al. (2001) found that nurses
working in organizations that support autonomy and control were more satisfied with
their jobs and experienced less burnout. A growing body of research supports a
relationship between structural empowerment, nurse job satisfaction, and loyalty to
the organization (Laschinger and Finegan, 2004):
H3a. Nurses perception of control over care will positively impact their job
satisfaction and loyalty.
3.3.2 Job flexibility. Job flexibility refers to the coordinated decision making between
nurses and supervisors with regard to scheduling the length of work shifts, days
worked, and total hours worked. Job flexibility is viewed as a means of increasing
nurse empowerment (Wright and Bretthauer, 2010). Studies show that allowing nurses
flexibility over their work schedules increases their ability to balance job and family
commitments and to adjust income as they wish (Holtom and ONeill, 2004). This
flexibility gives nurses control over how they deal with the emotional and physical
demands of the job (OBrien-Pallas et al., 2004). Laine et al. (2009) found in their study
of ten European countries that nurses concerned about involuntary changes in work
schedules are more likely to leave the organization and/or the profession:
H3b. Nurses perception of job flexibility will positively impact their job
satisfaction and loyalty.
3.4 The hierarchical impact of bonding activities
In this study, we were particularly interested in the hierarchical structure between the
three types of bonding activities. Recent empirical research in the marketing and
nursing literature suggests that structural bonds have the greatest direct impact on job
satisfaction (Peltier et al., 2008; Wagner et al., 2010). We hypothesize that nurses
perceptions of their level of empowerment and autonomy will not only have a direct

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impact on job satisfaction and loyalty, but will also have an indirect effect as well by
influencing their level of satisfaction with social and financial bonding activities. We
also posit that the nurses perception of their empowerment in care provision and job
flexibility (structural bonding activities) significantly impact their perception of the
relationships they have with physicians, other nurses and support staff (social bonds):
H4. Nurses perception of control over care will positively impact their perception
of the relationship they have with physicians (H4a) and other nurses and
support staff (H4b).

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H5. Nurses perception of job flexibility will positively impact their perception of
(H5a) the relationship they have with physicians and (H5b) other nurses and
support staff.
Along these same lines, we posit that as nurses feel more empowered they tend to view
their financial package and job support activities in a more favorable light (Stewart
et al., 2010):
H6. Nurses perception of control over care will positively impact their perception
of (H6a) the financial package and (H6b) job support.
H7. Nurses perception of job flexibility will positively impact their perception of
(H7a) the financial package and (H7b) job support.
There is also recent support that social bonds have a greater impact on job satisfaction
and loyalty than do financial bonds (Peltier et al., 2008). Based on our earlier
discussion, we would expect that as the work environment becomes more supportive,
cooperative, and friendly, nurses will tend to be more satisfied with the jobs
compensation package and job support activities:
H8. Nurses perception of the relationship they have with other nurses and
support staff will positively impact their perception of (H8a) the financial
package and (H8b) job support.
H9. Nurses perceptions of the relationship they have with physicians will
positively impact their perception of (H9a) the financial package and (H9b)
job support.
Together, the preceding hypotheses form the Internal relationship marketing model of
nurse job satisfaction and loyalty displayed in Figure 1.
4. Methodology
4.1 Survey construction
To test the proposed model and related hypotheses, data were collected via a survey of
US nurses. A three-step procedure was employed to construct the questionnaire. First,
the nurse loyalty, internal marketing and relationship marketing literatures were
reviewed to identify possible topics. Next, 20 interviews were conducted with staff
nurses and supervisors at the target hospitals and clinics to identify questionnaire
content. Third, the questionnaire was pre-tested and modified as needed. The
questionnaire was finalized and approved by the participating hospital. The final
survey contained 29 questions related to financial, social, and structural bonds, six

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Figure 1.
An internal relationship
marketing model of nurse
job satisfaction and
loyalty

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906

overall satisfaction and loyalty measures, and three demographic items. All of the
bonding questions used a five-point scale ranging from 1 very dissatisfied to
5 very satisfied.
4.2 Data collection
The study was administered to 242 nurses at a not-for-profit US hospital and its two
clinics. A communication was sent to nurses describing the purpose of the study and
why their involvement was important. The survey was distributed via the in-house
mail system to all full time nurses at these organizations. To encourage candid
responses, completed surveys were returned in a sealed envelope to a confidential
return box. A total of 200 questionnaires were returned for an 82.6 percent response
rate. As expected given the high response rate, the sample was nearly identical to the
overall population of nurses.
4.3 Model testing procedures
The structural model was evaluated using the process proposed by Diamantopoulos and
Siguaw (2000), and Joreskog (1993). First, the structural model based on the hypotheses
was defined and specified. The basic approach was a two-step procedure (Anderson and
Gerbing, 1988), where the purified measures were determined prior to specifying and
estimating the model. Next the model (displayed in Figure 1) was estimated with the
summated measures (items parcels approach) using the SPSS structural equation modeling
software, Amos 19.0. The fit of the model was evaluated using the measures proposed by
Blunch (2008, p. 117), specifically the overall chi square value for the structural model, the
goodness of fit index (GFI), the adjusted goodness of fit index (AGFI), the root mean square
error of approximation (RMSEA), and the probability of close fit index (PCLOSE). As
recommended by Blunch (2008, p. 98), Diamantopoulos and Siguaw (2000), Olobatuyi
(2006, p. 127) and others, we assessed the model fit using the modification indices.
5. Results
5.1 Measures
The multiple indicants representing the six measures related to the financial, social, and
structural bonds were evaluated according to the principles outlined by Nunnally (1978)
and detailed by Churchill (1979). The items were subjected to a principle components
exploratory analysis employing a Varimax rotation to determine the degree to which the
items represented unique measures. Five of the 29 bonding questions were dropped due to
low (,0.40) or multiple factor loadings. As predicted, the items resulted in six unique
measures. Next, the items were subjected to an item to total correlation analysis to
determine if any items with low item to total correlations needed to be removed to increase
reliabilities. Finally, the coefficient alpha for each of the measures was computed as an
indicator of the measures reliability. All measures were found to be at satisfactory levels
of reliability. Table I contains the individual items for each of the bonding measures, the
factor loadings, and their estimated reliabilities.
The six item measure of overall job satisfaction and loyalty was evaluated separately
and included five overall satisfaction questions related to level of job stress, unit,
relationships with physicians, relationships with nurses, and satisfaction with job.
Loyalty was measured via overall likelihood of staying (five-point likelihood scale). The
coefficient alpha was 0.90.

Freedom to do your job as you see best

Ability to provide the best possible care to
patients
Input into your specific patient
responsibilities
Amount of input you have in care decisions
Input into your patient load assigned to you
each shift
Cohesion of the nursing staff
Your relationship with nurses
Communication among nursing staff
Your relationships with supervisors
Communication with other members of
health care team
Communication between administration and
yourself
Total income earned
Hourly wage that you receive
Health insurance benefits
Retirement benefits
Communication between physicians and you
How well physicians listen to what you have
to say
Your relationship with physicians
Number of hours you work each shift
Work schedule flexibility
Ability to determine how much overtime you
work
Continuing education/training opportunities
On-the-job training
Amount of recognition that you receive
Variance explained 63.8% (%)
Coefficient Alpha
12.9
0.86

0.58

0.72
0.67

0.73

0.73

Care
control

12.6
0.83

0.46

0.49

0.79
0.75
0.74
0.52

Comm with nurses and

caregivers

11.4
0.76

0.89
0.86
0.61
0.58

Financial
package

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10.8
0.86

0.78
0.77

0.83

Comm. with
physicians

8.4
0.65

0.63

0.77
0.71

Job
flex

0.74
0.74
0.46
7.7
0.72

Support/
growth

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Table I.
Model dimensions and
measures

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5.2 Structural model

The fit of the model was evaluated using the fit statistics described in section 4.3. The
results are shown in Figure 1. In total, these various fit measures suggested that the
model might benefit from some modifications. Although not hypothesized a priori, we
anticipated the need to account for the relationships of the variables within each of the
bonding levels. The modification indices confirmed this premise, suggesting that the
fit would be improved if the model accounted for these associations. We thus added
correlated error terms between the two structural, social, and financial bond measures.
By adding these correlated terms in our model the overall Chi Square improved from
0.7 to 52.6 and the goodness of fit improved from 0.933 to 0.999. This is consistent with
the theoretical model and our original thought that additional relationships were likely
to exist between these bonding levels. Finally, since they were not statistically
significant, we eliminated the paths from job flexibility to communications with
physicians and from communications with physicians to financial package. The final
model is shown in Figure 2
When these various paths were modified, the model fit improved significantly. The
results are shown in Figure 2. When comparing these fit statistics with those of the
original model there were substantial improvements across all five measures. The overall
chi square value for the structural model improved considerably as did the GFI and the
AGFI. In addition, the RMSEA was reduced to 0.001 and the PCLOSE improved to 0.809.
In summary, these fit measures suggested that the modified model was a good fit of the
data. In reviewing the estimates for the individual coefficients, most remained virtually
unchanged, suggesting that the model was stable and not significantly altered by the
modifications. The revised model along with the fit statistics are displayed in Figure 2,
and the individual parameter estimates are shown in Table II.
We then compared the modified model shown in Figure 2 to a variety of potential
alternative competing models. First, we compared this model to non-nested models
where the paths between the various bonding activities were reversed. Based on the
measures proposed by Blunch (2008, p. 117) for non-nested models, we found that none
of the alternative models performed as well as the modified model. Subsequently, we
compared the modified model to nested models where the direct and indirect paths
were eliminated from the model. Based on the chi square difference compared to the
change in degrees of freedom, along with Akaike Information Criterion (AIC),
Consistent Akaike Information Criterion (CAIC) and the expected value of the
cross-validation index (ECVI) (Blunch, 2008, p. 117; Diamantopoulos and Siguaw, 2000,
p. 136) none of the investigated models proved to be a better fit of the data compared to
the modified model.
Our final two evaluations of the model included investigations of its parsimony and
cross-validity. To evaluate parsimony we first reviewed the related measures
suggested by Blunch (2008, p. 118). The AGFI was sufficiently high and the AIC and
the CAIC measures for the proposed model were lower than either the independence or
saturated models, providing evidence of model parsimony. All of the proposed
structural paths were significant indicating that they each add value to the explanatory
value of the model. Eliminating any of them would reduce the fit of the model,
suggesting that it is parsimonious in its current form.
Our ability to assess the cross validity of the model was limited due to a sample size
that did not allow for the use of split samples. Instead, we evaluated the cross-validity

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Figure 2.
Final structural equation
model of the internal
relationship marketing
model of nurse satisfaction
and loyalty

using the one sample measures suggested by Blunch (2008, p. 117). We first reviewed
the EVCI, AIC and the CAIC for the proposed model compared to the independent and
saturated models and found that in each case they were lower for the proposed model
than for either of the alternatives. Next, we investigated Hoelters critical N and found
it to be sufficiently high (. 200), which also provided some evidence of cross-validity
(Blunch, 2008, p. 117). Finally, we ran a cross validation simulation. The simulation
only produced 4/500 permutations ( p-value 0.008) that fit the data better or as well
as the proposed model, providing more evidence of cross-validity.

Notes: *One tailed t-test

Financial package
Job support
Communication with other nurses and caregivers
Communication with physicians
Care control
Job flexibility
Care control
Care control
Job flexibility
Job flexibility
Care control
Care control
Job flexibility
Job flexibility
Communication with other nurses and caregivers
Communication with other nurses and caregivers
Communication with physicians
Communication with physicians

CR

p-value *

Job satisfaction and loyalty

0.063 0.035 1.809
0.05
Job satisfaction and loyalty
0.578 0.189 3.063
0.001
Job satisfaction and loyalty
0.232 0.064 3.607
0.001
Job satisfaction and loyalty
0.138 0.064 2.141
0.01
Job satisfaction and loyalty
0.109 0.049 2.235
0.01
Job satisfaction and loyalty
0.162 0.061 2.629
0.01
Communication with physicians
0.337 0.042 7.993
0.001
Communication with other nurses and caregivers 0.334 0.048 7.218
0.001
Communication with physicians
NS
Communication with other nurses and caregivers 0.123 0.070 1.754
0.05
Financial package
0.193 0.092 2.091
0.05
Support
0.061 0.018 3.330
0.001
Financial package
NS (0.07)
Job support
0.045 0.023 1.902
0.05
Financial package
0.408 0.122 3.346
0.001
Job support
0.102 0.023 4.343
0.001
Financial package
NS
Job support
0.046 0.024 1.917
0.05

Table II.
Model estimates for the
internal marketing model
of nurse job satisfaction
and job loyalty

H1a
H1b
H2a
H2b
H3a
H3b
H4a
H4b
H5a
H5b
H6a
H6b
H7a
H7b
H8a
H8b
H9a
H9b

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5.3 Hypotheses testing

We evaluated individual coefficients to test the hypotheses. In each case the sign of the
coefficient was correct, and using a one tailed t test, 15 of 18 of the originally proposed
structural paths were found to be significant; on path was marginally significant (see
Table II). The two notable exceptions were H9a and H5a. Specifically, satisfaction with
job flexibility did not impact communications with physicians and communications
with physicians did not influence satisfaction with the financial package. Although not
shown in Figure 2, the path from job flexibility to job support was marginally
significant.
This study produced findings concerning the magnitude of the effects and the
hierarchical nature of the antecedent variables. While all six of the antecedent variables
had a statistically significant impact on job satisfaction and loyalty, the actual
magnitude of the effects were very different. To investigate the actual size of the
effects, the direct, indirect and total standardized effect sizes were calculated using the
method proposed by Hayduk (1988) and Olobatuyi (2006). The effect sizes are
interpreted as the magnitude of the standardized unit change in the dependent variable
given a one standardized unit change in the independent variable (Olobatuyi, 2006,
p. 134). Table III displays the effect sizes.
While communications with other nurses and caregivers produced the largest direct
effect (0.237), control over care had the largest total effect (0.412) on job satisfaction and
loyalty, Conversely, the financial package was found to result in only a 0.105 change in
the measure of job satisfaction and loyalty. While we leave it to the reader to interpret
whether or not the individual effect sizes are meaningful in practice, we do note that all
of the total effect sizes with the exception of the financial package resulted in
substantive changes in the measure of job satisfaction and loyalty.

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6. Discussion of results
Our findings corroborate the work by Laschinger and Finegan (2004) and Nedd (2006)
concerning control over care and the findings of Laine et al. (2009) pertaining to job
flexibility and job satisfaction. The results also support the previous work of Miller (2006),
Rosenstein and ODaniel (2005), and others concerning the impact of the nurses
perception of their relationships and communications with physicians, nurses and other
caregivers on job satisfaction and loyalty. Finally, the results support the previous
findings that the financial package and job support are directly related to nurses job

Variable

No. of
items

Direct
effect

Indirect
effect

Total
effect

5
3
3

0.156
0.148
0.132

0.256
0.053
0.025

0.412
0.201
0.157

6
3
4

0.237
0.202
0.081

0.087

0.324
0.202
0.105

Control over care

Job flexibility
Communications with physicians
Communications with other nurses and care
givers
Job support
Financial package
Note: Effect sizes based on standardized coefficients
Source: Olobatuyi (2006, pp. 135-36)

Table III.
The direct and indirect
effects of the dependent
variables on job
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912

satisfaction and loyalty (Cooper, 2009; King and Grace, 2006; Laschinger et al., 2004). Also
as hypothesized, we found that a hierarchical relationship between structural, social, and
financial bonding activities existed. The study established support for the relationships
forwarded by Peltier et al. (2008) and Wagner et al. (2010) that nurses perceptions
pertaining to the structural bonds (control over care and job flexibility) impact their views
about the social bonds (relationships with physicians, other nurses and caregivers) which
affect their assessment of the financial package and job support. As Table II indicates, the
strongest relationships existed between control over care and communications with
physicians, nurses and other caregivers. To the extent that nurses feel empowered to do
their job in the way they see as best, they are more satisfied with the relationship they
have with the physicians, supervisors, other nurses, and members of the health care team.
In turn, they are more satisfied with their financial package and job support. All of this
leads to increased job satisfaction and loyalty.
This study also reaffirms and extends earlier findings regarding the importance of job
support activities (Chang and Chang, 2007, 2009; Tsai and Tang, 2008) and
communications (Chang and Chang, 2007, 2009), and builds on the work of Willem
et al. (2007), supporting their findings regarding the significant negative impact of
centralization (to the degree to which it negatively impacts the nurses ability to have a
say in care decisions and job flexibility) and importance of autonomy and interactions.
However, our results differed from theirs regarding the importance of the dimensions of
job satisfaction. While Willem et al. (2007, p. 1016) found that pay was not important in
the study of organizational structures and job satisfaction relationships, they did report
that the nurses in their study, considered pay as the most important dimension of job
satisfaction, followed by autonomy and interaction (Willem et al., 2007, p. 1015). Our
study found that the financial package, though significant, was the least impactful on job
satisfaction and loyalty. More research needs to be done in this area.
In summary, this study developed and tested a comprehensive model of nurse
satisfaction and loyalty with ordered relationships between the antecedent variables.
The results imply that the individual factors are not separable or substitutable, but
rather synergistic, which intimate that a combination of financial, social and structural
bonding activities is a more effective approach to increasing job satisfaction and
loyalty among nurses. Although these relationships need to be investigated across
different settings, the results provide insights for both practitioners and academics.
7. Managerial implications
The results from this study provide a number of innovative suggestions for service
industries in general and the health care industry that depends on front line employees
to deliver high quality services specifically.
First, the organization needs to empower its employees by allowing them some
control and flexibility over their jobs. As our study found, the empowerment of nurses
in terms of more control over care and job flexibility improved their evaluation of
almost all the other aspects of their jobs. Second, our findings suggest that the
organization needs to enhance social bonds by providing an atmosphere that promotes
communication and teamwork. Our study revealed that nurses who maintain open
communication lines and positive relationships with other care givers up and down the
chain of command are more satisfied with their jobs and feel in a better position to
provide quality services. Third, the organization needs to realize that job satisfaction is

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not just a function of the financial package. That is, there is a synergistic value of
financial, social and structural bonding activities and a multiplicative value of social
bonding on financial bonds. Our study suggests that investing in structural bonding
and social bonding activities pay compounded dividends in terms of improving job
satisfaction, loyalty and retention. Fourth, and possibly most importantly, health care
organizations need to implement an internal relationship marketing program (Ahmed
et al., 2003; Peltier et al., 2008). We advocate that all service organizations that rely on
skilled employees to provide high quality services must be both customer and
employee centered. In other words, a true stakeholder orientation (Greenley and Foxall,
1997) that addresses the interests of multiple stakeholder groups by applying its
marketing and communication competencies towards the satisfaction of customers and
employees might increase overall system performance. Service providers need to
become proactive internal marketers and develop communication programs directed
toward their employees.
In summary, service providers need to develop strategic plans with a mission and
goal dedicated to improving service quality and the work environment for its
employees. The internal relationship marketing model proposed in this study provides
a framework to build relationship bonds with employees and communicate with them
pertaining to the service quality being delivered.
8. Limitations and future research directions
This study provides a starting point for research on the application of the internal
relationship marketing model to the nursing profession. It should be noted that this
study was conducted at a small number of health organizations located in the
Midwestern US. In addition, many of the nurses were relatively satisfied with their jobs.
The results might be different in a less positive situation or in a different geographic
location. More research needs to be conducted across different countries and settings to
determine the models generalizability across a variety of health care organizations.
Given these limitations we propose a number of future research directions. First, we
would like to extend this work to other staff employees at health care organizations.
Second, we believe that this model should be investigated across a variety of health
care related job sites. Finally, a longitudinal study is needed to determine if a
health care organization can employ this internal relationship marketing approach to
actually impact perceptions about quality, job satisfaction and loyalty.
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Corresponding author
Alexander Nill can be contacted at: alexander.nill@unlv.edu
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