The Value of a Smile: Does Emotional Performance Matter More in Familiar or Unfamiliar Exchanges?

Purpose: The purpose was to understand how service familiarity (i.e., the familiarity of the customer with the employee and service provided) operates as a boundary condition for the impact of employee positive emotional displays on service performance. Design/Methodology/Approach: In Study 1, we assessed whether service familiarity (as rated by employees) moderated the relationship of employee-reported positive emotional displays and coworker ratings of service performance. In Study 2, through observed employee–customer exchanges, we tested whether customer-reported familiarity with the service context moderated the relationship between third-party-observed employee positive emotional displays and customer ratings of transaction satisfaction and employee friendliness. Findings: Employee positive emotional displays had the strongest influence on evaluations of performance under low familiarity contexts. Thus, positive emotional displays served as a signal of good performance when there was limited preexisting information about the employee. Implications: Service performance evaluations may be less influenced by employee positive emotional displays when the customer has a familiar relationship, suggesting that such displays from the employee are not always necessary. However, for encounters, employee positive emotional displays are more critical for signaling high quality service performance. Originality/Value: This combination of studies is among the first to isolate the influence of service familiarity at two different levels of conceptualization and measurement using multi-source ratings of service performance.