We examine how one aspect of the service encounter, perceived employee effort, affects customer satisfaction with service transactions. Results from two empirical studies indicate that perceived effort has a strong positive impact on transaction satisfaction, and this effect is not eliminated when the perceived success of the service outcome is statistically controlled. This shows that employee effort is appreciated by customers in its own right, regardless of its impact on the outcome. Additional analyses show that outcome can bias effort judgments. That is, when customers do not get the service outcome they want, they are less likely to recognize employee effort and hard work. The study results suggest implications for motivation, attribution, and customer satisfaction theories, as well as for managing the service encounter.
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