In line with previous research calls for greater alignment of the public with the private sector practices, this study highlights the significance of investigating organizational service orientation in public organizations, incorporating also internal customer and internal supplier satisfaction. The study incorporates a detailed statistical analysis (Instrumental Variables approach) to examine the relationship between Organizational Service Orientation and Job Satisfaction. This study utilized responses from 511 front-line employees in the public sector. Given the fact that Instrumental Variables approach controls for endogeneity, we can safely infer the existence of an interactive relationship between Organizational Service Orientation and Job Satisfaction. As with any study, several limitations may apply, including other factors that could intervene in the relationship between OSO and JS, greater sample size, and investigation among individuals of a single nationality. The findings of this study highlight the need to take initiatives towards enhancing public front-line employees‟ satisfaction as internal customers, and in turn their job satisfaction for improving delivery of services in public organizations. Our findings extend the line of research in service related theory within the public sector. Interestingly, the interactive relationship between Organizational Service Orientation and Job Satisfaction is also new to the private domain.

Europe’s unfavorable economic environment demands extensive innovation from the services sector. Despite the benefits that innovations (i.e., constant emphasis on new ideas, risk-taking and proactiveness) may accrue, such as superior performance and competitive advantage, they can also bring about increased workload, work-related pressures and high levels of overall job stress for service employees. Drawing on the theoretical frameworks of internal-external fit (Huselid, 1995) and the involvement approach (Boxall and Macky, 2014), and by adopting a service employee-centered perspective that is currently missing from the innovation, services, and management literature (Messersmith and Wales, 2013), we examine the impact of innovation on different types of job stressors in the services industry. Data was collected from 293 employees working in various managerial positions in the hospitality sector. All measures used were based on prior studies and were assessed for reliability using composite reliability (CR) and for validity using factor loadings and average variance extracted (AVE). A confirmatory factor analysis (CFA) tested the measurement of the model and Structural Equation Modeling was employed to examine the proposed relationships. We find that, in a highly innovative service work setting where employees are carefully selected, job positions are carefully designed and high-involvement employee practices are employed, service employees are less likely to report unclear job responsibilities, lack of resources and excessive work demands. While the effects of innovation on organizational performance have been extensively examined, there is scant evidence on the influence of organizational level innovativeness on non-financial outcomes such as employee outcomes (Wales, Gupta, and Mousa, 2013). This is despite the calls within the literature for more studies considering the central role of service employee attitudes and work behaviors in regard to productivity, job performance and turnover (Levy, 2003).