Enhancing Proactive Service Performance: The Role of Employee Involvement, Initiative Climate, and Harmonious Passion for Work (Some Insight from SMEs in An Emerging Market Economy)

Abstract

This study examines the impact of harmonious passion for work on proactive service performance, utilizing employee engagement and initiative climate as mediating variables within service-sector small and medium enterprises (SMEs) in Kalimantan. Using an explanatory research design, data were collected via convenience sampling from 546 respondents across the healthcare, logistics, and hospitality sectors. The data were analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The findings reveal that "integration of Engaged Harmonious Passion for Work" (EHPW)—a novel, second-order construct integrating employee engagement and harmonious passion for work—exerts a significant positive influence on both initiative climate and proactive service performance. Furthermore, the initiative climate is found to directly and positively enhance proactive service performance. While employees' tenure alone shows no direct, statistically significant effect on proactive service performance, it functions as a pure moderating variable. Specifically, a longer tenure strengthens the positive relationship between EHPW and proactive service performance, as evidenced by a significant interaction effect. This research contributes to the literature by introducing the EHPW construct, demonstrating that passion must be paired with active engagement to effectively drive proactive customer service and institutional growth in emerging economies.