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It is expected that the population of Generation Y will soon outnumber that of the Baby Boomers and become the largest portion of the overall workforce. However, previous studies have rarely focused on Generation Y employees, and these studies did not consider how different types of work motivations affect employee engagement among Generation Y employees. Thus, based on the self-determination theory, this study investigated how different work motivations affect Generation Y employees’ work engagement and how the perceived service guarantee strength (PSGS) mediates the relationship between employee engagement (a firm-level variable) and relationship quality (RQ; an individual-level variable). Responses were collected from Generation Y employees and customers in the hotel industry. A multilevel design and hierarchical linear modelling analysis were employed. The results indicated that among the four work motivations, task enjoyment had the strongest effect on engagement among Generation Y employees, followed by compensation seeking, recognition seeking, and challenge seeking. Additionally, a partial cross-level mediation effect was found in the relationships among employee engagement, PSGS, and RQ. The findings suggest that hospitality managers should support and motivate staff to increase employee engagement and ensure that employees provide the best possible customer service, which should, in turn, improve customer relationships.
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