Impact of Servitization on Employee Satisfaction with Performance Evaluation Systems: A Case Study of China’s New Energy Sector Amid Power Market Reforms

Abstract

This study investigates the mechanisms by which service-oriented transformation affects employee satisfaction with performance evaluation systems within the context of China’s electricity market reform. Using CGN New Energy’s Guangxi Branch as a case study and applying the grounded theory method, the research systematically analyzes employees’ perceptions of fairness, transparency, and career development during the transition from a product-oriented to a service-oriented model, based on in-depth interviews and surveys. The findings reveal that while servitization enhances employee skill development and career satisfaction, it also introduces challenges, such as increased work pressure and the demand for more transparent performance evaluation systems. This study provides valuable insights into optimizing management practices and performance evaluation systems in renewable energy companies, contributing both theoretically and practically to the literature on organizational transformation in the energy sector. These conclusions are not only significant for Chinese enterprises but also offer important reference points for global energy companies undergoing similar transitions.

1. Introduction

The global transition toward a green and sustainable economy places renewable energy at its core, playing an irreplaceable role in this process. Its widespread adoption not only facilitates the achievement of carbon neutrality and enhances energy security but also injects new momentum into global economic development (Gielen et al., 2019) [1]. Existing research has demonstrated the technical and economic feasibility of a shift to 100% renewable energy. However, achieving this goal requires sustained efforts, with a particular emphasis on technological advancements, policy innovation, and social acceptance (Al-Shetwi et al., 2024) [2]. While extensive studies have explored the environmental and technical aspects of this transition, a significant research gap remains in understanding how renewable energy companies manage internal organizational changes, especially in their shift toward service-oriented operations and the impact on employee satisfaction and performance evaluation systems. This study aims to fill this gap by analyzing how the transition affects the satisfaction of technical employees in new energy companies concerning their performance evaluation systems. By investigating this relationship, the study seeks to uncover and analyze one of the key factors for companies to succeed in the rapidly evolving new energy industry, an aspect that has been relatively underexplored.

With the increasing public awareness of environmental issues and stricter environmental regulations, green concerns are gaining prominence in the manufacturing sector (Zhang et al., 2022) [3]. Concurrently, the deepening of China’s power market reforms, particularly the introduction of market-oriented trading mechanisms and the establishment of a unified national power market, has intensified market competition (Guo et al., 2022) [4]. In this context, sales personnel in renewable energy companies face the challenge of transitioning from traditional roles as production and technical workers to roles focused on marketing and services. This role shift not only requires a change in work mindset but also demands the acquisition of new business skills, enabling companies to continuously adapt and adjust in a highly competitive market environment (Sadjadi et al., 2023) [5].

The shift toward servitization represents a major transformation in the role of companies, evolving from traditional energy suppliers to comprehensive energy solution providers. This strategic transition requires a shift from a product-based model to a service-based model (Baines et al., 2020; Kowalkowski et al., 2017) [6,7]. However, this transformation introduces new challenges to internal performance evaluation systems. Employee satisfaction with these systems is a key indicator of management effectiveness and overall employee morale (Jang et al., 2023) [8]. Previous studies have demonstrated that satisfaction with performance evaluation systems directly impacts organizational loyalty, employee motivation, and overall company performance (Dangol, 2021) [9]. Nevertheless, there remains a significant gap in research focusing specifically on how servitization impacts these systems within the energy sector, representing a critical omission in the current literature.

Therefore, this study aims to explore how the servitization transition in renewable energy companies affects employee satisfaction with performance evaluation systems, using CGN New Energy’s Guangxi Branch as a case study within the context of China’s power market reform. Grounded theory will be applied, leveraging in-depth interviews and survey data to identify the specific factors influencing employee satisfaction during this transition and to propose strategies for optimizing these factors. By addressing these research questions, we aim to uncover the key dynamics between servitization and employee satisfaction with performance evaluation systems. The findings will provide valuable insights not only for Chinese renewable energy companies but also for global energy firms undergoing similar servitization transitions. In light of global efforts to achieve carbon reduction targets and promote the widespread adoption of renewable energy, understanding how servitization impacts employee satisfaction with performance evaluation systems will offer critical guidance for improving organizational efficiency and supporting sustainable development goals.

2. Literature Review

2.1. Electricity Market Liberalization

Electricity market liberalization refers to the introduction of market mechanisms to transform the electricity industry from a monopolistic structure to a competitive one, thereby improving resource allocation efficiency and service quality (Joskow, 2008) [10]. In response to growing global energy demand and the rapid development of renewable energy, electricity market liberalization has become a key component of the energy policies in many countries. The primary drivers of this reform include enhancing industry efficiency, reducing operational costs, and addressing increasingly diverse energy demands (Borenstein et al., 2015) [11]. The implementation paths and models of electricity market liberalization vary by country or region, encompassing factors such as the unbundling of vertically integrated companies, the establishment of electricity trading markets, and the introduction of third-party competition (Green, 2006) [12].

The marketization of China’s electricity sector has advanced the participation of industrial consumers in market reforms. Future policy development should focus on enhancing market transparency, increasing industrial consumer engagement, and promoting the adoption of demand response mechanisms to ensure more efficient and sustainable energy use (Fatras et al., 2022) [13]. Moreover, the successful implementation of electricity market liberalization depends on the development and retention of multidisciplinary talents. These professionals need expertise in fields such as electricity, finance, and mathematics, as well as a high level of theoretical knowledge and practical experience in electricity marketing (Yang et al., 2024) [14]. Under the goal of carbon peaking, it is crucial to build a new electricity market system and pricing mechanism that align with China’s national conditions, enhance the stability and flexible regulation capabilities of the electricity system, and promote the formation of an electricity system primarily driven by renewable energy (Cheng et al., 2023) [15].

2.2. Servitization

Servitization refers to the integration of services into a company’s products as a strategy to enhance market competitiveness, increase revenue, and improve market influence (Vandermerwe et al., 1988) [16]. As global competition in the manufacturing market intensifies, the shift from a “product economy” to a “service economy” has become a critical strategy for enhancing corporate competitiveness (Baines et al., 2017) [17]. In the study of manufacturing servitization models, scholars have proposed three primary models: product extension services, product function services, and integrated solutions (Pei-Ju et al., 2014) [18]. The servitization process involves manufacturers transitioning from product-centric processes, organizational capabilities, and cultures to a stronger focus on service processes (Brax et al., 2017) [19]. Research suggests that servitization strategies are particularly suited for larger enterprises and that their impact on operational performance becomes more pronounced once a certain threshold of servitization is reached (Li et al., 2015) [20].

Servitization in China’s manufacturing industry has progressed relatively slowly, with a low proportion of service activities and limited service offerings. As a result, manufacturing firms need to transition from product-oriented approaches to service-oriented strategies, fostering innovation and integrating products with services (Lindhult et al., 2018) [21]. In contrast, developed regions such as Europe and North America have advanced their focus on servitization, emphasizing supply chain integration, digital servitization, and value co-creation. The integration of suppliers, internal processes, and customers not only enhances firm performance but also improves resource efficiency and the sustainability of product–service systems (PSSs) through technologies such as the Internet of Things (IoT) and artificial intelligence (AI), thereby driving business model innovation and increasing competitiveness (Shah et al., 2021; Kim et al., 2023; Shen et al., 2023) [22,23,24].

However, China’s servitization process faces unique environmental conditions, particularly among small- and medium-sized enterprises (SMEs), where the national strategy for promoting green and low-carbon development has had a profound impact. The government has played a pivotal role in facilitating this transformation through policy guidance, financial incentives, and regulatory frameworks. For instance, government subsidies have played a significant role in driving the transition of Chinese listed companies toward green technological innovation. In capital-intensive industries, subsidies effectively alleviate financial constraints, fostering the growth of green patents and the commercialization of innovative outcomes. Future subsidy policies are expected to gradually shift toward market-oriented mechanisms, leveraging tools such as green funds and tax incentives to enhance the sustainability and efficiency of green transitions (Shao et al., 2022) [25].

The rise of servitization in the energy sector is evidenced by the implementation of customer-centric smart services and innovative business models that decouple the energy value chain. This transformation not only enhances corporate competitiveness but also attracts significant investment and financing (Singh et al., 2022) [26]. However, employee acceptance of organizational transformation is often accompanied by several paradoxes, such as the tension between stress and opportunity, control and empowerment, and efficiency and adaptability. These paradoxes require organizations to strike a delicate balance in their management practices. Leadership support, transparent communication, and employee involvement are critical factors in fostering acceptance. By incorporating employee feedback and providing adequate support, organizations can effectively mitigate anxiety and resistance, facilitating smoother transitions (Klein et al., 2024) [27].

2.3. Performance Evaluation Systems

Performance evaluation systems provide essential information for various personnel decisions within organizations, facilitating the organization, retention, motivation, and development of productive employees. However, there is growing concern that many existing performance evaluation systems fail to effectively achieve their intended objectives (Latham et al., 1981) [28]. An efficient and fair performance management system can significantly enhance employee motivation and organizational loyalty, ultimately improving overall corporate performance (Judge et al., 2001) [29]. For example, studies have shown that university faculty members’ dissatisfaction with existing performance management systems primarily stems from the failure to closely link performance with salary, promotion, and rewards, which negatively impacts their job performance and career satisfaction (Dasanayaka et al., 2021) [30]. A significant positive correlation exists between job satisfaction and job performance, with the relationship being more pronounced in service-oriented and emotionally intensive roles. The strength of this association is moderated by key factors, including macro-level cultural context, job type, and managerial support. To effectively enhance employee satisfaction and performance outcomes, organizations should adopt an integrative approach that accounts for these moderating variables (Katebi et al., 2022) [31]. High-performance work systems (HPWSs) can provide a competitive advantage in the process of servitization by strengthening employees’ service capabilities, particularly in dynamic and complex environments (Baik et al., 2019) [32].

An effective performance management system should include clear goal setting, continuous communication, performance appraisal, rewards and recognition, and feedback mechanisms. Effective performance management strengthens employees’ intrinsic motivation and sense of achievement by setting clear goals, providing timely feedback, and implementing fair incentive systems. Trust and transparency are pivotal to its effectiveness. A fair and just management framework not only alleviates employees’ negative emotions but also enhances their organizational commitment and promotes higher levels of work engagement. (Whittington et al., 2017) [33]. When evaluating talent and technical contributions, photovoltaic new energy companies should establish scientific and standardized talent evaluation criteria and processes. Practical evaluation indicators and weighting systems, based on the company’s specific context, should be developed to ensure comprehensive, objective, and scientific assessments of employees’ education, professional skills, work attitudes, and performance. Through career planning, training, and incentives, the potential and creativity of employees can be fully realized, enhancing their work enthusiasm and innovation capabilities (Arcelay et al., 2021) [34].

2.4. Literature Review Summary

The existing literature has extensively discussed the impact of electricity market liberalization, servitization transformation, and performance evaluation systems on corporate competitiveness, employee motivation, and job satisfaction (Joskow, 2008; Baines et al., 2020; Katebi et al., 2022; Arcelay et al., 2021) [10,17,31,34]. However, these studies have paid limited attention to China’s renewable energy sector, particularly regarding the complex responses of employees to performance evaluation systems during the shift from product-oriented to service-oriented business models in the context of China’s power sector reforms. Furthermore, China’s unique market environment and management practices, such as policy-driven industry development, significantly differ from those in international markets. These differences exacerbate the challenges related to employee satisfaction with performance evaluation during the servitization process, a gap that has been insufficiently addressed in the existing research.

To bridge this gap, this paper employs grounded theory, utilizing in-depth interviews and surveys to systematically analyze the complex relationship between servitization transformation and employee satisfaction with performance evaluation systems. The study aims to uncover these unique challenges and provide both theoretical insights and practical recommendations for optimizing management practices and performance evaluation systems in the renewable energy sector.

3. Data and Research Methodology

3.1. Research Subjects

This study selects CGN New Energy’s Guangxi Branch as the research subject for the following reasons:

Representativeness: The CGN New Energy Guangxi Branch, a key subsidiary of China General Nuclear Power Group, focuses on the development and utilization of wind, solar, and biomass energy resources in Guangxi. In the context of China’s electricity market reforms, the company is advancing its servitization transformation, providing rich empirical data for this study. This transformation not only reflects the broader trends among Chinese renewable energy companies but also offers valuable insights into the impact of this shift on employee performance evaluation.

Geographical Advantage: Guangxi is located at the core of the China–ASEAN Free Trade Area and serves as a critical gateway for China’s economic cooperation with ASEAN countries, giving it significant geographical and economic strategic importance. Studying CGN New Energy’s Guangxi Branch sheds light on the management experiences of energy companies in the region as they undergo servitization transformations and provides a reference for other companies operating in similar contexts.

Generalizability: As a major energy base in China, Guangxi’s renewable energy development represents the broader national trend toward a low-carbon transition. By analyzing the servitization transformation in this case, the conclusions of the study offer broad reference value, applicable not only to China but also to other renewable energy companies worldwide undergoing similar market reforms.

3.2. Ethical Approval

This study was reviewed and approved by the Academic Committee of the School of Business Administration, Guangxi University, ensuring compliance with all ethical standards.

Employees from CGN New Energy’s Guangxi Branch were recruited as participants for questionnaires and interviews. The recruitment period began on 10 July 2024 and concluded on 20 July 2024. All participants voluntarily took part in the study and were free to withdraw at any time without providing an explanation; their participation or withdrawal did not affect their position, salary, or any other benefits at the company. Participants were fully informed about the purpose, process, and potential implications of the study, and they had the right to decline answering any questions they preferred not to address.

The survey and interview procedures were also acknowledged and approved by the Academic Committee of the School of Business Administration at Guangxi University. All interviews were conducted in the presence of teachers appointed by the Student Committee of the School of Business Administration, and oral consent was obtained from all participants. For the online questionnaire, a statement was included in the introduction indicating that participants who did not wish to take part could opt out, thereby eliminating the need for written consent.

Throughout the data collection process, the authors ensured that no information identifying individual participants was collected. All data were de-identified and gathered anonymously, ensuring full protection of participants’ privacy.

3.3. Research Methods

This study adopts grounded theory as the primary research method to explain the mechanism through which the service-oriented transformation of new energy power companies influences employee satisfaction with performance evaluation systems, within the context of China’s electricity market reform. Grounded theory, introduced by Anselm Strauss and Barney Glaser in the 1960s, is a qualitative research methodology that builds theory through the systematic analysis of empirical data (Glaser, 2017) [35]. While grounded theory is primarily used for theory generation, in this research, it serves as an interpretive tool to uncover the underlying mechanisms affecting employee satisfaction with performance evaluation in a specific organizational context. The rationale for employing grounded theory in this study is as follows:

First, although grounded theory is typically employed to develop new theoretical models, this study utilizes it as an explanatory framework to elucidate the complex relationship between service-oriented transformation and employee satisfaction with performance evaluation systems. Through this approach, the study delves into the collected data, revealing the “how” and “why” of organizational transformation’s impact on employee satisfaction with performance evaluation systems. Grounded theory is not merely a tool for generating new theories; it emphasizes a deep understanding of complex mechanisms in real-world contexts. By systematically analyzing empirical data, this study constructs a theoretical model without relying on preconceived frameworks, thereby uncovering the profound effects of this transformation on employees.

Second, while previous research has explored the relationship between service-oriented transformation and employee performance evaluation, most studies have focused on traditional manufacturing industries, with relatively few targeting new energy power companies. The operating environment of China’s new energy enterprises, particularly under the backdrop of power market reforms, is unique. Grounded theory, by closely integrating with empirical data, ensures that research findings emerge from authentic organizational experiences. This is crucial for understanding the dynamic changes occurring within Chinese new energy companies in this specific context. Additionally, traditional quantitative research methods often fail to capture the nuanced effects of servitization transformation, whereas grounded theory, through systematic coding and data analysis, can uncover the unique challenges encountered by enterprises and employees during this process, thereby providing a highly explanatory theoretical framework.

Finally, grounded theory offers a structured analytical process, extracting meaningful patterns and relationships through systematic coding and continuous comparison of interview and survey data. By using this method, the study develops an explanatory model that reveals how service-oriented transformation influences employee satisfaction and how this is reflected in performance evaluation systems. The application of grounded theory not only enhances the rigor of the research but also provides important theoretical and practical guidance for improving organizational practices and employee performance evaluations.

3.4. Data Collection

This study employs two data collection methods: in-depth interviews and structured questionnaire surveys.

(1) First Round of Data Collection

To avoid selection bias, the researchers randomly selected employees at various levels from the marketing department of CGN New Energy’s Guangxi Branch for interviews. The interviews primarily focused on the fairness of the performance evaluation system, the transparency of the evaluation criteria, the effectiveness of feedback mechanisms, and suggestions for improving the evaluation system.

Interview Design and Implementation: Based on the relevant literature and theoretical frameworks, an interview guide was carefully crafted to ensure comprehensive coverage of the research topics. A pilot interview was conducted to validate the clarity and effectiveness of the questions. During the actual interviews, participants were encouraged to express their genuine opinions in a pressure-free environment. All sessions were meticulously recorded and transcribed verbatim to ensure data accuracy.

Sample Selection: In line with theoretical sampling principles, five respondents were randomly selected from different organizational levels, including front-line employees, middle management, and senior management, to ensure data diversity and representativeness. Although the sample size was small, theoretical saturation was reached during the coding process, indicating that further interviews would not yield new insights. Additionally, the sample encompassed different hierarchical levels, providing sufficient representativeness to reflect multi-dimensional perspectives on servitization transformation and performance evaluation within the organization.

(2) Second Round of Data Collection

To verify and expand on the qualitative insights gained from the interviews, an online survey was conducted through the Questionnaire Star platform, targeting both headquarters staff and nationwide dispatched employees of the Guangxi Branch. The survey assessed employees’ satisfaction with various aspects of the performance evaluation system.

Survey Design: The questionnaire was developed based on the findings from the first-round interviews and the balanced scorecard theory, covering key dimensions of the performance evaluation system such as fairness, transparency, and feedback mechanisms. It was reviewed by domain experts and subjected to a small-scale pilot study to ensure its reliability and validity. The survey was conducted anonymously to protect participants’ identities, encouraging them to express their genuine thoughts freely and minimizing the potential impact of social desirability bias.

The final questionnaire consisted of 25 questions, with demographic data and survey details presented in

Table 1. Information of experts participating in the questionnaire survey.

Category	Item	Number of Participants	Proportion (%)
Gender	Male	82	66%
	Female	43	34%
Age Group	20–30 years old	66	53%
	30–40 years old	52	41%
	40–50 years old	7	6%
	Above 50 years old	0	0%
Education Level	Doctoral	0	0%
	Master’s	7	6%
	Bachelor’s	92	74%
	Associate’s	26	20%
Job Level	Senior Leadership	2	2%
	Department Manager	9	7%
	Department Staff	114	91%
Years of Service	0–2 years	29	23%
	3–5 years	34	27%
	6–10 years	40	32%
	Over 10 years	22	18%

and

Table 2. Overview of questionnaire structure.

Section	Description	Question Type	Number of Questions
Basic Information	Questions covering demographic factors, including gender, age, education level, years of service, and position (e.g., division leader, department manager, staff)	Multiple choice	5
Satisfaction with the Performance Evaluation System	Likert-scale questions (1–5) measuring satisfaction with fairness, clarity of criteria, transparency, relevance to job responsibilities, and motivation	Likert scale (1–5)	8
Work–Life Balance and Career Development	Questions on work–life balance, psychological support, career development opportunities, and skills training	Likert scale (1–5)	4
Career Development and Skills Improvement	Questions on satisfaction with career development opportunities and the relevance of skills training to job requirements	Likert scale (1–5)	4
Customer and Market Relationships	Questions assessing satisfaction with customer management, market expansion strategies, and interaction with customers	Likert scale (1–5)	4
Organizational Management and Market Background	Questions about organizational management adjustments and company strategies for responding to market reform	Likert scale (1–5)	5
Open-Ended Questions	Employees are asked to provide suggestions or feedback on improving the performance evaluation system	Open-ended	1

. Table 1 shows the distribution of participants by years of service. Employees with 6–10 years of service constituted the largest proportion, at 32%, indicating that most respondents had a deep understanding of the company and could provide more accurate feedback. Employees with 0–2 years of service accounted for 23%, a smaller proportion but crucial for understanding how new employees adapt to the company’s transformation and their initial perceptions of the performance evaluation system, thus offering representative insights.

3.5. Data Analysis Procedures

To ensure scientific rigor and systematic data analysis, this study involved multiple readings and thorough organization of the interview materials, during which irrelevant information was excluded to maintain high data relevance. Data analysis was conducted using Nvivo 14 software, and the coding process was divided into three stages: open coding, axial coding, and selective coding.

The entire data analysis process strictly adhered to established protocols, ensuring the credibility and validity of the research findings.

4. Results

4.1. Open Coding

In this study, we analyzed data from in-depth interviews with five employees across different hierarchical levels within the target enterprise, as well as 125 questionnaire responses. This process led to the identification of 15 initial categories, as outlined in

Table 3. Initial categories and indicators.

Initial Categories	Original Data
Work–life balance	“In our marketing department, you have to be on call even after hours. We start at 8:30 AM, and although our official workday ends at 5:30 PM, many of us continue working beyond that”
Career development opportunities	“I have been with the company for two months and feel quite fulfilled. I have been thinking about my career growth and future direction. Our manager often discusses our plans and ideas, which I find motivating despite the inevitable challenges.”
Customer relationship management	“When talking to clients, I noticed significant differences. For instance, one client, a leader in a listed company, has a remarkable depth of understanding and ability to grasp the essence of matters, which highlighted the gap between us.”
Context of market-oriented reforms	“Our products are simple, characterized by the attributes of the store. Under the 3060 renewable energy development backdrop, our leading department focuses on continuous construction of new power generation units.”
Employee mental health	“I have been in marketing since 2017 before our department was established in 2021. Unlike other roles where you might have regular hospital visits or childcare responsibilities, our job does not easily accommodate such personal time.”
Technical training and support	“Technical skills are crucial., especially in our trading center. Your sales price depends on your judgment and forecasts, along with communication with peers.”
Organizational management style	“Starting as a sales intern involves supporting sales staff, handling orders, and daily administrative tasks, which might differ from one’s expectations of a marketing role.”
Career achievement	“Our peak sales period is from October to December each year, preparing for the next year’s market. Initially, the targets from headquarters might seem daunting, but our excellent leadership makes the process manageable.”
Interpersonal communication	“The main difference lies in interaction. While production deals with machinery, marketing involves much human interaction, requiring higher interpersonal skills.”
Sales strategies	“Our marketing center focuses on market development, finding clients to purchase our power, followed by trading center activities to manage transactions.”
Employee benefits	“Both men and women are equally assigned tasks, but considering women’s additional family responsibilities, a more accommodating work arrangement for women would be beneficial.”
Customer satisfaction	“Our clients are mostly enterprises with high-level decision-making needs. It is essential to visit these companies, understand their power needs from their perspective, and address their core requirements.”
Personal life challenges	“Our industry is predominantly male, which creates challenges, especially for personal issues. Unlike sectors with a balanced gender ratio, here men often face difficulties in resolving personal matters.”
Professional skills	“Both technical and sales skills are crucial in our field. Despite focusing on trading, we continuously engage in customer development, highlighting the importance of diverse skills.”
Innovation capability	“Given the unique nature of electricity as a policy-driven commodity, it is vital to stay updated with regulations and continuously learn and adapt to changes.”

. Open coding requires researchers to maintain an open mindset, analyze the data collected through open sampling line by line, summarize concepts, and organize them into categories based on relevance or similarity. During this process, researchers first transcribed the interview recordings into written material and then analyzed the text line by line to extract key concepts.

4.2. Axial Coding

Based on the results of the open coding analysis, axial coding further increases the density of the categories, clarifies the distinctions between them, and establishes relationships among them. By clustering the 15 initial categories identified during open coding, axial coding integrates them into four major categories through reclassification. These major categories, derived from the attributes and intrinsic connections of the initial categories, are overall employee well-being, career development and skill enhancement, customer and market relations, and organizational management within a market context, as shown in

Table 4. Major category coding indicators.

Major Category	Initial Category	Category Connotation
Work–Life Balance	Work–Life Balance	The indistinguishability between work and life, arrangements for work during and after office hours
	Employee Mental Health	Psychological support and care, attending to employees’ family responsibilities
	Personal Life Challenges	Inclusivity in work arrangements, especially for female employees, balancing life and work
	Employee Benefits	Health and welfare benefits, working conditions, employee welfare policies
Career Development and Skill Enhancement	Career Development Opportunities	Individual development paths, regular communication with management about career goals and progress
	Sense of Career Achievement	Impact of role transitions on personal growth, character, challenges, and achievements in meeting career goals
	Professional Skills	Enhancement and application of professional skills, support for obtaining relevant professional certifications
	Technical Training and Support	Providing technical training and support, adapting to and applying new technologies
Customer and Market Relations	Customer Relationship Management	Managing and maintaining customer relationships, impact of customer interactions on employees
	Customer Satisfaction	Understanding and meeting customer needs, managing and improving customer feedback
	Customer Acquisition Strategies	Strategies for market development and customer acquisition, transaction and contract management
	Interpersonal Relationships	Building and maintaining relationships with customers and colleagues, teamwork, cross-departmental collaboration
Organizational Management and Market Context	Market Reform Background	Impact of electricity market reform, strategic adjustments of enterprises in the context of market reform
	Organizational Management Methods	Management approaches and decision-making transparency, sales cycle, management rhythm
	Innovation Capability	Innovative marketing strategies in the market, ability to respond to market demands

.

4.3. Selective Coding

Selective coding is conducted based on open and axial coding. It systematically organizes the relationships between different categories to identify core categories around which other categories are structured, ultimately constructing an integrated theoretical framework. Based on the original interview materials, we conducted an in-depth comparative analysis of the relationships between the categories identified through open and axial coding. The results of the analysis indicate that the most important categories for employee satisfaction with performance evaluation are the work environment and work–life balance, as well as career development and skill enhancement. These categories are highly explanatory and can serve as core categories.

The impacts of the work environment and work–life balance, as well as career development and skill enhancement, can be further divided into multiple dimensions, including work environment, mental health, life challenges, welfare benefits, career development paths, and skill enhancement. By integrating the management practices of the case enterprises and the relationships identified through grounded theory coding, we summarize three stages of servitization transformation under the backdrop of China’s electricity market reform: the adaptation stage, implementation stage, and optimization stage. At different stages, enterprises are influenced by market, customer, and internal management factors, and they develop corresponding transformational behaviors under various institutional pressures to achieve specific transformational outcomes. Detailed information is presented in

Table 5. Typical structural relationships.

Typical Structural Relationship		Relationship Connotation
Adaptation Stage	China’s electricity market reform → Corresponding increase in service-oriented job demands	China’s electricity market reform signifies a shift from a traditional, government-controlled model to a more open and competitive market environment. As a result, new energy power enterprises are evolving from traditional energy suppliers to providers of integrated energy solutions, thereby increasing the demand for service-oriented roles.
	Service-oriented job demand increase → Enterprise servitization transformation	As the demand for service-oriented roles increases, enterprises need to adjust their service models to meet market demands better. This necessitates innovation in service delivery methods and improvements in service quality to adapt to the continually evolving market environment.
	Enterprise servitization transformation → Adjusting organizational management and adapting to market background	In the process of servitization transformation, enterprises must adjust their organizational management structures to adapt to the new market context. This includes optimizing internal management processes and enhancing organizational flexibility to better respond to market changes and customer needs.
Implementation Stage	Adjusting organizational management and adapting to market background → Enhancing enterprise competitiveness	Adjusting organizational management structures and processes enhances enterprise efficiency and agility, thereby boosting competitiveness and positioning the enterprise advantageously in a highly competitive market.
	Enhancing enterprise competitiveness → New requirements for customer and market relationship management	As enterprise competitiveness improves, customers’ and the market’s expectations also rise. Enterprises need to manage customer and market relationships better to maintain and enhance customer satisfaction and market share.
	New requirements for customer and market relationship management → Expectations for employee performance evaluation systems	New customer and market management requirements increase the workload and changes in job content, leading to new expectations for employee performance evaluation systems. Enterprises need to develop more comprehensive and fair performance evaluation systems to motivate employees to serve customer and market needs better.
Optimization Stage	Expectations for employee performance evaluation systems → Overall employee well-being	Employees’ expectations of the performance evaluation system typically reflect their pursuit of a favorable work environment and work–life balance, which are crucial to their overall well-being. To enhance employee satisfaction with the performance evaluation system, enterprises need to create a positive work environment and pay attention to the quality of employees’ lives.
	Expectations for employee performance evaluation systems → Career development and skill enhancement	Employees expect a fair and transparent performance evaluation system and seek opportunities for career development and skill enhancement through their work. Enterprises should provide training and development opportunities to help employees improve their skills and achieve career growth, thereby increasing their satisfaction with the performance evaluation system.

.

4.4. Theoretical Saturation Test

During the process of examining the theoretical saturation of the interview transcripts, two out of the five transcripts were selected for analysis. The results indicated that the four major categories influencing the servitization transformation of new energy power enterprises and affecting employee satisfaction with the performance evaluation system—namely, work environment and work–life balance, career development and skill enhancement, customer and market relationships, and organizational management within the market context—revealed no new significant categories or relationships. Furthermore, no new components emerged within the primary categories.

Thus, this study concludes that the grounded theory coding process has reached theoretical saturation, indicating that the core themes of the research have been fully uncovered, resulting in a comprehensive and saturated theoretical model, as shown in Figure 1 (theoretical saturation test model).

To ensure the reliability and validity of the research data, this study employed a diverse range of data sources, including internal company interviews, corporate policy documents, external news reports, and media materials. Through comprehensive analysis and cross-validation of these data sources, the reliability and validity of the research findings were further reinforced. Specifically, internal interviews provided first-hand practical experiences and concrete cases, corporate policy documents offered institutional background and formal frameworks, and external news reports and media materials offered a macro-perspective and external evaluations. This multifaceted approach to data collection and analysis not only enhanced the reliability and validity of the research conclusions but also provided a robust foundation for constructing the theoretical model.

5. Discussion

This study conducts an in-depth analysis of the complex relationship between the servitization transformation of new energy power enterprises and employee satisfaction with performance evaluation systems in the context of China’s power market reform. Through a comprehensive examination of the three phases—adaptation, implementation, and optimization—within the relationship model, the study reveals both the positive and negative impacts of this transformation on employees. These findings hold significant implications for employee management and organizational strategy in the energy sector.

5.1. Model Analysis

5.1.1. Adaptation Stage

China’s power market reform has presented new energy power enterprises with the opportunity to transition from traditional power suppliers to integrated energy service providers. During this phase, companies face the challenge of shifting from a product-oriented to a service-oriented model, requiring adjustments to their operational framework and improvements in market competitiveness to navigate an increasingly complex market environment.

To successfully manage this transformation, companies must undertake fundamental organizational changes. Optimizing internal processes, enhancing managerial efficiency, and increasing organizational agility are key factors for success in this transition. Research indicates that organizational agility and innovative management directly influence a company’s competitiveness in rapidly changing market environments (Arsawan et al., 2022) [36]. This transformation demands that enterprises evolve from product providers to comprehensive solution providers, with a deep strategic focus on service innovation. Companies must leverage data-driven decision-making and market insights to develop customer-centric service strategies, enabling them to stand out in the competitive landscape. This not only strengthens the company’s market position but also enhances employee job satisfaction by helping them develop new skills, which is critical for achieving and sustaining servitization (Perona et al., 2017) [37].

However, this study finds that while the servitization transformation significantly improves employees’ job satisfaction and skill development, it also introduces new challenges. As employees transition from technical roles to service-oriented positions, their professional scope expands to align with the evolving demands of the energy market. Nevertheless, the increasing complexity of service delivery and the heightened demands for customer relationship management have led to increased work pressure and psychological burdens for employees. This finding highlights the need for companies to implement flexible management adjustments and innovative measures to alleviate these pressures and enhance employees’ adaptability (Jang et al., 2023; Dangol, 2021) [8,9].

5.1.2. Implementation Stage

During the implementation phase, the servitization transformation provides significant market competitive advantages but also imposes higher demands on enterprises’ customer relationship management (CRM) and performance evaluation systems.

(1) New Requirements for Customer Relationship Management (CRM)

As companies shift toward a service-oriented business model, CRM becomes increasingly critical. Enterprises often prioritize CRM to enhance customer satisfaction and address intensifying competition through service innovation and added value. CRM plays a pivotal role in the servitization transformation, acting as a strategic driver for online reputation management and positively influencing brand equity (Peco-Torres et al., 2023) [38]. For small- and medium-sized enterprises (SMEs), CRM is essential, contributing to improved customer satisfaction, sales growth, and operational efficiency. With proper planning and effective execution, SMEs can successfully implement CRM systems to enhance their competitiveness and market positioning (Stverkova et al., 2023) [39]. Servitization facilitates the attraction and retention of new customers by providing value-added services and personalized solutions, thereby expanding market share (Geissinger et al., 2023) [40].

(2) New Expectations for Performance Evaluation Systems

As servitization progresses, employees’ expectations of performance evaluation systems increase, particularly regarding fairness and transparency. Traditional performance evaluation metrics, which primarily focus on sales and operational efficiency, are insufficient for comprehensively assessing employee performance in areas such as customer interaction, service quality, and innovation capabilities. Servitization necessitates a stronger service orientation and customer focus, requiring corresponding adjustments to performance evaluation criteria. This finding aligns with the existing literature, which underscores the importance of fairness and transparency in performance evaluation systems for maintaining employee motivation and organizational loyalty. As Rabetino et al. (2021) note, in the context of servitization, evaluation standards should include customer-focused metrics such as customer satisfaction and service quality [41]. By adjusting evaluation criteria, companies can more effectively motivate employees and enhance their adaptability in the servitization process. Moreover, the integration of digital technologies in servitization has made performance evaluation systems more precise and comprehensive. Through the monitoring and analysis of product operation data, companies can better assess employee performance in the service process, leading to the development of more scientific performance evaluation metrics (Bustinza et al., 2019) [42].

5.1.3. Optimization Stage

During the optimization phase, companies must further refine employee performance evaluation systems and focus on career development and employee well-being to ensure the long-term success of servitization transformation.

(1) Employee Well-being and Work–Life Balance

Servitization often increases work intensity and responsibilities, posing challenges to employees’ work–life balance. Research indicates that organizations that offer flexible work arrangements, psychological support programs, and comprehensive employee benefits can significantly improve job satisfaction and career fulfillment (Malik et al., 2023) [43]. By fostering a supportive work environment, companies can help employees better manage the pressures associated with transformation while enhancing their acceptance of performance evaluation systems.

(2) Career Development and Skill Enhancement

Servitization provides ample career development opportunities, particularly in areas such as technological innovation and service management. Systematic skill training and well-defined career paths not only enhance employees’ professional competencies but also improve their sense of long-term career prospects within the company. By offering clear development opportunities and skill enhancement support, companies can significantly increase employee satisfaction with performance evaluation outcomes and boost their organizational loyalty. This strategy aligns with the existing literature, which emphasizes that supporting employees’ career development during servitization transformations can effectively enhance their motivation and job performance (Cetindamar et al., 2021) [44].

5.2. Theoretical Contributions and Implications

This study has significant theoretical, policy, and practical implications.

From a theoretical perspective, it enriches the framework for understanding the impact of servitization on employee satisfaction with performance evaluation systems, particularly in the context of the new energy sector. The existing literature primarily focuses on traditional manufacturing industries, while this study broadens the research scope of servitization by revealing the complex responses of employees to job stress, career development opportunities, and perceptions of fairness in performance evaluations during the transition process. This contribution fills a gap in the theoretical discourse in this underexplored field.

In terms of policy implications, this study provides valuable insights for policymakers, especially in supporting the transition of new energy companies from product-oriented to service-oriented models. First, it suggests that the government should further clarify its guidance on internal management mechanisms within enterprises, particularly by enhancing the fairness and transparency of performance evaluation systems. Second, it emphasizes the necessity of strengthening policies on vocational training and skill development to help employees meet the demands of their new roles following the transition. Finally, it advocates for improving long-term incentive mechanisms related to green development and servitization to promote transparency in performance evaluations and foster sustainable corporate development.

From a practical perspective, this study offers specific recommendations for managers of new energy companies. Managers should focus on ensuring fairness and transparency in performance evaluations, providing clear career development paths, and offering training opportunities to help employees navigate the professional challenges posed by the transition to a service-oriented model. By doing so, they can enhance the effectiveness of the transformation.

5.3. Limitations

Although this study employs grounded theory to gain an in-depth understanding of the complex relationship between the servitization transformation of new energy power enterprises and employee satisfaction with performance evaluation systems in the context of China’s power market reform, certain limitations must be acknowledged:

(1) Limited Sample Scope

The study focuses exclusively on CGN New Energy’s Guangxi Branch, with a relatively small sample size, which may limit the generalizability of the findings. Future research could expand the sample scope to include more regions and companies, allowing for the validation of conclusions and enhancing the external validity of the study.

(2) Single Methodology

This research predominantly utilizes a qualitative approach. Future studies could incorporate quantitative methods to provide a more comprehensive and in-depth exploration of the mechanisms by which servitization transformation impacts employee satisfaction with performance evaluations. Quantitative analysis would allow for a more precise measurement of relationships between variables, offering enterprises additional insights for operational management.

(3) Contextual Limitations

This study was conducted within the specific context of China’s electricity market reforms. While the findings offer valuable managerial insights for new energy companies in China, the conclusions may differ in other countries due to variations in policies, market structures, and cultural factors. As a result, further research is needed in diverse international settings to assess the generalizability and broader applicability of these results.

6. Conclusions

The conclusions of this study align with the evidence and arguments presented. In the context of China’s power market reform, this paper employs grounded theory to analyze the impact of the service-oriented transformation on employee satisfaction with performance evaluation systems in new energy companies. Through interviews and survey data, key factors influencing employee satisfaction—such as job pressure, career development opportunities, and perceived fairness of evaluations—were systematically identified. The findings confirm that the servitization transition enhances employees’ professional skills and sense of accomplishment, but also increases their workload and psychological pressure. This underscores the need for flexible and transparent evaluation systems to address the challenges arising from this transition. The study contributes to the literature on performance evaluation systems during the servitization of new energy power companies, offering both a new theoretical perspective on the intersection of energy market reform and employee management practices, as well as practical guidance for companies aiming to optimize employee management during such transitions.

The core issues of the study focus on two aspects: first, how the service-oriented transformation affects employee satisfaction with performance evaluation systems, and second, the specific manifestations of this transformation within the context of China’s power market reform. Through open coding, axial coding, and selective coding within grounded theory, the study systematically addresses these questions. The interview data highlight differences in employee perceptions of fairness, transparency, and career development opportunities in performance evaluation systems during the transition. The survey data quantify employee satisfaction across various dimensions of the performance evaluation system. Together, these analyses comprehensively answer the research questions and demonstrate the multifaceted impact of servitization on employees.

The primary contributions of this study are twofold. First, it focuses specifically on China’s new energy enterprises. Second, it uncovers the profound impact of servitization on performance evaluation satisfaction within the unique context of China’s power market reform. While existing research has explored the effects of servitization on performance evaluations in manufacturing industries, empirical studies on new energy companies are scarce. Through systematic analysis, this paper proposes an explanatory model, advancing theoretical research on service-oriented transformation. The findings provide practical recommendations for similar global enterprises and lay a solid foundation for further exploration of the relationship between servitization and organizational performance.