Our study examines the effect of customer emotions and contact employee performance in creating encounter and relationship satisfaction. It investigates the performance of the contact employee from an interactive perspective by specifying the employee performance into employee-specific and interaction-induced behaviors, using a multilevel approach. Our results reveal a significant influence of positive emotions on both types of satisfaction and no significant impact of negative emotions. Furthermore, our study identifies that not all of the employee behaviors that influence encounter satisfaction also influence relationship satisfaction. Additionally, results of the study demonstrate that specifying employee performance into employee-specific and interaction-induced behaviors allows a better understanding of customer encounter and relationship satisfaction.