Increased attention on the relationships between customer service training and organizational results is prompting human resource development (HRD) scholars and practitioners to more broadly consider outcomes. This study examined the role of perceived external prestige, an underexplored area in the service excellence literature. We proposed that employee perceptions of organizational prestige relate positively with customer‐oriented citizenship behaviors (COCBs). In the perceived external prestige–COCBs relationship, we also explored the mediating role of psychological empowerment, as well as the moderating effect of organization‐based self‐esteem (OBSE) and leader–member exchange (LMX). Valid and reliable self‐report and supervisory evaluation measures were collected from a sample of employees from luxury hotels in South Korea. The results indicate that perceived external prestige was a significant predictor for service employees' citizenship performance and the perceived reputation impact was indirect through psychological empowerment. The study also identified LMX as a key precondition for service organizations to engage employees in customer‐oriented behaviors beyond formal role. In discussing these results, we present significant insights in terms of reputation management as a motivational and competitive strategy to be included in HRD practices focused on customer service.