45506009 managing people for service advantage

7/28/2019 45506009 Managing People for Service Advantage

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Slide2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 11 - 1

Chapter 11

Managing People

for Service Advantage


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Frontline Service Personnel: Source ofCustomer Loyalty and Competitive Advantage

Frontline is an important source of differentiation andcompetitive advantage. It is:

a core part of the product

the service firm

the brand

Frontline also drives customer loyalty, with employeesplaying key role in anticipating customer needs,

customizing service delivery and building personalized

relationships


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Boundary Spanning Roles

Boundary spanners link the inside of the organization to theoutside world

Multiplicity of roles often results in service staff having to

pursue both operational and marketing goals

Consider management expectations of restaurant servers:

deliver a highly satisfying dining experience to their customers

be fast and efficient at executing operational task of servingcustomers

do selling and cross selling, e.g. We have some nice desserts to

follow your main course


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Role Stress in the Frontline

Person vs. Role:Conflicts between what jobs require andemployees own personality and beliefs

Organization vs. Customer:Dilemma whether to followcompany rules or to satisfy customer demands

Customer vs. Customer: Conflicts between customers that

demand service staff intervention

3 main causes of role stress:


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Emotional Labor

The act of expressing socially desired emotions duringservice transactions (Hochschild, The Managed Heart)

Three approaches used by employees

surface acting deep acting

spontaneous response

Performing emotional labor in response to societys or

managements display rules can be stressful

Good HR practice emphasizes selective recruitment,training, counseling, strategies to alleviate stress


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The Cycles of Failure, Mediocrity and Success

Too many managers make short-sighted assumptions about

financial implications of:

Low pay

Low investment (recruitment, training)

High turnover human resource strategies

Often costs of short-sighted policies are ignored:

Costs of constant recruiting, hiring & training

Lower productivity & lower sales of new workers

Costs of disruptions to a service while a job remains unfilledLoss of departing persons knowledge of business and customers

Cost of dissatisfied customers


7/23Slide2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 11 - 7

Cycle of Failure (Fig. 11.1)

Customerturnover

Failure to developcustomer loyalty

No continuity inrelationship for

customer

Customerdissatisfaction

Employees cantrespond to customer

problems

Employeesbecome bored

Employee dissatisfaction;poor service attitude

Repeat emphasis onattracting new customers

Low profitmargins Narrow design of

jobs to accommodate

low skill level

Use of technology

to control quality

High employee turnover;poor service quality

Payment oflow wages

Minimization ofselection effort

Minimizationof training

Emphasis onrules ratherthan service

Source: Schlesinger and Heskett



Service Sabotage (Fig. 11-A)

Customary-Private ServiceSabotage

Sporadic-Private Service

Sabotage

Customer-Public ServiceSabotage

Sporadic-Public Service

Sabotage

Openness of Service Sabotage BehaviorsCovert Overt

Normalityo

fServiceSabotageBehaviors

Routiniz

ed

In

termittent

e.g. Waiters serving smaller

servings, bad beer or sour winee.g. Talking to guests likeyoung kids and putting themdown

e.g. Chef occasionallypurposefully slowing downorders

e.g. Waiters spilling soup ontolaps, gravy onto sleeves, or hotplates into someones hands



Cycle of Mediocrity (Fig. 11.2)

Good wages/benefits

high jobsecurity

Other suppliers (if any)seen as equally poor

Customers tradehorror stories

Service not focused

on customers needs

Employees spendworking life

in environmentof mediocrity

Narrow designof jobs

Success =

not making

mistakes

Complaints met byindifference or

hostility

Employeedissatisfaction

(but cant easily quit) Emphasison rules

vs. pleasingcustomers

EPromotionand pay

increases basedon longevity,

lack of mistakes

Initiative isdiscouraged

Jobs are boring andrepetitive; employees

unresponsive

Resentment at inflexibility and

lack of employee initiative;

complaints to employees

No incentive for

cooperative relationship

to obtain better service

Training emphasizes

learning rules

Customer dissatisfaction



Cycle of Success (Fig. 11.3)

Lowcustomerturnover

Customerloyalty

Continuity inrelationship with

customer

High customersatisfaction

Extensivetraining

Employee satisfaction,positive service attitude

Repeat emphasis oncustomer loyalty and

retention

Higherprofit

marginsBroadened

job designsLowered turnover,high service quality

Above average

wages

Intensifiedselection effort

Train, empower frontline

personnel to control quality

Source: Heskett and Schlesinger



How to Manage People for Service Advantage?

1. Hire the right people

2. Enable your people

3. Motivate and energize your people

Staff performance is a function of both ability and motivation.How can we get able service employees who are motivated toproductively deliver service excellence?



Hire the Right People

The old saying People are your most

important asset is wrong.

The RIGHT people are your most

most important asset.

Jim Collins



Recruitment

The rightpeople are a firms most important asset: take afocused, marketing-like approach to recruitment

Clarify what must be hiredversus what can be taught

Clarify nature of the working environment, corporate valuesand style, in addition to job specs

Ensure candidates have/can obtain needed qualifications

Evaluate candidates fit with firms culture and values

Fit personalities, styles, energies to the appropriate jobs



Select And Hire the Right People:(1) Be the Preferred Employer

Create a large pool: Compete for Talent Market Share

What determines a firms applicant pool?

Positive image in the community as place to work

Quality of its services

The firms perceived status

There is no perfect employee

Different jobs are best filled by people with different skills, styles orpersonalities

Hire candidates that fit firms core values and culture

Focus on recruiting naturally warm personalities



Observe Behavior

Hire based on observed behavior, not words you hear

Best predictor of future behavior is past behavior

Consider group hiring sessions where candidates given group tasks

Personality Testing

Willingness to treat co-workers and customers with courtesy,

consideration and tact

Perceptiveness regarding customer needs

Ability to communicate accurately and pleasantly

Select and Hire the Right People:(2) How to Identify the Best Candidates



Select and Hire the Right People:(3) How to Identify the Best Candidates

Employ Multiple, Structured Interviews

Use structured interviews built around job requirements

Use more than one interviewer to reduce similar to me effects

Give Applicants a Realistic Preview of the Job

Chance to have hands-on with the job

Assess how the candidates respond to job realities

Allow candidates to self select themselves out of the job



The Organizational Culture, Purpose and Strategy Promote core values, get emotional commitment to strategy

Get managers to teach why, what and how of job.

Interpersonal and Technical Skills

Both are necessary but neither is sufficient for optimal job

performance

Product/Service Knowledge

Staffs product knowledge is a key aspect of service quality Staff need to be able to explain product features and to position

products correctly

Train Service Employees



Factors Favoring Employee Empowerment

Firms strategy is based on competitive differentiation and onpersonalized, customized service

Emphasis on long-term relationships vs. one-time transactions

Use of complex and non-routine technologies

Environment is unpredictable, contains surprises

Managers are comfortable letting employees work independentlyfor benefit of firm and customers

Employees seek to deepen skills, like working with others, andare good at group processes



Control vs. Involvement Model of Management

Information about operating results and measures ofcompetitive performance

Rewards based on organizational performance (e.g. profitsharing, stock ownership)

Knowledge/skills enabling employees to understand and

contribute to organizational performance

Power to influence work procedures and organizationaldirection (e.g. quality circles, self-managing teams)

Source: Bowen and Lawler

Control concentrates 4 key features at top of organization;Involvement pushes them down:



Suggestion involvement Employee recommendation

J ob involvement Jobs redesigned Employees retrained

Supervisors facilitate

High involvement Information is shared

Employees skilled in teamwork,

problem solving etc.

Participate in decisions

Profit sharing and stock ownership

Levels of Employee Involvement



Motivate and Energize the Frontline

Job content

Feedback and recognition

Goal accomplishment

Use the full range of available rewards effectively,including:



The Inverted Organizational Pyramid (Fig. 11.5)

FrontlineStaff

TopMgmt

MiddleMgmt

Legend: = Service encounters, or Moments of Truth.

Traditional

Organizational PyramidInverted Pyramid with a

Customer & Frontline Focus

Customer Base

Frontline Staff

Middle Mgmt& Top Mgmt

Support Frontline


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The Wheel of Successful HR in Service Firms(Fig. 11.6)

Leadership that:Focuses the entire organization

on supporting the frontline

Fosters a strong

service culture with

passion for service

and productivity

Drives values that

inspire, energize

and guide service

providers

1. Hire the

Right People

3.Motivate &Energize Your People

2. Enable Your People

Be the preferred

employer & compete

for talent market share

Intensify the

selection

process

Empower Frontline

Build high performance service

delivery teams

Extensive Training

Utilize the full

range of rewards

Service Excellence& Productivity

45506009 managing people for service advantage

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