Chapter 12

Managing customer-contact employees

Lecture objectives Understand the importance of customer-contact

employees in creating satisfactory or memorable customer experiences

Evaluate service-orientated culture in hospitality companies

Understand the concept of internal marketing and empowerment in a hospitality context

Identify the sources of conflict for hospitality customer-contact employees

Introduction Employees play a crucial role during hospitality service encounter

with customers

The behaviour of customer-contact employees creates impressions of high or poor service quality and is critical to delivering customer satisfaction

Employees also represent the hospitality brand

Recruiting, training and rewarding employees is a human resource management function, but marketers need to understand employment strategies to ensure HR represents brand values and delivers the service experience promised by marketers to customers

Human resource managers use marketing approaches to employee recruitment and retention – this is called internal marketing

Importance of employees W. J. (Bill) Marriott (Snr)’s quotation summarizes the

importance of employees – ‘it takes happy employees to make happy customers and this results in a good bottom line’

Customer-contact employees deliver on most dimensions of service quality: reliability, empathy, tangibles (partly), responsiveness and assurance

The service profit chain demonstrates the link between employee satisfaction, service quality, customer satisfaction and business performance – see Figure 12.1

(Heskett, Jones, Loveman, Sasser and Schlesinger, 1994)

Figure 12.1 The service profit chain

Developing service-orientated culture

Each hospitality organization has its own culture – its own DNA

Company culture influence on how employees look after customers

Company culture means the shared values, beliefs and assumptions that underpin how the organization operates, including the way that it treats its customers and employees

Cultural components are deeply rooted in the organization’s founding history and recent development

Employees learn organizational culture by observing the behaviour and messages from head office, the general manager and other employees

Developing service-orientated culture (continued)

General Manager as role model Characteristics of successful hospitality GMs vary, the personality, behaviour

and actions of the GM sends powerful signals to the employees and helps to shape the culture

Employee morale is a reflection of the general manager, and employees respond to the GM’s leadership

Service myths, heroes and villains Companies can use examples of extraordinary employee actions in their

advertising to promote their high quality service Eventually service myths create a dominant service culture personified by

company heroes Maverick companies might employ characters (notably celebrity chefs) who

are regarded as ‘villains’ and generate publicity – both positive and negative

Support systems Employees are dependent on effective support systems, human and

technological, to help to deliver appropriate service quality In hospitality, there is often conflict between front-of-house employees and

back-of-house employees, especially (kitchen/restaurant)

Internal marketing The services marketing triangle (see Figure 12.2) links pre-

encounter marketing, internal marketing and marketing during the encounter

Promises made to customers in pre-encounter communications have to be delivered during the service encounter

Internal marketing recognises competition for best employees because business success is dependent on service quality, which is dependent on employees

The following factors support positive employee recruitment and retention: recruitment, service inclination, service competence, training, empowerment and reward systems

Figure 12.2 The services marketing triangleZeithaml and Bitner, 2003

Recruitment, service inclination andservice competences

Recruitment Societies where tourism is a key industry (e.g. Caribbean), careers in

hospitality are relatively well paid and enjoy high status Societies where hospitality has low status, pay and prospects, the recruitment

challenge is difficult Company image/reputation as a good employer helps attract better

employees

Service inclination Employers seek employees with ‘right service attitude’. Some people natural

aptitude for service; characteristics linked to attitude cannot be taught A problem for hospitality employers is lack of employees with right service

attitude; if unsuitable employees recruited and service standards not delivered, customers and other employees will be unhappy

Service competences Employees need skills and knowledge, called service competences, to be

effective Historically, hospitality managers had limited education and learnt on-the-job Today, there are well-established hospitality/tourism education systems

which helps to educate tomorrow’s managers

Training, empowermentand reward systems

Training Hospitality companies have own service culture, operating systems, service

standards New employees need induction training to know product, service philosophy

and company culture Best companies provide continuous training and career development

Empowerment Employees work in boundaries set by companies which set rules about what

employees are allowed to do or not to do An alternative approach empowers employees to take responsibility for

ensuring customers are satisfied Empowerment needs to be matched with delegated authority and resources This approach is more customer focused and motivates employees

Reward systems Reward systems include pay, bonuses, tips, free meals, discounted

accommodation for live-in employees ‘Intangible benefits’ of hospitality work can compensate for unsocial hours

and lower pay Intangible benefits include the excitement, fun and teamwork that many

hospitality employees enjoy

Sources of conflict Employees can have interpersonal and interorganizational conflicts at

work Conflict at work can be source and symptom of employee dissatisfaction Continuous or excessive conflict creates powerful emotional responses,

including stress, for employees Understanding sources of conflict helps managers to create better

working conditions Personal/role conflict – employees perform roles at work that might

conflict with their own values, e.g. young people may resent a strict dress and grooming code

Organizational/customer conflict Companies have policies, processes and Standard Operating Procedures

to manage employee conduct Occasionally, customers can make reasonable requests which break the

company’s regulations Inter-customer conflict Disputes between customers creates difficult situations for employees –

especially if this happens on a regular basis

Conclusion Hospitality companies must develop

effective strategies to recruit and retain service-minded customer-contact employees

Companies use internal marketing to effectively communicate with employees

Hospitality companies claim to be good employers

The industry suffers from high employee turnover

There is a strong link between employee satisfaction, service quality, customer satisfaction and business performance (the service-profit chain)

Each hospitality company has its own culture which guides customer-contact employees in their behaviour towards customers

References and further reading Bitner, M. J., Booms, B. H. and Tetreault, M. S. (1990). ‘The service encounter:

diagnosing favourable and unfavourable incidents’. Journal of Marketing, 54, pp. 71–84.

Carlzon , J. (1987). Moments of Truth. Harper Collins. Customer Management. (2000). ‘Towards best practice’. Customer

Management, July/August, pp. 6–11. Gummesson, E. (2008). Total Relationship Marketing (3rd ed.). Butterworth-

Heinemann. Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr. and Schlesinger, L.

A. (1994). ‘Putting the service profit chain to work’. Harvard Business Review, 72, pp. 164–170.

Lashley, C. (2000). Hospitality Retail Management. Butterworth-Heinemann. Lashley, C. (2001). Employing Human Resource Strategies for Service

Excellence. Butterworth-Heinemann. Mudie, P. (2000). ‘Internal marketing: a step too far’. In R. J. Varey and B. R.

Lewis (eds) Internal Marketing: Directions for Management (Chapter 15). Routledge.

Schneider, B. and Bowen, D. E. (1995). Winning the Service Game. HBS Press. Varey, R. J. and Lewis , B. R. ( 2000 ). Internal Marketing: Directions for

Management. Routledge. Zeithaml, V. A. and Bitner, M. J. (2009). Services Marketing. McGraw-Hill.

Figure 12.3 Higher and lower customer-contact service contexts – an example from food service