© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

PEOPLE

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Overview

Like manufacturing organisations, service organisations are trying to use technology to get their tasks done more effectively and efficiently. However service organisations have realised that they cannot completely replace people with machines.

Service organisations need people because machines can act and respond only in the way they are programmed and therefore cannot deal with exceptional situations. People can be trained to deal with difficult customers and exceptional situations. However ,it is not very easy to attract and retain good people. People have their own set of expectations from organisation and from their jobs.

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

CUSTOMER

COMPANYService Delivery

Service Performance

GapCustomer-Driven

Service Designs and Standards

Provider Gap 3

Part 5 Opener

Employees’ Roles in Service Delivery

Service Culture The Critical Importance of Service

Employees Boundary-Spanning Roles Strategies for Delivering Service Quality

Through People Customer-Oriented Service Delivery

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Service Culture

“A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization.”

- Christian Gronroos (1990)

Integrity, joy, respect In front of the public – behind the scenes Hundreds of details

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The Critical Importance of Service Employees

They are the service.

They are the organization in the customer’s eyes.

They are the brand.

They are marketers.

Their importance is evident in: the services marketing mix (people) the service-profit chain the services triangle

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Figure 12.2

The Services Marketing Triangle

Internal Marketing

Interactive Marketing

External Marketing

Company(Management)

CustomersEmployees

“Enabling the promise”

“Delivering the promise”

“Making the promise”

Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler

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Services Marketing TriangleApplications Exercise

Focus on a service organization. In the context you are focusing on, who occupies each of the three points of the triangle?

How is each type of marketing being carried out currently?

Are the three sides of the triangle well aligned?

Are there specific challenges or barriers in any of the three areas?

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Ways to Use the Services Marketing Triangle

Overall Strategic Assessment How is the service

organization doing on all three sides of the triangle?

Where are the weaknesses? What are the strengths?

Specific Service Implementation What is being promoted and

by whom? How will it be delivered and

by whom? Are the supporting systems in

place to deliver the promised service?

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The Service Profit Chain

Source: An exhibit from J. L. Heskett, T. O. Jones, W. E. Sasser, Jr., and L. A. Schlesinger, “Putting the Service-Profit Chain to Work,” Harvard Business Review, March-April 1994, p. 166.

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

THE SERVICE PROFIT CHAIN SUGGESTS THAT “BOTH EMPLOYEE SATISFACTION & CUSTOMER SATISFACTION ARE INTERRELATED & DEPENDENT ON EACH OTHER ”

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Link between Internal Marketing and Profits

11-12

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Service Quality Dimensions

Reliability- ( Delivering the service as promised. This is within control of frontline employees)

Responsiveness- ( The personal willingness to help and promptness in serving customers)

Assurance- ( Highly dependent on employee’s ability to communicate their credibility )

Empathy - (Employees will pay attention ,listen ,adapt and be flexible in delivering individual customer’s need)

Tangibles- ( employees appearance and dress along with service facility, décor, brochures and signage)

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Service Employees

Who are they? “boundary spanners”

What are these jobs like? emotional labor many sources of potential conflict

person/role organization/client interclient

quality/productivity tradeoffs

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Figure 12.4

Boundary Spanners Interact with Both Internal and External Constituents

Internal Environment

External Environment

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BOUNDARY-SPANNING ROLESALL BOUNDARY-SPANNING POSITIONS EXHIBIT:-High stress jobsInvolves mental and physical skillsExtraordinary levels of emotional laborAbility to handle interpersonal & inter organisational conflictsReal time tradeoff between quality & productivity on a job

THE FRONT LINE EMPLOYEES ARE REFERRED TO AS “ BOUNDARY SPANNERS” AS THEY OPERATE AT ORGANISATION’S BOUNDARY.•THEY PROVIDE A LINK BETWEEN EXTERNAL CUSTOMER ENVIRONMENT & INTERNAL FIRM ENVIRONMENT

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EMOTIONAL LABOR –Coined by Arlie Hochschild

This refers to the labor that goes beyond physical or mental skills to deliver quality services. Frontline employees are expected to align their displayed emotions with organizationally desired emotions

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EMOTIONAL LABOUR (Cont’d)

Emotional labour includes:-•Delivering smiles•Making eye contact•Showing sincere interest•Engaging with friendly conversations with strangers who may not be seen again“ A frontline service employee who is having a bad day or not feeling well is still expected to put on a cheerful face while dealing with customers”

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Types of conflicts faced by front-line employees

PERSON /ROLE CONFLICT( Conflict between role requirements and self image/esteem

of employees) ORGANISATION/ CLIENT CONFLICT(Conflict between their bosses, organisation & individual

customers) INTER-CLIENT CONFLICT(Conflicts occur when incompatible expectationsAnd requirements from two or more customers)

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Figure 12.6

Human Resource Strategies for Delivering Service Quality through People

Provideneeded support

systems

Hire theright people

Retain thebest

people

Developpeople to

deliverservicequality

Hire for servicecompetencies and

serviceinclinationCompete for

the bestpeople

Measure andreward strong

serviceperformers

Treatemployees

ascustomers

Includeemployees in

the company’s

visionDevelop

service-orientedinternal

processes

Providesupportivetechnology

andequipment

Measureinternal service

quality

Promoteteamwork

Empower employees

Train fortechnical and

interactiveskills

Be the preferredemployer

Customer-OrientedServiceDelivery

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Empowerment

Benefits: quicker responses to customer

needs during service delivery quicker responses to

dissatisfied customers during service recovery

employees feel better about their jobs and themselves

employees tend to interact with warmth/enthusiasm

empowered employees are a great source of ideas

great word-of-mouth advertising from customers

Drawbacks: potentially greater dollar

investment in selection and training

higher labor costs potentially slower or

inconsistent service delivery may violate customers’

perceptions of fair play employees may “give away the

store” or make bad decisions

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Figure 12.7

Traditional Organizational Chart

Manager

Supervisor

Front-lineEmployee

Customers

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

Supervisor

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

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Figure 12.8

Customer-Focused Organizational Chart

Manager

Supervisor

Front-lineEmployee

Customers

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

Supervisor

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

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Customer Compatibility

“ The presence , behavior and similarity of other customers in receiving services has a strong impact on satisfaction and dissatisfaction of the given customer” The way other customers behave in many high contact services like education, clubs, transportation, restaurants has a strong influence on customer’s experience

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Dysfunctional / Jay Customers

Dysfunctional customer is one who acts in an abusive or thoughtless way causing problems for the firm, its employees and other customers. every service encounters has it share of jay customers who are undesirable to a service organisation. At best it would be avoiding them in the organisation