Chapter 10

PEOPLE ISSUES:
MANAGING SERVICE
EMPLOYEES
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 IMPORTANCE OF CONTACT
PERSONNEL
People provide a sustainable competitive
advantage
Focus should be equally based on service quality,
service delivery, and employee well-being
People selection should be dependent upon the
organization and the market it faces
different types of firms have different needs
Data needs to be tracked concerning what
customers want and which HR practices helps
deliver it to them
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 SERVICE PROVIDERS AS BOUNDARY
SPANNERS

Link the organization with the outside world

Primary purpose
information transfer (two-way)
representation

Service provider spectrum ranges from

professionals to subordinate service roles

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 MAJOR CUSTOMER COMPLAINTS
ABOUT SERVICE WORKERS

Apathy--DILLIGAD
Brush-off
Coldness
Condescension
Robotism
Rulebook
Runaround
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 SERVICE PROVIDERS AS BOUNDARY
SPANNERS

Boundary spanners are prone to conflict

person/role conflict
Inequality dilemmas
Feelings versus behavior

Territorial conflict

organization/client conflict
interclient conflicts

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 SERVICE PROVIDERS AS BOUNDARY
SPANNERS

Leads to feelings of roles stress

dissatisfaction
frustration
turnover intention

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 SERVICE PROVIDERS AS BOUNDARY
SPANNERS

Provider responses to reduce role stress

avoid the customer
move into a people-processing mode
add symbols and furniture to increase control
overact the role
forces customer into subservient role
side completely with the customer

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 WHAT, HOW AND WHEN
OF EMPOWERMENT
Empowerment
turning the front-line loose
encourages and rewards employees to exercise
initiative and imaginations

Enfranchisement
Couples empowerment with a compensation
method that pays people for their performance

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REWARDS THAT ENCOURAGE SERVICE
EXCELLENCE
The seven tests of rewards
Availability
Flexibility
Reversibility
Contingent
Visibility
Timeliness
Durability
** pay alone does not pass these effectiveness tests
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 WHAT, HOW AND WHEN
OF EMPOWERMENT
Empowerment benefits
quicker response to customer needs
quicker response to dissatisfied customers
employees feel better about their jobs and
themselves
employees interact with customers with warmth
and enthusiasm
employees become a great source of service
ideas
great w-o-m advertising and customer retention
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 WHAT, HOW AND WHEN
OF EMPOWERMENT

Empowerment costs
larger dollar investments in selection and
training
higher labor costs
slow or inconsistent service delivery
violations of fair play
giveaways and bad decisions

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 WHAT, HOW AND WHEN
OF EMPOWERMENT

Empowerment continuum
control-oriented vs. involvement oriented

1. Suggestion involvement
empowered to recommend
formal suggestion programs
quality circles

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 WHAT, HOW AND WHEN
OF EMPOWERMENT

2. Job Involvement
opening up of job content
use more skills, more freedom, and get more
feedback
extensive use of teams

higher level decisions and reward allocation remain

the responsibility of senior management

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 WHAT, HOW AND WHEN
OF EMPOWERMENT

3. High Involvement
trainpeople to manage themselves
profit-sharing and employee ownership
develop skills in teamwork, problem solving,
and business operations

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 WHEN TO EMPOWER:
A CONTINGENCY APPROACH

Contingencies:
basic business strategy
standardized vs. customized
tie to the customer
transaction vs. relationship
Technology
simple vs. complex

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 WHEN TO EMPOWER:
A CONTINGENCY APPROACH

Contingencies:
business environment
predictable vs. unpredictable
types of people
Managers
theory X vs. theory Y
Employees
low vs. high growth and social needs
low vs. high interpersonal skills

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 WHEN TO EMPOWER:
A CONTINGENCY APPROACH
Contingencies:
Scoring:
5 to 10
Control-oriented, production-line approach
11 to 15
Suggestion involvement strategy
16 to 20
Job involvement approach
21 to 25
High-involvement empowerment approach

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 PULLING IT ALL TOGETHER:
THE SERVICE-PROFIT CHAIN

Internal Service Quality =>

workplace design
job design
employee selection and development
employee rewards and recognition
tools for serving the customer

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 PULLING IT ALL TOGETHER:
THE SERVICE-PROFIT CHAIN
Employee satisfaction =>
Employee retention & productivity =>
External service value=>
results for customers
Customer satisfaction=>
Customer loyalty=>
retention, repeat business, referrals
Revenue growth & productivity
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