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Managing People for Service Advantage


Managing People for Service Advantage

Overview ? Service Employees Are Crucially Important ? Factors Contributing to the Difficulty of Frontline Work ? Cycles of Failure, Mediocrity, and Success ? Human Resources Management – How To Get It Right? ? Service Leadership and Culture

Service Employees Are Crucially Important
? Customer’s perspective: encounter with service staff is most important aspect of a service ? Firm’s perspective: frontline is an important source of differentiation and competitive advantage ? Frontline is an important driver of customer loyalty ? anticipating customer needs ? customizing service delivery ? building personalized relationships

Frontline in Low-Contact Services
? Many routine transactions are now conducted without involving frontline staff, e.g.,
? ATMs (Automated Teller Machines) ? IVR (Interactive Voice Response) systems ? Websites for reservations/ordering, payment, etc.

? However, frontline employees remain crucially important ? “Moments of truths” drive customer’s perception of the service firm

Factors Contributing to the Difficulty of Frontline Work
? Boundary spanners link the organization to the outside world ? Multiplicity of roles often results in service staff having to pursue both operational and marketing goals ? Consider management expectations of service staff:
? ? ? ? delight customers be fast and efficient in executing operational tasks do selling, cross selling, and up-selling enforce pricing schedules and rate integrity

Role Stress in Frontline Employees
? Organization vs. Client: Dilemma whether to follow company rules or to satisfy customer demands
? This conflict is especially acute in organizations that are not customer- oriented

? Person vs. Role: Conflicts between what jobs require and employee’s own personality and beliefs
? Organizations must instil ‘professionalism’ in frontline staff

? Client vs. Client: Conflicts between customers that demand service staff intervention

Emotional Labour
? “The act of expressing socially desired emotions during service transactions” (Hochschild, The Managed Heart)
? Performing emotional labour in response to society’s or management’s display rules can be stressful ? Good HR practice emphasizes selective recruitment, training, counselling, strategies to alleviate stress

Cycles of Failure, Mediocrity, and Success
? Failure

Cycle of success

Human Resources Management – How to Get it Right?

Be the Preferred Employer
? Create a large pool: “Compete for Talent Market Share” ? Select the right people:
? Different jobs are best filled by people with different skills, styles, or personalities ? Hire candidates that fit firm’s core values and culture ? Focus on recruiting naturally warm personalities for customercontact jobs

Tools to Identify Best Candidates
? Employ multiple, structured interviews
? Use structured interviews built around job requirements ? Use more than one interviewer to reduce “similar to me” biases

? 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 are given group tasks

? Conduct personality tests
? Willingness to treat co-workers and customers with courtesy, consideration, and tact ? Perceptiveness regarding customer needs ? Ability to communicate accurately and pleasantly

Tools to Identify Best Candidates
? Give applicants a realistic preview of the job
? ? ? ? Chance for candidates to “try on the job” Assess how candidates respond to job realities Allow candidates to self select themselves out of the job Manage new employees’ expectation of job

? Train service employees
Service employees need to learn:

? 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 ? Product/service knowledge
? Staff’s product knowledge is a key aspect of service quality ? Staff must explain product features and position products correctly

Is Empowerment Always Appropriate?
? Empowerment is most appropriate when:
? Firm’s business strategy is based on personalized, customized service, and competitive differentiation ? Emphasis on extended relationships rather than short-term transactions ? Use of complex and non-routine technologies ? Service failures are non-routine ? Business environment is unpredictable ? Managers are comfortable letting employees work independently for benefit of firm and customers ? Employees seek to deepen skills and have good interpersonal and group process skills

Is Empowerment Always Appropriate?
? Empowerment systematically redistributes the following:
? Information about operating results and measures of competitive performance ? Knowledge/skills that enable employees to understand and contribute to organizational performance ? Power to influence work procedures and organizational direction (e.g., quality circles, self-managing teams) ? Rewards based on organizational performance (e.g., bonuses, profit sharing, stock ownership)

? The Control model concentrates these elements at the top of the organization whereas the Involvement model pushes these features throughout the organization

Build High-Performance Service Delivery Teams
? The Power of Teamwork in Services
? Facilitate communication among team members and knowledge sharing ? Higher performance targets ? Pressure to perform is high

? Creating Successful Service Delivery Teams
? Emphasis on cooperation, listening, coaching, and encouraging one another ? Understand how to air differences, tell hard truths, ask tough questions ? Management needs to set up a structure to steer teams toward success

Motivate and Energize the Frontline
? Use full range of available rewards effectively, including: ? Job content
? People are motivated knowing they are doing a good job

? Feedback and recognition
? People derive a sense of identity and belonging to an organization from feedback and recognition

? Goal accomplishment
? Specific, difficult but attainable, and accepted goals are strong motivators

Service Leadership and Culture
? Charismatic/transformational leadership:
? Change frontline personnel’s values and goals to be consistent with the firm ? Motivate staff to perform at their best

? Service culture can be defined as:
? Shared perceptions of what is important ? Shared values and beliefs of why they are important

A strong service culture focuses the entire organization on the frontline, with the top management informed and actively involved

The Inverted Organizational Pyramid

Internal Marketing
? Necessary in large service businesses that operate in widely dispersed sites ? Effective internal marketing helps to:
? Ensure efficient and satisfactory service delivery ? Achieve harmonious and productive working relationships ? Build employee trust, respect, and loyalty

? Service employees are crucially important to firm’s success
? ? ? ? Source of customer loyalty and competitive advantage Frontline work is difficult and stressful; employees are boundary spanners, undergo emotional labor, face a variety of conflicts Understand cycles of failure, mediocrity, and success Know how to get HRM aspect right ? Hire the right people ? Identify the best candidate ? Train service employees actively ? Empower the frontline ? Build high-performance service delivery teams ? Motivate and energize people ? Unions have a role to play Understand role of service culture and service leadership in sustaining service excellence

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