Service Operations Management: The total experience SECOND EDITION Chapter Nine Service Operations Performance

Performance Staff will know how best to serve the customer, by being clear on: what behaviour serve the customer well; how they are performing; and the support and recognition they will receive by achieving acceptable and high performance. Objectives may be set which bear little relevance to business and customer needs and their measures of success are ill-defined. The result is that at performance review time it becomes very ambiguous as to whether worthwhile objectives have been achieved or not and what the individual's contribution was.

Figure 9.1 Performance management cycle

Reinforcing the customer-organization interface 360° appraisal promotes: greater and more explicit understanding of customer needs; specific targets for staff development which can be measured; and mutual co-operation between supplier and customer. Empowerment and involvement Performance training and coaching Appraisal and timing Ownership of performance processes

Identifying performance measures It is important to establish key performance questions (KPQs) prior to determining the key performance indicators (KPIs). A mistake made by many organizations is to develop KPIs before identifying the KPQs. A KPQ is a management question that captures exactly what it is that needs to be measured (in terms of performance).

Table 9.1. Examples of Key Performance Questions

Figure 9.2 Performance monitoring priority analysis matrix

Motivation and Staff Performance Linking performance metrics with customers’ needs A typical service organization when considering how much it knows about its full range of customers might be described in one of the following ways: They either know so much about their customers from various activities, such as marketing focus groups, that they feel they do not need to do any further specific research They are afraid about what might be said by customers so best not to ask They are so completely confident that they know exactly what it is that their customers want that they do not need to ask them – they are currently leading from their competitors They have very little idea on how or what to do to get closer to their customers They have almost no reliable data about their customers.

A paradigm shift in service performance monitoring: push-pull systems Payment-by-results, profit-sharing, and bonuses as performance inducements have long been traditional methods to motivate staff to meet targets – or even to encourage to go beyond planned targets. Employee empowerment versus target-setting

Performance and motivation Needs Theory Herzberg’s Motivator-Hygiene Theory Equity Theory Dealing with Inequities Reinforcement theory Expectancy Theory Goal-Setting theory

Figure 9.3 A customer-focused organization chart

Figure 9.4 Maslow’s (left-side) and Alderfer’s (right-side) hierarchies of needs

Balanced Scorecard – as a performance framework As a model of performance, the BSC is effective in that it describes the links between important inputs (human and technological), processes, and future outcomes. Translating the vision into operational goals; Communicating the vision and link it to individual performance; Business planning; index setting Feedback and learning, and adjusting the strategy accordingly.

Figure 9.5 Balanced Scorecard