People as Strategy: Managing Service Employees Chapter 9 People as Strategy: Managing Service Employees

Chapter Objectives Understand the importance of customer facing employees. Understand the stresses and strains faced by typical service employees and how this is likely to influence their behavior. Understand that creating a “climate for service” among employees is a key determinant of customer satisfaction. Define the role that a service employee has to play based upon the service strategy. Understand how that role definition can be used to recruit the most appropriate service team. Understand how the role definition is at the center and drives all HR systems in the service business. Understand the place of empowerment within that logic. Understand the role of management in supporting the resultant “climate for service. © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Opening Vignette: That’s It, I’m Done After receiving abuse from a passenger, flight attendant Steven Slater declared over the loudspeaker at the end of the flight, “…that's it, I'm done," picked up his bag and two cans of beer from the beverage cart, walked to the door, pulled the emergency exit lever, inflated the emergency chute, and jumped An hour later he was arrested, and within another hour he was a hero on Facebook and became the star of numerous supportive t-shirts, including “I Slide…. For Slater” © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.1: The Service-Profit Chain © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Service Providers as Boundary- Spanners Link the organization with the outside world Primary purposes: Information transfer Representation The service provider spectrum ranges from subordinate service roles to professional service roles Professional service roles Subordinate service roles © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Sources of Conflict for Contact Service Personnel Boundary-spanners are prone to conflicts Person/role conflict Organization/client conflicts Inter-client conflicts Leads to feelings of role stress Dissatisfaction Frustration Turnover intention © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Coping Strategies and Implications for Customers Major customer complaints about service workers: Apathy Brush-off Coldness Condescension Robotism Rulebook Runaround These behaviors can be understood as a “fight for control” © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Coping Strategies and Implications for Customers (cont’d) Employees often adopt a number of responses: Avoiding the customer Moving into a “people-processing” mode Adding physical symbols in their office to increase sense of control Overacting their role In extreme cases, the role conflict and ambiguity can lead to: Acts of service sabotage Siding completely with the customer © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Creating a Climate for Service Three core drivers in creating a climate for service: Work facilitation Interdepartmental support Human resource practices © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.2: The Services HR Wheel © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Layers of the Services HR Wheel Recruiting the right people Developing competent service employees Controlling, rewarding, and evaluating service employees Retaining service employees © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.3: Stereotypical “Customers from Hell” and Strategies to Deal with Them © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.3: Stereotypical “Customers from Hell” and Strategies to Deal with Them (cont’d) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.3: Stereotypical “Customers from Hell” and Strategies to Deal with Them (cont’d) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.3: Stereotypical “Customers from Hell” and Strategies to Deal with Them (cont’d) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.3: Stereotypical “Customers from Hell” and Strategies to Deal with Them (cont’d) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Rewards that Encourage Service Excellence Effective reward systems pass the following seven tests: Availability Flexibility Reversibility Contingent Visibility Timeliness Durability In many cases, pay alone does not pass these effectiveness tests © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Empowerment and Enfranchisement “Turning the front line loose” Enfranchisement Couples empowerment with a reward system that recognizes people for their performance Both empowerment and enfranchisement build an increased sense of accountability in the employee © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 9.4: The Continuum of Empowerment © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Levels of Empowerment Suggestion involvement Empowers employees to recommend Formal suggestion programs Quality circles © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Levels of Empowerment (cont’d) Job involvement Allows employees to: Examine the content of their jobs Define their jobs within the organization Compared to suggestion involvement, employees engaged in job involvement use a variety of skills, have more freedom, and receive more feedback Higher-level decisions and reward allocation decisions remain the responsibility of the firm’s upper management © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Levels of Empowerment (cont’d) High involvement Train people to manage themselves Extensive training is used to develop skills in teamwork, problem solving, and business operations Employees control the majority of the reward allocation decisions through profit sharing and employee ownership of the firm © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Role of Management Senior management has to ensure that the different functions and departments are aligned behind the service benefit concept and that they do not lose focus on the customer Middle managers must manage crises and move roadblocks to good service out of the way; they must relieve pressure by doing some of the front- line work © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Customer Relationship Management Companies assemble huge databases for tracking the purchases and the individual behavior of customers and assessing customer profitability The key is to use the data to improve the quality of service with recommendations Firms can target different levels of service depending upon current or potential profitability to the firm This leads to a disaggregation of customer contact roles © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.