Leveraging the People Factor Chapter 6 Leveraging the People Factor

Objectives To analyze why employees are key to a service organization’s success To examine the costs and benefits of empowerment and when it’s a good idea To consider the need for improvisation To examine the emotional side of services To explain the messages companies convey by costuming their employees To provide an understanding of how to maximize employee productivity

Outline Introduction Service Employees and Their Behavior Empowering Service Employees The Need for Service Improvisation The Emotional Side of Service Costuming Service Employees Maximizing Service Employee Productivity Summary and Conclusion

Service Employees and Their Behavior Why Are Service Employees So Important? Are All Service Employees Equally Important? Which Are More Important: Technical Skills or Social Skills? Ensuring Service Employee Excellence Addressing Employee Poor Performance

Are All Service Employees Equally Important? Boundary spanners – the frontstage employees who link an organization with its customers. Represent the organization to customers as well as provide information about customers to the organization Can range from subordinate positions to professionals Technical skills – the proficiency with which service employees perform their tasks. Social skills – the manner in which service employees interact with customers and fellow workers.

Ensuring Service Employee Excellence For all workers—the frontstage “boundary spanners” and those who work backstage--its important to: Hire intelligently Train intensively Monitor incessantly Reward inspirationally Sometimes, it’s necessary to address employees’ poor performance

Empowering Service Employees Empowerment involves sharing information, rewards, knowledge, and power with frontline service employees so that they can better respond to customers’ needs and expectations.  There are both Benefits and Costs of Empowerment Empowerment is sometimes met with resistance

Empowering Service Employees: Benefits of Empowerment Quicker response to customer needs during service delivery Quicker response to dissatisfied customers during service recovery Employees are more satisfied with their jobs and themselves

Empowering Service Employees: Benefits of Empowerment Employees will act more warmly and enthusiastically toward customers Empowered employees can be a great source of ideas Empowerment can generated great word-of-mouth communication and customer retention

Empowering Service Employees: Costs of Empowerment Greater monetary investment in the selection and training of employees Higher labor costs A possibility of slower and/or less consistent service delivery Possible violations of fair play Giveaways and bad decisions

The Need for Service Improvisation Improvisation is closely related to the concept of empowerment Workers are given freedom to creatively adapt to various service situations Is more likely needed in some services rather than others Improvisation insights gleaned from the arts may provide insights Theater improvisation Jazz improvisation

The Emotional Side of Services Workers are often required to display cheerful disposition, genuine concern and unrelenting care toward the customer, no matter what the worker’s true feeling may be Demands of such “emotional labor” can be stressful and mentally challenging Organizations can distinguish themselves via their workers’ emotional labor by attending to EI (Emotional Intelligence) in their hiring, training and management practices.

Costuming Service Employees Costuming offers several advantages: Provide desired evidence by adding a measurement of tangibility Send a message by projecting the desired image Reduce risk by establishing credibility and easy identification of employees Ensure consistency by having each employee dress the same Some drawbacks may emerge, such as Perceived loss of individuality The organization may appear to be rigid

Maximizing Service Employee Productivity Discretionary Effort is the difference between the maximum effort one can bring to a task and the minimum effort needed simply to get by.  To maximize Discretionary Effort, organizations need employees who are: Willing (to do the job they are hired for, i.e., motivated) Able (to perform their tasks well, i.e., well trained)

Maximizing Service Employee Productivity (cont’d) Fig. 2.4

Maximizing Service Employee Productivity (cont’d)

Maximizing Service Employee Productivity (cont’d) Internal Marketing is the practice of: treating employees as internal customers of the service organization responding to employees’ needs or wants in a similar manner as an organization would with respect to external customers promoting the organization and its policies to the employee Based on the notion that employees’ who are happy and motivated respond to customers in a more positive manner. Fig. 2.4

Web Sites The Louvre Museum Home Depot Nordstrom Ritz-Carlton Hotels Southwest Airlines (http://www.southwest.com), p. 81 Scandinavian Airlines (SAS) (http://www.sas.se), p. 83 FedEx (http://www.fedex.com), p. 84

Web Sites (cont’d) Denny’s Romano’s Macaroni Grill McDonald’s (http://www.dennys.com), p. 87 Romano’s Macaroni Grill (http//:www.macaronigrill.com) p. 87 McDonald’s (http://www.mcdonalds.com), p. 88 United Parcel Service (http://www.ups.com), p. 88 Singapore Airlines (http://www.singaporeair.com), p. 88 Disneyland Paris (http://www.disneylandparis.com), p. 89 Flyaway Farms and Kennels (http://www.flyawaybash.com), p. 92