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 inherent stresses and strains faced by the typical service employee. 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 role of management in supporting the “climate for services.” ©2011 Cengage Learning. All rights reserved.

Opening Vignette: Wegmans The Best Company to Work for In 2005, Wegmans was ranked number one for “The 100 Best Companies to Work for” Privately held supermarket chain that employees over 30,000 employees in its 67 stores located in New York, Pennsylvania, New Jersey, and Virginia. ©2011 Cengage Learning. All rights reserved.

Figure 9.1 Service-Profit Chain ©2011 Cengage Learning. All rights reserved.

Importance of Service Personnel Service personnel provide a sustainable competitive advantage Major customer complaints about service workers Apathy Brush-off Coldness Condescension Robotism Rulebook Runaround ©2011 Cengage Learning. All rights reserved.

Service Providers as Boundary Spanners Professional service roles Link the organization with the outside world Primary purpose information transfer representation Service provider spectrum ranges from professionals to subordinate service roles Subordinate service roles ©2011 Cengage Learning. All rights reserved.

Sources of Conflict on Contact Service Personnel Boundary spanners are prone to conflicts person/role conflicts organization/client conflicts inter-client conflicts ©2011 Cengage Learning. All rights reserved.

Coping Strategies and Implications for Customers Leads to feelings of roles stress dissatisfaction frustration turnover intention Employees often adopt a number of responses avoiding the customer moving into a "people-processing" mode adding physical symbols in their office to increase control overacting their role siding completely with the customer ©2011 Cengage Learning. All rights reserved.

Creating a Climate for Service Work facilitation Interdepartmental support Human resource practices ©2011 Cengage Learning. All rights reserved.

Figure 9.3 The Services HR Wheel ©2011 Cengage Learning. All rights reserved.

Layers of the Service HR Wheel Recruiting the right people Developing competent service employees Controlling, rewarding and evaluating service employees Retaining service employees ©2011 Cengage Learning. All rights reserved.

Five Customer Profiles “Customers from Hell” Egocentric Edgar Bad-Mouth Betty Hysterical Harold Dictatorial Dick Freeloading Freda ©2011 Cengage Learning. All rights reserved.

Profile # 1 – Egocentric Edgar appeal to his ego demonstrate action don’t talk policy rephrase: “for you, I can ….(policy)” don’t let his ego destroy yours ©2011 Cengage Learning. All rights reserved.

Profile # 2 – Bad-Mouth Betty ignore her language force the issue (hang-up) use selective agreement (with some statements) ©2011 Cengage Learning. All rights reserved.

Profile # 3 – Hysterical Harold let him vent take it backstage take responsibility for solving the problem ©2011 Cengage Learning. All rights reserved.

Profile # 4 – Dictatorial Dick break up his game (fulfill his request) stick with your game be consistent with customers tell him what you can do for him ©2011 Cengage Learning. All rights reserved.

Profile # 5 – Freeloading Freda give it to her don’t let the 1% dictate action for the 99% who actually have problems ©2011 Cengage Learning. All rights reserved.

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 ©2011 Cengage Learning. All rights reserved.

Empowerment and Enfranchisement 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 ©2011 Cengage Learning. All rights reserved.

Figure 10.2 Levels of Empowerment INVOLVEMENT ORIENTED High involvement Job involvement Suggestion involvement Production line CONTROL ORIENTED ©2011 Cengage Learning. All rights reserved.

Levels of Empowerment Suggestion Involvement empowered to recommend formal suggestion programs quality circles ©2011 Cengage Learning. All rights reserved.

Levels of Empowerment 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 ©2011 Cengage Learning. All rights reserved.

Levels of Empowerment High Involvement train people to manage themselves profit-sharing and employee ownership develop skills in teamwork, problem solving, and business operations ©2011 Cengage Learning. All rights reserved.

Customer Relationship Management The process of identifying, attracting, differentiating, and retaining customers where firms focus their efforts disproportionately on their most lucrative clients. Coding Routing Targeted Sharing Red-lining ©2011 Cengage Learning. All rights reserved.

Copyright © 2011 Cengage Learning. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Cengage Learning.  ©2011 Cengage Learning. All rights reserved.