COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v C hapter 10 P EOPLE I SSUES: M ANAGING S ERVICE E MPLOYEES

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v IMPORTANCE OF CONTACT PERSONNEL  People provide a sustainable competitive advantage  Focus should be equally based on service quality, service delivery, and employee well-being  People selection should be dependent upon the organization and the market it faces  different types of firms have different needs  Data needs to be tracked concerning what customers want and which HR practices helps deliver it to them

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v SERVICE PROVIDERS AS BOUNDARY SPANNERS  Link the organization with the outside world  Primary purpose  information transfer (two-way)  representation  Service provider spectrum ranges from professionals to subordinate service roles

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v MAJOR CUSTOMER COMPLAINTS ABOUT SERVICE WORKERS  Apathy--DILLIGAD  Brush-off  Coldness  Condescension  Robotism  Rulebook  Runaround

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v SERVICE PROVIDERS AS BOUNDARY SPANNERS  Boundary spanners are prone to conflict  person/role conflict  Inequality dilemmas  Feelings versus behavior  Territorial conflict  organization/client conflict  interclient conflicts

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v SERVICE PROVIDERS AS BOUNDARY SPANNERS  Leads to feelings of roles stress  dissatisfaction  frustration  turnover intention

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v SERVICE PROVIDERS AS BOUNDARY SPANNERS  Provider responses to reduce role stress  avoid the customer  move into a “people-processing” mode  add symbols and furniture to increase control  overact the role  forces customer into subservient role  side completely with the customer

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHAT, HOW AND WHEN OF EMPOWERMENT  Empowerment  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

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v 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

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHAT, HOW AND WHEN OF EMPOWERMENT  Empowerment benefits  quicker response to customer needs  quicker response to dissatisfied customers  employees feel better about their jobs and themselves  employees interact with customers with warmth and enthusiasm  employees become a great source of service ideas  great w-o-m advertising and customer retention

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHAT, HOW AND WHEN OF EMPOWERMENT  Empowerment costs  larger dollar investments in selection and training  higher labor costs  slow or inconsistent service delivery  violations of fair play  giveaways and bad decisions

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHAT, HOW AND WHEN OF EMPOWERMENT  Empowerment continuum  control-oriented vs. involvement oriented  1. Suggestion involvement  empowered to recommend  formal suggestion programs  quality circles

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHAT, HOW AND WHEN OF EMPOWERMENT  2. 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

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHAT, HOW AND WHEN OF EMPOWERMENT  3. High Involvement  train people to manage themselves  profit-sharing and employee ownership  develop skills in teamwork, problem solving, and business operations

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHEN TO EMPOWER: A CONTINGENCY APPROACH  Contingencies:  basic business strategy  standardized vs. customized  tie to the customer  transaction vs. relationship  Technology  simple vs. complex

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHEN TO EMPOWER: A CONTINGENCY APPROACH  Contingencies:  business environment  predictable vs. unpredictable  types of people  Managers  theory X vs. theory Y  Employees  low vs. high growth and social needs  low vs. high interpersonal skills

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v WHEN TO EMPOWER: A CONTINGENCY APPROACH  Contingencies:  Scoring:  5 to 10  Control-oriented, production-line approach  11 to 15  Suggestion involvement strategy  16 to 20  Job involvement approach  21 to 25  High-involvement empowerment approach

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v PULLING IT ALL TOGETHER: THE SERVICE-PROFIT CHAIN  Internal Service Quality =>  workplace design  job design  employee selection and development  employee rewards and recognition  tools for serving the customer

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED.v PULLING IT ALL TOGETHER: THE SERVICE-PROFIT CHAIN  Employee satisfaction =>  Employee retention & productivity =>  External service value=>  results for customers  Customer satisfaction=>  Customer loyalty=>  retention, repeat business, referrals  Revenue growth & productivity