1. Service Operations Management: The total experience
Chapter Nine
Service Operations Performance

2. 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.

3. Figure 9.1 Performance management cycle

4. 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

5. 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).

6. Table 9.1. Examples of Key Performance Questions

7. Figure 9.2 Performance monitoring priority analysis matrix

8. 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.

9. 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

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

11. Figure 9.3 A customer-focused organization chart

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

13. 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.

14. Figure 9.5 Balanced Scorecard