1. 1 The Organizational Agenda Four Seasons

2. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan2 The OB Connection The Services Angle –Given the greater likelihood of human interactivity, internal experiences of employees are more likely to be visible to the consumers. What do employees experience? –Climate = the perceptions/sense that employees have about what is important to the firm/institution? drivers: boss, peers, HRM practises, marketing, operations, etc. –Culture more intangible than climate Shared values about what is right/wrong, what works/doesn’t

3. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan3 The Organizational Agenda The three tiers in a service organization –customer –boundary –coordination Points to Ponder –what are the capabilities to be developed in the front- office and front-office personnel? –does the organization provide the necessary inputs and incentives for successful performance by front- office personnel? –what are the drivers of employee satisfaction?

4. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan4 The HRM Agenda Mission –From: Equipping employees to perform/meet the requirements of the job –To: Ensuring employees are capable of meeting the expectations of consumers

5. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan5 What Makes Employees Tick? Basic needs –Security –Esteem –Justice/Fairness Rewards –Monetary = economics of compensation –Non-monetary = the social contract between employee and the institution conflict between monetary and non-monetary (reward countable, tangible behaviors only) the relative importance of monetary versus non-monetary conflicts Performance = input (selection) + context (support) + rewards (internal and external)

6. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan6 Beyond an Internal Conception of HRM The employee in many instances is the “service” in the eyes of the consumers –Quality Control Selection, Training Rewards and Retention The HRM Spillover effect –Employee satisfaction influences consumer satisfaction “Experience” goods imply a need for quality signals –Employee morale –Physical Landscape Do unto consumers, as the Firm does to You –OCBs Point to Ponder: –When should we use the Customer as the Judge and not the supervisor (or pre-defined rules and procedures)?

7. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan7 Some Interesting Correlations When employees perceive strong culture, customer report receiving superior service quality Strong service culture plus support (managerial actions, logistics and systems support, communications, etc.,) correlate with lower stress indicators at the job level and higher job satisfaction Possible to have both types of correlations (positive as well as negative) between various indicators of organizational effectiveness (customer satisfaction, financial performance, etc.,) and service culture

8. P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan8 The Loyalty Premium: Employees