Role of Employees in

Services
Dr. Shiv M Kumar,
Fellow of Indian Institute of Management (IIM), Indore
Co-Founder, Augentia (www.augentia.com) & Augplat (www.augplat.com)
Delaware, USA | Bangalore, IN

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Discussion Points

– READING DISCUSSION: Motamarri, S., Akter, S. & Yanamandram,

V. K. (2017). Does big data analytics influence frontline employees in
services marketing? Business Process Management Journal.
– Service Culture
– Case Discussion: The Ordinary Heroes of the Taj: Harvard Business
Review
– The Critical Importance of Service Employees
– Boundary-Spanning Roles

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 Route to
Service Culture &
Excellence

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Service Culture

A culture where an appreciation for good service exists, and where giving
good service to internal as well as ultimate external customers, is
considered a natural way of life and one of the most important norms by
everyone in the organization.
- Christian Grönroos

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The Service Company
Marketing (Management)

Triangle
Internal Marketing External Marketing
“Enabling the promise” “Making the
promise”

Providers Customers
Interactive Marketing
“Delivering the promise”

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Aligning the triangle

– Organizations that seek to

provide consistently high levels
of service excellence will
continuously work to align the
three sides of the triangle.

– Aligning the sides of the triangle

is an ongoing process.

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Exercise 1: Class Activity & Discussions

– Focus on a service organization.

– How is each type of marketing being carried out currently?

– Are the three sides of the triangle well aligned?

– Are there specific challenges or barriers in any of the three areas?

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 Aligning the triangle: How?
– Hiring the right people
– Training and developing
people to deliver service
– Employee empowerment
– Support systems
– Appropriate technology
and equipment
– Rewards and incentives
Enabling Promise
Making a Promise
– Understanding customer
needs
– Managing expectations
– Traditional marketing
communications
– Sales and promotion
– Service delivery – Advertising
– Reliability, responsiveness,
empathy, assurance, tangibles, – Internet and web site
recovery, flexibility communication
– Face-to-face, telephone & online
interactions Keeping Promise
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What is Service Excellence?

Staff

It is a set of inter-related Corporate

principles Customers
components that work and values
inter-dependently to
produce a strategic Strategic Relationship
outcome. leadership with Council

Management
team

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Case Discussion:
The ordinary heroes of Taj
download from Moodle

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HARVARD CASE STUDY ON
TAJ MAHAL PALACE, MUMBAI
About Taj Mahal Palace, Mumbai

– The Taj Mahal Palace Hotel is a five-star hotel located in the Colaba
region of Mumbai, next to the Gateway of India.
– Sitaram Khanderao Vaidya and D. N. Mirza are the architects.
– First opened its doors to guests on 16 December 1903.
– Jamsedji Tata decided to build the hotel after he was refused entry to
one of the city's grand hotels of the time, Royal Navy Yacht Club, as
it was restricted to “whites only”.
– Taj Mumbai is ranked number 20 by Condé Nast Traveler in the
overseas business hotel category.

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What happened at Taj on 26/11

– On 26 November 2008, in a series of terrorist attacks in Mumbai, Taj

was also attacked.
– As many as 11 Taj Mumbai employees—over a third of the casualties —
laid down their lives while helping 1,200 guests escape.

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 TAJ BECOME A TOPIC FOR
HARVARD CASE STUDY
Dr. Rohit Deshpande, professor of marketing and branding at
Harvard Business School

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Did what is right!

–Waiters, busboys, and room cleaners who knew back exits and
paths through the hotel chose to stay in a building under siege
until their customers were safe.
–The telephone operators were calling guests and asking them
to switch off lights, turn off mobiles, block keyholes with the
room’s key, to safeguard themselves.

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Did what is right!

–Kitchen employees formed a human shield to assist guests

who were evacuating, and as a result lost their lives .
–The Taj staff kept calm, according to the guests, and
constantly went around offering water and asking people if
they needed anything else.
–Often during a crisis, a single hero or small group of heroes
take action and risk their lives. But what happened at the Taj
was much broader.

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What is Service Culture?

Taj employees’ actions weren’t prescribed in

manuals; no official policies or procedures
existed for an event such as 26/11.

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REAL HEROES OF 26/11

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Mallika
Jagad

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A Narrative by a Victim

– Mallika Jagad was only 24, but she was so poised, so in command of the situation.
– nothing in her training had ever taught her what to do when terrorists attack, but she
rose to the occasion
– to comfort people,
– to make sure all of us had water,
– to give information when she had it
– She took care of us all through the night
– When dawn broke and the room started filling with smoke, we knew we had to try to
escape
– It was Mallika who led us to safety, through many corridors and out via a back door
– As we were leaving, someone said to her: “Ladies first.”
– But, she replied: “No, tonight we live by my rules: guests first, staff next — and me last.”
– In a room of 30 business people, it was Mallika who stood tall and became the true
leader

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Karambir Singh
Kang

“If the hotel goes down, I will be

the last man out.”

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A Narrative about Karambir

– Karambir could save 1000+ guests staying at Taj that fateful night
– But he couldn’t save his wife.
– He couldn’t save his children.

– Karambir called his parents at midnight that night. “I don’t think they’ve made
it” he said, his voice splitting.
– His father, a retired Major General told him sternly over the phone from Bahrain.
He knew this was the only way to save his son. “Son, do your duty. Do not desert
your post.”
– There was silence, and then, “How can you think I can leave?” Karambir asked
his father. “If it goes down, I will be the last man there.”

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Why did the employees provide such a selfless service?

–There are no apt reasons as to why the employees from all

levels of the hierarchy did it, even when they knew the
secret routes and could have saved their lives.
–The organizational culture of Taj is such that employees are
willing to do right things for guests.

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Taj’s culture backed by hiring

–"They don't look for students who have the highest grades.
They're actually recruiting for personal characteristics.
They're recruiting for character & not for grades."
–In their search to find maids and bellhops, the Taj avoids big
cities and instead turns to small towns and semi-urban areas.
–Training and rewards systems set up by the Taj is designed to
encourage kindness.

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Why the hinterland?

The Taj Group prefers to recruit employees

from the hinterland because that’s where
traditional Indian values still hold sway.

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Training, Enablement, & Empowerment

– Most hotel chains train frontline employees for 12 months, on

average, but the Taj Group insists on an 18-month program.
– The reason being employees make 70% to 80% of their contacts
with guests in an unsupervised environment.
– a 24-hour stay in a hotel results in between 40 and 45 guest-
employee interactions, which it labels “moments of truth
– a two-hour weekly debriefing session with every trainee, who
must answer two questions:
– What did you learn this week?
– What did you see this week?

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Training, Enablement, & Empowerment

– To ensure that result, the company imparts three kinds of skills:

– technical skills, so that employees master their jobs (for instance, wait staff must know foods, wines,
how to serve, and so on);
– grooming, personality, and language skills, which are hygiene factors; and
– customer-handling skills,

– Employees learn to listen to guests, understand their needs, and

customize service or improvise to meet those needs.

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Which part of the Services Marketing Triangle this addresses?

Trainees are assured that the company’s

leadership, right up to the CEO, will support
any employee decision that puts guests front
and center.

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Front-line Employee Empowerment

– An irate guest swore he would never stay at the Taj Mumbai again
because the air conditioner hadn’t worked all night
– A trainee manager offered him breakfast on the house and provided
complimentary transportation to the airport.
– She also ensured that someone from the next Taj property at which he
was booked picked him up from the airport.
– Did the trainee spend a lot of the company’s money on a single guest?
Yes.
– Did she have to ask for permission or justify her actions? No.

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Which part of the Services Marketing Triangle this addresses?

“If you empower employees to take decisions

as agents of the customer, it energizes them
and makes them feel in command.”

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Recognition & Rewards (The STARS)

– Employees accumulate points throughout the year in three domains:

– compliments from guests,
– compliments from colleagues, and
– their own suggestions
– STARS committee comprising each hotel’s general manager, HR manager,
training manager, and the concerned department head review all the
nominations and suggestions
– Upon review, they post the deserving employee comments on the
company’s intranet
– If the committee doesn’t make a decision within 48 hours, the employee
gets the points by default.

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Recognition & Rewards (The STARS)

– By accumulating points, Taj Group employees aspire to reach one of five

performance levels:
– the managing director’s club;
– the COO’s club;
– platinum, gold, and silver levels
– At the annual Taj Business Excellence Awards ceremony, employees who
have made the managing director’s club get crystal trophies, gift
vouchers, and certificates.
– the Taj Group’s service standards and customer-retention rates rose after
it launched the STARS program, because employees felt that their
contributions were valued.

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Simply lived up to the occasion...

Taj Group’s hiring, training, and recognition

systems have together created an extraordinary
service culture, but you may still wonder if the
response of the Taj Mumbai’s employees to 26/11
was unique. Perhaps. Perhaps not.

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Service Excellence at its best...

– Ratan Tata, the then Chairman, did something holistic, as well.

– Every single person who was affected, including those like the
pav-bhaji vendor outside the hotel, was offered compensation
– Education of children of those affected, free medical facilities for
survivors & dependents at Tata hospitals for the rest of their lives
– Tata himself visited the families of each of the 80 employees affected
by the bomb blast, and offered compensation.

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Exercise 1: Discussion on Service Culture

– Narrate a situation you went through in your career

– Your organization or your boss has asked you to do something
– You are facing the customer
– The customer asked something diagonally opposite
– And what did you do?

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Reflections.

The critical importance of

Service Employees.

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Service Employees & Service

– They are the service.

– They are the organization in the customer’s eyes.

– They are the brand.

– They are marketers.

– Their importance is evident in:

– the services marketing mix (people)
– the service-profit chain
– the services triangle

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The Power of One

–Every encounter counts

–Employees are the service

–Every employee can make a difference

–Through their actions, all employees

shape the brand
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The Service Employees

–Who are they?

–“boundary spanners”
–What are these jobs like?
–emotional labor
–many sources of potential
conflict
–quality/productivity tradeoffs

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Boundary Spanners

They Interact with External Stakeholders

And Internal Stakeholders

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Boundary Spanning: Internal & External Customers

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Boundary-Spanning Workers Juggle Many Issues

–Person versus role

–Organization versus client

–Client versus client

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Types of Boundary Spanners in a Service Industry

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Inadequacy of Product Marketing Mix

– Services delivery needs

people intervention
(healthcare, food delivery)
– Services need a strong
process for maintaining
quality
– Services experience goes
beyond packaging (in
products)

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Seattle Click

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Traditional Org Chart

Manager

Supervisor Supervisor

Front-line Front-line Front-line Front-line Front-line Front-line Front-line Front-line

Employee Employee Employee Employee Employee Employee Employee Employee

Customers

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Customer Focused Org Chart

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Inverted Services Marketing Triangle

–Starts with the

emphasis on
“Delivering the
Promise”
–Backed by ”Enabling
& Making the
Promise”

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Employee Satisfaction à Customer Satisfaction

The grocery chain paid over $54 million for college

scholarships for 17,500+ employees over the past 20
years.
Wegmans did not hesitate to send cheese manager
Terri Zodarecky on a ten-day sojourn to cheesemakers
in Europe.
The firm gives employees flexibility to deliver great
customer satisfaction.

How can this be justified?

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How does this affect performance?

– Wegmans’ labor costs are 15-17% of sales, compared with

12% for industry.
– But annual turnover is just 6% (19% for similar grocery
chains).
– 20% of employees have 10+ years of service.
– This in an industry where turnover costs can exceed
annual profits by more than 40%.
– Wegmans’ operating margins are 7.5%, double what the
big grocers earn.
– Sales per square foot are 50% higher than industry
average.

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Service Excellence Model

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 Let’s Summarize

Route to Service Culture

– Defining Service Culture
– The services marketing triangle
– Aligning the triangle for service excellence
Case Discussion:
– The ordinary heroes of Taj
– Epitome of Service culture demonstrated
– Tightly aligned services marketing triangle

Importance of Service Employees

– They are the Service
– Boundary Spanners
– The inverted org chart and SM triangle

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Further Readings

– Zeithaml, V.A., Parasuraman, A. and Berry, L., (1985), “Problems and

Strategies in Services Marketing”, Journal of Marketing, Vol. 49, Spring,
pp. 33-46.
– B2B services branding in the logistics services industry, by Adam J.
Marquardt, Susan L. Golicic, and Donna F. Davis. Journal of Services
Marketing 25/1 (2011) 47–57

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Preparation for Next Class

Read the Paper and come prepared for discussion

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 Image Source: juanmerodio.com

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Reach Out

Dr. Shiv M Kumar

shiv.m@augentia.com fi13sivak@iimidr.ac.in
+1 (425) 894 3096 +91 72598 11539

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