Managing Service Quality: An International Journal

Effective performance management - the teamwork approach considered

Hadyn Ingram Brenda McDonnell
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Hadyn Ingram Brenda McDonnell, (1996),"Effective performance management - the teamwork approach considered",
Managing Service Quality: An International Journal, Vol. 6 Iss 6 pp. 38 - 42
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attitudes and managed performance", International Journal of Educational Management, Vol. 24 Iss 6 pp. 507-530 http://
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organisational culture and climate in public universities in Uganda", Measuring Business Excellence, Vol. 15 Iss 4 pp. 36-49
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Illuminate
Effective performance
management – the
teamwork approach
considered
Hadyn Ingram and
Brenda McDonnell
The authors
Downloaded by UNIVERSITY OF NAIROBI At 08:40 08 February 2016 (PT)
Hadyn Ingram is Academic Tutor in the Department of
Management Studies at the University of Surrey, Guildford.
He also owns and manages a hotel in Salisbury. His
doctoral research focuses on teamworking in service
industries.
Brenda McDonnell is a Lecturer in the School of Financial
Studies and Law at Sheffield Hallam University. She
teaches finance and writes on the subject of performance.
Abstract
Explores ways in which firms can improve service perfor-
mance through people. Analyses the nature and character-
istics of teamworking and ways in which performance can
be measured and benchmarked. Suggests possible
approaches to the management of performance in the
future.
Managing Service Quality
Volume 6 · Number 6 · 1996 · pp. 38–42
© MCB University Press · ISSN 0960-4529
38
The central focus for organizations today is
how best to manage the business, so as to
ensure that profits are made and that the
enterprise is successful over time. Conven-
tionally, profitability can be improved in one
or more of three ways:
(1) cost reduction;
(2) increasing selling prices;
(3) improving market share.
However, the problem with reducing costs is
that it may lead to a decline in standards,
thereby weakening market share and putting
pressure on the selling price. And in the
1990s, greater buyer power has made cost
reduction and premium pricing strategies less
effective, at a time when many firms are
changing from a production-led to a con-
sumer-led orientation. In this climate of
greater competition, firms can best improve
performance and market share by differentiat-
ing their products or services from those of
their competitors.
Where the product offering is largely simi-
lar, differentiation can be achieved by improv-
ing service quality to the customer. Inevitably,
service delivery involves people, and a key
question for management is how to develop a
human resource approach which balances
quality with efficiency. Effective performance
management may only be achieved by foster-
ing an organizational atmosphere in which
benefits accrue to each of three stakeholders;
the customer, the employee and the organiza-
tion itself.
Teamworking may provide a way in which
the employee and organization can work
together more effectively, to the advantage of
the customer. The aim of this article then is to
investigate a number of approaches to manag-
ing performance in the future, by exploring
the nature of teamworking and performance.
Which approach?
It is the responsibility of an organization’s
management to lead the organization success-
fully. This can only be achieved with an
awareness of competitors and customers, and
through managing the people who provide the
means to produce goods and services. Man-
agement attitudes towards employees may be
contrasted in a continuum in which the priori-
ties are productivity or people, as shown in
Figure 1.
 Effective performance management – teamwork approach considered
Hadyn Ingram and Brenda McDonnell
Figure 1 Polar approaches to managing human resources
Productivity
Bias towards productivity
Traditional “scientific” management
approaches, as defined by Frederick Taylor,
look on labour as a factor of production in
which work is wholly planned and controlled
by management. Successful mass producers
such as Henry Ford found that economies of
scale could be gained by scientific manage-
ment approaches, in which employee skills are
taken to be less important than production
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planning. Modern service firms too, including
fast food chains like McDonald’s, have suc-
cessfully used standardized work processes,
de-skilling strategies and technology success-
fully, to ensure consistent product quality.
Productivity approaches have the advantage
of minimizing human error in ensuring quali-
ty, but service may be seen as “sterile” and
lacking in individuality.
Bias towards people
In direct contrast to “scientific”, production-
centred approaches, are those in which there
is a bias towards people as the primary source
of competitive advantage. In this scenario,
employees are seen as a key resource through
which a firm’s products, and especially its
service offering, can be differentiated from
those of its rivals. Such an approach may be
more difficult to manage because it involves a
more open attitude in which management
must facilitate rather than control, and dele-
gate responsibility. More emphasis is placed
on developing the skills of employees in order
to make them more productive to the organi-
zation, operating in an atmosphere of trust
rather than one of control.
The polarity of these contrasting approach-
es represents extreme ways in which organiza-
tions may utilize their employees. In practice,
the choice of approach is constrained by two
factors; leadership style and organizational
size. The personal leadership style of a man-
ager is affected by both in-born and acquired
traits, which may change over time. Even if it
is possible to change management approach
without difficulty, many owner-managers of
Managing Service Quality
Volume 6 · Number 6 · 1996 ·38–42
smaller businesses may be unable to adopt the
scientific approach. For these small business-
es, productivity strategies may be constrained
People
by a lack of the necessary skills, or the neces-
sary financial resources, or a level of sales
volume which produces economies of scale.
In the high street, for example, it is the larger
or multiple shops which use the new technol-
ogy to best effect.
People strategies
Most modern management writers argue that
corporate strategy needs to be continually
reviewed in a flexible way and that firms
should make better use of their most impor-
tant asset, namely, their people. Recently,
more attention has been devoted to groups as
the organizational building blocks, so that
work tasks may be assigned to autonomous
groups responsible for specific tasks, rather
than being done by individuals. In western
society, there is evidence to suggest that supe-
rior organizational performance may be
directly attributed to effective teamwork[1].
In particular, classical management theories
have been challenged by more recent claims
that money may not be the prime motivator
and that people can find self-actualization and
fulfilment through their work.
There is evidence to suggest that while
managers have little difficulty in deriving
satisfaction from their work, it is also impor-
tant to ensure that operational staff at the
customer interface are kept interested in their
work. It is an increasing challenge for man-
agement to keep up this interest as operational
tasks are often repetitive and stressful. Those
at the sharp end of the service encounter
deserve full support!
Work teams
Proximity to others during the course of work
contributes to friendship and association.
Indeed, many people derive a great deal of
enjoyment through going to work and inter-
acting with their work colleagues. They form
formal and informal work groups which can
generate their own powerful culture and
values, that may either enhance organizational
objectives or conflict with those of the organi-
zation, sometimes causing resistance to
change. Effective managers are those who are
aware of these powerful group forces and can
39
 Effective performance management – teamwork approach considered
Hadyn Ingram and Brenda McDonnell
harness them for the good of both the organi-
zation and individual.
What are work teams?
Effective work teams are those which:
• are composed of two or more people;
• have a specific performance objective or
recognizable goal to be attained;
• co-ordinate activity among the members
for the attainment of the team goal or
objective.
Teams must also possess a definable member-
ship, a group consciousness, a sense of shared
purpose, and they must interact in a co-
operative way. Teams may then be portrayed
as effective work groups whose effectiveness
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rests on the degree of motivation, co-ordina-
tion and purpose, and whose synergy pro-
duces an energy and creativity which is
beyond them as individuals. This unitary and
focused energy can be channelled by organi-
zations to address increasingly complex prob-
lems, and is a primary strategy for continuous
improvement. Building teams is a potentially
rewarding task for management, but one that
must be approached with knowledge and sen-
sitivity. Effective grouping, therefore, depends
on matching personality types and balancing
levels of skill, knowledge and expertise so that
potential conflict can be minimized.
In the hotel industry, for example, there is
an ongoing rivalry between kitchen and
restaurant which can often cause arguments,
and adversely affect the quality of the guests’
meal experience. This may be partially
explained by the differences in the skills and
personalities of cooks and waiters, and by the
pressure (and heat) of a busy meal service. It
is an ongoing management challenge to try to
help both factions to see themselves as part of
the greater whole, i.e. as a team.
Team development
Teams develop in stages from formation to
maturity, and the process may be an emotion-
al and stormy one involving conflict and
disagreements. Although team building is
often advocated as a desirable strategy, there
is little empirical research to suggest ways in
which it may be sustained over time. One
problem is inter-departmental conflict, where
group culture may cause rivalry. Rivalry
between work teams within organizations can
40
Managing Service Quality
Volume 6 · Number 6 · 1996 · 38–42
assist the internal unity of those work teams,
but needs to be carefully managed.
Successful teams
Japanese firms like Honda, Canon and Sharp
have become successful by rapid and adaptive
organizational responsiveness, facilitated by
continuous innovation and self-renewal. The
success of such Japanese firms is also due to
their recognition that people are the key asset
of the business, and that the management of
people is a central strategic issue, rather than
a necessary inconvenience. In many Japanese
companies, there is great emphasis placed on
the work group, and on teamwork as a means
of benefiting both individuals and organiza-
tion. While western problem solving is serial
in character, the Japanese process uses
involvement to ensure cultural and political
acceptance and leads to optimal decision
making. Perhaps the Japanese culture is con-
ducive to consensus, but their success con-
tains lessons for western organizations.
What is performance?
Performance is the result of achieving organi-
zational objectives; a yardstick of success.
Porter[2] asserts that the basis of above-
average performance in the long run is “sus-
tainable competitive advantage”. This ideal
position is achieved by raising barriers that
make a firm’s strategy difficult to imitate,
principally by differentiating its product or
service so that “… it is perceived industrywide
as being unique”. Differentiation has always
been a powerful strategy because, where core
products are broadly similar, competitive
advantage can always be achieved by improv-
ing the service element. The main advantage
of effective differentiation is that it can stimu-
late loyalty in customers who become less
price sensitive so that the firm’s margins and
volumes can grow. In the present competitive
climate, where many firms are seeking sus-
tainable competitive advantage by continually
monitoring the strategies of their rivals, those
who succeed do so by keeping one step ahead,
particularly with the quality of their goods and
services.
One service firm which has been successful
in differentiating its product using both
people and productivity strategies is TGI
Friday’s, the themed American restaurant
chain. TGI Friday’s ensure tangible food and
 Effective performance management – teamwork approach considered
Hadyn Ingram and Brenda McDonnell
drink quality by well-developed procedures,
and differentiate through their service strate-
gy. Service staff work in teams and are encour-
aged to have fun at work so that both they and
the customer enjoy the experience.
Measuring performance
Performance measurement is necessary
because it enables firms to take a snapshot of
current activity to assess their progress and
help refocus strategy. These snapshots must
always be compared against others both inside
and outside the firm in the following three
main ways:
(1) Past performance: recorded successes and
achievements in the past.
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(2) Benchmarking: contrasting performance
against that of other firms.
(3) Goals: comparing achievements with
strategic aspirations and expectations.
The problems arise in deciding the criteria by
which performance should be measured.
Economic or “hard” concepts like productivi-
ty and profit can be used to measure the
relationship between the inputs and outputs
of an operation, but softer criteria such as
attitudes and behaviour are also used to evalu-
ate performance.
Our customers judge quality on a range of
objective and subjective issues which are often
difficult to pin down. Employee attitude, for
example, was ranked as the most important
critical success factor to hotel companies, but
is difficult to measure accurately. Often,
measures of performance aim at short-term
operational (often financial) objectives, rather
than the longer-term strategic goals of the
business. In assessing performance it is possi-
ble to measure outcomes (growth, profitabili-
ty) or the means of achieving those outcomes
(quality, flexibility, resource utilization).
Generally, performance outcomes are mea-
sured by hard data, expressed in the same
terms as the objective. However, it is often
necessary to use soft, subjective measures to
monitor equally important objectives such as
customer satisfaction or innovation.
As these are difficult to measure, it may be
appropriate to employ directly-related indica-
tors, for example the number of complaints,
as an indicator of customer satisfaction.
Unfortunately, some firms concentrate too
much on those factors which are easily mea-
surable, rather than those which contribute to
41
Managing Service Quality
Volume 6 · Number 6 · 1996 ·38–42
organizational effectiveness. If, for example,
service quality is selected as a strategic objec-
tive, this will help organizations to plan the
management and measurement of customer
satisfaction. However, an over-emphasis on
one aspect of performance may be detrimen-
tal to other aspects.
One answer is the balanced scorecard as
developed by Kaplan and Norton[3], a report-
ing system which offers a set of financial mea-
sures that report the results of actions already
taken as well as operational measures that drive
future performance. These may be viewed in
four perspectives as shown in Figure 2:
• customer perspective – a key area of concern
that seeks to measure customer satisfaction
by formal and informal methods;
• financial perspective – bottom line measures
such as sales, profits and return on invest-
ment;
• innovation and learning perspective – activi-
ties such as the identification of new mar-
kets, staff development and improvements
to facilities;
• internal perspective – relating to those opera-
tions, processes and skills that have the
greatest impact on customer satisfaction,
such as teamwork and employee develop-
ment, as well as internal measures of effi-
ciency such as gross profit percentages.
The internal perspective may prove to be the
most challenging sphere to measure, although
potentially it contributes most to customer
satisfaction. While cost efficiency measures
are absolute, how could, or should, the degree
of teamwork and co-ordination be accurately
measured? The number of team meetings or
training, for example, may show the level of
management time and resource commitment
to these important activities, but may not
accurately reflect the effectiveness of team
performance or team processes. The balanced
Figure 2 The four perspectives of the balanced score-card
Financial
Customer Internal
Innovation and
learning
 Effective performance management – teamwork approach considered
Hadyn Ingram and Brenda McDonnell
scorecard corrects the imbalance which has
historically characterized the relationship
between financial and non-financial perfor-
mance indicators. It shows management very
clearly that over-emphasis on any one per-
spective has consequences for one or more of
the others. The “balance”, therefore, comes
from considering a range of performance
indicators as well as incorporating a greater
time span.
Comparing performance using bench-
marking
Once organizations have developed an appro-
priate framework to measure performance, it
is useful to compare that performance with
those of other similar businesses. Benchmark-
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ing is a potentially beneficial strategy that
enables companies to compare their products,
services and work processes with those of
other organizations. This may be done by
investigating good practice internally, and
then comparing it with best practice demon-
strated by both rival firms and those from
unrelated industries. The practice of bench-
marking may be compared to systematic
strategic planning frameworks in which inter-
nal and external environments are scanned in
order to match internal capabilities with
external requirements. The benchmarks
established through the external comparisons
can then be incorporated into the balanced
scorecard as desirable performance levels.
42
Managing Service Quality
Volume 6 · Number 6 · 1996 · 38–42
Summary
All of this suggests that managing perfor-
mance is an increasingly challenging activity.
Firms need to find the right balances
between productivity and people, using
indicators which reconcile “hard” and “soft”
components. This suggests that the continu-
ous search for service quality should be
conducted using a flexible and holistic
approach. Short-term gains should not be
sought at the expense of longer-term strate-
gies in which people play a major part.
Effectiveness may result by harnessing the
latent creative energy of teams at every level
in the organization. This energy should be
driven by top-level teams who need to man-
age the process of change, so as to channel
the efforts of teams at lower levels which are
closest to the customer. The organizations
which succeed will be those who harmonize
the efforts of their employees in a unitary
way.
References
1 Margerison, C. and McCann, D., Team Management,
Management Books 2000, Didcot, 1995.
2 Porter, M.E., Competitive Strategy: Techniques for
Analyzing Industries and Competitors, Free Press, New
York, NY, 1980.
3 Kaplan, R.S. and Norton, D.P., “The balanced
scorecard – measures that drive performance“,
Harvard Business Review, Vol. 70 No. 1, 1992,
pp. 71-9.
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