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Chapter 9

Managing
people for
service
advantage

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Learning objectives
• 9.1 Demonstrate an understanding of the service profit chain framework
• 9.2 Explain why the frontline is crucial to the success of a service firm
• 9.3 Explain why the work of frontline service employees is so demanding, challenging and often
difficult
• 9.4 Explain how to attract, select, train, motivate and retain outstanding frontline employees
• 9.5 Describe the role of service culture and service leadership in sustaining service excellence

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• Quintessentially we are a people-based company. You

couldn’t find another consumer brand as dependent on
human behaviour.
Howard Schultz
CEO of Starbucks

• The old adage “People are your most important asset” is

wrong. The right people are your most important asset.
Jim Collins
Author of the book
“Good to Great”

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© Olesia Bilkei/Shutterstock.com

• Emotional contagion: a cheerful, confident frontline employee transfers their attitude to a customer via their
body language, facial expressions and other personal cues

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Service personnel as a source of customer

value, loyalty and competitive advantage

• From a customer’s perspective: the

encounter with service staff is often the
most important aspect of a service
• From the firm’s perspective: service
staff can be an important source of
differentiation as well as competitive
advantage

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Service personnel as a key source

of customer satisfaction, value,
loyalty and competitive advantage

• The frontline:
• is a key part of the product (service).
• is the service firm.
• is the brand, e.g., Singapore Airlines
(SIA), City Circle tram of Melbourne

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Frontline work is difficult

and stressful

• Boundary spanning
• Person–role conflict:
• conflict between what their job requires and
their own personalities, self-perception and
beliefs, e.g., difficult customers, cleaner
• Surface versus deep acting
• Organisation-client conflict:
• Conflict occurs when boundary spanning
employees are expected to satisfy
conflicting goals of customers and the firm
e.g., reducing time allocated to individual
customers (“two-bosses” dilemma)
• Coping with customer aggression

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Frontline work is difficult and stressful (2)

• Emotional labour: degree to which emotions are managed
to achieve socially desirable outcomes such as smiling,
showing a sincere interest, concern, or engaging in
conversation
“We pretend to be cheerful, pleasant, earnest, energetic, and so forth
throughout the journey even though those emotions are unfelt in
most cases. Furthermore, we also depress our anger, hate, or disgust
when facing difficult guys. We are also not allowed to manifest worry
or fear even if we are indeed in some serious trouble. I don't want
people to lose confidence in my ability” (Karen, female, 32 years old, a
tour leader for 7 years)

• Facial and bodily display management: occurs along with

managing feelings hence ‘service as theatre’

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© Martin Novak/Shutterstock.com

• Work in customer contact centres is intense! Yet how customer service representatives perform often
determines how a firm’s service quality is perceived by customers

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Human resource management—

how to get it right
• Hire the right people
• Identify the best people
• Train service employees actively
• Empower the frontline
• Build high-performance service delivery teams
• Motivate and energise people

“We don’t train people to be nice. We just hire nice people.”

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Hiring the right people

• Be the preferred employer brand, e.g., Google

• Select the right people, e.g., Disney

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How to identify the best people

• Observe behaviour
• Conduct personality tests
• Give applicants a realistic preview of the job

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Train service employees actively

• Organisational vision, culture and strategy, e.g., Disney

University Orientation
• Interpersonal and technical skills
• Product/service knowledge, e.g., Apple
• Reinforce training to shape behaviours, e.g., Ritz-Carlton
Gold Standards

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Courtesy of Malaysia Airlines

• Malaysia Airlines understands staff are a key component of its service offering

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Empower the frontline

• Empowerment means giving staff the information and

authority to make discretionary decisions, that is, to vary from
the policy and procedures manual in certain circumstances.

• Is empowerment always appropriate?

• High empowerment leads to higher customer satisfaction
• Empowerment is most likely to be appropriate when specific
factors are present within the organisation and its
environment, e.g., Southwest airlines “whatever it takes”
mentality

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Build high-performance service delivery teams

• The power of teamwork in services

• Creating successful service delivery teams

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Motivate and energise people

• Job content
• Service climate
• Feedback and recognition
• Goal accomplishment

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<www.hewitt.com>

• Figure 9.8 ‘People issues are complex: managing them doesn’t have to be.’ Hewitt Associates, a professional firm
delivering human capital management services, captures employees’ complexity in its advertising

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Service culture

• A service culture can be defined as:

• shared perceptions of what is important in an organisation
• shared values and beliefs of why those things are
important

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Internal marketing
• Strong communication is essential to shape
the culture and get the message to the
troops.

• Internal communications play a vital role in

maintaining and nurturing a corporate
culture founded on specific service values.

• Effective internal communication helps to

ensure efficient and satisfactory service
delivery, achieve productive and
harmonious working relationships and build
employee trust, respect and loyalty.

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Next week

• Topic 8: Crafting the service environment

• Lovelock et al. (2015) Chapter 10

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