Managing People in

Services
 Moments of Truth
Each customer contact is called a moment of
truth.
Service Employees have the ability to either
satisfy or dissatisfy the customers when
contacted.

6-2
 Frontline Service Personnel:

Source of Customer Loyalty and Competitive Advantage

 SERVICE STAFF-CRUCIAL
Is either a Villain Versus a Hero
Is a Core part of the product
Is the service firm
Is the brand

They also form the key

component of possible
‘Moments of Truth’
Frontline Service Personnel: Source of Customer
Loyalty and Competitive Advantage

Frontline also drives customer loyalty,

with employees playing key role in

anticipating customer needs,

customizing service delivery and building

personalized relationships
 How to Manage People for Service
Advantage?
Staff performance is a function of both ability and motivation.
How can we get able service employees who are motivated
to productively deliver service excellence?

1. Hire the right people

2. Enable your people
3. Motivate and energize your people
Three Phases in the Development of Internal Marketing:

Phase 1 : Employee Motivation & Satisfaction

Phase 2: Customer Orientation

Phase 3: Broadening the internal marketing concept, i.e. ,

Strategy implementation & change management
 INTERNAL MARKETING
1. Staffing
a. Manpower Planning
b. Selection
c. Recruitment
2. Training
a. Social Skills
b. Interactive Skills
c. Technical Skills
 INTERNAL MARKETING
3. Organising
a. Work Assignment (Role)
b. Empowerment
c. Service Culture
d. Teamwork
4. Supporting
a. Process Support
b. Technical Support
 INTERNAL MARKETING
5. Motivating
a. Treat Employees as customers
b. Promotions
6. Evaluating
a. Measuring performance
b. Feedback to employees
c. Feedback to management
 INTERNAL MARKETING
7. Rewarding
a. Compensation
b. Recognition
c. Extend Benefits
8. Retaining
a. Inclusion in the company vision
b. Retaining the best employees
 Interdependence of Marketing,
Operations & Human Resources

Marketing
Operations Management
Management

Customers

Human Resource
Management
Defining 3 Functional Imperatives

Marketing imperative
• Target “right” customers and build
relationships
• Offer solutions that meet their needs
• Define quality package with competitive
advantage
Defining 3 Functional Imperatives

Operations imperative
• Create, deliver specified service to target
customers
• Adhere to consistent quality standards
• Achieve high productivity to ensure
acceptable costs
Defining 3 Functional Imperatives

Human resource imperative

• Recruit and retain the best employees for
each job
• Train, motivate them to work well together
• Achieve both productivity and customer
satisfaction
 Boundary Spanning Roles
 Boundary spanners link inside of organization to
outside world
 Multiplicity of roles often results in service staff
having to pursue both operational and marketing
goals
 Management expectations of service staff:
 Delight customers
 Be fast and efficient in executing operational tasks
 Do selling, cross selling, and up-selling
 Role Stress in Frontline Employees
Three main causes of role stress:
 Person versus Role: Conflicts between what jobs
require and employee’s own personality and beliefs
 Organizations must instill “professionalism” in
frontline staff
 Organization versus Client: Dilemma whether to
follow company rules or to satisfy customer
demands
 This conflict is especially acute in organizations
that are not customer oriented
 Client versus Client: Conflicts between customers
that demand service staff intervention
 Emotional Labor
“The act of expressing socially desired emotions
during service transactions”
Three approaches used by employees:
Surface acting—simulate emotions they don’t actually feel
Deep acting—psych themselves into experiencing desired emotion,
perhaps by imagining how customer is feeling
Spontaneous response
Performing emotional labor in response to society’s or
management’s display rules can be stressful
(eg. Airline staff on long-haul flights are not expected to show sighs
of fatigue )
 The Cycles of Failure, Mediocrity and
Success
Too many managers make short-sighted assumptions about financial
implications of:
Low pay
Low investment (recruitment, training)
High turnover human resource strategies
Often costs of short-sighted policies are ignored:
Costs of constant recruiting, hiring & training
Lower productivity & lower sales of new workers
Costs of disruptions to a service while a job remains unfilled
Loss of departing person’s knowledge of business and customers
Cost of dissatisfied customers
 Cycle of Failure
High
customer
turnover Repeat emphasis on
attracting new customers

Failure to develop
customer loyalty
Low profit
margins Narrow design of
jobs to accommodate
low skill level
High employee turnover;
poor service quality

No continuity in Use of technology Emphasis on

relationship for to control quality rules rather
customer Employee dissatisfaction; than service
poor service attitude
Payment of
low wages

le
yc
ee
C
Employees
oy
become bored pl Minimization of
Customer Em selection effort
dissatisfaction Minimization
of training
Employees can’t

le
respond to customer
problems yc
er
C

tom Source: Schlesinger and Heskett

Cus
 Cycle of Failure ( 2)
The employee cycle of failure
Narrow job design for low skill levels
Emphasis on rules rather than service
Use of technology to control quality
The customer cycle of failure
Managers’ short-sighted assumptions about
financial implications of low pay,
high turnover human resource strategies
 Routinized
Service Sabotage
‘Openness’ of Service Sabotage Behaviors
‘Normality’ of Service Sabotage Behaviors

Covert Overt

Customary-Private Service Customer-Public Service

Sabotage Sabotage
e.g. Waiters serving smaller e.g. Talking to guests like
servings, bad beer or sour wine young kids and putting them
down

Sporadic-Public Service
Sporadic-Private Service
Sabotage
Sabotage
e.g. Waiters spilling soup onto
e.g. Chef occasionally laps, gravy onto sleeves, or hot
purposefully slowing down plates into someone’s hands
orders
Intermittent
 Cycle Of Mediocrity (1)
Customers trade
horror stories
Other suppliers (if any)
seen as equally poor

Employees spend
working life
in environment
Employee of mediocrity
dissatisfaction
(but can’t easily quit) Emphasis
on rules
Narrow design vs. pleasing
of jobs
customers
No incentive for Complaints met by
cooperative relationship Training emphasizes
indifference or Success =
to obtain better service hostility learning rules
not making
mistakes
Service not focused
Jobs are boring and on customers’ needs
repetitive; employees
unresponsive Good wages/benefits
high job security
Resentment at inflexibility and
lack of employee initiative; Promotion
and pay
complaints to employees increases based Initiative is
discouraged
on longevity,
lack of mistakes
Source: Heskett and Schlesinger
Customer dissatisfaction
 Cycle Of Mediocrity (2)

Most commonly found in large, bureaucratic

organizations
Service delivery is oriented toward
Standardized service
Operational efficiencies
 Cycle of Mediocrity (3)

Job responsibilities narrowly and un-imaginatively

defined
Successful performance measured by absence of
mistakes
Training focuses on learning rules and technical
aspects of job and not on improving interactions
with customers and co-workers
 Cycle of Success
Low
customer
turnover Repeat emphasis on
customer loyalty and
retention

Customer
loyalty
Higher
profit
margins
Broadened
Lowered turnover, job designs
high service quality

Continuity in
relationship with Train, empower frontline
customer Employee satisfaction, personnel to control quality
positive service attitude

cle
Cy
y Above average

ee
Extensive mplo wages
training E
High customer Intensified
satisfaction selection effort

cle
mer Cy
st o
Cu Source: Schlesinger and Heskett
 Cycle of Success (2)

Longer-term view of financial performance; firm

seeks to prosper by investing in people
Attractive compensation packages attract better job
applicants
More focused recruitment, intensive training, and
higher wages make it more likely that employees
are:
Happier in their work
Provide higher quality, customer-pleasing service
 Cycle of Success (3)

Broadened job descriptions with empowerment

practices enable frontline staff to control quality
and facilitate service recovery
Regular customers more likely to remain loyal
because:
Appreciate continuity in service relationships
Have higher satisfaction due to higher quality
 Leadership
Many services organisations owe their success to good
leadership
Two main models of leadership – transactional and
transformational
 Leadership
Many services organisations owe their success to good
leadership
Two main models of leadership – transactional and
transformational
Key success factors for leadership:

setting clear expectations of staff

recognising excellence
leading by example
being able to empathise with employees
showing adaptability to changing circumstances
Cultivating Happiness in the
Workplace is the key to
providing superior service.
Make your company a life style.

Your company has an affect on your

employee’s personal & professional
lives.
Always involve your people in decisions,
give them a sense of ownership.
PEOPLE WORK BETTER WHEN THEY
WANT TO WORK

Take a look at areas with rising costs to

see if there is a correlating morale
problem.

The humanistic approach to business

yields the financial results, because
Choose wisely-
•the emotional and financial costs of turnover
are high
• service is interrupted
•training costs are lost competitive
information works out the doors

•Projects are put on hold

Look for team & cultural fit
When interviewing for
leadership positions, place your
candidates in situations beyond
the normal scope of their work
sports
informal get-together
watch their interactive skills
Avoid:
arrogant people,
egotists,
political animals,
and these who have eyes on the
benefits of your industry, perks &
privileges.
LOOK FOR NICE PEOPLE WHO
CARE, EVERYTHING ELSE CAN
BE TAUGHT
Recruiting, Training & Rewarding Staff
Involve marketing staff in setting personnel specification
Consider key requirements for successful job performance
Use appropriate rewards – monetary and non-monetary
which reflect employees’ motivations
Provide appropriate training and development
Do satisfied employees result in satisfied customers?
Training should begin with a
formal orientation program
First impressions are lasting and both
good & bad habits begin early.
Therefore,
everyone should go through the
same program, regardless of the job
and location,
before beginning the first day at work.
Consider Training as essential part
and remember the kinder garden
principle. Make learning Fun.
People retain more, when
information is presented in a
creative, interactive and interesting
manner.
Training must
be attitudinal as
well as
technical.
Culture and
attitude are as
important, in
services, as
skills.
Five Skill Sets
Five Skill Sets

Task Skills which mean that an individual must be able to

perform individual tasks to an acceptable level of skill.
Five Skill Sets

Task Management Skills where the individual is expected to

manage a number of different tasks within the job.
Five Skill Sets

Contingency Management skills where the individual is

expected to favorably respond to irregularities or when things
go wrong.
Five Skill Sets

Job/Role Environment Skills where the individual is required

to deal with the responsibilities and expectations of the work
environment, including interacting appropriately with others in
the workplace.
Five Skill Sets

Transfer Skills where an individual is expected to transfer

knowledge, skills and attitudes to new situations.
Training must
be attitudinal
as well as
technical.
Culture and
attitude are as
important, in
services, as
skills.
Try offering training on general
skills/subjects to all of your people,
on a regular basis. It might help
people in personal and professional
lives. You will be pleased with the
results.
Always provide training for your
people on new methods/products.

This will minimize need to employ

new set of personnel's.
Groom your own trainer, select those
with teaching and corporate training
instead a typical HR. Professional
 Reducing dependency on HR

Employees are often an expensive and highly variable

input
Methods used to reduce dependence on employees:
Replace with machines (e.g. bank ATM)
Computer-assisted scripting
Involve customers more fully in co-production
Information is power.
Capture it and create ways to put it to
work for your company and your
clients.
Look for methods by which
technology can save time in your
company.
Automating mundane processes can
remove opportunities for error, reduce
stress & improve service.
Consider the creation of an
automation lab in which ‘service
products’ that apply to your industry
can be developed, tested and
refined.
Companies can never stand still on
technologically. So continually
reinvestment in technology, both in
terms of people and the tools.
Exercise your service as an attitude,
an art, and a process.
Attitude starts with the right people in
the right environment.
Process brings order to service so
people can concentrate on the
added touches that bring it to life.
Quality and quantity are not mutually
exclusive, they are interdependent.
Whether you are in the service
industry or not,
service is the key to every business
Therefore,
select nice people,
with right attitude and personality,
everything else can be taught.
 Hire the Right People

“The old saying ‘People are your most

important asset’ is wrong.

The RIGHT people are your most

most important asset.”

Jim Collins