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Chapter 12

Chapter 12. Managing customer-contact employees. Lecture objectives. Understand the importance of customer-contact employees in creating satisfactory or memorable customer experiences Evaluate service-orientated culture in hospitality companies

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Chapter 12

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  1. Chapter 12 Managing customer-contact employees

  2. Lecture objectives • Understand the importance of customer-contact employees in creating satisfactory or memorable customer experiences • Evaluate service-orientated culture in hospitality companies • Understand the concept of internal marketing and empowerment in a hospitality context • Identify the sources of conflict for hospitality customer-contact employees

  3. Introduction • Employees play a crucial role during hospitality service encounter with customers • The behaviour of customer-contact employees creates impressions of high or poor service quality and is critical to delivering customer satisfaction • Employees also represent the hospitality brand • Recruiting, training and rewarding employees is a human resource management function, but marketers need to understand employment strategies to ensure HR represents brand values and delivers the service experience promised by marketers to customers • Human resource managers use marketing approaches to employee recruitment and retention –this is called internal marketing

  4. Importance of employees • W. J. (Bill) Marriott (Snr)’s quotation summarizes the importance of employees – ‘it takes happy employees to make happy customers and this results in a good bottom line’ • Customer-contact employees deliver on most dimensions of service quality: reliability, empathy, tangibles (partly), responsiveness and assurance • The service profit chain demonstrates the link between employee satisfaction, service quality, customer satisfaction and business performance – see Figure 12.1 (Heskett, Jones, Loveman, Sasser and Schlesinger, 1994)

  5. Figure 12.1 The service profit chain

  6. Developing service-orientated culture • Each hospitality organization has its own culture – its own DNA • Company culture influence on how employees look after customers • Company culture means the shared values, beliefs and assumptions that underpin how the organization operates, including the way that it treats its customers and employees • Cultural components are deeply rooted in the organization’s founding history and recent development • Employees learn organizational culture by observing the behaviour and messages from head office, the general manager and other employees

  7. Developing service-orientated culture (continued) General Manager as role model • Characteristics of successful hospitality GMs vary, the personality, behaviour and actions of the GM sends powerful signals to the employees and helps to shape the culture • Employee morale is a reflection of the general manager, and employees respond to the GM’s leadership Service myths, heroes and villains • Companies can use examples of extraordinary employee actions in their advertising to promote their high quality service • Eventually service myths create a dominant service culture personified by company heroes • Maverick companies might employ characters (notably celebrity chefs) who are regarded as ‘villains’ and generate publicity – both positive and negative Support systems • Employees are dependent on effective support systems, human and technological, to help to deliver appropriate service quality • In hospitality, there is often conflict between front-of-house employees and back-of-house employees, especially (kitchen/restaurant)

  8. Internal marketing • The services marketing triangle (see Figure 12.2) links pre-encounter marketing, internal marketing and marketing during the encounter • Promises made to customers in pre-encounter communications have to be delivered during the service encounter • Internal marketing recognises competition for best employees because business success is dependent on service quality, which is dependent on employees • The following factors support positive employee recruitment and retention: recruitment, service inclination, service competence, training, empowerment and reward systems

  9. Figure 12.2 The services marketing triangle Zeithamland Bitner, 2003

  10. Recruitment, service inclination andservice competences Recruitment • Societies where tourism is a key industry (e.g. Caribbean), careers in hospitality are relatively well paid and enjoy high status • Societies where hospitality has low status, pay and prospects, the recruitment challenge is difficult • Company image/reputation as a good employer helps attract better employees Service inclination • Employers seek employees with ‘right service attitude’. Some people natural aptitude for service; characteristics linked to attitude cannot be taught • A problem for hospitality employers is lack of employees with right service attitude; if unsuitable employees recruited and service standards not delivered, customers andother employees will be unhappy Service competences • Employees need skills and knowledge, called service competences, to be effective • Historically, hospitality managers had limited education and learnt on-the-job • Today, there are well-established hospitality/tourism education systems which helps to educate tomorrow’s managers

  11. Training, empowermentand reward systems Training • Hospitality companies have own service culture, operating systems, service standards • New employees need induction training to know product, service philosophy and company culture • Best companies provide continuous training and career development Empowerment • Employees work in boundaries set by companies which set rules about what employees are allowed to do or not to do • An alternative approach empowers employees to take responsibility for ensuring customers are satisfied • Empowerment needs to be matched with delegated authority and resources • This approach is more customer focused and motivates employees Reward systems • Reward systems include pay, bonuses, tips, free meals, discounted accommodation for live-in employees • ‘Intangible benefits’ of hospitality work can compensate for unsocial hours and lower pay • Intangible benefits include the excitement, fun and teamwork that many hospitality employees enjoy

  12. Sources of conflict • Employees can have interpersonal and interorganizational conflicts at work • Conflict at work can be source and symptom of employee dissatisfaction • Continuous or excessive conflict creates powerful emotional responses, including stress, for employees • Understanding sources of conflict helps managers to create better working conditions • Personal/role conflict – employees perform roles at work that might conflict with their own values, e.g. young people may resent a strict dress and grooming code • Organizational/customer conflict • Companies have policies, processes and Standard Operating Procedures to manage employee conduct • Occasionally, customers can make reasonable requests which break the company’s regulations • Inter-customer conflict • Disputes between customers creates difficult situations for employees – especially if this happens on a regular basis

  13. Conclusion • Hospitality companies must develop effective strategies to recruit and retain service-minded customer-contact employees • Companies use internal marketing to effectively communicate with employees • Hospitality companies claim to be good employers • The industry suffers from high employee turnover • There is a strong link between employee satisfaction, service quality, customer satisfaction and business performance (the service-profit chain) • Each hospitality company has its own culture which guides customer-contact employees in their behaviour towards customers

  14. References and further reading • Bitner, M. J., Booms, B. H. and Tetreault, M. S. (1990). ‘The service encounter: diagnosing favourable and unfavourable incidents’. Journal of Marketing, 54, pp. 71–84. • Carlzon , J. (1987). Moments of Truth. Harper Collins. • Customer Management. (2000). ‘Towards best practice’. Customer Management, July/August, pp. 6–11. • Gummesson, E. (2008). Total Relationship Marketing(3rd ed.). Butterworth-Heinemann. • Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr. and Schlesinger, L. A. (1994). ‘Putting the service profit chain to work’. Harvard Business Review, 72, pp. 164–170. • Lashley, C. (2000). Hospitality Retail Management. Butterworth-Heinemann. • Lashley, C. (2001). Employing Human Resource Strategies for Service Excellence. Butterworth-Heinemann. • Mudie, P. (2000). ‘Internal marketing: a step too far’. In R. J. Varey and B. R. Lewis (eds) Internal Marketing: Directions for Management (Chapter 15). Routledge. • Schneider, B. and Bowen, D. E. (1995). Winning the Service Game. HBS Press. • Varey, R. J. and Lewis , B. R. ( 2000 ). Internal Marketing: Directions for Management. Routledge. • Zeithaml, V. A. and Bitner, M. J. (2009). Services Marketing. McGraw-Hill.

  15. Figure 12.3 Higher and lower customer-contact service contexts – an example from food service

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