Leveraging the People Factor in Service Organizations: Empowering, Improvising, and Maximizing Productivity

1. Chapter 6 Leveraging the People Factor

2. Objectives • To analyze why employees are key to a service organization’s success • To examine the costs and benefits of empowerment and when it’s a good idea • To consider the need for improvisation • To examine the emotional side of services • To explain the messages companies convey by costuming their employees • To provide an understanding of how to maximize employee productivity

3. Outline • Introduction • Service Employees and Their Behavior • Empowering Service Employees • The Need for Service Improvisation • The Emotional Side of Service • Costuming Service Employees • Maximizing Service Employee Productivity • Summary and Conclusion

4. Service Employeesand Their Behavior • Why Are Service Employees So Important? • Are All Service Employees Equally Important? • Which Are More Important: Technical Skills or Social Skills? • Ensuring Service Employee Excellence • Addressing Employee Poor Performance

5. Are All ServiceEmployees Equally Important? • Boundary spanners – the frontstage employees who link an organization with its customers. • Represent the organization to customers as well as provide information about customers to the organization • Can range from subordinate positions to professionals • Technical skills – the proficiency with which service employees perform their tasks. • Social skills – the manner in which service employees interact with customers and fellow workers.

6. Ensuring ServiceEmployee Excellence • For all workers—the frontstage “boundary spanners” and those who work backstage--its important to: • Hire intelligently • Train intensively • Monitor incessantly • Reward inspirationally • Sometimes, it’s necessary to address employees’ poor performance

7. Empowering Service Employees • Empowerment involves sharing information, rewards, knowledge, and power with frontline service employees so that they can better respond to customers’ needs and expectations.  • There are both Benefits and Costs of Empowerment • Empowerment is sometimes met with resistance

8. Empowering Service Employees:Benefits of Empowerment • Quicker response to customer needs during service delivery • Quicker response to dissatisfied customers during service recovery • Employees are more satisfied with their jobs and themselves

9. Empowering Service Employees:Benefits of Empowerment • Employees will act more warmly and enthusiastically toward customers • Empowered employees can be a great source of ideas • Empowerment can generated great word-of-mouth communication and customer retention

10. Empowering Service Employees:Costs of Empowerment • Greater monetary investment in the selection and training of employees • Higher labor costs • A possibility of slower and/or less consistent service delivery • Possible violations of fair play • Giveaways and bad decisions

11. The Need for Service Improvisation • Improvisation is closely related to the concept of empowerment • Workers are given freedom to creatively adapt to various service situations • Is more likely needed in some services rather than others • Improvisation insights gleaned from the arts may provide insights • Theater improvisation • Jazz improvisation

12. The Emotional Side of Services • Workers are often required to display cheerful disposition, genuine concern and unrelenting care toward the customer, no matter what the worker’s true feeling may be • Demands of such “emotional labor” can be stressful and mentally challenging • Organizations can distinguish themselves via their workers’ emotional labor by attending to EI (Emotional Intelligence) in their hiring, training and management practices.

13. Costuming Service Employees • Costuming offers several advantages: • Provide desired evidence by adding a measurement of tangibility • Send a message by projecting the desired image • Reduce risk by establishing credibility and easy identification of employees • Ensure consistency by having each employee dress the same • Some drawbacks may emerge, such as • Perceived loss of individuality • The organization may appear to be rigid

14. Maximizing ServiceEmployee Productivity • Discretionary Effort is the difference between the maximum effort one can bring to a task and the minimum effort needed simply to get by.  • To maximize Discretionary Effort, organizations need employees who are: • Willing (to do the job they are hired for, i.e., motivated) • Able (to perform their tasks well, i.e., well trained)

15. Maximizing Service Employee Productivity(cont’d)

16. Maximizing Service Employee Productivity(cont’d)

17. Maximizing Service Employee Productivity(cont’d) • Internal Marketing is the practice of: • treating employees as internal customers of the service organization • responding to employees’ needs or wants in a similar manner as an organization would with respect to external customers • promoting the organization and its policies to the employee • Based on the notion that employees’ who are happy and motivated respond to customers in a more positive manner.

18. Web Sites • The Louvre Museum (http://www.louvre.fr), p. 77 • Home Depot (http://www.homedepot.com), p. 79 • Nordstrom (http://www.nordstrom.com), p. 79 • Ritz-Carlton Hotels (http://www.ritzcarlton.com), p. 79 • Southwest Airlines (http://www.southwest.com), p. 81 • Scandinavian Airlines (SAS) (http://www.sas.se), p. 83 • FedEx (http://www.fedex.com), p. 84

19. Web Sites (cont’d) • Denny’s (http://www.dennys.com), p. 87 • Romano’s Macaroni Grill (http//:www.macaronigrill.com) p. 87 • McDonald’s (http://www.mcdonalds.com), p. 88 • United Parcel Service (http://www.ups.com), p. 88 • Singapore Airlines (http://www.singaporeair.com), p. 88 • Disneyland Paris (http://www.disneylandparis.com), p. 89 • Flyaway Farms and Kennels (http://www.flyawaybash.com), p. 92