Services Marketing Chapter 6 Leveraging the People Factor

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Chapter 6
Leveraging the
People Factor

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

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Service Employees
and 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

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Are All Service
Employees 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.

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Ensuring Service
Employee 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

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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

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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

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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

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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

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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

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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.

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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

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Maximizing Service
Employee 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)

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Maximizing Service Employee
Productivity (cont’d)

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Maximizing Service Employee
Productivity (cont’d)

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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.