Chapter 9People as Strategy: Managing Service

Employees

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Chapter Objectives

• Understand the importance of customer facing employees.

• Understand the inherent stresses and strains faced by the typical service employee.

• Define the role that a service employee has to play based upon the service strategy.

• Understand how that role definition can be used to recruit the most appropriate service team.

• Understand how the role definition is at the center and drives all HR systems in the service business.

• Understand the role of management in supporting the “climate for services.”

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Opening Vignette: WegmansThe Best Company to Work for

• In 2005, Wegmans was ranked number one for “The 100 Best Companies to Work for”

• Privately held supermarket chain that employees over 30,000 employees in its 67 stores located in New York, Pennsylvania, New Jersey, and Virginia.

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Figure 9.1 Service-Profit Chain

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• Service personnel provide a sustainable competitive advantage

• Major customer complaints about service workers– Apathy– Brush-off– Coldness– Condescension– Robotism– Rulebook– Runaround

Importance of Service Personnel

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• Link the organization with the outside world

• Primary purpose– information transfer – representation

• Service provider spectrum ranges from professionals to subordinate service roles

Service Providers as Boundary Spanners

Professional service roles

Subordinate service roles

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Sources of Conflict on Contact Service Personnel

• Boundary spanners are prone to conflicts– person/role conflicts

– organization/client conflicts

– inter-client conflicts

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• Leads to feelings of roles stress

– dissatisfaction– frustration– turnover

intention

• Employees often adopt a number of responses– avoiding the customer

– moving into a "people-processing" mode

– adding physical symbols in their office to increase control

– overacting their role

– siding completely with the customer

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Coping Strategies and Implications for Customers

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Creating a Climate for Service

1. Work facilitation

2. Interdepartmental support

3. Human resource practices

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Figure 9.3 The Services HR Wheel

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Layers of the Service HR Wheel

• Recruiting the right people• Developing competent service

employees• Controlling, rewarding and evaluating

service employees• Retaining service employees

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Five Customer Profiles “Customers from Hell”

1. Egocentric Edgar2. Bad-Mouth Betty3. Hysterical Harold4. Dictatorial Dick5. Freeloading Freda

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Profile # 1 – Egocentric Edgar

• appeal to his ego• demonstrate action• don’t talk policy

– rephrase: “for you, I can ….(policy)”

• don’t let his ego destroy yours

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Profile # 2 – Bad-Mouth Betty

• ignore her language• force the issue (hang-up)• use selective agreement (with some

statements)

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Profile # 3 – Hysterical Harold

• let him vent• take it backstage• take responsibility for solving the

problem

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Profile # 4 – Dictatorial Dick

• break up his game (fulfill his request)• stick with your game

– be consistent with customers– tell him what you can do for him

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Profile # 5 – Freeloading Freda

• give it to her• don’t let the 1% dictate action for the

99% who actually have problems

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Rewards that Encourage Service Excellence

• The seven tests of rewards– Availability– Flexibility– Reversibility– Contingent– Visibility– Timeliness– Durability

• Pay “alone” does not pass these effectiveness tests

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Empowerment and Enfranchisement

• Empowerment– turning the front-line loose– encourages and rewards employees to

exercise initiative and imaginations

• Enfranchisement– Couples empowerment with a

compensation method that pays people for their performance

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High involvement

Job involvement

Suggestion involvement

Production line

Figure 10.2 Levels of Empowerment

INVOLVEMENT ORIENTED

CONTROL ORIENTED

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Suggestion Involvement

– empowered to recommend

– formal suggestion programs

– quality circles

Levels of Empowerment

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Levels of Empowerment

Job Involvement

– “opening up” of job content– use more skills, more freedom, and get

more feedback– extensive use of teams– higher level decisions and reward

allocation remain the responsibility of senior management

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Levels of Empowerment

High Involvement

– train people to manage themselves– profit-sharing and employee ownership– develop skills in teamwork, problem

solving, and business operations

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Customer Relationship Management

The process of identifying, attracting, differentiating, and retaining customers where firms focus their efforts disproportionately on their most lucrative clients.

– Coding– Routing– Targeted– Sharing– Red-lining

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mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2011 Cengage Learning. 

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