CH 10 People

Chapter 10
Managing People for

Service Advantage
Nguyen Thu Lan, NEU
Copyright © 2023 Pearson Education Limited

Objectives Outline (1 of 3)
10.1 Explain why service employees are so important for the

success of a firm.
10.2 Understand the factors that make the work of front-line
staff demanding and often difficult.
10.3 Describe the cycles of failure, mediocrity, and success
in human resources for service firms.
10.4 Understand the key elements of the Service Talent
Cycle for successful human resource management in
service firms.
10.5 Know how to attract, select, and hire the right people for
service jobs.
10.6 Explain the key areas in which service employees need

training.
10.7 Understand the role of internal marketing and
communications.
10.8 Understand why empowerment is so important in many
front-line jobs.
10.9 Explain how to build high-performance service delivery
teams and know how to integrate teams across
departments and functional areas.

10.10 Know how to motivate and energize service

employees so that they will deliver service excellence
and productivity.
10.11 Understand what a service-oriented culture is and
service climate is
10.12 Explain the qualities of effective leaders in service
organizations and understand different leadership styles
and realize the importance of role modeling and focusing
the entire organization on the front line.

Objective Outline 10.1
• Explain why service employees are so important for the
success of a firm.

The importance of service personnel

Frontline Service Personnel: Source of
Customer Loyalty and Competitive Advantage
• Frontline is an important source of differentiation and
competitive advantage. It is:
– a core part of the product
– the service firm
– the brand
• Frontline also drives customer loyalty, with
employees playing key role in anticipating customer
needs, customizing service delivery and building
personalized relationships

The importance of service personnel
• Help maintain firm’s positioning. They are:
– A core part of the product
– The service firm
– The brand
– Affects sales
– Is a key driver of customer
loyalty
– Determine productivity

• Understand the factors that make the work of front-line
staff demanding and often difficult.

Boundary Spanning Roles
• Boundary spanners link the inside of the organization to the outside world
• Multiplicity of roles often results in service staff having to pursue both operational and
marketing goals
• Consider management expectations of restaurant servers:
– deliver a highly satisfying dining experience to their customers
– be fast and efficient at executing operational task of serving customers
– do selling and cross selling, e.g. “We have some nice desserts to follow your main
course”

Role Stress in the Frontline
3 main causes of role stress:
 Person vs. Role: Conflicts
between what jobs require and employee’s
own personality and beliefs
 Organization vs. Customer: Dilemma whether to follow company rules or
to satisfy customer demands
 Customer vs. Customer: Conflicts between customers that demand
service staff intervention

Emotional Labor
 “The act of expressing socially desired emotions during service transactions” (Hochschild,
The Managed Heart)
 Three approaches used by employees
 surface acting
 deep acting
 spontaneous response
 Occurs when there is gap between what employees feel inside, and emotions that
management requires them to display to customers
 Performing emotional labor in response to society’s or management’s display rules can be
stressful
 Good HR practice emphasizes selective recruitment, training, counseling, strategies to
alleviate stress

Frontline work is difficult and
stressful
Service Sweatshops
• Deployment of new technology and methods can change
the nature of the work environment
• In many firms, face-to-face contact is replaced by the use
of the internet or call-center services
• Such jobs can offer flexible working hours and part-time
employment
• The work is often intense, with a high level of monitoring
• Motivated agents suffer less customer stress

• Describe the cycles of failure, mediocrity, and success in
human resources for service firms.

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

The cycles of failure, mediocrity, and
success
• Cycle of Failure

success
The employee cycle of failure
• Narrow job design for low skill levels
• Emphasis on rules rather than service
• Use of technology to control quality
• Bored employees who lack ability to respond to customer
problems
• Dissatisfied with poor service attitude
• Low service quality
• High employee turnover

success
The customer cycle of failure
• Repeated emphasis on attracting new customers
• Customers dissatisfied with employee performance
• Customers always served by new faces
• Fast customer turnover
• Ongoing search for new customers to maintain sales
volume

success
Costs of short-sighted policies are ignored
• Constant expense of recruiting, hiring, training
• Lower productivity of inexperienced new workers
• Higher costs of winning new customers to replace those
lost—more need for advertising and promotional discounts
• Loss of revenue stream from dissatisfied customers who
go elsewhere
• Loss of potential customers who are turned off by negative
word-of-mouth

Service Sabotage Routinized
‘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-Private Service Sporadic-Public Service

Sabotage Sabotage
e.g. Chef occasionally e.g. Waiters spilling soup onto

purposefully slowing down laps, gravy onto sleeves, or hot
Intermittent
orders plates into someone’s hands

success
• Cycle of Mediocrity

success
Cycle of Mediocrity
• Most commonly found in large, bureaucratic organizations
• Service delivery is oriented towards:
– Standardized service
– Operational efficiencies
– Promotions based on long service
– Successful performance measured by absence of
mistakes
– Rule-based training
– Little freedom in narrow and repetitive jobs

success
Cycle of Mediocrity
• Customers find organizations frustrating to deal with
• Little incentive for customers to cooperate with
organizations to achieve better service
• Complaints are often made to already unhappy employees
• Customers often stay because
of lack of choice

success
• Cycle of Success

success
Cycle of Success (1)
• Longer-term view of financial performance; firm seeks to
prosper by investing in people
• Attractive pay and benefits 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

success
Cycle of Success (2)
• Broadened job descriptions with empowerment practices
enable front-line staff to control quality, facilitate service
recovery
• Regular customers more likely to remain loyal because:
– Appreciate continuity in service relationships
– Have higher satisfaction due to higher quality

• Understand the key elements of the Service Talent Cycle
for successful human resource management in service
firms.

The service talent cycle for
service firms

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

• Know how to attract, select, and hire the right people for
service jobs.

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

Recruitment
• The right people are a firm’s most important asset: take a focused, marketing-like approach
to recruitment
• Clarify what must be hired versus what can be taught
• Clarify nature of the working environment, corporate values and style, in addition to job
specs
• Ensure candidates have/can obtain needed qualifications
• Evaluate candidate’s fit with firm’s culture and values
• Fit personalities, styles, energies to the appropriate jobs

Select And Hire the Right People:
(1) Be the Preferred Employer
(2) How to Identify the Best Candidates
• Observe Behavior
• Personality Testing
• Employ Multiple, Structured Interviews
• Give Applicants a Realistic Preview of the Job

Hiring the right people
• Be the Preferred Employer:
– Create a large pool: “Compete for Talent Market Share”
– What determines a firm’s applicant pool?
 Positive image in the community as place to work
 Quality of its services
 The firm’s perceived status
• Select the right people:

– There is no perfect employee
 Different jobs are best filled by people with different skills,
styles or personalities
 Hire candidates that fit firm’s core values and culture
 Focus on recruiting naturally warm personalities for customer-
contact jobs
Tools to Identify the Best Candidates (1)
• Employ multiple, structured interviews:
– Use structured interviews built around job requirements
– Use more than one interviewer to reduce “similar to
me” biases
• Observe candidate behavior:
– Hire based on observed behavior, not words you hear
– Best predictor of future behavior is past behavior
– Hire those with service excellence awards and
complimentary letters

Tools to Identify the Best Candidates (2)
• Conduct personality tests:
– Willingness to treat co-workers and customers with
courtesy, consideration and tact
– Perceptiveness regarding customer needs
– Ability to communicate accurately and pleasantly
• Give applicants a realistic preview of the job:
– Chance for candidates to “try on the job”
– Assess how candidates respond to job realities
– Allow candidates to self select themselves out of the
job
• Explain the key areas in which service employees need
training.

Training service employees actively
• Service employees need to learn:
– Organizational culture, purpose and strategy
 Get emotional commitment to core strategy and core values
 Get managers to teach “why”, “what” and “how” of job
– Interpersonal and technical skills
 Both are necessary but neither alone is enough for performing
a job well
– Product/service knowledge
 Staff’s product knowledge is a key aspect of service quality
 Staff must explain product features and help consumers make
the right choice

• Understand the role of internal marketing and
communications.

Internal marketing and
communications
• Especially necessary in large service businesses that
operate in widely dispersed sites
• Employees need to be kept informed about new policies,
changes in service features, and new quality initiatives
• Nurtures team spirit and support common corporate goals
across national frontiers
• Can complement training
– ensures efficient and satisfactory service delivery
– achieves productive and harmonious working
relationships
– builds employee trust, respect, and loyalty

Understand why empowerment is so important in many
front-line jobs.

The importance of empowerment
• Empowerment is most appropriate when
– the firm’s business strategy is based on personalized,
customized service and competitive differentiation
– emphasis is on extended relationships rather than
short-term transactions
– complex and non-routine technologies are used
– service failures are non-routine and cannot be
designed out of the system
– the business environment is unpredictable
– managers are comfortable letting employees work
independently for the benefit of firm and customers

Factors Favoring Employee Empowerment
 Firm’s strategy is based on competitive differentiation and on

personalized, customized service
 Emphasis on long-term relationships vs. one-time transactions
 Use of complex and non-routine technologies
 Environment is unpredictable, contains surprises
 Managers are comfortable letting employees work independently
for benefit of firm and customers
 Employees seek to deepen skills, like working with others, and are
good at group processes

Control vs. Involvement Model of
Management
Control concentrates 4 key features at top of organization;
Involvement pushes them down:
• Information about operating results and measures of competitive performance
• Rewards based on organizational performance (e.g. profit sharing, stock ownership)
• Knowledge/skills enabling employees to understand and contribute to organizational
performance
• Power to influence work procedures and organizational direction (e.g. quality circles, self-
managing teams)
Source: Bowen and Lawler

Levels of Employee Involvement
• Suggestion involvement
– Employee recommendation
• Job involvement
– Jobs redesigned
– Employees retrained
– Supervisors facilitate
• High involvement
– Information is shared
– Employees skilled in teamwork, problem
solving etc.
– Participate in decisions
– Profit sharing and stock ownership

• Explain how to build high-performance service delivery
teams and integrate teams across departments and
functional areas

Building high-performance service
delivery teams
• Many service require cross-functional coordination for
excellent service delivery
• Teams, training and empowerment go hand-in-hand
• Creating Successful Service Delivery Teams
– Emphasis on cooperation, listening, coaching and
encouraging one another
– Understand how to air differences, tell hard truths, ask
tough questions
– Management needs to set up a structure to steer
teams towards success

Integrating teams across
departments and functional areas
• Ways to reduce conflict and break down the barriers
between departments
– Transferring individuals internally to other departments and
functional areas.
– Establishing cross-departmental and cross-functional project
teams.
– Having cross-departmental and cross-functional service delivery
teams.
– Appointing individuals whose job is to integrate specific objectives,
activities, and processes between departments.
– Carrying out internal marketing, training, and integration
programs.
– Having top management’s commitment to ensure that the
overarching objectives of all departments are integrated.

• Know how to motivate and energize service employees so
that they will deliver service excellence and productivity.

Motivating and energize service
employees
• Use full range of available rewards effectively, including
– Job content:
 People are motivated and satisfied knowing they are
doing a good job
– Feedback and recognition:
 People derive a sense of identity and belonging to
an organization from feedback and recognition
– Goal achievement:
 Specific, difficult but attainable and accepted goals
are strong motivators

• Understand what a service-oriented culture is

What is a service-oriented culture?
• Organizational culture involves:
– Shared perceptions or themes regarding what is important in the
organization
– Shared values about what is right and wrong
– Shared understanding about what works and what doesn’t work
– Shared beliefs and assumptions about why these beliefs are
important
– Shared styles of working and relating to others
• Service culture is defined by

– Shared perceptions of what is important in the organization
– Shared values and beliefs about why those things are important.

Service climate and culture
• Organizational climate
– The shared perceptions of employees about the
practices, procedures, and types of behavior that get
supported and rewarded in a particular setting
– Employees form perceptions based on daily
experiences with HR; operations; marketing; and IT
policies, practices, and procedures
– Essential features of a climate for service include clear
marketing goals and a strong drive to be the best

• Explain the qualities of effective leaders in service
organizations

Effective leaders in service
organizations
• Qualities of effective leaders in a service organization:
– Leaders should love their business.
– Leaders should be driven by a set of core values that
are related to service excellence and performance.
– Leaders must recognize the key part played by
employees in delivering service.
– Effective leaders can involve the team in decision-
making rather than dominating the process.
– Leaders must be able to role model the behaviors they
expect
– Effective leaders have a talent for communicating with
others in a way that is accessible.
Effective leaders in service
organizations
• There are two leadership styles in a service climate:
– management of the “basics”
– transformational leadership that sets strategy and drives change.
However, both are important.
• Persistent management of the basics and endless details

create a strong climate for service.
• Leaders create a strong climate for service when they
– demonstrate commitment to service quality
– set high standards, recognize and remove obstacles
– ensure the availability of the resources required to do it
• A strong service culture is one where the entire

organization focuses on the front line.
The Inverted Organizational Pyramid
Customer Base
Top
Mgmt Frontline Staff
Middle
Mgmt
Middle Mgmt
Frontline & Top Mgmt
Staff Support Frontline
Traditional Inverted Pyramid with a

Organizational Pyramid Customer & Frontline Focus
Legend: = Service encounters, or ‘Moments of Truth.’

The Wheel of Successful HR in Service
Firms
Leadership that:
 Focuses the entire organization 1. Hire the
on supporting the frontline Right People
 Fosters a strong
3. Motivate &  Be the preferred
service culture with
Energize Your People employer & compete
passion for service
and productivity for talent market share
 Drives values that Service Excellence  Intensify the

 Utilize the full
inspire, energize & Productivity selection
range of rewards process
and guide service
providers
2. Enable Your People
 Empower Frontline
 Build high performance service
delivery teams
 Extensive Training

CH 10 People

Uploaded by

Copyright:

Available Formats

CH 10 People

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CH 10 People

Uploaded by

Copyright:

Available Formats

Chapter 10

Managing People for

Nguyen Thu Lan, NEU

Copyright © 2023 Pearson Education Limited

10.1 Explain why service employees are so important for the

10.6 Explain the key areas in which service employees need

Copyright © 2023 Pearson Education Limited

10.10 Know how to motivate and energize service

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

‘Openness’ of Service Sabotage Behaviors

Customary-Private Service Customer-Public Service

Sporadic-Private Service Sporadic-Public Service

e.g. Chef occasionally e.g. Waiters spilling soup onto

orders plates into someone’s hands

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

1. Hire the right people

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

“The old saying ‘People are your most

The RIGHT people are your most

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

(1) Be the Preferred Employer

(2) How to Identify the Best Candidates

• Employ Multiple, Structured Interviews

• Give Applicants a Realistic Preview of the Job

Copyright © 2023 Pearson Education Limited

• Select the right people:

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

Copyright © 2023 Pearson Education Limited

 Firm’s strategy is based on competitive differentiation and on