The document discusses human resources management in service businesses. It covers topics like the strategic importance of recruiting, training, and retaining employees; different approaches to HR management and their impact on customer satisfaction; the concept of "emotional labor"; designing jobs and recruiting the right people; retaining employees and linking it to customer retention; and managing people through empowerment versus a production-line approach. The key is choosing a management approach that meets employee and customer needs.

1. Rommae Reyes BSBA4
Jennifer Salazar MKTG. 29
Vladimir Medina Mr. Abelito Quiwa

2. Objectives
 To know the importance of Human Resources as an
investment to service businesses.
 To know the strategic importance of recruitment,
selection, training, motivation and retention of
employees.
 To understand meant by the control and involvement
models of management.
 To know when strategy of empowering employees
appropriate, benefits and implications.
 To understand the different approaches to human
resources management affect customer satisfaction
and retention.

3. Human Resources: An Asset
Worth Investing In
Behind most of today’s successful service
organizations stands a commitment to effective
management of human resources, including the recruitment,
selection, training and retention of the employees.

4. Role of Frontstage Personnel
A single employee may play many roles.
They may be part of the product,
part of the delivery system
adviser and teacher and even.

5. Emotional Labor
“This is the work done with feelings, as part of
paid employment.” - Arlie Hochschild (The Managed Heart,
1983)

6. Job Design and Recruitment
The Goal of job design is to study the requirements of the
operation, the nature of the customer needs, the capabilities
of the employees and the characteristics of operational
equipment.

7. Recruiting the Right People
for the Job
Several special characteristics may be important in recruiting
and training employees. These include interpersonal skills,
personal appearance and grooming, voice, knowledge of
the product and the operation, selling capabilities and skills.

8. Employee Retention: Service
Jobs as Relationships

9. The Concept of Exchange
Applied to Employment
pay
health
insurance pension
funding

10. Other job benefits:
learning
companionship
meeting new people

11. Other job benefits:
travel
social contribution

12. Employee Retention and
Customer Retention

13. Employee
Retention
 is an effort by a business to
maintain a working
environment which
supports current staff in
remaining with the
company.
http://www.businessdictionary.com/definition/employee-retention.html#ixzz2KD8AG2XT

14. Customer
Retention
 is an assessment of the
product or service
quality provided by a
business that measures
how loyal its customers
are.
http://www.businessdictionary.com/definition/customer-retention.html#ixzz2KKGG66DQ

15. Cycles of Failure,
Mediocrity and
Success
 cycle of failure
businesses with high employee turnover
 cycle of mediocrity
organizations which offer job security but little
scope for personal initiative
 cycle of success
if managed well, there is potential for a virtuous
cycle in service employment

16. The Cycle of
Failure

17. The Cycle of
Mediocrity

18. The Cycle of Success
Some firms take long-term view of financial performance,
seeking to prosper by investing in their people in order to
create “cycle of success”.

19. The Cycle of Success
• With more focused recruitment, more
intensive training and better wages,
employees are likely to be happier in their
work and to provide higher quality, customer-
pleasing service.
• Regular customers also appreciates the
continuity in service relationships resulting
from lower turnover and so are more likely
to remain loyal.
• In many countries, once-mediocre public
corporations have undergone radical culture
change in the wake of privatization and exposure
to a more competitive environment.

20. 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?

21. The role of Unions
• For innovations in the way a firm’s employees are organized
and managed to realize their full potential, employee
cooperation is often essential.
• Many managers seem to be rather antagonistic toward
unions.
• Many of the world’s most successful service businesses are,
in fact, highly unionized. The presence of unions in a service
company is not an automatic barrier to high performance
and innovation unless there is a long history of mistrust,
acrimonious relationships and confrontation. However,
management consultations and negotiations with union
representatives are essential if employees are to accept
new ideas (conditions that are equally valid in non-unionized
firms, too). The challenge is to work jointly with unions, to
create a climate for service.

22. EMPOWERMENT OF
EMPLOYEES
• How important is the much advocated practice of
empowering employees to use their own discretion to
serve customers better?
• From a humanistic standpoint, the notion of encouraging
employees to exercise initiative and discretion is an
appealing one.
• Empowerment looks to frontline staff to find solutions to
service problems and to make appropriate decisions
about customizing service delivery.
• It depends for its success on what is sometimes called
enablement-giving service workers the training, tools and
resources they need to take on these new responsibilities.

23. Is Empowerment Always
Appropriate?
• Advocates claim that the empowerment approach is more likely
to yield motivated employees and satisfied customers than the
“production-line” alternative, where management designs a
relatively standardized system and he expects workers to
execute tasks within narrow guidelines.
• Different situations may require different solutions, declaring
that “both the empowerment and production-line approaches
have their advantages...and... each fits certain situations. The
key is to choose the management approach that best meets
the needs of both employees and customers”.

24. Control versus Involvement
•The production-line approach
to managing people is based
upon the well established
“control” model of organization
design and management.
•Empowerment, by contrast, is
based upon the “involvement”
(or “commitment”) model, which
assumes that most employees
can make good decisions and
produce good ideas for
operating the business, if they
are properly socialized, trained
and informed.

25. Control versus Involvement
In the control model, four key features are concentrated at the top of
the organization, while in the involvement model these features are
pushed down through the organization. The four features are:
1. Information about organizational performance (e.g.,
operating results and measures of competitive
performance).
2. Rewards based on organizational performance (e.g.,
bonuses, profit sharing and stock options).
3. Knowledge that enables employees to understand
and contribute to organizational performance (e.g.,
problem-solving skills)
4. Power to make decisions that influence work
procedures and organizational direction (e.g., through
quality circles and self-managing teams).

26. Levels of Employee
Involvement
• The empowerment and production-line approaches are at opposite
ends of a spectrum that reflects increasing levels of employee
involvement as additional knowledge, information, power and
rewards are pushed down to front line. Empowerment can take
place at several levels:
1. Suggestion Involvement
2. Job Involvement
3. High Involvement

27. Levels of Employee
Involvement
• The empowerment and production-line approaches are at opposite
ends of a spectrum that reflects increasing levels of employee
involvement as additional knowledge, information, power and
rewards are pushed down to front line. Empowerment can take
place at several levels:
1. Suggestion Involvement
Suggestion Involvement •Employee recommendation
2. Job Involvement
3. High Involvement

28. Levels of Employee
Involvement
• The empowerment and production-line approaches are at opposite
ends of a spectrum that reflects increasing levels of employee
involvement as additional knowledge, information, power and
rewards are pushed down to front line. Empowerment can take
place at several levels:
1. Suggestion Involvement
-Jobs redesigned
2. Job Involvement
2. Job Involvement
3. High Involvement
-Employees retrained
-Supervisors facilitate

29. Levels of Employee
Involvement
• The empowerment and production-line approaches are at opposite
ends of a spectrum that reflects increasing levels of employee
involvement as additional knowledge, information, power and
rewards are pushed down to front line. Empowerment can take
place at several levels:
1. Suggestion Involvement •Information is shared
2. Job Involvement •Employees skilled in
3.
3. High Involvement
High Involvement teamwork, problem
solving etc.
•Participate in decisions
•Profit
sharing and stock
ownership

30. HUMAN RESOURCE
MANAGEMENT IN A
MULTICULTURAL CONTEXT
•The trend toward a global economy means that more and more
service firms are operating across national frontiers. Other
important trends are increased tourism and business travel and
substantial immigration of people from different cultural
backgrounds into foreign countries. The net result is pressure on
service organizations to serve a more diverse array of customers.
These customers have different cultural expectations and speak a
variety of languages. A more diverse workforce has also to be
recruited.
•Striking a balance between diversity and conformity to common
standards is not a simple task, since societal norms vary across
cultures.
•Part of the HR challenge as it relates to culture is to determine
which performance standards are crucial and which should be
treated more flexibly.

31. CONCLUSION
Successful service organizations are
those that are committed to effective
management of human resources (HR),
including recruitment, selection, training and
retention of employees. They recognize that
service personnel play an important role in
creating customer satisfaction and
competitive advantage.

32. CONCLUSION
It is probably harder to duplicate high-performance
human assets than any other corporate resource.
Winning service organizations have employees who
understand and support the goals of an organization,
have the skills needed to succeed in performing their
jobs, work well in teams, recognize the importance of
customer satisfaction and have the authority and self-
confidence to use their own initiative to solve the
problem. In the following chapter, we examine the
leadership task of integrating marketing, operations and
human resources in a strategic partnership.

33. Thank You