Smkt chp11
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It describes the service concept of cycle of success, failure, mediocrity. Also customers as partial employees.
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Smkt chp11
- 1. Chapter 11 : Managing people for service advantage
- 11. Cycle of Failure Customer turnover Failure to develop customer loyalty No continuity in relationship for customer Customer dissatisfaction Employees can’t respond to customer problems Employees become bored Employee dissatisfaction; poor service attitude Repeat emphasis on attracting new customers Low profit margins Narrow design of jobs to accommodate low skill level Use of technology to control quality High employee turnover; poor service quality Payment of low wages Minimization of selection effort Minimization of training Emphasis on rules rather than service E m p l o y e e C y c l e C u s t o m e r C y c l e Source: Schlesinger and Heskett
- 14. Service Sabotage (Insight 11-1) Customary-Private Service Sabotage Sporadic-Private Service Sabotage Customary-Public Service Sabotage Sporadic-Public Service Sabotage ‘ Normality’ of Service Sabotage Behaviors Routinized Intermittent e.g. Waiters serving smaller servings, bad beer or sour wine, slowing service for getting overtime payments e.g. Talking to guests like young kids and putting them Down, time consuming credit card veracity confirmation e.g. Chef occasionally purpose fully slowing down orders , hygiene issues, quality, misread orders, gross misconduct e.g. Waiters spilling soup onto laps, gravy onto sleeves, or hot plates into someone’s hands ‘ Openness’ of Service Sabotage Behaviors Covert Overt
- 15. Cycle of Mediocrity y Good wages/benefits high job security Other suppliers (if any) seen as equally poor Customers trade horror stories Service not focused on customers’ needs Employees spend working life in environment of mediocrity Narrow design of jobs Success = not making mistakes Complaints met by indifference or hostility Employee dissatisfaction (but can’t easily quit) Emphasis on rules vs. pleasing customers E m p l o y e e C c l e C u s t o m e r C y c l e Promotion and pay increases based on longevity, lack of mistakes Initiative is discouraged Jobs are boring and repetitive; employees unresponsive Resentment at inflexibility and lack of employee initiative; complaints to employees No incentive for cooperative relationship to obtain better service Training emphasizes learning rules Customer dissatisfaction
- 18. Cycle of Success Source: Heskett and Schlesinger C y Low customer turnover Customer loyalty Continuity in relationship with customer High customer satisfaction Extensive training Employee satisfaction, positive service attitude Repeat emphasis on customer loyalty and retention Higher profit margins Broadened job designs Lowered turnover, high service quality Above average wages Intensified selection effort E m p l o y e e c l e C u s t o m e r C y c l e Train, empower frontline personnel to control quality
- 22. 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
Editor's Notes
- Cycle insolvency In many service industries find ways to increase productivity has comprehensive and continuous process that absorbs a lot of effort and time. One the most common methods involves the greatest possible simplification of routine working procedures and hiring staff to carry out such operations, which require virtually no training and education, at the lowest possible wages. In the consumer market, most often in connection with this problem refers to the network fast food restaurants, though, should recognize that it is not all enterprises of this type. That such a strategy becomes the basis cycle of insolvency, which, in turn, is divided into two concentric, But the interaction cycle - the insolvency of the company when working with workers and its failure when working with clients. Cycle insolvency when working with employees begins with the construction of limited work tasks in order to be able to hire unskilled workers force; with the fact that the focus is not on the level of service, and Implementation of the rules, the use of technical means of control over quality. Strategy of minimizing the minimum wage is accompanied by cost money and effort on the selection and training of personnel. The consequences will be bored staff who are not able due to lack of professional skills to solve problems of clients, employees, who are increasingly not satisfaction with their work and, consequently, take their responsibilities "slipshod." For a company it usually ends low quality of service and high turnover. Due to low margins profit this cycle supports itself, because again and again instead retired work are taken low paid workers, condemned to work in the same working atmosphere. starting point cycle insolvency when working with clients is a constant emphasis to attract more and more new customers, which eventually also disappointed and unhappy with the level of service provided by disgruntled employees of the company. All this translates into a constant whirlwind new faces, because of which, in turn, the company can not form a backbone loyal customers (as well as long-term employees), and this leads to continuing search for new customers to maintain sales volumes of certain level. The fact that outstanding customer care is particularly disturbing in light of the fact that loyal customers bring the company a higher income than random. Every conscious manager today must seriously disturb social consequences of the incredible number of service employees, wandering from a stingy employer to another, experiencing a "black strip "professional decline partly due to the reluctance of employers to invest in something to break this vicious circle and break the cycle of failure. Manager staff in the survey gave a very impressive list of various arguments in defense of organizations that remain in this cycle. "Today simply impossible to find good employees ". "Today People simply do not want to work ". "Search really good employees is very expensive, but we can not shift these costs to our customers ". "No sense to teach and conduct training good employees, who will soon leave company ". "High turnover - a feature of our business. You just need to learn to survive in such circumstances ". It noted that many managers today tend to myopically evaluate the financial consequences of policies of low wages and high turnover. Part the problem lies in their inability to evaluate all associated costs. Out of sight often elude three major variable costs: costs constant search, selection and hiring of personnel and to train new employees (which costly working time of managers and from a purely financial costs), losses due to low productivity of inexperienced new employees, costs associated with constant interventions aimed customer acquisition (which requires significant expenditures on advertising and associated with the financial losses associated with the provision of promotional discounts). Also ignores two important variables of income: the future revenue streams, often come in for several years and terminated when dissatisfied customers go to a competitor, loss of potential profits from potential customers who renounce the use of our services, hearing negative assessment of the quality of its services from the mouths of other consumers. And Finally, there are costs that are practically not subject to quantitative assessment, such as loss of a service system at a time when jobs are unfilled, and leakage of knowledge and experience of staff leaving the company.
- “ service sabotage,” denoting organizational member behaviours that are intentionally designed negatively to affect service. The numerous examples of such behaviours can broadly be classified into two main types of sporadic-public sabotage. First are examples wherein frontline staff initially publicly and intentionally disrupt the service encounter, damage personal property, or even harm customers and subsequently immediately apologize to the customer for their “accidental clumsiness.” Second are sporadic-public service sabotage instances wherein, uniquely, multiple participating employees collude to disrupt service.
- Second cycle, which bears negative, the cycle of mediocrity , most found in large organizations, bureaucratic type, typical representatives of which are state monopolies, cartels, industrial and controlled oligopoly. In such organizations there are practically no strong incentives to improve efficiency, and implementation of innovative policies and practices in management personnel are often blocked because of the risk conflicts with trade unions. In such an environment (which should be recognized, today is constantly shrinking) standards services, usually dictated by the conservative set of rules focused primarily on the standardization of service, profitability operational processes and prevention of fraud and undue privileges in relation to individual clients. Often it is assumed that staff continue in the same company for life. Responsibilities as usually very limited and extremely precisely defined, clearly classified by size and level of responsibility, and more fixed rules of trade unions. Increases in wages and promotions service depends primarily on seniority rights in the company, and excellent performance is assessed by the absence of errors, rather than on the basis of high productivity and outstanding achievements of quality of customer service. Education and training of staff, if conducted in general, are focused on studying the rules and technical aspects work, rather than on improving the quality of interpersonal relationships with colleagues and customers. As the flexibility and initiative minimal work in such organizations, as a rule, monotone and boring. It should, however, recognize that, unlike the above-described cycle insolvency, the majority of posts decently paid and provides other benefits and advantages, which, combined with a guarantee employment leads to the relative stability of personnel. Mobility of employees such organizations is reduced due to their lack of experience and skills for other activities. Customers As a rule, prefer not to deal with such companies. Facing bureaucratic red tape, lack of flexibility in the service and reluctance of workers "even lift a finger" to serve consumer is better (a typical explanation: "It's not in my responsibilities "), customers are offended and disappointed. What do if that client has nowhere else to turn - either because the market the service completely monopolized, either due to the fact that he was aware that alternative company worse? In such a situation it is no surprise that dissatisfied customers express their dissatisfaction and often hostility to the staff serving them a service company which at that time are trapped in their duties and often powerless to improve the situation, so they have to defend themselves indifference inability to depart from the instructions, or, at worst, they are responsible rudeness to rudeness. What was the outcome? Again we are dealing with a vicious circle. Disgruntled customers constantly complain gloomy staff (and other clients!) the poor quality of service and bad attitude, which raises more active defense reaction and lack of attention to customers by employees. Obviously, in such circumstances, the consumer has a very weak incentives to cooperate with the company to improve the quality of care.
- Some Absolutely do not accept the assumptions underlying the cycles Insolvency and mediocrity . Instead, they adhere long-term perspective on financial efficiency, seeking to prosperity by investing heavily in personnel to establish a cycle success . In this case, the notion of success , as well as the concept of insolvency and mediocrity , is applicable to customers and employees. Expansion duties in these companies is accompanied by education, training and practice of empowering employees, allowing employees direct contact with customers, to exercise quality service. With more focused selection and hiring of new employees, more intensive training and high salaries have created conditions in which employee receives more pleasure from their work and serves customers high-level best meets their needs. Regular customers also appreciate the long relationship with service companies, possibly due to low turnover, and, as a rule, remain loyal to a company for a long time. Profit margin in such a situation tends to increase, and the company appears more opportunities to send additional funds for marketing activities retain customers, ie use the strategy, implementation of which usually much cheaper than a strategy to attract new customers. In many cases, effective methods of withdrawal of firms from the cycle of mediocrity began deregulation in a number of service industries and privatization of public corporations. Thus, in the United States and Canada in the past completely monopolized the regional telephone companies had adapt to functioning in the new competitive environment. Many countries at the dawn of the era of privatization and formation of competitive environment in many public corporations are in a cycle of mediocrity , in dramatic changes of corporate culture. Reducing value official position (which in most cases led to the retention of most dynamic and focused on quality of service of employees), the revision performance criteria, intensive training and extensive structural reorganization - all this helped to create service firms capable offer customers a truly high level of service. Today time such a change "at full speed" are being introduced in many countries world.
- This applies to Service Firms.