Services Marketing:

People, Technology,
Strategy
CHAPTER 11

Managing People For Service

Advantage

Learning Objectives
Explain why service employees are so important to
the success of a firm.
Understand the factors that make work of frontline
staff so demanding and often difficult.
Describe cycles of failure, mediocrity and success in
HR for service firms.
Understand key elements of Service Talent Cycle of
successful HR management in service firms.
Know how to attract, select, and hire the right people
for service jobs.
Explain key areas in which service employees need
training.
Understand role of internal marketing and
communications.
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Learning Objectives
Understand why empowerment is important in
frontline jobs.
Explain how to build high performance servicedelivery teams.
Know how to integrate teams across departments
and functional areas.
Know how to motivate and energize service
employees so that they will deliver service
excellence and productivity.
Understand what is a service-oriented culture.
Know difference between service climate and
culture, and describe determinants of a climate for
service.
Explain qualities of effective leaders in service
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organizations.

Service Employees Are

Extremely Important
Frontline jobs are among the most
demanding jobs in service businesses.
Frontline employees are a key input for
delivering service excellence, and
competitive advantage.
Service firms are characterized by a
distinctive culture of service leadership,
and role modeling by its top management.
Good HR strategies allied with strong
management leadership at all levels often
lead to a sustainable competitive
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advantage.

Managing People For

Service Advantage

Service Personnel As Source Of

Customer Loyalty And Competitive
Advantage

Importance of Service
Employees:
Is a core part of the product
Is the service firm
Is the brand
Affects sales
Is a key driver of customer loyalty
Determines productivity
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Service-Profit Chain
It demonstrates the chain of
relationships among:
(1)employee satisfaction, retention, and
productivity;
(2)service value;
(3)customer satisfaction and loyalty; and
(4)revenue growth, and profitability for the
firm.
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The Frontline In Lowcontact Services

Many services are moving towards using

low-contact delivery channels such as call
centers, where contact is voice-to-voice
rather than face-to-face.
A large and increasing number of customer
contact employees work through
telephone, or e-mail, never meeting
customers face-to-face.
These service encounters are critical
they are the moments of truth that drive
a customers perceptions of the service
firm.
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Frontline Work
Is Difficult And Stressful
Why frontline jobs are demanding:

Service jobs are boundary spanning

positions
Role conflict and role stress; sources of
role conflict:
Organization/Client Conflict
Person/Role Conflict
Inter-client Conflict

Emotional labor
Service sweat shops

Cycle Of Failure
The employee cycle of failure begins
with a narrow design of jobs to
accommodate low skill levels, an
emphasis on rules rather than
service, and the use of technology to
control quality.
Managers ignore the long-term
financial effects of low-pay/high
turnover human resource strategies.
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Cycle Of Failure
Failure to measure all relevant costs
and revenue variables:
cost of constant recruiting, hiring, and
training
lower productivity of inexperienced new
workers
costs of constantly attracting new
customers
Revenue:
(1) future revenue streams that might
have continued for years
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(2) potential income lost from prospective

Cycle Of Failure

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Service
Sabota
ge by
the
Frontli
ne

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Cycle Of Mediocrity
The cycle of mediocrity is a vicious
employment cycle found in large,
bureaucratic organizations.
In such environments, service-delivery
standards tend to be prescribed by
rigid rulebooks, oriented towards
standardized service, and operational
efficiencies.
Faced with bureaucratic hassles, lack
of service flexibility, and unwillingness
of employees to make an effort to
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Cycle Of Mediocrity

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Cycle of Success
For long-run profitability and success, firms
should ideally move towards the Cycle of
Success.
Success applies to both employees and
customers.
Better pay and benefits attract good quality
staff.
Broadened job designs accompanied by
training, and empowerment practices allow
frontline staff to control quality.
Employees are happier at work and provide
higher quality service.
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Human Resource
Management

Figure 11.12

The Service Talent Cycle Getting HR Right

17in Service Firms

Hiring The Right People

Hiring the right people includes
competing for applications from the
best employees in the labor market,
then selecting from this pool the best
candidates for specific jobs to be
filled.
Be the Preferred Employer:
Service firms have a brand in the labor
market too, and potential candidates
tend to seek companies that are good to
work for, and have an image that is
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congruent with their own values and

Hiring The Right People

Select the Right People:
Different brands have different
personalities, and it is important
that there is a good employeebrand fit so that it is natural for
employees to deliver service that
supports the firms espoused image,
and that their behavior is perceived
as authentic by their customers.
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Tools To Identify The Best

Candidates
1. Use multiple, structured interviews

2.

Structure interviews around job requirements

Using more than one interviewer reduces risk
of similar to me bias

Observe candidate behavior

3.

Directly or indirectly observed by using

behavioral simulations or assessment center
tests

Conduct personality tests; help to identify

traits related to a particular job
Give applicants a realistic preview of the
job

4.

Candidates try on the job and asses

if job is a
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Train Service Employees

Actively
Training Contents

Organizational Culture, Purpose, and

Strategy
Focus on getting emotional commitment to firms core
strategy, and promote core values such as commitment
to service excellence, responsiveness, team spirit,
mutual respect, honesty and integrity.

Interpersonal and Technical Skills

Interpersonal skills include visual communications skills
such as making eye contact, attentive listening,
understanding body language, and even facial
expressions, and reading customers needs.
Technical skills include all required knowledge related to
processes, machines, and rules and regulations related
to customer service processes.
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Train Service Employees

Actively
Product/Service Knowledge
Knowledgeable staff are key aspect of
service quality, explain product features
effectively and position products correctly
Products features, usage, and any other
aspects of service like maintenance, service
bundles

Reinforce Training to Shape Behaviors

Training to result in observable changes
Practice and reinforcement is needed
Supervisors to help by following up regularly
on learning objectives
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Internal Communications To
Shape
The Service Culture And
Behaviors
Internal communications to employees
play vital role in maintaining and nurturing
a corporate culture founded on specific
service values
Effective internal communications are an
excellent complimentary tool to training;
help ensure efficient and satisfactory
service-delivery, achieve productive and
harmonious working relationships and
build employee trust, respect and loyalty
Training and learning professionalizes
the
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Build High-Performance
Service-Delivery Teams
Nature of many services require people to
work in teams, often across functions, to
offer seamless customer service
Service organizations have created crossfunctional teams with authority and
responsibility to serve customers from
beginning of service encounter to end
Such teams are also called self-managed
teams
Team ability and motivation are crucial for
effective delivery of many types 24of services,

Structure ServiceDelivery Teams For

Success
Identify what the team will achieve; define
goals and share with team members
Select team members with care; skills
needed to achieve goal must be found
within the team
Monitor the team and its team members,
and provide feedback to align individual
and team goals with those of organization

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Structure Servicedelivery Teams For

Success

Keep team members informed of goal

achievement, update them, and reward
them for their efforts and performance.
Coordinate and integrate with other
teams, departments, and functions to
achieve the overall company objectives
(see next section for details).

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Integrate Teams Across

Departments
And Functional Areas
Transferring individuals internally to other
departments and functional areas allows
them to develop a more holistic
perspective.
Establishing cross-departmental and
functional project teams.
Having cross-departmental/functional
service-delivery teams.

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Integrate Teams Across

Departments
And Functional Areas
Appoint individuals whose job is to
integrate specific objectives, activities and
processes between departments
Carry out internal marketing and training,
and integration programs
Have top managements commitment to
ensure overarching objectives of all
departments are integrated

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Motivate And Energize

People

Motivating and rewarding strong service

performers are some of the most effective
ways of retaining the service people.
Lasting motivating factors other than
salaries, incentives and bonuses are:
Job content
Feedback and recognition
Goal achievement

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Service Culture, Climate

And Leadership
Organizational culture concerns
the basic assumptions and values
that guide organization action; it
includes:
Shared perceptions or themes regarding
what is important in organization.
Shared values about what is right and wrong.

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Service Culture, Climate,

And Leadership
Shared understanding about what
works and what does not
Shared beliefs and assumptions
about why these beliefs are
important
Shared styles of working and relating
to others

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Service Culture
Leonard Berry advocates a value-driven
leadership that inspires and guides service
providers.
Core values found in excellent service
firms included excellence, innovation, joy,
teamwork, respect, integrity and social
profit.
Definition of service culture according to
Berry:
Shared perceptions of what is important
in an organization, and
Shared values and beliefs of why
those
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A Climate For Service

Organizational climate is part of
organizations culture that can be felt and seen.
Culture that is translated into more concrete
aspects experienced by employees; in turn
drives employee behavior and customer
outcomes.
Climate must relate to something specific e.g.,
service, support, innovation, or safety
multiple climates often coexist within a single
organization

Focus entire organization on the frontline

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Inverted Organizational
Pyramid

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Qualities Of Effective Leaders In

Service Organizations
Qualities effective leaders in a service
organization should have:
Love for the business.
Driven by a set of core values related
to service excellence and
performance
Believe in the people who work for
them, and pay special attention to
communicating with employees.
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Qualities Of Effective Leaders In

Service Organizations
Able to ask great questions and get
answers from the team, rather than
just relying on themselves to
dominate the decision-making
process.
Role model the behaviors they
expect from their teams.
Have a talent of communicating with
others in a way that is easy to
understand.
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Leadership Styles
Leaders who demonstrate commitment
to service quality, set high standards,
recognize and remove obstacles, and
ensure availability of resources required
to do it, create a strong climate for
service.
One of the traits of successful leaders is
the ability to role model the behavior
they expect of managers and other
employees.
This is known as management by
walking around.
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