2. Chapter 12 Managing customer-contact employees

3.  Understand the importance of customer-contact employees in creating satisfactory or memorable customer experiences  Evaluate service-orientated culture in hospitality companies  Understand the concept of internal marketing and empowerment in a hospitality context  Identify the sources of conflict for hospitality customer- contact employees

4.  Employees play a crucial role during hospitality service encounter with customers  The behaviour of customer-contact employees creates impressions of high or poor service quality and is critical to delivering customer satisfaction  Employees also represent the hospitality brand  Recruiting, training and rewarding employees is a human resource management function, but marketers need to understand employment strategies to ensure HR represents brand values and delivers the service experience promised by marketers to customers  Human resource managers use marketing approaches to employee recruitment and retention – this is called internal marketing

5.  W. J. (Bill) Marriott (Snr)’s quotation summarizes the importance of employees – ‘it takes happy employees to make happy customers and this results in a good bottom line’  Customer-contact employees deliver on most dimensions of service quality: reliability, empathy, tangibles (partly), responsiveness and assurance  The service profit chain demonstrates the link between employee satisfaction, service quality, customer satisfaction and business performance – see Figure 12.1 (Heskett, Jones, Loveman, Sasser and Schlesinger, 1994)

6. Figure 12.1 The service profit chain

7.  Each hospitality organization has its own culture – its own DNA  Company culture influence on how employees look after customers  Company culture means the shared values, beliefs and assumptions that underpin how the organization operates, including the way that it treats its customers and employees  Cultural components are deeply rooted in the organization’s founding history and recent development  Employees learn organizational culture by observing the behaviour and messages from head office, the general manager and other employees

8. General Manager as role model  Characteristics of successful hospitality GMs vary, the personality, behaviour and actions of the GM sends powerful signals to the employees and helps to shape the culture  Employee morale is a reflection of the general manager, and employees respond to the GM’s leadership Service myths, heroes and villains  Companies can use examples of extraordinary employee actions in their advertising to promote their high quality service  Eventually service myths create a dominant service culture personified by company heroes  Maverick companies might employ characters (notably celebrity chefs) who are regarded as ‘villains’ and generate publicity – both positive and negative Support systems  Employees are dependent on effective support systems, human and technological, to help to deliver appropriate service quality  In hospitality, there is often conflict between front-of-house employees and back-of-house employees, especially (kitchen/restaurant)

9.  The services marketing triangle (see Figure 12.2) links pre- encounter marketing, internal marketing and marketing during the encounter  Promises made to customers in pre-encounter communications have to be delivered during the service encounter  Internal marketing recognises competition for best employees because business success is dependent on service quality, which is dependent on employees  The following factors support positive employee recruitment and retention: recruitment, service inclination, service competence, training, empowerment and reward systems

10. Figure 12.2 The services marketing triangle Zeithaml and Bitner, 2003

11. Recruitment  Societies where tourism is a key industry (e.g. Caribbean), careers in hospitality are relatively well paid and enjoy high status  Societies where hospitality has low status, pay and prospects, the recruitment challenge is difficult  Company image/reputation as a good employer helps attract better employees Service inclination  Employers seek employees with ‘right service attitude’. Some people natural aptitude for service; characteristics linked to attitude cannot be taught  A problem for hospitality employers is lack of employees with right service attitude; if unsuitable employees recruited and service standards not delivered, customers and other employees will be unhappy Service competences  Employees need skills and knowledge, called service competences, to be effective  Historically, hospitality managers had limited education and learnt on-the-job  Today, there are well-established hospitality/tourism education systems which helps to educate tomorrow’s managers

12. Training  Hospitality companies have own service culture, operating systems, service standards  New employees need induction training to know product, service philosophy and company culture  Best companies provide continuous training and career development Empowerment  Employees work in boundaries set by companies which set rules about what employees are allowed to do or not to do  An alternative approach empowers employees to take responsibility for ensuring customers are satisfied  Empowerment needs to be matched with delegated authority and resources  This approach is more customer focused and motivates employees Reward systems  Reward systems include pay, bonuses, tips, free meals, discounted accommodation for live-in employees  ‘Intangible benefits’ of hospitality work can compensate for unsocial hours and lower pay  Intangible benefits include the excitement, fun and teamwork that many hospitality employees enjoy

13.  Employees can have interpersonal and interorganizational conflicts at work  Conflict at work can be source and symptom of employee dissatisfaction  Continuous or excessive conflict creates powerful emotional responses, including stress, for employees  Understanding sources of conflict helps managers to create better working conditions  Personal/role conflict – employees perform roles at work that might conflict with their own values, e.g. young people may resent a strict dress and grooming code  Organizational/customer conflict  Companies have policies, processes and Standard Operating Procedures to manage employee conduct  Occasionally, customers can make reasonable requests which break the company’s regulations  Inter-customer conflict  Disputes between customers creates difficult situations for employees – especially if this happens on a regular basis

14.  Hospitality companies must develop effective strategies to recruit and retain service-minded customer-contact employees  Companies use internal marketing to effectively communicate with employees  Hospitality companies claim to be good employers  The industry suffers from high employee turnover  There is a strong link between employee satisfaction, service quality, customer satisfaction and business performance (the service-profit chain)  Each hospitality company has its own culture which guides customer-contact employees in their behaviour towards customers

15.  Bitner, M. J., Booms, B. H. and Tetreault, M. S. (1990). ‘The service encounter: diagnosing favourable and unfavourable incidents’. Journal of Marketing, 54, pp. 71–84.  Carlzon, J. (1987). Moments of Truth. Harper Collins.  Customer Management. (2000). ‘Towards best practice’. Customer Management, July/August, pp. 6–11.  Gummesson, E. (2008). Total Relationship Marketing (3rd ed.). Butterworth- Heinemann.  Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr. and Schlesinger, L. A. (1994). ‘Putting the service profit chain to work’. Harvard Business Review, 72, pp. 164–170.  Lashley, C. (2000). Hospitality Retail Management. Butterworth-Heinemann.  Lashley, C. (2001). Employing Human Resource Strategies for Service Excellence. Butterworth-Heinemann.  Mudie, P. (2000). ‘Internal marketing: a step too far’. In R. J. Varey and B. R. Lewis (eds) Internal Marketing: Directions for Management (Chapter 15). Routledge.  Schneider, B. and Bowen, D. E. (1995). Winning the Service Game. HBS Press.  Varey, R. J. and Lewis, B. R. ( 2000 ). Internal Marketing: Directions for Management. Routledge.  Zeithaml, V. A. and Bitner, M. J. (2009). Services Marketing. McGraw-Hill.

16. Figure 12.3 Higher and lower customer-contact service contexts – an example from food service – an example from food service