1. Leveraging the People Factor
Chapter 6
Leveraging the People Factor

2. Objectives
To analyze why employees are key to a service organization’s success
To examine the costs and benefits of empowerment and when it’s a good idea
To consider the need for improvisation
To examine the emotional side of services
To explain the messages companies convey by costuming their employees
To provide an understanding of how to maximize employee productivity

3. Outline Introduction Service Employees and Their Behavior
Empowering Service Employees
The Need for Service Improvisation
The Emotional Side of Service
Costuming Service Employees
Maximizing Service Employee Productivity
Summary and Conclusion

4. Service Employees and Their Behavior
Why Are Service Employees So Important?
Are All Service Employees Equally Important?
Which Are More Important: Technical Skills or Social Skills?
Ensuring Service Employee Excellence
Addressing Employee Poor Performance

5. Are All Service Employees Equally Important?
Boundary spanners – the frontstage employees who link an organization with its customers.
Represent the organization to customers as well as provide information about customers to the organization
Can range from subordinate positions to professionals
Technical skills – the proficiency with which service employees perform their tasks.
Social skills – the manner in which service employees interact with customers and fellow workers.

6. Ensuring Service Employee Excellence
For all workers—the frontstage “boundary spanners” and those who work backstage--its important to:
Hire intelligently
Train intensively
Monitor incessantly
Reward inspirationally
Sometimes, it’s necessary to address employees’ poor performance

7. Empowering Service Employees
Empowerment involves sharing information, rewards, knowledge, and power with frontline service employees so that they can better respond to customers’ needs and expectations. 
There are both Benefits and Costs of Empowerment
Empowerment is sometimes met with resistance

8. Empowering Service Employees: Benefits of Empowerment
Quicker response to customer needs during service delivery
Quicker response to dissatisfied customers during service recovery
Employees are more satisfied with their jobs and themselves

9. Empowering Service Employees: Benefits of Empowerment
Employees will act more warmly and enthusiastically toward customers
Empowered employees can be a great source of ideas
Empowerment can generated great word-of-mouth communication and customer retention

10. Empowering Service Employees: Costs of Empowerment
Greater monetary investment in the selection and training of employees
Higher labor costs
A possibility of slower and/or less consistent service delivery
Possible violations of fair play
Giveaways and bad decisions

11. The Need for Service Improvisation
Improvisation is closely related to the concept of empowerment
Workers are given freedom to creatively adapt to various service situations
Is more likely needed in some services rather than others
Improvisation insights gleaned from the arts may provide insights
Theater improvisation
Jazz improvisation

12. The Emotional Side of Services
Workers are often required to display cheerful disposition, genuine concern and unrelenting care toward the customer, no matter what the worker’s true feeling may be
Demands of such “emotional labor” can be stressful and mentally challenging
Organizations can distinguish themselves via their workers’ emotional labor by attending to EI (Emotional Intelligence) in their hiring, training and management practices.

13. Costuming Service Employees
Costuming offers several advantages:
Provide desired evidence by adding a measurement of tangibility
Send a message by projecting the desired image
Reduce risk by establishing credibility and easy identification of employees
Ensure consistency by having each employee dress the same
Some drawbacks may emerge, such as
Perceived loss of individuality
The organization may appear to be rigid

14. Maximizing Service Employee Productivity
Discretionary Effort is the difference between the maximum effort one can bring to a task and the minimum effort needed simply to get by. 
To maximize Discretionary Effort, organizations need employees who are:
Willing (to do the job they are hired for, i.e., motivated)
Able (to perform their tasks well, i.e., well trained)

15. Maximizing Service Employee Productivity (cont’d)
Fig. 2.4

16. Maximizing Service Employee Productivity (cont’d)

17. Maximizing Service Employee Productivity (cont’d)
Internal Marketing is the practice of:
treating employees as internal customers of the service organization
responding to employees’ needs or wants in a similar manner as an organization would with respect to external customers
promoting the organization and its policies to the employee
Based on the notion that employees’ who are happy and motivated respond to customers in a more positive manner.
Fig. 2.4

18. Web Sites The Louvre Museum Home Depot Nordstrom Ritz-Carlton Hotels
Southwest Airlines
( p. 81
Scandinavian Airlines (SAS)
( p. 83
FedEx
( p. 84

19. Web Sites (cont’d) Denny’s Romano’s Macaroni Grill McDonald’s
( p. 87
Romano’s Macaroni Grill
(http//: p. 87
McDonald’s
( p. 88
United Parcel Service
( p. 88
Singapore Airlines
( p. 88
Disneyland Paris
( p. 89
Flyaway Farms and Kennels
( p. 92