Service management
Lecture 3: Chapter 5: Designing HR practi ces that matt er for service organizati ons
Happy people make happy customers
Every line has effect on the other line
Nature of services – simultaneity (pag. 77)
Simultaneity
= It means that service organizations have a permeable boundary
between themselves and their customers.
Satisfaction mirror
= The relationship between employee and customer satisfaction
Employee loyalty is crucial
- Employees who stay on the job long enough not only develop their skills to a high level but
also begin to know customers and their specific interests and needs.
This allows them to provide an even better, personalized and customized service.
It creates more value, which, in turn, increases customer satisfaction and benefits
profitability.
Schneider and Bowen have documented this relationship extensively. Heskett, Schlesinger and Sasser
has created the service profit chain. (=The difference in employee satisfaction causes difference in
customer perception of service quality)
HRM
= Employees are no longer seen as cost but as organizational assets
Two models to understand HRM:
1. Michigan model
= The Michigan model stresses the idea of strategic matching and the basic building blocks of
HRM
o In this model, the resource side is emphasized. People in organizations are resources
and should be managed in a way that is consistent with organizational requirements.
o Creating a fit between human resources and business strategies. HRM should be in
line with and help to achieve the business goals
, o The quality of service delivery will depend on the commitment of the service
employees to the defined service concept. Casting these employees in a mere
‘compliance’ role does not seem the best way to create this commitment.
that is why it is important to address HR values and practices when defining the
service concept (a process in which employees could also be involved)
2. Harvard model
= The Harvard model directs our attention to the diversity of stakeholders involved and
introduces the four C’s of HRM.
o There are four HRM policy areas
Human resource flows
= Are comprised of activities related to managing the flow of people
in, through and out of the organization
o For example: recruitment and selection, placement,
development, performance appraisal and promotion
Reward systems
= Imply everything that is related to attracting and retaining
employees
o For example: Pay systems, motivation and benefits
Employee influence
= Refers to the levels of employee authority and power and the way
in which they are designed within the organization
Work systems
= Refers to the way that work is designed and the arrangements of
tasks and technology that achieve optimum results.
o The Harvard model recognizes different stakeholders, each with their own interests:
Shareholders, management, employees and unions, government and the
community
Outcomes that need to be achieved in these different policy domains and
among the different stakeholders involved are called the four C’s:
1. Commitment of employees to their work and organization
2. Congruence between the objectives of the different stakeholders
3. Competence now and in the future to what extent one attract,
keep and develop the skills and knowledge of the people
involved.
4. Cost effectiveness: What are the consequences of certain
policies in terms of wages benefits, turnover, motivation,
employment and so on? Costs can be considered at the
individual, organizational or even societal level.
A competency-based framework
Lecture 3: Chapter 5: Designing HR practi ces that matt er for service organizati ons
Happy people make happy customers
Every line has effect on the other line
Nature of services – simultaneity (pag. 77)
Simultaneity
= It means that service organizations have a permeable boundary
between themselves and their customers.
Satisfaction mirror
= The relationship between employee and customer satisfaction
Employee loyalty is crucial
- Employees who stay on the job long enough not only develop their skills to a high level but
also begin to know customers and their specific interests and needs.
This allows them to provide an even better, personalized and customized service.
It creates more value, which, in turn, increases customer satisfaction and benefits
profitability.
Schneider and Bowen have documented this relationship extensively. Heskett, Schlesinger and Sasser
has created the service profit chain. (=The difference in employee satisfaction causes difference in
customer perception of service quality)
HRM
= Employees are no longer seen as cost but as organizational assets
Two models to understand HRM:
1. Michigan model
= The Michigan model stresses the idea of strategic matching and the basic building blocks of
HRM
o In this model, the resource side is emphasized. People in organizations are resources
and should be managed in a way that is consistent with organizational requirements.
o Creating a fit between human resources and business strategies. HRM should be in
line with and help to achieve the business goals
, o The quality of service delivery will depend on the commitment of the service
employees to the defined service concept. Casting these employees in a mere
‘compliance’ role does not seem the best way to create this commitment.
that is why it is important to address HR values and practices when defining the
service concept (a process in which employees could also be involved)
2. Harvard model
= The Harvard model directs our attention to the diversity of stakeholders involved and
introduces the four C’s of HRM.
o There are four HRM policy areas
Human resource flows
= Are comprised of activities related to managing the flow of people
in, through and out of the organization
o For example: recruitment and selection, placement,
development, performance appraisal and promotion
Reward systems
= Imply everything that is related to attracting and retaining
employees
o For example: Pay systems, motivation and benefits
Employee influence
= Refers to the levels of employee authority and power and the way
in which they are designed within the organization
Work systems
= Refers to the way that work is designed and the arrangements of
tasks and technology that achieve optimum results.
o The Harvard model recognizes different stakeholders, each with their own interests:
Shareholders, management, employees and unions, government and the
community
Outcomes that need to be achieved in these different policy domains and
among the different stakeholders involved are called the four C’s:
1. Commitment of employees to their work and organization
2. Congruence between the objectives of the different stakeholders
3. Competence now and in the future to what extent one attract,
keep and develop the skills and knowledge of the people
involved.
4. Cost effectiveness: What are the consequences of certain
policies in terms of wages benefits, turnover, motivation,
employment and so on? Costs can be considered at the
individual, organizational or even societal level.
A competency-based framework
