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Wageningen UR
Internal Marketing and Human
Resource Management: a
potentially fruitful cooperation in
the service industry
A cooperation which leads to high quality service delivery
Elisabeth Sohl
Bachelor thesis
Supervisors:Dr. Ir. F. Verhees and Dr. R. Wesselink
06-07-2012
Abstract
This paper examines the crucial role, and the development of competencies to successfully
fulfill this role, role of front line employees in the delivery of consistent high quality service. To
deliver high quality service this employee should posses certain characteristics or competences to be
able to provide top quality service. This employee fulfills a representative function towards the
customer. When this front line employee manages to live up to or exceed the customers’
expectations, customer satisfaction and therefore loyalty will be created. Which will enlarge the
change of success and continuity of the organization.
Through the deployment of an internal marketing strategy, the entire organization should be
motivated to be customer oriented to secure high quality service delivery. Internal Marketing should
consist of three main parts which are; treating the employees as internal customers, teaching every
employee in the organization to behave as a ‘part time marketer’ and the use of information systems
to be able to use all the available knowledge and information throughout the entire organization.
The crucial role of the front line employee cannot be fulfilled when these employees are not
developed, motivated and retained. This is where Human Resource Management comes into play.
When the main focus points of HRM on development and motivation are explored and exploited in
the right way, the service organization can attain a competitive advantage. This advantage is attained
because well trained and motivated employees can deliver service of superior quality which can
ensure customer satisfaction and loyalty.
Based on scientific literature the conclusion is drawn that Internal marketing and Human
resource management can achieve superior service quality if these departments work together.
These departments both focus on the employee, albeit in different perspectives. Together these
departments should develop and motivate front line employees to exceed customers expectations,
which will result in customer satisfaction and loyalty, two of the most important strategic goals of
service organizations.
2
Table of Contents
Abstract ................................................................................................................................................... 2
Introduction............................................................................................................................................. 4
Problem statement ............................................................................................................................. 4
Aim of the paper.................................................................................................................................. 5
Chapter 1. Why are front line employees of crucial importance in service delivery? ............................ 6
1.1 Representation .............................................................................................................................. 6
1.2 Characteristics ............................................................................................................................... 7
1.3 Quality ........................................................................................................................................... 7
Chapter 2. What is internal marketing and how can it be applied? ..................................................... 10
2.1 Goals ............................................................................................................................................ 10
2.2 Internal customers ...................................................................................................................... 10
2.3 Part time marketers .................................................................................................................... 12
2.4 Information systems .................................................................................................................... 13
Chapter 3: What are the main focus points of HRM when it comes to development and motivation of
employees? ........................................................................................................................................... 14
3.1 Competences ............................................................................................................................... 15
3.2 Development ............................................................................................................................... 16
3.3 Motivation and retention ............................................................................................................ 18
Chapter 4: When and how should internal marketing be taken into account at development and
motivation activities? ............................................................................................................................ 20
4.1Internal Customers and developement ........................................... Error! Bookmark not defined.
4.2 Internal Customers and motivation ................................................ Error! Bookmark not defined.
4.3 Part time marketeers and development ....................................... Error! Bookmark not defined.1
4.4Part time marketeers and motivation..........................................................................................22
4.5 Information systems and development......................................................................................23
4.6 Information systems and motivation..........................................................................................24
4.7 Cooperation ................................................................................................................................. 24
Conclusion ............................................................................................................................................. 25
Discussion .............................................................................................................................................. 26
References ............................................................................................................................................. 27
3
Introduction
In many service organizations one of the most important organizational strategies is to deliver
consistent high quality services (Rafiq & Ahmed, 2000). This strategy is the core of the organization
and therefore deserves a lot of thought and attention. However, delivering services of consistently
good quality is difficult, as many organizations have discovered (Zeithaml, Berry and Parasuraman,
1988). Delivering high quality service does not only involve the management of an organization, but
all the employees with a special emphasis on the front line employees. Front line employees are for
example bank tellers, waiters and waitresses in restaurants, employees that are directly in contact
with the customer, but also call centre employees, since they establish and maintain direct contact
with the customer too. These employees are the link between the company and the customer
(Zeithaml, Berry and Parasuraman, 1988). The role of the front line employee is of critical importance
during seller-buyer interactions. When these front line employees fail to deliver, the organizations
service quality and the perceptions of customers of the service organization can be jeopardized
(Barnes, Fox and Morris, 2004). In a situation of buyer-seller interactions, front line employees not
only represent the organization but also have a large impact on future buying behavior of the
customers. Therefore, these employees should be considered to be marketing resources and the
interactions with the customer should be viewed as marketing activities and opportunities (Gronroos
1989).
Unfortunately, this is not always the case. In many cases the execution of the buyer-seller
interactions are supervised by non-marketing managers. Even worse, these interactions, which are of
great marketing importance, are most of the time executed by employees who do not know that
they are involved in important marketing processes, let alone care about marketing or customer
interest (Gronroos 1989). According to Gronroos and Ravald (2011) the employees must first know
which value is created for the customer when he/she consumes a service. Without qualified
customer oriented front office employees, no value can be created for the customers, which would
imply failure of one of the most important goals of the service organization. In order to offer the
right service to the right customer or right customer segment, the front line employees need to have
customer specific knowledge of the demand characteristics of these customers (Batt,2002). The front
line employees also need to perform to the expectations of the customers and subscribe to the
philosophy of customer service of the organization (Benoy, 1996).
Many marketing papers (Rafiq and Ahmed, 2000, 2003, George, 1990, Gronroos, 1989,
Greene, 1994) point out that development and motivation of the employees who are capable of
delivering high quality service, can have significant effect on the service quality.This development,
motivation and retention are taken care of by the Human resource Management. Therefore, HRM is
responsible for the ability of the front line employee to deliver superior quality service.
Problem statement
As was pointed out in the introduction, many managers and front office employees who are involved
in the direct selling process underestimate how important their role is in a marketing perspective.
This in turn may lead to services that do not provide the quality that customers expect, which means
that the service organization cannot fulfill its goal of delivering constant high quality service. Many
marketing papers (Rafiq and Ahmed, 2000, 2003, George, 1990, Gronroos, 1989, Greene, 1994) point
out that development and motivation of the employees who are capable of delivering high quality
service, can have significant effect on the service quality, however this stays on the level of
suggestion. What concrete effect these components of HR can have on front line employees remains
unknown.
4
Aim of the paper
The aim of this Thesis is to find out how service quality can be improved by focusing on the (front
line) employees that are involved in the direct selling process. By supporting internal marketing with
Human resource management, with special focus on development and motivation activities specified
on front line employees, a possible improvement of the job and performance of the front line
employees will be investigated.
This improvement will be of practical relevance to all service organizations. By combining these two
disciplines the service delivery process can be improved in ways which will result in more consistent
high quality service, which in turn leads to satisfied and loyal customers.
This paper also contributes to the body of knowledge that has been developed so far, both on HRM
and on Internal Marketing. Hopefully, these disciplines will be combined more often in the near
future.
Many Scholars (among others; Rafiq and Ahmed(2000, 2003), Berry(1988), Gronroos(1989) ) have
named Internal Marketing the best solution to the problem of inconsistent service quality. Greene et
al.(1994) even call Internal marketing the key to superior service, resulting in external marketing
success. Internal Marketing has been described in many definitions, but in this Thesis the definition
of Rafiq and Ahmed(2000, pp.451) will be used, since it is the most complete definition in my
opinion.
‘Internal marketing is a planned effort using a marketing-like approach to overcome organizational
resistance to change and to align, motivate and inter-functionally co-ordinate and integrate
employees towards the effective implementation of corporate and functional strategies in order to
deliver customer satisfaction through a process of creating motivated and customer orientated
employees’
An improvement of this situation will be formulated based on the following research question:
To what extent can Human resource Management be deployed to support Internal Marketing to
secure consistent high quality service delivery?
This paper starts with an explanation why front line employees are so very important, because
without understanding of what makes them special, there is no possible way to find out how to make
them better service deliverers. After that I will move on to finding out what the concept of internal
marketing encapsulates and how it can be applied to service organizations. Then I will move on to
the role of HRM, in particular the development and motivation of employees, in the improvement of
the quality of service. Last but not least the HRM concepts of development and motivation will be
applied to a marketing perspective on front line employees.
The research question will be answered based on knowledge that has resulted from scientific
literature and research that has been conducted in the study fields relevant to this thesis.
5
Chapter 1. Why are front line employees of crucial
importance in service delivery?
For the last couples of decades many marketing academics and practitioners have come to the
conclusion that in service industries, the front line employees play one of the most important roles.
According to Greene (1990) frontline employees are the key to success of service organizations. In
any organization that strives to deliver high quality service to its customer, the front line employees
and the customers need to be the focus point of the management of the organization. Because
ultimately, this is where the value is added, the service is delivered and the money is made. When
the management give front line employees and customers the highest priority the organization will
notice a transformation in the way the organization measures and manages success (Heskett et al.,
1994). The relationship that exists between front line employees and customers is a central feature
of the difference between manufacturing goods or products and delivering products through the
provision of services (Batt, 2000). When a customer buys a service, he or she buys a performance
rather than an actual tangible product (Gronroos, 1989). This performance is delivered by the front
line employee, this means that the quality of the service is dependent upon the employee who is
providing the service. That is one of the obvious reasons why front line employees are so very
important.
In this chapter, the most important features of the front line employees will be discussed.
First I will start off with the way front line employees represent the organization they work for
towards the customers, next I will look at some characteristics that a front line employee should
have to be able to deliver high quality service and after that the influence of front line employees on
the quality of services will be discussed.
1.1 Representation
First of all, the front line employees represent the organization they work for towards the customer,
they are the face of the entire organization. The interaction between the organization’s employees
and its customers has one of the greatest impacts on customer perception of the organization and
perception of the delivered services (Bell et al., 2004). The way in which front line employees behave
towards customers is the embodiment of the attitude and behavior of the organization in the eyes of
the customer (Bell et al. 2004). Not only is it the job of front line employees to deliver the service the
customer came for, but these employees also have to leave a positive image of the organization in
the minds of the customers. By behaving in an appropriate manner and delivering high quality
service, the front line employees can (re) present their organization in a positive way (Tsaur and Lin,
2004). The quality of the service that is provided is inseparable from the person who is providing it.
For example at a bank, a rude teller is translated into the minds of the customer into a rude bank
(Greene, Walls and Schrest, 1994), which will result in customers taking their business elsewhere.
Therefore the front line employees must be aware of their representative function and act
accordingly. The needed behavior might be stated in behavioral codes the organization has
established, but the front line employee himself should have an idea or a gut feeling about what is
wanted and what is unwanted behavior.
The ‘moment of truth’ interaction between front line employees and customers have a great
impact on (future) purchasing behavior of the customers (Gronroos, 1981). Moreover, these
moments of interaction provide the service organization with marketing opportunities. In certain
situations customers might have demands that cannot (yet) be fulfilled. When front line employees
keep their eyes and ears open to these kind of requests, they might find a new opportunity for
providing new products or services which will attract new customers and retain the present clientele.
Customer oriented and sales minded employees are needed to seize these opportunities. When the
front line employees are properly trained and experienced, they will be able to see certain
6
opportunities and report them back to the management of the organization. This way the front line
employees are not only a medium for communication from the organization to the customer, but
also from the customer back to the organization.
1.2 Characteristics
Not just anyone can become a provider of top quality service. Not only should front line employees
exhibit positive service behavior, the front line employees must also possess the right service
mindset and capabilities to be able to provide good service to customers (Tsaur and Lin, 2003). There
are certain characteristics that are needed, for example courteous and empathic behavior when an
employee deals with a customer. Also customer orientation and sales mindedness are prerequisites
for high quality service delivery and the spotting of new opportunities. The importance of being
customer oriented lies in the key role this orientation plays in achieving customer satisfaction and
therefore organizational goals (Rafiq and Ahmed, 2000). When the front line employees display this
kind of behavior and characteristics, this will most probably lead to greater customer satisfaction and
loyalty (Rafiq and Ahmed, 2000). In table 1 an overview can be found with the needed characteristics
and the ability to train employees to acquire these characteristics. These characteristics and the
possibility of the characteristic being taught or not, where extracted from the literature used for this
paper.
Marketing research on views on how organizations can improve the effectiveness of front line
employees is important input from and for all service organizations (George, 1990). Some of the
needed behaviors and characteristics can be trained, but others, for example natural warmth and
empathy, cannot be learned and therefore need to be looked out for when selecting new front line
employees (Lovelock and Wirtz, 2007). This is among others the job of the HR department, just as the
development and motivation of employees. These last two tasks will be discussed in chapter 3.
Besides being warm and empathic, a front line employee also needs to have a sharp eye for
opportunities. Not only do front line employees have the need to be well instructed, they still should
have the possibility to be flexible to meet the needs or unusual requests of customers in an effective
manner (Rafiq and Ahmed, 2000). However, in many service organizations the internal organization
hinders the employees to deliver fast and accurate service to the customer(Zeithaml, Berry and
Parasuraman, 1988). When the front line employee needs to ask approval of managers or different
departments, the quality of the service is jeopardized even before it is delivered (Zeithaml, Berry and
Parasuraman, 1988). This is a pity, since according to Zeithaml, Berry and Parasuraman (1988) front
line employees have the desire and drive to want to serve the customer in the best way they can. Of
course this drive is a characteristic that must be sought for during the selection of front line
employees but may also be taught to front line employees that are already employed by the service
organization.
1.3 Quality
When a customer buys a service, he buys something that is more like a performance rather than a
product (Gronroos, 1989). This performance is highly dependent on the employee who provides the
service. During the delivery of most services, the quality is created and delivered at that very same
point in time. The quality occurs during the interaction that occurs during the delivery between the
customer and the front line employee. Therefore the quality is very dependent upon the
performance of the front line employee (Zeithaml, Berry and Parasuraman, 1988). This is one of the
reasons why the service the customers experience is not always the same as the marketers have
promised. Because of the dependency of the service quality on the front line employees, precise
manufacturing specifications for consistent high quality service can seldom be established and
enforced by the organization (Zeithaml, Berry and Parasuraman, 1988). Most services cannot be
measured or tested in advance to secure consistent high quality service delivery. Especially service
7
which are very labor intensive can vary in quality depending on who provides the service (Zeithaml,
Berry and Parasuraman, 1988). Therefore, front office employees should be aware of their important
role in the level of quality that is delivered to the customer and strive to provide the highest quality
service they possibly can. The delivery of service quality depends greatly on the effectiveness of the
front line employees in handling customers. If the front line employees display the behavior most
customers expect (like being courteous) the quality of the service is positively influenced (Tsaur and
Lin, 2004). Not only should front line employees live up to the expectations of the customer, but they
should always try to exceed these expectations and give the customers just a little bit more than
what they came for. When expectations are exceeded, customer will be more than just satisfied and
the possibility of them returning to the organization will be significantly greater. Moreover, satisfied
customers are more likely to talk about their positive experiences to other potential customers in a
way that can draw more customers to the organization. This means that by providing excellent
service quality, the front line employees does not only satisfy and retain the current customers, but
also attracts new customers through positive word of mouth.
However, the managers of service organizations experience difficulties when they try to fulfill
or exceed the customers’ expectations. According to Zeithaml, Berry and Parasuraman(1988) This is
caused by a discrepancy between the managers perceptions of the customers’ expectations, which is
the base on which the services are shaped, and the actual expectations. Therefore, a solid
communication system is needed in every service organization so that the management can
communicate with the front line employees and customers, but moreover that the front line
employees can tell the management what the actual wants and needs of the customers are and
possibly ways to fulfill these needs and wants.
At the moments of customer-employee interaction, the service firms are in most cases not in a
position to differentiate their services from other service providers based on technical quality of the
outcome rendered to the customers (George, 1990). A service firm needs to differentiate on the way
the service is delivered and the time and effort the front line employee puts into the service.
For a service organization, the way a service is delivered by front line employees can be one of the
most important sources of competitive advantage (Lovelock and Wirtz, 2007). Since the activities and
relations of front line employees among themselves and the relationships of the front line employees
with the customer are unique, they are very hard to copy for any competitors. By delivering excellent
services, an organization can establish a large and loyal clientele. Moreover, when a service
organization manages to satisfy the customers, these customers could be one of the most fruitful
marketing tools: positive word of mouth. Every customer has experiences he can recall of bad
services and of good or even excellent services. Unfortunately, the bad experiences are in most cases
discussed more often with other potential customers (Lovelock and Wirtz, 2007). That is why front
line employees should do their utmost best, to prevent customers from having bad experiences and
talking about it, which can cost the organization new potential customers.
The front line employees should also be able to pick up why the customers come to the organization
for the service and what is it that attracts and retains these customers. The front line employees and
the management of the service organization should keep in mind that the quality of the service is not
only dependent on who provides the service but also on who receives the service. The quality of
service is not a completely objective matter. According to Gronroos (2011) customers can be cocreator of the value they get from consuming a service. This is due to the fact that in most occasions,
service production and consumption take place at the same time. Therefore customers are engaged
in the process and become participants of the production process. This co creation of value can also
be explained by the goals of service consumption. Consumption can then be seen as the mean to
create value, the customer buys the positive consequences that are embedded in the possession and
consumption of certain goods and services they buy. This means that with the help of marketing
research, service organizations should find out what consequences customers look for when
consuming a service. The front line employees play a crucial role in this research, since they are
8
closest to the customers, they are in the position to pick up on what the customer is looking for.
When a certain service organization manages to deliver this positive outcome to the customer, the
customer will be more satisfied and more inclined to come back and maybe even recommend the
good quality service to other potential customers. However, in many service organization this
marketing research is not executed or not paid attention to. This may be caused by the front line
employees not picking up on the wishes of the customers but this might also be caused by the
management of the service organization. When the top managers of an organization spend more
time interacting with the customers, they gain firsthand knowledge of the customers’ expectations
and perceptions. This contact makes top managers realize that there is a lot to know about their
customers a still a lot to find out to deliver better service to the customers. This is when marketing
research gets more attention and importance in a service organization (Zeithaml, Berry and
Parasuraman, 1988). And this is also when the front line employees get more attention in the
perspective of the knowledge that needs to be gained of the customer. This is the opportunity for
front line employees to display their skills and capabilities to see the wishes of the customers and
deliver the quality on a consistent high level.
Table 1. Needed characteristics in front line employees and their ability to be taught or trained
Needed characteristics for front line
employees
Courteous: being considering towards
others, also seen as polite
Customer orientation: keeping the customer
in mind in every activity
Warmth and empathy
Alertness for new opportunities
Positive and helpful attitude
Language and communication skills
Drive to serve the customer
Can this be taught or trained?
Yes, through intensive training
Yes, through intensive training
No, these must be selection criteria
Yes, through intensive training
No, this should be a selection criterion
Yes, this can be taught
Yes, this can be taught
9
Chapter 2. What is internal marketing and how can it be
applied?
In the introduction, a definition of Internal Marketing by Rafiq and Ahmed (2000) was given, which
was: ‘Internal marketing is a planned effort using a marketing-like approach to overcome
organizational resistance to change and to align, motivate and inter-functionally co-ordinate and
integrate employees towards the effective implementation of corporate and functional strategies in
order to deliver customer satisfaction through a process of creating motivated and customer
orientated employees’. But a definition alone is not enough. The goal of this chapter is to explain
what Internal Marketing exactly is, how it can be applied to the service industry and what can be
accomplished when Internal Marketing is utilized.
This is done by discussing the goal of internal marketing based on the opinion of different scholars,
after that a part on internal customers will follow, which is one of the cornerstones of internal
marketing. Where after another cornerstone of internal marketing will follow, which is the vision of
regarding all employees as part time marketers. Last but not least, the need for a communication
system is discussed.
2.1 Goals
According to Greene et al. (1994), internal marketing should start at the top of a company and be
communicated downwards into the entire organization. It is important that internal marketing is
explained at every level of the organization and that all employees understand its importance.
When internal marketing is systematically applied, an organization can develop and maintain service
minded and customer-conscious employees (George, 1990). Which in turn will lead to better service
quality, the main goal of Internal Marketing since its creation(Rafiq and Ahmed, 2000). Internal
marketing aims to assess, start and improve processes that help the organization to reach its goals. In
the broad sense, Internal Marketing ‘includes all individual and organizational functions, activities,
communications and elements that a firm uses to create, develop and maintain appropriate interlinkages that result in the delivery of “quality” expected by the final customer’, as Rafiq and Ahmed
(2003) put it. This means that internal marketing not only focuses on the actual delivery of the
service, but on the entire organization that must be involved to create this service. In the view of
internal marketing, every person in the organization is involved in putting together the service and
delivering it to the right customer. So not only the front line employees should be held responsible
for the quality of the service, although they play al large part in the delivery process, but the entire
organization should do their utmost best to create the best possible service.
According to Bell et al. (2004) Internal marketing should take care of all internal relationships
in the organization. These relationships between employees, departments, management and the
organization should be initiated, developed, maintained and coordinated to create superior value for
the customers. By making sure that everyone works together, the organization can be certain that
every employee knows what he or she is working for and towards.
By giving every employee in the organization a more clear picture of the inside of the organization,
internal marketing prepares the organization for the competition. By harmonizing the entire
organization to become a whole , internal marketing provides strategic guidance on how to maintain
business performance and profitability in a competitive environment (Rafiq and Ahmed, 2003).
2.2 Internal customers
Internal marketing is a strategy that aims to secure high quality service delivery. Not only by serving
the wants and needs of external customers, but by regarding the employees of the organization as
customers as well, the internal customers, and satisfying their wants and needs too. It is believed
10
that an organization must have satisfied employees in order to have satisfied customers, mainly due
to the reason that customers of service organizations buy labor for the larger part. The most
apparent way to satisfy the employees is by treating them as customers (Rafiq and Ahmed, 2000).
George(1990) states that organization behavioralists have suggested that by treating especially front
line employees as internal, or as he states ‘partial customers’, a service oriented culture can be
promoted and enhanced. Rafiq and Ahmed (2003) explain that by satisfying the needs and wants of
internal customers, the organization and the front line employees are better equipped to deliver high
quality service to satisfy external customers. This implies that satisfied employees are more
motivated and capable to deliver high quality service. One assumption that is also associated with
treating employees as internal customer is that they are less inclined to quit their jobs. Job
satisfaction and motivation are two strong reasons for employees not to quit their job. This as a
positive influence on the quality of service, since there exists a strong link between low employee
turnover and high customer satisfaction(Heskett et al, 1994). By providing the customers with
familiar faces and with employees who know the previous requests and preferences of the
customers, customers feel more at ease and are inclined to return to the same organization. Of
course this cannot always be applied in this modern day world since a part of the services that are
provided are provided through the telephone or the Internet. However, it is still important and more
comfortable for the customer if the person providing the service is aware of the customers previous
wishes so that employee knows to which expectations he should live up to.
The more employees are satisfied, the better the chances are that the organization can
create external customer satisfaction and loyalty. Rafiq and Ahmed (2000) also call this the ‘internal
customer supply chain’, where every manager, department and employee in the organization views
other departments as customers and tries to supply the best service possible, also within the
organization. Within the organization, this supply chain establishes a network of interactions and
relationships which result in collaborations that create more value added. These internal interactions
can be managed with a form of Internal marketing strategy or plan. The alignment and creation of
strong relationships between departments and employees within the organization is a prerequisite
to improve the quality of the service delivery and the performance of the organization as a whole to
create value added (Rafiq and Ahmed, 2000).
So how does an organization treat his employees as customers?
First of all the organization has to look at what she is offering its employees. Jobs should be viewed
as internal products that are offered to the employees. These products have to be attractive and
valuable to the employee. When applying internal marketing, jobs are viewed as internal products
and just as with external marketing, these products have to be designed in a way that meets the
needs of the customers better than other products of other organizations do, while meeting the
objectives of the organization at the same time (Greene et al. 1994). When the managers of the
organization treat the jobs they offer as if they were products, it forces these managers to dedicate
as much time and attention as they do when it involves external products (Rafiq and Ahmed, 2000)
However, most executives are not thinking of the jobs they offer this way, they are simply
looking for someone to fulfill the job. But changing this mindset would show these executives that
people do actually ‘buy’ jobs from employers. Employers can and should use marketing to sell these
jobs in a way that offers better and more satisfying jobs. This way the organization will attract more
capable employees that can be effective service providers (Greene et al. 1994). However, one should
keep in mind that employees do not have as many choice options as external customers in choosing
the product that is ‘sold’ to them. The employees might not even want the ‘product’ in the first place
(Rafiq and Ahmed, 2000). But the organization is not looking for people who do not want the job,
because these people would not be suited for the job anyway. When making job offers more
attractive, the organization should keep in mind what kind of people they are looking for and what is
found attractive by these people. These attractive assets should be researched and emphasized.
Apart from seeing employees as internal customers, acknowledgement of employees as key
stakeholders of the organization is a way to establish greatly enhanced effectiveness. Everyone likes
11
to be acknowledged and respected for the job they do and the organization cannot expect from its
employees to deliver high quality service to internal and external customers, unless they are treated
with the utmost respect (De Bussy et al. 2004). As will be discussed in the next chapter,
acknowledgement is one of the main sources of motivation.
By looking after the needs of the employees the organization shows to its internal customers that
they are valued by the organization (Rafiq and Ahmed, 2003). This is one of the areas where Internal
Marketing and HRM overlap. The well being of the organization is linked to the wellbeing of the
employees. Moreover, the wellbeing of the customers is dependent on the well being of the
employees (Dahlgaard and Dahlgaard, 2003). When an organization shows to the employees that
they are valued and important to the organization, this will evoke (more) commitment to the
organization and to its goals and success. This will work in a reciprocal way, the more the
organization cares for and is involved with its employees, the more the employees will also be
involved with and care for the organization and its goals. It is the task of internal marketing to find
out what the needs are of the organization (demand of organization on the employee) in direct
relation to the needs and ambitions of the employees (the demands of the employees on the
organization). Only when these demands are in balance the organization can implement service
oriented strategy with the assurance of motivated and committed employees, which will lead to
customer satisfaction and long term prosperity (Rafiq and Ahmed, 2003). When organizations strive
to make their employees more creative and committed, they need to start and maintain
relationships with their employees in a way that supports and stimulates employees to do their
utmost best. Up till now, very few organizations have managed to build these kind of relations, and if
they have done so, these relations were most of the time on a superficial level, and not
understanding that employees have both rational and emotional needs (Rafiq and Ahmed, 2003).
When an organization is committed to fulfill the wishes of the employees, the organization needs to
invest time and money to find out what these needs are and how they can be fulfilled. Unfortunately,
not many organizations have acknowledged the effect of these investments.
One of the drawbacks of seeing employees as internal customers is that the needs of the external
customer could become less important than the needs of the employees. The organization should
stay focused at the external customer at all times, even when treating employees as internal
customers. Ultimately, this is why the organizations threats her employees as internal customers; to
make sure the employees can deliver high quality service to the external customer. There are also
considerable costs when a organization tries to keep all employees satisfied(Rafiq and Ahmed, 2000).
For example this can involve pay raises, extra days off, extra facilities like support with child care or
sports facilities etcetera.
2.3 Part time marketers
The service of the delivered quality is not only dependent on the effort of the front line employees,
but is a joint effort made by all the members of the service organization (Benoy, 1996). Internal
marketing aims to motivate employees who are not in contact with the customer to behave in a way
that enhances the service for the end customer (Rafiq and Ahmed, 2000). Not only should
employees view each other and be viewed as being customers, all employees who contribute to the
delivery of the service should also become a part time marketer. As a part time marketer the
employee should do his utmost to deliver and sell high quality services to as many ‘internal
customers’ as possible. By making every employee aware of their contribution to marketing goals, an
organization becomes more service minded and makes her employees more customer-conscious
(George and Gronroos, 1989). When the employees fulfill their jobs in a marketing like fashion, they
will strengthen the relationships with the customers and make the customers want to return
(Gronroos, 1989). Not only the front line employees are important to the delivery of services, but all
12
support persons who indirectly influence the quality of the service should become ‘part time
marketers’ as well. Of course the front line employees play the major role, but the supporting
employees do contribute to the service quality. These employees should recognize the internal
customer as their focus point, which in this case are the front line employees. The supporting staff
should perform marketing like activities towards the front line employees to assist them in delivering
high quality service to the external customer (George,1990). Or as Albrecht and Zemke(1985) stated
in their book ‘Service America!’: ‘if you’re not serving the customer, you’d better be serving someone
who is’. This indicates not only the importance of the front line employees, but of all employees
involved in service creation and delivery.
2.4 Information systems
Another key element of internal marketing is communication. The management should provide all
employees with clear, unambiguous information. By paying more attention to the communication of
marketing goals, the employees will form an understanding about their important roles in reaching
these goals, since this understanding is lacking in many situations and organizations (Gronroos,
1981). Information systems are crucial for internal promotion by supporting product relationships,
customer needs and competitive trend (Greene, 1994). By providing the employees with the right
information at the right time, they can get acquainted with new products and services and the way
they should be promoted. Also the employees should be kept up to date with new developments in
the field wherein the organization is operating, to be able to serve the customers in the best and
most up to date way they can.
Not only information for internal marketing purposes should be communicated, but also
external marketing messages should be known to all employees. When the employees know what is
promised in advertisements, the front line employees can have a clearer image of what the customer
expects and how to fulfill this expectation (Rafiq and Ahmed, 2003). Zeithaml, Berry and
Parasuraman(1988), called this horizontal communication, where the advertising department
communicates with the front line employees. Not only can front line employees find out what is
promised and therefore what is expected of them, but they can also provide information about the
wants and needs of the customers to the marketing department. By living up to, or exceeding the
customers’ expectations, customer satisfaction and loyalty will have a larger chance of success.
When information of different departments is shared openly the ability of the front line employees
to provide other members of the organization and the customers better information and services, is
enhanced(Bansal et al., 2001).
One prerequisite for open information sharing is trust. Employees have to be assured that
even when they share all the information they have gathered and their ‘know-how’, they will still be
a valuable asset to the organization. When employees are treated as partners in the organization
they will feel more valued and more committed to the organization. This however demands a large
change in the attitudes of the managers of service organizations, since in most service organizations
this is currently not the common practice (Rafiq and Ahmed, 2003).
Not only should communication be clear and unambiguous, it should also recognize the fact that
within one organization several employees segments exist ( Rafiq and Ahmed, 2003). Different
segments of employees have different needs and should be addressed differently. When the
message of the management of the organization is broad and diffuse, distance will be created
between the employees and the organization and in the worst case scenario it will cause confusion.
This implies that all ways of communications should be adjusted to the receivers to make sure the
information can be understood and utilized by the receivers.
13
Chapter 3: What are the main focus points of HRM when it
comes to development and motivation of employees?
The field of Human Resource Management encapsulates many functions, for example: Selection,
Training and development, Quality improvement programs, Internal promotion, Individualized
reward systems, Communication, Employee involvement and many more (Guest, 1997). Together
with the other departments in an organization HRM is responsible for getting the right people at the
right place to deliver excellent performance (Guest, 1997). Within HR practices many tasks are
present and, depending on the organization, can be emphasized. Human Resource management can
be employed to reached many different goals, for example HRM can be strategically relevant, when
the organization views its employees as the main source for competitive advantage and success. In
most organizations HR practices are being utilized to select, develop and motivate the employees
within an organization. The last two will be focused on in this chapter, since it is not realistic for a
service organization to be able to start with an entirely new front line staff when the organization
decides to apply an Internal Marketing strategy. The organization needs to recognize the potential of
the present employees and work from thereon. There will also be a paragraph on competences, since
these also play an important role in HR practices. These competences form the base of the talents
that are present in the service organization, ready to be deployed to reach for superior service
quality.
Of course HRM plays a much bigger role in service organizations than described in this
chapter, but based on previous research I will only focuses on the competences, training and
motivation of front line service employees, since these aspects of HRM are most important in service
organizations in my opinion.
In a service organization not only the internal marketing is important for service delivery, also
Human Resource Management plays a crucial role. When an organization’s HRM policy is not
customer oriented as it should be, the development might fall short of providing employees with the
knowledge, skills and abilities required to serve the customer. Also, the motivations and rewards
might be understood and executed in the wrong way (Schneider, 2004). Of course also other
employees and activities within the organization may fail to contribute to the organizations goal of
consistent high quality service delivery. Therefore HRM practices are a cornerstone of high quality
service. In a service organization it is the task of the HR department to make sure that the right
employees have the right skills and knowledge and motivation to deliver high quality service. Of
course this also involves a cooperation with the front office managers.
Customers will form their opinion of the organization based on the behavior of the front line
employees, rather than on the organizations HR practices, which the customer does not get to see
directly. What they do get to see, are the front line employees who provide the service, which are
indirectly an effect of HR practices. Therefore it is crucially important that through the front line
employees behavior, the organization shows it has strong HR practices, because the employees
behavior is strongly related to the HRM policy of the organization (Tsaur and Lin, 2004). Except for
tangible assets of services, HRM practices are significantly related to all dimensions that are involved
in service quality and delivery (Tsaur and Lin, 2004).
When employees feel they work in an organization that has positive HR practices, which are
HR practices that encourage and support employees to grow and to learn in their profession,
customers feel they receive superior service quality (Schneider, 2004). This can also be connected to
the facet of Internal Marketing of every employee being a part time marketeer. Whenever
employees look out for and serve the wants and needs of other employees, the quality of the service
is very likely to increase. Employees who experience positive HRM practices may be reciprocating to
the organization by being more positive, courteous and helpful towards customers (Tsaur and Lin,
14
2003). This brings benefits to both the customer, in the shape of superior service, and to the
organization, namely the achievement of the organizational goals.
Not only are well trained and motivated employees crucial to high quality service delivery,
they are also a possible competitive advantage. Because of the socially complex nature of employees
and their relationships within the organization and with the customers, this competitive advantage is
very hard to imitate by competing organizations (Hitt et al., 2001). Not only are the right employees a
competitive advantage, in most service industries the quality of the service is the only differentiating
factor between competing organizations, therefore having the right employees is the only way
organizations can set themselves apart from the competitors (Rafiq and Ahmed, 2000).
High quality service is a great goal to strive for, but without well trained and motivated front line
employees this becomes an impossible goal to reach. As was stated in the chapter on Internal
marketing, there is a need for employees who can deliver consistent high quality service.
Unfortunately, in most Marketing papers this need is only stated but not looked into any further.
That is why I found it very interesting to dig a little deeper, to not only state that need but also to
discover what this need means for the HR practices of a service organization. Organizations across
different industries need to adjust their HR practices to the kind of people they are working with.
Presumably the employees in different industries have different wants and needs and different ways
of being developed and motivated.For the organization to know on which parts employees need
training and development it is wise for organizations to explore the competences of the employees.
These competences must then be developed and utilized to improve the quality of service.
3.1 Competences
Importance of competences
To be able to provide top quality service, front office employees need to possess the service
competences that enable the employee to deliver top quality service. These capabilities can be
operationalized as the required knowledge, attitude and skills for the front line employee to offer top
quality service (Tsaur and Lin, 2004). Next to having the required knowledge and skills, front line
employees also need to be able to show the appropriate behavior and mindset (as was stated in the
first chapter an in table 1). Front line employees need to be courteous, customer oriented, warm,
alert, helpful and have strong communication skills and a drive to serve the customer. Some of these
competences and behaviors can be taught to the front line employees trough training programs, but
other competences are hard to train and therefore need to be part of the selection criteria.
Dahlgaard and Dahlgaard (2003) specify competences into Emotional Competences and
Intellectual Competences. Emotional Competences are based on sensing and feeling and are needed
to understand other people, therefore these competences is of the essence for front line employees.
Intellectual competences are needed to think rationally, to analyze and to solve problems. These
competences are also needed in front line employees, for example when they need to deal with a
customer complaint. Most of the needed characteristics stated in table 1 could be labeled as
Emotional Competences.
Difference in competences
Not all employees possess the same characteristics or competences. Therefore, it is wise for
an organization to analyze and develop the present competences of employees. According to George
(1990), there is a need for some kind of formal procedure to be able to assess the interpersonal
competences and service orientation of the employees to build a reservoir of service oriented
employees. Competences depend on various personal factor like an individual's intelligence,
creativity, responsibility and experience(Rafiq and Ahmed, 2000). When we speak of competences,
many factors are involved: values, standards, views on life and on oneself and others. Especially the
underlying personality aspects are of essence for responsible tasks. Opposed to knowledge and skills,
15
these aspects are hard to learn through training (Bergenhenegouwen, 1996). By knowing the strong
points of the employees, the organization can focus on a specific market segment that fits best to the
competences of the employees (Batt, 2000). However, the ability to effectively match the strengths
of the employees to customer segments differs across industries and their customers (Batt, 2002). Of
course the choice of customers should not fully depend on the capabilities of the employees, but by
focusing on a segments that matches the strong points of the employees the organization is able to
achieve a competitive advantage.
How these competences are used to serve the customer can determine the difference
between average and excellent service (Bergenhenegouwen,1996). Bergenhenegouwen (1996) also
speaks about ‘individual competences’ by which he means the underlying motives and skills that are
the drivers of the behavior of employees. These individual competences are based on fundamental
personality characteristics that will be reflected in the employee’s actions in relation to service
delivery. Many people can be equally qualified for a job in term of work experience or diplomas, but
the personal competences like the employee’s effort, enthusiasm, motivation and underlying selfimage set apart the successful employees from the less successful ones (Bergenhenegouwen, 1996).
3.2 Development
According to Zeithaml, Berry and Parasuraman (1988) problems with the delivery of services often
occur because front line employees are not suited for their jobs. In the first place this is of course the
job of the selection phase to select the right people but this is also caused by the fact that these
employees tend to be at the lower end of the organizational charts. There is too little attention being
paid to these employees, which is a pity since they are of importance in a marketing perspective.
More importantly, these employees are frequently amongst the lowest paid and least educated
employees of the organization. This results in a potential lack in language, communication or
interpersonal skills that are so very much needed to provide service in an effective manner.
To secure the delivery of consistent high quality service, front line employees need to be trained.
First, I will discuss the goal of the development of employees, next I will explain the current way in
which training is provided and regarded in the service industry. After that I will elaborate in the
relation between development and customer complains.
Goal of development
Not only do the employees that have been working at the organization for a longer period of
time need training, the newcomers into the organization need to be trained too. By providing
training and socialization the newcomers have a better chance of becoming part of the already
exiting team (Schneider, 2004). Through training the employees find out what they can expect from
the organization and from the customers (Zeithaml, Berry and Parasuraman, 1988). Moreover, the
employees find out what is expected of them, and how their performances are measures and
evaluated. When service goals are established, service quality must be defined in a way that makes it
possible for the employees to understand what the management is demanding from them (Zeithaml,
Berry and Parasuraman, 1988). This involves clear communication but also training so that the
employees develop the skills to fulfill the wishes of the management of the organization nad of the
customers.
Current developments
In current service organizations, if front line employees are given some form of training, this training
is designed to enhance the interpersonal skills of front line employees (Rosenthal, 2004). In service
organizations, two types of training are most prevalent (Taylor et al., 2006). The first type is result
focused training, which aims to enhance outcomes that are valued by the organization. This kind of
training is focused on improvement of the execution of current tasks of the employees. Training also
needs to be consistent with the selection criteria on which the employees were selected, the training
16
must be in line with what the employee was hired for (Rafiq and Ahmed, 2000). Next to result
focused training there is also task focused training. This training focuses on preparing employees for
new tasks or jobs (Taylor et al., 2006). As a part of training, front line employees should be taught to
deal with and listen to the customer. Training in communication skills and understanding the
expectations of the customer should provide the employees a clearer definition of the goals of the
organization and their role in achieving these goals (Zeithaml, Berry and Parasuraman, 1988).
Unfortunately, many organizations are not willing to invest in front line employees for
financial reasons. Many firms hire workers with low levels of education for low payments (Batt,
2000). However, this means that service firms are ‘saving money’ on one of the most important
assets of the service delivery process: the service deliverer. Managers in many service organizations
are trying to cut costs by generalizing and automating the delivery of service. However, they could
enhance customer loyalty through customization and relationship management (Batt, 2000). This
would mean that the managers would have to hire more experienced and more expensive front line
employees or invest in the development of the current employees. Especially in ‘lean’ times, training
is very vulnerable to budget cuts. Therefore it is important to link training to results, for example
improved quality, to justify the costs of training towards the management of the organization and for
maintaining the training function (Taylor et al., 2006). Moreover, investing in training should be
viewed as creating value, since a lot of knowledge (for example about customer handling) resides in
the employees, in the firms human capital (Hitt et al., 2001).
Development and customer complains
Not only should front line employees be trained, they should have ongoing training, which
aims to teach front line employees to effectively manage time and to resolve problems and prevent
emotional exhaustion (Karatepe and Tekinkus, 2006). The quality of the service can be jeopardized if
the employee providing the service is tired from the requests made by the customers. Especially
when it comes to the handling of complaints, front line employees need to know what to do and how
to prevent themselves from becoming the target of an unfriendly customer. Of course no
organization would like their customers to complain, but when they do, the customer complains
allow an organization to work on service recovery and reduce customer turnover (Bell et al., 2004).
The attitudes and behavior of front line employees are important in any interaction with customers
(see chapter 1) but are even more important when it comes to the handling of customer complaints.
In this regard, not only the front line employees need to be trained, but also their direct supervisors.
These supervisors should be able to support the front line employees to deal with organizational
stressors, like complaining customers (Bell et al., 2004). These supervisors should also motivate the
front line employees to communicate the customer complaints and the way they dealt with them to
the management. This way, front line employees are able to establish two way communication
between the organization and its customers, so that structural problems which customers complain
indicate, can be resolved as quickly as possible. When organizations can provide courses in customer
relationship management to its front line employees and motivate them to develop and maintain
these relationships, these employees will show more willingness to assist the customers and help
customers with problems or complains beyond what is expected or required of these employees
(Tsaur and Lin, 2003).
When front line employees are given the training that provides them with knowledge how to
serve the customer better, they can learn how to meet the customers’ needs and requests in a more
effective way (Rafiq and Ahmed, 2000). Highly trained employees are also better capable of building
long term relationships with the customers. When this relationship is developed, the front line
employee knows exactly what the customer needs and can build a database of customer information
to be able to serve the customer better and to spot future sales opportunities (Batt, 2000).
Also training that works on specific services offered by the organization should help the front
line employees to understand how they should handle the wishes and complains of the customers.
Especially communication skills, listening to the customer and understanding and then delivering
17
what the customer expects should be a major issue in training programs (Zeithaml, Berry and
Parasuraman, 1988). Besides training the employees for specific service activities, employees should
also be trained based on their competences. To focus on underlying characteristics that form the
basis of the competences, many methods can be used, for example gaming, simulation, action-based
learning and training-on-the-job (Bergenhenegouwen, 1996). With these methods employees will be
able to get to know their own competences better and be able to use these competences to achieve
organizational goals.
3.3 Motivation and retention
Everyone in an organization, not only in service organizations but every organization which strives for
some kind of goal, need to be motivated to contribute to achieve this goal and to stay with the
organization to keep achieving its goals in the future. According to Dahlgaard and Dahlgaard (2003)
there a two shapes of motivation: intrinsic and extrinsic motivation. Intrinsic motivation occurs when
a person enjoys doing a certain tasks and they tend to identify themselves with their task or job. In
this case, people are not performing the job solely for the outcomes, but because the fulfillment is
seen as ‘exiting’. Extrinsic motivation occurs when employees need to do a task because someone
tells them to. These tasks are performed to attain a certain goals, for example the salary.
The kind of motivation can be different per person, however it needs to be there. Not only is
motivation needed to fulfill a job, the motivation (and skills) of the employees of an organization are
an important strategic asset when it comes to the realization the organizations goals
(Bergenhenegouwen, 1996). To use the competences of the organization to the full extent, the
organization most pay attention to the expertise and skills of the employees. Next to the capabilities
and experience employees have, attention must also be paid to the underlying motives and qualities
of the employees (Bergenhenegouwen, 1996). These motives and qualities must be enhanced and
emphasized to keep the employees motivated.
There are several ways in which an organization can enhance its employee’s motivation.
Strong relationships between the organization and the employees can improve the motivation of the
employees. Because of these relationships employees can be more motivated towards their jobs and
become more willing to provide better customer service. Research has proven that there is a strong
positive relation between job motivation and commitment to customer service (Bell et al., 2004).
Both support and supervision from the organization are proposed to have a direct effect on the
commitment of the front line employees towards customer service and an indirect effect through the
development and enhancement of job motivation (Bell et al., 2004). Next to focusing on the front
line employees in training programs, attention should also be paid to employees who do not interact
with the customers. These employees should be motivated to behave in a way which supports front
line employees to enhance the quality of the service for the end-customer (to behave as ‘part time
marketeers’, see chapter 2)(Rafiq and Ahmed, 2000).
Front line employees will be more enthusiastic about their jobs if they perceive their
contribution to the organization as being valued by others. When employees get positive feedback
from their direct supervisors they will be more motivated. Support and encouragement is highly
valued by employees who in turn will form a more positive attitude towards their job responsibilities
(Bell et al., 2004).
Next to satisfied superiors, satisfied customers are also a source of motivation (Batt, 2000).
This completes the circle: satisfied employees are more motivated to provide high quality service,
which in turn satisfies customers, which makes the front line employees even more motivated and so
on. According to George (1990) managers and supervisors should encourage and reward employees
who dare to be more service minded. These behaviors should be supported and communicated
throughout the organization so that others are not afraid to follow.
Not only does positive feedback from superiors and customers contribute to motivation,
compensation and rewards do too. To attract and retain the right employees that can live up to the
18
customers’ expectations, an organization must pay attention to multiple ways of rewarding the
employees, like compensation, recognition, trust and acknowledgement (Schneider, 1994). If
employees can expect a fair reward for their efforts and hard work, they are more likely and more
willing to satisfy customer’s needs (Tsaur and Lin, 2003). Supervisors should motivate front line
employees to be more involved and committed to the organization, since this promotes coherence
and focus which will ultimately lead towards goal achievement of the entire organization (Rafiq and
Ahmed, 2000).
Also, winning new customers over and building an reputation for the organization cannot be
done when the front line employees are not fully committed to delivering high quality service (Benoy
Joseph, 1996). Also for financial reasons it is very important that an organization rewards employees
en encourages them to stay inside the organization. It would be a waste of capital to invest in
development of employees who after the training find a (better) job with a competing organization.
19
Chapter 4: When and how should internal marketing be taken
into account at development and motivation activities?
In organizations that provide services, the quality of the delivered service is a result of the quality
and performance of the HR department (Bansal et al.,2001). According to Heskett et al. (1994) profit
and growth are a direct result of customer satisfaction and loyalty. Therefore the front line
employees play a much larger role in the achievement of the organizational goals than most people
may think. This means that customer satisfaction and organizational success both depend on the
front line employees of the service organization. These employees are responsible for delivering
service in such a way that it satisfies the needs of the customers in a way that makes the customers
want to come back. Also, these employees should be aware that they play an important role in a
marketing process, since their interaction with the customer has a large effect on the customer’s
future buying behavior and possible the yield or loss of new customers through positive or negative
word of mouth. Without the Human Resource Management to develop and motivate the front line
employees to deliver this high quality service, these goals cannot be achieved and customers cannot
be satisfied. Internal Marketing has the goal to improve the service quality, and puts the main focus
on the employees to deliver this high quality service. During the implementation of Internal
Marketing strategy, a close cooperation with the HR department is needed to find, develop and
retain the employees who are capable to deliver this high quality service. Ultimately, the employees
should become one of the most important resources for the marketing strategy (George, 1990).
Through strategic segmentation of the customer market, the organization is able to choose
one or more segments of customers by their demand characteristics and link these characteristics to
the skills of the front line employees and the HR practices, whom together shape the customeremployee interface (Batt, 2000). By combining the characteristics of the customer segment(s) to the
characteristics of the employees, the organization can focus on what is does best and for whom. This
way, the organization enlarges the chance of successful high quality service delivery and satisfied
customers.
Also involvement plays a very large role in Internal Marketing and HRM. When the
employees are more involved with the organization and the delivery of the service, the quality of the
service is likely to improve. However, involvement does not only relate to the employees, but also
concerns all organizational resources. Practitioners and scholars have suggested that Internal
Marketing also includes all individual and organizational functions, communications and relations,
activities and all the assets the organization that must be utilized to deliver the quality that is
expected by the final customer (Rafiq and Ahmed, 2003).
Not only are employees the focus of HR practices, Internal Marketing also puts the front line
employees centre stage when it comes to organizational success. Because internal Marketing
connects the strategy to the employee, the strategy can only be successfully implemented when the
right employee is at the right place with the right amount of development and motivation (Rafiq and
Ahmed, 2003). By designing strategies that develop competencies of the employees, internal
Marketing and HRM can cooperate to enhance organizational success, not only by managing the
individual but the collective that makes up the organization (Rafiq and Ahmed, 2003), which is
conceptualized in figure 1. The combination of the three pillars of Internal Marketing with the three
focus aspects of HRM will be discussed below.
4.1 Internal Customers and development
The marketing and the HR departments cannot be separate in a service oriented organization.
Because the front line employees play such a crucial role in the achievement of organizational goals,
they deserve a separate HR policy or even department that is totally focused on making these front
line employees the best service deliverers they can possibly be. The front line employees should be
seen as internal customers, who deserve and demand nothing but the best. When this is kept in mind
during the development of training programs for the front line employees, the employees are more
20
likely to accept the development programs and through this development become better service
deliverers. Whenever the organization develops these concepts, they must be developed at the same
time with both the marketing and HR department in mind and preferably with close cooperation
(George, 1990).
In some definitions of Internal Marketing the management of internal relations is also
included. This means that all relationships and interactions that result in additional value added must
be analyzed, understood and managed (Rafiq and Ahmed, 2000). This also includes the treatment of
employees as internal customers, which is one of the main pillars of Internal Marketing. next to the
employees, the relation between the marketing and HRM department should be a point of focus.
When these departments are combined, for example on the issues of customer and employee focus,
or when the marketing department gets her own HR department, superior quality service can be
delivered.
When viewing HR practices in an Internal Marketing perspective, additional input from
organizational behavior would be very helpful when it comes to internal customers. Not only should
employees be developed, trained and motivated to deliver high quality service, they should also be
thought and trained to treat each other as internal customers. The front line employees should also
be trained and motivated to see themselves and their colleagues as an important link between the
organization and the customer.
4.2 Internal Customers and Motivation and Retention
Rewarding employees for executing the organizations plans is one way of motivating
employees towards displaying the needed behavior for excellent service delivery. These rewards can
take the shape of monetary rewards but also non monetary rewards. According to Rafiq and Ahmed
(2003) Internal Marketing is responsible for developing reciprocal relationships between the
employees and between the employees and the organization. These relationships should be based
on understanding and intimacy, trust and commitment. These relationships can be the base of
employees treating each other as internal customers, and the organization treating their employees
as internal customers and catering to their needs. By showing employees that the organization has
faith in them and want to invest in them, the employees will be motivated to prove that they are
worthy of this trust and effort. These kind of relations are in many cases more valuable to the
employees than for example a pay raise or bonus. The HR department is responsible to assess when
to reward which employee with which reward, but by cooperating with the marketing department,
the right behaviors can be rewarded and therefore stimulated.
4.3 Part time marketeers and development
The front line employees should know their importance to the marketing goals of the organizations
and act accordingly. The capabilities and attitudes, knowledge and skills of employees to take part in
an Internal Marketing strategy must be explored and enhanced (George, 1990). To be able to
continuously be one step ahead of the competition, individual strengths, knowledge and expertise
should be investigated and exploited to the full advantage of the organization (Bergenhenegouwen,
1996). This implies that not only the front line employees should work to achieve the organizational
goals, all the employees in the organization should be involved and aware of their role and
contribution in marketing processes and behave accordingly. This means that the organization should
appeal to and utilize the competences that are present in the organization as the main success factor
for the organizations survival and goal achievement.
Without the cooperation of the HR departments the goals of the Internal Marketing strategy
and of the organization cannot be reached. According to Bansal et al. (2004) almost all papers about
Internal Marketing practices put an emphasis on the importance of the training of front line
employees to gain the much needed knowledge and skills to be able to deliver high quality service. A
study conducted by Tsaur and Lin (2004) showed evidence of a positive correlation between training
and higher level service quality delivered and positive front line employee behavior in tourist hotels.
These training programs do not only involve the front line employees, but involve all employees in
21
the organization to be more customer oriented and to contribute to the quality delivered to the end
customer. These training programs need to be developed by the marketing and HR departments
together. By evaluating the current abilities and competences of the employees and finding their
strengths and weaknesses, the marketing department can determine where the emphasis of the
training should be on, and the HR department can assure a good quality training program.
4.3 Part time marketeers and development
Internal Marketing aims to create the right atmosphere and environment for the front line
employees in which they are stimulated to create, coordinate and improve the delivered service and
the business as a whole. This implies that Internal Marketing strives for actions, interactions and
adaptations that improve the quality of service and therefore the satisfaction of the customer ( Rafiq
and Ahmed, 2003). Not only is it the task of Internal Marketing strategy to motivate the front line
employees to be more customer focused, the entire organization should learn how to keep the
customer in mind at all times (Rafiq and Ahmed, 2000). This awareness can be established in
cooperation with HR practices, for example through extensive training.
For a service organization to be able to keep up the high quality service delivery, the front
line employees should not only be aware of their role in marketing perspective, they should also be
motivated to keep fulfilling this role in the best way they can. Especially in customer-contact
situations, high turnover of front line employees should be prevented at all times. High quit rates
increase the costs of selection substantially, but more importantly, high turnover of front line
employees has a negative effect on the quality of the service delivered. Many service organizations
that do have high turnover tend to hire new employees quickly, to fill the gap. These employees are
even hired when they are not qualified or lack the right background and skills (Zeithaml, Berry and
Parasuraman, 1988). These employees have a negative effect on the quality and consistency of the
service level. Managers of service firms should pay more attention to the selection process of their
employees to secure their service quality in the long run. Some employees with lacking skills can be
hired and trained to develop the needed skills, but as was said before, some competences like a
customer orientation or the right attitude, are very hard to learn and if they can be taught to the
employees it will cost a lot of time and money. Not only is it more pleasant for customers to see
familiar faces every time they go to the organization for services, moreover do new employees have
a learning curve that consumes time before these employees are able to provide top quality service
(Batt, 2000). This may result in marketing opportunities that are not picked up on, because the new
employees still needs to learn how to spot and take advantage of these opportunities. Moreover,
during this time of learning, the new employee might cost the organization revenue (due to missed
chances) and maybe even customers, because the customers do not get the high service quality they
expected. Employees that have been a member of the organization for a longer period of time have
developed firm specific knowledge and skills and can offer the customers a personal relationship,
which is needed for more effective interaction with the customers (Batt, 2000). Also employees that
are not in direct contact with the customer, can assist the new front line employees by acting as so
called part time marketeers. By being customer oriented and also helpful towards colleague
employees, the possible loss of quality can be reduced. However, this attitude towards customers
and fellow employees does not come naturally to most employees. Therefore, the entire
organization should be trained and developed to be customer and service oriented, so that all
employees are striving for the same goal.
4.4 Part time marketeers and Motivation
In the service industry, the jobs of frontline employees are very important, but employees do
not always perceive this task as a fun job on the long term. Of course this is where the motivational
policies come into play, but an important part of job motivation is whether the job itself is fun to do.
Personally I think that front line employees will enjoy their jobs more if they know that they are not
alone in the goals they strive for. If every employee in the organization sees itself as a part time
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marketeer and behaves in such way, the front line employees will feel strengthened and motivated
by their colleagues, who are supporting them in the delivery of high quality service to the customer.
To prevent high employee turnover organizations should construct new job ladders for front
line employees, which makes it possible for them to build a career in different customer segments
(Batt, 2000). This also means that the front line employees can experience in different segments how
the organization is working together to achieve a common goal. This movement through the
organization can also enhance communication throughout the organization, when the employees
share the experiences they have had with other customer segments. Organizations who invest in the
long term careers of their front line employees are more likely to gain advantages because these
employees stay motivated through working in different customer segments. (Batt, 2000). Also, the
organization will try to keep employees who have gone through some form of (expensive) training,
on board to benefit from their increased productivity and knowledge after the training but also to
earn back the investment of the training. By keeping the turnover rate low, the quality of service will
stay high. Next to providing the front line employees with other customer segments to work in, it is
also possible to give front line employees more freedom and responsibility to keep them motivated
and in the organization.
4.5 Information systems and development
Internal Marketing is also responsible for assessing core competences, of the organization
and of the employees (Rafiq and Ahmed, 2003). Together with the HR department these
competences should be nurtured, developed and deployed. This implies that the service
organization, and especially these two department, should build communication systems with each
other but more importantly with the employees. When these departments have open
communication with the employees, the need for development can be more accurately be
discovered and acted upon. When the current competences are compared to future strategic plan
and goals, the gap in present competences and competences needed to achieve these goals can be
found and made as small as possible, to be prepared for anything the future might bring.
Next to the communication of the need for development, the communication systems can
bring many other advantages, of for example shared knowledge across the entire organization. When
this communicative system is set up by the cooperation of two very important department in a
service organization, the communication will run more smoothly than when the employees should
find ways to communicate with their colleagues in their own way.
4.6 Information systems and Motivation
Several service organizations have strict rules for front line employees how to handle
customers, this results in very standardized services that are very inflexible. These strict rules are
communicated throughout the entire organization and prevent employees from sharing their
experiences and knowledge with other employees. This is unfortunate, since it is difficult to leave a
deep (positive) impression on customers doing routine and duty jobs (Tsaur and Lin, 2003). Especially
difficult situations and special requests are an opportunity for the front line employees to show what
they are made of and exceed the customers’ expectations.
When the front line employees get more freedom to serve the customer the way they think is best,
these employees will feel more involved and more responsible and therefore motivated. Most
service employees want to provide good service rather than bad service, so they should be
empowered to do so (Greene, Walls and Schrest, 1994). When the front line employees are set free
to handle the customer in the way they think is best, the employees will be more likely to confer with
their colleagues and develop solutions together, which will benefit not only the customer but also
the organization.
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4.7 Cooperation
One of the main goals of Internal Marketing in combination with HRM is to create more
satisfied, customer oriented front line employees who are aware of the importance of courteous,
empathetic behavior when dealing with customers, which would ultimately lead to more satisfied
and loyal customers. Chimhanzi and Morgan (2003) speak of ‘connectedness’, which describes how
comfortable marketing en HR employees feel in communicating and cooperating with each other.
When the barriers for communication and cooperation are low, the relationship will be beneficial for
both departments and will be experienced as mutually satisfying and effective. This means that when
an organization is willing to pay attention to the alignment of the HR and marketing department, the
organization will be able to implement strategic changes better and with more success.
Unfortunately, in reality this kind of collaboration is scarce. for most organizations it would
be simply too expensive to give each department (or at least the marketing department) their own
HR team. However, after consideration, service organizations must come to the conclusion that
having the same HR department and policy for, for example the cleaning personnel and the front line
employees, does not make any sense. These employees simply fulfill different roles within the
organization, and are therefore of different levels of importance. This also means they have different
needs for development. Of course, a clean organization is also important, but it does not contribute
to the organizational goals as much as the front line employees do by delivering superior service.
Because the front line employee plays such a crucial role, the HR policies should be developed
separately for these employees to support them to function as well as possible. Not only are the
front line employees the delivers of the service to the customer, they are also a source of invaluable
information about the customers which can be used to the advantage of the organization and
moreover is very hard to replace. When marketing and HR join forces, an overview can be made of
the specifications and the competences needed for front line employees. Based on this overview the
need for training and development can be mapped out and the development and motivation policies
can be specified to the front line employees in a way that will drastically improve service quality.
Figure 1. Conceptual model of integration Internal Marketing and Human resource Management
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Conclusion
Throughout the years many service organizations have struggled to provide service of a consistent
high quality. The delivery of high quality service is one of the most important organizational goals of
service organization. Through the delivery of high quality service, the organization can create
customer satisfaction and loyalty. The growth and profit of the organization are in direct relation to
customer satisfaction and loyalty. Therefore the service organization should pay close attention to
the quality of the service and continue to find ways to improve this quality if the organization wants
to secure continuity and profit.
High quality service depends for the larger part on the service deliverer: the front line
employee. This employee should posses certain characteristics or competences to be able to provide
top quality service. This employees also fulfills an representative function towards the customer.
When this front line employee manages to deliver a quality of service that lives up to or exceeds the
customers’ expectations, customer satisfaction and therefore loyalty will be created.
To support the front line employee in delivering high quality service, the strategy of internal
marketing must be applied. This strategy aims to improve overall service quality. Internal Marketing
consists of three main parts which are; treating the employees as internal customers, teaching every
employee in the organization to behave as a ‘part time marketer’ and the use of information systems
to be able to use all the available knowledge an information throughout the entire organization.
In this strategy of internal marketing, Human Resource Management plays a large role.
Without the right employees, right training and motivation, no excellent service can be delivered. HR
practices also focus on the competences of the employees and ways to deploy and develop these
strong points of the employees.
As for the research question: ‘To what extent can Human resource Management be deployed
to support Internal Marketing to secure consistent high quality service delivery?’, the answer
inevitably will be that to deliver consistent high quality service, the service organization should
develop and maintain a close cooperation between the Human Resource practices and the Internal
Marketing strategy. The HR department should do its utmost to develop training and motivation of
the front line employees specifically to serve their needs and to make them better service deliverers
and maintain their level of service quality. Where the strategy of internal marketing stops, HR
practices continue and together they can drastically improve the service quality of the organization,
and therefore make a substantial contribution to the achievement of organizational goals of service
organizations.
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Discussion
As was stated in the introduction, many papers have been written about internal marketing and
many about HRM, but very few papers actually cover the combination or cooperation between both
disciplines. I have attempted to bring these important departments in service organizations closer
together. Hopefully, this paper will make a small contribution to the closing of the gap between
disciplines that need to work closely together.
For this paper a selection of articles has been utilized which have been written many years
ago. This might cause a somewhat old fashioned view on certain topics. However, these articles
might be a bit older, they are still the foundation on which further research in this field has been
build. Also, I used other, more modern articles to compensate for and be up to date with the most
recent academic developments.
Not all of the articles used for this paper have been published in highly regarded journals.
Also, some of them come from journals which are not directly related to the topic of the paper, but
were still a contribution since they for example did touch the subject of internal marketing or the HR
practices in other industries. However, some of the knowledge from these papers has been used to
apply to service organizations in general, while they were specified to a certain sector. Nevertheless,
I belief that some of these basic principles or concepts can be applied in every service organization,
or perhaps even in every organization in general.
In this paper I have focused on the training and motivation part of the HR practices. Of
course HRM encapsulates many more functions than these two, but based on the literature I have
focused on these elements, and left out for example the practice of selection. Naturally, selection
plays a critical role in finding the right employees for high quality service delivery, but since this is
such a broad topic with many facets, I have left this part of HRM out of this paper. I recommend that
future research will take a close look at the role selection and other HR practices play in the process
of high quality service delivery. Also , I recommend future research to look beyond the literature and
conduct actual field research within service organizations, to see if these theories are utilized and if
they result in the outcomes the theories predict.
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