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The Organizational Agenda Four Seasons 1 The OB Connection • The Services Angle – Given the greater likelihood of human interactivity, internal experiences of employees are more likely to be visible to the consumers. • What do employees experience? – Climate = the perceptions/sense that employees have about what is important to the firm/institution? • drivers: boss, peers, HRM practises, marketing, operations, etc. – Culture • more intangible than climate • Shared values about what is right/wrong, what works/doesn’t P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 2 The Organizational Agenda • The three tiers in a service organization – customer – boundary – coordination • Points to Ponder – what are the capabilities to be developed in the frontoffice and front-office personnel? – does the organization provide the necessary inputs and incentives for successful performance by frontoffice personnel? – what are the drivers of employee satisfaction? P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 3 The HRM Agenda • Mission –From: • Equipping employees to perform/meet the requirements of the job –To: • Ensuring employees are capable of meeting the expectations of consumers P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 4 What Makes Employees Tick? • Basic needs – Security – Esteem – Justice/Fairness • Rewards – Monetary = economics of compensation – Non-monetary = the social contract between employee and the institution • conflict between monetary and non-monetary (reward countable, tangible behaviors only) • the relative importance of monetary versus non-monetary conflicts • Performance = input (selection) + context (support) + rewards (internal and external) P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 5 Beyond an Internal Conception of HRM • The employee in many instances is the “service” in the eyes of the consumers – Quality Control • Selection, Training • Rewards and Retention • The HRM Spillover effect – Employee satisfaction influences consumer satisfaction • “Experience” goods imply a need for quality signals – Employee morale – Physical Landscape • Do unto consumers, as the Firm does to You – OCBs • Point to Ponder: – When should we use the Customer as the Judge and not the supervisor (or pre-defined rules and procedures)? P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 6 Some Interesting Correlations • When employees perceive strong culture, customer report receiving superior service quality • Strong service culture plus support (managerial actions, logistics and systems support, communications, etc.,) correlate with lower stress indicators at the job level and higher job satisfaction • Possible to have both types of correlations (positive as well as negative) between various indicators of organizational effectiveness (customer satisfaction, financial performance, etc.,) and service culture P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 7 The Loyalty Premium: Employees P4 Sept/Oct -2003 Services Marketing – Professor V. Padmanabhan 8