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Research Project on Hotel Employees Satisfaction

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Research Project on Hotel Employees Satisfaction Powered By Docstoc
					     ISM 270
Service Engineering and
      Management
Lecture 4: Service Quality
        Max Maximilien
Research Staff Member
IBM Almaden Research Center
Almaden Services Research group
12+ years experience in software research,
architecture, design, and implementation
Research interests in SOA, Web services,
mashups, OOD/P, SE, and Agile methods
Ph.D. in computer science from NC State
University, Raleigh
             Announcements
 Project   on web
     Due 13 Feb
 Homework      files
     Make sure you get confirmation from
      Geoff/me
              Algorithm for Project
   Traveling Salesman-type problems very
    common in services
       Delivery of goods
       Mail routes
       Sales tour
   Standard problem:
       Given the distance between each city pair, visit all N
        cities in some order, ending back at the base
         • Objective: Minimize total distance traveled
               Traveling salesman
   Standard problem is very difficult to solve (NP –
    complete)
   We will use the Clarke-Wright Algorithm (page 499 of
    text)
   C-W algorithm intuition:
       Start with the path that returns to base between every node
       Add links between nodes instead of returning in order of distance
        gained
       Stop when no gain can be made
   Note: This is a good heuristic
       Performs well in practice, but not guaranteed to find the best
        solution.
Service Quality
       Learning Objectives
   Describe the five dimensions of service
    quality.
   Use the service quality gap model to
    diagnose quality problems.
   Illustrate how Taguchi methods and poka-
    yoke methods are applied to quality design.
   Perform service quality function deployment.
   Construct a statistical process control chart.
   Develop unconditional service guarantees.
   Plan for service recovery.
   Perform a walk-through audit (WtA)
            Key question
 How to we ensure that our customers are
 having a good experience?
       Customer Feedback and
           Word-of-Mouth
   The average business only hears from 4% of their customers who
    are dissatisfied with their products or services. Of the 96% who do
    not bother to complain, 25% of them have serious problems.

   The 4% complainers are more likely to stay with the supplier than
    are the 96% non-complainers.

   About 60% of the complainers would stay as customers if their
    problem was resolved and 95% would stay if the problem was
    resolved quickly.

   A dissatisfied customer will tell between 10 and 20 other people
    about their problem.

   A customer who has had a problem resolved by a company will tell
    about 5 people about their situation.
         Moments of Truth
 Each  customer contact is called a moment
 of truth.

 Youhave the ability to either satisfy or
 dissatisfy them when you contact them.

A service recovery is satisfying a
 previously dissatisfied customer and
 making them a loyal customer.
    Dimensions of Service Quality
 Reliability: Perform promised service dependably and
  accurately. Example: receive mail at same time each
  day.
 Responsiveness: Willingness to help customers
  promptly. Example: avoid keeping customers waiting for
  no apparent reason.
 Assurance: Ability to convey trust and confidence.
  Example: being polite and showing respect for customer.
 Empathy: Ability to be approachable. Example: being a
  good listener.
 Tangibles: Physical facilities and facilitating goods.
  Example: cleanliness.
 Perceived Service Quality
  Word of         Personal         Past
   mouth           needs         experience




Service Quality   Expected     Service Quality Assessment
 Dimensions        service    1. Expectations exceeded
   Reliability                   ES<PS (Quality surprise)
Responsiveness                2. Expectations met
  Assurance       Perceived      ES~PS (Satisfactory quality)
   Empathy         service    3. Expectations not met
   Tangibles                     ES>PS (Unacceptable quality)
               Service Quality Gap Model
                            Model
        Service Quality Gap Customer
         Customer               Customer Satisfaction
                                      GAP 5
          Perceptions                                        Expectations

Managing the                                           Customer /        Understanding
 Evidence                                           Marketing Research   the Customer
               Communication
                  GAP 4                                  GAP 1
                                                                   Management
    Service
                                                                   Perceptions
    Delivery                                                       of Customer
                                                                   Expectations
                  Conformance
                                                        Design GAP 2
                    GAP 3
        Conformance                                                Service Design
                                    Service
                                   Standards
    Quality Service by Design
 Quality in the Service Package
    Budget Hotel example
 Taguchi Methods (Robustness)
    Notifying maids of rooms for cleaning
 Poka-yoke (fail-safing)
    Height bar at amusement park
 Quality Function Deployment
    House of Quality
Classification of Service Failures
 with Poka-Yoke Opportunities
       Server Errors                   Customer Errors
Task:                             Preparation:
   Doing work incorrectly           Failure to bring necessary
Treatment:                          materials
  Failure to listen to customer   Encounter:
Tangible:                           Failure to follow system
  Failure to wear clean             flow
  uniform                         Resolution:
                                    Failure to signal service
                                    failure
        House of Quality
                                                                                                                Relationships

                                                                                                                    *   Strong

                                                                                                                        Medium

                                                                                                                    O   Weak
         Relati ve

                                                           O          O
                                                       *                         *                                  Customer Perc eptions
                        Servic e Elements




                                                                                     Informatiion
                                                                                                                    o Village Volvo




                                                                                                    Equipment
                     Im
                        po




                                                                      Capacity
                                            Training
                          rta




                                                           Attitude
                              nc
                                 e
                                                                                                                    + Volvo Dealer

Customer Expectations                                                                                           1 2 3 4 5
 Reliability                           9      8                                        5               5            + o
 Responsiveness                        7      3                        9                3              2                 o   +
 Assurance                             6      5             9                          6                            +          o
 Empathy                               4                    7                                                       +          o
 Tangibles                             2      2                                                        3        +                  o

                                       +
                                                           o                          o
Comparison with Volvo Dealer                  o                                                        o
                                       _                               o


Weighted score                              127 82                    63 102                        65
Improvement difficulty rank                    4            5          1               3             2
     Achieving Service Quality
 Cost   of Quality (Juran)

 Service   Process Control

 Statistical   Process Control (Deming)

 Unconditional    Service Guarantee
            Costs of Service Quality
                           (Bank Example)
   Failure costs               Detection costs             Prevention costs
External failure:          Process control         Quality planning
 Loss of future business     Peer review            Training program
 Negative word-of-mouth    Supervision             Quality audits
 Liability insurance       Customer comment card   Data acquisition and analysis
 Legal judgments            Inspection                   Recruitment and selection
 Interest penalties                                 Supplier evaluation

Internal failure:
   Scrapped forms
   Rework

Recovery:
  Expedite disruption
  Labor and materials
Service Process Control
                         Customer
                           input                         Service
                                                         concept


                         Service             Customer
Resources                                     output
                         process




              Take                     Monitor           Establish
            corrective             conformance to       measure of
              action                requirements        performance


       Identify reason
             for
      nonconformance
Control Chart of Departure Delays
Percentage of flights on


                           100
                                                      expected
                           90
                                           Lower Control Limit
         time




                           80

                           70

                           60
                                 1998          1999



                                p (1  p                     p(1  p
                    UCL  p  3                  LCL  p  3
                                    n                           n
 Unconditional Service Guarantee:
          Customer View
 Unconditional  (L.L. Bean)
 Easy to understand and communicate
  (Bennigan’s)
 Meaningful (Domino’s Pizza)
 Easy to invoke (Cititravel)
 Easy to collect (Manpower)
 Unconditional Service Guarantee:
       Management View
 Focuses   on customers (British Airways)
 Sets clear standards (FedEx)
 Guarantees feedback (Manpower)
 Promotes an understanding of the service
  delivery system (Bug Killer)
 Builds customer loyalty by making
  expectations explicit
          Customer Satisfaction
 All   customers want to be satisfied.

 Customer    loyalty is only due to the lack of
  a better alternative

 Giving  customers some extra value will
  delight them by exceeding their
  expectations and insure their return
        Walk-Through-Audit
 Service   delivery system should conform to
  customer expectations.
 Customer impression of service influenced
  by use of all senses.
 Service managers lose sensitivity due to
  familiarity.
 Need detailed service audit from a
  customer’s perspective.
                       Severity      Perceived          Psychological      Tangible         Psychological
                         Of           Service             -empathy         -fair fix        -apology
                       Failure        Quality            -apology         -value add        -show interest
            Service                             Provider                                Fair
            Failure                             Aware of                             Restitution
            Occurs                               Failure




                            Service                                                            Follow-up             Loyalty
                                                                Service                         Service
Patronage                   Recovery                                                                                 Satisfaction
                                                                Recovery                       Recovery
                            Expectations                                                                             Retention




                      Customer      Service            Speed of         Frontline               Tangible
                      Loyalty       Guarantee          Recovery         Discretion            -small token



                      Pre-recovery Phase                Immediate Recovery Phase                   Follow-up Phase




               Service Recovery Framework
    Approaches to Service
         Recovery
 Case-by-case addresses each customer’s
  complaint individually but could lead to
  perception of unfairness.
 Systematic response uses a protocol to
  handle complaints but needs prior
  identification of critical failure points and
  continuous updating.
 Early intervention attempts to fix problem
  before the customer is affected.
 Substitute service allows rival firm to provide
  service but could lead to loss of customer.
              Discussion
 What are the advantages and
 disadvantages of delivering high service
 quality, when the service is delivered by
 web or information systems?
The Service Encounter
    Chapter 7 Learning Objectives
   Use the service encounter triad to describe a
    service firm’s delivery process.
   Discuss the role of organizational control
    systems for employee empowerment.
   Prepare abstract questions and write situational
    vignettes.
   Discuss the role of customer as coproducer.
   Describe how elements of the service profit
    chain lead to revenue growth and profitability.
The Service Encounter Triad

                   Service
                 Organization


    Efficiency                   Efficiency
     versus                        versus
    autonomy                    satisfaction



     Contact
                                 Customer
    Personnel     Perceived
                   control
    The Service Organization
 Culture
    ServiceMaster (Service to the Master)
    Disney (Choice of language)
 Empowerment
    Invest in people
    Use IT to enable personnel
    Recruitment and training critical
    Pay for performance
       Organizational Control
Beliefs       To           Core values Identify core
Systems       contribute   & mission values

Boundary      To do right Specify and   Risks to be
Systems                   enforce       avoided
                          rules
Diagnostic    To achieve Build clear    Critical
Control                   targets       performance
Systems                                 variables

Interactive   To create    Encourage    Strategic
Control                    learning     Uncertainties
Systems
         Difficult Interactions with
                 Customers
Unrealistic customer expectations Unexpected service failure
 1. Unreasonable demands            1. Unavailable service
 2. Demands against policies       2. Slow performance
 3. Unacceptable treatment of      3. Unacceptable service
    employees
 4. Drunkenness
 5. Breaking of societal norms
 6. Special-needs customers

           Use scripts to train for proper response
Service Encounter Success
         Factors
Customer         Service Provider
               Human          Machine
           Employee selection     User friendly
           Interpersonal skills   Verification
 Human     Support technology     Security
           Engender trust         Easy to access
           Easy to access         Compatibility
           Fast response          Tracking
 Machine   Verification           Verification
           Remote monitoring      Security
Employee Perceptions of Customer
    Service at a Branch Bank
    Outstanding            6

               Custom er   5

                           4

                           3

                           2

        Terrible           1
                               1      2   3     4    5        6
                           Terrible                      Outstanding
                                          Employee
Satisfaction Mirror

              More          More Familiarity with
              Repeat        Customer Needs and
              Purchases     Ways of Meeting
                            Them
       Stronger Tendency    Greater Opportunity
       to Complain about    for Recovery
       Service Errors       from Errors

Higher Customer                             Higher Employee
Satisfaction                                Satisfaction
            Lower Costs     Higher Productivity


           Better Results   Improved Quality
                            of Service
                                                   Is attitude emphasized?
                                                   Are job previews utilized?
                                                   Are customers screened?



      Are employees                                   Careful Employee
      encouraged to                                 and Customer Selection
      refer friends?                                                                                   Is training for job and life?
                                                      (and Self-selection))
      Are referrals from                                                                               Is it an important element
      the “best” employees                                                                             of quality of work life?
                                  Employee                                          High-Quality
      given priority?
                                 Referrals of                                         Training
                                 Potential Job
                                  Candidates
Is satisfaction
measured                                                                                                       Do they reflect
                                                                                         Well-Designed         needs of the
periodically?
                                                                                         Support Systems       service encounter?
Are measurements              Satisfied                     Cycle                         Information
                             Employees                  of Capability                     Facilities          Are they designed to
linked to other
functions on                                                                                                   foster relationships?
the cycle?

                                  Appropriate                                       Greater Latitude
                                    Rewards                                              to Meet
                                  and Frequent                                      Customer’s Needs       Does it reflect top
      Are they linked to           Recognition                                                             management “talk”?
      service objectives?
                                                         Clear Limits on,                                  Is it enough to allow
      Are they balanced                                  and Expectations                                  delivery of results to
      between monetary                                    of, Employees                                    customers?
      and non-monetary?
                                                 Do they limit the “right” risks?
                                                 Are they logical to employees?
       Service Profit Chain

                Internal                                                       External
        Operating strategy and                  Service
                                                concept                       Target market
        service delivery system

                 Loyalty
                                                                              Customers                       Revenue
Satisfaction                                                                                                  growth
                           Productivity
                               &                  Service
               Employees                                            Satisfaction        Loyalty
                             Output                value
Capability                   quality
                                                                                                             Profitability

                 Service
                 quality

   Customer orientation/quality emphasis   Quality & productivity    Attractive Value      Lifetime value
   Allow decision-making latitude          improvements yield        Service designed      Retention
   Selection and development               higher service quality    & delivered to        Repeat Business
   Rewards and recognition                 and lower cost            meet targeted         Referrals
   Information and communication                                     customers’ needs
   Provide support systems                                           Solicit customer
   Foster teamwork                                                   feedback

				
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