Factors Determining Perceived Service Quality in the Hospitality Industry - Essay Example

? Factors determining perceived service quality in the hospitality industry and Human resource tools to improve them. Executive summary The hospitality industry is directly dependent upon its workers for customer satisfaction. Thus it is vital for the management of a iihotel to plan to keep both its employees and customers satisfied. For that the human resource department can use various people management tools. The following reports gives an insight into factors which determine customer and employee satisfaction. These factors are justified on both empirical and theoretical grounds. This is followed by suggestions and recommendations of the best practices of the hospitality industry which are commonly practiced to increase customer satisfaction. Writer: HardeepKaur Mann – M00318673 Module tutor: SebastionFusch Submission date: 7th March 2011 Word account: 3941 (exclusive table of content and list of references) Table of contents 1) Introduction ___________________________________________________3 2) Importance of transformational leadership and how it can be improved for better service quality _________________________________________________ 5 3) Training and development_______________________________________ 7 4) Maintenance of diversity_________________________________________ 8 5) Employee task control ___________________________________________9 6) Job design ____________________________________________________ 10 7)Other employee characteristics_____________________________________ 10 8)Effective resourcing ____________________________________________10 9) Performance appraisals and corrective measures ______________________11 10) Courtesy and customer orientation________________________________13 11) Employee welfare, safety and benefits_____________________________13 12) Remuneration and rewards ______________________________________15 13) Getting the best from employees and removing stressors _______________15 14) Causes and consequences of turnover_______________________________16 15) Developing a positive work environment ____________________________16 16) Conclusion _____________________________________________________17 17) References _____________________________________________________18 Introduction The service industry is the core industry of most developed countries, hence it is extensively researched. The economy of advanced countries is dominated by services which contribute to up to 70% of their economy. (Ostrom, 2010).It is unanimously agreed that all industries are customer driven but it is these selection of services about which customers are the most particular and drivers of optimum service and customer satisfaction lead to the most growth and success. Thus service organizations worldwide are shifting their focus to service quality as a priority to carve a niche in the current competitive environment. This allows for differentiation and sustainable global advantage in the market place. (Gounaris,2003) The hotel industry is no different and the customers judge the service according to perceived service quality. This perceived service quality is in turn determined by many indicators which include assurance, empathy, reliability, responsiveness and other tangibles. These are the five service quality dimensions which are based upon the Golden rule. (Jac Fitz-enz)Other factors which determine perceived service quality are communications, human resource and employee management standards and employee attitudes.(Snipes,2005). Thus all employee improvement tools that lead to employee satisfaction and affective commitment can mediate the relationship between service culture and customer perceived service quality. (Hung Trong Hoang, 2010). These employee tools have to affect the five service quality dimensions either directly or indirectly to have a positive effect on the hotel. It should also be noted that different subsets of customers have different notions about service quality and thus a variety of service standards must be met for customer satisfaction. (Shannon Anderson,2008). The customer may want the most responsive staff, the best facilities and the staff attitude to go with them. This is particularly true in case of the hotel industry where the customer base is extremely diverse as they belong to different cultural and ethnic backgrounds, their language, lifestyles and expectations are all very different and therefore the service satisfaction drivers have to be of international standards adjusting to global differences. Another service satisfaction indicator in hotels is personal relationships between service employees and customers. They may greatly impact perceived quality as they could enhance authentic understanding and avoid uncooperative behaviour between two parties (Bitner,1994). Since the effect on the five quality dimensions is essential for effective HR, thus a view at these dimensions is necessary. They include 1) Empathy This is the caring and personal attention that the hotel can provide its customers. 2) Tangibles The presence of physical facilities, human resources, the right equipment and the right personnel will greatly determine the effect on hotel guests. 3) Reliability This is the ability of the hotel to provide the desired services dependably and accurately. 4) Responsiveness It is the willingness to perform prompt service. 5) Assurance Assurance is the ability and courtesy of employees to convey trust and confidence. Now with an overview of all factors which determine perceived quality, the hotel industry will be analysed specifically and all possible ways in which factors determining perceived quality can be improved will be discussed. Human resource management is extremely important for the hotel industry as it stands or falls on the staff it employs. There is an insatiable growth potential in the hospitality industry but growth is dependent upon customers standards of satisfaction which have to be met. Human resource management can deploy numerous tools to raise this perceived quality. Importance of transformational leadership and how it can be improved for better service quality It has been proven that retention of customers is dependent upon perceived service quality which has been directly linked to transformational leaderships in employee groups. For a five star hotel chain relationship marketing to establish, develop and enhance long term relationships is essential as most of its services revolve around service relationships.(Colgate,2000) An empirical view further reinforces these different factors of perceived customer satisfaction. A recent study included a survey with adhoc or temporary customer groups which were formed for one-time group experience. Rafting and soccer groups were chosen and the impact of transformational leadership on the group was questioned. The focus of the study was on different roles and their impacts on individual customers. The results indicated that satisfaction with formal and informal leaders influences the perceptions of services in a positive way. (Volker G Kuppelwieser,2010)These findings are very important for managers of service operations who should acknowledge that emergence of informal leaders from a group of customers is extremely important and they should know how to manage this to positively influence customer satisfaction dynamics. Transformational and charismatic leadership increases the intrinsic motivation of employees by linking goals and efforts and thus increase other employees self efficacy internalization of group values and enjoyment in task or role. (Bono,2003)Transformational leaders also imbibe confidence in followers by the way they delegate tasks and thus indirectly have a positive impact of the quality of services provided by their subordinates. (Shamir) Another focus of the argument for the need of great leadership comes from Isaken's(Isaksen,1983)argument which states the leaders ability to trust and emphatise works wonders for employee's morale and self esteem and thus they are able to perform their relationship and service oriented roles in a batter way, leading to customer retention. (Hui Liao,2007) The acquisition of this transformational and charismatic leadership is the job of the Human resource department. While recruitment and hiring procedures, the hotel Hr department must ensure that they filter all candidates and select those with appropriate leadership qualities and hire them in the right numbers. The maintenance of the correct number of leaders in the organization and staff is extremely important as too many leaders will cause conflict of opinion and too less will lead to power and authority being retained in a few hands. The HR department should also search for such transformational and guiding leaders with empathy from the unemployed pool by looking for people who have worked in the hospitality or other service industries previously and design measures to attract them to the hotel. Since employees make up a crucial part of the service industry thus the managers, the leaders and those with authority have to be carefully chosen. Measures for carefully and rightly choosing them include making them sit through a series of interviews, some of which should be quite rigorous. These and other stress interviews will determine whether the future employee can handle difficult conditions and can provide services courteously even when under stress. Other measures to ensure that the leading candidate is apt for the motivation providing job is through training and development and by teaching him how to treat subordinates. Training and development Other factors such as responsiveness, communication and service standards can be improved by training and development of all employees. The first way to achieve this training is to provide on-job and off-job training to all new employees. This orientation will help build confidence in employees and teach them how to do their jobs adequately. For example a junior chef should be asked to only observe in the main kitchen before starting to work or a practice program for all new waiters to get acclimatized to serving customers in style. (Dessler,2009) The other way to provide training to existing employees is to request them to fill a self evaluation form. This evaluation form will be assessed by the Human resource department and the needs of each employee will be identified. Training will then be deployed to employees formally in areas where it is needed. Training and development needs have to be fulfilled by the existence of a formal training system and the hotel management needs to realize that a minimum number of hours per employee should be devoted to every employee for training. This training need not be specific and related to core job competencies but should also be related to motivational and self esteem issues. Boosting an employee's morale is directly linked to higher job satisfaction and thus better performance. This recommendation is justified both on theoretical and empirical grounds. A significant relationship was found between employee training and their performance in the hotel industry in Pakistan. A study of the Pearl continental hotels showed that employees who had spent more time on training performed better than their non-trained counterparts. (Fakhar Ul Afaq,2010). Since it was discussed previously that employee performance, responsiveness and empathy is directly related to service quality, thus provision of adequate training is a tool that can be employed. Maintenance of diversity The other recommendation is maintenance of diversity in the employee pool. It is a result of many researches that if a company maintains a diversity-friendly work environment and the leaders demonstrate a visible commitment to diversity than employee and customer perception of the firm engaging in fair HR practices is reinforced. (Patrick F. McKay, 2010) A survey in October 2006 by McKay, Avery, Liao, & Morris showed that interactive effects of diversity climate increase customer satisfaction by up to 2%. (Patrick F. McKay,2010) Another reason for being pro-diversity is the fact that five star hotels serve customers from diverse background, different countries and different ethnic groups. An inclusion of minorities, different nationalities and diverse backgrounds in the workforce provide advantages in two different aspects. Firstly it becomes easier for the existing workforce to understand cultural diversity and overcome global barriers due to cultural differences easily as they have colleagues who come from different backgrounds too. Besides that it portrays a positive image of the hotel in the eyes of the customers as being tolerant and accommodating. The inclusion of diversity in the workforce can be ensured during the selection, hiring and the recruitment process. Minorities and people from diverse ethnic background should be encouraged to apply. It should be maintained and regulated that the workforce has a fixed minimum number of minority and different people in the workforce. Disabled and special needs people should also form a fixed number of employees in the workforce. This people management tool will ensure that the hotel has the image of an organization practicing corporate social responsibility. A point which should however be realized is that its is integral for the managers and all other employees to have the knowledge of diverse backgrounds. Besides that they should have cultural awareness and possess enough sensitivity to deal with their culturally different counterparts and guests. Employee task control Another dimension of customer satisfaction originating from employee behavior is employee task control. Customers perception of service can be both positively and negatively affected by employees behavorial responses. (M. B. Bitner,2003). Another qualitative research (Nor Azila Mohd Noor,2009) shows that customers are more satisfied with the service encounter when the employees possess willingness, ability and competency to solve their problems. Employee performance improves considerably when they have the authority and some discretionary power towards the job which they are doing and thus it should be ensured that the job structure and description is modified to adjust employee preferences. Another way which has been used by hoteliers to improve service quality is the adoption of customer orientation in its front liners. (Kim,2002) The provision of authority will need a change in the job design by the HR management. Personnel should be given some freedom to mould their jobs as needed and develop an organic environment where changes are possible. They should be provided with limited freedom and independence and they should be completely credited for the visible outcomes. This again raises employee morale and job satisfaction and this in the employees particularly front liners transfers this satisfaction in the customers. Job design As for the development of customer orientation, the job design should be changed to encourage motivation. This should come from a single employee performing a variety and a range of jobs to provide him with substantial freedom and discretion. Front liners should also be provided with whole pieces of work so that they can identify themselves with the outcomes. Last but not the least they should be given appropriate feedback on the results of their performances. (Nor Azila Mohd Noor,2009). Only in this way the employees will be able to give priority to customer preferences over their own needs. Other employee characteristics Another determinant of positive perceived service is employees extraversion and agreeableness. Research has depicted a positive relationship between extraversion and the job performance of groups in pro-social occupations like the hotel industry. Employees who are more extroverted deliver higher performance. (Hui Liao,2007). Similarly people who are more agreeable obtain more acceptance from other people. Thus agreeable employees are better at helping and serving customers. Agreeableness was also positively and strongly related to customer service orientation (Frei,1998) To ensure agreeableness and extroversion in employees, job candidates should be made to go through performance tests such as the Myer-Briggs personality indicator. There personality types must be assessed and front liners with an agreeable and extroverted personality must be recruited. Effective resourcing Thus effective resourcing of hospitality workers should be done. Maintenance and regulation of quality circles is also a common practice for positive portrayal of quality. They are based upon a working group of volunteers who work on McGregor's theory Y. It believes that people are willing to participate and solve their problems. Frequent meetings of these groups lead to an understanding of recurrent problems and brainstorming leading to solutions. (Michael J. Boella,2005) Another tool that the Human resource management should use is proper job designing. The HR department should ensure that a proper job description is provided to every candidate who undertakes a job. This should include a list of jobs, duties and responsibilities he should perform. Besides that a clear indication of how each job factor will be measured should also be provided. Ergonomics should also be used to facilitate job design. (Michael J. Boella,2005). These tools are extremely important as they transfer clear job knowledge to the employees and they know where and why they could be held accountable for under-performing. This also serves to motivate the employees who get a sense of importance from an entire list of jobs that have to be completed by them and thus efficiency and effectiveness in serving the customers is achieved. A different approach to job design is management by objectives. It integrates the hotel's principle targets with the managers own aspirations. It requires the establishment of a list of objectives and then develops a plan to achieve these objectives. Also included is a plan to monitor the progress. This feedback resultant mechanism and management by one's own objectives leads to superior employee performance and thus customer satisfaction. Performance appraisals and corrective measures Another human resource tool which is very frequently deployed for satisfied employees and thus satisfied customers is performance appraisals. Performance appraisals are normally processes which take place with regular intervals. This can only be done if the employee has been given a clear job description and he will be evaluated depending upon the benchmarks set in the job requirements. Once the employee has clear cut information about his job, two different kinds of performance appraisals can take place. The first one is the self appraisal where the employee can rate his own self and the second one where he is appraised by a superior or colleagues. This part of performance management not only determines pay and reward systems but also helps develop a plan for correcting any deficiencies and solve problems. Performance appraisal provides an insight to employees about their shortcomings and also serve as a career planning tool both for the hotel management and the employee. Removal of any problems from performance appraisals can lead to efficient and streamlined functioning of the hotel chain and thus higher customer satisfaction is guaranteed. Besides that it also develops a rapport and an understanding between a manager and his subordinate thus leading to better communication and organizational synergy. (Dessler,2009) Appraisals have to be realistic and honest. Supervisors when performing appraisals should be instructed to be unbiased in their assessment of their subordinates. It will also be the responsibility of the HR department to ensure that the policies and the frameworks regarding appraisals are correctly defined. They will also be responsible for preparing detailed forms which are going to be used in appraisals and evaluations. The Human resource department will also be responsible to train the supervisors to improve their appraisal skills and should monitor the appraisal systems effectiveness to ensure that it complies with laws, rules and regulations. The performance appraisal will be followed by a feedback and an evaluative measure which will expose employee weaknesses and strengths. Some of these weaknesses will need to be correct or removed and for that the human resource department will have to design corrective mechanisms and ensure their implementation. Corrective measures will have to be clearly described. For example supervisors should be told that negative reinforcement should be the first corrective measure followed by overtime and subsequent measures will be followed by an eventual firing or termination. Courtesy and customer orientation As the management has the complete right to expect that the employees and the customers will follow a code of conduct, similarly employees and customers are not wronged in expecting a few things from the hotel. Firstly the hotel should have a frontline staff who deals with both employees and customers to be extremely courteous. Thus courtesy, politeness and responsiveness are the main people management tools used to improve the hotels perception. As mentioned before customer orientation should also be a pre requisite for all employees. A cliche in the service industry which also holds true for the hospitality industry is that "the customer is always right". This is a philosophy to stick by because of a huge reason called customer retention. It is easier to retain a customer than to gain a new one and an unsatisfied customer can cause negative publicity for the hotel. Thus all employees should be trained to tend to the customer and fulfill his needs and demands even when his demands pester. This can specially be true in case of difficult clients who have a habit of complaining. Another reason why the customer should be served in such circumstances is that arguments with the customer will present a negative image of the hotel to other guests and onlookers and would deter them from using the hotels services. Thus in order to encourage more guests to use the hotels arguments with present customers should always be avoided and if they are inevitable, it should be ensured that they are done away from public sight. Employee welfare, safety and benefits The positive correlation between employee and customer satisfaction has been emphasized multiple times. Employee satisfaction is again determined by the facilities provided to them. Basic rights such a sick leaves, a fixed number of paid leave and health insurance are the right of all employees and these should be provided. Besides that employee welfare association must be present which can motivate and counsel employees in times of need. Remuneration and rewards Since the hotel industry is extremely competitive, attractive remuneration and reward packages should be designed as incentives for the employees. The employees would be extremely motivated to leave if the pay scale of their employer is lower than that of others in the market. Bonuses and other rewards should also be given as well as visible rewards to outstanding employees to encourage them. This is besides the fact that the entire remuneration package should contain health benefits and vacation time. Getting the best from employees and removing stressors The best thing that a manger can do for his employees and his people is that he can get the best out of them. He can motivate them and trigger them to work to their full potential. He should also help polish the skills of all his employees or subordinates by constantly guiding them. By motivation and the usage of full employee potential the manager ensures that the least possible number of people are employed which increase the possibility of better remuneration and higher profits. (Browne,2011) Research has validated that the turnout of having stressors in the work environment has negative consequences. Role ambiguity and role conflict has led to emotional exhaustion.(Karatepe). These stressors have been identified as role conflict, role overload and role ambiguity. This also results in burn out and decreases the quality and effectiveness of employees particularly front line employees which are the most important to hotel success. Research results have also shown that resourcefulness buffers these dysfunctional effects of these stressors. (Nicholas J. Ashill). Thus provision of resourcefulness, clear definition of goals to reduce job ambiguity and moderation of work can reduce burnout and exhaustion in employees. This will also maintain their work satisfaction which is essential for optimum performance. . Causes and consequences of turnover Turnover is a pervasive problem for the hospitality industry and in some cases can be as high a 200 to 300 %. The reason for this is the high demand for skilled workers in the industry. This can again be addressed by employee satisfaction and satisfied employees are less likely to leave the hotel. This can be achieved by fair treatment of employees and reasonable work schedules. The HR department should also address issues which cause dissatisfaction such as a bossy colleague or inadequate transportation. Job security can also be improved and the pay scale should be competitive with reasonable promotions, rewards and incentives. In the current competitive industry it is very difficult but very vital to retain quality employees and besides hygiene factors, motivation factors should also be provided. these include challenging job and provision of responsibility and advancement. These tactics if followed can lead to employee commitment and low turnover. (Michael J. O'Fallon,2010) Developing a positive work environment Research by Karl andPeluchette(Karl)suggested that employees who have fun at the workplace had greater job satisfaction. Additionally satisfied employees provided services which were responsive and empathetic. The concept of workplace fun is being carved to ensure that a positive service climate and customer-oriented culture is developed. Matt Weinsten in his book "Managing to have fun states ""If you want your company to provide excellent customer service, you first have to provide that same kind of attention and appreciation to your internal customers--your own employees.You can't expect your employees to provide "service with a smile" if you don't give them something to smile about!" Thus the development of a positive work environment is essential for satisfied employees. This can be achieved by provision of ample recognition and rewards, company provided food and entertainment which is very feasible for the hotel industry and specific company events. These will create a positive and light hearted work environment and the employees will love to come to work thus working efficiently and improving customer satisfaction. Conclusion Thus in a nutshell, it has been concluded that there are various ways of personnel management which an organization can use. The management need to provide transformational leadership to act as a beacon, guidance and support for employees. Stressors from the work environment need to be removed to create a positive work environment and to ensure that the employees are not exhausted or burnt out. Training and development should also be deployed to employees to ensure that they have the necessary skills for customer service and job related tasks. The employers should recruit a diverse group of employees to create a learning and tolerant environment and design jobs to create effectiveness and efficiency. Similarly clear task descriptions, job roles and responsibilities should be provided. performance appraisals and equivalent rewards and remunerations also motivate employees so does the existence of employee welfare and security measures so these measures should also be undertaken. 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