Chapter 12
Managing customer-contact employees

Understand the importance of customer-contact
employees in creating satisfactory or memorable
customer experiences

Evaluate service-orientated culture in hospitality
companies

Understand the concept of internal marketing and
empowerment in a hospitality context

Identify the sources of conflict for hospitality customercontact employees

Employees play a crucial role during hospitality service encounter
with customers

The behaviour of customer-contact employees creates impressions
of high or poor service quality and is critical to delivering customer
satisfaction

Employees also represent the hospitality brand

Recruiting, training and rewarding employees is a human resource
management function, but marketers need to understand
employment strategies to ensure HR represents brand values and
delivers the service experience promised by marketers to
customers

Human resource managers use marketing approaches to employee
recruitment and retention – this is called internal marketing

W. J. (Bill) Marriott (Snr)’s quotation summarizes the
importance of employees – ‘it takes happy employees to
make happy customers and this results in a good bottom
line’

Customer-contact employees deliver on most dimensions
of service quality: reliability, empathy, tangibles (partly),
responsiveness and assurance

The service profit chain demonstrates the link between
employee satisfaction, service quality, customer
satisfaction and business performance – see Figure 12.1
(Heskett, Jones, Loveman, Sasser and Schlesinger, 1994)
Figure 12.1 The service profit chain





Each hospitality organization has its own culture – its own
DNA
Company culture influence on how employees look after
customers
Company culture means the shared values, beliefs and
assumptions that underpin how the organization
operates, including the way that it treats its customers
and employees
Cultural components are deeply rooted in the
organization’s founding history and recent development
Employees learn organizational culture by observing the
behaviour and messages from head office, the general
manager and other employees
General Manager as role model

Characteristics of successful hospitality GMs vary, the personality, behaviour
and actions of the GM sends powerful signals to the employees and helps to
shape the culture

Employee morale is a reflection of the general manager, and employees
respond to the GM’s leadership
Service myths, heroes and villains

Companies can use examples of extraordinary employee actions in their
advertising to promote their high quality service

Eventually service myths create a dominant service culture personified by
company heroes

Maverick companies might employ characters (notably celebrity chefs) who
are regarded as ‘villains’ and generate publicity – both positive and negative
Support systems

Employees are dependent on effective support systems, human and
technological, to help to deliver appropriate service quality

In hospitality, there is often conflict between front-of-house employees and
back-of-house employees, especially (kitchen/restaurant)




The services marketing triangle (see Figure 12.2) links preencounter marketing, internal marketing and marketing
during the encounter
Promises made to customers in pre-encounter
communications have to be delivered during the service
encounter
Internal marketing recognises competition for best
employees because business success is dependent on service
quality, which is dependent on employees
The following factors support positive employee recruitment
and retention: recruitment, service inclination, service
competence, training, empowerment and reward systems
Figure 12.2 The services marketing triangle
Zeithaml and Bitner, 2003
Recruitment

Societies where tourism is a key industry (e.g. Caribbean), careers in
hospitality are relatively well paid and enjoy high status

Societies where hospitality has low status, pay and prospects, the recruitment
challenge is difficult

Company image/reputation as a good employer helps attract better
employees
Service inclination

Employers seek employees with ‘right service attitude’. Some people natural
aptitude for service; characteristics linked to attitude cannot be taught

A problem for hospitality employers is lack of employees with right service
attitude; if unsuitable employees recruited and service standards not
delivered, customers and other employees will be unhappy
Service competences

Employees need skills and knowledge, called service competences, to be
effective

Historically, hospitality managers had limited education and learnt on-the-job

Today, there are well-established hospitality/tourism education systems which
helps to educate tomorrow’s managers
Training

Hospitality companies have own service culture, operating systems, service
standards

New employees need induction training to know product, service philosophy
and company culture

Best companies provide continuous training and career development
Empowerment

Employees work in boundaries set by companies which set rules about what
employees are allowed to do or not to do

An alternative approach empowers employees to take responsibility for
ensuring customers are satisfied

Empowerment needs to be matched with delegated authority and resources

This approach is more customer focused and motivates employees
Reward systems

Reward systems include pay, bonuses, tips, free meals, discounted
accommodation for live-in employees

‘Intangible benefits’ of hospitality work can compensate for unsocial hours and
lower pay

Intangible benefits include the excitement, fun and teamwork that many
hospitality employees enjoy










Employees can have interpersonal and interorganizational conflicts at
work
Conflict at work can be source and symptom of employee dissatisfaction
Continuous or excessive conflict creates powerful emotional responses,
including stress, for employees
Understanding sources of conflict helps managers to create better
working conditions
Personal/role conflict – employees perform roles at work that might
conflict with their own values, e.g. young people may resent a strict
dress and grooming code
Organizational/customer conflict
Companies have policies, processes and Standard Operating Procedures
to manage employee conduct
Occasionally, customers can make reasonable requests which break the
company’s regulations
Inter-customer conflict
Disputes between customers creates difficult situations for employees –
especially if this happens on a regular basis






Hospitality companies must develop effective
strategies to recruit and retain service-minded
customer-contact employees
Companies use internal marketing to effectively
communicate with employees
Hospitality companies claim to be good employers
The industry suffers from high employee turnover
There is a strong link between employee satisfaction,
service quality, customer satisfaction and business
performance (the service-profit chain)
Each hospitality company has its own culture which
guides customer-contact employees in their
behaviour towards customers











Bitner, M. J., Booms, B. H. and Tetreault, M. S. (1990). ‘The service encounter:
diagnosing favourable and unfavourable incidents’. Journal of Marketing, 54,
pp. 71–84.
Carlzon , J. (1987). Moments of Truth. Harper Collins.
Customer Management. (2000). ‘Towards best practice’. Customer
Management, July/August, pp. 6–11.
Gummesson, E. (2008). Total Relationship Marketing (3rd ed.). ButterworthHeinemann.
Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr. and Schlesinger, L.
A. (1994). ‘Putting the service profit chain to work’. Harvard Business Review,
72, pp. 164–170.
Lashley, C. (2000). Hospitality Retail Management. Butterworth-Heinemann.
Lashley, C. (2001). Employing Human Resource Strategies for Service
Excellence. Butterworth-Heinemann.
Mudie, P. (2000). ‘Internal marketing: a step too far’. In R. J. Varey and B. R.
Lewis (eds) Internal Marketing: Directions for Management (Chapter 15).
Routledge.
Schneider, B. and Bowen, D. E. (1995). Winning the Service Game. HBS Press.
Varey, R. J. and Lewis , B. R. ( 2000 ). Internal Marketing: Directions for
Management. Routledge.
Zeithaml, V. A. and Bitner, M. J. (2009). Services Marketing. McGraw-Hill.
Figure 12.3 Higher and lower customer-contact service contexts
– an example from food service