People, Service and Trust:
Links in a Public Sector Service Value Chain
by Ralph Heintzman and Brian Marson
Are there important but neglected links between three of the most important priorities of
public sector reform?
According to the 2005 IPAC Deputy Ministers survey, human resource modernization,
service improvement, and improving Canadians’ trust and confidence in public
institutions are top public sector challenges. But they may also be linked in ways that
are critical for public managers to understand, and to act on. There is accumulating
research evidence to suggest that ‘people, service and trust’ are linked in a Public
Sector Service Value Chain.
The private sector service-profit chain
Researchers in the private sector have, for over a decade, documented the links
between employee engagement and client satisfaction, as well as between client
satisfaction and bottom line financial results. For example, based on a recent major
study of 100 companies, Northwestern University researchers concluded that:
There is a direct link between employee satisfaction and customer satisfaction, and
between customer satisfaction and improved financial performance. It is an
organization’s employees who influence the behaviour and attitudes of customers, and
it is customers who drive an organization’s profitability through the purchase and use of
its products.
(http://www.performanceforum.org/PFM/pdf/linkingorg_characteristics_to_employee_attit
udes_andbehavior.pdf)
This causal relationship was proposed and documented by, among others, Professor
James Heskett and his colleagues at the Harvard University Business School in their
1997 book, The Service Profit Chain. The simplified Service Profit Chain takes the
following form:
Staff Satisfaction → Client Satisfaction → Bottom Line Profit
Based on Heskett’s research, and their own internal analysis, companies such as
Sears, Delta Hotels, Telus, Taco Bell and IBM have incorporated the Service Value
Chain into their companies’ management strategies and systems.
Five years ago, we posed the question: is there something similar to the ‘service profit
chain’ in the public sector, and if so, what does it look like? Obviously the third element
in the private sector chain (the bottom line) could not be transferred directly to the public
sector. But based on research showing a link between government service outcomes
and Canadians’ rating of overall government performance, we suggested the third
element for the public sector might be trust and confidence in public institutions. So a
public sector service value chain would look like this:
Engaged Employees ↔ Citizens’ Service Satisfaction → Trust & Confidence in Public
Institutions
Emerging public sector research in Canada confirms the concept. A key feature of the
Public Sector Service Value Chain is the performance drivers for each part of the chain,
as shown in Figure 1. This concept of ‘performance drivers’ emerges from Canadian
research on the drivers of service satisfaction, which identified five generic factors that
‘explain’ or ‘cause’ about 75% of the service satisfaction scores for public services.
Researching the chain
The Public Sector Service Value Chain proposes that there are two key links in the
chain: one between employee engagement and Canadians’ satisfaction with public
sector service delivery, and one between Canadians’ service satisfaction and their trust
and confidence in public institutions. What evidence do we have that these two links
exist in practice? Let’s look first at the service-trust link.
The Service-Trust link
The Citizens First 3 and Citizens First 4 studies examined whether service satisfaction
was a driver of citizen trust and confidence. Citizens First 3 found (through structural
equation modeling) that this relationship does exist, that service satisfaction is a strong
driver of trust, and that the link only works in the service-trust direction, not vice versa.
This finding is important, because it indicates that service satisfaction is a cause of
higher trust, not just a reflection of it, as some researchers have suggested. That’s why
the arrow between service satisfaction and citizen trust points in only one direction,
whereas the arrow between employee engagement and service satisfaction points in
both directions.
The Citizens First 3 service-trust model is illustrated in Figure 2.
Based on this first model, Citizens First 4 went on to look for some of the other drivers
of trust and confidence in public institutions, beyond service. It discovered that other
important drivers include perceptions of fair and equitable treatment, and perceptions of
how well public organizations are led and managed (see Figure 4).
The People-Service link
The other link in the chain is between employee engagement and citizens’ satisfaction
with public sector service delivery. This link is thoroughly documented in the private
sector, but research in the public sector is still in the early stages (program outcomes
may be part of this link, for example). However, the public sector data available so far
does confirm the existence of this relationship. For example, a study commissioned by
Treasury Board Secretariat from the SQM Group (which surveys over 200 client contact
centres each year for both staff satisfaction and client satisfaction) confirms the strong
link between staff and service satisfaction in public sector call centres, as shown in
Figure 3.
More research needs to be done to document the relationship between employee
engagement and service satisfaction in a wide range of public organizations, and interjurisdictional research is already in the planning stage.
The drivers of performance
The Public Sector Service Value Chain is composed of three key building blocks:
Employee Engagement, Service Satisfaction, and Trust in Public Institutions. If we can
determine the main performance ‘drivers’ for each of the three outcomes, then public
managers would be in a position to focus on those drivers, to improve performance
along each part of the Public Sector Service Value Chain.
Service Satisfaction
As already noted, we know a lot about the drivers of public sector service delivery
performance in Canada. The main generic drivers are:
§
Timeliness
§
Outcome
§
Knowledge
§
Courtesy and extra mile, and
§
Fairness.
These five service drivers account for about 75% of service satisfaction for most public
sector business lines. They do vary somewhat by service channel, and service type, as
summarized in Citizens First 4 (Phase 5, 2005).
Employee Engagement
The drivers of employee engagement (defined as a combination of staff satisfaction and
staff commitment) are still being documented. But candidates so far (Erin Research
2006) include:
§
Support for the goals and mandate of the organization
§
Effective leadership and management
§
Supportive colleagues and work unit
§
Tools, authority and independence to do the job
§
Career progress and development, and
§
Workload.
Building on research currently underway led by the governments of Canada, Ontario,
Manitoba, BC, and Peel Region, it is anticipated that the drivers of employee
engagement across the public sector will become clearer and more defined during the
year ahead.
Public Trust and Confidence
Through the Citizens First 3 and Citizens First 4 work, we now know that service
satisfaction is one of the drivers of citizen trust and confidence in public institutions and
the public service. The drivers for ‘trust in the public service’ identified by Citizens First 4
in 2005 (see Figure 4) include:
§
Strong services
§
Perceived service quality
§
Satisfaction with recent service
§
Benefit of services to citizens
§
Equal and ethical treatment, and
§
Perceptions of strong public service leadership and management.
This is a very complex area of research, on which there is a growing theoretical and
research literature around the world. Many other contributing factors remain to be
identified, and their contribution weighed. But Canadian research is leading the way,
and has strongly confirmed the role that service satisfaction plays in strengthening
confidence in the public sector.
Conclusion
Evidence is mounting to confirm the existence of a Public Sector Service Value Chain,
highlighting important links between employee engagement, service satisfaction, and
trust and confidence in public institutions. Research underway among several
jurisdictions should continue to document the nature and strength of these relationships
in the months and years to come.
These findings are exciting for public managers, because they show the critical links
between several of the most important priorities of public sector reform: human
resources modernization, service improvement, and strengthening trust and confidence
in public institutions. They also give public managers important tools to improve
outcomes in each of these key areas. By focusing on performance ‘drivers’ in each of
the three main components of the Public Sector Service Value Chain, public managers
can use these findings to make significant improvements both in their own work, and in
the overall performance and perception of the public sector. Moreover, the research
suggests that even the everyday tasks of people management and leadership can have
a positive downstream impact on Canadians’ trust and confidence in public institutions.
Ralph Heintzman is Senior Research Fellow, Faculty of Social Sciences at the
University of Ottawa (rheintzm@uottawa.ca). Brian Marson is Senior Advisor, Policy
and Service Transformation, Treasury Board of Canada Secretariat, and Senior
Advisor, Office of Public Service Values and Ethics (marson.brian@tbs-sct.gc.ca). More
information on the Public Sector Service Value Chain can be found in: Ralph Heintzman
and Brian Marson, “People, service and trust: is there a public sector service value
chain?” International Review of Administrative Studies. Vol 7 (4) December 2005, 549575. http://ras.sagepub.com/cgi/reprint/71/4/549.