Service quality and human resource management.

Introduction

One of the most important contributions to competitive advantage in recent years derives from an organisation's quality strategy. This has been driven by both customer requirements and increasing intensity of competition. It seems essential these days to invest in quality improvement simply to stand still, let alone increase sales or market share. The historical dichotomy of high quality versus low cost is increasingly challenged by effective quality management, resulting in both improved quality and reduced costs (Reitsperger and Daniel, 1991).

The inspiration of modern approaches to quality management comes from the achievements of Japanese companies, epitomised by what has become known as total quality management (TQM). TQM is something of a slippery concept and the label is frequently attached to a pot-pourri of diverse practices and often unrelated organisational change activities. Survey evidence on the practice of TQM also finds the term often very loosely used (Wilkinson et al., 1993). However, far from being viewed as a difficulty for the coherence and credibility of quality management, this is embraced by some as its principal virtue (Dale and Plunkett, 1989, p. 346).

Dean and Bowen's (1994) review of the TQM literature suggests that its key principles are customer focus, continuous improvement and teamwork. Each of these principles is then implemented through a series of practices, such as collecting customer information and analysing processes, supported by the use of specific quality management techniques such as team-building and Pareto analysis. Other writers on TQM add employee involvement and senior management commitment to these as the "basic principles" of TQM, while many identify TQM's distinctive features as a strong and pervasive customer orientation and an approach of managing quality for competitive advantage. TQM is often seen as a general business management philosophy, which is about the attainment of continuously improving customer satisfaction by quality-led company-wide management. This goes beyond the mere application of total quality ideas to the whole organisation and its management by any one business function, to being a new approach to corporate management itself. Quality becomes a way of life which permeates every part and aspect of the organisation (Wilkinson and Witcher, 1991).

It is the practices of the manufacturing sector which have dominated much of the early quality debate, to the neglect of services. This perhaps reflects quality management's engineering and operations origins and its domination by researchers from such disciplines. Principal techniques that underpin a quality strategy clearly illustrate these origins, with statistical process control (SPC) and quality function deployment (QFD) being good examples. The intangibility of services means that the methodological and conceptual transfer of quality management practices developed in manufacturing is fraught with difficulty. Nevertheless, quality management practices in the service sector have attracted increasing interest in the 1980s and there is now a developing body of general literature.

In services the organisational form is as an inverted pyramid with a large number of individuals (the majority in most service organisations) coming into direct contact with the customer. In contrast, a goods producer typically has only a small handful of people -- often only the salesforce -- who routinely engage in customer contact. Thus, for many organisations in the service sector, there is no simple means by which the consumer can be separated from the person providing the service. The term service can cover a wide variety of performances or acts. These range from the intimate context of the highly personal services to those offered by large multinationals. Our main concern is not one of size but rather the degree to which customers interact with service providers. In this context we focus on the high contact pure service end of the spectrum. This leads to a particular emphasis on the service encounter as being the crucial link in service quality.

In 1980 Schneider differentiated between two types of management style, the service enthusiast and the service bureaucrat. As Schneider (1980, p. 52) pointed out, in the service organisation "climate is crucial". Further work (Schneider and Bowen, 1985) links together organisational climate, employee morale/attitudes and customer satisfaction. More recent work has looked at a range of specific human resource management (HRM) practices (Schneider and Bowen, 1993). In summary, they suggest that managerial focus must be on the consumer rather than the financiers. The latter focus does not foster service-mindedness among employees and does not help in the delivery of the "ideal" service to consumers.

One must then ask the question do HRM policies, procedures and practices in general support services, quality and the service encounter? "Best practice" in HRM has been developed over decades but do these practices lend themselves to the service context? Before addressing particular HRM issues we explore the influence that the characteristics of services have on quality and then seek to define what we mean when we talk about quality. The article then examines critical strands of HRM theory and practice to determine the extent to which current theory and managerial techniques contribute to underpinning service quality. Further, in the interest of generating more empirical research in this rather neglected area we develop a series of research propositions. Lastly, we conclude by suggesting a research agenda that could begin to test the validity of these propositions.

Characteristics of services: challenges to quality

The features that characterise a service have been explored by a number of authors. Regan (1963) employed a four-category typology of: inseparability; intangibility; heterogeneity and perishability that is commonly used (see Edgett and Parkinson (1993) for a summary of research and review of developments in the area).

Intangibility of services places a barrier to understanding

The most obvious thing about services is that they are intangible -- they cannot be seen or touched. This poses great problems to the vendors in communicating to the buyer exactly what is on offer. In simple terms, a consumer cannot really evaluate a service until it has been consumed. As a result, Siehl and Bowen (1991) have commented that the "service organisation is in need of mechanisms by which it can reduce this input of uncertainty and acquire the information necessary for effective service production and delivery" (p. 15). The role of the employee becomes much more critical since to a very real extent the employee is the service, given the absence of any tangible artefact. They carry the responsibility of projecting the image of the organisation and it is in their hands that the ultimate satisfaction of the consumer rests.

Inseparability of service producer from consumer

Services cannot be separated from the service provider; thus getting close to the customer is an unavoidable feature of service encounters. The encounter itself is the method par excellence for persuading, negotiating or damaging a customer relationship. Customers have the opportunity to observe the detail of service provision including significant interpersonal aspects such as non-verbal behaviour and linguistic ability. Studies of non-verbal behaviour have indicated how non-verbal leakage can create ambiguity and uncertainty for the listener, casting doubts on the accuracy of the verbal account (Ekman and Friesen, 1969; 1974).

Heterogeneity and variability

One issue that complicates this debate, particularly at the level of the service encounter, is that services are different each time they are performed. This is mainly because each party to the service encounter -- the service provider and the customer -- is liable to introduce variation to the service, either by providing a service that deviates from the norm, or by failing to articulate needs. A service provider may not maintain absolute consistency throughout the day even with well-defined service standards, nor is it always desirable to do so. Customer perceptions may also vary from one occasion to another. Some services may become dull or boring if there is no change in the offering. Thus, many potential interactions are subject to variation leading to the possibility of "service role ambiguity" (Berry et al., 1989).

Perishability

If a service is not consumed it disappears. The jet, having taken off, cannot fill further seats and the opportunity to maximise profit has gone forever. This is an economic cost to the organisation that cannot be recovered and is critical to the very survival of the organisation. Consequently, service organisations often consider minimising costs or increasing flexibility. Perishability is a concern to all service providers but the method …