Most managers recognize that good service is a direct result of having effective, productive people in customer contact positions. You need winners at the front lines, not just warm bodies. But most service companies perpetuate a cycle of failure by tolerating high turnover and expecting employee dissatisfaction. Schlesinger and Heskett explore the reasons that so many managers have trouble breaking this cycle. They spotlight a number of companies that are developing winning customer service teams, including one that pays twice the industry average to its front-line employees while its sales and profits have soared. Instead of submitting to the cycle of failure, they argue, managers should take advantage of ways to break it, and get their organizations onto the cycle of success.
1. Entry level service jobs often have annual turnover rates of 100 percent to 300 percent. See:
R.H. Woods and J.F. Macaulay, “Rx for Turnover: Retention Programs that Work,” Cornell HRA Quarterly, May 1989, pp. 78–90.
2. Current Population Survey (Washington, D.C.: U.S. Government Bureau of Labor Statistics, 1986).
3. L.C. Thurow, Toward a High-Wage, High-Productivity Service Sector (Washington, D.C.: Economic Policy Institute, 1990).
4. B. Schneider and D.E. Bowen, “New Services Design, Development, and Implementation and the Employee,” in New Services, eds. W.R. George and C. Marshall (Chicago: American Marketing Association, 1985), pp. 82–101.
5. E.E. Lawler III, Motivation in Work Organizations (Monterey, California: Brooks/Cole, 1973), pp. 153–165.
6. J.J. Parkington and B. Schneider, “Some Correlates of Experienced Job Stress: A Boundary Role Study,” Academy of Management Journal 22 (1979): 270–281;
W.G. Bennis, “Beyond Bureaucracy,” in American Bureaucracy, ed. W.G. Bennis (Chicago: Aldine, 1970), pp. 3–17; and
P.M. Blau, On the Nature of Organizations (New York: John Wiley & Sons, 1974), pp. 80–84.
7. See, for example, E.M. Johnson and D.T. Seymour, “The Impact of Cross Selling on the Service Encounter in Retail Banking,” in The Service Encounter, eds. J.A. Czepiel et al. (Lexington, Massachusetts: DC. Heath, 1985), pp. 225–239.
8. L. Waldstein, Service Sector Wages, Productivity, and Job Creation in the United States and Other Countries (Washington, D.C.: Economic Policy Institute, 1989), pp. 24–25.
9. S.S. Roach, “America’s Technology Dilemma: A Profile of the Information Economy? Morgan Stanley Special Economic Study, 22 April 1987.
10. Wall Street Journal, 9 August 1989, p. B1.
11. L.A. Schlesinger and J. Zornitsky, “Job Satisfaction, Service Capability, and Customer Satisfaction: An Examination of Their Linkages and Management Implications,” Human Resource Planning, forthcoming, Spring 1991.
12. Hay Associates, personal correspondence, 1989.