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Key attributes of internal service recovery strategies as perceived by frontline food service employees
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Hospitality Management 25 (2006) 496–509 www.elsevier.com/locate/ijhosman
Key attributes of internal service recovery strategies as perceived by frontline food service employees Joanne Jung-Eun Yooa,, Seo-Young Shinb, Il-Sun Yangc a
School of Hotel and Tourism Management, The Hong Kong Polytechnic University, China b Research Institute of Food and Nutritional Sciences, Yonsei University, Korea c Department of Food and Nutrition, Yonsei University, Korea
Abstract This paper reports on a study investigating key attributes of internal service recovery strategies from the perspectives of frontline food service employees in restaurants. Insights into the employees’ perceived importance of different attributes were obtained through the use of conjoint analysis. The study examined how customer-contact employees evaluate internal service recovery strategies, and revealed four key attributes of internal service recovery strategies—monetary reward, recognition, empowerment, and reward method consistency. The analysis indicated that the food servers surveyed, favored recovery strategies with attributes such as pay raises, recognition from colleagues, full empowerment, and a case-bycase reward method. This exploratory study can be used as a basis for restaurant service managers to develop successful service recovery strategies for their internal customers. r 2005 Elsevier Ltd. All rights reserved. Keywords: Service recovery strategy; Internal service recovery; Frontline employee; Restaurant
Corresponding author. Present address: Strategic Intelligence Centre, Pacific Asia Travel Association (PATA), Unit B1, 28th Floor, Siam Tower, 989 Rama I Road, Pathumwan, Bangkok, Thailand. Tel.: +66 2 658 2000; fax: +66 2 658 2010. E-mail addresses: [email protected] (J.J.-E. Yoo), [email protected] (S.-Y. Shin), [email protected] (I.-S. Yang).
0278-4319/$ - see front matter r 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2005.01.002
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1. Introduction Large numbers of employees in the restaurant industry are frontline staff in direct contact with customers. As the restaurant industry involves a high degree of interaction between food service employees and customers, there are numerous opportunities for service failures to occur. Miller et al. (2000) considered a restaurant as a place where customers most frequently experience service failures. Frontline service employees play an important role not only in service delivery but also during service recovery. As they are normally the first port of call for a dissatisfied customer, effective service recoveries are in many cases those solved immediately by customer-contact staff (Zeithaml et al., 1996). Meanwhile, frontline employees repeatedly deal with complaining customers when there is service failure, and these continuing negative experiences are likely to bring them a great deal of frustration and stress. The pressures created by their ongoing exposure to customer complaints need to be addressed just as customers need to recover from service failures. Although the concept of service recovery has been widely discussed in the literature (e.g., Bell and Zemke, 1987; Bitner et al., 1990; Gro¨nroos, 1988; Tax and Brown, 1998), the available extant research focuses mainly on the customers’ perspective. Yet, few studies have explored the employees’ view of a service failure and the company’s recovery efforts. Given that service encounters involve both customers and employees, an understanding of service failure and service recovery from both perspectives is relevant. The purpose of this study is to examine the perceptions of frontline employees with regard to internal service recovery strategies. More specifically, this study attempts to identify important attributes of internal service recovery strategies from the viewpoint of frontline food service employees in restaurants. The paper concludes with discussions of marketing implications for the restaurant industry.
2. Literature review 2.1. Service recovery A service failure occurs when the quality of service delivery falls short of customers’ expectations (Bell and Zemke, 1987). As mistakes are an unavoidable feature of service delivery just like all human endeavors, service firms must have service recovery strategies to offset service failures. Service recovery refers to the action a service provider takes to seek out customers’ dissatisfaction as a response to poor service quality and service failure (Boshoff, 1997; Gro¨nroos, 1988). The concept of service recovery has received growing attention from scholars and practitioners alike. Although there is variance in their perspectives, all share the common belief that effective service recovery can enhance customer satisfaction and prevent customer defection (Hart et al., 1990).
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Several researchers have discussed what constitutes effective service recovery strategies. Bell and Zemke (1987) proposed five ingredients for service recovery— apology, urgent reinstatement, empathy, symbolic atonement, and follow-up. A study by Bitner et al. (1990) suggested four key elements of successful service recovery strategies—acknowledgement, explanation, apology, and compensation. Focusing specifically on the retail industry, Kelly et al. (1993) identified seven recovery strategies. These were discount, correction, management/employee intervention, correction plus, replacement, apology, and refund. Their research found that discount, correction plus, management/employee intervention and replacement were particularly more effective, whereas apology and refund were less effective. Based on the examination of critical incidents covering several types of service organizations, Johnston (1995) found that most incidents where customers were delighted by the outcomes of service recovery three key strategies were identified. These were empathy, information, and action. A review of the literature indicates that researchers suggest a combination of psychological and tangible recovery strategies in response to service failures. 2.2. Internal marketing Service delivery is an integral part of a hospitality product, and employees’ performance and attitude play a crucial role in the process (Lewis, 1989). As it is difficult to promote the delivery of excellent service before employees are ready to provide it, management should first satisfy the needs of employees. From this insight emerges the concept of internal marketing, viewing employees as a company’s internal customers. The concept of internal marketing was first introduced by Berry et al. (1976) as a solution to the problems of delivering consistently high service quality. Berry (1981) argued that if management wants employees to deliver high-quality service to customers, it must be prepared to do a great job with its employees, who are internal customers. Bowen and Schneider (1985) and Johnston (1989) developed the concept of ‘‘partial customers’’, also urging firms to treat internal customers as equally important as their external customers. As such, the concept of internal marketing has been well discussed in the literature for the last few decades (e.g., Berry, 1981; George, 1977, 1990; Piercy, 1995; Pitt and Foreman, 1999). The concept of internal marketing is also supported by Gummesson (1987) who termed customer-contact employees as ‘‘part-time marketers’’. He argued that a service provider’s part-time marketers often have a major impact on customers’ future purchasing decisions than full-time marketers, i.e., marketing specialists from marketing and sales departments. The theoretical base for part-time marketers comes from the recent development of the three theories: services marketing, industrial marketing and total quality management, notably by the Nordic School of Services (Gro¨nroos, 2000; Gro¨nroos and Gummesson, 1985; Gummesson, 1991, 1997). Unlike traditional marketing theories that only focus on external customers, the three theories stress the significance of internal customers.
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Furthermore, these modern approaches view marketing as an interactive process in a social setting where relationship building and management are essential components. According to the Gro¨nroos’s (1989, 1994) definition of relationship marketing, marketing is a process including customers and several other parties, seeing each other as partners in a win-win relationship. In the process, the objectives of all parties involved have to be met by a mutual exchange and fulfillment of promises (Gummesson, 1994). In this context, internal marketing can be seen as part of relationship marketing, giving indirect and necessary support to the relationship with external customers. 2.3. Internal service recovery Despite the concept of internal marketing being in the literature for more than a few decades, studies on how to support internal customers in the service recovery process have been under-researched. The existing studies on service recovery have been exclusively devoted to the perspective of customers (e.g., Bell and Zemke, 1987; Hart et al., 1990; Kelly and Davis, 1995), yet few have explored the topic from the viewpoint of the employees (Bitner et al., 1994; Boshoff and Allan, 2000; Bowen and Johnston, 1999). Frontline service employees frequently deal with service failure situations and these experiences may give them a high level of stress and job dissatisfaction. As frontline personnel are seldom provided with the autonomy or resources to handle external service recovery, they are likely to experience a sense of helplessness derived from their inability to control outcomes (Bowen and Johnston, 1999). Bowen and Johnston (1999) introduced the concept of internal service recovery within the framework of internal marketing. They argued that employees’ perceptions as to how well they have performed would influence customers’ perceptions of service recovery. Since high-contact service firms rely almost totally upon customer-contact staff, management should help its internal customers recover from possible negative feelings associated with external recovery efforts. Recognizing and understanding the expectations of frontline service employees toward internal service recovery may be the first step in implementing successful internal marketing strategies. Consequently, the present study adopted an exploratory approach to identify key attributes of internal service recovery strategies from the perspectives of frontline food service employees working in restaurants.
3. Methodology This study utilized a conjoint analysis technique that simultaneously assesses the relative weights of different product/service attributes (Claxton, 1994). Through the use of conjoint analysis, the study aimed at examining how frontline employees at restaurants perceive different attributes of internal service recovery strategies and how they would make trade-offs among the attributes.
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A critical decision in the choice of conjoint analysis is attribute selection. The attributes used in the analysis must be important characteristics or attributes which apply to the situation (Claxton, 1994). Due to the exploratory nature of this study, the first stage was to discover the important attributes that employees consider with regard to internal service recovery strategies. For this purpose, step one in-depth interviews were conducted with 21 frontline food service employees working in three franchise restaurants in Seoul, Korea. The interviewees recalled personal experiences with complaining customers and their company’s reactions to the situations. Then they were asked to describe how they want the company to help them recover from their emotional burnout caused by service failure situations. Step two additional interviews with 10 employees were conducted as a pretest to confirm the appropriateness of the attributes identified. Based on the interview responses, four attributes of internal service recovery strategies and the related levels of each attribute were determined. The four primary attributes of the hypothetical internal service recovery strategies were identified as empowerment, reward method consistency, recognition, and monetary reward. ‘‘Empowerment’’ was described as allowing employee to use independent thoughts and actions during a service recovery attempt. The respondents explained ‘‘reward method consistency’’ as the perceived consistency in which the employee is rewarded by management for their successful service recovery efforts. ‘‘Recognition’’ was the spontaneous, sincere, and personal appreciation of employee efforts in the service recovery process. The service employees also identified ‘‘monetary reward’’ as the financial incentive given by management for individual achievement in service recovery efforts. Two levels for ‘‘empowerment’’ were considered: ‘‘full’’ (employee can solve a problem immediately) and ‘‘partial’’ (employee cannot solve a problem until they have been authorized by their supervisor to proceed). ‘‘Reward method consistency’’ was at two levels: ‘‘consistent’’ (the employee is rewarded consistently regardless of the situation) and ‘‘case-by-case’’ (the employee is rewarded on a case-by-case basis). ‘‘Recognition’’ had three levels: ‘‘recognition from supervisor’’, ‘‘recognition from colleagues’’, and ‘‘recognition from manager’’. ‘‘Monetary reward’’ was divided into three levels: ‘‘bonus’’ (employee receives an immediate bonus), ‘‘pay raises’’ (employee receives a higher base salary), and ‘‘merit rating’’ (employee receives a merit when determining salary raises). Table 1 summarizes the four primary attributes and each of their levels derived from the in-depth interviews. Initially, the total number of profile configurations was 36 (2 2 3 3 ¼ 36) with the four attributes and the corresponding level for each of the attributes. However, studies have shown that too many attributes make respondents confused, causing denial or no response (Smith, 1995). As the use of all 36 combinations was considered to be too large for respondent fatigue, it was decided to reduce these to a set of nine hypothetical profiles. This was achieved by using the orthogonal design tool of SPSS, chosen on the basis of a Latin-square design to be statistically significant (Green and Srinivasan, 1978). By assuming certain interactions between attributes to be negligible, it may be acceptable to eliminate some profiles from the conjoint measurement exercise by using the orthogonal design (Green, 1974). The
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Table 1 Attributes and levels of internal service recovery strategies Attributes
Levels
Empowerment
1-1 1-2
Full Partial
Reward method consistency
2-1 2-2
Consistent Case-by-case
Recognition
3-1 3-2 3-3
Recognition from supervisor Recognition from colleagues Recognition from manager
Monetary reward
4-1 4-2 4-3
Bonus Pay raises Merit rating
Table 2 Hypothetical profiles of internal service recovery strategies 1
2 Full empowerment Case-by-case reward Recognition from colleagues Pay raises
4
3 Full empowerment Consistent reward Recognition from manager Merit rating
Full empowerment Case-by-case reward Recognition from supervisor Merit rating
Partial empowerment Case-by-case reward Recognition from manager Bonus
5 Full empowerment Consistent reward Recognition from manager Pay raises
7
6
8 Full empowerment Consistent reward Recognition from supervisor Bonus
Partial empowerment Consistent reward Recognition from colleagues Merit rating
Full empowerment Consistent reward Recognition from colleagues Bonus
9 Partial empowerment Consistent reward Recognition from supervisor Pay raises
use of carefully selected subsets made it possible to estimate the nine attribute-level parameters without burdening the respondents with a heavy task. Table 2 shows the descriptions of the nine different profiles. The study participants were asked to make evaluations on the profiles with each representing different combinations of attribute levels. Considering ease of response and a desire for a high response rate, the evaluations for each hypothetical package were designed according to a rating system, from 1 (least preferred) to 9 (most preferred). The study used a survey questionnaire completed by frontline food service employees. In the questionnaire, the nine hypothetical profiles were given with the
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explanation of the attributes and levels, and the respondents were asked to evaluate and rank the profiles with regard to their preferences. The authors contacted 23 franchising restaurants located in Seoul, Korea to obtain approval for the survey, and 14 restaurants agreed to participate. The participated restaurants can be classified as mid- to high-priced, full service restaurants. The frontline food service employees were chosen as a target sample— those who were taking orders from, and delivering service to, customers in the 14 restaurants. The managers of each restaurant were instructed to distribute and collect a copy of the questionnaire to/from each frontline food service employee. An envelope was included with each survey instrument to ensure confidentiality. The number of questionnaires was determined in proportion of the number of employees of each restaurant under investigation. The total number of 400 questionnaires was distributed and 282 questionnaires were returned with a response rate of 70.5%. The respondents were first asked to indicate how many complaining customers they met per day in general. The responses to this question ranged between 1 and 12 with an average of 2.3 cases, so the authors could conclude that the restaurant employees of this study frequently confront service failure situations. Based on the evaluations of the hypothetical profiles by the respondents, the conjoint analysis program derived estimates of the utility function for each survey participant. The importance of a given attribute was calculated and identified as the percentages of the total decision ascribed to that attribute. Through the conjoint analysis, the most desirable attribute configuration for the internal service recovery strategies was also determined.
4. Data analysis and results A total of 123 males (43.6%) and 151 females (53.5%) participated in the survey. The majority of the surveyed employees (54.6%) were in their 20s, or less than 20 years of age. More than half of the respondents (n ¼ 166, 58.9%) were full-time employees, and the length of working experiences ranged from less than 6 months to a more than 3 years. Table 3 summarizes demographic information of the survey respondents. The results of the conjoint analysis revealed the internal service recovery strategies that were favored by the frontline employees of this study. The relative important values of each attribute were calculated by determining the part-worth utilities for each level of each attribute. As shown in Table 4 and Fig. 1, the part-worth utility indicated the relative importance of each level of each attribute in terms of its contribution to the overall worth of a strategy package. The average utility value presented the relative importance of each level of each attribute. The analysis showed that monetary reward was perceived as more important to the frontline food service employees, accounting for 33.97% when compared to the other alternatives. It was followed, in terms of the relative importance, by recognition (28.74%), empowerment (23.13%), and reward method consistency (14.16%).
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Table 3 Demographic profile of surveyed frontline food service employees Variables
Frequency (%)
Variables
Frequency (%)
Gender Males Females Missing
123 (43.6) 151 (53.5) 8 (2.8)
Position Managers Full-time employees Part-time employees Missing
52 166 43 21
(18.4) (58.9) (15.2) (7.4)
Age Under 29 30 Over 40
154 (54.6) 87 (30.9) 41 (14.5)
Working experience Less than 6 months 6 mo—less than 1 yr 1 yr—3 yrs More than 3 years Missing
65 64 81 67 5
(23.0) (22.7) (28.7) (23.8) (1.8)
Total
282(100)
Total
282 (100)
Table 4 Average utility values and relative importance of each attribute Attributes
Levels
Description
Average utility
Relative importance
Empowerment
1-1 1-2
Full Partial
0.5895 0.5895
23.13
Reward method consistency
2-1 2-2
Consistent Case-by-case
0.2890 0.2890
14.16
Recognition
3-1 3-2 3-3
From supervisor From colleagues From manager
0.2644 0.3621 0.0977
28.74
Monetary reward
4-1 4-2 4-3
Bonus Pay raises Merit rating
0.5484 0.5751 0.0267
33.97
As for the empowerment attribute, the average frontline food service employees preferred ‘‘full empowerment’’ to ‘‘partial empowerment’’ when they dealt with service failure situations. For the attribute of ‘‘reward method consistency’’, the employees assigned a higher utility to ‘‘case-by-case reward method’’ than to ‘‘consistent reward method’’. With respect to ‘‘recognition’’ to be gained from different levels, while the service employees preferred ‘‘recognition from colleagues’’ the most, they perceived ‘‘recognition from manager’’ more desirable than ‘‘recognition from supervisor’’. The monetary reward with most preferred by the frontline employees was ‘‘pay raises’’, followed by ‘‘merit rating’’, and ‘‘bonus’’. By combining the attribute levels attaining the highest utility scores, the analysis suggested a bundle of the attributes that was most preferred by this sample of
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Reward Method Consistency 0.3
0.4
0.2
0.2
0.1
Utility
Utility
Empowerment 0.6
0.0
0.0
-0.2
-0.1
-0.4
-0.2
-0.6
-0.3
Full
Partial
Consistent
Recognition
Case-by-case
Monetary Reward
0.4
0.6
0.3 0.4 0.2
Utility
Utility
0.2 0.1 0.0
0.0
-0.2
-0.1
-0.4
-0.2 -0.3
-0.6
From Supervisor
From Colleagues
From Manager
Bonus
Pay Rises
Merit Rating
Fig. 1. Average utility values of attribute levels for frontline food service employees.
frontline food service employees. Their most desirable service recovery strategies would have the following attributes: pay raises, recognition from colleagues, a caseby-case reward method, and full empowerment.
5. Conclusion and implications Frontline employees are an important resource in generating revenue and ensuring customer satisfaction in the hospitality industry (Ross and Boles, 1994). Understanding the needs and expectations of the employees is an important task of management especially as the success of a restaurant business is greatly influenced by food service employees’ performance in service delivery. Through the use of conjoint analysis, this study identified four key attributes of internal service recovery strategies perceived by frontline employees working in restaurants. The attributes are monetary reward, recognition, empowerment, and
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reward method consistency. The analysis also proposed that the most desirable service recovery strategies for the average frontline employees of this study would have attributes such as pay raises, recognition from colleagues, a case-by-case reward method, and full empowerment. The conjoint analysis not only allows management to assess the combination of different attributes of recovery strategies but also enables them to determine where employees are willing to make trade-offs among the attributes. If a company cannot afford to offer a package of the most ideal strategies, they should understand the extent to which their employees are willing to give up one attribute or level to gain more of another. Among the attributes, the results demonstrate that restaurant service employees put a higher value on monetary reward than other alternatives. Chonko et al. (1992) stated that salespeople might attempt to maximize lower-order rewards such as monetary reward because they are uncertain of their ability to obtain other highorder rewards like promotion opportunities. Given the fact that the majority of the survey respondents were in the early stage of employment, the employees might have viewed monetary benefits as a long-run value providing them with financial security while non-monetary rewards as rather a short-term value. The study indicated that frontline food service employees would also benefit from non-monetary rewards in the service recovery process. Psychological recovery, which does not necessarily require financial incentives, is most likely when employees are recognized personally and pleased with their job. When management acknowledges an employee’s contributions, the employee values the personal touch and a feeling of pride may last for a long time. Hence, management should provide organizational support such as public recognition to compensate employees for their ongoing exposure to complaint handling. The more support employees feel, the less likely recovery efforts will stress them. Interestingly, the average employees of this study regarded recognition from colleagues more desirable than recognition from manager or supervisor. Voss (1992) argued that recognition from one’s peers is the highest compliment one can receive. As one way of recognizing employees’ contributions, management can highlight success stories of service recovery efforts in a company newsletter so that it can heighten an awareness of excellence in employees themselves as well as colleagues. Feeling of social gratification and confidence in fellow employees may lead to an increase in employee morale and job satisfaction (Hurst et al., 1994). As they are the closest to the customer, frontline employees are most affected by the introduction of empowerment. Empowerment is one of the best solutions to many business problems in the hospitality industry, helping employees find quick solutions for customers’ problems (Bryner, 1991). Empowerment is part of the Gro¨nroos’ (1989, 1990) interactive marketing framework, which views marketing as an interactive process in a social context where interrelations and interdependence are a vital element. In order for interactive marketing to occur, all customer-contact employees need to have responsibility for all the marketing activities that occur in the interaction with customers. In reality, however, frontline employees are often not given the resources and authority that they need to provide the required level of service, particularly when a service failure occurs (Parasuraman, 1987). The
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customer contact staff in this study preferred to be fully empowered in handling service recovery situations. Hancer and George (2003) regarded employee empowerment as a means of giving employees greater opportunity to influence the guest experience in a positive manner. The employees who are able to make appropriate on-the-spot decisions will be more effective part-time marketers and better service recovery performers. Employees’ perceptions of reward method consistency are closely related to their motivation and job performance. Effective rewards specifically implemented for each case or situation can help employees to understand the level of service that needs to be delivered, motivating them to practice proper behavior in any given service failure situation. The rewards offered must be perceived as being valuable and fair, everyone should have the chance to be rewarded, and rewards should be commensurate with the outstanding service performed (Arnett et al., 2002). Moreover, fair reward methods and procedures can serve as a signal to employees that they are valued and respected members of their company, enhancing job satisfaction. In conclusion, as customer satisfaction is a primary goal of any service organization, management must recognize the important role of customer-contact personnel in enhancing customer satisfaction. Since service employees and customers often interact closely, what employees experience is likely to be transmitted to customers. Likewise, in service recovery situations, employees’ perceptions of how well they have been recovered internally will affect customer perceptions of how well they have been recovered externally. Managers who design internal service recovery strategies should understand the complexity of employees’ preference for recovery strategy attributes. A variety of psychological and tangible rewards should be provided to service employees for their achievement in service recovery efforts. Parasuraman (1987) argued that the way in which a company rewards its employees has a significant effect on the level of service provided. Thus, management must ensure that employees’ endeavors are actively encouraged and appropriately rewarded to motivate them to provide service excellence and satisfy customers in the event of a service failure (Berry and Parasuraman, 1991). The provision of financial support, personal recognition, empowerment, and strategies directed specifically toward recovery efforts will lead to happy employees who do even more for their customers. The service recovery process can then eventually create a win-win situation for both customers and frontline service employees (Gro¨nroos, 1994). When a new internal service recovery strategy is being developed, the nature of the strategy and its salient attributes must be understood by all the parties involved. Based on careful analyses, the right strategy should be designed to meet the mutual benefits of the employees, the management, the organization, and the customer. This study also demonstrated how conjoint analysis could be applied to evaluate the relative importance that employees place on the various service recovery strategies used by employers. The results provide a more realistic view of the employee preference because they had to take trade-offs among attributes and express their preference for some particular combination of attributes. This analysis
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technique can provide management with a means to determine employees’ preference for service recovery strategies more easily than asking independent questions.
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Hospitality Management 25 (2006) 496–509 www.elsevier.com/locate/ijhosman
Key attributes of internal service recovery strategies as perceived by frontline food service employees Joanne Jung-Eun Yooa,, Seo-Young Shinb, Il-Sun Yangc a
School of Hotel and Tourism Management, The Hong Kong Polytechnic University, China b Research Institute of Food and Nutritional Sciences, Yonsei University, Korea c Department of Food and Nutrition, Yonsei University, Korea
Abstract This paper reports on a study investigating key attributes of internal service recovery strategies from the perspectives of frontline food service employees in restaurants. Insights into the employees’ perceived importance of different attributes were obtained through the use of conjoint analysis. The study examined how customer-contact employees evaluate internal service recovery strategies, and revealed four key attributes of internal service recovery strategies—monetary reward, recognition, empowerment, and reward method consistency. The analysis indicated that the food servers surveyed, favored recovery strategies with attributes such as pay raises, recognition from colleagues, full empowerment, and a case-bycase reward method. This exploratory study can be used as a basis for restaurant service managers to develop successful service recovery strategies for their internal customers. r 2005 Elsevier Ltd. All rights reserved. Keywords: Service recovery strategy; Internal service recovery; Frontline employee; Restaurant
Corresponding author. Present address: Strategic Intelligence Centre, Pacific Asia Travel Association (PATA), Unit B1, 28th Floor, Siam Tower, 989 Rama I Road, Pathumwan, Bangkok, Thailand. Tel.: +66 2 658 2000; fax: +66 2 658 2010. E-mail addresses: [email protected] (J.J.-E. Yoo), [email protected] (S.-Y. Shin), [email protected] (I.-S. Yang).
0278-4319/$ - see front matter r 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2005.01.002
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1. Introduction Large numbers of employees in the restaurant industry are frontline staff in direct contact with customers. As the restaurant industry involves a high degree of interaction between food service employees and customers, there are numerous opportunities for service failures to occur. Miller et al. (2000) considered a restaurant as a place where customers most frequently experience service failures. Frontline service employees play an important role not only in service delivery but also during service recovery. As they are normally the first port of call for a dissatisfied customer, effective service recoveries are in many cases those solved immediately by customer-contact staff (Zeithaml et al., 1996). Meanwhile, frontline employees repeatedly deal with complaining customers when there is service failure, and these continuing negative experiences are likely to bring them a great deal of frustration and stress. The pressures created by their ongoing exposure to customer complaints need to be addressed just as customers need to recover from service failures. Although the concept of service recovery has been widely discussed in the literature (e.g., Bell and Zemke, 1987; Bitner et al., 1990; Gro¨nroos, 1988; Tax and Brown, 1998), the available extant research focuses mainly on the customers’ perspective. Yet, few studies have explored the employees’ view of a service failure and the company’s recovery efforts. Given that service encounters involve both customers and employees, an understanding of service failure and service recovery from both perspectives is relevant. The purpose of this study is to examine the perceptions of frontline employees with regard to internal service recovery strategies. More specifically, this study attempts to identify important attributes of internal service recovery strategies from the viewpoint of frontline food service employees in restaurants. The paper concludes with discussions of marketing implications for the restaurant industry.
2. Literature review 2.1. Service recovery A service failure occurs when the quality of service delivery falls short of customers’ expectations (Bell and Zemke, 1987). As mistakes are an unavoidable feature of service delivery just like all human endeavors, service firms must have service recovery strategies to offset service failures. Service recovery refers to the action a service provider takes to seek out customers’ dissatisfaction as a response to poor service quality and service failure (Boshoff, 1997; Gro¨nroos, 1988). The concept of service recovery has received growing attention from scholars and practitioners alike. Although there is variance in their perspectives, all share the common belief that effective service recovery can enhance customer satisfaction and prevent customer defection (Hart et al., 1990).
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Several researchers have discussed what constitutes effective service recovery strategies. Bell and Zemke (1987) proposed five ingredients for service recovery— apology, urgent reinstatement, empathy, symbolic atonement, and follow-up. A study by Bitner et al. (1990) suggested four key elements of successful service recovery strategies—acknowledgement, explanation, apology, and compensation. Focusing specifically on the retail industry, Kelly et al. (1993) identified seven recovery strategies. These were discount, correction, management/employee intervention, correction plus, replacement, apology, and refund. Their research found that discount, correction plus, management/employee intervention and replacement were particularly more effective, whereas apology and refund were less effective. Based on the examination of critical incidents covering several types of service organizations, Johnston (1995) found that most incidents where customers were delighted by the outcomes of service recovery three key strategies were identified. These were empathy, information, and action. A review of the literature indicates that researchers suggest a combination of psychological and tangible recovery strategies in response to service failures. 2.2. Internal marketing Service delivery is an integral part of a hospitality product, and employees’ performance and attitude play a crucial role in the process (Lewis, 1989). As it is difficult to promote the delivery of excellent service before employees are ready to provide it, management should first satisfy the needs of employees. From this insight emerges the concept of internal marketing, viewing employees as a company’s internal customers. The concept of internal marketing was first introduced by Berry et al. (1976) as a solution to the problems of delivering consistently high service quality. Berry (1981) argued that if management wants employees to deliver high-quality service to customers, it must be prepared to do a great job with its employees, who are internal customers. Bowen and Schneider (1985) and Johnston (1989) developed the concept of ‘‘partial customers’’, also urging firms to treat internal customers as equally important as their external customers. As such, the concept of internal marketing has been well discussed in the literature for the last few decades (e.g., Berry, 1981; George, 1977, 1990; Piercy, 1995; Pitt and Foreman, 1999). The concept of internal marketing is also supported by Gummesson (1987) who termed customer-contact employees as ‘‘part-time marketers’’. He argued that a service provider’s part-time marketers often have a major impact on customers’ future purchasing decisions than full-time marketers, i.e., marketing specialists from marketing and sales departments. The theoretical base for part-time marketers comes from the recent development of the three theories: services marketing, industrial marketing and total quality management, notably by the Nordic School of Services (Gro¨nroos, 2000; Gro¨nroos and Gummesson, 1985; Gummesson, 1991, 1997). Unlike traditional marketing theories that only focus on external customers, the three theories stress the significance of internal customers.
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Furthermore, these modern approaches view marketing as an interactive process in a social setting where relationship building and management are essential components. According to the Gro¨nroos’s (1989, 1994) definition of relationship marketing, marketing is a process including customers and several other parties, seeing each other as partners in a win-win relationship. In the process, the objectives of all parties involved have to be met by a mutual exchange and fulfillment of promises (Gummesson, 1994). In this context, internal marketing can be seen as part of relationship marketing, giving indirect and necessary support to the relationship with external customers. 2.3. Internal service recovery Despite the concept of internal marketing being in the literature for more than a few decades, studies on how to support internal customers in the service recovery process have been under-researched. The existing studies on service recovery have been exclusively devoted to the perspective of customers (e.g., Bell and Zemke, 1987; Hart et al., 1990; Kelly and Davis, 1995), yet few have explored the topic from the viewpoint of the employees (Bitner et al., 1994; Boshoff and Allan, 2000; Bowen and Johnston, 1999). Frontline service employees frequently deal with service failure situations and these experiences may give them a high level of stress and job dissatisfaction. As frontline personnel are seldom provided with the autonomy or resources to handle external service recovery, they are likely to experience a sense of helplessness derived from their inability to control outcomes (Bowen and Johnston, 1999). Bowen and Johnston (1999) introduced the concept of internal service recovery within the framework of internal marketing. They argued that employees’ perceptions as to how well they have performed would influence customers’ perceptions of service recovery. Since high-contact service firms rely almost totally upon customer-contact staff, management should help its internal customers recover from possible negative feelings associated with external recovery efforts. Recognizing and understanding the expectations of frontline service employees toward internal service recovery may be the first step in implementing successful internal marketing strategies. Consequently, the present study adopted an exploratory approach to identify key attributes of internal service recovery strategies from the perspectives of frontline food service employees working in restaurants.
3. Methodology This study utilized a conjoint analysis technique that simultaneously assesses the relative weights of different product/service attributes (Claxton, 1994). Through the use of conjoint analysis, the study aimed at examining how frontline employees at restaurants perceive different attributes of internal service recovery strategies and how they would make trade-offs among the attributes.
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A critical decision in the choice of conjoint analysis is attribute selection. The attributes used in the analysis must be important characteristics or attributes which apply to the situation (Claxton, 1994). Due to the exploratory nature of this study, the first stage was to discover the important attributes that employees consider with regard to internal service recovery strategies. For this purpose, step one in-depth interviews were conducted with 21 frontline food service employees working in three franchise restaurants in Seoul, Korea. The interviewees recalled personal experiences with complaining customers and their company’s reactions to the situations. Then they were asked to describe how they want the company to help them recover from their emotional burnout caused by service failure situations. Step two additional interviews with 10 employees were conducted as a pretest to confirm the appropriateness of the attributes identified. Based on the interview responses, four attributes of internal service recovery strategies and the related levels of each attribute were determined. The four primary attributes of the hypothetical internal service recovery strategies were identified as empowerment, reward method consistency, recognition, and monetary reward. ‘‘Empowerment’’ was described as allowing employee to use independent thoughts and actions during a service recovery attempt. The respondents explained ‘‘reward method consistency’’ as the perceived consistency in which the employee is rewarded by management for their successful service recovery efforts. ‘‘Recognition’’ was the spontaneous, sincere, and personal appreciation of employee efforts in the service recovery process. The service employees also identified ‘‘monetary reward’’ as the financial incentive given by management for individual achievement in service recovery efforts. Two levels for ‘‘empowerment’’ were considered: ‘‘full’’ (employee can solve a problem immediately) and ‘‘partial’’ (employee cannot solve a problem until they have been authorized by their supervisor to proceed). ‘‘Reward method consistency’’ was at two levels: ‘‘consistent’’ (the employee is rewarded consistently regardless of the situation) and ‘‘case-by-case’’ (the employee is rewarded on a case-by-case basis). ‘‘Recognition’’ had three levels: ‘‘recognition from supervisor’’, ‘‘recognition from colleagues’’, and ‘‘recognition from manager’’. ‘‘Monetary reward’’ was divided into three levels: ‘‘bonus’’ (employee receives an immediate bonus), ‘‘pay raises’’ (employee receives a higher base salary), and ‘‘merit rating’’ (employee receives a merit when determining salary raises). Table 1 summarizes the four primary attributes and each of their levels derived from the in-depth interviews. Initially, the total number of profile configurations was 36 (2 2 3 3 ¼ 36) with the four attributes and the corresponding level for each of the attributes. However, studies have shown that too many attributes make respondents confused, causing denial or no response (Smith, 1995). As the use of all 36 combinations was considered to be too large for respondent fatigue, it was decided to reduce these to a set of nine hypothetical profiles. This was achieved by using the orthogonal design tool of SPSS, chosen on the basis of a Latin-square design to be statistically significant (Green and Srinivasan, 1978). By assuming certain interactions between attributes to be negligible, it may be acceptable to eliminate some profiles from the conjoint measurement exercise by using the orthogonal design (Green, 1974). The
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Table 1 Attributes and levels of internal service recovery strategies Attributes
Levels
Empowerment
1-1 1-2
Full Partial
Reward method consistency
2-1 2-2
Consistent Case-by-case
Recognition
3-1 3-2 3-3
Recognition from supervisor Recognition from colleagues Recognition from manager
Monetary reward
4-1 4-2 4-3
Bonus Pay raises Merit rating
Table 2 Hypothetical profiles of internal service recovery strategies 1
2 Full empowerment Case-by-case reward Recognition from colleagues Pay raises
4
3 Full empowerment Consistent reward Recognition from manager Merit rating
Full empowerment Case-by-case reward Recognition from supervisor Merit rating
Partial empowerment Case-by-case reward Recognition from manager Bonus
5 Full empowerment Consistent reward Recognition from manager Pay raises
7
6
8 Full empowerment Consistent reward Recognition from supervisor Bonus
Partial empowerment Consistent reward Recognition from colleagues Merit rating
Full empowerment Consistent reward Recognition from colleagues Bonus
9 Partial empowerment Consistent reward Recognition from supervisor Pay raises
use of carefully selected subsets made it possible to estimate the nine attribute-level parameters without burdening the respondents with a heavy task. Table 2 shows the descriptions of the nine different profiles. The study participants were asked to make evaluations on the profiles with each representing different combinations of attribute levels. Considering ease of response and a desire for a high response rate, the evaluations for each hypothetical package were designed according to a rating system, from 1 (least preferred) to 9 (most preferred). The study used a survey questionnaire completed by frontline food service employees. In the questionnaire, the nine hypothetical profiles were given with the
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explanation of the attributes and levels, and the respondents were asked to evaluate and rank the profiles with regard to their preferences. The authors contacted 23 franchising restaurants located in Seoul, Korea to obtain approval for the survey, and 14 restaurants agreed to participate. The participated restaurants can be classified as mid- to high-priced, full service restaurants. The frontline food service employees were chosen as a target sample— those who were taking orders from, and delivering service to, customers in the 14 restaurants. The managers of each restaurant were instructed to distribute and collect a copy of the questionnaire to/from each frontline food service employee. An envelope was included with each survey instrument to ensure confidentiality. The number of questionnaires was determined in proportion of the number of employees of each restaurant under investigation. The total number of 400 questionnaires was distributed and 282 questionnaires were returned with a response rate of 70.5%. The respondents were first asked to indicate how many complaining customers they met per day in general. The responses to this question ranged between 1 and 12 with an average of 2.3 cases, so the authors could conclude that the restaurant employees of this study frequently confront service failure situations. Based on the evaluations of the hypothetical profiles by the respondents, the conjoint analysis program derived estimates of the utility function for each survey participant. The importance of a given attribute was calculated and identified as the percentages of the total decision ascribed to that attribute. Through the conjoint analysis, the most desirable attribute configuration for the internal service recovery strategies was also determined.
4. Data analysis and results A total of 123 males (43.6%) and 151 females (53.5%) participated in the survey. The majority of the surveyed employees (54.6%) were in their 20s, or less than 20 years of age. More than half of the respondents (n ¼ 166, 58.9%) were full-time employees, and the length of working experiences ranged from less than 6 months to a more than 3 years. Table 3 summarizes demographic information of the survey respondents. The results of the conjoint analysis revealed the internal service recovery strategies that were favored by the frontline employees of this study. The relative important values of each attribute were calculated by determining the part-worth utilities for each level of each attribute. As shown in Table 4 and Fig. 1, the part-worth utility indicated the relative importance of each level of each attribute in terms of its contribution to the overall worth of a strategy package. The average utility value presented the relative importance of each level of each attribute. The analysis showed that monetary reward was perceived as more important to the frontline food service employees, accounting for 33.97% when compared to the other alternatives. It was followed, in terms of the relative importance, by recognition (28.74%), empowerment (23.13%), and reward method consistency (14.16%).
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Table 3 Demographic profile of surveyed frontline food service employees Variables
Frequency (%)
Variables
Frequency (%)
Gender Males Females Missing
123 (43.6) 151 (53.5) 8 (2.8)
Position Managers Full-time employees Part-time employees Missing
52 166 43 21
(18.4) (58.9) (15.2) (7.4)
Age Under 29 30 Over 40
154 (54.6) 87 (30.9) 41 (14.5)
Working experience Less than 6 months 6 mo—less than 1 yr 1 yr—3 yrs More than 3 years Missing
65 64 81 67 5
(23.0) (22.7) (28.7) (23.8) (1.8)
Total
282(100)
Total
282 (100)
Table 4 Average utility values and relative importance of each attribute Attributes
Levels
Description
Average utility
Relative importance
Empowerment
1-1 1-2
Full Partial
0.5895 0.5895
23.13
Reward method consistency
2-1 2-2
Consistent Case-by-case
0.2890 0.2890
14.16
Recognition
3-1 3-2 3-3
From supervisor From colleagues From manager
0.2644 0.3621 0.0977
28.74
Monetary reward
4-1 4-2 4-3
Bonus Pay raises Merit rating
0.5484 0.5751 0.0267
33.97
As for the empowerment attribute, the average frontline food service employees preferred ‘‘full empowerment’’ to ‘‘partial empowerment’’ when they dealt with service failure situations. For the attribute of ‘‘reward method consistency’’, the employees assigned a higher utility to ‘‘case-by-case reward method’’ than to ‘‘consistent reward method’’. With respect to ‘‘recognition’’ to be gained from different levels, while the service employees preferred ‘‘recognition from colleagues’’ the most, they perceived ‘‘recognition from manager’’ more desirable than ‘‘recognition from supervisor’’. The monetary reward with most preferred by the frontline employees was ‘‘pay raises’’, followed by ‘‘merit rating’’, and ‘‘bonus’’. By combining the attribute levels attaining the highest utility scores, the analysis suggested a bundle of the attributes that was most preferred by this sample of
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Reward Method Consistency 0.3
0.4
0.2
0.2
0.1
Utility
Utility
Empowerment 0.6
0.0
0.0
-0.2
-0.1
-0.4
-0.2
-0.6
-0.3
Full
Partial
Consistent
Recognition
Case-by-case
Monetary Reward
0.4
0.6
0.3 0.4 0.2
Utility
Utility
0.2 0.1 0.0
0.0
-0.2
-0.1
-0.4
-0.2 -0.3
-0.6
From Supervisor
From Colleagues
From Manager
Bonus
Pay Rises
Merit Rating
Fig. 1. Average utility values of attribute levels for frontline food service employees.
frontline food service employees. Their most desirable service recovery strategies would have the following attributes: pay raises, recognition from colleagues, a caseby-case reward method, and full empowerment.
5. Conclusion and implications Frontline employees are an important resource in generating revenue and ensuring customer satisfaction in the hospitality industry (Ross and Boles, 1994). Understanding the needs and expectations of the employees is an important task of management especially as the success of a restaurant business is greatly influenced by food service employees’ performance in service delivery. Through the use of conjoint analysis, this study identified four key attributes of internal service recovery strategies perceived by frontline employees working in restaurants. The attributes are monetary reward, recognition, empowerment, and
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reward method consistency. The analysis also proposed that the most desirable service recovery strategies for the average frontline employees of this study would have attributes such as pay raises, recognition from colleagues, a case-by-case reward method, and full empowerment. The conjoint analysis not only allows management to assess the combination of different attributes of recovery strategies but also enables them to determine where employees are willing to make trade-offs among the attributes. If a company cannot afford to offer a package of the most ideal strategies, they should understand the extent to which their employees are willing to give up one attribute or level to gain more of another. Among the attributes, the results demonstrate that restaurant service employees put a higher value on monetary reward than other alternatives. Chonko et al. (1992) stated that salespeople might attempt to maximize lower-order rewards such as monetary reward because they are uncertain of their ability to obtain other highorder rewards like promotion opportunities. Given the fact that the majority of the survey respondents were in the early stage of employment, the employees might have viewed monetary benefits as a long-run value providing them with financial security while non-monetary rewards as rather a short-term value. The study indicated that frontline food service employees would also benefit from non-monetary rewards in the service recovery process. Psychological recovery, which does not necessarily require financial incentives, is most likely when employees are recognized personally and pleased with their job. When management acknowledges an employee’s contributions, the employee values the personal touch and a feeling of pride may last for a long time. Hence, management should provide organizational support such as public recognition to compensate employees for their ongoing exposure to complaint handling. The more support employees feel, the less likely recovery efforts will stress them. Interestingly, the average employees of this study regarded recognition from colleagues more desirable than recognition from manager or supervisor. Voss (1992) argued that recognition from one’s peers is the highest compliment one can receive. As one way of recognizing employees’ contributions, management can highlight success stories of service recovery efforts in a company newsletter so that it can heighten an awareness of excellence in employees themselves as well as colleagues. Feeling of social gratification and confidence in fellow employees may lead to an increase in employee morale and job satisfaction (Hurst et al., 1994). As they are the closest to the customer, frontline employees are most affected by the introduction of empowerment. Empowerment is one of the best solutions to many business problems in the hospitality industry, helping employees find quick solutions for customers’ problems (Bryner, 1991). Empowerment is part of the Gro¨nroos’ (1989, 1990) interactive marketing framework, which views marketing as an interactive process in a social context where interrelations and interdependence are a vital element. In order for interactive marketing to occur, all customer-contact employees need to have responsibility for all the marketing activities that occur in the interaction with customers. In reality, however, frontline employees are often not given the resources and authority that they need to provide the required level of service, particularly when a service failure occurs (Parasuraman, 1987). The
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customer contact staff in this study preferred to be fully empowered in handling service recovery situations. Hancer and George (2003) regarded employee empowerment as a means of giving employees greater opportunity to influence the guest experience in a positive manner. The employees who are able to make appropriate on-the-spot decisions will be more effective part-time marketers and better service recovery performers. Employees’ perceptions of reward method consistency are closely related to their motivation and job performance. Effective rewards specifically implemented for each case or situation can help employees to understand the level of service that needs to be delivered, motivating them to practice proper behavior in any given service failure situation. The rewards offered must be perceived as being valuable and fair, everyone should have the chance to be rewarded, and rewards should be commensurate with the outstanding service performed (Arnett et al., 2002). Moreover, fair reward methods and procedures can serve as a signal to employees that they are valued and respected members of their company, enhancing job satisfaction. In conclusion, as customer satisfaction is a primary goal of any service organization, management must recognize the important role of customer-contact personnel in enhancing customer satisfaction. Since service employees and customers often interact closely, what employees experience is likely to be transmitted to customers. Likewise, in service recovery situations, employees’ perceptions of how well they have been recovered internally will affect customer perceptions of how well they have been recovered externally. Managers who design internal service recovery strategies should understand the complexity of employees’ preference for recovery strategy attributes. A variety of psychological and tangible rewards should be provided to service employees for their achievement in service recovery efforts. Parasuraman (1987) argued that the way in which a company rewards its employees has a significant effect on the level of service provided. Thus, management must ensure that employees’ endeavors are actively encouraged and appropriately rewarded to motivate them to provide service excellence and satisfy customers in the event of a service failure (Berry and Parasuraman, 1991). The provision of financial support, personal recognition, empowerment, and strategies directed specifically toward recovery efforts will lead to happy employees who do even more for their customers. The service recovery process can then eventually create a win-win situation for both customers and frontline service employees (Gro¨nroos, 1994). When a new internal service recovery strategy is being developed, the nature of the strategy and its salient attributes must be understood by all the parties involved. Based on careful analyses, the right strategy should be designed to meet the mutual benefits of the employees, the management, the organization, and the customer. This study also demonstrated how conjoint analysis could be applied to evaluate the relative importance that employees place on the various service recovery strategies used by employers. The results provide a more realistic view of the employee preference because they had to take trade-offs among attributes and express their preference for some particular combination of attributes. This analysis
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technique can provide management with a means to determine employees’ preference for service recovery strategies more easily than asking independent questions.
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