Module 5; Total Quality Management in Services

OPM106-Module5-TQMinServices.ppt

Total Quality Management in Services

The personal component of services is more difficult to measure than the quality of the tangible component. Generally, the user of a service, like the user of a good, has features in mind that form a basis for comparison among alternatives. Lack of any one feature may eliminate the service from further consideration.

Quality also may be perceived as a bundle of attributes in which many lesser characteristics are superior to those of competitors. This approach to product comparison differs little between goods and services. However, what is very different about the selection of services is the poor definition of the (1) intangible differences between products and (2) the intangible expectations customers have of those products.

Indeed the intangible attributes may not be defined at all. They are often unspoken images in the purchaser’s mind. This is why all of those marketing issues such as advertising, image and promotion can make a difference.

The operations manager plays a significant role in addressing several major aspects of service quality.

First, the tangible component of many services is important. How well the service is designed and produced does make a difference. This might be how accurate, clear, and complete your checkout bill at the hotel is, how warm the food is at Pizza Hut, or how well your car runs after you pick it up at the repair shop.

Second, another aspect of service and service quality is the process. Notice that 9 out of 10 of the determinants of service quality are related to the service process. Such things as reliability and courtesy are part of the process. An operations manager can design processes (service products) that have these attributes and can ensure their quality through the TQM techniques.

Third, the operations manager should realize that the customer’s expectations are the standard against which the service is judged. Customers’ perceptions of service quality result from a comparison of their before-service expectations with their actual service experience. In other words, service quality is judged on the basis of whether it meets expectations. The manager maybe able to influence both the quality of the service and the expectation. Don’t promise more than you can deliver.

Fourth, the manager must expect exceptions. There is a standard quality level at which the regular service is derived, such as the bank teller’s handling of a transaction. However, there are “exceptions” or “problems” initiated by the customer or by less-than-optimal operating conditions (e.g., the computer “crashed”). This implies that the quality control system must recognize and have a set of alternative plans for less-than-optimal operating conditions.

Well-run companies have service recovery strategies. This means they train and empower frontline employees to immediately solve a problem.

Determinants of Service Quality

Reliabilityinvolves consistency of performance and dependability. It means that the firm performs the service right the first time and that the firm honors its promises.
Responsivenessconcerns the willingness or readiness of the employees to provide service. It involves timeliness of service.
Competencemeans possession of the required skills and knowledge to perform the service.
Accessinvolves approachability and ease of contact.
Courtesyinvolves politeness, respect, consideration, and friendliness of contact personnel (including receptionists, telephone operators, etc.)
Communicationmeans keeping customers informed in language they can understand and listening to them. It may mean that the company has to adjust its language for different consumers - increasing the level of sophistication with a well-educated customer and speaking simply and plainly with a novice.
Credibilityinvolves trustworthiness, believability, and honesty. It involves having the customer’s best interests at heart.
Securityis the freedom from danger, risk, or doubt.
Understanding/Knowing the customerinvolves making the effort to understand the customer’s needs.
Tangiblesinclude the physical evidence of the service.

Service Quality

Quality service can be defined as "how well the service does what the customer thinks it is supposed to do."
Quality management in services must focus on employee performance related to intangible, difficult-to-measure quality dimensions.
The most important of these quality dimensions is how quickly, correctly, and pleasantly employees are able to provide

Assessing Service Quality

Managers of service firms may find SERVQUAL useful when evaluating performance.
SERVQUAL is a widely used instrument that provides direct comparisons between customer service expectations and the actual service provided.
SERVQUAL focuses on five service dimensions that influence customers’ perceptions of service quality:
- Tangibles, reliability, responsiveness, assurance and empathy.
Research also indicated that customers, across a broad range of service businesses, have the following expectations in descending order of importance:
- Reliability (consistency)
- Responsiveness (speed)
- Assurance (competence)
- Empathy (customer orientation)
- Tangibles (what he/she can see, feel, smell, hear, and taste)

Service Failure

In all service contexts, service failure is inevitable.
Service failure occurs when service performance that falls below a customer’s expectations in such a way that leads to customer dissatisfaction.
Managers should have a plan for when services fail

Service Recovery

Service recovery refers to the actions taken by a firm in response to service failure.
Service recovery - Refers to the training and empowering frontline workers to solve a problem immediately.
Well-run companies have service recovery strategies.
This means they train and empower frontline employees to immediately solve a problem
For instance, staff at Marriott Hotels are drilled in the LEARN routine—
- L isten,
- E mpathize,
- A pologize,
- R eact,
- N otify—with the final step ensuring that the complaint is fed back into the system.
At the Ritz-Carlton, staff members are trained not to say merely “sorry” but “please accept my apology.”The Ritz gives them a budget for reimbursing upset guests.
Similarly, employees at Alaska Airlines are empowered to soothe irritated travelers by drawing from a “toolkit” of options at their disposal

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