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Competition in the service industry Proposal

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Updated: Apr 9th, 2019

Introduction

Since the industrial revolution, a lot of advancements have been experienced in the field of technology. However, since the 1970s, rapid advancement in information technology has increased the productivity of many firms from all around the world (Pfeffer 21). Consequently, the availability of cash, the viability of the market, improvement in the production technology, and the fact that firms can enter and exit a market freely has greatly increased the number of players within a given industry.

As a result, therefore, the level of competition has greatly increased. To stand at a competitive edge, firms in the modern world usually strive to retain their customers and to increase their market share. From research, it has been identified that delivery of service quality plays a critical role in retaining customers who are loyal, as well as the ones who have been satisfied (Pfeffer 34).

Since they interact with customers directly or indirectly, frontline employees play a critical role in determining the quality of service a firm offers to its customers. Despite this realization, there are several factors that deter these employees from achieving the level of effectiveness and efficiency that is expected from them.

Low pay, long working hours, poor working conditions, stress and customer aggression reduce their level of motivation, impacting negatively on their performance. It is thus difficult for managers to retain employees who are highly skilled under such conditions (Pfeffer 40).

To reduce employee turnover rates, managers have turned to the concept of job embeddedness (Pfeffer 40). According to Pfeffer (1994), job embeddedness represents the concepts and techniques that can be applied to prevent employees from leaving their jobs. Training, empowerment, and rewards are some of the concepts and techniques that are used to guarantee job embeddedness.

Pfeffer (1994) regards these concepts as one of the most effective human resource practices. If these concepts and techniques are applied in an effective and efficient manner, they will result in High-performance work practices (HPWPs). The application of these concepts and techniques will increase the knowledge, skills and expertise of employees.

Consequently, the presence of a conducive working environment will give the employees the chance to put into practice the skills and knowledge that they have acquired. This will greatly increase the productivity of the employees hence increasing their motivation and the ease at which they will attain the firms as well as their personal goals and objectives.

As a result, firms will not only retain their key employees, but they will also increase their service delivery quality hence retaining loyal and satisfied customer. This will guarantee their profitability and sustainability in the short run and in the long run.

Given all these factors, the main purpose of this study is to critically analyze a conceptual model that has been designed to determine the effect of job embeddedness on the commitment of the management to improve the quality of service delivery. Therefore, the study will focus on the impacts that job embeddedness has on training, empowerment, rewards, and the overall performance of the employees.

This study will provide essential literature in the field of marketing and management. The study will also be a continuation of studies that have been conducted in the field of job embeddedness. According to Grandey (1999), training can only achieve the desired outcome if it is coupled with empowerment and rewards.

Consequently, empowerment can only be beneficial to an employee and the firm if it is supported with training and rewards. With this analysis, therefore, it is evident that these constructs are interrelated and they play a critical role in determining the level of job embeddedness that a firm enjoys.

Job embeddedness therefore plays a critical role in reducing the employee turnover rates within organizations (Boshoff 78). The current labor market is characterized with high employee turnover rates due to numerous reasons. Despite this fact, only a limited number of studies have been conducted to determine the effect that job embeddedness has on the performance of employees.

In this study, service recovery and extra-role performance service are the key performance indicators of frontline employees that need to be assessed. Service recovery is the role played by employees in resolving the issues that might reduce the level of satisfaction among customers.

While dealing with customers, there are instances where a customer might not be satisfied as a result of the quality of the goods or service offered the response he/she received or any other factor. It is thus the role of frontline employees to ensure that these issues are resolved before the customer is completely dissatisfied with the goods to retain him/her. On the other hand, extra-role performance entails the extra efforts that employees to put to ensure that a customer is satisfied.

According to Boshoff (2000), service delivery recovery can be considered as extra-role performance. Therefore, through training, empowerment, and rewards, a firm can develop a team of specialized employees who have the knowledge and skills to respond to specific service failures hence meeting the needs and desires of its customers.

Therefore, for a firm to achieve high levels of service delivery from its frontline employees, it needs to have consistent HPWPs that are based on the concepts of training, empowerment and rewards. This will increase its level of job embeddedness hence retaining its key employees as well as loyal and satisfied customers.

The results of this study will therefore show the level of managerial commitment in service delivery, job embeddedness, and the performance of hotels in Romania. At the end, the study will come up with recommendations with will aim at improving the level of service delivery by frontline employees. The study will also bring forward avenues that future research should focus on with regards to job embeddedness.

Literature Review

In the service industry, frontline employees play a critical role in the service delivery process. Therefore, the management of such firms such view them as partners in the process of meeting the needs and desires of their customers as well as retaining loyal and satisfied customers (Grandey 355).

For such employees to offer effective and efficient services to customers, they need to work in an environment where their efforts are supported by the management. In an event whereby the management is not fully committed in offering excellent services to its employees, the efforts put by frontline employees will therefore not be fruitful.

As a result, it will be difficult for such employees to successfully deal with complaints and requests that come from the customers that they are serving. Therefore, to ensure that their operations are sustainable in the short term and in the long term, the management of service delivery firms needs to be results oriented. In the process, frontline employees will get the motivation they need to meet the needs and desires of their customers (Grandey 362).

In the line of work, mistakes are always inevitable. Therefore, service organizations, through their frontline employees need to ensure that, “…they do the right thing the second time to avoid adverse effects that might have negative impacts on the operations of the organization” (De Ruyter 96).

The management of any given organization is driven by its mission and vision. However, the vision and mission set by organizations need to be designed from the viewpoint of frontline employees who are in direct contact with the customers. This will ensure that the management empowers its frontline employees through training, rewards, up to date technologies, and effective and efficient recruitment services (Bishoff 67).

According to Boshoff (2000), these are some of the factors that determine best human resource practices within an organization. Due to the fact that they result in a consistent performance by frontline employees, their presence in any organization is a good indicator of management commitment to service quality.

Consequently, it has been determined that training, empowerment, and rewards not only increase the performance and motivation of frontline employees, but they also attract highly qualified individuals (Bishoff 68). This greatly increases the versatility, effectiveness, and efficiency of the workforce of a given organization.

Several models have been advanced to show the relationship between HPWPs and performance within a given organization. The Ability, Motivation, and Opportunity (AMO) model is a prime example. The AMO model focuses on the individual variables within an individual that affect the level of his/her performance (Podsakoff 881).

Thus, the model focuses on competence of a given employee, his/her level of motivation and the opportunity such an employee has to put into practice their skills and expertise. Through training, the performance of employees is increased as a result of the additional knowledge, skills, and expertise that they have acquired (Podsakoff 883).

Through rewards, such employees will be motivated to put into practice the acquired knowledge and skills hence enabling them to deal with the complaints and request that have been raised by customers in an effective and efficient manner.

The level of commitment that the management has with regards to HPWPs plays a significant role in determining the level of job embeddedness that it wants to achieve. According to Podsakoff (2003), job embeddedness has three dimensions; links, fit, and sacrifice. Links is the formal or informal relationship that an employee has with an institution, or other individuals (Podsakoff 884).

An employee will have high levels of job embeddedness if the links that he/she has within his work environment increase. Fit is the compatibility that an individual has with his working environment (Podsakoff 885). With regards to this dimension, the level of job emdeddedness can only be increased if the goals and values of a given employee are in line with the overall goals and objectives of the organization he/she is working for.

Finally, sacrifice can be defined as the benefits that an individual is willing to forego by leaving a particular job (Podsakoff 885). An employee will have high levels of job embeddedness given the fact that the benefits he is enjoying from his current employment exceed the costs incurred.

Therefore, firms need to focus on achieving HPWPs to increase their levels of job emdeddedness. This will reduce their employee turnover rates and will play a critical role in encouraging extra-role performance (Podsakoff 885).

From the literature that has been covered so far, it has been identified that training, empowerment, and rewards are the key indicators of the commitment that the management of a given organization has on service quality. Through training, employees develop their skills and expertise in their respective fields.

As a result, such employees become acquitted with the role that they are playing within an organization, as well as with their values and beliefs. On the other hand, it will be difficult for employees who do not have relevant training to handle customers’ complaints and requests with a high degree of effectiveness and efficiency (Grandey 366).

Empowerment on the other hand gives employees the authority and responsibility to respond to the customers’ requests and complaints since the exact tasks that might be required to satisfy the needs of the customers cannot be predetermined. Thus, empowerment motivates employees and maintains employees within an organization (Grandey 366).

Rewards such as promotions, bonuses, passages and so on show the commitment that a given organization has to service delivery by appreciating the efforts of its frontline employees (Grandey 366). With regards to training, empowerment, and rewards, the following hypotheses can be developed for this study:

H1: Training has a direct relationship with frontline employees’ job embeddedness.

H2: Empowerment has a direct relationship with frontline employees’ job embeddedness.

H3: Rewards have a direct relationship with frontline employees’ job embeddedness.

Training, empowerment, and rewards also play a critical role in determining the quality of service delivery from frontline employees. According to Karatepe (2012), empowerment and rewards are one of the main factors that affected the performance of bank employees in South Africa.

With an effective training, empowerment, and reward system, employees develop listening and problem solving skills that make their response to customers’ complaints to be quick, appropriate and equitable hence conducting their services to effectively and efficiently. With regards to performance outcome, the following hypotheses can be developed for this study:

H4: Training has a direct relationship with frontline employees’ service recovery and extra-role performance.

H5: Empowerment has a direct relationship with frontline employees’ service recovery and extra-role performance.

H6: Rewards have a direct relationship with frontline employees’ service recovery and extra-role performance.

Consequently, the performance of employees who have several links and have developed a desirable fit with individuals and the organization is usually high (Grandey 367). Such employees will incur a lot of costs as compared to benefits if they decide to leave their work.

Therefore, it will be wise for such employees to retain their current jobs. With regards to these facts, the following hypothesis can be developed for this study:

H7: Job embeddedness has a direct relationship with frontline employees’ service recovery and extra-role performance.

H8: Job embeddedness has a direct relationship with the effects of training, empowerment, and rewards on frontline employees’ service recovery and extra-role performance.

Methodology

This study will focus on seven 4 star hotels and one 5 star hotel in the Poiana Brasov region of Romania, a key tourist destination in the winter. The study will only focus on frontline employees who have face-to-face contact with customers (tourists). This will include but not limited to:

  1. Front desk agents
  2. Food servers
  3. Bartenders
  4. Door attendants
  5. Guest relations representatives
  6. Bell attendants

To ensure that the collected data is credible, effective and efficient, questionnaires will be administered using random sampling. The study will have a sample size of 200 respondents ranging between the ages of 18 to 65 years. This will ensure that the views of the individuals of all age groups have been collected and considered in the study.

To collect data from these individuals, the management of these hotels will be contacted. However, due to the fact that it might be difficult to get direct access of frontline employees of these hotels, the questionnaires will be sent to the management. It is the management that will distribute the questionnaires to its frontline employees.

The consent of the respondents will be sought prior to the exercise. Consequently, this study will guarantee the confidentiality and anonymity of the participants. There will be two sets of questionnaires. The first questionnaire to be administered will collect information regarding training, empowerment, and rewards. The second questionnaire will collect information regarding service delivery recovery and extra-role performance.

To ensure that the data collected in this study are consistent and useful to the study, the questionnaires will be administered simultaneously. This will ensure that the respondents of the first questionnaire will also take part in the second questionnaire. After filling the questionnaires, the respondents (frontline employees) will seal them in an envelope and deposit it in a special box where the research will come to collect all of them at the end of the session.

In this study, literature review will be used as the main source of secondary data. This will include literature, information, and ideas from studies that have been conducted by other researchers. Therefore, peer reviewed journals, books, magazines, dissertations, and any other credible source of literature relevant to the topic of study will be used.

For accurate analysis of the statistical data, SPSS 16.0 will be used for descriptive data analysis. The data will be explored using descriptive statistics and histogram plots to determine the shape of the distribution for each sample variable. The name given to each variable in the data analysis will be provided in a table.

Data analysis will be carried out using parametric tests where the data will follow a normal distribution and where the sample number will be equal to or greater statistical power. Where the data will not follow a normal distribution or where the data will be split into groups of less than the sample size (n), non-parametric test will be used.

Conclusion

The high level of competition in the service industry has prompted the management of most organizations to come up with effective measures that will ensure that they stand on a competitive edge over their rivals to be sustainable and profitable in the short run and in the long run.

To achieve this, it has been identified that the frontline employees of these organizations need to be trained, empowered and rewarded to reduce their turnover rates and to increase their service delivery recovery and entry-role performance. As a result, a firm will be able to meet the needs and requirements of its customers hence retaining satisfied and loyal customers in the long run.

Works Cited

Boshoff, Charles. “The influence of selected antecedents on frontline staff’s perceptions of service recovery performance.” International Journal of Service Industry Management, 11.1 (2000): 63–90. Print.

De Ruyter, Kings. “Customer equity considerations in service recovery: a crossindustry perspective.” International Journal of Service Industry Management, 11.1 (2000): 91–108. Print.

Grandey, Andrew. “The conservation of resources model applied to workfamily conflict and strain.” Journal of Vocational Behavior, 54.2 (1999): 350–370. Print.

Karatepe, Michael. “Does job embeddedness mediate the effect of work engagement on job outcomes? A study of hotel employees in Cameroon.” Journal of Hospitality Marketing and Management, 21.4(2012): 440–461. Print.

Pfeffer, John. Competitive Advantage through People: Unleashing the Power of the Work Force. Boston: HBS Press, 1994. Print.

Podsakoff, Peter. “Common method biases in behavioral research: a critical review of the literature and recommended remedies.” Journal of Applied Psychology, 88.5 (2003): 879–903. Print.

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IvyPanda. 2019. "Competition in the service industry." April 9, 2019. https://ivypanda.com/essays/competition-in-the-service-industry/.

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