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Implementing RM programmes: Shared values, staff, skills &

style

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Shared values, staff, skills & style of the employees

Softer issues in Seven “s” in Mc Kinsey’s model.

Involves internal marketing.

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Payne, Christopher, Clark & Peck (2001).

Internal markets: the individuals and groups within the organization who by their actions and beliefs determine the style and ethos of the business. It is now widely recognized that developing shared values in support of a customer-oriented corporate culture is a critical requirement for sustained success in the marketplace.

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Internal marketing IM – employee as customers IM as a change management IM as a social process IM as knowledge renewal

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The implementation of any change, such as the move to a RM approach, must be supported by corresponding change within the organization.

Not only in terms of systems and cultures but also the attitudes and abilities of staff.

Internal Marketing – Employees as customers

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Berry (1980) first coined the term internal marketing. Internal marketing is defined as the means of

applying the philosophy & practice of marketing to people who serve external customers so that

(i) the best possible people can be employed & retained

(ii) they will do the best possible work

Internal Marketing – Employees as customers

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The focus of Berry’s conception of internal marketing was on employee recruitment & motivation with a view that employee as the customer and the job as the product.

Stress placed on customer satisfaction in external marketing is just as appropriate, just as necessary, in internal marketing

Internal Marketing – Employees as customers

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Internal Marketing – Employees as customers Berry (1983) emphasize that IM is relevant to

virtually all organizations, esp. labor-intensive service organizations the quality of services sold is determined in large measure by the skills and work attitudes of the personnel producing the services.

To the extent that labor-intensive service firms can use marketing to attract, keep and motivate quality personnel, they improve their capability to offer quality service.

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Internal Marketing – Employees as customers Berry (1983)

The process one thinks of as marketing – eg. Marketing research, market segmentation, product modification, and communications program – are just as relevant to IM as to external marketing.

The marketing task is not only of encouraging external customers to buy, but also encouraging internal customer to perform increase the likelihood of external customers continuing to buy

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Rafiq and Ahmed (2000) – 5 elements of internal marketing1) Employee motivation & satisfaction -

productivity & external service quality

2) Customer orientation & customer satisfactionThe creation of employee satisfaction as an end itself.Gronroos (1985) presents internal marketing as a vehicle for the explicit promotion of customer-orientation behavior.

3) Inter-functional coordination and integrationWinter (1985) recommends the use of internal marketing as a tool for aligning the efforts of the various functions within an organization

Internal marketing as a change management tool

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Internal marketing as a change management tool4) A marketing-like approach to the above: IM must look

to marketing principles and practices in order to design and implement its programs.

5) Implementation of specific corporate or functional strategiesIM as a crucial stage in the implementation of strategic change.

In this context, internal marketing is used as tool to generate understanding and support for strategic change, removing barriers such as complacency, the misallocation of resources and internal politics

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Internal marketing as a social process ‘internal relationship marketing’: An

integrative process within a system for fostering positive working relationships in a developmental way in a climate of cooperation and achievement.

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Internal marketing as a social process The practice of internal RM involves the blurring of

the internal-external boundary of the organization through inter alia:1) Customer involvement in product design, production and service2) Close partnership between suppliers and customers3) Acceptance that relationships are enterprise assets4) Open exchange of ideas of mutual gain5) The systematic collection and dissemination of customer information (detailing and negotiating, requirements, expectations, needs, attitudes and satisfaction).

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Internal RM as knowledge renewal

Ballantyne (2000) argue that the common denominator in all approaches to IM is knowledge renewal (generation and circulation of new knowledge)

There is a clear distinction between internal transaction marketing and internal relationship marketing.

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Internal RM as knowledge renewal Transaction marketing – concerned with the capture of

knowledge, through measurement, control and research methods in the form of new product information, policy, strategy etc.

Internal RM: concerned with knowledge generation, through cross-functional teams and creative approaches to problem solving and knowledge circulation through team-based learning programme, feedback systems, and skills development workshops.

Trust is a prerequisite of internal RM both between the organization’s various employees and betweeen employees and the management.

Without trust, the interaction, dialogue and motivation towards a common goal cannot occur.

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Shared values and culture Shared values as “those ideas of what is right

and desirable which are typical of the organization and common to most of its members”

The presence of a set of shared values that permeate all levels of the organization is essential for the development of a culture conducive to RM.

These shared values must include a commitment to quality and customer service.

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Shared values - The mission statement

Creation of RM-oriented culture started in mission statement.

“what business are we in” and “what bussines should we be in”.

In a study of 83 Canadian and North American companies, Bart, Bontis and Taggar (2001) found that those mission statements which specified means as well as ends had a greater effect on the performance of the business.

Mission statement should be clear and meaningful

Requires commitment of the staff throughout the organisation, particularly senior management.

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Shared values - Communication

Marketing communication are central to RM. Trust and commitment are products of

communication, ‘Relationship… are impossible without

communication’ Key to successful RM communications is the

integration of the various messages transmitted and received by the organization. It is the shared values that provide the basis for such integration, providing a set of guiding principles that temper the collective voice of the organization.

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Staff and internal service quality

Internal service quality can be defined as the degree to which the experience of working for the organization creates employee satisfaction.

External Service Quality is defined as the extent to which the service consumption experience creates customer satisfaction.

Internal service quality affects external service quality

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The Virtuous Circle Various authors have put forward the views

that employee retention is essential for profitability. Profitability can be enhanced by relying on employees’

natural predisposition to offer good service – emphasis on mechanism which motivates employee to achieve as highly as possible and support mechanism such as training programs which enable them to do their job to the best of their ability.

This creates a ‘virtuous circle’

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The virtuous circle model

External service quality

Internal service quality

Employee satisfaction

Employee retention Employee productivity

Profitability and growth

Customer satisfaction

Customer loyalty

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Implications

Organizations must focus on internal service quality in order to promote growth.

Key implications of the virtuous circle model is the assumption that the RM manager must seek to create an environment within which member of staff are motivated and empowered to deliver good customer service.

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Internal Service Quality

Internal service quality

Tools

Training

Rewards and recognition

Communication

Managementsupport

Teamwork

Policies and procedure

Goal alignment

Hallowell et al (1996) identify eight components of internal service quality

Managing these components effectively can enhance internal service quality and so improve external service quality and create satisfaction

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Style – The impact of style Christopher, Payne & Ballantyne (1991)

Style – “The way managers collectively act with respect to use of time, attention and symbolic actions.”

Gronroos (1981) identified the adoption of a supportive management style as a key element of strategic internal marketing. The way in which managers behave will have a significant impact on the behaviour of staff for the following reasons:

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Style – The impact of style1) Power – reward power vs. coercive power managers have significant power to influence the behavior of staff2) Leadership – staff will look to managers to provide guidance, support and model behavior, because of their authority, and usually greater experience3) Communication: managers provide a vehicle by which messages can be passed between senior mgmt & the lower level staff

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Exercising influence through reward systems

Managers at all levels of the organizations have a significant impact on the success of a RM strategy.

The reward systems of an organization determine the way in which managers exert influence on staff.

Two types of rewards: monetary and non-monetary.

Appropriate rewards closely related to better performance.

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Style – Non-monetary rewards When management seeking to establish a quality

culture throughout the company, non-monetary reward systems are better used.

Such practices provide for positive reinforcement of appropriate behaviour without involving a fundamental shift in the organization systems and structures.

Non-monetary rewards that were associated with high quality performance include:

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Rewards in kind; gift certificates, merchandise or similar tangible rewards

Celebrations: special events, parties or dinners Praise: verbal or written expressions of recognition Staff development: training, education or

experience that will increase the individual’s employability

Advancement: promotion criteria based on quality achievement

Style – Non-monetary rewards

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Allan & Kilman (2001) appropriate behavior must ultimately be rewarded financially – to ensure every member in the organization embedded into the organization culture

This involves assimilating quality-based rewards into the performance targets, appraisal systems and pay structures of the business.

Style –Monetary rewards

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Monetary reward systems that were associated with high quality performance are:

1) Profit sharing2) Gain sharing (bonus are paid on the basis of gains in

productivity & profitability)3) Employment security4) Compensatory time (option to take overtime pay) 5) Individual reward system6) Quantity-based performance appraisals

Style –Monetary rewards

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RM Reward systems

Should be based on team rather than individuals-fostering a sense of teamwork and collective efforts towards common goals.

Goals should be quality rather than quantity. Based on customer keeping not getting.

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Skills – The importance of skills Appropriate training program will serve 2 key

functions in RM:

1) Motivate and empower staff, serve as a vehicle for enhancing internal relationship, and thereby indirectly benefiting external ones

2) It will have a direct effect on the maintenance of relationships with external customers (organization’s staff effectiveness - service quality)

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Skills – Training and quality TQM – underpinned by appropriate training Christopher, Payne & Ballantyne (1991) warn

the dangers of jumping directly into intensive, large scale ‘quality training,’ which can be waste of time and resources.

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Skills – The training process

Needs assessment

Programme delivery

Evaluation

Internal

Customer f/back

Employee feedback

Analysis of Marketing plan

Managers’ assessment

Internal data

External consultant

External

Trainee evaluation

Feedback frommanagers

Customer feedback

Productivity/Financial measures

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External consultant Hire external consultant to conduct training

needs assessment identify organization’s skills gaps

Drawback: the employment of outside expert maybe misinterpreted by employees, leading to defensiveness & un-cooperation

Skills – The training needs assessment

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Internal data Zemke (1998) suggested sources that can offer

insights into skills gaps:1. error data2. customer complaints3. grievance records4. exit interview records

Cheap and quick.

Skills – The training needs assessment

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Managers’ assessment Matthews, Akiko, Kekale, Reka, Pereira & Silva

(2001) found that the most important sources of information on training needs were the judgment of senior managers and the opinion of supervisors

Top-down approach – show managers’ commitment, but might result to resistance among the employees

Staff involvement in decision making is considered important in most important.

Skills – The training needs assessment

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Analysis of RM plans Careful analysis of company’s future plan can help to

anticipate future needs. Managers have an important role to ply in

determining the skills that will be required to meet the changing requirements of the business’s strategic customers, both present and future.

Employee feedback Involving staff in the process of identifying training

needs better understand training required + ensure that any training delivered is well received.

However, these benefits will only occur if the staff perceive that senior management listen and act on such feedback.

Skills – The training needs assessment

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Skills – The training needs assessment

The customer feedback Very important sources of information. Soliciting customer feedback works in the

same way as with employees.

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Skills – Delivering the programme Internal training

An effective vehicle for the transmission of corporate values to new staff.

Suitable for an organization in which a culture of continuous improvement and customer service are already established.

For RM training, internal staff can offer insights on the particular requirements of customers.

External delivery Internal training – unlikely to bring influx of new ideas The use of external training program allows the trainee to

reflect on their current working practice away from the culture that has created such practice

Facilitate a more critical view of current systems, culture, and a greater openness to change

Increase the receptivity of trainees to new ideas and practices – broader experience that brought by trainers + perceive external trainers as independent of management influence

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Skills – Evaluating the effectiveness of training Kirkpatrick (1998) identifies 4 assessment levels of

training effectiveness:1) Reaction: trainees’ internal assessment of the training2) Learning: trainees’ evaluation of the learning gained3) Behavior: managers’, supervisors’ or other

independent view of the change in the trainee’s behavior as a result of the training

4) Results: measurement of the employee’s performance (e.g. customer satisfaction or employee productivity)

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Skills – Evaluating the effectiveness of training

Trainee evaluation Most of the time, training evaluation has been

made by asking the trainees to fill up the evaluation form as they pack their bags to leave the session widely criticized

Waterhouse-Cranfield surveys of European HRM suggests that trainees be asked to evaluate the effectiveness of training some time after the event reflect the training experience + allowing trainees to attempt to apply the training in the workplace.

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Skills – Evaluating the effectiveness of training

Productivity/financial measures Evaluate tangible impact of training can be done

through changes in productivity or financial performance

Besides financial measures, it is important to take into account the less direct benefit like organization culture and employee motivation

Feedback from managers Provide a perspective on changes to behaviour,

learning & the functional effectiveness

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Skills – Evaluating the effectiveness of training

Customer feedback It provides a valuable external view of the impact

of training and the changes in trainee behaviour Enhance the relationship