PEOPLE - THE FIFTH ‘P’

The Objective of this Lesson is to have an

insight into
A.Importance of Employees in service
marketing
B.Role of employees in service marketing
C.Staff selection and recruitment
D.Training and Development
E.HRM Issues
A. Importance of Employees in service marketing
 In today’s competitive environment, organizations in all
industries have been forced to realize the importance of
customer care and its key role in strategy. Nowhere is this more
vital than in services marketing.
 The inseparable nature of services means that the human
element forms an intrinsic part of the service package.
 ‘People’ as the fifth element in the services marketing mix applies
not only to service personnel, but also recognizes the role that
other people - the customers - play in service delivery.
Sometimes the role of the customer is an important part of the
service itself, as in education,
 Management of people within the organization is a key task. The
organization’s staff are its prime resource, and human resources
management is the professional approach to finding and
developing the right people.
 Employees need to understand their role in the service exchange,
and human resources management provides the programs and
strategies to ensure the highest standards of customer care
B. The Role of the Employee in Services Marketing
 The role of the employee in services marketing varies according to
the situation and the level of interaction. It depends on the
degree of tangibility of a service. The level of contact can be
determined by classifying the service according to whether it is a
labor-intensive (people-based) service or an equipment-based
service, as follows:
 High Contact
People-based services: Education, dental and medical care,
restaurants
 LOW Contact
Equipment-based services: Automatic car wash, launderette,
vending machine, cinema
 Additionally, people-based services can be further broken down in
terms of the expertise and skills of the service provider:
 Professional: Medical and legal services, accountancy, tutoring
 Non-professional: Babysitting, care taking, casual labor
This illustrates the variety which exists in the roles of people in
service provision.
 These different roles may be grouped into
the following broad categories:
Primary - where the service is actually
carried out by the service provider, e.g.
dentists, hairdressers.
Facilitating - where employees facilitate
the service transaction and participate in
it, e.g. bank counter staff, waiters, hotel
porters.
Ancillary - where the employee helps to
create the service exchange but then is
not part of it, e.g. travel agents, insurance
brokers, equipment hire.
C. Staff selection and recruitment
 Employees and potential employees are customers of the
organization’s internal market and their needs and wants should
be considered in the same light as those of external clients.
Approaches and techniques for recruitment, the basic steps are as
follows:
Preliminary stage
 Identification of vacancy (may be a new post or replacement0.
 Develop job profile - review job description and person
specification. The person specification can be adapted to place
emphasis on customer and service orientation, a desirable or even
essential quality for all jobs.
 Consider internal sources
 Consider using specialist recruitment agency
 Advertise - internally and externally
 Process applications
 Screen applications for shortlist
 Selection stage
 Arranging interviews; venue, timing, date
 Determine process for selection; formal/informal
interviews use of pre-selection test, presentations
 Conducting interviews
 Testing
 Offer / Acceptance
 Formal appointment
 Follow-up stage
 Induction
 Training
 Ongoing staff development and appraisal.
 Requirements for the Job
Service employees frequently have
significant personal contact with customers
and responsibility for satisfactory service
delivery lies on the individual’s shoulders.

Basic requirements should be identified as

a starting point and may include:

Qualifications / technical knowledge

Ability, specialist skills and aptitude
Experience
Personality and personal attributes
Physical characteristics
 Recruitment issues in the service sector
 Certain services have special aspects, which may impact on
recruitment. The so-called ‘caring professions’ are an
example. Many caring services operate in traditionally low-
paid sectors so a sense of vocation and commitment may
be desirable personal attributes e.g. Charity Organizations
 Some services obviously require staff with certain
qualifications, such as teachers and lawyers. The degree of
specialization required will govern the potential
marketplace for recruits. In a situation where demand for
certain skills outstrips supply, which sometimes occurs, or
in highly specialized areas, a different approach to
recruitment may need to be found, such as in-service
training for potential applicants, to bring them to the
required standard.
 The rate of legislative changes, for example, affecting
organizations in the public sector brought about by
compulsory competitive tendering, privatization and the
introduction of a quality culture geared to customer care
has led to different personnel requirements.
D. Training and Development
 Training is needed on more than one level; at its basic level it
may be needed to impart knowledge about a particular aspect of
the organization or job; at a broader level, it gives focus and
direction for the future to employees and also plays a
communications role within the organization.
 Essentially there are three stages in managing the training of the
human resources - the staff - of the organization. These are:

 Identification of training needs: Define training objectives,

develop measures for evaluating training and decide on content/
scope.
 Implementation of training programs: Design training methods,
materials and facilities, coordinate training program and trainees.
 Evaluation of training effectiveness: Measure outcomes, compare
performance - adjust and refine future training accordingly.
 Staff development takes training a stage further. It
should be ongoing, and form an integral part of the
employee’s progress, incorporating areas such as the
following:

Functional training: specific job skills, technical

skills
Personal development: assertiveness training,
study for formal qualifications Organizational
development (cross-functional): quality
initiatives, customer care programs, corporate
mission awareness
Appraisal systems: incorporating both
employee and employer feedback
 Training can be carried out in any number of ways.:
 Workshops,
 Team briefings,
 Formal presentations
 Structured programs
 Work shadowing,
 Job exchange schemes and
 project management

If a new initiative is launched, such as Total Quality

Management (TQM), training will be an essential part
of communicating the new policy to all employees.
The task of designing and implementing training and
development programs lies with Human Resources
Management even though the commit-ment and
initiation of such programs must be led by top
management and involve all line management and
employees
E. HRM Issues
 When the people in an organization represent its most valuable asset, then the
task of looking after those people is equally important as financial, operations or
marketing management.
 The responsibilities of human resources managers include the
following:
 Recruitment and selection
 Training and development
 Setting up new modes of operation, e.g. quality circles
 Management of change
 Team briefings, communications strategies
 Staff suggestion schemes
 Internal communications
 Administration (pensions, insurance)
 Appraisal schemes
 Pay structures
 Staff development and support
 Trade Union liaison
 Conditions of service
 Discipline and grievance procedures
 Termination issues (redundancy, ill-health) Capability
 Additionally, human resources management plays a very
central role within an organization. If the human resource
task is to be handled effectively, managers need: A
thorough understanding of the needs of the directors,
managers and employees throughout the organization
 Clear identification with organizational goals and objectives
 Understanding of the needs and wants of external
customers
 Close co-operation with other functional managers.
 In practical terms, there are a number of ways in
which these wide-ranging aspects of human resources
management can be translated into effective
strategies for service organizations.
An action plan can be designed along the following
lines:
Organizational Objectives
Recruitment
Induction
Appraisal and Review
Training and Development
Pay Structure and Benefits
Quality