Recent Trends in Human Resource Management

Wednesday, June 24, 2009

HR practices- Customer Satisfaction and HR

HR practices- Customer Satisfaction and HR

HR is crucial to improve customer satisfaction-surprising but true.

The adage 'customer is king ', signifies the importance and value of customers. Customers are crucial for a business and a customer friendly culture drives a company's profitability. No longer is the sales team alone expected to determine customer satisfaction. HR too plays a major part in ensuring customer satisfaction by hiring the best talent and training them to serve customers effectively. An analysis on 800 Sears Roebuck stores in 1999 revealed that an increase of 5% in employee attitudes increased customer satisfaction by 1.3%.

The Workforce Optimas Award winner, NCCI Holdings trained its customer service representatives in insurance data software products because a survey conducted by them revealed that its customers wanted assistance to use their products. Consequently, there was a significant increase of 33% in the customer satisfaction rating.

Customer satisfaction and loyalty can take the company ahead even during a downturn. Southwest Airlines boasted of profit in the fourth quarter of 2001 despite the sudden decrease in air traffic due to the September 11 attacks. Kmart on the contrary was declared bankrupt because it could not provide a customer friendly environment like Walmart.

According to Michael DeSanto, a consultant for Walker Information, the cost of acquiring a new customer is equal to 5 times the expenses incurred for serving an existing customer. All these instances reiterate the need to build a strong customer relationship.

HR's Initiative

In order to drive customer satisfaction to an enviable level HR should concentrate on smart hiring practices and employee development.

Hiring the budding star performers

To build a customer friendly culture HR should hire only such employees who are capable to reinforce customer satisfaction. According to Ron Zemke, president of Performance Research Associates, a consulting firm, a successful customer service representative is one who is an optimist, flexible and able to manage stress and criticism. He should be able to strike a balance between his interests and that of the company and the customer.

Scrutinising a potential candidate should begin from the time he appears for the interview. The candidate's body language and attitude before and during the interview might give some cues about his capabilities.

Probing situations the candidate may have encountered during his earlier work experience during the interview helps to identify the candidate's abilities and attitude. Patrick Wright director of the Centre suggested this probing technique for Advanced HR Studies at Cornell University to Whirlpool.

Talent+ Inc, another HR consulting firm helped Ritz-Carlton in restructuring their hiring system. Previously, their customer complaints reached an all time high of 27%. After the new system was introduced, the complaints dropped to an amazing 1% in the year 2000.

According to the company's managing director Lisa French, the new system appraises the prospective candidate's traits. This is done through open-ended questions in the interview and a comparison of their traits with those of well-known personalities in the same field.

Training the budding stars

On being recruited, a candidate should be trained to establish customer relationships. To serve the customer better one needs to understand his needs. For this the employee should be aware of the different personality traits and their behavioural patterns. The Meyers Briggs Type Indicator questionnaire is an effective tool in identifying personality types.

Effective communication skills need to be imparted. Further developing the voice tone of the employee and his body language take the lead here. Research shows that 55% of the total impact of an employee's interaction with the customers is by body language and 38% by his tone. In particular, employees serving customers telephonically need to improve their listening skills, as it is difficult to comprehend the same over the phone. Listening to the customer attentively and restating it concisely shows the kind of attention a customer is given.

The people at Rosenbluth differ here also. They insist that their employees speak in an amicable manner to customers. Words like 'certainly', 'it's been my pleasure' put the customer at ease and display the employee's zeal to serve.

Building customer loyalty through employee loyalty

Employee allegiance is crucial to build customer satisfaction and loyalty, because customer and employee satisfaction run parallel.

According to Michael DeSanto, new employees feel good about their company when they have the opportunity to acquire new skills and move up the corporate ladder. Once an employee stays with the company for about 3 years he gets restless if nothing new is happening.

Similarly, new customers feel thrilled by the attention showered on them by the company. Over the years, regular customers used to attention, however begin to feel neglected and explore new avenues.

An organisation that does not acquire the loyalty of the customer or employees might be left in lurch. The two are interdependent. If the employee is happy then the customer satisfaction is also high.

One touch solutions at Captain D's

Captain D's proves that HR's role is detrimental in the restaurant industry where customer service is crucial.The HR initiatives taken by Captain D's to lower their staff turnover, increase customer service and thereby increase their profitability is commendable. Shoney's Inc, started in 1947, provides family dining at Shoneys' and Captain D's chain of restaurants spread over 20 states with 550 franchises.

According to Matt Gloster, vice president of administration for Captain D's, around 8000 employees are trained in all the aspects of restaurant business every year. An uphill task because employees are spread over 20 states and training them from recipes to business operations is an arduous task. The wide geographical spread made a simple thing like communicating a change in the recipe of a dish a complicated process during training sessions. The problem was that the changes have to be communicated to all the branches and thereby requiring to reproduce the same data a number of times.

OneTouch solution, an application software that has a video and two way voice and data application was introduced to allow the employees to communicate with the trainer.

The solution can be applied to PC or non- PC environments so Captain D's and Shoneys used it at all places in the restaurant. This ensures that groups or individual employees attend the training sessions. The training programmes introduced the employees to different topics and a quiz ensured that the trainees comprehend the programme.

Top managements know the developments in the restaurants when they access the data stored by Matt Gloster. Moreover, they can easily update the training programmes by downloading them. OneTouch also helped the restaurants to maintain a productive workforce by training the employees to multitask.

Captain D's thus improved its productivity and customer satisfaction and decreased turnover. Glowing over the restaurant's success Matt Gloster recalls the phrase coined by the chairman 30 years ago, ' show and tell '. The approach states ' tell me, and I'll forget. Show me, and I'll try to remember. Do it with me, and I'll always know how '.

The case of Captain D's shows the importance of an effective training programme to improve customer satisfaction. It also establishes the need to hire potential employees, train them and keep them happy.

Reference:The ManageMentor


Ray said...

The Wall Street Journal wrote a great article about 3 technologies which are replacing job boards and recruiters in the quest to source and identify key talent -

Professional Consultant said...

Thanks a ton dear Ray.

I want to make this blog a success ans would require help to do so.

The idea of running this online forum is to make it a ready reference for its followers for the long time.

Please suggest some topics for discussion.


Maria_Rilke said...

HR is very important to an organization. While the Employee development and elearning can be very expensive. Today, there are softwares right now that can give cost-effective programs that are appropriate to the specific needs.

kemai said...


Tks very much for post:

I like it and hope that you continue posting.

Let me show other source that may be good for community.

Source: Restaurant interview questions

Best rgs

Sonia Roody said...

Start early, right? It's about hiring the best employees to give satisfaction to customers. It's also about training them and teaching them the best values they should always show to their clients. Bad customer feedback should be prevented and it starts with hiring good employees.

Inzinc Consulting India said...

Very informative and useful blog.
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