Expanding paradigms in providing internal service

Expanding paradigms in providing internal service





The Authors


Debra F. Cannon, Debra F. Cannon is Director and Associate Professor at the Cecil B. Day School of Hospitality Administration, Georgia State University, Atlanta, Georgia, USA.


Abstract


Continual quality improvement is crucial to competitive success. A systems approach is vital in encompassing every segment of the hospitality organization in striving for service quality. The focus of this article is on employees as internal customers and the critical role this group plays in the delivery of quality results. The article will discuss the theoretical foundations for the concept of “internal customers.” Research will be reviewed that has linked service quality between internal and external customers. The necessity of integrating service to “internal customers” into an organization’s culture is also explained. Examples from leading hospitality companies are presented that reinforce the concept of “internal customer” from the pre-hire stage to other career stages.

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Article Type: Conceptual Paper
Keyword(s): Service quality; TQM; Employee relations; Hospitality industry.


Managing Service Quality
Volume 12 Number 2 2002 pp. 87-99
Copyright © MCB UP Ltd ISSN 0960-4529

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Introduction


Over the last decade, a significant number of hospitality companies have embraced the concepts of total quality management (TQM). As service expectations of customers and potential customers have escalated, hospitality businesses have found the implementation of quality processes to be a vital competitive component. Although there have been numerous modifications and adaptations of TQM, the essential principles of this management philosophy are fundamental to most continual improvement processes. One of the TQM elements that is particularly relevant in the delivery of the intangible hospitality product of service is the involvement of those delivering this product – employees.

Singh and Deshmukh (1999) described TQM as involving a systems approach that encompasses every interaction between the various elements of the organization and is a continuous, never-ending process. Silos (1999) reiterated that every aspect and every process of the business system must be involved reaching vertically and horizontally across levels and functions of an organization. This pervasive infiltration of quality processes obviously includes, or should include, every employee within the organization.

Kanji and Asher (1993) in their analysis of Total Quality Management, stressed the expansion of the role of “employee” to that of “internal customer.” In their analysis of delivering quality results, satisfying customers’ requirements relates to internal as well as external customers. One of their TQM principles was the “internal customers are real” and that it is necessary to achieve successful internal working relations in order to be able to satisfy external customers. Johnson (1993) further stressed that quality change can be driven by the realization that every person in the organization has internal customers who must be satisfied. A new, more cooperative organizational culture can be created by this sense of interdependency. “As the working climate improves internally, people see external customers in an improved light” (Johnson, 1993, p. 27).

Richbell and Ratsiatou (1999) emphasized that there is an increasing realization that TQM has implications for the entire work force and that proper utilization of TQM processes and tools requires a focus on the management of human resources. Whereas the “hard side” of TQM has included systems data collection and measurement, the “soft side of TQM,” pertains to generating an organizational culture that reinforces and supports continuous improvement involving re-educating employees as well as supports for their evolving new roles and responsibilities including greater participation and teamwork (Wilkinson et al., 1991). “Soft” should not be misinterpreted as of less importance because, in fact, research supports the human resource areas to be of paramount importance to TQM implementation and results. Dow et al. (1999) found that the “soft” quality practices of employee commitment, shared vision and customer focus combine to yield a positive correlation with quality outcomes whereas the “hard” practices of benchmarking, advanced manufacturing technologies and close supplier relations did not contribute significantly to superior quality outcomes.

The focus of this article is on employees as “internal customers.” Although the “internal customer” concept is typically included in quality-related literature, often no theoretical foundation is provided nor are components delineated or implementation strategies discussed. This article will explore the theoretical foundations for the internal customer concept as well as research on quality processes related to internal customers. Some of this research, in being anecdotal, discusses how quality-oriented organizations have operationalized this concept. A model will be presented in illustrating the numerous components that can be included in addressing holistic and changing needs of employees as internal customers. Lastly, the challenges in delivering service to internal customers will be delineated including the culture of the organization.



Theoretical foundations


Zeithaml and Bitner (1996) acknowledged that the term, total quality management (TQM), is used in myriad ways and is most often defined as a management philosophy based on continuous improvement. Since there is not a universally accepted definition and the connotations are numerous when using the term, TQM, this article will use Zeithaml and Bitner’s more exact term, service quality. Service quality is defined by the two authors as “the delivery of excellent or superior service”.

The differentiation between service quality, as compared to quality in the delivery of tangible goods, is critical to address. A number of researchers (Chase, 1981; Parsuraman et al., 1988; Ross, 1994) have emphasized that service quality is unique in that:

the customer is a participant in the service process;
the product and consumption occur simultaneously;
service capacity is time-perishable;
the challenging intangible nature of service and the inability to store the output;
the more labor-intensive operations involved;
the level of quality expected is less perishable;
site selection is dictated by customer location; and
the importance of individual preferences and perceptions.
Singh and Deshmukh (1999), in addition, stressed the difficulties involved in measuring quality service levels.

ServQual, a research questionnaire, developed by Parasuraman et al. (1988), identified five dimensions of service quality that can be measured. The five dimensions included: assurance, empathy, reliability, responsiveness and tangibles. In further defining the five criteria, the following explanations were used:

(1) Assurance: knowledge and courtesy of employees and their ability to convey trust and confidence;
(2) Empathy: caring, individualized attention which the firm provides to customers;
(3) Reliability: ability to perform the promised service dependably and accurately;
(4) Responsiveness: willingness to help customers and provide prompt service;
(5) Tangibles: appearance of physical facilities, equipment, personnel and communication materials (Dale and Bunney, 1999).
Zeithaml et al. (1990) also addressed when customers’ perceptions of the service received fall short of their expectations. Called “Gap 5,” the fault can ultimately be linked to one of four shortfalls, called by the researchers Gap 1, 2, 3, and 4. These shortfalls include:

Gap 1 – Customers’ expectations/management-perceptions gap. There is a discrepancy between the customers’ expectations and what management perceives their expectations to be.

Gap 2 – Management’s perceptions/service-quality specifications gap. Even if the customers’ expectations are correctly identified, management may fail to translate these expectations into appropriate performance standards. This gap is probably due to a lack of commitment from management to service quality.

Gap 3 – Service quality specifications/service delivery gap. This gap is related to employees failing to meet the appropriately designated service standards because adequate and appropriate resources are lacking such as people, systems, technology, etc.

Gap 4 – Service delivery/external communications gap. This gap results from broken promises. This gap may also occur because of a failure to explain internal procedures which are followed for the benefit of the customers. This gap can result, therefore, from problems in customer expectations and perceptions.

Although not specifically applied to internal service by the ServQual developers, the service quality criteria and five gaps can be applied to employees. Employees join organizations with expectations regarding working, the anticipated caliber of supervision and management as well as the overall quality of the business environment. Seemingly, Gap 5 with employees, can result in uncommitted workers who then do not deliver service quality and ultimately probably leave the organization, voluntarily or involuntarily.

The important role of the employee is grounded in the literature of total quality management and these theoretical perspectives are important to incorporate as a foundation from which the service quality concept was born. Although Deming did not refer to employees as “internal customers,” his philosophy of total quality management included the need for employers to support employees in delivering optimum performance. Deming’s “Fourteen Points,” contained specific ways to better the employer-employee relationship, with the goal of increasing organizational quality (Walton, 1986). Although all 14 of Deming’s points affect employees, those items that directly impact workers will be discussed.

His “Point 6” urged companies to “institute training.” Deming’s perception was that workers often learn their jobs from untrained employees. “They can’t do their jobs because no one tells them how” (Walton, 1986, p. 68). His “Point 7,” urged employers to “institute leadership.” In Deming’s words, “Leading consists of helping people do a better job and of learning by objective methods who is in need of individual help” (Walton, 1986, p. 70). He also admonished employers to “drive out fear” (Point 8), stating that “it is necessary for better quality and productivity that people feel secure” (Walton, 1986, p. 72). Deming encouraged organizations to “break down barriers between staff areas” to facilitate teamwork. In fact, he noted, one department’s goals may actually cause trouble for the work outcomes of another department (Point 9, Walton, 1986, pp. 74-75). Deming urged in his “Point 10” to “eliminate slogans, exhortations, and targets of the workforce.” In his opinion, these approaches never helped employees do a good job and instead generated “frustration and resentment” (Walton, 1986, p. 76). He also admonished to eliminate numerical quotas (Point 11) because they only guarantee inefficiency and high costs. An emphasis on quotas can result in turning out quantity rather than quality and can, in addition, be demoralizing to the worker. Deming’s “Point 12” reflected the philosophy that employees want to do a good job and are distressed when they cannot. “Too often, misguided supervisors, faulty equipment, and defective materials stand in the way. These barriers must be removed” (Walton, 1986, p. 82). Deming’s “Point 13” again emphasized “instituting a vigorous program of education and retraining” particularly in the areas of teamwork and statistical techniques (Walton, 1986, p. 84).

Deming’s “chain reaction of quality” concept reflected the ultimate outcome benefiting employees and perspective employees – job stability and more jobs in the marketplace. The rational from Deming was that by improving quality, costs decrease, productivity improves, a greater market share is captured, the company stays in business and grows. Deming, in his worldwide travels to organizations, however, often found managers wanting to implement speedy solutions to deal with employee problems. Deming called the quick-fix solutions “instant pudding” and explained them as being smoke-screens used by managers in pretending to do something about a problem but yet not investing employees with any authority, nor acting on their recommendations or ideas. Employees, in this process, become disillusioned (Walton, 1986).

Peter Drucker, in Management Challenges for the 21st Century (1999) stated that “increasingly ‘employees’ have to be managed as ‘partners’ – and it is the definition of a partnership that all partners are equal.” He continues that, increasingly, “the management of people is a ‘marketing job.’ In marketing, one begins with the question: ‘What does the other party want?’ Drucker predicted that very different assumptions about people in organizations and their work will be necessary in the twenty-first century. He concluded, “One does not manage people. The task is to lead people. And the goal is to make productive the specific strengths and knowledge of each individual” (Drucker, 1999, pp. 21-22).

Drucker’s marketing concept relates closely to “relationship marketing” as a strategic business orientation. Batt (1999) explained that there are two basic strategies for competing in the delivery of sales and service. One approach entails maximizing sales and minimizing costs. This mass production approach was inspired by Scientific Taylorism. The second approach, reflecting TQM principles, is to maximize sales by providing good service and can be referred to as “relationship management.” In providing quality service, the goal is to build long-term customer relationships (Gutek, 1995; Keltner, 1995). Buttle (1996) broadened the concept of relationship marketing even further by stating that this orientation must consider the management of all relationships with which a business is involved including all contacts that a company may have with individuals who have the potential to influence and motivate customer satisfaction. The “six markets model” developed by Christopher et al. (1991) reflected this perspective, as did Gummesson’s “30Rs” (1997) which delineated 30 relationships important to an organization that extend beyond that of the customer. Internal relationships, including functional areas and employees, are vital in building long-term customer ties.

Additional quality models can be found in the well-known quality awards that exist around the globe. Japan’s Deming Application Prize, the USA’s Malcolm Baldrige National Quality Award and the European Quality Award each delineate and describe factors critical to quality results and processes leading to these results (Soriano, 1999).

The Malcolm Baldrige National Quality Award includes criteria for human resource utilization. This category examines the “effectiveness of the company’s efforts to develop and realize the full potential of the work force, including management, and to maintain an environment conducive to full participation, quality leadership, and personal and organizational growth.” Specific criteria in this category target employee involvement, quality education and training, employee recognition and performance measurement, and employee well being and morale (National Institute of Standards & Technology, 2000). The European Quality Award includes people satisfaction in its “results category” (90 points out of a possible 500 points) and people management in “factors that led to those results” category (also 90 points out of a possible 500 points). These criteria include “how the organization releases the full potential of its people to improve its business continuously” (Dale and Bunney, 1999, p. 212) and the resulting level of success in the organization of satisfying the needs and expectations of its employees. The Deming Application Award likewise includes “human resources focus” among its ten categories (Dale and Bunney, 1999).



Review of research linking service quality between internal and external customers


In addition to the literature on quality, research in human resource management has shown a connection between employee-oriented practices, employee behavior and organizational effectiveness. Mills (1986) maintained that service quality must be based on positively impacting employee behavior before the customer-employee interaction rather than measuring service outcomes after the fact. Schneider and Bowen (1985) maintained that service employees provide service to customers commensurate with the treatment they receive from their employers. Zerbe, Dobni, and Harel (1998) agreed with this theoretical position but stressed that an employee-level measurement was necessary to properly test such a theory. Their study of airline employees showed a positive correlation between employee satisfaction with specific human resource practices and self-reported employee behavior regarding the delivery of quality service. This study also found that employee satisfaction with leadership and work demands had a significant direct impact on service behavior.

Additional research, in a wide range of service organizations and employing varied methodologies, has supported a positive relationship between employee perceptions of organizational practices and customer ratings of organizational effectiveness (Tornow and Wiley, 1991; Ulrich et al., 1991; Wiley, 1991). Ulrich et al. (1991) delineated the specific organizational practices of employee selection and hiring, appraisal, promotions and reward administration. These researchers maintained that these practices can be used to “increase the shared mindset among employees and customers” (Ulrich et al., 1999, p. 91). The result is customer attachment and competitive advantage in the delivery of quality service.



Integrating theory and implementation


In establishing a theoretical foundation for internal service quality, the works of many are relevant. The ServQual model is applicable in delineating service quality criteria as well as the corresponding shortfalls or “gaps” that occur when customer perceptions do not meet their expectations. Although developed for external customers, this framework is applicable to internal customers as well. The work of Deming is relevant in the delineation of his “Fourteen Points,” many of which can directly impact every employee in an organization. The additional topics of relationship marketing, participative management, employee empowerment and teamwork merge in the recommended organizational environment for maximizing service quality.

Table I illustrates the factors delineated by Deming, in his TQM philosophy, and the ServQual model of measuring service quality. The table also delineates employee-related processes that could reflect one or both of these theoretical approaches as a preface to the more anecdotal illustrations of internal service quality to follow in hospitality environments.



Making paradigm shifts in an organization’s culture


Where does a company begin in this paradigm shift of the role of the employee? In keeping with the theoretical foundation of internal service quality, what must happen in an organization for employees to be treated as customers or, using Drucker’s term, “partners?”

Laza and Wheaton (1990) made an initial attempt to delineate typical pitfalls in implementing a quality management philosophy. Their number one pitfall was “over-simplification and under-estimation of the difficulty in bring about cultural change.” Silos (1999) elaborated on the difficulties of switching from a traditional, top-down management style to a style of total participative management, which is a crucial component in consistent quality results. She noted that years ago, Ford Motor Company established a task force to study the Japanese manufacturing process in analyzing why Japanese companies were outperforming American plants. The task force found that the key to Japanese efficiency was the empowerment and teamwork found among the employees. Mak (1999) further explained the cultural differences between East and West in that Japanese workers and management think in the same way. In knowing that the quality movement would benefit the company in achieving higher levels of excellence, both groups support the involved processes. In Japan, managers and workers collaborate on solving quality problems reflecting a trustful relationship between the two groups. In Western organizations, the trustful relationship between managers and workers is lacking and, in Mak’s research, managers feel more threatened by empowered employees.

Brown et al. (1994) further delineated five obstacles in shifting from traditional to participative management. The five challenges in making this cultural change in organizations included: change, mistrust by workers of management’s motives, lack of clear expectations, lack of participative skills and lack of executive commitment. These researchers stressed that upper management, in making this transformation, must reinforce the changes continuously and in every visible way. They concluded that repetition and consistency were key in phasing out the traditional management model.

In addition, Brown et al. (1994) outlined three levels of change that must support the participative environment. First, on the organizational level, job responsibilities and roles at all levels must change to correspond with the participative philosophy. Second, on the interpersonal level, employees must be encouraged and supported in solving problems themselves with collaboration valued over competition. Third, on the individual level, employees must increase their skills and have the confidence and desire to accept greater responsibility.

Changing the organizational culture is reflected in Deming’s “Point 2” which states, “Adopt a new philosophy” (Walton, 1986, p. 58). Deming elaborated that Point 2 really means “a transformation of management. Structures have been put in place in management that will have to be dismantled. They have not been suitable for two decades” (Walton, 1986, p. 59).



Changing organizational cultures in hospitality companies


The National Restaurant Association (NRA), in the quest to recruit and retain quality employees for foodservice operations, has advocated a caring, supportive environment for restaurant workers. The first step in developing a “caring culture” is to formalize a mission statement or declaration of long-term goals from upper management. Then it is essential that each individual employee understands the mission and believes in it (NRA, 1999).

Southwest Airlines epitomizes the fact that commitment to internal service starts at the top and must be clearly interwoven into the organizational culture. Southwest Airlines’ CEO, Herb Kelleher, models the company’s legendary culture. Fun is a definite element in this culture along with hard work and open communication. Kelleher, one Easter, dressed as an Easter Bunny and walked down one of his plane’s aisles. On Saint Patrick’s Day, he was dressed as a leprechaun. The employees of Southwest Airlines, likewise, can dress casually and comfortably (shorts and tennis shoes) and can even sing the safety instructions. The corporation has an Executive Vice President of Customers (both internal and external). This company, in printed materials, capitalizes the words, “employee” and “customer.” The once voluminous operations manual was thrown out for an 88-page, Guidelines for Leaders, which emphasizes common sense and good judgement. The company emphasizes open, multi-directional communication. Answering 150 to 200 cards and letters from employees every month is not unusual for this airline leader. A great amount of feedback is derived from executives working in the field each quarter on the front lines. Herb Kelleher routinely helps flight attendants serve drinks and peanuts when he flies (Rosenbluth and Peters, 1998).

The corporate founders of Accor North America, a hotel company, operate their organization on the philosophy of “what leads to growth and profitability is managing people well” (Dube´ et al., 1999, p. 36). One reinforcer of this philosophy is found in the incentive program for property general managers. Thirty per cent of the bonus is based on employee satisfaction with the same percentage tied to customer satisfaction. Forty per cent of the general manager’s bonus is based on profitability. The review process used in this company further reinforces the concept of internal service. Managers are evaluated, using a 270-degree review process, by peers, subordinates and superiors. Training is conducted in preparing employees for their role in the review process. The company also utilizes roundtables that allow employees to discuss issues with the executive team (Dube´, et al., 1999).

Marriott International has long been recognized worldwide as an employee-oriented, family atmosphere organization. The company’s founder, J. Willard Marriott, Sr, was a proponent of internal service before the term or label was even born. His motto, “Take care of Marriott people and they will take care of Marriott guests” has been a core value of the company’s since its inception over 70 years ago. This “employees first” philosophy can be observed in countless ways throughout the Marriott organization. “Hands-on managers” are absolutely vital to the continuation of the Marriott culture, in the opinion of J.W. Marriott, Jr, Chairman and CEO. These managers must possess people skills in being able to “support, encourage, lead, inspire, and listen to associates.” Otherwise, the manager is going against the “grain of the organization and seventy years of corporate culture” (Marriott and Brown, 1997, p. 45). The importance of managers in the satisfaction, or dissatisfaction, of employees cannot be understated. Dissatisfaction with management is the number one reason for employees supporting unions. Dissatisfaction with management, including front-line supervisors, is the number one reason for employees leaving organizations (Woods, 1997). Lisa Unsicker, from the National Restaurant Association, echoes the importance of management style: “We’re seeing a movement away from emphasizing the technical or hard skills and more into soft skills like conflict resolution and stress management.” This trend is tied to the realization that “many employees leave the industry because of their manager. If the manager is better trained, fewer employees will leave and it will make for a happier workplace” (Coeyman, 1997, p. 48). Dr Roberta Kraus, site manager for the Center for Creative Leadership in Greensboro, North Carolina, reinforced internal service trends occurring in food service operations. The trends are tied to increased awareness, she believes, of the link between happy works and happy customers (Coeyman, 1997).



Internal service through employee selection processes


Quality guru, Tom Peters, likens effective employee recruiting to a “two-way courting ritual” whether it is for janitorial staff or high-level managers. Peters states that the recruiting process should say to the candidate, “How would you like to be part of our community, do neat things together, grow individually and with your peers?” The underpinnings of this message, according to Peters, include trust, respect, commitment and mutual support (Peters, 1994).

Harris and Brannick (1999) include as a “staffing best practice” treating the applicant as a customer. The authors note that many companies see applicants and customers as “two separate and unique groups of people” instead of realizing the inter-relatedness of advertising, customer service, marketing and recruiting activities. They delineate three ways to treat applicants as customers:

(1) know what you want in an applicant in terms of job qualifications and “fitting” with the company’s culture;
(2) communicate the same message to applicants and customers – “a congruency should exist between the promise that the company makes to customers and the promise that the company makes to its employees;” and
(3) give applicants a positive experience including those not hired (Harris and Brannick, 1999, pp. 101-102).
Harris and Brannick (1999) use Ben and Jerry’s Homemade as an example of a company that treats its applicants as customers – in a most creative way. Several years ago, Ben and Jerry’s conducted a contest entitled “Yo, We Want You to Be Our CEO” with advertisements featured in major business publications. The result was 20,000 applications. Rejected applicants were in store for a treat, however, with the packets that were sent to these individuals. Contents included: a multicolor certificate, with a picture of Ben Cohen and Jerry Greenfield. The personalized certificate contained the caption, “It warms our hearts – and blows our minds – that someone of your high caliber would even consider a job with us.” The “rejection packet” also contained a coupon for a free pint of Ben and Jerry’s ice cream.



Internal service through employee training, development and advancement


A significant percentage (39 percent) of people change jobs because of lack of opportunity for advancement (Dessler, 2000). Crucial “internal services” include employee training and development in preparation for career advancement and continual professional learning.

Rosenbluth International has the second largest global presence in travel management in the world. Founded in 1892, the company primarily focuses on corporate travel. With world headquarters in Philadelphia, Pennsylvania, Rosenbluth has over 4,600 employees (associates). Each year, each associate creates an individualized learning plan or IDP. All learning objectives must support the company’s strategic objectives and individual department needs. The plan also incorporates learning objectives for improvement in the current position of the associate. Objectives are, in addition, included to help advancement in the career path desired by each individual employee. The learning objectives are determined through a variety of tools including performance reviews, 360-degree reviews, career goals, and knowledge and skill self-assessment tools. Skill profiles developed for each position in the company assist employees in gauging their skills against requirements for current positions as well as for positions to which they aspire. Actual training programs encompass classroom training as well as numerous self-study modules, either through computer-based instruction or workbooks (Rosenbluth and Peters, 1998).

The Ritz-Carlton Hotel Company invests an enormous amount of money and time in providing 120 or more hours of customer service training for each of its 17,000 employees worldwide. From this training, employees become “professionals in the hospitality industry.” According to the Ritz-Carlton, you are either a professional or a servant in this industry. “We don’t create servants. We create professional employees who have the desire to provide exceptional customer service, and who want to be part of our company” (Hays, 1999, p. 101). The company’s motto, “Ladies and gentlemen serving ladies and gentlemen” reflects this expected level of professionalism in employees. Winner of the Malcolm Baldrige National Quality Award in 1992 and 1999 (the only hotel company to have won this coveted award), the Ritz-Carlton reinforces employee training through daily 10- to 15-minute line-up and pre-shift meetings.

Carlson Hospitality Worldwide provides personal development courses and one-on-one coaching for all levels of employees. Included in the courses provided are sessions on “The 7 Habits of Highly Effective People.” “The 7 Habits program adds a great deal to people’s lives and provides a framework for them to create their lives and future,” according to the company’s vice president of human resources. This program also ties into the coaching program, called the “GROW Model.” This highly proactive approach involves employees working with trained peers or supervisors in helping them move from where they are to where they want to go. The process involves four stages including “goals, reality, option and way forward.” Other personal development courses offered throughout the company include financial planning, computer skills and retirement planning in addition to numerous courses focused directly on work skills (Falbo, 1999, p. 41).



Internal service in maximizing teamwork


Whole Foods Market, the largest natural-foods grocer in the USA, utilizes “decentralized teamwork” as a vital part of its customer-service culture. Store teams are used in the employee selection process with only these teams having the power to approve full-time new hires. After a typical 30-day trial period, two-thirds of the team must approve the candidate for full-time status. This practice clearly shows applicants the importance of teamwork early in the hiring process (Harris and Brannick, 1999).

The Boulders, a deluxe resort located in Carefree, Arizona, utilizes self-directed, three-person housekeeping teams. The teams were initiated in 1998 with improved morale and retention of housekeepers resulting. Each team is empowered to divide and interchange all room duties. Instead of relying on housekeeping supervisors, the teams are responsible for room quality and conduct their own room inspections. Each team is required to be multi-lingual to assist employees trying to learn the English language and to encourage greater employee interaction (Dube´ et al., 1999).



Internal service through employee empowerment


Research has shown that employees want to do more than merely “attend” work. Response Analysis of Princeton, New Jersey surveyed 1,600 employees from a variety of industries regarding the most important aspects of work. The majority, 52 percent, wanted to be responsible for their work and the results it produced, 42 percent wanted acknowledgement for their contributions and 39 percent wanted their tasks matched to their strengths. Designing work so that employees can take responsibility and rewarding them appropriately is a major step toward making work meaningful (Herman and Gioia, 1998).

The Ritz-Carlton Hotel Company empowers each employee to rectify a guest’s complaint immediately. Employees are authorized to invest up to $2,000 in service recovery. This level of empowerment is supported through comprehensive, quality-driven, continuous training (Harris and Brannick, 1999). In addition, all Ritz-Carlton employees are empowered to examine every process in their hotels to ensure that the most efficient, customer-service driven methods are in place. Often accomplished by project teams or cross-functional teams, employees have developed processes ranging from guest recognition to wedding planning to guestroom child safety (Ritz-Carlton Hotel Company, 1999).



Internal service through employee recognition and motivation


Marriott International supports a variety of employee-oriented programs to recognize and maximize motivation among their associates. Associates have the opportunity to belong to the company’s profit sharing program and thousands are included as Marriott stockholders. In addition to other benefits in their comprehensive package for associates, Marriott conducts each year, company-wide, an Associate Appreciation Day, which in actuality has now expanded to a week of events. Special awards are bestowed during this week including the J. Willard Marriott Award of Excellence, designed to honor associates who “go the extra mile” on a regular basis. Another award, the Tiefel Award, named after lodging group president Bill Tiefel, recognizes extraordinary service to guests and lateral service between employees. The Alice S. Marriott Award for Community Service, named after the founder’s wife, recognizes operating units of Marriott that have made outstanding community contributions as exemplary corporate citizens (Marriott and Brown, 1997).

Each Marriott property or unit also has unique ways of thanking and recognizing associates. One Marriott vacation resort has implemented the Hospitality Gold Star program. Three guests are selected at random each week and asked to identify the Marriott associate who had been most helpful during their stay. The participating guests receive a gift beach towel for their assistance. The selected associates receive a monetary award in addition to gold stars to wear on their uniforms. The three winning associates are then asked to identify three “heart of the house” employees who had been most helpful to them during the week. These identified employees also receive monetary awards and gold stars. This very effective recognition program reinforces the importance of both external and internal service to the property’s success (Marriott and Brown, 1997).



Internal service through competitive wages and benefits


When 278 employees from 12 different hotels in the USA and Canada were surveyed regarding what they most wanted from their employers, competitive wages and job security were the top two choices. Opportunities for advancement and development were third in importance (Simons, 1995). While a competitive wage and benefit package may be considered fundamental for some companies, many businesses do not provide benefits particularly for employees that may fluctuate below a full-time status. However, according to the Industry of Choice report for the Foodservice Research Forum, the third most common reason employees leave the industry is lack of good benefits. Having health insurance was viewed as very important to 64 percent of uninsured employees and retirement benefits were very important to 62 percent of workers who did not have this type of benefit (Van Houten, 1997).

Starbucks, the Seattle, Washington-based coffee company, has provided a benchmark for internal service regarding employee benefits. Starbucks’ employees, referred to as “partners,” only have to work 20 hours per week to be eligible for benefits of which the company pays 75 percent. A variety of plans are available including medical, vision, dental, chemical dependency, disability and life insurance coverage. Benefits are also available to domestic partners of Starbucks’ employees. All employees have access to a 401(k) retirement savings plan. First-year partners are also eligible for one week’s paid vacation and two personal days. Workers can buy company stock at a discount through the “Bean Stock” program. In addition, stock options are awarded to partners annually based on wages, company profits and stock price. Added to this comprehensive benefit package is a free pound of coffee every week and a 30 percent discount on Starbucks’ products. The company also provides 25 hours of classroom training for each employee with management trainees receiving eight to 12 weeks of classes (Van Houten, 1997).



Providing internal service by addressing the needs of a changing work force


The way a company responds to changing and varied needs of employees is increasingly important to a diverse and dynamic work force. Scandura and Lankau (1997) found that flexible working hours were related to higher organizational commitment and job satisfaction for employees with family responsibilities. Similar results were obtained in a study of business executives in Hong Kong (Ngo and Tsang, 1998). Work interferences involving childcare responsibilities were also found negatively related to organizational commitment and job satisfaction in a study of hotel employees (Cannon, 1998).

Hospitality companies in a number of cities have begun addressing the family needs of employees. For example, in Atlanta, Georgia, a consortium of five competing hotels joined to provide a childcare facility for employees and residents of the nearby community. The five properties financed the construction of Atlanta’s “Inn for Children” and agreed to support its continuing operation. The Inn offers non-traditional hours of operation, often necessary for hotel workers, and provides reduced fees for employees. The result has been zero days missed by participating employees because of child care problems (Balzer, 1998).

Marriott International, in recognizing the personal and family responsibilities of their associates, offers a toll-free consultation service for their lodging employees. Staffed by social workers, this resource can be delivered in more than 100 languages and can assist in matters from childcare to immigration questions. The 800 Associate Resource Line (ARL), in addition to providing an important employee service, has resulted in dramatic drops in turnover, absenteeism, tardiness and short workdays among those using the consultants (Marriott and Brown, 1997).

Restaurant companies are also addressing quality of life issues and have responded to employee needs for more accommodating, flexible work schedules. For example, The Olive Garden was one of the first restaurant companies to make concerted efforts in improving the quality of work life for its managers. The restaurant company went from a one- or three-manager system to a five-manager system, which subsequently allowed managers to work 50-hour weeks and have two days off. Outback Steakhouses have also taken a leadership role in quality of life issues for managers. The chain is only open for dinner, which reduces the length of work shifts. In addition, managers can actually buy into the units they work thereby giving the manager a stake in the restaurant’s success. Managers are allowed to remain for at least five years at the same unit, which contributes to a sense of ownership (Coeyman, 1997).

Hyatt Hotel Company has been a hospitality leader in maximizing work place enrichment through cultural diversity. The company has, on the corporate level, a Director of Diversity. The management team for each Hyatt property has diversity objectives included in their bonus program to foster the development and mentoring of minorities into management positions throughout the corporation. The management bonus plan for Hyatt, as related to internal service, has components representing both customer and employee objectives. Individual Hyatt properties provide a variety of supports and services for a culturally diverse work force including English as a second language classes, classes in other languages represented among employees, sign language classes and mentoring programs (Stewart, 2001).



A model for internal service


In analyzing the theoretical and application approaches to internal service, a model for planning an employee-oriented service culture can be delineated. As can be seen from the numerous and varied examples of internal service in hospitality organizations, there is no one “right” way. The crucial component that is present in every organization actually delivering consistent internal service is a high-level commitment from the organization’s leaders. The philosophy of internal service must be imbedded in the organization’s culture and not be a temporary prescription to a limited, competitive labor supply. As the model in Table II also illustrates, internal service is not only competitive wages and benefits, positive working conditions and team support among employees. The environment for internal service contains many possible components including varied ways for employees to maximize their work experiences through support in achieving quality performance levels and continuous learning and development opportunities.



Conclusions


As in providing external service to customers and guests, there are many necessary components and processes involved in consistently delivering internal service quality.

With a dynamic and diversified work force, employers will be challenged to know their employees, their expectations and their needs as internal service is modified and adapted to be most effective. The return on investment for those employers effectively providing internal service quality can include a more stable and committed work force and a higher level of quality-driven external service.

Many companies have implemented the internal service quality strategy in recruiting and attempting to retain employees. Employees, who are treated as “internal customers” have been shown to feel more respected and appreciated and remain longer with their employer organizations. This lower employee turnover, in turn, can positively impact consumer confidence as well as lower hiring and training costs. Apart from reactions to fluctuating labor supplies, however, established quality-focused organizations have long supported the philosophy and practice of internal service quality in realizing that consistent, high levels of external service cannot be maintained without it.


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Table I Theories related to HR practices
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Table II Human resource practices to minimize internal service gaps

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