Service Productivity
The productivity of
process is related to how effectively input resources are transformed into
value for customers.
According to
Gronroos, for the needs of manufacturers of physical products, there are widely
used productivity concepts and measurements instruments. However, in service
processes, the underlying assumptions of these concepts and models do not hold.
For example, manufacturing-based productivity models assume that any change of
input in the production process does not lead to quality changes in outputs.
However, in a service context, changes in the production resources and systems
do affect the perceived quality of services. Therefore, using
manufacturing-oriented productivity models in service contexts are likely to
mislead organizations.
Since the service
economy is now the largest portion of the industrialized world’s economy, its
development has significantly raised the importance of maximizing productivity
excellence in service organizations.
The quantity and
quality of service sector cannot be treated in isolation, because it may be impossible
to separate the impact on the entire service experience. Hence, both the
quantity and quality aspects must be considered together to provide a joint
impact on the total productivity of the service organizations.
According to
Kontaghiorghes, Service sector productivity can be defined as the ratio of:
= Service Sector
productivity
Strategies for
Improving Service Productivity:
1.
Increased use of technology: Service
sector productivity is heavily dependent on fast developing technologies and
automation. For eg Customers not only interact with a contact person, they also
transact using an ATM or a computer (website). According Normann, there are
five main reasons for using information technologies:
(a)
Reducing costs by substituting service officers for information technologies.
(b)
Standardizing services.
(c)
Increasing availability (24-hour access to services using appropriate machines
or computers).
(d)
Linking customers into the service system.
(e)
Affecting customer and personnel relationships and behavior.
2.
Training and development: The
importance of ‘people dimension’ in the service performance cannot be
undermined. For e.g. it is the receptionist who first interacts with the
customer or the hairstylist who cuts the hair etc. To a large extent, it is on
the basis of interaction with this ’employee’ that the customer forms his
perception. Therefore, employees and staff must not only be trained in
functional/technical skills but also in soft skills. Training should be looked
as an investment and not a cost.
3.
Universal beliefs: To improve
the productivity of services, certain beliefs must be understood, accepted and
practiced by all. For e.g. quality and customer service must be seen as an
invaluable partner, not just for gatekeepers or receptionists but even managers
and directors.
4.
Recruitment planning: Improving
service productivity requires assistance from human resources. It should
understand what each department requires so it can find the best employees.
They can take inputs from each department and design job descriptions which
help find the best fit employee. Better suited employees lead to increased
productivity
5.
Reducing service level: By
allotting less time to a service offering, productivity can be increased. For
e.g., a doctor gives less time to his patients so he can see more patients in a
given day. However, care should be taken that quality does not suffer,
otherwise it would lead to customer dissatisfaction
6.
Increase or diversify service offerings: This is another way
of increasing productivity. For e.g. a doctor can start a pathology lab in his
premises, or hotels can add event planners to their list of service offerings
etc.
7.
Changes in demand and supply: These
forces play a role in determining the service productivity. For e.g. to meet an
increased demand, companies can hire part- time employees and where capacity is
restricted, companies can promote non peak times
To summarize, in the
words of Paul Krugman, ‘Productivity isn’t everything, but in the long run it
is almost everything. A country’s ability to improve its standard of living
over time depends almost entirely on its ability to raise its output per
worker.’
