Employee Motivation at Service Firms

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The service firms should focus their efforts because low morale and absenteeism are serious problems that cut across the industry. On a distinctive day, between 2 and 4% of employees at service firms fail to show up for work, which does not sound like a high rate of absence, but more time is lost for a reason of low morale and absenteeism than through strikes and lockouts. The yearly costs of low morale and absenteeism in the United States are estimated to be $29 billion. A change of 4.99% in the national absence rate changes the gross national product by $10 billion. (London, 2003) A great number of studies are done to identify the determinants of low morale and absenteeism. Many variables are found to be considerably related to indices of absence; the results appear to be unstable across situations and time.

The basic option is an incentive program for employees in services firms. Every incentive program is based on a formula for enhancing motivation that engages four fundamental variables: effort, performance, outcomes, and satisfaction. The logic behind these programs goes something like this: employees at service firms will put in the accurate quantity of effort to meet performance hopes if these part-time employees at service firms obtain the types of outcomes that include pay raises and promotions, which will provide part-time employees satisfaction.

Effort => Performance => Outcomes=> Satisfaction

Conversely, the problem with most incentive programs is that they center exclusively on the submission of outcomes and overlook the three beliefs that are the key to making the motivation solution work:

Can one do it?
Will outcomes be tied to one’s performance?
Will outcomes be satisfying to one?

The first conviction compacts with the relationship between employee effort and performance. The second compacts with the relationship between performance and outcomes. And the third compacts with the relationship between outcomes and satisfaction. These three beliefs form the basis of the belief system of motivation and performance.

Accepting that these beliefs are decisive preconditions for motivation helps to explain why incentive programs generally yield such lackluster results since employees do not always hold these beliefs to be true, attempts to improve motivation by using incentives cannot make the grade, even when the incentives are highly desirable ones. At service firms, a major transformation attempt only makes the situation difficult. If any of the three beliefs are shaky, to begin with, organizational change at service firms can weaken them even further. The result is often serious motivation and performance problems, at a time when organizations can least afford them, and a resultant surge in the negative emotions associated with change.

Worker beliefs that ‘outcomes are not tied to one’s performance’ can also escort to noteworthy motivation problems, especially lack of trust. This is normally accompanied by feelings of skepticism or disbelief, precisely the emotions that another manager felt when one was told early on change effort that power would be allocated differently.

Employee beliefs that ‘outcomes will not be satisfying to one’ often escort to a third major problem, chronic dissatisfaction, and to feelings of anger, rebelliousness, low morale, and absenteeism. (Miner, 2002)

Preconditions for Employee Motivation

At service firms, managers have to note that an employee is motivated to perform when

The employee believes that effort will lead to performance.
The employee believes that performance will lead to outcomes.
The employee believes that outcomes will lead to satisfaction.

At service firms, once a manager has recognized a specific motivation problem, one can then work with the employee to find its cause and develop an appropriate solution. There are several reasons that this model performs far better than managers expect, such as:

This model prepares managers and employees for solving motivation problems by getting them to think about these issues before they meet.
This model promotes effective change by clarifying expectations, uncovering hidden agendas, and managing emotions before they escalate.
This model relies on the cooperation and involvement of the one person who knows most about the problem and what may be causing it: the employee. (Caruth, 2001)

The model works to generate an environment in which managers and employees divide the responsibility for solving performance problems, and it fosters the kind of communication that helps managers maintain the critical preconditions for employee motivation: confidence in their ability to meet performance expectations, trust in others to tie outcomes to performance, and satisfaction with their job and the outcomes that they receive.

Services firms need to focus on the following plans in light of the examples of other firms.

Give emphasis to service and continuing support: The services firms should focus on passing up selling merely single service units at the lowest rates for each customer and attentiveness account selling which very much enhances client preservation. The same policy was adopted by Real Insurance when it started its operations in Australia. With this strategically focused approach, Real Insurance captured a large share of target markets in Australia.
Establish a Service Affiliation: The customer would not like to search every time for a new representative. Emphasize establishing a long-term liaison with customers and make the client and staff members be grateful for the value of a long-term liaison. This policy was not adopted by Lufthansa Air when they started their operations in Pakistan and could not be able to achieve good results in the region.
Concentrate on target markets: Service firms need to concentrate on personal and business customers that they classify and pick to provide services, rather than permitting potential customers to select these firms, which could give rise to attracting trouble clients from other service providers. Amazon always focuses on the clients that have been troubled by other companies in the industry, and Amazon always gives an impression to these customers that they have been treated in a better way here than the previous sellers.

References

Butkus T. Raymond, Thad B. Green, (1999), Motivation, Beliefs and Organizational Transformation. Quorum Books. Westport, CT.

Cameron Judy, Pierce W. David, (2002), Pay and Motivation: Resolving the Controversy. Bergin & Garvey. Westport, CT.

Caruth L. Donald, Handlogten D. Gail, (2001), Managing Compensation (And Understanding It Too): A Handbook for the Perplexed, Quorum Books.

Gorman Phil, (2003), Motivation and Emotion. Rutledge. New York.

Hanlan Marc, (2004), High Performance Teams: How to Make Them Work, Praeger.

London Manuel, (2003), Job Feedback: Giving, Seeking, and Using Feedback for Performance Improvement, Lawrence Erlbaum Associates.

Mele R. Alfred, (2003), Motivation and Agency, Oxford University Press.

Miner B. John, (2002), Organizational Behavior: Foundations, Theories, and Analyses, Oxford University Press.

Thomas Neil, (2004), The Concise Adair on Teambuilding and Motivation, Thorogood.

White Geoff, Druker Janet, (2000), Reward Management: A Critical Text, Rutledge. New York.

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Employee Motivation at Service Firms

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