importance of employees empowerment in banking

Employee Empowerment“An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success.” - Stephen Covey

An organization’s human resource is its most valuable asset. The employees are the repository of knowledge, skills and abilities that can’t be imitated by the competitors. Technologies, products and processes are easily imitated by the competitors; however, at the end of the day, employees are the most strategic resource of the company.

Generally, people are a firm’s most underutilized resource. And that is why management tries to empower the employees. But employees often are afraid of taking this responsibility. They fear the additional work pressure that they will have to bear as a part of being empowered. Besides, they also fear being held accountable for the decisions they make.

But, what does employee empowerment actually mean? Does it mean absolute authority or absolute power? The answer is certainly NO. Empowerment refers to enlargement of an employee’s job responsibility by giving him the authority of decision making about his own job without approval of his immediate supervisor. Empowerment is the degree of responsibility and authority given to an employee. By empowerment, the employees are supported and encouraged to utilize their skills, abilities and creativity by accepting accountability for their work. Empowerment occurs when employees are adequately trained, provided with all the relevant information and the best possible tools, fully involved in key decisions, and are fairly rewarded.

Employee empowerment entails identifying how much responsibility and authority an individual can effectively handle without becoming over-burdened or distressed. Empowerment includes supervisors and employees working together to establish clear goals and expectations within agreed-upon boundaries.

Why Employee Empowerment Fails?Employee empowerment means that an employee has the power to take some decisions without consulting his boss or reporting manager. Employee empowerment is an essential part of employee retention. But due to many known or unknown reasons, it fails. Some of the reasons may be:

Managers don’t take employee empowerment seriously in the first place. It becomes more of a prestige issue to give control to others.

Even if managers take it seriously, they are unable to lay down proper boundaries for the empowerment.

Managers sometimes fail to provide a strategic framework.

Managers sometimes don’t provide the information, and growth & learning opportunities that are needed by the employ to empower himself and take good decisions.

On the other hand, managers sometimes hand over all responsibilities to the

employee. This may lead to misuse of powers given to the employee.

Some managers act like a barrier and hamper the decision making practice of the empowered employee out of jealousy.

Employees Empowerment: A key to intrinsic motivation

Empowerment is the process of enabling or authorizing an individual to think, behaves, take action, and control work and decision making in autonomous ways. It is the state of feeling self-empowered to take control of one’s own destiny. It is not something that can be delegated or somebody can bestow because it comes from Individual and self direction The basic purpose of empowerment is lost in majority of organization because employees expect it as a delegation process instead of a initiating and ongoing process in which an individual enabling himself to take action and control work and decision making in autonomous ways which comes from the individual.

The organization has the responsibility to create a work environment which helps foster the ability and desire of employees to act in empowered ways. The work organization has the responsibility to remove barriers that limit the ability of staff to act in empowered ways.

Differentiating empowerment with employee involvement and participative management. These terms are sometimes used interchangeably but they differ a lot and connote different meaning. Since empowerment in itself is a macro approach and participative management and employees involvement are a part of this approach.

Empowerment refers to a state of mind as well as a result of position, policies, and practices or as defined by Bowan and Lawler it is a process of sharing with front-line employees four organizational ingredients knowledge, information, power and reward which makes the complete process of empowerment a success or as defined by Menon it was defined as a cognitive state of perceived control, perceived competence and goal internalization.

In the, mechanistic approach managers and researchers believed that empowerment was about delegating decision making within a set of clear boundaries. Delegate responsibility and Hold people accountable for results. In the, organic approach to empowerment researchers and managers believed that it empowerment was about risk taking, growth, and change understanding the needs of the employees model empowered behavior for the employees build teams to encourage cooperative behavior; encourage intelligent risk taking; and trust people to perform.

Empowered employees are, after all, more innovative, creative, and resourceful. They are free from the shackles of management, so they are happy and motivated at work and willing to take on new responsibilities.

Employee involvement means that every employee in an organization  is valuable and is having worth and is having involvement in running the business  empowerment means that  management recognizes his ability  and provide employees with authority  and tools required to  continuously improve the process

Essentials before implementing Empowerment process  

1) A company culture which would support a participative approach2) Employee relations must be reasonably healthy 3) Acceptance of long term commitment

4) Willingness to provide sufficient company resources5) Availability of Management attention6) Voluntary Participation 7) Top management support 8)  Facilitator guidance 9) Operational Support 10) Training

Techniques / process for employee’s empowerment

Certain questions for the management to understand are –How to involve the people? How can we use teams to improve? How to involve employees in quality improvement process?

Different techniques for employee’s involvement include suggestion systems, team, focus groups, surveys, self – directed work groups, incentive program. Other methods involve –

a) Giving responsibility to employeesb) Training employees to accept responsibility c) Communicating and giving feedback d) Giving reward and recognition e) Process reengineering f) Employees involvement g) Total quality management

Steps in employee’s empowerment

1) Clarity of the purpose , goals and objectives of empowerment 2) Willingness by employees and supervisors to accept responsibility 3) Communication and feedback to supervisors 4) Reward and recognition

For example CMD won Baldridge award in 1994  as ATR&T consumer   communication services. They do it through 6 interconnect approaches –

a) Common bondb) Ask question c) Process management team d) Quality improvement team e) Corrective and preventive action system f) Communication

Apart from this the basic essential ingredients are

a) Respect for individuals b) Dedication for customers c) Highest standards for integrity d) Innovation teamwork

Another successful strategy as used by Oral-B laboratories   which follow this cycle   Looking > Seeing> Caring> Doing

Management perspective: The employer’s angle

Since empowerment is a two way process and involves equal involvement of both employers perspective is very important .Since it is a development strategy following principles are necessary to be essential -

a) Determine people value b) Share Leadership Visionc) Share Goals and Directiond) Trust Peoplee) Provide Information for Decision Makingf) Delegate Authority and Impact Opportunities, Not Just More Workg) Provide Frequent Feedbackh) Solve Problems: Don’t Pinpoint Problem Peoplei) Help Employees Feel Rewarded and Recognized for Empowered Behavior to Learn and Ask Questions to Provide Guidancej) Building team work –It should be result oriented, customer focus, partnership development, continuous innovation, commitment

Benefits of employee’s empowerment

* Development of interpersonal, analytical, and leadership skills * Instilling a quality consciousness among all employees* Higher quality product * More effective use of resources* More individual job satisfaction* Improved two-way communications between employees and their management

Management should understand primary aim for the company, obstacles for employee’s productivity, sources of employee’s motivation and knowing the empowerment level of the employees.

Obstacle in implementing empowerment

A) Negativism in reviewing employees recommendation B) Fear is another negative emotion C) Failure to respond  employee recommendation D) Unclarity of the  concept of empowerment E) Failure to provide strategic framework F) Clear understanding  of training and feedback

Conclusion:

Empowerment is one of the most effective ways of enabling employees at all levels to use their creative abilities to improve the performance of the organization they work for, and the quality of their own working life. Employee empowerment is a process whereby  a culture of empowerment is developed information—in the form of a shared vision, clear goals, boundaries for decision making, and the results of efforts and their impact on the whole is shared competency in the form of training and experience is developed; resources, or the competency to obtain them when needed to be effective in their jobs, are provided; and support in the form of mentoring, cultural support, and encouragement  of risk-taking is provided.

Companies have been forced to face the harsh reality that management cannot bestow empowerment any more than it can bestow self-esteem. Instead it must create an environment that allows employees to become empowered on their own.

Creating Service Excellence (Indian Services Sector)

By

Prof. R.K. Gupta Director

Sobhagya Consultancy & Marketing Services-IndiaChandigarh

E-mail: rkgupta_india@rediffmail.com / cityju@rediffmail.com 

Overview of Services

58% of Indian GDP now comes from Services sector and large FDI has started flowing into this sector in India. IT/ITES appears to be largest and fastest growing services sector with estimated revenue of $34 Billion this year. However Indian economy has largely been regulated from time of independence till 1995, a few years after official milestone of economic liberalization in country of 1991. The undersigned having worked as senior functionary in Indian corporate sector in medium and large organizations in both Public and Private sector minutely observed various phases of regulation, deregulation, opening up of various sectors and the mindset of various entrepreneurs from different ethnic/community background and education. This environment is complex and has bearing on success of services excellence efforts.

In recent speech at Asia Society in Washington, the President Bush clearly spelt out advantages of outsourcing to India defending movement of service jobs offshore to India from US and many other western countries (one of the four modes of service delivery).

Some of key features need to be addressed in Indian services sector business are:

1. Attitude towards employees, their compensation, reasonable job stability (I wont call any more security). Even now a good part of Indian business treats employee like hat from regulate manufacturing system based on quotas and permits. Human resource is still considered as one of factors of production and most unwelcome and of least value as a factor.

2. Attitude to customer is also indifferent and casual having same mindset of regulated rationed economic development with shortages and Public Distribution order. Thus neglecting very essential difference in services and manufacturing sector that the former passes on intangible benefits and is based on personal relationship, service attitude and intense people processes. Creating credibility of services offering and post sales service guarantee are major challenges

3. Need for change to develop a global attitude in operations and marketing in services (World class operations and marketing).

4. Market forces and economics , rather than ideology will drive the 21st century. 

5. Large amount of funds are required in infrastructure growth and capital assets required for various sectors like Hospitals, Hotels, Roads, Airports and Tourism packages. These required investments can be mobilized by encouraging FDI.

6. Focus on marketing backed by ITES technology for netter marketing and customer care, an important component in services marketing.

As compared to China, India has distinct advantages in services competencies based on inherent Indian cultural system and genes (For example-Traditional hospitality of Rajasthan and its majestic past make it a distinct place for Heritage and Conventional tourism} and high IQ and English speaking erstwhile British colony. For example, Indian origin nurses are considered one of the best in world markets,

particularly UK and US. US government has separate class of Visa for Nurses. It is also true for priests and ITES too.

India can become important services outsourcing center providing both know-how and export of trained personnel (Refer Four types of services classification in GATS) Healthcare is one of important sector, which India can tap both offshore and by way of exporting skilled Medicare personnel. In USA alone the 8% of GDP on health care will rise to 18% or so due to rising population of senior citizens and the same is also true in Japan.

However there is a catch to it. In blind temptation for profits and dollars revenue Indian domestic health sector may suffer badly with medical care out of reach of common man being costly and the public infrastructure poorly developed. I think already the cost of medicines and health care services have rapidly escalated in past few years time. This is of serious concern. The insurance companies are not providing properly designed and customer oriented products but are also unwilling to issue even Individual’s Hospitalization policies due to alleged accumulated losses. This aspect of balanced growth between Domestic and Export markets, Agriculture vs. Tourism and Manufacturing vs. Services needs to be paid attention to.

Any planning for boosting services exports without strong and well developed domestic market may have serious consequences in long run and not sustainable.

The Key labor wage differential and high education level of English speaking Indians can be leveraged for sectors like R &D outsourcing. Moving high up in value chain is imperative for Indians services industry in a few years time, as other nations including China will be catching up with us fast.

Nature of services

A quick review of nature and scope of services marketing would be in order to derive strategic steps needed in delivering service excellence.Services can be classified as: Pure service (Baby-sitting, legal services), Derived service (Repairs and maintenance) and Value added service (Financing, System Integration)These can also be classified as:Personalized services (Hair dresser), Substitutable services (Tax consultancy, accountancy) and explosive (Telecom network) Another important feature of service delivery is through Front office-Back office concept (TV programs, restaurant or Hospital)I am afraid few Indian entrepreneurs have developed mindset of service to consumer as they have been long exposed to manufacturing under restrictive license regime and regulated supplier driven markets.

How Service Industry is different from Manufacturing Sector

Dimension                                 Manufacturing                               Services

Objective                                    Transaction                                     RelationshipFocus                                 Buyer                                     User Strategy                             Acquisition                              Retention Organization                        Product Centric                        Account Centric Processes                           Non Interactive                        Highly interactive Infrastructure                      Machines based                       People based                                                                                      ( Atomization possible)

Measurement                       Market share                           Share of customer business Need for CustomerInformation                         Moderate-High                         High and continuous Employee Empowerment         Varies                                    Always high Communication skills             moderate                                      High

While atomization is catching up but it has been found to be deficient in terms of accessibility, flexibility and personalization effect. One example is automated call centers and help lines (Toll free numbers included).

Success factors in Services excellence can be grouped as:

Performance Value

Quality Obsession through Six sigma, HR competencies and Internal marketingServices Guarantees- satisfaction & Performance guarantee, on time delivery and extended service contract adding value in offering like auto financingTangibility through creating service ICONS, spokes persons and ambience or servicescape.Management of service delivery failure

Price Value

Standardization through faster and reliable service (home catering of Mac Burgers and Dominos). Well designed and looked after tours and cruises and hospitality industry.Time and Location based pricing – Like home delivery vs. in-store, air ticketing and stock markets.Value based segmentation- Frequent flyer programs of airlines, Key accounts management, Customer lifetime value.

Personalization Value

Mass personalization Professionalism and competenceFrontline information system   and through the web Ongoing feedback from customers and innovation

Requirements for Becoming Globally Competitive 

Domain Expertise (Example- Financial and banking packages from Indian IT Companies)Creating service culture in whole organizationGlocal Competence  (Mc Donald’s Localization in Global operations)Career Orientation and not jobs (Call centers)Strong training and certification programs (Balanced scorecard approach, Corporate Entrepreneurship approach)Services Quality certification (International certifications like Malcolm Balridge model, ISO 9000, EQA)Information InfrastructureProcess Driven operationsScale efficiencyCustomization within scale efficienciesContinuous Innovation

Service Excellence

Excellence can be defined as the quality or state of being outstanding or superiorSince customer have rising threshold of satisfaction levels and hence excellence.

Excellence will deliver memorable personal experiences including customer Delight (significantly beyond expectation of customer, positively outrageous, unexpected and random) Delight is when customer says “Wow” experiencing a positive emotional gap than expected. It is like moving from Must to satisfiers to Delight chain.

What is important is First, to believe genuinely in customer delight and service as a goal of organization, which is only possible by Top management support and then go on and train and empower employees right from front desk and beyond. Selection of right attitude employees is must backed by database and technology systems.

The key control points in service chain right from first contact point of a customer to after sales guarantee have to be identified and the systems of monitoring and improvements around them has to be built for leading to service quality and delight.

Since it is often difficult to standardize pricing in personalized need for services products and customer is not able to find value of the service product- reliability, loyalty programs, credibility and efficiency of service providers (Services Triangle – Valerie, et al) is vital for ensuring service excellence.

It is pity that several top service organizations in India in various sectors like share registry and brokerage, insurance higher education, medical care and public services are far from abovementioned quality components for excellence. Some of the   reasons seen are: Poorly designed processes, ill-trained and overworked staff with unachievable targets and general lack of service attitude. Similar, is the situation in after sales service of manufactured goods and call-center systems in India that need to be addressed seriously.

In services as well as manufactured goods it is the value delivery and communication of this value proposition to customer is very important for growth and profitability. It would always be rewarding for organizations to develop the evaluation criteria by which customer can judge and appreciate the value. This is one area, which needs well-designed systems and communication with customer. In multi-ethnic, multi religion and multi lingual society like in India it is quite daunting and challenging for creating such components of service excellence.

About Author

Prof RK Gupta is Director, Sobhagya Consultancy & Marketing Services – India (SCMS India ) and has worked as senior corporate executive and Management Professor over last 30 years in India >he is also Hony President – Forum for enforcement of Civil Liberties-India (India FORCE), a Voluntary organization focusing on consumer rights and education, environment and civil rights with international membership from over 17 countries.E-mail: rkgupta_India @rediffmail.comURL: www.geocities.com/rkgupta_india

Acknowledgements:

Some of the material and ideas are based on presentation of eminent scholars like Prof Jagdish Seth, Prof Shyam S Lodha and Dr Mahmood A Khan working in USA.

Measuring Customer Satisfaction in The   Banking Industry

Abstract:

The working of the customer’s mind is a mystery which is difficult to solve and understanding the nuances of what customer satisfaction is, a challenging task. This exercise in the context of the banking industry will give us an insight into the parameters of customer satisfaction and their measurement. This vital information will help us to build satisfaction amongst the customers and customer loyalty in the long run which is an integral part of any business. The customer’s requirements must be translated and quantified into measurable targets. This provides an easy way to monitor improvements, and deciding upon the attributes that need to be concentrated on in order to improve customer satisfaction. We can recognize where we need to make changes to create improvements and determine if these changes, after implemented, have led to increased customer satisfaction. “If you cannot measure it, you cannot improve it.” - Lord William Thomson Kelvin (1824-1907).

This study takes a look at the models for measuring customer satisfaction and suggests areas for further research.

MEASURING CUSTOMER SATISFACTION IN THE   BANKING INDUSTRY

Introduction:

Banking operations are becoming increasingly customer dictated. The demand for ‘banking supermalls’ offering one-stop integrated financial services is well on the rise. The ability of banks to offer clients access to several markets for different classes of financial instruments has become a valuable competitive edge. Convergence in the industry to cater to the changing demographic expectations is now more than evident. Bancassurance and other forms of cross selling and strategic alliances will soon alter the business dynamics of banks and fuel the process of consolidation for increased scope of business and revenue. The thrust on farm sector, health sector and services offers several investment linkages. In short, the domestic economy is an increasing pie which offers extensive economies of scale that only large banks will be in a position to tap.With the phenomenal increase in the country’s population and the increased demand for banking services; speed, service quality and customer satisfaction are going to be key differentiators for each bank’s future success. Thus it is imperative for banks to get useful feedback on their actual response time and customer service quality aspects of retail banking, which in turn will help them take positive steps to maintain a competitive edge.

The working of the customer’s mind is a mystery which is difficult to solve and understanding the nuances of what customer satisfaction is, a challenging task. This exercise in the context of the banking industry will give us an insight into the parameters of customer satisfaction and their measurement. This vital information will help us to build satisfaction amongst the customers and customer loyalty in the long run which is an integral part of any business. The customer’s requirements must be translated and quantified into measurable targets. This provides an easy way to monitor improvements, and deciding upon the attributes that need to be concentrated on in order to improve customer satisfaction. We can recognize where we need to make changes to create improvements and determine if these changes, after implemented, have led to increased customer satisfaction. “If you cannot measure it, you cannot improve it.” - Lord William Thomson Kelvin (1824-1907).

The Need to Measure Customer Satisfaction:

Satisfied customers are central to optimal performance and financial returns. In many places in the world, business organizations have been elevating the role of the customer to that of a key stakeholder over the

past twenty years. Customers are viewed as a group whose satisfaction with the enterprise must be incorporated in strategic planning efforts. Forward-looking companies are finding value in directly measuring and tracking customer satisfaction (CS) as an important strategic success indicator. Evidence is mounting that placing a high priority on CS is critical to improved organizational performance in a global marketplace.

With better understanding of customers’ perceptions, companies can determine the actions required to meet the customers’ needs. They can identify their own strengths and weaknesses, where they stand in comparison to their competitors, chart out path future progress and improvement. Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company.

 When buyers are powerful, the health and strength of the company’s relationship with its customers – its most critical economic asset – is its best predictor of the future. Assets on the balance sheet – basically assets of production – are good predictors only when buyers are weak. So it is no wonder that the relationship between those assets and future income is becoming more and more tenuous.  As buyers become empowered, sellers have no choice but to adapt. Focusing on competition has its place, but with buyer power on the rise, it is  more important to pay attention to the customer.

Customer satisfaction is quite a complex issue and there is a lot of debate and confusion about what exactly is required and how to go about it. This article is an attempt to review the necessary requirements, and discuss the steps that need to be taken in order to measure and track customer satisfaction.

What constitutes Satisfaction?

The meaning of satisfaction: “Satisfied” has a range of meanings to individuals, but it generally seems to be a positive assessment of the service.

The word “satisfied” itself had a number of different meanings for respondents, which can be split into the broad themes of contentment/happiness, relief, achieving aims, achieving aims and happy with outcome and the fact that they did not encounter any hassle:

Happy

- Content- Happy, pretty happy, quite happy- Pleased- Walked out of there feeling good- Walk out of there chuffed- Grateful the service has been OK

Relieved

- Thank God for that- Phew- At ease - Can relax- Stress reduction- Secure- Safe- Go to the bank with a troubled mind and they sort it out for you- Sleep at night without worrying what’s going to go on

- Everything is sorted out in your mind and you’re happy- Secure, you know the money has been sorted out- Knowing the money’s going to be there

Achieving aims

- Achieving your aim or goal- Getting what you went in for- Achieve whatever it is you wanted to achieve- Come away with a proportion of what you want- Got what wanted in the end- Got what you went down for- Everything went according to plan, the way it should have done- Met expectations- To be unsatisfied is when you come out and you are still on the same level as you were before

Achieving aims, and happy with outcome

- Happy with the results- Happy with what you’ve got- When you walk out you’re happy they’ve sorted everything out and quickly- Happy with outcome- Pleased with what’s happened- Content with what’s been done for you- A feeling of happiness having achieved your goal- You go in there feeling down and the only way you are going to come out satisfied is if they have been good to you

No hassle

- Not frustrated- Everything goes smooth- No hassle- No problems- No hassle getting there- Straightforward

Clearly then there is some variation in understanding of the term. Some of the interpretations fit with the definitions used in much of the service quality and satisfaction literature, where satisfaction is viewed as a zero state, merely an assessment that the service is adequate, as opposed to “delight” which reflects a service that exceeds expectations. However, most respondents have more positive interpretations of the term. These questions allow us to identify priorities for improvement by comparing satisfaction with stated (overt) importance, comparing satisfaction with modeled (covert) importance (from identifying key drivers of overall satisfaction), as well as respondents’ own stated priorities.

Service Quality and Customer Satisfaction:

There is a great deal of discussion and disagreement in the literature about the distinction between service quality and satisfaction. The service quality school view satisfaction as an antecedent of service quality - satisfaction with a number of individual transactions “decay” into an overall attitude towards service quality. The satisfaction school holds the opposite view that assessments of service quality lead to an overall attitude towards the service that they call satisfaction. There is obviously a strong link between

customer satisfaction and customer retention. Customer’s perception of Service and Quality of product will determine the success of the product or service in the market.

If experience of the service greatly exceeds the expectations clients had of the service then satisfaction will be high, and vice versa.. In the service quality literature, perceptions of service delivery are measured separately from customer expectations, and the gap between the two provides a measure of service quality.

Expectations and Customer Satisfaction:

Expectations have a central role in influencing satisfaction with services, and these in turn are determined by a very wide range of factors lower expectations will result in higher satisfaction ratings for any given level of service quality. This would seem sensible; for example, poor previous experience with the service or other similar services is likely to result in it being easier to pleasantly surprise customers. However, there are clearly circumstances where negative preconceptions of a service provider will lead to lower expectations, but will also make it harder to achieve high satisfaction ratings - and where positive preconceptions and high expectations make positive ratings more likely. The expectations theory in much of the literature therefore seems to be an over-simplification.

The ISO Guideline:

Measurement of Customer Satisfaction is a new and significant addition to the new ISO9000: 2000 standard. Organizations certified to this standard are now required to identify parameters that cause customer satisfaction or dissatisfaction and consciously measure them. We cannot create customer satisfaction just by meeting customer’s requirements fully because these have to be met in any case. However falling short is certain to create dissatisfaction.

Clause 8.2.1 in ISO9000: 2000 states:

“As one of the measurements of the performance of the Quality Management System, the organizations shall monitor information relating to customer perception as to whether the organization has met customer requirements. The methods for obtaining and using this information shall be determined”.

The requirement has been there in the QS9000 standard clause 4.1.6 which says:

“... Trends in customer satisfaction and key indicators of customer dissatisfaction shall be documented and supported by objective information. These trends shall be compared to those of competitors, or appropriate benchmarks, and reviewed by senior management.”

Attributes of customer satisfaction can be summarized as:

* Product Quality* Product Packaging * Keeping delivery commitments * Price * Responsiveness and ability to resolve complaints and reject reports * Overall communication, accessibility and attitude

We cannot begin to address the customer satisfaction issue until we define the parameters and measures clearly.

Major overall satisfaction measure, consisting of four subscales: general satisfaction (e.g. You feel happy recommending the bank to a friend); Trust (e.g. You trust the staff at your branch to do what is best for you); Reliability (e.g. Requests are carried out right first time); and professionalism (e.g. Staff have the knowledge to deal with any queries you have).

It is far more difficult to measure the level of performance and satisfaction when it comes to the intangible expectations. One of the ways to help obtain loyal customers is by having products and services that are so good that there is very little chance that the customer requirements will not be met. Of course one of the difficulties in understanding the true customer requirements is that the customer can and will change them without notice or excuse.  Having a good recovery process for a dissatisfied customer is a very vital process for any service organization.

The MODELS OF customer satisfaction

The KANO Model: The customer satisfaction model from N. Kano is a quality management and marketing technique that can be used for measuring client happiness.

Kano’s model of customer satisfaction distinguishes six categories of quality attributes, from which the first three actually influence customer satisfaction:

1. Basic Factors. (Dissatisfiers. Must have.) - The minimum requirements which will cause dissatisfaction if they are not fulfilled, but do not cause customer satisfaction if they are fulfilled (or are exceeded). The customer regards these as prerequisites and takes these for granted. Basic factors establish a market entry ‘threshold’.

2. Excitement Factors. (Satisfiers. Attractive.) - The factors that increase customer satisfaction if delivered but do not cause dissatisfaction if they are not delivered. These factors surprise the customer and generate ‘delight’. Using these factors, a company can really distinguish itself from its competitors in a positive way.

3. Performance Factors. The factors that cause satisfaction if the performance is high, and they cause dissatisfaction if the performance is low. Here, the attribute performance-overall satisfaction is linear and symmetric. Typically these factors are directly connected to customers’ explicit needs and desires and a company should try to be competitive here.

The additional three attributes which Kano mentions are:

4. Indifferent attributes . The customer does not care about this feature.

5. Questionable attributes. It is unclear whether this attribute is expected by the customer.

6. Reverse attributes . The reverse of this product feature was expected by the customer.

Steps in the customer satisfaction model. Process

Kano developed a questionnaire to identify the basic, performance and excitement factors as well as the other three additional factors.

1. For each product feature a pair of questions is formulated to which the customer can answer in one of five different ways.

2. The first question concerns the reaction of the customer if the product shows that feature (functional

question);

3. The second question concerns the reaction of the customer if the product does NOT show this feature (dysfunctional question).

4. By combining the answers all attributes can be classified into the six factors.

The Profit –Chain Model:

Research has shown that organizational subunits where employee perceptions are favourable enjoy superior business performance. The service profit chain model of business performance (Heskett, Sasser, & Schlesinger, 1997) has identified customer satisfaction as a critical intervening variable in this relationship.(profit-chain model) A number of researchers have found that revenue-based measures of business unit performance, for example, sales and profitability, are significantly correlated with employees’ work-related perceptions. The evidence suggests that business units in which employees’ collective perceptions are relatively favourable perform better.

Stated simply, the service profit chain asserts that satisfied and motivated employees produce satisfied customers and satisfied customers tend to purchase more, increasing the revenue and profits of the organization. Heskett et al. (1997), for example, define the service profit chain as ‘involving direct and strong relationships between profit; growth; customer loyalty; customer satisfaction; the value of goods and services delivered to customers; and employee capability, satisfaction, loyalty and productivity.’ (p. 11). These authors recommend the service profit chain as a framework for constructing a strategic organizational vision, and suggest that, provided service profit chain concepts are carefully interpreted and adapted to an organization’s specific situation, they are capable of delivering ‘remarkable results’ (p. 18).

The second crucial element of the service profit chain is the link between customer satisfaction and financial performance. Management theorists and chief executives have often argued that superior business performance depends critically on satisfying the customer (e.g. Heskett et al., 1997; Peters & Waterman, 1982; Watson, 1963).

Consumer researchers have established that customers who are satisfied with a supplier report stronger intentions to purchase from that supplier than do dissatisfied customers (e.g. Anderson & Sullivan, 1993; Mittal, Kumar, & Tsiros, 1999; Zeithaml, Berry, & Parasuraman, 1996). However, as noted by Verhoef, Franses, and Hoekstra (2001), the link between customer satisfaction and actual, as opposed to intended, purchase behavior is less well established. Indeed, the results are mixed, with both positive findings (e.g. Bolton, 1998; Bolton & Lemon, 1999) and null findings (e.g. Hennig-Thurau & Klee, 1997; Verhoef et al., 2001).

The   Service Expectation Model:

Customer satisfaction with a service/product (p/s) can be measured through a survey of the actual perception of the users or otherwise comparing their actual perception with their expectations. More appropriately in the first case “quality” is considered, in the second “customer satisfaction” (CS) (Cronin et al.1992,1994). Therefore to measure the CS we have to compare the evaluations of the user with his expectations connected to an ideal p/s. For some kinds of p/s such expectations are typically “subjective”, they  have to be gathered ad hoc; for others they can be suggested by the provider the p/s referring to an optimum p/s; in this way the expectations are collected in an “objective” way.(degree course)

Variability in   the Service Process Model(Wharton):

Service quality has become an essential part of organizational success due to increased customer expectations and customization of services in many markets. In fact, even the definition of service quality is changing. Good service quality used to mean that the output was made to conform to the specifications set by the process designers. Today, the concept of service quality is evolving to mean uniformity of the service output around an ideal (target) value determined by the customer. However, when the dimensions or performance of a service output exceed allowable limits, the variation needs to be identified so the problem can be corrected.

Four factors represent major explanations for the existence of process variation in services: heterogeneous customers with different service expectations; lack of rigorous policies and processes; high employee turnover; and nature of customization. The financial performance of a financial service institution is driven to a large extent by its ability to attract and retain customers. Customers increasingly have alternatives from which they can choose. We are interested in whether a customer’s decision whether to stay with her current service provider might be more sensitive to variability of service than the level of service quality.

While there is a significant body of theoretical (Morroni, 1992) and anecdotal (Davenport and Short, 1990) evidence on the importance of process management, there is very little statistical evidence that process management matters with respect to the ‘bottom line’ of the institution.

The model shows that, while no individual process is correlated with firm performance, the aggregate measure of process performance affects firm performance. More importantly, the most significant finding is that while aggregate process performance is correlated with financial performance, it is not correlated with customer satisfaction. The process performance measure associated with both firm financial performance and customer satisfaction is the measure of variation across processes. We have found that if processes are managed in a consistent way, then both financial performance and customer satisfaction are improved. By consistent process management, we mean that the performance of individual processes within a firm are similar to one another and thus provide a consistent service offered to the consumer. Consumers’ desire consistency and thus, the bank must align its various delivery processes to meet the consumer’s needs. Therefore, we define process variation as the variation in performance across the eleven individual process performance scores for each bank. It is the variation that we have found to be the best predictor of overall firm performance.

The Common Measurements Tool (CMT):

CMT is the result of an extensive study by researchers at the Canadian Centre for Management Development and others, which examined a number of approaches to standardising measurement of customer satisfaction with public services. The model they have developed provides a useful example of how elements of different approaches can be combined to improve our understanding of satisfaction and highlight priorities for improvement. It incorporates five main questioning approaches, measuring:

- expectations of a number of service factors;- perceptions of the service experience on these factors;- level of importance attached to each of a number of service elements;- level of satisfaction with these elements; - respondents’ own priorities for improvement.

The approach is therefore made up of three distinct strands. The measures of expectations and perceptions of the service experience tend to focus on a relatively small number of very specific factors, such as how long customers wait to be served etc. This allows the gap analysis approach through comparing expected service quality with experience.

The second strand involves asking levels of satisfaction with a more extensive list of elements, followed by

asking how important each of these aspects are to respondents. This allows the comparison of satisfaction and importance that asking people to think about what should be provided by an ideal or excellent service. As noted above, this approach has also been taken by Berry in later studies.

The Customer Satisfaction Index (CSI)

The Customer Satisfaction Index represents the overall satisfaction level of that customer as one number, usually as a percentage. Plotting this Satisfaction Index of the customer against a time scale shows exactly how well the supplier is accomplishing the task of customer satisfaction over a period of time.

Since the survey feedback comes from many respondents in one organization, the bias due to individual perception needs to be accounted for. This can be achieved by calculating the Satisfaction Index using an importance weighting based on an average of 1.

Calculate the average of all the weightings given by the customer. Divide the individual weightings by this average to arrive at the weighting on the basis of average of 1. Customer’s higher priorities are weighted more than 1 and lower priorities less than 1. The averages of the Customers Importance Scores are calculated and each individual score is expressed as a factor of that average. Thus Customer Satisfaction can be expressed as a single number that tells the supplier where he stands today and an Improvement plan can be chalked out to further improve his performance so as to get a loyal customer.

Conclusion:

SCPR conducted a qualitative project for the Department of Social Securitywhich looked at the factors that affect satisfaction with local Benefit Agencyoffices. This followed up respondents to the National Customer Surveyconducted by the department among Benefit Agency users. The SCPR studyincluded an attempt to explore in more detail what “satisfaction” actually meansto customers.

BIBILOGRAPHY:

There has been less research on satisfied customers to determine what it takes for a satisfied customer to change.  Why take a chance on mere satisfaction?  Loyal customers don’t leave even for an attractive offer elsewhere.  At the very minimum they will give you the opportunity to meet or beat the other offer.  Maintaining loyal customers is an integral part of any business. 

Dr. Manoj Kumar DashAsst. Professor

Galgotia College of Engineering & TechnologyGreater Noida

&

D.M. MahaptraLecturer

GNITGreater Noida

The key to customer retention is good customer service. Regardless of whichever industry one is a part of, customer care is of utmost importance. An increasing number of organizations are realizing that with growing competition, new technological innovations and constantly improving services and products, consumers are being pulled in different directions. It is vital to ensure that customer loyalty programs are an integral part of an organization. Acquiring new customers is important, but holding on to existing customers is crucial.

Empowerment is the key component of the business arena. Unless the organizations find new methods to empower people, it would not be possible for them to get closer to the customer, improve service delivery, continuously innovate, increase productivity, and avail the competitive edge. Empowerment in specific term means increasing the skills of both sides to make better decisions for themselves rather than power-balancing or redistribution. It also means encouraging people to become more involved in the decisions and activities that affect their jobs. Specifically, Bush and Folger use the term "empowerment" to mean "The restoration to individuals of a sense of their own value and strength and their own capacity to handle lifes problems." Empowerment is a major issue accompanying this transition. Workers must be able to feel confident in their decision-making abilities, must feel supported by the company environment, and, most of all, must be able to make good, effective decisions in a teams-based organization. Empowerment is a process, and a necessary one in organizations where workers are used to doing their jobs essentially on autopilot as their supervisors make all decisions for them. The next issue is how to help employees feel empowered. A good starting-point in the empowerment process in an organization is to see how empowered its employees feel (Robinson, 1997, p. 3). An Empowerment Measure, a current state assessment of the organization along several dimensions, should be devised and conducted. While there cannot be a catchall, generic Empowerment Measure procedure, it should cover the general areas listed below : Organizational Structure, Management Style, Worker Profile, Informal Power, Organizational Culture. Empowerment encourages employees to participate actively in the decision making process. The first essential in any attempt to empower staff is an efficient and comprehensive communication system. In most organisations, the flow of information and ideas tends to be downwards. If the employees are to be fully empowered then it is essential that they have access to channels of upward communication, which is within their own control. The ultimate goal of empowerment is to create a workbase of employees who are informed and engaged in the organizations functioning, and feel enabled to contribute through their actions.

There are various guidelines to empowerment which are as follows : Making of a leader Empowerment in an organization is the a key criteria.An empowered is driven by the force to be at his best to achieve whatever he desires to achieve. Here the person feels responsible and creative and drives other people in the organization to achieve the best he wants. People in the empowering organization are aware of what the organization expects out of them and how well they are meeting their targets. An empowered person often tends to feel at the centre of a go-getter team. Once that individual knows the organisational needs, top management becomes relatively less important. This may be called Me model. They are able to help create the objectives and their experience finds into the development of credible strategies. . In this model, the empowering leader performs, develops and helps people to perform and deliver their performance, information and development for the organisation.

Organizational Structure Basically, a diagram of the organizational power structure, but also, a sort of cast of characters in the process. Identify all components of the organization. Included should be departments, job descriptions, and other key players, such as unions, employee action committees, the role of customers and suppliers, etc. Traditional ("Theory X") organizations would be hierarchical in arrangement, each individual manager responsible for a layer below them, on down to the worker. A key issue in regards to empowerment is how deep the hierarchy goes, i.e., how many layers of management it has. The more levels to the hierarchy, the less power and autonomy is relegated to workers. It also may be a good indicator of how autocratic the organizations culture may be . Exceptionally deep structures will require significant empowerment implementation procedures and organizational restructuring if the transition to a teams environment is to be successful.The organization structure helps one to know the level of Empowerment that every organization has.

Management structure Management structure is an important key in any organization. The structure of any management is also one of the revealing factor that helps to determine the level of empowerment an organization has. Empowerment allows organisation to respond rapidly, flexibly and effectively to customer and market demands. The result is reduced waste, delays and errors. Flexible management empowers staff to take fast decisions based on clear vision of success and explicit goals. It is forward focussed,

expects change and operates by trying to anticipate future demands as well as present demands. Once the structure of the organization has been determined, there must now be a sort of assessment of how employees are managed. This is different from the personality assessments later in the process in that it is simply an assessment of each layer of the hierarchy to see how much supervision is given or needed and how broad the span of control is. Fairly broad spans of control would mean less supervision and thus perhaps workers more used to functioning relatively independently. More narrow spans mean a higher level of supervision and less autonomy for the workers. Also, attention should be paid to what sort of disciplinary practices there are, i.e., how is tardiness handled, is there a "quota" for production and what happens when employees do not meet it, evaluation process, etc. If these policies are in place to regulate and control, then empowerment will be low. If instead they are aimed more to guide the employees and develop and nurture them, then there is a high likelihood of feeling empowered. Employee empowerment offers those concerned about greater employee commitment to the organisations goals, a technique that provides win-win situation. Employees gain greater sense of ownership through the added responsibility and authority. Employers, meanwhile, gain by increased productivity, better quality and reduce labour turnover. An organisation is empowered when people have the information they need to make decisions about the organisation. In empowering organisation, every one understands importance of good work. In hamstrung organisation, planners working in dark, leave gaps between their own expectations and those of the people who have to carry out the plans. The difference between the empowered group and hamstrung group is that the group decides what measures are most appropriate. It takes a good leader to empower people. Without confidence in their leader, people feel that it is risky to take responsibility. People want day-to-day leadership from their own supervisors. Empowering people is not a skill or competence. It is a strategy for the organisation and a personal conviction for the manager.

Workplace culture Youve certainly heard the term "culture" as it applies to a work-place environment. Culture in the work place means the same thing as it does when social scientists refer to the culture of a society or group of people. It is a term that refers to the mores, customs, and norms that characterize the interactions of members of a particular work group.Work place culture is something thats within a person or a group of individuals in matters of taking decisions etc. Organizational culture can be described as a set of collective beliefs and values that influence behavior. organizations that create and maintain a healthy workplace culture find the incidence of depression decreasing. Employees who feel well, empowered and respected, not only benefit personally, but are more productive and less costly to their employers health and benefits costs.Creating a healthy organization involves first understanding the culture of the organization and creating a culture of trust and respect, where recognition, flexibility, control, good communication, purpose and balance are valued. When organizational health is approached from a cultural perspective -- versus a program approach -- there is a much greater likelihood of affecting employee well-being (mental, physical, spiritual, emotional and social). When employees "feel good" they are more energetic, creative, innovative and productive - qualities that are essential to an organizations competitive advantage. These qualities lead to a healthier organization. An organisation is empowered when people have the information they need to make decision about the operation in which they are engaged; the motivation to make these decisions in the best interest of the organisation and the authority.