Importance of Employees in Service Culture, Empowerment, and Service- Profit Chain

This article discusses the importance of employees in maintaining a service culture in the hotel industry. It explores the concept of employee empowerment and its impact on job satisfaction and performance. Additionally, it explains the service-profit chain model and the consequences of poor customer service.

Running head: GUEST EXPERIENCE AND HOTEL INDUSTRY
Guest Experience and Hotel Industry
Name of the University:
Name of the Student:
Author Note:

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Importance of Employees in Service Culture, Empowerment, and Service- Profit
Chain:
In order to understand the importance of employees in the service culture, it is important
to understand the concept of service culture. A service culture refers to the systems of
training and rewarding of the employees of an organization, who are to indulge into and
involve a system of interaction with the customers and prioritizes the needs and requirements
of the same (Hudson & Hudson, 2017). The service culture refers to the system of improving
the customer service policies and programs of an organization, therefore, it is easily
understood that in order to provide the customers with a better and quality service it is
important for the employees to understand their role and the requirements that are made from
them, and further this implies that the employees hold the pivotal role in the successful
completion of the customer requirements and also in maintain the service culture of an
organization (Liden at al., 2014). Therefore, the researchers have come up with the following
attributes the importance of the employees in maintaining the service culture.
The behaviours of the employees with its customers can influence and determine the
brand image or the market position of the organizations. The behaviour of the employees of
the organization, upholds the behaviour of the organization as a whole. The organizational
behaviour further shapes the behaviours of the customers as well.
Further the service provided by the employees and the quality of the services provided
create the marketing component for the employees (Wei et al., 2013).
The employee involvement in the processes of the organizational conducts, ensure the
customer satisfaction and further employ the employee satisfaction, which is also important
for the achievements of the personal goals of the employees as well as the completion of the
goals of the organization as a whole (Wei et al., 2013).

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The employee involvement or the behaviour of the employees towards the customers also
increase the reliability of the customers on the organization and is essentially important for
creating a brand loyalty among the customers (Wei et al., 2013).
Employee involvement is also important as when an employee does something
extraordinary, then that in a way expends the reputation of the brand or the organization as
well, which further gains both the employees of the organization and the organization as a
whole (Wei et al., 2013).
Employee involvement in the conducts of the businesses also help the organization to
retain employees and extend employee turnover (Wei et al., 2013).
In order to understand the employee importance in order to empower the workplace or the
work culture, it is essential to understand the concept of employee empowerment. Employee
empowerment can be defined in a lot of ways, but the most basic definition of the concept of
employee empowerment is enabling the employees to take decisions by themselves. It is
related to the concept of accountability as practiced among and expected from the employees
of the organizations (Hudson & Hudson, 2017). This further, influence the performance of
the employees. As according to the Harvard Business Review, an empowered work strength
can elicit a stronger job performance and result into job satisfactions among the employees,
increasing their commitment towards the organization (Schulz & Nakamoto, 2013). The
empowerment of the employees within an organization can benefit the organization in the
following ways,
An empowered workforce can result into a better and quality production. The finished
products and the completed services becomes personal pride for the employees, which further
creates a sense of satisfaction and self-appropriation among the employees, which increase
their zeal and their commitment to the services (Ghosh, 2013).

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Empowerment within the organization, also increases a team cohesiveness, and integrity,
which again proves beneficial for the organization as a whole as well as for the employees
(Ghosh, 2013).
Therefore, in order to include an empowerment process within the organizational or
workplace culture, it is important for the management of the organization to actively include
the employees of the organization in to the empowerment process. There are various ways to
empower the employees of an organization but in ordered to ensure the success of these
programs the management team must understand the importance of the employee
involvement within the training sessions or the business conducts.
Since it is the employees who are to provide with the sense of empowerments, or rather who
are essentially needed to be empowered, therefore, the employee involvement is much
important. It is the employees who musts initially and essentially understand the importance
and concept of empowerment and the way it can gain them. Further the managers must also
understand, since it is the employees of the organization, who are to get empowered,
therefore, they must be capable enough to grasp the empowerment processes (Iqbal &
Hashmi, 2015). They must be able enough to practice an independent thought process and
must have the capacity to practice an independent decision making power in the business
conducts, as per their understanding of the situations. According to Bowen and Lawler (1992,
1995), employee empowerment is a multifaceted approach which enable the employees to
share four organizational ingredients, which are, information about the organization’s
performance, knowledge that enables employees to understand and contribute to
organizational performances. Rewards based on the organization’s performance, power to
make decisions that will influence the organizational direction and performance. The
researchers are of the opinion that such a conduct will result into a comparison with the
growing body of the research regarding the employee empowerment as illustrated by Hudson

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& Hudson. Further, the author has shown that the Self Determination theory states that the
employee empowerment is positively and directly related to the job satisfaction of the
employees. As according to the theory, people have an orientation to response towards
growth and intrinsic motivational factors. This refers to certain of the psychological needs of
relatedness, competence and autonomy. Therefore, along with the external stimuli, these
internal stimuli also play a major part in the desired behaviour. The empowerment practices,
for example, granting the employees with discretion, providing them with the feedback and
the necessary skills, which further, increases the job satisfaction, and also increase the
employee’s trust and feelings psychological safety. Therefore, all these are related to the
factor of employee empowerment. Disney, has rightly found the ways to approach this, and
are famously known for their unique guest experience. They listen to the employees to come
up with innovation in the process and they also share positive customer stories to motivate
them. They also provide the staff with simple demonstrations and genuine cares, as they find
it important for the empowerment of the employees.
The business organizations are now abided by the service- profit chain model, and it
is believed as propounded by the employees that the service profit chain model is majorly
influenced by the conduct and the behaviours of the employees. Therefore, in order to
understand the the important of employee involvement in the service profit chain, it is
important to know about the concepts of service profit chain. As according to the researchers,
the service profit chain model refers to the relation between the profits of the organizations
the customer satisfaction, brand loyalty and the increased production or services by the
employees (Hudson & Hudson, 2017). According to this particular model, the customer
satisfaction is the most important aspect of any organization, which has a direct influence
upon the brand loyalty or the customer loyalty as depicted towards the organization (Hong et
al., 2013). Therefore, as can be viewed, this is a chain process, where the first step or stage is,

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Customer Satisfaction Drives Customer Loyalty, this essentially refers to the concept,
that thee customer satisfactions do not equal the customer loyalty but rather it derives from
the customer satisfaction, that is, it is perceived as the result of the customer satisfaction.
Therefore, as according to the service profit chain model, the customer loyalty is the
perceived value (Cohen & Olsen, 2013). This is because, the customer satisfaction is a
variable and is dynamic in nature, it continuously changes, and therefore, the customer
loyalty here is the dependant variable, which changes with the changes in the independent
variable, that is, the customer satisfaction.
The second stage is the value within the team. The system of value in the
organization, mong the employees, which is essentially an emotional aspect that grows and
emerges among the customers and the employees with the experiences of purchasing and
selling. However, the customer may not consider hold the products as valuable as do the
employees. Therefore, it depends upon the employees of the organization, to employ a sense
of value or worth among the customers (Iensen et al., 2013).
The third stage is the employee productivity that is derived and driven from the
values. The well the employees can sell the products or thee services and market the same,
the more the productivity of the organization as a whole, increases. The customers perceiving
the products as being of high worth or of high value, are the ones who are seen to be as
satisfied with the products and the services (Sarwar & Aburge, 2013). Therefore, a satisfied
customer base can increase the productivity of the organization a whole.
Therefore, in these three scenarios, the involvement of the employees, in the whole
process of business conducts, and further, the employees play the pivotal role in the same.
The customer satisfaction depends largely upon the quality or the products and the services
that are provided to them, therefore, the employees are the ones who are to provide the

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services to the customers (Hudson & Hudson, 2017). Moreover, the communication process
that they are to involve into with the customers, is also seen to be important as it influences
the customer experiences, and both these factors further contribute to the profit of the
organization as a whole.
Consequences of poor Customer Services:
As understood from the above explanations, the hospitality and tourism and event
management industry, are essentially driven by the customer experiences, and the economic
gain in this field is essentially gained upon the customer experiences. For example, good
customer service not only helps in creating a brand image and maintaining a communication
system with the customers (Hudson & Hudson, 2017). Therefore, a management service that
results into poor customer services, or a management that fails to provide the customers with
exquisite service experiences are faced with certain consequences. The poor customer service
essentially refers to the elongated time to respond to the customer needs, lack of knowledge
and understanding of the customer needs and requirements, unprofessional and personal
interactions or making the customers to feel a breach in the privacy (Wan, 2013). Also the
lack of understanding the significance of detailing in the plans and also failing to maintain the
security of the customers and the details of the same, are some of the was that can affect the
reputation of an organization and are essentially termed as the poor customer experience
quality. Therefore, the consequences of such situations can be,
A Damaged Reputation:
Warren Buffet had rightly mentioned that it takes twenty years to make a reputation and it
only takes twenty minutes to ruin get it ruined. As forwarded by Hudson & Hudson, (2017)
failing to meet the customer requirements and practice of services that do not rightly adhere
to the codes of conduct of the organization, essentially, will damage the reputation of the

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same, which will directly affect the client base of the organizations. Especially, in the age of
the social media, where the customers can easily put up reviews of the services that they have
availed, a poor quality of service will generate negative reviews regarding the organization,
which will therefore, damage the reputation of the same (Shani et al., 2014). For example, the
United Airlines, one of the major airlines services, in the country, is perceived with affected
reputation. Since the incident of a video of passenger being removed from his seat, had
become viral, and further, the United’s handling of the incident has made the situation worse.
This incident has made the organization loose its 4% of stock within days of this incident,
wiping almost $1 billion off the company’s market value. Since then, the company is trying
to make its position back within the market, and saw a drop or reduction in the bookings and
the marketing position of the company.
Customer Retention:
A poor quality of service and a damaged reputation can decrease the customer base of
the organization. Poor customer services and poor communication system with the customers
affect the employee customer relationship and further affect the customer base for the
organizations. A poor customer service creates a negative impression of the organization as a
whole upon the customers (Mohsin, Lengler & Kumar, 2013). Therefore, this affects the
existing customer base for the organization as well as affects the customer revenue of the
same.
Customer Loyalty:
The poor customer service also affect the customer loyalty for the same. A customer
who already bore a negative impression for the organization, will effectively lose faith upon
the organization as and upon the conducts of the same. They will never go back and avail the
same services from the same organization, and further they will practice a negative

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recommendation for that particular organization (Mohsin, Lengler & Kumar, 2013). This will
affect the customer loyalty of that organization and further will lose upon the extended
customer that the existing customer base could have ensured.
Employees Retention:
A poor reputation of the organization and the decreasing profitability of the same
directly affect the employee base or the workforce of the organization, and cause them to
leave. The employees are likely to start looking for newer and better opportunities, which will
suffice them economically and will also provide them with employee satisfaction (Amin et
al., 2013).
Decreased Financial Value:
A damaged reputation ill affect an organization in the most core of its part, that is, in
case of customer expansion. A poor customer service leads to a poor customer experience
which affects the reputation of the organization as a whole. Now, although, the customer
service implies providing services to the current customers, but an expanded customer base
can get an organization leads for furthering or increasing the customer base further (AlBattat
& Som, 2013). Therefore, an affected reputation and an unsatisfied customer base can affect
the further expansion of the customer base.
Damaged Revenue System:
As discussed in the above points, that a poor customer service can damage the reputation of
the organization, reduce the employee retention capability of the same, and further damage
the lifetime value of the existing customers. Therefore, all these leads to a damaged revenue
system of the organization. For example, as the organization loses upon its existing
customers, the potential revenue generation source drops for the organization. Furthermore, a
poor customer service, provided by an organization, reduces the capability of the organization

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to extend its customer base, which further affects the resource for the organizations to
increase its potential revenue generation system (Hudson & Hudson, 2017). This leads to a
damaged revenue generation for the organizations. Furthermore, the poor customer service
that leads to a damaged reputation of the organizations, determines the inability of the
organizations to retain its employees. Now the employee or the workforce of any
organization is perceived as the central tool for the organizations to increase its revenue, as
the employees of the organizations are the ones who work and maintain the customer
relationships (Karatepe, 2013). Now, a decreased workforce affects the resource for the
organizations to generate revenue. Now, all of these aspects lead towards an affected revenue
system of the organization. For example, in the Southwest Airlines, upholds how the
employee productivity plays an important role in driving the service profit chain. Almost
86% of the company’s staff are unionised, and the positions, which are provided to them, are
designed in a way, so that they can perform and involve themselves into all kinds of jobs. The
customers perceive high values for the employees and the service that they get. This
particular airlines maintain the timing regularly, frequent departures, friendly employees and
quite low fares, as compared to the other airlines services. Therefore, among the major
airlines of the country, the Southwest Airlines, have been seen with the major marketing unit
among with the other major airlines, and this is because of the services provided by the
employees of the airlines organizations, which, irrespective of the lack of funds, and smaller
size, making the organization to compete with the major airlines services.
Dropping of the Customer Lifetime Value:
One of the most important aspect of maintaining a good customer service is to
maintain the existing customer base. The organizations often find it more difficult to maintain

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the existing customers than to increase or add to the existing customer base. It is especially
true for the hospitality services. As the organizations are providing with quality services and
certain perks to the customers, the expectations of the same gets increased and therefore, the
customers often get offended if the expectations are not met properly. Therefore, the
organizations, dealing in these industries, must consider the fact that their prime objective is
to serve the customers with the optimum quality of services (Dusek et al., 2014). As the
organizations fail to understand this, they result in serving a poor quality service to the
customers. Therefore, this adversely affects the maintaining of the customers, and thus a poor
customer service results into affecting the existing customer base and drops the lifetime value
of the same.
Strategies to Maintain the Customer Services:
In order to better the customer experiences, the organizations must practice the following
strategies.
The customers must be provided with a clear vision which is focused on the customer
experiences and these visions must be properly communicated with the students.
The organization must also focus on targeting the customer base (Long et al., 2013).
Essentially introducing a feedback system within the organization, this will enable the
organization to understand the weak points of the same and the places where they can
better themselves (Hudson & Hudson, 2017).
The organizations must understand the expectations of the existing customers. As it is
mentioned that the existing customers of a particular organization, are seen to have
perceived with greater expectations, the organizations must consider these aspects and

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further increase the added benefits and perks for the existing customers in order to
maintain the lifetime value of the customers (Chen, 2015).
In order to maintain the employee retention in these organizations, the organizations
must focus upon providing its employees with perks and benefits, which will increase
the employee retention ability for the organizations. For example, the organizations
must work upon maintaining an organizational culture that will contribute to the
employee retention policies for the organizations (Hudson & Hudson, 2017). The
managerial section of these organizations must understand and recognise the need and
significance for the maintaining a strong and potential workforce and further work
upon the practice of employee retention within the organizational structure. The
organizations must ensure a good organizational culture for this whereby, they will be
able to provide the employee a sound work ambience and the added perks will ensure
further employee involvement within the organizational structure and the business
conducts (Tseng & Wu, 2014). This is very important for the hospitality
organizations, as the employees of the same arse the pivotal part and the reputation of
the organizations are dependent upon the conducts and the behaviours of the
employees, therefore, maintaining a sound work culture is essmnetila for the
organizations as they will further contribute in maintaining the employee retention.
The organization also needs to maintain the code of conducts that are essential for the
organizations to follow. Also, the organizations must follow a proper structure of
development that will enable them to meet the required needs of the customers (del
Mar & Bremser, 2013).

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