Steps or Guidelines for improving productivity in service industries

How to improve productivity in service industries?

Raising the productivity in service industries is the single greatest challenge the managers are facing at present. The diversity in knowledge, skill, responsibility, social status and pay essential for raising the productivity of knowledge of service workers. He further views that mere replacement of labor with technology does not raise productivity. 1hree fundamental questions need to be answered in raising productivity of the service sector.

• What is task?
• What are we trying to accomplish?
• Why do we do it at all?

Re-engineering helps improve productivity:

Re-engineering aims at improving various processes in order to meet the customer’s requirements of quality, speed, innovation, customization and services. Nowadays, Business Process Re-engineering (BPR) is attracting the attention of large service organizations.

Re-engineering involves reinventing the process to achieve a higher level of customer satisfaction. It enables the service provider to redesign the business process by taking advantage of the enormous potential of the computers and information technology. It strives to breakaway from the old rules about how a service provider organizes and conducts his business. BPR simplifies the work flow, reduces the number of stages involved in the process, speeds up customer service and involves fewer staff.

Role of employees in improving productivity

In order to improve the productivity of a service organization, its employees may be asked to air their views on matters affecting their work. Giving importance to the views of subordinates will encourage them to work positively for the betterment of the service organization. It will prove to be an important source of feedback for everyone concerned with the service. Employees can evaluate the role of their boss by contributing their views on performance of the boss, improvement of the existing systems, initiating action on urgent issues, keeping people well informed and handling a disruptive employee.

Role of service managers in improving productivity

The service manager should carefully decide as to what to appraise and how to do it. Appraisal by subordinates may be encouraged since they are directly affected by the management performance. The views of subordinates may be compared against those of management. In concise, the following steps may be taken to improve productivity in terms of efficiency and effectiveness.

Steps taken to improve productivity in service industries

General motive on any organization is to improve productivity and thereby increasing profits. The following are the steps or guidelines to improve productivity by any organization.

1. Exercise of careful cost control by the management.

2. Designing jobs by the management in pursuit of productivity enhancement.

3. Replacing human labor with automation.

4. Improving employee motivation by studying the employee’s perception about organizational culture.

5. Making employees feel part of the organization.

6. Offering rewards in commensurate with the work accomplished.

7. Selecting people disposed more towards productivity.

8. Achieving the benefits of the manufacturing technology by extending the activities of back office.

9. Deployment of resources according to the fluctuation in the level of customer demand.

10. Encouraging more involvement of the customers in the production and delivery of service.

11. Avoiding entrusting work to highly skilled employees that could be accomplished by untrained staff.

12. Improving the knowledge, skills, attitudes and behavior of existing and new staff is sure to improve the productivity. There should be better methods of recruitment. Training should be given to those service personnel who come into direct contact with customers. Some visible elements of service are performed by the staff in the form of handling queries and complaints. Staff may be encouraged to work hard by allowing them to share the gains resulting from increased productivity of the organization.

13. Reducing service levels: Reducing service levels suggests that the service provider can reduce the quantity of service without affecting the quality of service. For example, a doctor may spend less time with each patient he is treating. However, in case of delivery of high levels of services, reducing service levels may adversely affect the prospects of the service organizations.

14. Substituting products for services: Substituting a product for the service can well improve the productivity of services. For example, the telegram service has been replaced with a new data transfer technology.

15. Introducing new services: An effective service may be designed in the place of a less effective service. For example, the offer of credit card by banks has reduced the need for an overdraft.

16. Customer interaction: The measure of customer interaction may be carefully adopted for improving the productivity of the service organization. After analyzing the consumer behavior and its underlying causes, consumers may be involved more in the production process. The involvement of consumers in service delivery may be active or passive. It is appropriate to use new managerial approaches, changed organizational structures, the employment of paraprofessionals and changed role of the service manager for encouraging the active role of the customers.

17. Reducing the mismatch between supply and demand: In many service organizations, a mismatch exists between the supply of service and demand for the same. A service provider should always aim at striking a balance between these two factors. He may use spare capacity to cope up with the increasing demand. Where demand for the service is excessive, he may reduce the demand.

Philip Kotler has formulated the concept of “demarketing” where an organization can discourage additional customers on a temporary or permanent basis. He also uses the term “Synchro marketing” which explains the strategy adopted by the organization to bring supply and demand into better balance.