Quality Management in the Hospitality Industry
Quality Management in the Hospitality Industry
Service: Hospitality Industry’s Main Product
The hospitality industry is a service-oriented industry. The main offering to customers is service. Let us first discuss what a service is. By definition, services are intangible. The product that is a service or that component of the product that is a service cannot be seen, touched, or felt. As a deed, performance or action, a service is consumed as it is produced, such that the acts of production and consumption are inseparable. Services are perishable, in that they cannot be inventoried or produced and stored for later use. Nor can they be produced without some level of customer interaction. Since services are produced and consumed in real time, they are inherently variable – from customer to customer, from provider to provider and from time to time for the same customer and/or the same provider (John 2003).
Characteristics of Services
Services as Intangible
Services are performances. Services cannot be seen but they can be experienced. The product is a process. Services are the result of value creating activities. The product being purchased is an experience and not a physical good (John 2003). In the hospitality industry for example, hotels provide the service of overnight stay as their core product. The customer does not take title to the room that is being rented. The hotel provides the use of the room for the duration of the time that the customer has paid for.
Services are Consumed and Produced Simultaneously
The acts of production and consumption occur simultaneously in services. Services are produced and consumed in real time. There is a great deal of interaction before, during, and/or after the service between provider and customer. In services, the provider is part o the product. The personnel that the customer interacts with are a part of the product (John 2003). For example in a hotel, the quality of service provided by the front line staff such as the front desk personnel is a factor in customer satisfaction. The front desk personnel is part of the hospitality product.
Services are Perishable
Since services cannot be produced and stored for later use, as physical products can, services are said to be perishable products (John 2003). For example in a restaurant setting, a waiter’s time or unproductive when he is not serving a customer. A hotel’s reservations staff ready to handle customer enquiries is not producing a service unless there is a customer to serve. A vacant room perishes when a guest does not check-in within a given day. The factors of production such as labor, facilities, equipment, and billable time are the value-creating assets for the service provider.
Services vary from Production to Production
Service products as experiences vary form one experience to the next, form customer to customer, as well as for the same customer from one occasion to the next. When there are several steps in the service process where the customer interacts with several different personnel of the service provider, there could be variation from one interaction to another (John 2003).
Quality Systems within the Hospitality Industry
A Quality Management System constitutes a formal record of an organization’s method of managing the quality of its products or services. It enables the organization to demonstrate to itself, its customers that it has established an effective system for managing the quality of its products and services (Beckford 2002).
As a service-oriented industry, quality is defined by the level and excellence of service rendered by the provider to the customer. Customer service quality is the focus of quality management in the Hospitality industry. Beginning in the late 1980s and continuing into the early 1990s, there was an upsurge of attention and interest in quality, primarily because of falling competitiveness of U. S. firms in the wake of Japan’s advances. Quality in the hospitality industry is judged according on how it meets customer expectations. The main goal of every hotel is customer loyalty. In order to achieve customer loyalty, it is imperative that firms create and deliver a quality product – as defined by the customer.
Service quality refers to the customers’ appraisals of the service core, the provider, or the entire service organization (Duffy and Ketchand 1998). In the hospitality industry, service quality is measured on how the provider meet customer needs, requirements and expectations (Lewis and Booms 1983). Parasumaran et al (1988) identify five main dimensions of service quality. The first dimension of service quality is “tangibles”. Examples of tangibles are the physical facilities, equipment, and appearance of employees. The second dimension of service quality is “reliability”, which is the ability to perform the required service dependably and accurately. Third is “responsiveness”, which is displayed through the willingness to help customers and provide prompt service. The fourth dimension is “assurance”, which can be judged base on the knowledge and courtesy of employees and their ability to inspire trust and confidence. The last dimension is “empathy”, which is measured through the caring and individual attention provided by the staff (Parasumaran et al 1988).
Service quality is intangible and instantaneous. It perishes with the completion of the transaction and cannot subsequently be verified and audited. It depends not on what actually happened but on how the parties to the transaction feel about what happened. The key to quality service provision is not standardization and verification but skills, knowledge and education.
In the article ‘Successful Change Programs Begin with Results’ by Shaffer and Thhompson (1992), the authors state that too many companies equate ends with means and processes with outcomes. Managers believe that if they benchmark, assess customers’ expectations and go through training then their sales will increase and quality will improve. Activity-centered programs tend to have negligible result on operation and financial performance. There is no explicit connection between action and outcome. Activity-centered programs rely on broad-based policies. The authors argue that many organizations are wrong in employing activity-centered programs in order to improve continuously and ensure quality. They believe that many organizations continue to pour money and energy of activity-based programs because of their desire to keep pace with fast-moving competitors and the hundreds of advocates of activity-based programs. They argue that activity-based programs yield meager results and that there is a more effective alternative. Activity-centered programs generally fail because they are (1) Not keyed to specific results; (2) Too large scale and diffused; (3) Result is four letter word; (4) Delusional measurements; (5) Staff and consultants-driven; and (6) Bias to Orthodoxy, Not Empiricism.
Activity centered programs have negligible result on operation and financial performance. Moreover, the connection between action and outcome is unclear. Lastly, activity-centered programs rely on broad based policies.
For example, many companies spent considerable resources in the form of money, time and energy on different activities that yielded only small changes in quality, productivity and business performance. The benefits that were achieved by these companies have been insufficient. Many companies subscribe to the idea of Total Quality Management. These companies were forced later on to abandon the Total Quality Management program because the focus of such quality improvement program is on the activity rather than bottom-line improved performance. As an illustration, let us look at the case of a large financial institution in the United States. The organization committed itself to a Total Quality Management Program. After two years of spending considerable money, time and effort, the organization reported the results of the Total Quality Management Program. The organization reported that there are established a number of improvement teams. In addition, the organization also reported that the employees display positive attitude towards Total Quality Management. There were no reported bottom-line performance improvements (Dramm 2000).
Results driven programs are much more likely to transform an organization over time and require minimal investment. Results-driven improvements bypass lengthy preparation rituals and aim at accomplishing measurable goals. Result-driven approach is based on a set of small activities with definite result for each. There are four key benefits of result-driven approach.
Companies introduce managerial and process innovations only as they are needed. Using results-driven approach, the management is able to identify and prioritize the innovations that will speedily contribute to the improvement of the quality of product or service. Management style, work methods, goal setting, information systems and customer relationships are modified only if the change has a potential to speed up the progress toward measurable goals.
Empirical testing reveals what works. Because management introduces each managerial and process innovation sequentially and links them to short-term goals, it can discover fairly quickly the extent to which the extent to which each approach yields results. Frequent reinforcement energizes the improvement process. Short-term projects yield tangible results. Management creates a continuous learning process by building on the lessons of previous phases in designing the next phase of the program. Results-oriented programs are geared towards the identification of the most urgently needed performance improvements. By using each incremental project as a testing ground for new ways of managing, measuring and organizing for results, management gradually creates a foundation of experience on which to build an organization-wide performance improvement.
Activity centered programs fail because the goals are hard to measure, meaning there are no specific results that are targeted. In addition, activity-centered programs are too large scale. It is hard to implement because it seeks to change the entire system. Activity-centered programs are successful because it fails to determine the most urgent needs of the organization. It does not prioritize the needs that will speedily contribute to the quality initiative. There are also no short-term goals. The aim of activity centered programs is large-scale changes, which are harder and longer to achieve. It would be more successful if incremental changes are introduced and the management focuses on short-term goals that will yield long-term benefits.
In the course of accomplishing results-driven efforts, improvement strategies and techniques are introduced. Results-driven teams are trained when new skills, knowledge and abilities are needed. In the results-driven approach, team building is seen as an activity that enables the teams to achieve goals faster (Dramm 2000).
Preventing Rewards from becoming Illusory
Schaffer and Thompson (1998) argue that many programmes fail because management focuses on the activities, not the results. According to them, by initiating activities-centered programs, such as statistical process control, and total quality management training, management falsely assume that one-day results will materialize. However, because there is no explicit connection between action and outcome, improvements seldom materialize.
As a service-oriented industry that capitalizes in people, firms in the hospitality industry needs to assign clear accountability for getting the result, and make sure that the people understand what must be accomplished and why. The results-driven approach does not tell people how to get the job done, but rather make clear what results are needed. Figuring out how to get those results is up to the accountable individuals (Ashkenas 1994).
Just-in-Time Training and Support
Just-in-time training and support is a fundamental part of empowerment. Activity-centered programs start out by inoculating everyone with large doses of training which they may or may not ever use (Ashkenas 1994).
Tannenbaum (1997) defines continuous learning as the process by which individual and/or organizational learning is fostered on an ongoing basis. One of the major tenets of continuous learning philosophy is that employees at all levels of the company must actively pursue training and development activities. Continuous learning also requires employees to understand the relationship between their jobs and work units and the company’s mission. Continuous learning is an ongoing acquisition of new skills, which happens as the person senses the need for updating, as opposed to a less frequent, massive reskilling process. Continuous learning focuses on helping the employees to develop and update their knowledge and skills. Just as the current business environment demands that organizations unleash employee potential by empowering them and delegating authority and responsibility for meeting customer needs, employee also needs to be given responsibility, autonomy, and resources for his or her own continuous learning and development (Craig and Hall 2004).
There is an argument that many quality initiatives are unsuccessful because it focuses on activities. These initiatives fail to focus on results. Management tend to think that by facilitating activities-centered programs, results will be felt quickly. Often times improvements are hardly felt. In order to prevent quality initiatives from failing there are steps that must be taken. First, it is important to enlist every employee in the quality initiative. Educating and empowering employees can prevent failure because it gives responsibility and accountability to the employees. If the employees feel that they play significant roles in the quality initiative, they will be responsible. Another strategy is just in time training and support. The organization does not need to bombard the employees with numerous training and development programs at once. Most activity-centered programs fail because of large numbers of trainings that prove to be useless in the end. The key is introducing training programs when it is needed. Most of the time employees know what they need, when it comes to training and development. In order to prevent unnecessary trainings, the organization needs to coordinate with the employees regarding the requirements of the organization and the developmental needs of the employees. As part of employee empowerment, continuous learning also prevents quality initiatives from failing. The organization needs to have a continuous commitment to quality and lifelong learning. Through lifelong learning, the employees acquire new knowledge, skills and abilities in a continuously. Employees needs to be given responsibility for his or her own continuous learning and development.
Continuous Achievement and Gradual Improvements
Creating continues achievement can be done either through the expansion on the first exceptional challenge, or the creation of new ones. In either case, there always needs to be a mobilizing theme that connects people’s day to day activities with the broader strategic challenges of the organization, and thus makes work exciting and meaningful.
Results-driven programs according to Schaffer and Thompson (1992) begin by identifying the most urgently needed performance improvements and carving off incremental goals to achieve quickly. As the organization moves from project to project, a foundation of experience is created on which organization-wide performance improvement is built. According to Ashkenas (1994), as leaders drive change using programs, possible changes in organization structure, workflow, and support processes start to emerge. The key is to initiate and accomplish changes in infrastructure and design gradually. They are based entirely on expanding experience with the success of organizational change.
The hospitality industry is a service-focused industry. The main offering of the hospitality industry is service. Service has different characteristics that differentiate it from other products. The first characteristic of service is intangibility. Service cannot be seen rather, it is experienced. Service is also consumed and produced simultaneously. There is a great deal of interaction before, during and after the service. Another characteristic of service is perishability. Services cannot be produced and stored for later use. Lastly, services vary form production to production. Defining and measuring quality in service oriented industries are different from manufacturing industries. Customer service quality is the focus of quality management in the Hospitality industry.
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