Understanding what drives customer satisfaction, customer loyalty and customer value, empowers leaders to direct their organization’s efforts to better serve the needs of their customers. Their strategies however can best be realized through a team that is highly motivated.
The service-profit chain, depicted in (Exhibit 6.2), is a road map for leaders of service organizations that emphasizes the importance of each employee and each customer in driving shareholder value. It is essentially the commonsensical notion that customer satisfaction strategies begin with employee satisfaction — by winning their hearts and minds, companies can motivate their employees to improve performance and productivity, for the benefit of customers.
Employee satisfaction is a long debated subject. Numerous theories abound on the nature of human motivation, and many practices prevail within organizations to boost and sustain employee satisfaction. Overwhelming evidence, however, suggests that the challenge of winning the hearts of employees is not an easy one.
The reward and recognition programmes and the “carrot and stick” policies that prevail tend to focus on the individual’s need for self-esteem. The negative impact of these policies which drive employees to compete for rewards was emphasized by Kohn in 1993. Earlier in 1989 Stephen Covey described how we are deeply scripted in the win/lose mentality, from the days we compete for grades and medals, to the days we compete for promotions and bonuses. Teams, however, are part of an interdependent reality where success hinges more on cooperation than competition. Perhaps more should be done by way of support to help employees fulfil their need for belonging and self-actualization.
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