PERFORMANCE STANDARDS AS PREDICTORS OF QUALITY SERVICE

 

 

 

 

 

 

By Arnie Witchel

 

Copyright 2003: Witchel & Associates

 

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Abstract

 

This paper explores the strategic human resources importance of training and development in performance standards for an organization. The reasons behind performance standards are explored, as well as their link to an entire Human Resources strategy that includes the rationale for training and development in those standards as well as the methods for reinforcing the training through the organization’s appraisal and reward systems. A study of correlations between acknowledgement of performance standards and an understanding of how quality service is delivered, as well as the correlation between acknowledgement of service standards and the recognition of established service guidelines was conducted in a call service center. A very high degree of correlation was found for both hypotheses.

 

Introduction

     The mantra of continuous improvement, that nothing improves until it is measured, has an important corollary: As soon as something is measured, it begins to improve (Ludeman, 1991). This is particularly true when the improvement revolves around standards of performance, by which the organization measures itself. Performance standards may be compared to gauges on a ship that allow the captain to ensure the ship is on track, headed in the right direction and the right speed (Lisoski, 1998). Performance measurement is one of the first steps toward better service delivery in the business sector. It can lead to more sophisticated measurement tools, including benchmarking, whereby the organization measures its performance with the performance of other organizations. However, to move in that direction requires the organization to select, identify, and apply the service standards (Fine & Snyder, 1999). It also requires the organization to train the employees so they have the ability to identify and apply the service standards. In order to measure employees on their performance in service standards, the standards themselves must be defined and set, and the relationship and meaningfulness of those standards to the functional job should be approached through a four step training process: needs assessment, development of instructional objectives, choosing the method to meet the objectives, and evaluation (Noe, Hollenbeck, Gerhart & Wright, 1997). It is unrealistic for organizations to believe that performance standards can be met or performance improved without training on what the performance expectations are.

     This approach to performance standards allows the organization to customize assessments of standards that are rooted in the company’s values, business goals and development needs (Ludeman, 1991).

Statement of the Problem

     The problem is more clearly focused when addressing the first training step, needs analysis. It is unclear if the level of recognition or acknowledgement of performance standards has a correlation with the level of understanding of how quality service is delivered through those performance standards. If trainees already have a level of understanding of what the performance or service standards are for the organization, does it follow that they also have a similar level of understanding of how quality service is delivered through those performance standards? Does the level of acknowledgement of performance standards have a close relationship with the level of understanding of how quality service is delivered? Does an increase in one variable (acknowledgement of performance or service standards) correlate to an increase in the second variable (understanding of how quality service is delivered)? Further, does the level of recognition of established service/performance guidelines have a relationship with the level of understanding of quality service delivery in the employee’s mind? If a relationship between the levels of acknowledgement of performance standards to the understanding of quality service can be identified, it could have significance for the other steps in the training process in terms of direction, content and emphasis. 

Review of the Literature

     Many organizations embark upon performance management systems as a means to make changes in the organizational culture and mesh human resources considerations into the business objectives and improve overall organizational performance (Bevin & Thompson, 1991). Robbins (1998) points out that performance standards are no more than performance norms that affect the individual employee’s performance by modifying performance prediction based solely on the employee’s abilities and motivation. However, these norms should be tied to the overall mission or vision of the organization, but at the same time be sufficiently specific to direct the behavior of the employee. The worst measure of performance is none at all (Lisoski, 1998). Unclear standards not only lead to lack of performance, but also to problems in adequately appraising performance (Dessler, 1997). The customized approach to assessing needs and implementing standards for quality programs allows the human resources function to link with the organization’s goals (Ludeman, 1991). Behavioral or performance standards allow organizations to tap into what Miller (1998) calls discretionary effort, that effort that separates the marginal employee who views the workplace as a job, from the winners, who give more effort and are high performers. Tax and Brown (1998) concur that implementing service standards not only overcomes the problem of unclear expectations, but expresses values to employees that signal the importance of taking responsibility.

     Bevan and Thompson (1991) state that performance management is headed down two distinct paths. The first is linked to pay and uses a pay for performance approach. The second is linked to training and development. The two are not mutually exclusive. Dessler (1997) argues that effective incentive plans set effective standards that are high, but reasonable and fair. At the same time, the standards should be viewed as a contract with the employee, upon which incentive is based and the training needs of the employees are assessed. However, the two considerations, assessment and training, can be viewed as distinctly different approaches to the same problem. One is concerned with aspects such as compensation and discipline, while the other leans more toward coaching and improving performance through training and development (Bevan & Thompson).  A strategic approach would view training and development as activities that are aligned with the organization’s overall business strategy, while at the same time aligned with the overall Human Resources Management policies and strategies that would include recruitment and selection, appraisal and assessment, reward and recognition, and career development (Mabey, Salaman & Storey, 1998).

     It is difficult to set standards of performance without communicating what those standards are (Lisoski, 1998). It is even more difficult to appraise employees without clearly communicating the performance expectations (Farren & Young, 1995). Not addressing the training component leads to what Blanchard calls “leave alone—zap” (1995, p. 25). In this scenario, the manager hires an employee and assumes that they will perform at a high level, with no further training on performance expectations. When the employee fails to perform, the manager quickly moves toward punitive action as a corrective measure. The role of human resources in motivating and educating employees is even more critical now, as organizations respond to the economy by becoming leaner in the managerial ranks (Ludeman, 1991). Firms that wish to improve recovery performance need to implement four practices, all of which involve human resources, and all of which hinge on effective training: hiring, training, empowerment, and establishing service-recovery guidelines and standards (Tax & Brown, 1998).

     The common feature that triggers training is the spotlight on a skills performance gap (Mabey, Salaman & Story, 1998). The role of training in communication of performance or service standards becomes even more critical when coupled with the realization that performance is dynamic over time, and performance growth approximates a learning curve and consists of different stages, which include transition and maintenance (Ployhart & Hakel, 1998). The first few months on the job may be considered a transition stage, with performance becoming more stable as one approaches the maintenance stage. It would appear to be ideal if the performance standards were clearly communicated and reinforced by training while the employee is in the transition stage and before maintenance of learning occurs. Holton (1996) notes that combining socialization and task-related training can be a powerful strategic tool for an organization during new employee development, because new employee job training teaches and models organizational norms, culture and values by the way they are conducted. Even if this does not occur, the employee can be trained in performance standards with a development process that is customized to the work environment (Ludeman, 1991).

     Training in standards and company values can reinforce the values the organization considers crucial to their success. The performance standards should be an outgrowth of the organization’s values. In 1990, several companies that were finalists for the Malcolm Baldridge Award were criticized because they failed to connect management training with their published values (Ludeman, 1991).  Firms with little maturity enter training with no clear objectives. Firms with a higher level of maturity view the human resources function, and training, as strategic change and development agents (Lee, 1996). It would seem logical that organizations would want to address the issue of new employee empowerment by teaching professional aptitudes and expectations (Holton, 1996). The identification of training with establishing performance standards and reinforcement of corporate values moves training from a specific function to a strategic Human Resource Management consideration. Not only does it address skill or performance deficiencies, but it can act as a catalyst for further changes in standards or values, give an organization a competitive edge as well as establishing a learning climate for the organization (Mabey, Salaman & Story, 1998).

     Of course, training by itself cannot establish performance standards or values in the trainee’s behavior. And changing the behavior is a prime consideration of training in performance standards. There is a difference between what a trainee can do and does or will do (Alliger, Tannenbaum, Bennett, Traver & Shotland, 1997).  Intrinsic variables, such as the trainee’s motivation, attitude, and perceived situational constraints may affect the training event (Mathieu, Tannenbaum & Salas, 1992). Extrinsic variables in the work environment also will affect whether or not the training is reinforced. Trainers consistently report that the most depressing part of their job, upon follow-up, is when they find that participants in the program aren’t applying the standards or skills to their jobs (Ludeman, 1991). Part of the reason may be that management positions are not included in the training program, so the trainee feels no obligation to make specific behavioral changes (Ludeman). Weiss (1977) found that subordinates tend to adopt the work values of their immediate supervisors.  The social norms of the organization, and whether or not there is encouragement to transfer the training of performance standards into performance behavior can also affect the training’s success (Tracey & Tews, 1995). When training is aligned with the other Human Resources policies and strategies, such as reward and performance appraisal systems, trainees report greater intentions to use the training they receive (Baldwin & Magjuka, 1991).

     Training must be maintained for some time in order to be effective (Matthieu, et al., 1992). That is why training in performance standards must be constantly reinforced and re-evaluated. There is only one way to measure if performance standards training is actually transferring into behavior: pre- and post-measurement tests (Ludeman, 1991). Letting the trainees know ahead of time that they will be measured on the implementation of the training will increase their motivation to add the performance standards to developmental behavior (Ludeman).

     Training and development, when viewed as a strategic consideration and part of an integrated Human Resources strategy, changes from an event based activity to a strategy that helps the organization manage its overall performance. Part of managing that performance is dependent on training the employees on what the standards of performance are, and how they must behave in order to meet those standards and successfully navigate their way through the organization’s expectations. A further understanding of the correlation between the cognizance of performance/service standards and the understanding of how quality service is delivered through those standards may help Human Resources Managers evaluate the needs of employees in the training effort.

Hypotheses

     Based on the problem, two hypotheses will be tested:

     Hypothesis 1: There is a correlation between the acknowledgement or cognizance of performance/service standards and the understanding of how quality service is delivered through those standards.

     Null hypothesis: There is no correlation between performance/service standards and understanding of how quality service is delivered.

     Hypothesis 2:  There is a correlation between an understanding of how quality service is delivered and the acknowledgement of established service guidelines.

     Null hypothesis: There is no correlation between an understanding of how quality service is delivered and established service guidelines

Methodology

     The study was designed to measure employee cognizance or acknowledgement of performance standards, as well as the level of understanding of how quality performance is delivered. It will be prepared as part of a needs analysis for a major call center to conduct training to improve customer service.

Selection of Subjects

     The subjects were selected from a call service center population of a large health care provider organization in Tampa, Florida. This was a non-random sample, utilizing cluster sampling of the entire call service center population of associates based in that location.

Instrumentation

     The instrument used was a Likert scale designed to identify if the respondents agree that the call service center has established, explicit service standards, if they understand how quality service is delivered, and if they acknowledge that the call center has established service guidelines.

These questions were part of an 11-item questionnaire designed for needs analysis on improving customer service at the center. On a scale of 1 through 5, the scale represented the following values: 1= strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree, and

5 =strongly agree. The wording of the questions was as follows:

We have established, explicit service standards.

We understand how quality service is delivered.

We have established service guidelines.

     A copy of the test instrument can be found in Appendix A.

Assumptions or Limitations

     The fundamental assumption of the test instrument is that there are significant correlations between performance/service standards, an understanding of how service is delivered, and establishment of performance/service guidelines in a call service setting. There is a further assumption that training in these areas is important in establishing performance or service

 

standards and their connection to understanding how service should be delivered. These assumptions limit the scope of the study beyond any research outside of this area.

     The limitations of the study are the non-random nature of the sample and its population. The generalizability of these findings may not be valid for the general population of service employees or call service employees due to the nature of the sampling and the cluster technique used. A further limitation is that these are self-reported findings that could not be verified through independent observation.

 Procedures

     The Training Director at the call service center administered the survey at the workplace through personal delivery and delivery of interoffice mail over a two-week period. The surveys were anonymous and voluntary; employees returned the surveys to the Training Director, who forwarded them to the researcher. The employees were advised that this survey’s purpose was to gather input about the current service standards and how the employees perceived the service that was being delivered.

Data Collection and Analysis

     A total of 79 completed and usable questionnaires were collected. Using Pearson’s product moment correlation, the statements “We have established, explicit, service standards” and the statement “We understand how quality service is delivered”, which hypothesis #1 tested, have a very high degree of positive correlation (r = .99). The null hypothesis, that there is no correlation between the acknowledgement or cognizance of performance/service standards and the understanding of how quality service is delivered through those standards is rejected, because the obtained value of r is greater than the critical value (.227) at the .05 level of confidence.  

     Examining the second hypothesis, the statements “We understand how quality service is delivered” and “We have established service guidelines” also demonstrate a very high degree of correlation (r = .93). The null hypothesis, that there is no correlation between an understanding of how quality service is delivered and the acknowledgement of established service guidelines is also rejected, because the obtained value of r is greater than the critical value (.227) at the .05 level of confidence. 

     The analysis of data would indicate that there is a very high degree of positive correlation between the acknowledgement or cognizance of performance/service standards and the understanding of how quality service is delivered through those standards. It would also indicate that there is a very high degree of positive correlation between an understanding of how quality service is delivered and the acknowledgement of established service guidelines. However, the data does not positively establish a correlation between acknowledgement of the standards and action on the standards. Nor does it establish if the self-professed understanding of quality service is in fact real. The content of that knowledge was not the subject of the test.

Summary and Recommendations

     This study indicates that there is a high degree of correlation between acknowledging or cognizance of performance standards and the profession of an understanding of how quality service is delivered. There also appears to be a high degree of correlation between understanding how quality service is delivered and the acknowledgement or cognizance of established service guidelines. This indicates that performance standards should be closely scrutinized when they are constructed. If what is measured begins to improve (Ludeman, 1991), then the standard that is being measured should be carefully constructed, as should the service guideline that steers the employee toward the standard. This may also indicate to Human Resource Managers that establishing service standards and guidelines and training employees in the area of established service guidelines can be a critical component for delivering quality service in the customer service arena. This has implications for Human Resources from the time an employee is hired, through their socialization and metamorphosis processes. The strong identification with performance standards should begin with the employee’s first day and it should be closely associated with the concept of quality service, which is the desired end result. The correlation between cognizance of performance standards and the understanding of how quality service is delivered, as well as the correlation between the understanding of how quality service is delivered and the cognizance of established service guidelines should be reinforced through training. Testing in these areas of cognition for new employees can aid in the needs analysis phase of training. Through an understanding of the employee’s current acknowledgement of established service guidelines, training can more specifically address how those guidelines aid in the delivery of quality service and which areas of understanding and association still need development. This is a cornerstone for improving performance practices that Tax and Brown (1998) identify as beginning with hiring, training and empowerment and establishing service-recovery guidelines and standards.

     The link between cognizance of performance standards and the understanding of how quality service is delivered also needs to be reinforced for existing employees. Employee development is a continuous process and refreshing the understanding of service standards and guidelines, as well as the connection to how quality service is delivered can only result in continuous service growth for the organization. As Holton (1996) asserts, training the existing organizational insider on these relationships, whether they be coworkers or supervisors, can only facilitate the development of new employees as they adapt to the organizational culture.

     Further studies of a more generalizable nature outside of this specific industry, including random sample studies, may yield further insights that may or may not support these results. However, further analysis should be conducted in more longitudinal studies to determine through independent observation if the acknowledgement of performance standards does indeed lead to acting on those standards and delivering quality service. In addition, studies that would help construct assessment tools for needs in the training of employee service standards and their relationship to quality service would benefit the Human Resources Manager in specific interventions.  Studies that would measure specific interventions and their effectiveness in cognizance of performance standards and their relationship to quality service delivery and the relationship between cognizance of how quality service is delivered and performance guidelines would aid all Human Resource Managers in protecting their training budgets, especially for new employees, and reinforcing training for seasoned employees to deliver continual quality customer service for the organization.

    

References

Alliger, G.M., Tannenbaum, S.I., Bennett, W. Jr., Traver, H., & Shotland, A. (1997). A meta-analysis of the relations among training criteria. Personnel Psychology, 50, 341(18).

 

Baldwin, T.T., & Magjuka, R.J. (1991). Organizational training and signals of importance: linking program outcomes to pre-training expectations. Human Resource Development, 2, 25-36.

 

Bevan, S., & Thompson, M. (1991). Performance management at the crossroads. Personnel Management, 23(11), 36(4).

 

Blanchard, K. H. (1995). Situational leadership II.  In R.A. Ritvo, A.H. Litwin, & L. Butler (Eds.), Managing in the age of change. (pp. 14-33). New York: Irwin Professional Publishing.

 

Dessler, G. (1997). Human resources management (7th ed.).Upper Saddle River: Prentice-Hall).

 

Farren, C. & Young, M. (1995). The manager's role in career development: Linking employee aspirations and organizational aims. In R.A. Ritvo, A.H. Litwin, & L. Butler (Eds.), Managing in the age of change. (pp. 98-110). New York: Irwin Professional Publishing.

 

Fine, T., & Snyder, L. (1999). What is the difference between performance management and benchmarking? Public Management, 81(1), 24(2).

 

Holton, E.F. (1996). New employee development: A review and reconceptualization. Human Resource Development Quarterly, 7, 233(20).

 

Lee, R. (1996). The 'pay-forward' view of training. People Management, 2(3), 30(3).

 

Lisoski, E. (1998). If you can’t measure it you can’t manage it. Supervision, 59(6), 8(3).

 

Ludeman, K. (1991). Customized skills assessments. HRMagazine, 36(7), 67-85.

 

Mathieu, J.E., Tannenbaum, S.I., & Salas, E. (1992). Influences of individual and situational characteristics on measures of training effectiveness. Academy of Management Journal, 35, 828(20).

 

Mabey, C., Salaman, G., & Storey, J. (1998). Human resource management: A strategic introduction. Malden, MA: Blackwell Publishers.

 

Noe, R.A., Hollenbeck, J.R., Gehart, B., & Wright, P.M. (Eds.). (1997). Readings in human resource management. Boston: Irwin/McGraw-Hill.

 

Ployhart, R.E., & Hakel, M.D. (1998). The substantive nature of performance variability: Predicting interindividual differences in . Personnel Psychology, 51, 859(43).

 

Robbins, S. P. (1998). Organizational behavior: concepts, controversies, applications. Upper Saddle River, NJ: Prentice-Hall.

 

Tax, S.S., & Brown, S.W. (1998). Recovering and learning from service failure. Sloan Management Review, 40, 75-88.

 

Tracey, J.B. & Tews, M.J. (1995). Training effectiveness: accounting for individual characteristics and the work environment. Cornell Hotel & Restaurant Administration Quarterly, 36(6), 36(7).

 

Weiss, H.M. (1977). Subordinate imitation of supervisor behavior: The role of modeling in organizational socialization. Organizational Behavior and Human Performance, 19, 89-105.

 

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APPENDIX A

 

Study Instrument

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee Feedback

 Using the following ranking scale, please rank the following statements:

1 = Strongly Disagree

2 = Disagree

3 = Neither agree nor disagree

4 = Agree

5 = Strongly Agree

 

 

 

1

2

3

4

5

We know who our customers are

 

 

 

 

 

We know what our customers need

 

 

 

 

 

We know what our customers want

 

 

 

 

 

We know what our image is to our customers

 

 

 

 

 

We know what makes up quality service to our customers

 

 

 

 

 

We have a service theme

 

 

 

 

 

We have established, explicit, service standards

 

 

 

 

 

We understand how quality service is delivered

 

 

 

 

 

We have established service guidelines

 

 

 

 

 

We understand the processes that affect quality service

 

 

 

 

 

We know which elements of service are non-negotiable and which are flexible

 

 

 

 

 

 

Our top three priorities for customer service are:

1.

 

2.

 

3.

 

Our top three complaints from our customers are:

1.

 

2.

 

3.

 

The top three expectations our customers have of us are:

1.

 

2.

 

3.