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Human Resource Management in the Service Sector

Jody Hoffer Gittell and Rob Seidner

INTRODUCTION

RELATIVE IMPORTANCE OF HRM IN THE SERVICE SECTOR

HOW HRM IMPACTS PERFORMANCE IN SERVICES: COMMITMENT,

SKILL AND RELATIONSHIPS

CONCLUSION

ENTRY CITATION

INTROD!TION

The service sectr !" #cc$!ts %r ver &'( % e)*+)e!t i! the i!-$stri#+i.e-ec!)ies % the "r+-, "ith Nr"# #!- the U!ite- St#tes $t %r!t #t ver &/( %

e)*+)e!t 0OECD, 1''/23 Te+ec))$!ic#ti!s, tr#!s*rt#ti!, "h+es#+e4ret#i+,

%i!#!ce, i!s$r#!ce #!- 5$si!ess services #cc$!t %r #5$t 6'( % #++ e)*+)e!t

cre#te- i! the i!-$stri#+i.e- ec!)ies ver the *#st -ec#-e, "hi+e c))$!it, sci#+

#!- *ers!#+ services, i!c+$-i!7 he#+th #!- e-$c#ti!, #cc$!t %r the re)#i!i!7 8'(3

L9i!7 #he#-, this 7r"th is e*ecte- t c!ti!$e, "ith !e#r+ 1'( e)*+)e!t

7r"th e*ecte- i! services i! the !et -ec#-e i! the US, "ith ! ch#!7e e*ecte- i!

)#!$%#ct$ri!7 e)*+)e!t 0US ;$re#$ % L#5r St#tistics, 1''623 ?2, %#st %- rest#$r#!ts 0Lei-!er, =>>=2, ret#i+ stres 0e373 R#%#e+i, =>?>B S$tt!#!- R#%#e+i, =>??2, !$rsi!7 h)es 0e373 E#t!, 1'''B D-s! #!- i!c#v#7e,

%rthc)i!72, rest#$r#!ts #!- hte+s 0S#+#!v# et #+3, 1''/2, h#ir s#+!s 0Li# #!-

Ch$#!7, 1''&2, #!- hs*it#+s 0e373 Wr.es!ie"s9i #!- D$tt!, 1''=23 This +iter#t$re

-escri5es vivi-+ the i!ter*ers!#+ -!#)ics 5et"ee! i!-ivi-$#+ *rvi-ers #!-

i!-ivi-$#+ c$st)ers th#t sh#*e the service -e+iver e*erie!ce3

Re+#tive t )#!$%#ct$ri!7 "r9, service "r9 is ch#r#cteri.e- 5 the si)$+t#!eit %

*r-$cti! #!- c!s$)*ti!, 5 hi7h +eve+s % $!cert#i!t #!- t#s9 i!ter-e*e!-e!ce,

#!- 5 the r+e th#t c$st)ers *+# #s *te!ti#+ c@*r-$cers i! the service -e+iver

*rcess3 T7ether, these %e#t$res % service "r9 *se # -i+e))# %r HRM3 O! the

!e h#!-, e)*+ee 5eh#vir is *te!ti#++ )re i!%+$e!ti#+ -$e t the -irect

c$st)er4*rvi-er i!ter%#ce, 5$t #t the s#)e ti)e it is )re -i%%ic$+t t c!tr+ -$e t

http://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#INTRODUCTIONhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#RELATIVE%20IMPORTANCE%20OF%20HRM%20IN%20THE%20SERVICE%20SECTORhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#HOW%20HRM%20IMPACTS%20PERFORMANCE%20IN%20SERVICES:%20COMMITMENT,%20SKILL%20AND%20RELATION%20http://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#HOW%20HRM%20IMPACTS%20PERFORMANCE%20IN%20SERVICES:%20COMMITMENT,%20SKILL%20AND%20RELATION%20http://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#HOW%20HRM%20IMPACTS%20PERFORMANCE%20IN%20SERVICES:%20COMMITMENT,%20SKILL%20AND%20RELATION%20http://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#CONCLUSIONhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#entrycitationhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#entrycitationhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#INTRODUCTIONhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#RELATIVE%20IMPORTANCE%20OF%20HRM%20IN%20THE%20SERVICE%20SECTORhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#HOW%20HRM%20IMPACTS%20PERFORMANCE%20IN%20SERVICES:%20COMMITMENT,%20SKILL%20AND%20RELATION%20http://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#HOW%20HRM%20IMPACTS%20PERFORMANCE%20IN%20SERVICES:%20COMMITMENT,%20SKILL%20AND%20RELATION%20http://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#CONCLUSIONhttp://www.sage-ereference.com/hdbk_humanresourcemgmt/Article_n30.html?searchQuery=y%3D0%26searchPage%3D6%26quickSearch%3DHR%26fullSearch%3D1%26x%3D0#entrycitation

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the 7re#ter -i%%ic$+t % )e#s$ri!7 *er%r)#!ce, s$*ervisi!7 "r9, *re@*r7r#))i!7

"r9 #!- cr-i!#ti!7 "r9, 5et"ee! service "r9ers #!- "ith the c$st)er3

T7ether, these c!-iti!s s$77est the i)*rt#!ce % i!vest)e!ts i! HRM3 ;$t #t the

s#)e ti)e, #!ther %e#t$re % service "r9 is th#t it is +#5r i!te!sive re+#tive t

)#!$%#ct$ri!7 #!- #s # res$+t, cst c)*etiti! i! this sectr te!-s t %c$s ! the

re-$cti! % +#5r csts, "hich )# -isc$r#7e i!vest)e!ts i! HRM3

Dr#"i!7 $*! #! ete!sive rese#rch +iter#t$re ! HRM i! the service sectr, this

ch#*ter #--resses t" %$!-#)e!t#+ $esti!s3 First, "e #s9 "hether HRM is

i)*rt#!t %r #chievi!7 *er%r)#!ce $tc)es i! the service sectr3 We c!tr#st the

#r7$)e!t th#t HRM is )re i)*rt#!t i! the service sectr -$e t the -irect

c$st)er4*rvi-er i!ter%#ce, "ith the #r7$)e!t th#t HRM )# 5e +ess i)*rt#!t i!

this sectr -$e t the +#5r i!te!sive !#t$re % the "r9 *rcess #!- the res$+ti!7

te!-e!c t c)*ete thr$7h the re-$cti! % +#5r csts #t the +" e!- % the *r-$ct

)#r9et3 Sec!-, "e #s9 h" HRM i!%+$e!ces *er%r)#!ce $tc)es i! the service

sectr3 We c!si-er three #+ter!#tive )ech#!is)s=2 )tiv#ti! #!- c))it)e!t, 12

h$)#! c#*it#+ #!- s9i++s, #!- 2 sci#+ c#*it#+ r re+#ti!shi*s thr$7h "hich HRM)# i!%+$e!ce service *er%r)#!ce3

R"#$TI%" IM&ORT$N!" O' HRM IN TH"

S"R%I!" S"!TOR

There #re t" c)*eti!7 #r7$)e!ts re7#r-i!7 the i)*rt#!ce % h$)#! res$rce

)#!#7e)e!t i! the service sectr re+#tive t )#!$%#ct$ri!73 The %irst #r7$)e!t

s$77ests th#t HRM is )re i)*rt#!t %r #chievi!7 *er%r)#!ce $tc)es i! the

service sectr th#! e+se"here -$e t the -irect c$st)er4*rvi-er i!ter%#ce, "hi+e the

sec!- #r7$)e!t s$77ests th#t HRM )# 5e +ess i)*rt#!t %r #chievi!7

*er%r)#!ce $tc)es i! the service sectr, r #t +e#st i! +#r7e se7)e!ts % it, -$e t

the +#5r i!te!sive !#t$re % the "r9 #!- the res$+t#!t te!-e!c t c)*ete ! +#5r

csts #t the +"er e!- % the *r-$ct )#r9et3

HRM matters more in service sector

Sch!ei-er #!- ;"e! 0=>>2 #r7$e th#t service "r9 is -isti!ctive: %irst, i! services

there is # *er)e#5+e 5$!-#r 5et"ee! c$st)ers #!- e)*+ees s$ch th#t the

5eh#vir % !e -irect+ i!%+$e!ces 5eh#vir #!- $tc)es %r the ther3 D$e t -irect

c!t#ct 5et"ee! c$st)ers #!- e)*+ees i! the *rcess % service -e+iver, # *rcess% *sch+7ic#+ )irrri!7 cc$rs s$ch th#t the s#tis%#cti! % !e #%%ects the

s#tis%#cti! % the ther3 Sec!-+, services #re *r-$ce- #!- c!s$)e-

si)$+t#!e$s+ s th#t there is # !ee- t #chieve $#+it thr$7h$t the r7#!i.#ti!,

eve! 5 e)*+ees "h - !t h#ve -irect c$st)er c!t#ct, -$e t the i!#5i+it t -

# $#+it c!tr+ chec9 #%ter *r-$cti! t e!s$re $#+it3 Accr-i!7 t Sch!ei-er #!-

;"e!, these ch#r#cteristics % service "r9 i!cre#se the i)*rt#!ce % h$)#!

res$rce )#!#7e)e!t %r #chievi!7 -esire- *er%r)#!ce $tc)es i! the service

sectr3 Mre s*eci%ic#++:

Managers, in their pursuit of service quality, need to create two related, but different,

climates: a climate for service and a climate for employee well-being. The firstrequires practices such as systems and logistics support anything that creates an

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organization setting in which customers feel their needs are being met. The second

focuses on meeting the needs of employees through quality !M practices "#chneider

and $owen, %&&': (')

;$i+-i!7 ! this #r7$)e!t Sch+esi!7er #!- Hes9ett 0=>>=B =>>12 -eve+*e- #

theretic#+ )-e+ c#++e- the service *r%it ch#i!, #r7$i!7 th#t c$st)er s#tis%#cti! is# critic#+ -river % *r%it#5i+it i! the service sectr, #!- th#t service e)*+ees i! t$r!

#re # critic#+ -river % c$st)er s#tis%#cti!3 ; ete!si!, c)*#!ies th#t see9 t 5e

*r%it#5+e i! the service sectr sh$+- i!vest he#vi+ i! the )#!#7e)e!t % their

h$)#! res$rces3 This +iter#t$re -c$)e!ts the *rev#+e!ce #!- cst % e)*+ee

t$r!ver i! the service sectr, #!- the *te!ti#+ %r # s@c#++e- cc+e % %#i+$reG t

-eve+*, i! "hich *r "r9i!7 c!-iti!s +e#- t e)*+ee t$r!ver, "hich

i!cre#ses e)*+ee "r9+#- #!- c$st)er -iss#tis%#cti!, "hich %$rther -ecre#ses

e)*+ee s#tis%#cti!, %$rther c!tri5$ti!7 t e)*+ee t$r!ver3

U+rich #!- c++e#7$es 0=>>=2 #r7$e- si)i+#r+ %r the i)*rt#!ce % HRM i! the

service sectr 5#se- ! the %#ct th#t service e)*+ees h#ve -irect c!t#ct "ithc$st)ers #!- there%re # -irect i!%+$e!ce ! their s#tis%#cti!3 I% )#!#7ers c#! 5$i+-

s)ethi!7 *sitive "ith e)*+ees, the #r7$e-, the! the sh$+- 5e #5+e t see

res$+ts "ith their c$st)ers 5ec#$se c$st)ers "i++ 5!- "ith e)*+ees #!- res*!-

t 7- service3 M#!#7ers sh$+- there%re -eve+* HRM *r#ctices "ith the 7#+ %

5$i+-i!7 5th e)*+ee #tt#ch)e!t #!- c$st)er #tt#ch)e!t3 ;$t t - this,

)#!#7ers !ee- t 5e %#)i+i#r "ith c$st)er e*ect#ti!s #!- re$ire)e!ts #s "e++ #s

"ith e)*+ee e*ect#ti!s #!- re$ire)e!ts3

C!siste!t "ith these #r7$)e!ts, st$-ies h#ve -e)!str#te- +i!9s 5et"ee! h$)#!

res$rce )#!#7e)e!t #!- service $tc)es3 Ch#se #!- ;"e! 0=>>=2 %$!-

evi-e!ce th#t e)*+ee se+ecti! #!- tr#i!i!7 i)*#ct service $#+it #!- c$st)er

s#tis%#cti!3 I! # st$- % c$st)ers #!- e)*+ees i! 1? 5#!9 5r#!ches, Sch!ei-er

#!- ;"e! 0=>>2 %$!- th#t c+i)#tes % service #!- e)*+ee "e++ 5ei!7 #re

crre+#te- "ith ver#++ c$st)er *erce*ti!s % service $#+it3 HRM *sitive+

i!%+$e!ces $#+it $tc)es s$ch #s *#tie!t )rt#+it 0West et #+3, 1''12 #!- *#tie!t

s#tis%#cti! "ith the $#+it % c#re 02, "hi+e #+s e*+#i!i!7

*er%r)#!ce -i%%ere!ces #)!7 c#++ ce!ters 0;#tt, =>>>2, #ir+i!es 0

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i!vest)e!ts i! *r7ressive HRM re7#r-+ess % "hether the chse t c)*ete !

csts r ! $#+it3 D$e t re+#tive+ hi7h c#*it#+ i!te!sit % )#!$%#ct$ri!7 %ir)s,

eve! %ir)s th#t chse t c)*ete ! csts c#! - s 5 i!cre#si!7 the *r-$ctivit %

their c#*it#+ #ssets r#ther th#! 5 re-$ci!7 +#5r csts3 M#!$%#ct$ri!7 %ir)s c#!

there%re 5e!e%it %r) i!vest)e!ts i! HRM, "hether their str#te7 is t e!7#7e

e)*+ees i! i!cre#si!7 $#+it, r i! re-$ci!7 csts3 C!siste!t "ith Le77es#r7$)e!t, Ke+t!er #!- Fi!e7+- 0=>>6: /&2 re*rt th#t:

Most service-sector firms have been slow to redesign wor* practices. +rom hotels to

ban*s to retail outlets, service-sector managers continue to rely on an industrial

model of service delivery. They have organized wor* so as to tolerate low s*ills and

short employment tenures and continue to concentrate on cutting costs rather than

adding value "#chlesinger and es*ett, %&&%). $y thin*ing mainly about price

competition, most service managers have invested minimally in their employees.

ownward pressure on wages, minimal training e/penditures, and heavy use of part-

time wor*ers have reduced personnel costs and maintained managers fle/ibility to

cut the wor*-force when demand slac*ens.

Li9e"ise, ;#tt 01'''2 #r7$e-, 5ec#$se service i!-$stries #re +#5r i!te!sive "ith

re+#tive+ %e" 5#rriers t e!tr, service %ir)s th#t c)*ete ! csts te!- t c)*ete

thr$7h the re-$cti! % +#5r csts, +e#vi!7 +itt+e r) %r #chievi!7 *#%%s %r)

i!vest)e!ts i! HRM3 I! ther hi7her v#+$e@#--e- se7)e!ts % the service sectr,

%ir)s c#! e#r! re!ts #!- c)*ete ! -i)e!si!s ther th#! cst, th$s 7ivi!7 the)

7re#ter *te!ti#+ti!vesti! HRM #!- e#r! # ret$r! ! their i!vest)e!t3 As ;#tt 01''':

/8&2 e*+#i!e-:

0n service operations, labour still comprises 12 per cent of costs, and labour

productivity continues to grow at less than % per cent annually. espite the vision of

high involvement and quality service, therefore, reducing labour costs continues to be

a ma3or priority in services, particularly in price-conscious mass mar*ets. 4ut simply,

for low margin customers, the costs of high involvement wor* systems are li*ely to be

prohibitive but for high value-added customers, relationship management via high

involvement wor* systems has a high pay-off. The logic of customer segmentation in

services, therefore, suggests a fairly straightforward relationship between the choice

of wor* system and the potential revenue stream of the customer.

Si)i+#r+, ;#++ 01'': =/2 #r7$e-: Cst@5#se- +" )#r7i! c)*etiti! i! services

te!-s t -rive $t *ssi5i+ities %r HR #-v#!t#7e, ece*t "here %ir)s c#! %$!- 7re#terHR i!vest)e!t $t % *re)i$) 5r#!-i!73G I! s$**rt % these #r7$)e!ts, # rece!t

st$- % the hte+ i!-$str i! A$str#+i# %$!- th#t "hi+e hte+ "r9*+#ces i! 7e!er#+

c!ti!$e t 5e #ssci#te- "ith hi7h +eve+s % !$)eric#+ #!- te)*r#+ %+ei5i+it #!-

7re#ter i!%r)#+it % HR *+icies, +#r7er +$$r hte+s "ere #-*ti!7 )re

sste)#tic e)*+ee )#!#7e)e!t tech!i$es #!- stre!7the!i!7 their i!ter!#+ +#5r

)#r9ets thr$7h %$!cti!#+ %+ei5i+it i!iti#tives, )vi!7 t"#r- # )re *r7ressive,

v#+$e@#--e- #**r#ch t HRM 0K! #!- W#+sh, 1''/23

This se7)e!t#ti! #r7$)e!t is !t c)*+ete+ c!tr#-ictr t th#t % Sch!ei-er #!-

;"e!B i!-ee- the i)*+ic#ti! % this #r7$)e!t is th#t the Sch!ei-er #!- ;"e!

#r7$)e!t c#! h+- tr$e i! hi7h@v#+$e #--e- se7)e!ts % services3 ;$t i! +"@v#+$e#--e- se7)e!ts % services, "here csts #re the *ri)#r -eter)i!#!t % c)*etitive

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s$ccess, the se7)e!t#ti! #r7$)e!t i)*+ies th#t !either the *er)e#5+e 5$!-#r

5et"ee! e)*+ee #!- c$st)er !r the si)$+t#!eit % *r-$cti! #!- c!s$)*ti!

)# 5e s$%%icie!t t e!c$r#7e si7!i%ic#!t i!vest)e!ts i! HRM3 Eve! th$7h 7#i!s i!

service $#+it c$+- cert#i!+ 5e #chieve- thr$7h HRM i! these %ir)s, c!siste!t

"ith Sch!ei-er #!- ;"e!, these 7#i!s i! service $#+it )i7ht !t c))#!- #

s$%%icie!t *re)i$) t )#9e #! i!vest)e!t i! the) "rth"hi+e #!- s$st#i!#5+e3

Others h#ve #r7$e- th#t the i)*#ct % HRM ! service *er%r)#!ce is c!ti!7e!t !t

! # %ir)s %c$s ! hi7h vers$s +" v#+$e #--e- se7)e!ts % the )#r9et, 5$t r#ther

! ther c)*etitive %#ctrs s$ch #s the !ee- %r str#te7ic %+ei5i+it 0Rc#@P$i7 et #+3,

1''/2, r str#te7ic *siti!i!7 )re 7e!er#++ 0S9#77s #!- Y$!-t, 1''/23 H$!ter

01'''2 #r7$es %r et # -i%%ere!t 9i!- % c!ti!7e!c, !#)e+ th#t service %ir)s #re

)re +i9e+ t $se HRM t #chieve %+ei5i+it i! -e*+)e!t #crss ti)e r#ther th#!

%$!cti!, there%re #-*ti!7 h$)#! res$rce i!!v#ti!s th#t #++" e)*+ees the

#5i+it t )#tch their "r9 t i-is!cr#tic sche-$+es r -e)#!-s % c$st)ers3

Relevance of HRM for firms engaged in lo( cost com)etition*

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H"ever, i! the -et#i+e- #!#+sis th#t #cc)*#!ies this )#tri, this *#rtic$+#r t*e %

%ir) is !t -isc$sse-3

Sec!-+, eve! i! +" cst )#r9ets, there #re 5#sic $#+it st#!-#r-s th#t c$st)ers

c!ti!$e t -e)#!-3 I! the #ir+i!e i!-$str, these 5#sic $#+it st#!-#r-s ! +!7er

i!c+$-e %ri++sG s$ch #s )e#+s #!- 5$si!ess c+#ss se#ti!7, 5$t the - i!c+$-e s#%e,re+i#5+e, !@ti)e tr#ve+ #+!7 "ith -ece!t tre#t)e!t 5 service *rvi-ers3 I!

he#+thc#re, "hich h#s #+s 5ee! hit 5 *ress$res t re-$ce csts, the $#+it st#!-#r-s

e*ecte- 5 c$st)ers #!- )#!#7e- c#re *#ers sti++ i!c+$-e 5#sics s$ch #s *#tie!t

s#%et, -esire- he#+thc#re $tc)es #!- -ece!t tre#t)e!t 5 c#re *rvi-ers3

There is +itt+e -$5t th#t HRM i!vest)e!ts #re re+ev#!t %r #chievi!7 this ch#++e!7i!7

set % 7#+s3 I! ther "r-s, +" cst c)*etiti! is !t J$st #5$t )vi!7 -"! the

cst4$#+it c$rve t # +"er cst se7)e!t, s#cri%ici!7 $#+it i! the e%%rt t #chieve

+" csts3 R#ther the )st s$ccess%$+ +" cst c)*etitrs i! the service i!-$str, J$st

#s i! )#!$%#ct$ri!7, #re thse "h %i!- "#s t *$sh $t the *r-$cti! *ssi5i+ities

%r!tier, #chievi!7 the 5#sic $#+it st#!-#r-s -e)#!-e- 5 c$st)ers "ith$t the%ri++sG "hi+e i!cre#si!7 *r-$ctivit t #chieve +"er csts #t the s#)e ti)e3 P$t

si)*+, s$ccess%$+ +"er cst c)*etiti! re$ires c)*#!ies t )eet 5th

*r-$ctivit #!- $#+it 7#+s, #!- i!vest)e!ts i! HRM c!tri5$te si7!i%ic#!t+ t

their #5i+it t - s3 W)#c9 et #+3 0=>>'2 )#-e this #r7$)e!t 5#se- ! the c!ce*t

% +e#! )#!$%#ct$ri!7, "hi+e Hes9ett #!- c++e#7$es 0=>>'2 )#-e this #r7$)e!t 5#se-

! the c!ce*t % 5re#9thr$7h service3 ;#tt 0=>>>B 1''12 -e)!str#te- th#t

c)*#!ies *$rs$i!7 +" cst c)*etiti! c#! i!-ee- 5e!e%it %r) i!vest)e!ts i!

HRM, sh"i!7 th#t HR str#te7ies c#! he+* %ir)s t #chieve 5th $#+it #!-

*r-$ctivit $tc)es i! +" cst se7)e!ts3 I! #ir+i!es # service i!-$str th#t h#s

5ee! re@-e%i!e- 5 +" cst c)*etiti!,

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The )st c))! #r7$)e!t %r h" HRM #%%ects *er%r)#!ce i! the service sectr,

%te! i)*+icit 5$t s)eti)es teste- e*+icit+, is th#t HRM i!cre#ses e)*+ee

c))it)e!t #!- th#t c))itte- e)*+ees i! t$r! -e+iver hi7her $#+it services t

c$st)ers -$e t hi7her +eve+s % e%%rt 0U+rich et #+3, =>>=B Wrs%+-, =>>>23

C))it)e!t is c!si-ere- t 5e *#rtic$+#r+ i)*rt#!t i! service setti!7s -$e t the

ch#++e!7es % )!itri!7 #!- )e#s$ri!7 e)*+ee 5eh#vir3 I!vest)e!ts i! HRM #re5e+ieve- t i!cre#se c))it)e!t, i!v+ve)e!t #!- e)*"er)e!t, tr#!s%r)i!7

e)*+ees %r) )ere e)*+ees i!t *#rt!ers %r #chievi!7 r7#!i.#ti!#+ 7#+s

0C#s*ers., 1''623 C))it)e!t@5#se- HRM *r#ctices cre#te #! r7#!i.#ti!#+ c+i)#te

th#t )tiv#tes e)*+ees t #ct i! the 5est i!terest % the r7#!i.#ti!, th$s e!h#!ci!7

*er%r)#!ce 0Oster)#!, =>??B L#"+er, =>??B M#h!e #!- W#ts!, =>>B Ts$i,

Pe#rce, Prter #!- Hite, =>>/B ;ish* et #+3, 1''?23

C!siste!t "ith this vie", st$-ies h#ve %$!- th#t *#rtic$+#r "r9 *r#ctices #re

#ssci#te- "ith i!cre#se- e)*+ee c!tr+ ver "r9, i!cre#se- e)*+ee

i!v+ve)e!t #!- hi7her +eve+s % c))it)e!t 0e373 Ts$i et #+3, =>>&B White!er, 1''=2,

#!- th#t these 5eh#virs i! t$r! #re *sitive+ #ssci#te- "ith *er%r)#!ce 0e373Rse!5er7 #!- Rse!stei!, =>?'B Estri! et #+3, Ich!i"s9i et #+3, =>>6, =>?&B T)er,

1''=23 Fi!-i!7s %r) # rece!t st$- s$77ests th#t -i%%ere!t HRM *r#ctices )# )#tter

%r c))it)e!t -e*e!-i!7 ! the t*e % service e)*+ee *r%essi!#+, )#!#7er

r %r!t@+i!e "r9er 0Ki!!ie et #+3, 1''/2, 5$t s$**rts the #r7$)e!t th#t HRM 5$i+-s

c))it)e!t, th$s s$**rti!7 *er%r)#!ce 7#+s3

;#rte+s 01''82 %i!-i!7 % # *sitive re+#ti!shi* 5et"ee! 5#!9 5r#!ch *er%r)#!ce

#!- e)*+eesG s#tis%#cti! "ith the $#+it % *er%r)#!ce ev#+$#ti!, %ee-5#c9, #!-

rec7!iti! s$77ests the i)*rt#!ce % the )tiv#ti!#+ -i)e!si! % # hi7h

*er%r)#!ce "r9 sste)3 Her %i!-i!7s s$77est th#t these HRM *r#ctices *sitive+

#%%ect *er%r)#!ce -$e t their i)*#ct ! e)*+ee )tiv#ti! #!- c))it)e!t,

eve! th$7h the i!ter)e-i#te v#ri#5+es #re !t )e#s$re-3 I! # st$- % S$th A%ric#!

service r7#!i.#ti!s, r7#!i.#ti!#+ c))it)e!t "#s )e#s$re- e*+icit+ #!- "#s

%$!- t *+# # )e-i#ti!7 r+e i! the re+#ti!shi* 5et"ee! %r!t+i!e e)*+eesG

*erce*ti!s % HRM #!- their service 5eh#vir 0;r"!i!7, 1''623

HRM *r#ctices th#t i!s*ire e)*+ee c))it)e!t #re 5e+ieve- t i!c+$-e

i!v+ve)e!t, -iscreti! #!- e)*"er)e!t #!- #re %te! c!tr#ste- t HRM *r#ctices

th#t #i) t est#5+ish c!tr+3 The #r7$)e!t h#s t*ic#++ 5ee! th#t c))it)e!t@5#se-

HRM is )re e%%ective th#! c!tr+@5#se- HRM i! the service sectr, 5$t s)e #r7$e

this is !+ tr$e "he! there is s)e -e7ree % c$st)i.#ti! t 5e c#rrie- $t 5service e)*+ees, #!- e!$7h J5 #$t!) th#t -iscreti!#r e%%rt c#! )#9e #

-i%%ere!ce %r *er%r)#!ce $tc)es 0Fre!9e+ et #+3, =>>?23 Fre!9e+ et #+3 0=>>?2

%$!- %$rther th#t c$st)er service c#++ ce!ters te!- t $se # h5ri- %r) % h$)#!

res$rce )#!#7e)e!t 5#se- ! 5th c))it)e!t #!- c!tr+, -$e t the r7#!i.#ti!

% "r9 th#t #++"s s)e -e7ree % e)*+ee #$t!) #+!7 "ith %#ir+

st#!-#r-i.e- "r9 *rcesses3 The +#5e+ this h5ri- %r) )#ss c$st)i.e-

5$re#$cr#c3G I! # revie" % %r!t+i!e service "r9, Krc!s9i 01''/2 !tes th#t there

h#s 5ee! #! i!cre#se i! -iscreti! 7ive! t service "r9ers i!rece!t e#rs, 5$t th#t this

-iscreti! te!-s t 5e !#rr"+ c!%i!e-, *#rtic$+#r+ t the service recver #s*ects

% the J5 r#ther th#! t the ri7i!#+ service -e+iver3

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I!teresti!7+, Rees 0=>>/2 %$!- th#t service %ir)s th#t e!7#7e i! $#+it )#!#7e)e!t

te!- t $se # )ie- %r) % HRM, i!c+$-i!7 s)e e+e)e!ts % c!tr+ #!- ther

e+e)e!ts % c))it)e!t3 O! the !e h#!-, these %ir)s te!-t$se %r)s % e)*+ee

e)*"er)e!tG s$ch #s # %+#tte!i!7 % the hier#rch #!- the re-$cti! % -irect

s$*ervisi!, 5$t ! the ther h#!-, this e)*"er)e!t is c$*+e- "ith c+ser

)!itri!7 #!- ti7hter c!tr+s ver "r93 Other %i!-i!7s #+s $esti! the -icht)5et"ee! c))it)e!t #!- c!tr+ %r)s % h$)#! res$rce )#!#7e)e!t3 8B M#cMi++#! et #+3, =>?&B Te5Jee #!-;r$!, =>?82 thr$7h *rcesses s$ch #s i)*rve- *r5+e)@s+vi!7 #!- i)*rve-

c$st)i.#ti! 5 e)*+ees 0;#tt, 1''123

S9#77s #!- Y$!-t 01''82 test # )-e+ i! "hich h$)#! c#*it#+ is the )e-i#ti!7

v#ri#5+e 5et"ee! HRM #!- *er%r)#!ce $tc)es3 S)eti)es h$)#! c#*it#+ is

i!ter*rete- #s the )e-i#ti!7 v#ri#5+e 5et"ee! HRM #!- $tc)es, eve! "he! h$)#!

c#*it#+ is !t )e#s$re-3 Fr e#)*+e, Pre., #!- F#+c! 01''82 %$!- th#t s#vi!7s

5#!9s "ith HR *+icies #i)e- #t the cre#ti! #!- -eve+*)e!t % their st#%% #chieve-

hi7her *r-$ctivit th#! thse "ith$t s$ch *+icies, #!- i!ter*rete- this #s evi-e!ce

th#t HRM i!%+$e!ces *r-$ctivit $tc)es thr$7h its i)*#ct ! the -eve+*)e!t %

h$)#! c#*it#+3

A! #+ter!#tive i!ter*ret#ti! % the #ssci#ti! 5et"ee! hi7h *er%r)#!ce HRM #!-

h$)#! c#*it#+ is %%ere- 5 ;#c! #!- H$e 01''/23 Their #!#+sis %$!- th#t the

str!7est ver#++ *re-ictr % the ete!t % #-*ti! % HRM *r#ctices i! s)#++ t

)e-i$) si.e- e!ter*rises "#s the s9i++@)i % the "r9%rce3 Fir)s "ith # hi7her

*r*rti! % +"@s9i++e- "r9ers "ere +ess +i9e+ t h#ve #-*te- %ive % the ei7ht

*r#ctices #s9e- #5$t, s$77esti!7 the *ssi5i+it th#t h$)#! c#*it#+ is # *re-ictr %

the #-*ti! % HRM *r#ctices, r#ther th#! #! $tc)e % these *r#ctices3 Mre

+i9e+, the se+ecti! % s9i++e- e)*+ees, i!vest)e!t i! their tr#i!i!7 #!- -esi7! %

J5s t )#9e $se % thse s9i++s, #re c)*+e)e!t#r HRM %#ctrs th#t t7ether res$+t

i! hi7her +eve+s % h$)#! c#*it#+ #!- hi7her service *er%r)#!ce3

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Social ca)ital and relationshi)s in the service sector

Re+#ti!shi*s #re #!ther *te!ti#+ )e-i#tr 5et"ee! *r7ressive h$)#! res$rce

)#!#7e)e!t #!- service $tc)es3 Whi+e re+#ti!shi*s #re rec7!i.e- #s #!

i)*rt#!t -river % $tc)es i! the service "r9*+#ce, )$ch % the %c$s h#s 5ee! !

the e)*+ee4c$st)er re+#ti!shi*3 As #r7$e- 5 5th the Sch!ei-er #!- ;"e!0=>?/2 service )irrri!7 )-e+ #!- the Sch+esi!7er #!- Hes9ett 0=>>12 service *r%it

ch#i! )-e+, %r!t@+i!e e)*+ees )#tter i! services i! *#rt 5ec#$se the -eve+*

re+#ti!shi*s "ith c$st)ers, there5 -irect+ i!%+$e!ci!7 r7#!i.#ti!#+ *er%r)#!ce3

As !te- i! the i!tr-$cti! t this ch#*ter, r7#!i.#ti!#+ sch+#rs h#ve %c$se- !

the c$st)er i!ter%#ce #s # -isti!ctive %e#t$re % service -e+iver, e#)i!i!7

c$st)er4*rvi-er -!#)ics i! )#! service c!tets, vivi-+ -escri5i!7 the

i!ter*ers!#+ -!#)ics 5et"ee! i!-ivi-$#+ *rvi-ers #!- i!-ivi-$#+ c$st)ers th#t

sh#*e the service -e+iver e*erie!ce #!- the $tc)es e*erie!ce- 5 c$st)ers3

Other sch+#rs h#ve #r7$e- th#t r7#!i.#ti!s c#! 7 5e!- c$st)er4*rvi-er

re+#ti!shi*s t #chieve c$st)er4r7#!i.#ti! re+#ti!shi*s "ith the res$+t %

i)*rvi!7 c$st)er s#tis%#cti! #!- c$st)er +#+t 0Sieh+ et #+3, =>>1B Pe**ers #!-

R7ers, =>>B ;it!er, =>>/B Crss #!- S)ith, =>>/23 1/B C#se, =>&B

K7$t #!- #!-er, =>>623 Service #!- *r-$cti! *rcesses i!v+ve i!ter-e*e!-e!t

t#s9s th#t )$st 5e i!te7r#te- e%%ective+ i! r-er t #chieve hi7h $#+it, e%%icie!t

$tc)es3 O%te! cr-i!#ti! cc$rs thr$7h r$ti!es, sche-$+i!7, *re*+#!!i!7 r

st#!-#r-i.#ti!, "ith )i!i)#+ !ee- %r i!ter#cti! #)!7 service *rvi-ers

0&&23 H"ever, 5ec#$se these *r7r#))e- )e#!s % cr-i!#ti! h#ve+i)ite- 5#!-"i-th 0D#%t #!- Le!7e+, =>?62, the #re e*ecte- t 5e )st e%%ective i!

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setti!7s "ith *+e- r se$e!ti#+ i!ter-e*e!-e!ce r#ther th#! reci*rc#+

i!ter-e*e!-e!ce 0Th)*s!, =>6&2, "ith +" +eve+s % $!cert#i!t 0Ar7te, =>?1B V#!

-e Ve! et #+3, =>&62, #!- "ith$t severe ti)e c!str#i!ts 0A-+er, =>>/23

Service *er#ti!s t*ic#++ h#ve cr-i!#ti! re$ire)e!ts th#t c#!!t 5e )et 5

*r7r#))e- %r)s % cr-i!#ti! #+!e 0

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$#+it % i!ter#cti!s #!- )i!-%$+!ess #)!7 the !$rsi!7 st#%% ! hs*it#+ $!its3

2 %$rther -eve+*e- this #r7$)e!t 5 %c$si!7 ! the -eve+*)e!t

% re+#ti!#+ cr-i!#ti! #crss )$+ti*+e "r97r$*s e!7#7e- i! -e+iveri!7 *#tie!t

c#re3 The i-e!ti%ie- the "r9 *r#ctices th#t i!cre#se- +eve+s % re+#ti!#+

cr-i!#ti! #)!7 -ctrs, !$rses, *hsic#+ ther#*ists, sci#+ "r9ers #!- c#se

)#!#7ers, i! t$r! i)*rvi!7 $#+it #!- e%%icie!c $tc)es %r *#tie!ts3

Th$7h the %r)s % sci#+ c#*it#+ e*+re- i! the #5ve e)*iric#+ st$-ies #re v#rie-,

i!c+$-i!7 re+#ti!#+ cr-i!#ti! 0

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re*rese!t#ti!, s$ch #s %i!#!ci#+ services #t 1(, 5$si!ess services #t (, #!-

+eis$re4hs*it#+it #t (3

U!i!s th#t #re -evte- t the service sectr, +i9e SEIU #!- UNITE HERE, #re

#)!7 the )st #ctive $!i!s i! the U!ite- St#tes %r) #! r7#!i.i!7 st#!-*i!t,

"ith SEIU #+s see9i!7 t e*#!- its re#ch 5 *#rt!eri!7 "ith $!i!s i! therc$!tries 0;#i, 1''/23 Si)i+#r+, i! C#!#-#, service sectr $!i!i.#ti! is ! the rise3

The +#te =>>'s s#" #! i!cre#se i! service sectr $!i!i.#ti! #%ter the !#ti!s +#5r

$!i!s )#-e # c!certe- e%%rt t %c$s ! the 7r"i!7 *#rt % the C#!#-i#! ec!)

th#t h#- 5ee! vie"e- #s the +#5$r )ve)e!ts Achi++es hee+G 0Y#tes, 1'': 1=23

Service sectr $!i! #ctivis) is evi-e!t i! E$r*e #s "e++3 I! ;e+7i$), service sectr

e)*+ees st#7e- # ='@-# stri9e i! 1''/ 5e%re receivi!7 # %ive@e#r c!tr#ct 0EIRR,

1''/: =2, "hi+e i! S"it.er+#!- service $!i!s !e7ti#te- t est#5+ish )i!i)$) "#7es

i! #--iti! t i!cre#se- *# 0EIRR, 1''/: 123 M#! c$!tries #re sti++ -)i!#te- 5

their )#!$%#ct$ri!7 $!i!s, h"ever 0ie!t#r#, 1''62, #!- $!i!i.#ti! ver#++ is !

the -ec+i!e3 A+th$7h *revi$s st$-ies s$77est +itt+e t ! -i%%ere!ce i! the #-*ti! %

HRM 5 $!i! #!- !!@$!i!%ir)s 0Oster)#!, =>>8B Ver)#, 1''/2, it re)#i!s t 5esee! "hether these !e" service sectr $!i! )ve)e!ts "i++ h#ve # )re si7!i%ic#!t

*sitive i)*#ct th#! tr#-iti!#+ )#!$%#ct$ri!7 $!i!s -i- ! the #-*ti! %

*r7ressive HRM3

Sec!-, "e #s9e- h" HRM i!%+$e!ces *er%r)#!ce $tc)es i! the service sectr3

We c!si-ere- three #+ter!#tive )ech#!is)s =2 )tiv#ti! #!- c))it)e!t, 12

h$)#! c#*it#+ #!- s9i++s, #!- 2 sci#+ c#*it#+ r re+#ti!shi*s thr$7h "hich HRM

)# i!%+$e!ce service *er%r)#!ce3 E#ch % these #r7$)e!ts h#s # c)*e++i!7

r#ti!#+e 5ehi!- it re+#te- t the !#t$re % service "r9, #!- # s+i- set % rese#rch

%i!-i!7s t s$**rt it3 We c!c+$-e th#t HRM i)*#cts service *er%r)#!ce i! # )$+ti@

-i)e!si!#+ "#, 5 *r-$ci!7 c))it)e!t, s9i++s #!- re+#ti!shi*s3 H" HRM

*r#ctices c#! 5e sh#*e- t )eet these three 5Jectives si)$+t#!e$s+ is # $esti! %r

%$rther e*+r#ti!3 St#rti!7 i! this -irecti!, Le#!# #!- Pi+ 01''62 h#ve e*+re- the

c!tri5$ti! % 5th h$)#! c#*it#+ #!- sci#+ c#*it#+ t *er%r)#!ce $tc)es

i!*$5+ic sch+s, th$7h the h$)#! res$rce *r#ctices th#t #re !ee-e- t -eve+* hi7h

+eve+s % 5th h$)#! #!- sci#+ c#*it#+ h#ve !t et 5ee! i-e!ti%ie-3 I! *ri!ci*+e, there

is ! re#s! "h h$)#! res$rce *r#ctices c#!!t 5e -esi7!e- t serve these )$+ti*+e

*$r*ses e)*+ees c#! 5e se+ecte- %r their c))it)e!t t r7#!i.#ti!#+ 7#+s,

%r the #**r*ri#te!ess % their i!-ivi-$#+ 9!"+e-7e #!- s9i++s, #!- #t the s#)e ti)e

%r their #5i+it t c!!ect "ith thers t cr-i!#te the "r9 *rcess3 Si)i+#r

#r7$)e!ts c$+- 5e )#-e "ith res*ect t the -esi7! % hiri!7, tr#i!i!7, *er%r)#!ce)e#s$re)e!t, J5 -esi7! #!- s !3

I! c!c+$si!, service "r9 is -isti!ct %r) )#!$%#ct$ri!7 "r9 -$e t the -irect

i!ter%#ce 5et"ee! c$st)ers #!- e)*+ees, the si)$+t#!eit % *r-$cti! #!-

c!s$)*ti!, the re+#tive+ hi7h +eve+s % $!cert#i!t #!- t#s9 i!ter-e*e!-e!ce, #!-

the r+e th#t c$st)ers *+# #s *te!ti#+ c@*r-$cers i! the service -e+iver *rcess3

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"r9, #s i!ve!tries #re re-$ce- t e!#5+e 7-s t 5e *r-$ce- J$st i! ti)eG i!

res*!se t c$st)i.e- -e)#!- 0W)#c9 et #+3, =>>'B A5er!#th et #+3, =>>>B

H+"e7 #!- Pi+, 1''82, th$s )vi!7 t"#r- the si)$+t#!eit % *r-$cti! #!-

c!s$)*ti! #!- t"#r- the hi7her +eve+s % $!cert#i!t #!- t#s9 i!ter-e*e!-e!ce

th#t h#ve tr#-iti!#++ )#-e service "r9 -isti!ctive3 I! #--iti!, )#!$%#ct$ri!7

c)*#!ies #re )vi!7 -"! the v#+$e ch#i! t *+# # 7r"i!7 r+e i! service-e+iver, #s #%ter@s#+es service s$**rt 5ec)es #! i!cre#si!7+ i)*rt#!t -i)e!si!

% the *r-$ct v#+$e *r*siti!3

L9i!7 %r"#r-, "e %%er sever#+ rec))e!-#ti!s %r %$rther rese#rch3 First, #s the

5$!-#ries 5et"ee! services #!- )#!$%#ct$ri!7 5ec)e )re 5+$rre- ver ti)e,

HRM sch+#rs "$+- 5e "e++ #-vise- t %c$s +ess ! the sectr #!- )re ! the

ch#r#cteristics % the "r9 itse+% "he! -r#"i!7 i)*+ic#ti!s %r h$)#! res$rce

)#!#7e)e!t3 Sec!-, "e rec))e!- c!ti!$e- e%%rts t i-e!ti% the "r9 *r#ctices

th#t 5$i+- re+#ti!shi*s i! the "r9*+#ce, *#rtic$+#r+ #)!7 %r!t+i!e service

*ers!!e+ "h #re e!7#7e- i! -irect service *rvisi!3 These "r9 *r#ctices #re +i9e+

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