Engaging Customer-Facing Bank Employees to Create a Service Culture

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1 Engaging -Facing Bank Employees to Create a Service Culture By Rich Brose, Director, Research Consulting, Financial Services Research Group, Maritz Research Introduction Bank executives are striving to establish service cultures within their organizations to engender customer loyalty, thus improving customer retention, revenue and profitability. Maritz believes that one of the keys to creating and sustaining a service culture is to foster employee satisfaction and engagement, particularly among employees who deal directly with customers. To test this theory and help banks establish a foundation for creating a service culture, Maritz Research conducted a study to: evaluate the degree of engagement among customerfacing employees in retail banks understand what causes customer-facing employees to be engaged, and explore the relationship between employee engagement and customer service quality This article summarizes our learning. (see Figure 1) that addresses several key areas critical to effectively managing the customer experience and achieving desired business results: The company s management and leadership The organization s performance climate, including the work environment, communications, and relationships among co-workers The employee s job and their place within the organization The organization s customer orientation factors that facilitate or inhibit creating a positive customer experience and aspects that customers like and dislike about their experiences with the company, its products and services, people, and business processes Figure 1 A Comprehensive Employee Measurement Framework & Management Maritz Research conducted an online research study in the summer of 2006 among 500 retail bank employees who worked in a branch or telephone service center and have direct daily contact with customers. These employees include tellers, branch customer service representatives, assistant branch managers, branch managers and telephone service center representatives. Performance My Job & My Place in This Organization Overall Employee Engagement & Committment Indirect Direct Business Performance & Results The Employee Engagement and Voice of the Employee Framework Maritz has developed a comprehensive framework for assessing employee perceptions and engagement Orientation & Focus Satisfaction & Loyalty Indirect

2 In addition to measuring elements related to each of the four components of employee perception and opinion, Maritz gauges overall employee engagement through three questions: I am completely satisfied with my job I would recommend my company as a great place to work I would be very happy to spend the rest of my career at my present company To be considered engaged, respondents had to completely agree (highest rating on a 5-point agreement scale) to all three questions. What We Learned Engagement Banks do not appear to have created an environment that develops engaged employees. As shown in Figure 2, only 21% of customer-facing bank employees are engaged while an equal percentage are disengaged. Most employees fall in the neutral middle ground, being neither engaged nor disengaged. the drivers fall into the Performance climate and My job and my place in the organization portions of the Employee Measurement Framework indicating the importance employees place on the company s culture and their own job. We then classified the key drivers of engagement into four tiers based on the strength of their relationship to employee engagement. As banks plan actions aimed at improving employee engagement, we recommend focusing on the attributes in Tiers One and Two. Further, we urge banks to conduct some additional discovery work to determine exactly what makes employees look forward to coming to work every day and what makes their company a fun place to work, two key, yet somewhat broad, drivers of engagement. Figure 3 Key Drivers of Employee Engagement Driver I look forward to coming to work everyday My job gives me a strong sense of personal accomplishment My company is a fun place to work I am provided with the tools and resources I need to best perform my job Framework Component Figure 2 -Facing Employee Engagement All Employees Tellers 21% 58% 21% % 60% 22% The pay I receive is fair for the work that I perform My company has effective training programs I am recognized for my work performance in ways that are important to me Open and honest dialogue is encouraged at my company Work expectations at my company are realistic and fair Branch Service Representatives Branch Managers / Assistant Managers Telephone Service Representatives 0% 24% 59% 17% 24% 57% 19% 21% 54% 25% 20% Engaged 40% Neutral 60% 80% Disengaged 100% My company genuinely listens to and cares about its employees My work and personal life are well balanced Senior management s actions are completely consistent with their words All employees in my company are given an equal opportunity for advancement It seems like we re all on the same team, working for the same goals I have real opportunities to develop the skills I need to do the best job possible What will it take for banks to engage customer-facing employees? To answer this question, Maritz identified the key drivers of employee engagement (see Figure 3). Nearly all of Our research uncovered distinct differences between engaged employees ratings of their bank and the ratings of neutral/disengaged employees across all of the key drivers (see Figure 4). When employees are engaged, they perceive

3 their job and the bank favorably on all fronts. The challenge banks face, then, is to develop a culture that positively impacts the entire employee experience. If a bank is able to transform the majority of their employees that fall into the neutral category into engaged employees, they will create a powerful force for serving customers. Figure 4 Performance on Key Drivers of Engagement Key Engagement Drivers I look forward to coming to work everyday My job gives me a strong sense of personal accomplishment My company is a fun place to work I am provided with the tools and resources I need to best perform my job The pay I receive is fair for the work I perform My company has effective training programs Framework Component All Employees Engaged Neutral Disengaged Performance (Percent Completely Agree) 32% % % 12% Engagement and Service Now, let s examine the ingredients that employees believe are necessary for them to provide high-quality service to customers. As shown in Figure 5, the key drivers of service quality as viewed from the employee perspective differ from the key drivers of employee engagement. As expected, elements related to orientation and focus appear prominently. Employees still consider performance climate attributes to be important, but those related to their job and place in the organization diminish considerably in importance. Figure 5 Key Drivers of Service Quality Driver My company has the necessary capabilities to satisfy customers Work expectations at my company are realistic and fair It seems like we re all on the same team, working for the same goals My company has formal programs and processes for ensuring a consistently high level of customer service My company s leaders are ethical and honest Framework Component I am recognized for my work performance in ways that are important to me Open and honest dialogue is encouraged at my company My company commits the resources required to meet the needs and expectations of customers Open and honest dialogue is encouraged at my company My company sets specific goals for improving customer service and satisfaction Work expectations at my company are realistic and fair My company genuinely listens to and cares about its employees My work and personal life are well balanced Senior management s actions are completely consistent with their words My company is a fun place to work I have the authority I need to respond promptly to customer problems and requests I have real opportunities to develop the skills I need to do the best job possible I look forward to coming to work every day My company has effective training programs My company genuinely listens to and cares about its employees I am provided with the tools and resources I need to best perform my job All employees in my company are given an equal opportunity for advancement It seems like we re all on the same team, working for the same goals I have real opportunities to develop the skills I need to do the best job possible Does this difference in drivers mean that having engaged employees is not necessary for creating a service culture? We do not believe so. This difference simply means that a bank must pull one set of levers to engage employees and another set to orient itself for providing high-quality service to customers. To become engaged, employees must feel good about their jobs and the performance climate at the bank.

4 To be positioned to serve customers, employees need the positive service climate and they must also believe the organization as a whole is ready and able to provide highquality service to customers. The clear-cut differences in performance ratings of the key drivers of service quality between engaged employees and neutral/disengaged employees reinforces the link between employee engagement and a service culture. As shown in Figure 6, engaged employees believe their company is capable and committed to serving the customer, while neutral and disengaged employees do not share these beliefs. Thus, a bank needs to engage its employees to set the stage for establishing a service culture. Our research demonstrates, however, that having engaged employees is not enough to guarantee high service quality. The bank must do what it takes to prove itself capable, in the minds of its employees, of providing a high-quality service experience to the customer. Figure 6 Performance on Key Drivers of Service Quality Key Service Drivers My company has the necessary capabilities to satisfy customers Work expectations at my company are realistic and fair It seems like we re all on the same team, working for the same goals My company has formal programs and processes for ensuring a consistently high level of customer service My company s leaders are ethical and honest My company commits the resources required to meet the needs and expectations of customers Open and honest dialogue is encouraged at my company My company sets specific goals for improving customer service and satisfaction My company is a fun place to work Framework Component All Employees Engaged Neutral Disengaged Performance (Percent Completely Agree) 50% % % % I have the authority I need to respond promptly to customer problems and requests I have real opportunities to develop the skills I need to do the best job possible 73 I look forward to coming to work every day My company has effective training programs 36 My company genuinely listens to and cares about its employees I am provided with the tools and resources I need to best perform my job

5 Conclusion Maritz Research confirmed that one of the keys for a retail bank to create and sustain a service culture is to engage its customer-facing employees. Engaging these employees is not enough, however; banks must also prove capable of providing high-quality customer service in the minds of their employees. Currently, only a minority of bank employees who deal with customers on a daily basis are engaged. These engaged employees look forward to coming to work each day, feel a strong sense of personal accomplishment from their jobs and consider their bank a fun place to work. When employees couple these feelings with beliefs that the bank has the necessary capabilities to satisfy customers, that everyone in the bank is working as team, and their work expectations are fair and realistic, the foundation for creating a service culture will exist.

6 (877) 4 MARITZ info@maritz.com MRC / Maritz Inc.