Tradeoffs in responses to work pressure in the service industry

California Management Review

Volumn , Issue 4, 2001, Pages 26-43

  Oliva, Rogelio ^a  

^a NONE

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EID: 0035618763     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.2307/41166099     Document Type: Review

References (27)

1. B. Tuchman, "The Decline of Quality," New York Times Sunday Magazine, November 2, 1980, p. 38; J. Main, "Toward Service Without a Snarl," Fortune, March 23, 1981, p. 58; M.R. Feinberg and A. Levenstein, "It's Not My Job, Man," Wall Street Journal, November 11, 1985; S. Koepp, "Why Is Service So Bad? Pul-eeze! Will Somebody Help Me?" Time, February 2, 1987, p. 46; D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128.
2. B. Tuchman, "The Decline of Quality," New York Times Sunday Magazine, November 2, 1980, p. 38; J. Main, "Toward Service Without a Snarl," Fortune, March 23, 1981, p. 58; M.R. Feinberg and A. Levenstein, "It's Not My Job, Man," Wall Street Journal, November 11, 1985; S. Koepp, "Why Is Service So Bad? Pul-eeze! Will Somebody Help Me?" Time, February 2, 1987, p. 46; D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128.
3. B. Tuchman, "The Decline of Quality," New York Times Sunday Magazine, November 2, 1980, p. 38; J. Main, "Toward Service Without a Snarl," Fortune, March 23, 1981, p. 58; M.R. Feinberg and A. Levenstein, "It's Not My Job, Man," Wall Street Journal, November 11, 1985; S. Koepp, "Why Is Service So Bad? Pul-eeze! Will Somebody Help Me?" Time, February 2, 1987, p. 46; D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128.
4. B. Tuchman, "The Decline of Quality," New York Times Sunday Magazine, November 2, 1980, p. 38; J. Main, "Toward Service Without a Snarl," Fortune, March 23, 1981, p. 58; M.R. Feinberg and A. Levenstein, "It's Not My Job, Man," Wall Street Journal, November 11, 1985; S. Koepp, "Why Is Service So Bad? Pul-eeze! Will Somebody Help Me?" Time, February 2, 1987, p. 46; D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128.
5. B. Tuchman, "The Decline of Quality," New York Times Sunday Magazine, November 2, 1980, p. 38; J. Main, "Toward Service Without a Snarl," Fortune, March 23, 1981, p. 58; M.R. Feinberg and A. Levenstein, "It's Not My Job, Man," Wall Street Journal, November 11, 1985; S. Koepp, "Why Is Service So Bad? Pul-eeze! Will Somebody Help Me?" Time, February 2, 1987, p. 46; D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128.
6. "American Customer Satisfaction Index," American Society for Quality, 2000, .
7. D.B. Weinberg, "Why Are the Nurses Crying? Restructuring, Power, and Control in an American Hospital," unpublished Ph.D. dissertation, Harvard University, Cambridge, MA, 2000.
8. D.S. Friedman, "Help Wanted," The McKinsey Quarterly, 1 (1998): 34-44.
9. W. Baumol, S.B. Blackman, and E. Wolf, Productivity and American Leadership (Cambridge, MA: MIT Press, 1991).
10. For a full description and documentation of the model, see R. Oliva and J.D. Sterman, "Cutting Corners and Working Overtime: Quality Erosion in the Service Industry," Management Science, 47/7 (2001): 894-914.
11. For evidence on erosion of service quality, see D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128; Oliva and Sterman, op cit. For erosion of job scope and employee satisfaction, see L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28. For low profitability in the service sector, see W.J. Baumol, S.A.B. Blackman, and E.N. Wolff, "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, 75/4 (1985): 806-817; P.T. Harker, "Introduction: Service-Sector Productivity - The MS/OR Challenge," Interfaces, 25/3 (1995): 1-5.
12. For evidence on erosion of service quality, see D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128; Oliva and Sterman, op cit. For erosion of job scope and employee satisfaction, see L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28. For low profitability in the service sector, see W.J. Baumol, S.A.B. Blackman, and E.N. Wolff, "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, 75/4 (1985): 806-817; P.T. Harker, "Introduction: Service-Sector Productivity - The MS/OR Challenge," Interfaces, 25/3 (1995): 1-5.
13. For evidence on erosion of service quality, see D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128; Oliva and Sterman, op cit. For erosion of job scope and employee satisfaction, see L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28. For low profitability in the service sector, see W.J. Baumol, S.A.B. Blackman, and E.N. Wolff, "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, 75/4 (1985): 806-817; P.T. Harker, "Introduction: Service-Sector Productivity - The MS/OR Challenge," Interfaces, 25/3 (1995): 1-5.
14. For evidence on erosion of service quality, see D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128; Oliva and Sterman, op cit. For erosion of job scope and employee satisfaction, see L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28. For low profitability in the service sector, see W.J. Baumol, S.A.B. Blackman, and E.N. Wolff, "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, 75/4 (1985): 806-817; P.T. Harker, "Introduction: Service-Sector Productivity - The MS/OR Challenge," Interfaces, 25/3 (1995): 1-5.
15. For evidence on erosion of service quality, see D. Brady, "Why Service Stinks," Business Week, October 23, 2000, pp. 118-128; Oliva and Sterman, op cit. For erosion of job scope and employee satisfaction, see L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28. For low profitability in the service sector, see W.J. Baumol, S.A.B. Blackman, and E.N. Wolff, "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, 75/4 (1985): 806-817; P.T. Harker, "Introduction: Service-Sector Productivity - The MS/OR Challenge," Interfaces, 25/3 (1995): 1-5.
16. Note that prioritizing customer orders - or subjecting them to a triage process -does not help reduce work pressure. Through prioritization, it is possible to speed up the response to an important customer or to a person requiring the service more promptly, but the overall load over the service delivery system remains unchanged.
17. For a discussion on the impact of improvement efforts in the order fulfillment rate, see N.P. Repenning, L.J. Black, and P. Gonçalves, "Why Good Process Sometimes Produce Bad Results," published in this issue [California Management Review, 43/4 (Summer 2001)]; E. Keating, R. Oliva, N.P. Repenning, S. Rockart, and J.D. Sterman, "Overcoming the Improvement Paradox," European Management Journal, 17/2 (1999): 120-134.
18. For a discussion on the impact of improvement efforts in the order fulfillment rate, see N.P. Repenning, L.J. Black, and P. Gonçalves, "Why Good Process Sometimes Produce Bad Results," published in this issue [California Management Review, 43/4 (Summer 2001)]; E. Keating, R. Oliva, N.P. Repenning, S. Rockart, and J.D. Sterman, "Overcoming the Improvement Paradox," European Management Journal, 17/2 (1999): 120-134.
19. For a survey of evidence on the effects of overtime on labor productivity, see H.R. Thomas, "Effects of Scheduled Overtime on Labor Productivity: A Literature Review and Analysis," PTI9107, The Pennsylvania Transportation Institute, Pennsylvania State University, University Park, PA, 1990. Homer explores the burnout mechanisms from a systems dynamics perspective. J.B. Homer, "Worker Burnout: A Dynamic Model with Implications for Prevention and Control," System Dynamics Review, 1/1 (1985): 42-62.
20. For a survey of evidence on the effects of overtime on labor productivity, see H.R. Thomas, "Effects of Scheduled Overtime on Labor Productivity: A Literature Review and Analysis," PTI9107, The Pennsylvania Transportation Institute, Pennsylvania State University, University Park, PA, 1990. Homer explores the burnout mechanisms from a systems dynamics perspective. J.B. Homer, "Worker Burnout: A Dynamic Model with Implications for Prevention and Control," System Dynamics Review, 1/1 (1985): 42-62.
21. See J. March and H. Simon, Organizations (New York, NY: Wiley, 1958); R. Cyert and J. March, A Behavioral Theory of the Firm (Englewood Cliffs, NJ: Prentice Hall, 1963). For empirical evidence, see T.K. Lant, "Aspiration Level Adaptation: An Empirical Exploration," Management Science, 38/5 (1992): 623-644.
22. See J. March and H. Simon, Organizations (New York, NY: Wiley, 1958); R. Cyert and J. March, A Behavioral Theory of the Firm (Englewood Cliffs, NJ: Prentice Hall, 1963). For empirical evidence, see T.K. Lant, "Aspiration Level Adaptation: An Empirical Exploration," Management Science, 38/5 (1992): 623-644.
23. See J. March and H. Simon, Organizations (New York, NY: Wiley, 1958); R. Cyert and J. March, A Behavioral Theory of the Firm (Englewood Cliffs, NJ: Prentice Hall, 1963). For empirical evidence, see T.K. Lant, "Aspiration Level Adaptation: An Empirical Exploration," Management Science, 38/5 (1992): 623-644.
24. Quality of the lending book is measured through a risk index calculated by weighting the each account's risk grade by the loan amount. The lending centers had yielded significant improvements of the book's risk index through centralization and standardization of the lending criteria.
25. Notice in Figure 5 how the employee's responses disappear after the permanent erosion of the service standard and service capacity reach an equilibrium and work pressure returns to zero. The slight adjustment between capacity expansion and the permanent erosion of service standard after week 48 is due to an overshoot of the hiring policy that results in negative work intensity. The system slowly reaches equilibrium (through employee attrition) at the service level attained when work pressure first reached equilibrium. In this particular test, the simulated organization increased its throughput 10 percent by reducing the internal standard of customer service 5.4 percent and increasing service capacity 4.1 percent. Throughput (orders/week) is defined as service capacity (man-hours/ week), divided by time per order (man-hours/order). (1+0.041)/(1-0.054)=1.1.
26. For an account of an employee attempting to survive on low satisfaction, high turnover services, see B. Ehrenreich, Nickel and Dimed: On (Not) Getting by in America (New York, NY: Metropolitan Books, 2001 ). See also L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28.
27. For an account of an employee attempting to survive on low satisfaction, high turnover services, see B. Ehrenreich, Nickel and Dimed: On (Not) Getting by in America (New York, NY: Metropolitan Books, 2001 ). See also L. Schlesinger and J. Heskett, "Breaking the Cycle of Failure in Services," Sloan Management Review, 32/3 (Spring 1991): 17-28.