Steph Case

The research problem

Employee effort has a direct impact on customer advocacy

Hypotheses:

1) Companies who empower their employees to make decisions will increase employee engagement

2) Empowered employees reduce customer effort and increased customer satisfaction, leading to advocacy.

Introduction

In a competitive consumer market, a poor economic climate and with customer expectations rising, the role of front line people in the delivery of customer service is very important to the survival and growth of businesses. This applies to both businesses to consumer and business to business.

With the rise in fast moving technology and a pressure on time, consumers expect a business to be easy to do business with, a company who will provide a solution simply and quickly. Recent research conducted by Customer Contact Council showed that companies who tried to exceed customer expectations, by providing refunds, expedited shipping or free products only marginally increases loyalty and customers were more likely to leave a company due to service interactions, however loyal.

The two hypotheses relate directly to the research question and help to focus on two essential areas that organisations can influence through a shift in culture and leadership, leading to greater engagement of both employees and customers.

It is the purpose of this research paper to explore best practise in low employee effort and identify the type of culture where this is most apparent. It will explore if there is an overarching leadership style linked to low employee effort and if there is a correlation between employee voice, employee effort, employee engagement and customer engagement.

Definition of terms

* Employee engagement - Employee engagement measures the degree to which an employee is involved in and passionate about their work. Engaged employees are committed to the values of the company and go beyond their basic responsibilities to drive the business forward

* Customer effort - from initial contact , the number of times a customer has to call to get a resolution or is transferred, swapped from one medium to another to purchase, ie web to phone or retail outlet

* Employee effort - The empowerment of an individual employee, ease of which they can resolve an issue, make a change or decision without fear of repercussions

* Culture - The values and behaviours that contribute to the unique social and psychological environment of an organisation. An organisations expectations, experiences, philosophy and values that hold it together and are expressed in its self image, inner workings, interactions with the outside world and future expectations. It is based on shared attitude, beliefs, and customs and written and unwritten rules that have been developed over time and are considered valued. It is shown in the way an organisation conducts its business, treats its employees and customer and wider community.

* Customer advocacy - Customer effort is measured by asking customers one question: How much effort did you personally put forth to handle your request? Scores range from 1 , very low to 5, very high

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* Leadership style - Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. Kurt Lewin (1939) led a group of researchers to identify different styles of leadership. This early study has been very influential and established three major leadership styles. The three major styles of leadership are:

Authoritarian or autocratic

Participative or democratic

Collaborative or Free Reign

Although good leaders use all three styles, with one of them normally dominant, bad leaders tend to stick with one style

* Employee Voice - a cultural approach which encourages everyone in the business to have a voice, to share ideas, challenge the status quo, be listened to and work in an environment which is transparent and trusting.

Review of Literature:

A review of literature on employee effort and customer effort has yielded little return, however there has been extensive review of literature on the study of employee empowerment, engagement and customer service. For the purposes of this research paper, I shall be drawing in this research, which is mainly derived from the World Wide Web. In addition to this I will draw references from business journals, online forums, articles, books and survey data.

An article appearing in the Harvard Business Review July 2010 sparked an interest in the role culture plays in customer advocacy. This interest was deepened with the publication of Nita Clarke's white paper on 'Engagement for Success' (N Clarke, McLeod 2009) which highlighted the importance of employee engagement to the productivity and profitability of organisations. The paper was commissioned by the Secretary for State in 2008r with a view to explore whether an increased focus on engagement would positively impact on the UK competitiveness and performance. This was at a time when the recession was taking hold and was thought to be key to our efforts to come through the current economic difficulties and be in a position to take maximum advance of the upturn when it comes. It would also enable us to meet the challenges of increased global competition.

Subsequently in November 2011, Nita Clarke published a second research paper 'Rethinking employee voice' which, developed in conjunction with IPA and Tomorrow Company explored the importance of increasing the employee voice within organisation to create trust and transparent working environments, providing opportunities and forums for employees to challenge the status quo, make decision and share ideas, all with the net result of improving engagement.

The CIPD published an article stating that whilst most organisations see the value in employee engagement, it is still only a good intention and that we are not able to fully embrace