Internal service quality drives inernal customer satisfaction


In todays competitive world, organisations are becoming increasingly more aware of the growing need for delivering a appreciated service quality in order to maximise their profitability. The creation of dedicated customers is the key to the growth of any business. Devotion is the immediate consequence of a satisfied customer. Nowadays, customers are value- focused. The quality of service sent to them is the determinant of the degree of satisfaction. Value provided externally to the customers is dependent upon the level of satisfaction and loyalty one of the employees who are also the inner customers of the organisation. Staff satisfaction is in turn dependent upon the quality of service provided to them internally to empower them as can be viewed in the Service Earnings Chain.

The Service- Revenue String : linking worker, customers and profit

In the service sector, the employee's work experience and the organisational performance are two factors which can be related. Management theorists called this view of organisational performance as the service profit string. The model state governments that satisfied and stimulated employees are the key to satisfied external customers. Thus, it is of paramount importance for taking the inner service quality under consideration if the organisation wants to make a motivated labor force.

The model lays emphasis upon delivering excellent inside service quality to truly have a pool of satisfied inner customers who will then be more productive, thus in turn exhibit enthusiasm to provide valued external service that finish up infecting countless customers with similar satisfaction, loyalty and devotion which ultimately increase the revenue and success of the organisation.

Before we can explore the service earnings chain, it's important to get a understanding of what constitute something.


A service is a non-material equivalent of a good. As Mike (2008) stated, 'service is recognized as any activity or profit that one get together can offer to some other that is essentially intangible and will not bring about the ownership of anything'. For example the Mauritius Commercial Loan provider provides its customers with services such as secretarial services which include providing advice and assistance on execution of corporate activities. The characteristics a service has helps it be unique in itself.

The key characteristics of a service can be grouped under four categories




A service is a kind of intangible good. Intangibility means that a service can not be touched, smelled, dealt with or tasted instead of a physical goods.


Services can't be stored and carried forward to a future time frame ( Zeithaml et al 1985). They are simply time reliant and time important which will make them very perishable ( Onkvisit et al. , 1991).

Inseparability & simultaneity

Production and ingestion of services are inseparable ( Gronroos, 1978). Services are provided by the service provider and used by the service consumer at the same time.


It shows the prospect of high variability operating delivery ( Zeithaml et al 1985). The same service provided to 1 customer at a specific point in time, can't ever be exactly repeated at another time for a different one.

Service marketing mix : a fresh imperative to market services

The marketing mix is the combo of marketing activities an organisation performs in order to best meet the needs of its targeted customers. Initially, McCarthy (1964) unveiled the 4Ps which included the product, place, price and promotion. Down the road, in the framework of services marketing, Booms and Bitner (1981), suggested another extra 3Ps which consisted of people, process and physical facts.


This aspect includes all the folks immediately or indirectly involved in the service encounter, among whom are the contact employees who also happen to be the inner customers. The last mentioned aren't always standard in their performance since services are produced and used on the spot. As a result, this may lead to different service quality. Thus, bank or investment company management should invest seriously in their internal customers through providing them with an outstanding inside service quality that will empower them to provide valued exterior service to the bank's external customers as shown in the body 3. 1.

Physical Evidence

From the appearance of the building to the interior furnishing till the staff members, all is known as the physical data. The latter need to be properly handled since it has a deep impact on the customer's belief about an organisation (Lovelock et al. , 1999). Furthermore, financial institutions should give importance to the design of their office if they want to make their workers satisfied and empowered to better serve their customers. The employees must be well dressed to create a good impression in the customers' head.


It refers to the procedures, device and movement of activities adopted to provide the service. Badly designed operations annoy customers because of poor and inadequate service quality also prevent contact employees from accomplishing their job properly (Lovelock et al. , 1999). In banking institutions, the employees should be provided with the necessary resources and tools to increase the flow of activities, with the successful delivery of the service. The next section will give a view about the value of the service sector nowadays.

Service sector as a significant part of the economy

The service sector is the segment of the market which provide service instead of just end product. Additionally it is known as the tertiary sector. The service sector includes bank, communication, finance, education, health care, wholesale, transportation as well as others.

The entries below gives the ratio contribution of agriculture, industry, and services to total GDP.

According to the above survey, the importance of the service sector for the economy is clear both in Mauritius and worldwide. The service sector in Mauritius accounts for over 70 per cent of the Gross Household Product in '09 2009, that for the United States and the uk is 76. 9 per cent and 75 % respectively for the same season. For your world, the service sector accounted for 63. 4 per cent of the Gross Home Product, in '09 2009. Hence, it could be said that the contribution of the service sector to the current economic climate of nearly every country about the world is ideal.

Similarly in britain, in a recently available report published by the BBC, on 3rd March 2010, it was stated that the service sector grew at its most effective monthly acceleration in three years in February. Relating to a survey, it was shown that the UK current economic climate grew by 0. 3% in the ultimate 90 days of last year and the climb was because of the strong performance of the service sector. Hence, the service is undoubtedly a vital element of the UK current economic climate. Little by little, the service sector is now an important area of the economy of almost every country. Thus, it's important to shed some light after the proper management of services.

Sustaining success through a service orientation

Christian Gr¶nroos( 1984) explained that "service management is the understanding of how to control an enterprise in competitive situation where services, are thought as the key to success available on the market, regardless of whether the primary of the offering is something or made product".

A service orientation boosts both the internal and external local climate of an company as shown in figure 3. 2. An excellent internal weather in the lenders make the employees committed to their work and thus more beneficial, providing respected service with their customers. An excellent exterior service creates faithful customers, which improves organisation's profitability over time as shown in the Service Income Chain in amount 3. 1. Hence banking institutions being truly a service organisation should be more service oriented towards their inside customers who are their property. They should adopt something culture internally to be able to gain a competitive position on the market. According to Dark brown (2003) "a service culture is one where an appreciation for good service exists, and where supplying good service to internal as well as ultimate exterior customers is considered by everyone a natural way of life and one of the main prices". Along with implementing a service orientation, banking institutions should purpose at bettering their service quality if they desire to be a market leader in their particular fields.

Pursuit of brilliance through Service Quality

Service quality is a way of measuring an organisation's performance and is constantly on the attract the attention of experts and academics ( Yavas et al. , 2001). Within the context of banking, quality may be defined as the ability to gratify the customer's requirements and needs also to have the ability to replicate this with an on-going basis. The ever more competitive market for most services has lead consumers to be more selective in the services they choose. Very often, service consumers use the term quality to identify between the service offered by one bank to some other. The internal as well as the external service quality should be the prime concern of most banking institutions. Quality has been described differently by differing people, as value ( Abbott, 1955), conformance to specifications ( Gilmore, 1974), conformance to requirements ( Crosby 1979), fitness for use ( Juran, 1974), reduction avoidance ( Tanguchi, 1989) and meeting and/or exceeding customers' anticipations ( Zeithaml et al. , 1985).

Below are the examples of two banks who've recognised for their service quality

The concentration of the HSBC Insurance Singapore Pte Ltd on service quality has put it ahead of its competitors. It offers won the globe Finance Insurance Company of the year 2009 out of 36 countries for the financial steadiness and quality of their service. ( News release, HSBC Insurance Singapore Pte Ltd, , 2009).

Barclays was given Business Superbrands position for 2008 in recognition of quality, trustworthiness and distinction.

The above examples show that organisations are becoming increasingly more mindful about providing a good service quality. They are employing service quality models to evaluate their degree of service quality as well as to determine where they are simply lagging in the challenge for quality.

Some Service Quality Models

There are numerous service quality models which tries at recording and defining service quality. Some of the service quality models are listed below

The Gap model (Parasuraman et al. , 1985)

The RATER model (Zeithaml et al. 1990) or the SERVQUAL model (Parasuraman et al. , 1988)

INTSERVQUAL model (Zeithmal et al. , 1990)


The Difference model was created by Parasuraman et al. (1985). It measures service quality as the gap between a customers' goals and perceptions. It was built upon the assumption that the smaller the distance, the better the grade of service provided.

Role of HR

Gap 1

Customer expectation & management understanding gap

- Insufficient internal communications

- Lack of management connection with customers

- Inaccurate information from market research

- The lender should have flatter organisational structure

- Implement something to register customer response

- Adopt more effective marketing strategies

Gap 2

Management perception & service quality specification gap

- Poor planning

- Insufficient service leadership

- Recruit the correct candidate who've the appropriate authority skills to raised guide the employees towards the bank's goal.

Gap 3

Service quality specification & service delivery gap

- Failure to match resource and demand

- Specs not in line with existing corporate culture

- Inadequate inside marketing

- Inner service quality in the bank should be better through frequent inner marketing. They also needs to choose a good forecasting solution to avoid disparity between supply and demand.

Gap 4

Service delivery & exterior communication gap

- Overpromising

- Insufficient horizontal communication

- The lender should ensure that they have the correct resources prior to making any offer to the customer to avoid dissatisfaction and the organisational composition should be decreased to facilitate communication.

Gap 5

Expected service & perceived service gap

- A terrible effect on company's image

- Bad quality

- The bank should create a quality manual based after which every worker will continue to work. Thus delivering a valued external service quality that will lead to a good commercial image.

Source: Key factors in the Difference model (Zeithaml 1990)

Table 3. 4: Information of the gaps in the Gap model

It must be mentioned that all of the aforementioned gaps are mirrored on the full total Service Quality Conception. This recognized quality model was introduced by Christian Gronroos in 1982. It includes the outcome of something, the service process and the service provider's image (Suzana Salai et al. , 2007). Applying this model internally in a standard bank, then it can be said that the grade of a service as identified by the bank's inside customer is the difference between their expected quality and experienced quality. This gap is the total recognized quality. If experienced quality is significantly less than expected quality, then the total recognized quality will be negative. The expected quality is a function of factors such as inside marketing, image, word of mouth and others whereas the experienced quality is a result of the specialized and useful quality which is filtered through the image of the company. In the context of a loan provider, the complex quality identifies 'what' the lender provides customer and the functional quality refers to 'How' the bank's services are given to the client. Both of these quality factors will be filtered by the organization image. A poor commercial image will lead an undesirable experienced quality as shown by Difference 5 in table 3. 5.

After the GAP model, Parasuraman et al. (1985) proposed a measurement model SERVQUAL for dimension of service quality within the Distance framework.


The SERVQUAL can be an instrument, produced by Parasuraman et al. (1988), for measuring customer's perception of service quality by causing an evaluation between their expectation with the perception of the assistance received. The model is dependant on a 22-item questionnaire designed to cover five wide sizes of service quality namely tangibles, stability, responsiveness, assurances, empathy (Parasuraman, 1988). It is utilized to measure the expectation- notion service distance, which is the fifth distance in the Difference model. This gap is the consequence of the four internal quality gaps( Zeithaml et al. 1990). The five service quality dimensions are as implemented



People aspect


Tangibles refers to the appearance of physical facilities, bank or investment company employees cool dress and professional appearance.

Access to a wide variety of tangibles to perform their job empower the internal customers to raised serve their external customers. The work area is one of the tangibles structured upon which the customers form their conception.


The ability to perform the promised service dependably and effectively.

The internal companies should live up to the promises they have got made to the internal customers if they want to avoid worker alienation. Subsequently, the inner customer will better fulfill the promises designed to the exterior customers to set-up loyalty included in this and raise the income of the organisation as shown in the Service Revenue Chain.


The determination to provide quick service and to help consumers.

For the employees to reply quickly to the customers, they should be satisfied with the inner service provided to them. To begin with, the employees should receive a quick service from the inner service providers. If they're satisfied then only they'll react quickly to the customers.


Knowledge and thanks to employees and their ability to convey trust and self-confidence.

The exterior customers form their perception based on the data and courtesy of the inner customers. The last mentioned should be able to focus on their queries proficiently. Hence their should be continuous training and knowledge sharing across the organisation.


It refers to the caring attention the employees provide with their individual customers- Good communication.

For the employees to give individual focus on their particular customers, the internal customers themselves should be accorded such attention. Then only the employees will be satisfied and much more empower to deliver better service to the customers as shown in the SPC.

Source: Zeithaml et al. (1990)

Table 3. 5: Description of the RATER

The HSBC bank of Maurititus have set up a 24-Hour Contact Centre to attend to enquiries and a fervent unit to consider all claims and endeavours to resolve them within 2 business days and nights from the day of receipt. This implies that they are extremely responsive to their clients.

Based on the discrepancies between goals and experiences within the 22 attributes, an overall quality score is calculated. The greater the score demonstrates experiences are below expectation, the low the identified quality. The goal of SERVQUAL is to serve as a strategy for discovering broad areas of an organisation's service quality shortfalls and advantages. ItL has been used to evaluate service quality in a variety of service industries, like the healthcare sector, banking, junk food, telecommunications and more, over the USA, China, Australia, Cyprus, Hong Kong, South Africa, Netherlands and the UK (Riadh Ladhari, 2009, pp172-198). Several studies have been conducted in the past using the SERVQUAL model. Among these, Yavas et al. (1997) looked into the relationship between service quality, client satisfaction, complaint behaviour and commitment in the banking sector of Turkey using the SERVQUAL. Regardless of the diverse criticisms after its dimensional structure, the SERVQUAL has been a useful tool for dimension of service quality (Buttle, 1996).


Service organisations rarely have satisfied external customers without satisfied internal customers, hence internal service quality is essential for superior external service quality. There's a need to to have a good service quality internally in the organisation, thus the term Internal Service Quality ( INTSERVQUAL). The organisation represents a minuscule society where the employees are the inside customers and the Individuals Source is the service provider. In this setting, the Human Resource Department should cater for the needs of his customers. It really is his duty to provide his inner customers with good quality service in order that they become devoted to the service provider. Enhancing the inner service quality soars staff satisfaction and eventually success as shown in stand xx below: To enhance profitability in a standard bank, the internal service delivered to the employees should be of top quality.

The inside service Quality can be an version of the Distance Model and the SERVQUAL model ( Frederick A. Frost, 2000).

Expected service of the

bank's inner customers



Internal Gap 5

Perceived service of

bank's internal customers №


- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -


Service delivery Internal Difference 1

Internal Gap 3 ^

Translation of conception into

service Quality Specifications

Perception of bank's

internal supplier


Source: Frederick A. et al. , 2000. An interior version of the GAP model

Figure 3. 4 : Interior service quality model for a bank

Internal gaps


Internal Distance 1

It is the difference between the internal supplier's notion of the inner customer's expectation

Internal Gap 3

The gap between service quality specs and the service quality which is in fact delivered. It really is known as the internal service performance space.

Internal Gap 5

It refers to the customer's goals of something weighed against their perception of this service,

Table 3. 6 : Description of the internal gaps

To eradicate the gaps from the main, it is imperative to conduct inside marketing in organisations to be able to raised identify the issues and design solutions about the needs of the internal customers.

Directing services inwards through Internal Marketing

Nowadays marketing activities are no longer restricted and then the external customers but to the internal ones as well. The employees are referred to as the internal customers of a business. Parasuraman et al. (1991), define inner marketing as the process of " appealing to, growing, motivating and keeping certified employees through job-products that fulfill their need". Internal marketing literature suggests that the best way to satisfied customers is through satisfied employees ( Hesket et al. , 1994). In case the banks want their employees to deliver exceptional services to their customers then they must anticipate to do a congrats with their employees. They should carry out frequent interior marketing to identify the needs, requirements and problems of their employees. Consequently, the employees will be more satisfied, dedicated and successful as shown in the physique 3. 1.

Relationship marketing as part of internal marketing

Marketers are needs to appreciate that the basis for enduring a profitable expansion is the creation and support of creating customer interactions. Gr¶nroos (1997) described relationship marketing as the marketing strategy used "to determine, maintain, and enhance relationships with customers and other lovers, at a earnings, so the targets of the functions included are met". This can be achieved through adopting a customer romantic relationship marketing with the inner customers. This is attained by a mutual exchange and fulfilment of promises".

The promise concept

Along with a marriage marketing, the financial institutions should also adopt a assurance concept internally. Its aim is to develop long-term human relationships with new and existing internal customers, and enhancing the banking institutions' performance through inside customer commitment and retention. The bankers should make sure that they have the required resources, knowledge, skills and desire before making promises to the employees. In the event the promises are not kept, this might lead to employee dissatisfaction and alienation ( Gr¶nroos, 2006). Honoring the guarantees made will generate loyalty among the employees thus empowering them to execute better as shown in amount 3. 1.

The next section will talk about the internal service quality dimensions that require to be promoted internally to improve success as shown in the desk below.

This link. . . .

The interior service quality dimensions

The environment in which the employees work have a great effect on their degree of satisfaction. The second option is among main links in the Service Income chain leading to Profitability as shown in desk 3. 12, thus the assistance delivered to them should be of top quality. Here are the measurements of the task environment that can be improved upon to increase satisfaction and therefore productivity among the employees.

(a) Job Design: the main element to interest and retention

The main reason for job design is to increase both employee motivation and production ( Hurry, 1971). Careers should be arranged so in order to reduce worker alienation due to recurring and mechanistic jobs. The Job Feature Style of Hackman and Oldham (1976) says that employees will work hard when they are compensated for the work they do so when the work offers them satisfaction. Therefore, they advised that drive, satisfaction and performance should be included in the work design.

According to the model, there are five core job sizes which plays a part in three psychological expresses which influence the work outcomes.

Skill Variety

Task Identity

Task significance





Knowledge of


High Motivation






Source:Hackman and Oldham, 1976. Job Characteristics Model.

Figure 3. 5: THE WORK Characteristics Model

How satisfying a job is can be measured matching to these five sizes

Job Characteristics



Skill variety

This make reference to the range of skills or abilities the worker will be required to use to perform the job. The employee will be more motivated to work if he's challenged to use a variety of skills to complete employment.

Vary the job to enable use of more skills.

Task Identity

This refer to the extent the job requires completion of a "whole" and identifiable piece of work. Employees who are entrusted to complete a work from beginning to the finish, with a obvious outcome, are definitely more satisfied (J. Hackman, 1994).

Assign the task to group to increase the wholeness of the task performed.

Task Significance

This looks at the influences of the work. Employees are usually more determined to accomplish employment that they know is adding value to the company or is making a notable difference to the contemporary society at large.

Same for Task Personality.


This describes the quantity of freedom and independence the employees are allowed while undertaking their jobs. More discretion leads to more employee satisfaction.

Allocate works to their lowest possible level to make autonomy as well as responsibility.


This dimension looks at the amount of information an employee obtain about his or her performance, and the level to which they might start to see the impact of the task. The more the employees receive opinions about their careers, the more they will be determined to do an improved job next time.

Connect the employees to the consequence of their work and the clients that get them in order that they study from the blunders they commit.

Table 3. 7: Description and alternatives of the work characteristics

Bassey (2002) seen in his review that skills, process identity, task significance, autonomy, responses, job security and settlement are crucial factors for the drive of employees. Corresponding to J. Hackman (1994), these five primary dimensions derive from three psychological says specifically meaningfulness of work, responsibility and understanding of final result. Skill variety, Process Identity and Task Significance contributes to a job's meaningfulness. A sense of personal responsibility for work final result is derived from the degree of autonomy provided. The extent of opinions provided gives a concept about the data of results provided.

(b) Work area Design

In the swiftly changing business environment, there can be an urgent need to use the look of the work area as a technique to enhance productivity. The place of work has since years been at the mercy of multitude of improvements. Investment in the quality of working environment is a means of avoiding loss of performance and therefore creating a competitive advantage. A study conducted by the Commission for Architecture & the Built Environment and the Uk Council for Offices in 2005 has exposed that easy things such nearly as good lighting and having satisfactory daylight can reduce level of absenteeism by 15 per cent and increase output by between 2. 8 % and 20 % ( Manangement Issues, 2005).

Below are some proportions that must definitely be improved during the design of a place of work



SERVQUAL dimensions

work patterns

How employees work in a different way.

It can refer to any office work hour routine or in-the office work patterns.

As due to good psychological guidelines and proper work patterns, the employees will tend to be more reliable, reactive as well as convey guarantee and empathy to the clients.

psychological principles

Environment should be stimulating for the employees to work. They should have a sense of belongingness, individuality and control.

working spaces

How the spots are efficiently been able. It vary according to the arrangements of the various tools and resources they are given with.

It identifies the Tangibles of the office that can be improved upon to help make the employees more satisfied.

physical design principles

Refer to the light, color, surfaces, shape, distance, audio and others at work.

physical layout elements

Refer to the design of the entrances, windows, flooring, safe-keeping, ceilings as well as others.

workstation design

Design of the desks, light, storage and utilities where in fact the staff sits and work.

workplaces for teams

Building of space where groups can work alongside one another.

Designing experiences

Customers must have a good experience when they go to the office. It should also be motivating for the worker to work.

Source: office design, Changing Brains. org

Table 3. 8: Principles in creating workplaces and offices

Booms and Bitner introduces the servicescape model to help organisation better control the physical setting up of the surroundings for the service process. Booms and Bitner (1981) defined servicescape as 'the environment where the service is put together and where the owner and customer interact, coupled with tangible commodities that aid performance or communication of the service'. This model highlight the impact of the physical setting ( the Tangibles as shown in table 3. 5) in which the service process between the contact employee and the client occurs. Parasuranam et al. (1988) states that operating organisations, the same physical environment that communicates with and effect customers may affect employees of the organization. Sundstrom et al. (1989) says that research in organisational behavior suggests that the physical setting can affect employee's satisfaction, production and inspiration. Hence the physical setting of an company must be well designed to avoid employee disengagement and dissatisfaction.

Tangibles of the service in the banking sector includes the ambient condition such nearly as good ventilation, smell, sound prevailing in the bank's environment, the physical layout, the artefacts in the bank, the lender staffs who are neatly and professionally outfitted.

( c) Staff selection

The collection of employees from the pool of recruits is a critical step for the success of an company. (M. Ronald Buckley, 2004). Selecting the incorrect candidate for the incorrect job can result in worker dissatisfaction and can be quite costly for the company in the long run, leading to an unhealthy exterior service quality as shown in the Service Revenue Chain. Therefore, it is of paramount importance to use a selection of test as well as interviews during the selection process. Some ways of tests are through diagnosis centres, personal interviews, discussions, presentations, psychometric lab tests yet others.

Some productive selection methods are referred to below.

Selection methods


Personal Interview

It is a formal meeting of several people where in fact the interviewer asks the interviewee questions to be able to obtain information about the last mentioned.

Assessment Center

It refers to a number of testing techniques designed to allow candidates to show, under standardized conditions, the skills and abilities that are most essential for success in confirmed job (Coleman, 1987). Some competencies that this judge are interpersonal skills, intellectual capacity, planning and arranging capabilities as well as others.

Psychometric testing

Aptitude Personality tests testing

Aptitude trials explore things such as reading understanding, critical thinking skills, mathematical abilities, logic, and others. Personality testing is used to assess the personality of the candidate to make predictions about their likely behavior in a role (Michael Armstrong, 2003).

Table 3. 9: Information of some selection methods

The staff selection process can identify all the abilities of the actual applicant and place them in the correct job in order to gather of the pool of satisfied and stimulated workforce who'll be able to deliver valued exterior service. Even after a worker have been appointed, this does not mean that they will always create value for the organisation. They'll be able to do this only when their skills and talents are consistently developed.

(d) Creating value by investing in the labor force: Worker development

Nowadays business realities demand that organizations place focus on developing competent employees and learning to be a learning organization. Staff development is an on-going- effort on behalf of an employer to continuously develop and give then opportunities to enhance their skills and capabilities so that they can give a better contribution towards organisational success( Armstrong M. , 2003). Multiple programs of organizational change and renewal must be undertaken to keep organisational competitiveness. This requires ongoing training for all employees to achieve today's global market.

Some staff training programs are

Employee development program

Description ( related to bank sector)

Talent management

Among all factors that could influence success of banks in the foreseeable future, the foremost driver is talent( Buckingham & Vosburgh, 2001) Talent matters but managing expertise matters more ( Martin, 2006). Talent management is the process of ensuring that the organisation attracts, retains, motivates and builds up the accomplished people it requires (Michael Armstrong, 2003). In the banking sector an internal talent development is crucial to make empower the employees and so converting loan company into a skill factory where outstanding services are shipped.

Succession planning

Talent management is also about producing internal successors to be able to avoid a talent crisis in the foreseeable future. It is an activity whereby an company recognise and develop employees with the potential to load key organizational positions. Several company on earth acknowledge that there surely is an edge to investing in strong succession-planning programs. Thus by helping employees form their profession paths and develop skills needed to increase into new jobs, banking companies are taking one step further towards their success.

Knowledge management

As Michael Armstrong (2003) said, "a successful company is a knowledge creating company". Hence, controlling knowledge of internal customers within the bank sector is very important to value creation. "Knowledge management is approximately storing and showing the intelligence, understanding and experience accumulated within an company about its operations, techniques and operations"( Michael A. , 2003). Based on the strong causes of competition common among the banking institutions, it is essential for banks to focus more along the way they control and nurture their intellectual capital to get competitive advantage.

Diversity management

As companies flourish, they identify, recruit and coach pros from a diverse blend of backgrounds, ethnicities, styles and motivations into positions of increasing power and responsibility ( Marshall Goldsmith, 2010). Variety management identifies "initiatives by organizations to positively recruit, hold on to, and facilitate working connections among individuals from a variety of backgrounds" (Thomas, 1991). Diversity can be a dual edged sword. Banking institutions should be able to make the diversity at work to their resources. The bank's employees should develop an gratitude for the differences in race, gender, disability, ethnicity and religion among their co-workers.

Table 3. 10 : Worker development programs

To promote gender equality, the HSBC Loan company Australia Limited offered a career progression initiative aimed at bringing internal promotion rates for ladies in line with men.

Through the correct staff training programs, lenders may flourish in keeping superior employees because they'll appreciate enough time, attention, and development that the management is buying them. They can reap multitude of benefits such as increased output through improved upon job related skills of their employees. The above employee development programs may be a competent way to make the bank's employees more satisfied and successful, thus resulting in a valued exterior service quality as shown earlier in the figure 3. 1. These programs also make reference to the various tools that the internal supplier may give to their inner customers in an effort to corporate and business success as reviewed later in section XXX

(e) Boost employee satisfaction with rewards and recognition

With the swiftly developing global current economic climate and the rise in the competitive business environment, organisations have significantly began to consider rewards and acceptance as an instrument to empower, draw in and wthhold the employees. With this battle of expertise, organisations have acknowledged that such some sort of value exchange between the company and the employee can gas their success. To achieve success, organisations should choose a complete Rewards Strategy. This concept involves the deliberate integration of five important elements that effectively draw in, retain and stimulate the talent required to achieve desired business results. It is thought that the staff creates value for the organisation in trade of the tangible or intangible value that they will get. The components of the full total Rewards Strategy are explained below




Compensation is the pay that the company offers to the employee for the skill, time and effort he or she has spent to perform his / her work. Example: Fixed( bottom part) pay and the changing pay( pay vulnerable).


It refers to the programs the employer adopts to complement the cash compensation that the employee obtain. Example:Friendly insurance, Group insurance (medical & disability insurance), Pay for time not worked.


It refers to a set of organizational practices and programs which supports initiatives to help employees become successful both at work and home. Example:Place of work overall flexibility, financial support, health and well being yet others.

Performance and Recognition

Performance includes the alignment of the employee's, team's and the organisational's effort towards attaining organisational goals and success. Identification is the act of appreciating the effort, habit and performance of a person. The popularity can be monetary or non-monetary. Example: Verbal recognition, trophies, certificates, meals yet others.

Development and Job Opportunities

This area targets the idea that motivating and engaging the workforce entails planning for the improvement and/or change in tasks to best suit specific skills, skills and wants. Example:Learning opportunities, instruction and advancement opportunities. With the Mauritius Commercial Bank, there are ongoing in-house training programs, the Service Plus lessons, which falls very much in line with their corporate and business value of customer support.

Table 3. 11: Components of Total Rewards Strategy

In days gone by, Companies like Walt Disney World have noted the success of worker recognition program ( Lynch, 2003).

Examples at the HSBC Standard bank Canada

At the bank, there's a President's Awards program, which recognizes top performers from across HSBC. In 2002, the prize contains an Alaskan luxury cruise and it 2003 the honor winners loved a cruise on the eastern seaboard of Canada and the United States (HSBC Loan company Canada, Annual Records and Accounts, 2002).

The bank sent fifteen of its staff to take part in the HSBC Group's Staff Environmental Fellowship program in 2002. After going back home, the employees received grants or loans to establish conservation jobs in their communities and members will volunteer to speak at local academic institutions about their encounters (HSBC Loan company Canada, Annual Information and Accounts, 2002).

Along with these five elements, the organisation should also adopt a Worker Value Proposition (EVP) to increase their likelihood of being among the very best service providers.

It is defined as "the initial set of qualities and benefits that will stimulate target employees to join a corporation and current employees to stay"(Brand Learning, EVP, an integral marketing tool for talent management). In simple terms, it refers to the "get" versus the "give". If in the employees' minds they "get" rewards add up to or exceeding what they "give, " the business will tend to have more satisfied employees and increased retention (QuestionPro, Worker Value Proposition challenge). It ought to be adopted as an integral marketing tool to draw in and wthhold the right talent and to build the competitive advantage needed to drive progress.

The understanding that the employee receives in form of rewards for his or her effort, the opportunities these are allowed to boost in their profession, the benefits they are simply allocated to protect themselves as well as their families from financial problems and others, make the employees more profitable. A highly effective total rewards strategy and a smartly designed EVP leads to a satisfied, employed and productive labor force who in turn strives to execute better as can be viewed in physique 3. 1.

(f) Tools for providing customers

The organisation should ensure that the inner customers have the correct resources to have the ability to deliver a valuable exterior service quality to the exterior customers. The resources may be physical resources, financial resources, informational resources and recruiting. The second option is referring to the support staffs without whom the task of the front-line staffs would be almost impossible. The employees of the bank sector should be prepared with good training and development programs to boost their quality of service they deliver. They also needs to discover a stimulating environment that may boost their satisfaction level. It refers to the tangibles as shown in desk 3. 5. In short the tools are the inner service quality that the inner providers deliver to the inner customer to avoid worker disengagement.

Leadership the chain's success

A a head immediate influenc eon customer is low whi;le that on employees are high.

For the successful execution of a respected inside as well as exterior service quality calls for a capable head within the company. It should not be forgotten that management underlies the Service Income Chain's success. The leader should be comfortable with the diversity pressure at work. Diversity tension is the strain and tension that accompanies mixtures of differences and similarities ( Marshall Goldsmith, 2010).


With the fast development of the service sector and their significant contribution to the development of the world's economy, organisations are becoming more alert about providing top notch service quality to their internal external customers who are the key to organisational success as shown in the Service Revenue String. Organisations should target at appealing its internal customers with attractive services and opportunities to hold on to as well concerning empower them. After an effective inside marketing, the needs and requirements of the employees will be recognized and fulfilled. Subsequently, setting up a pool of satisfied, engaged and productive interior customers who will strive to achieve organisational goals and goals.

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