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Gomes Yasin and Lisboa I JC HM 2007
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Carlos F. Gomes
University of Coimbra
Faculty of Economics
Institute of Systems and Robotics
Coimbra - Portugal
Mahmoud M. Yasin
East Tennessee State University
Department of Management & Marketing
P.O. Box 70625
Johnson City, TN 37614
João V. Lisboa
University of Coimbra
School of Economics
Institute of Systems and Robotics
Coimbra - Portugal
This is a post-print (i.e. final draft post-refereeing) of an article published in International Journal of
Contemporary Hospitality Management (ISSN: 0959-6119), available online at:
http://www.emeraldinsight.com/doi/abs/10.1108/09596110710818301?journalCode=ijchm
Citation: Gomes, Carlos F., Yasin, Mahmoud M. e Lisboa, João V. (2007), “The Effectiveness of
Hospitality Service Operations: Measurement and Implementation Concerns”, International
Journal of Contemporary Hospitality Management, 19(7), pp. 560-573.
The Effectiveness of Hospitality Service Operations: Measurement and
Implementation Concerns
ABSTRACT
Purpose
The objective of this research is to propose a systematic approach to measuring, tracking,
monitoring and continuously improving service efficiency, availability and quality in hospitality
operational settings.
Design/methodology/approach
The proposed measure of service operational effectiveness (SOE) consists of three indicators.
They include the availability indicator, the quality indicator, and the efficiency indicator.
Findings
The proposed operational performance approach based on the SOE is consistent with the themes
of performance measures and measurement reported in the literature.
Research limitations/implications
The proposed service operational effectiveness approach represents a serious attempt at
quantifying the key facets of service effectiveness in hospitality operational settings. The
validation of this performance assessment and measurement approach is worthy of future
research.
Practical implications
The approach advocated by the SOE has operational and strategic relevance to decision-makers of
hospitality organizations. Field interviews with hospitality operating managers in different
operating base cultures confirmed this.
Originality/value
This research presents a practical, systematic approach to the problem of enhancing service
operational effectiveness in hospitality organizations. Relevant implementation issues associated
with the proposed approach are also addressed. Interviews with operational managers
representing different types and sizes of hospitality organizations in different operational cultures
were utilized to provide initial validation of the proposed approach and to shed some light on
relevant practical implementation issues.
Keywords
Performance Measurement, Hospitality Organizations, Decision-Makers, Service operational
effectiveness, Implementation issues
The Effectiveness of Hospitality Service Operations: Measurement and
Implementation Concerns
1. Introduction
New markets and competitive realities are forcing service organizations to take the
performance, in order to meet the growing challenges posed by the customers, very
seriously. Theses challenges have been unmistakable in recent years, as they encompass
key performance facets, which shape the relationships between the customer and the
service operational system. In this context, key performance facets focusing on improving
the service encounter and the customer-orientation through paying close attention to service
performance. Improvement aimed at these key service performance dimensions are critical
toward enhancing the service value offered to customers. Thus, the systematic
quality, and availability is the first step in the road toward enhancing the customers-
Most services operational systems are organized based on two stages. The first stage is
labeled the “front-stage”, while the second stage is labeled the “back-stage” (Yasin and
Yavas, 2001). The front-stage includes all operational tasks and activities, which the
customer directly interact with. An example of such tasks and activities is the process of
checking-in a guest in a hotel. The back-stage, on the other hand, includes all operational
tasks and activities, which take place without direct interaction with the customers. An
example of such tasks and activities is the room cleaning service in a hotel.
The overall performance of the service system is very much influenced by the
performance of both service stages (Dorsch et al., 1997). Therefore, any attempt to improve
1
the overall performance of the service system must systematically incorporate and integrate
the service performance aspects related to service efficiency, quality, and availability of the
two service stages. In this context, the service operational system of a hospitality
organization is no exception. The two service stages of hospitality operational system must
be measured and monitored to ensure the overall service operational effectiveness. This
recent environmental changes (Lovelock and Wirtz, 2004 in Gursoy and Swanger, 2006).
In recent years, the significance of hospitality related services has increased significantly in
developing countries (Tsaur and Lin, 2004; Barros, 2005). Overall, the hospitality industry
is becoming a truly competitive, global industry (Claver et al., 2006). Due to increasing
level of competition in the global hospitality industry, organizations in this industry are
becoming more aware of the need to customize services and service performance to the
and improving service quality, availability and efficiency are becoming more critical than
measure called service operational effectiveness (SOE) to monitor, track and improve
service quality, availability and efficiency. The development and components of this
measure are presented and discussed from a practical perspective. In the process, the
operational and strategic benefits of the proposed approach are presented in the context of
2
2. Background
Based on an extensive literature review concerning performance evaluation, measures
and related implementation issues (Gomes et al., 2004b), two distinct themes emerged. The
first theme may be labeled as the “universal” theme. The second theme, on the other hand,
(Cross and Lynch, 1988-1989; Lynch and Cross, 1991; Kaplan and Norton, 1992, 1993;
Ghalayini et al. 1997; Kloot and Martin, 2000; Kaplan and Norton, 2004, Moullin, 2004,
Chand et al, 2005). The second theme includes approaches which stress the unique
and/or implementing performance measures and measurement (Dixon et al., 1990; Eccles
and Pyburn, 1992; Crowther, 1996; Neely et al., 1995; Waggoner et al., 1999; Neely et al.,
2001, 2002; Gunasekaran et al., 2004; Bourne, 2005). The performance measurement
approaches advocated in the literature under these two themes highlighted above have
While the approaches advocated under these two themes tend to differ with regards to
their treatments of different organizational and environmental contexts, they tend to clearly
performance (Dempsey et al., 1997; Gomes et al., 2004a; Abdel-Maksoud et al., 2005;
Hoque, 2005).
Despite the fact that organizations in the hospitality industry have been slow in
focusing on performance measurement (Witt and Witt, 1989), they have attempted to adopt
similar practices found in other industries. In this context, the hospitality organizations have
3
(Stank et al., 1999, Brady et al., 2002, Chow et al, 2006) and human resources (Eaglen et
al., 2000, Tsaur and Lin, 2004; Haber e Reichel, 2006, Cho et al., 2006). In addition to the
Denton and White, 2000). These organization-wide approaches are, somewhat, consistent
with the Balanced Scorecard approach (Harris and Mongiello, 2001). Such approaches,
however have been characterized by their small scale and limited scope (Atkinson and
primarily, focused on traditional financial measures (Chung and Parker, 2006). This narrow
focus has been attributed to the limited understanding of operations' managers in the
management has led to adoption of performance measurement approaches which lack and
The performance measurement literature underscores the notions that the future of
performance measurement systems will not be judged only based on their aggregation or
integration features, but also on their abilities to incorporate the dynamic relationships
and tools (Lohman et al., 2004; Chenhall, 2005). In this context, organizations in
hospitality industry still have a long way to go, before they can have effective integrated
The performance measurement literature reviewed tends to suggest that two types of
organizational performance evaluation platforms are needed. The first platform maintains a
4
measure-specific perspective. This platform defines the relationship between specific
measures and the organizational units responsible for them. Under this evaluation platform,
efficiency, and quality aspects of the operational system and its different processes. To
accomplish this goal, diverse individual measures should be utilized individually and/or in
small groups. These measures are critical to detecting and dealing with specific
measures should be consistent with the executives’ individual cognitive capacities (Lipe e
Salterio, 2000, Garg et al., 2003). This platform stresses an organizational effectiveness
of this platform should be consistent with indicators designed to gage the competitiveness
of the organization in the marketplace (Basu and Wright, 1997; Chenhall, 2005). The
emphasis under this platform is on the effective flow of products/services to markets. Such
effective flow has positive impact on the profitability of the hospitality organization
(Goldratt and Cox, 1993). Under this platform the involvement of the executive is viewed
5
et al., 2003). Investments and effects to improve organizational performance on the part of
service hospitality organizations consistent with this platform appear to be not sufficient.
While the above two platforms focus on different aspects of operational and
measurement system. In this study, the services operational effectiveness (SOE) measure is
introduced forward that end. This measure is consistent with the two platforms addressed
above. As such, it can be used in a way consistent with the organizational-wide (system-
wid) platform to measure and track overall organizational performance. However, it can
also be used in a way consistent with the measures-specific platform to measure key
effectiveness performance measure (Blanchard, 1997). However, since that time, several
authors (Raouf, 1994; De Groote, 1995; Al-Najjar, 1996; Dal et al., 2000; Eti et al, 2004;
Kenyona et al., 2005) have provided insights into the operationalization of the machine
effectiveness measures and measurement. The SOE measure proposed in this research
transposes the performance concepts, from a narrowly-defined system (the machine) with
specific components and well-defined work procedures, to a more complex system (the
hospitality organization and its service system). The SOE value incorporates the values of
quality, and efficiency. The proposed SOE can be utilized to either the support of the
system. As such the management of hospitality organizations has the flexibility to utilize
Quality (Q) and Efficiency (E). This measurement approach was originally used in
association with a closed system (machine) (De Groote, 1995), where the system
some certainty. However, the proposed SOE approach, as advocated in a hospitality service
setting, utilizes these three indicators in association with an open, complex system (the
the case of a hospitality service operational system. However, two counter arguments can
be easily made. First, the components of measurement are both applicable and relevant to
Thus the application of the SOE approach in hospitality service operational settings is not
only relevant but perhaps very much needed. Thus the practical justification for such
is required due to the unique and open nature of the hospitality service operational system.
In addition, such modifications take into consideration the intangible, yet important people-
7
orientation of this service operational system. In such system, operational activities, tasks
and resources (people, technology and know-how) are blended systematically to ensure the
effectiveness of the service encounter from the unique perspective of each customer (see
Figure 1). Thus, the customer is an integral part of the service operational system.
“take in Figure 1”
consist of three key service performance indicators. Since the performance of a hospitality
important facets of such performance. These indicators have operational organizational, and
customer implications.
SOE = A × Q × E
The service performance indicators of the SOE are summarized below. These include
1. Service availability
2. Service quality
3. Service efficiency
Space limitations and readership interest prevent us from presenting the detailed
interviews conducted with a sample of twenty hospitality operating managers in the US and
8
fifteen Middle Eastern managers, representing different sizes and type of hospitality service
organizations.
executives and operating managers of hospitality organizations. In this context, not only the
SOE can be used to monitor the performance of the different aspects of the hospitality
service system, but it also can provide a performance-oriented context for continuous
offer a road map towards the effective implementation and utilization of the SOE in
hospitality service operational settings. The stages of this framework are highlighted below.
“take in Figure 2”
STAGE I - Initialization
The implementation of the SOE approach begins with the initiation of its relevant
determining the initial values, and establishing target benchmarks for the indicators.
Although the theoretical target for the SOE, and its indicators is one (1), the initial practical
During this stage, needed procedural modifications can be made in ways consistent
9
literature. Such methodologies include statistical quality control procedures, theory of the
constraint (Goldratt and Fox, 1986), and simulation. Upon the completion of this effort, a
launched.
The continuous improvement cycle should allow for the verification of progress of the
willing to commit the resources needed to foster the improvement efforts. The involvement
In this stage, it is critical to make available the relevant information needed to evaluate
the SOE measure and relevant indicators. As such, the role of organizational information
performed, performance gaps are identified and plans to address them are formulated and
implemented
important. This is need, not only to maintain high levels of motivation, but also to identify
much time, this may encourage dysfunctional behavior (Almgren, 1999). Thus, every time
a new value of SOE is obtained, it should be compared to previous values in order to verify
progress and aware for improvement. Thus, serving as further justification and motivation
The utility of the SOE approach can be illustrated through simulation, or actual
operational data. The results of the data analysis pertaining to the overall SOE measure and
its three indicators will clearly reflect the state of operational effectiveness of the
10
hospitality organization at any given period. Undesirable results of such analysis should
present some concern to the management of the hospitality organizations. In this case
corrective managerial actions will be need needed. To take the right corrective action, a
more detailed, systematic analysis of the three indicators of SOE measure over a period of
time maybe needed. Toward that end, a graphical analysis is helpful, especially in
association with historical operational data. See Figure 3, as an example of such graphical
analysis. The graph can be structured to show the SOE values, the target line, and the line
representing the average value of SOE for a period of time. Based on this graph,
management can verify two important aspects of service operational effectiveness, which
represent the gap between the target and actual values, as well as the extent of variability in
the behavior of the service system. According to the interviewed hospitality operating
managers, such analysis will be extremely useful to take corrective actions aimed at
quality, efficiency and availability. According to the managers interviewed, the collective
“take in Figure 3”
The graphical analysis shown in Figure 4 for the three indicators of the SOE measure
may indicate that the high variability in the SOE can be attributed to efficiency problems.
This, in turn can be attributed to planning problems, inaccurate service demand forecast, or
even low productivity. The graphical analysis of planned operational service capacity
relative to delivered services capacity can be used as a first step toward the diagnosis and
11
resolution of this problem. In any case, the graphical analysis provides management with
visual aid that makes it feasible to think of performance from a practical rather than abstract
perspective.
“take in Figure 4”
The success of the SOE implementation approach is very much dependent on the
precision of the indicators may be traded for more procedural and informational simplicity.
Thus, leaving the achievement of more precise results for later phases of the
implementation process. At that point in time during the implementation process, the
of the SOE approach. Thus, the emphasis can be shifted to the refinement of measures and
complementary approaches are suggested. These include the monitoring orientation and the
stresses obtaining the information needed to quantify, and evaluate the SOE measure on a
whenever changes aimed at improving are made to the hospitality service operational
12
5. Conclusion and Implications
Environmental and competitive challenges are forcing hospitality service operational
systems to pay closer attention to the different aspects of performance (Yasin and Yavas ,
2001; Yasin et al, 2003; Tsaur and Lin, 2004; Yasin et al, 2004; Barros, 2005; Claver et al.,
2006). The performance measurement literature stresses the utility of individual measures,
the utility of aggregate measures, aimed at measuring and tracking the overall performance
of such service operational system. The SOE approach proposed in this study lends itself to
The proposed SOE approach utilizes key indicators, which includes services
availability, quality, and efficiency. While these indicators are operational in nature, they
tend to have strong customer-orientation, service value, and service encounter implications
to customers. In addition, the collective value of these indicators, as reflected in the overall
procedures can be made to ensure the availability, accuracy, and availability of such
information. While the actual SOE implementation process will require serious
commitment and support from management and employees, the anticipated performance
improvements, especially the financial and costumers-related aspects should justify the
hospitality managers tend to provide hospitality organizations with a road map toward
13
providing the organizational context needed to support a systematic, organizational
systems were people serve people. Thus, the effective performance of this unique
operational system has strong consequences and implications to the organizations, the
people who work for it, and its customers. The SOE approach advocated in this article
14
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19
Figure 1 – Service operational system and the effectiveness
SERVICE OPERATIONAL
SYSTEM
Service Operational
FRONT-STAGE BACK-STAGE
Effectiveness (SOE)
OPERATIONS OPERATIONS
Approach
OPERATIONAL SERVICE
EFFECTIVENESS
20
Figure 2 – A conceptual framework for the implementation of the service operational
effectiveness (SOE) approach
STAGE I – Initialization
- Gather information
- Define SOE parameters
- Establish benchmark targets
- Start the SOE process
21
Figure 3 – A graphical evolution of the service operational effectiveness (SOE) values
over time
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
38 39 40 41 42 43 44 45 46 47 48 49 50
Period
SOE TARGET MAVG
22
Figure 4 – A graphical evolution of the service operational effectiveness (SOE) graph
including their indicators
1.20
1.10
1.00
0.90
0.80
0.70
0.60
0.50
38 39 40 41 42 43 44 45 46 47 48 49 50
Period
23