The Impact of Employee Quality of Work Life on Customer Relationship Management

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INTERDISCIPLINARY JOURNAL

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VOL 4, NO 11 ARCH 2013

The Impact of Employee Quality of Work Life on Customer Relationship

Management

Marzieh Vahidi Roodpishi

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, Samaneh Poor Naserani

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, Seyedeh Zahra Hashemi

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Mohadeseh Mohammadi Choolabi

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, Mahdiyeh Noghreh Chafi

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, Shirin Aghajan Khah

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Foroogh Ranjbar

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1234567-M A Student of Financial Business Management, Islamic Azad University, Rasht, Iran

Abstract

Nowadays, in contemporary management, the concept of “quality of work life” has become a major societal issue throughout the world; while in the past decades, just personal life (non-working) has been emphasized. The quality of work life illustrates the type of organizational culture or management methods, in which personnel, based on it improve their sense of ownership and self-esteem. On the other hand, the emergence of new instruments such as “customer relationship management” will increase organizational capacity, to reduce internal costs, better interaction with the environment, and finally more profitability to organization. In fact, customer relationship management is a strategy that is used to acquire more knowledge about customers' needs and behavior toward more communicating with them. Therefore, recognizing the effective and related factors to customer relationship management is very important, because quality of work life programs is including any improvements in communicating with customer that support organization development. Therefore, in this paper, after studying the performed research in aspect of research topic, we are trying to investigate the impact of quality of work life on the customer relationship management.

Keywords: Quality of Work Life, Customer Relationship Management, Walton Model, Customer Orientation

1. Introduction

Nowadays one of the contemporary management concepts that have become a major societal issue throughout the world is the concept of quality of work life. “Edgar” and “Baldwin” argue that quality of work life is a set of real work situation in organization, and believe that quality of work life indicate employee‟s attitudes and feelings toward their own activities[6].therefore, organization, in order to improve the quality of employees‟ life, develops more opportunities to influence personnel and cooperating on effectiveness of the organization. This will lead employees to use their intelligence, such that as a member of organization help improving decision-making process that is performed by organization‟s top managers. Some of discussed issues in this area include:

1- Promoting the employeesquality of work life through setting leisure time system for them [8].

2- Investigating the relationship between quality of work life and customer relationship management in public organizations of Marivan [16].

3- The impact of employee quality of work life by their initiatives, case study of units in the electricity sector, India [9].

As it is mentioned, an important concept, in recent decades that is called marketing decade, and in the field of personnel quality of work life is the concept of customer relationship management that means the effort of organization to develop and provide higher value customer. Organizations have widely recognized that customers are their most important asset therefore paying attention to relationships with customers as beneficial and mutual transactions, as well as opportunities that require managing [11].

2. Background of Research

In order to better investigate the impact of employee quality of work life on customer relationship management; we are trying to study internal and external (domestic and foreign) performed research in these two domain

2.1- Performed Research Out of Iran

In this group of studies, although there is no basic research to examine or evaluate the impact of employee quality of work life on customer relationship management, thematic data collecting and rating scales, will provide proper and

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VOL 4, NO 11 ARCH 2013 useful situation to researches in order to study and evaluate in both domain. Table 1 illustrates some performed researches in two discussed domain, out of Iran.

Table1. Performed Researches about Subject Out of Iran

Researcher Topic Results

Michelle Lee et al, 1986 [10]

Relationship between participating in quality cycle and programs related to employee quality of work life, and attitudes ,productivity and behaviors of work choosing

There is positive and significant relationship between quality cycle and changes in perceptions of quality of work life

Lao, 2000 [12]

Comparing the performance of companies that are known to have a high quality of work life and performance of other companies

Results indicate better performance of companies with personnel who have high quality of work life than other discussed companies

Shin Cheul, 1990 [13]

Empirical analyzing of excellent correlations among the factors of auditors' quality of work life

Job controlling will help customers controlling and can reduce auditors‟ stress; both have direct and significant effect on job stress, but customers controlling has negative effects on stress that its reason was increasing the role conflict; these results, in combination, have positive effect on customer satisfaction

Rah et al, 2005[14]

Identifying effective factors on customer relationship management

All above factors directly are in associated with customer relationship management and their improvement has a positive impact on customer relationship management

Yonguee et al, 2011[15]

An integrated framework to customer value and the performance of customer relationship management

Providing higher value to customers will have a significant effect on customer behaviors; and the

performance of customer relationship management should be measured through customer behaviors

Anthony, 2011[16]

organizational commitment, job satisfaction and quality of work life

it was not so positive in understanding quality of work life among personnel, in aspects related to job and relationship between co-workers; and organizational commitment was neutral

2.2- Performed Researches in Iran

In internal researches, similar to foreign ones, discussed topics are addressed independently. For example a research that “Jazayeri” and “Pardakhtchi” (2007) have developed to provide a model of evaluating employee quality of work life in organization; or a research that “Gharedaghi” has performed it in order to investigate effective factors on implementing customer relationship management in some touristic small and medium enterprises, in Tehran. Table 1 illustrates some performed researches in two discussed domain in Iran.

Table 2.Performed Researches about Subject in Iran

Researcher Topic Results

Gharedaghi, 2007[18]

Studying effective factors on implementing customer relationship management in some touristic small and medium enterprises, in Tehran

Relationships with customer and dynamics of business are the most effective factors on

implementing customer relationship management in SME's

Mehrabi, 2008 [19]

Providing a model to evaluate the impact of customer relationship management on performance of organizations and companies

Infrastructure resources of customer relationship management in comparison to technological resources have fairly more significant impact on the process of customer relationship management

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Fattah, 2008 [20]

The relationship between employee quality of work life and productivity of high education management services

Results indicates that there is a significant relationship between quality of work life and management

services productivity

Pardakhtchi, 2007[21]

Providing a model to evaluate quality of work life in organization

Different dimensions of quality of work life through three structural, managerial and psychological factors

Dargahi et al2008 [22]

Investigating the quality of work life of nurses in Tehran medical sciences university

The results show that nurses are dissatisfied with the most of their quality of work life

Mirkamaly et al, 2008 [23]

Investigating the quality of work life and job satisfaction among members of faculty in Tehran and Sharif university

The regression results indicate that lawfulness in organization, provides the chance of promotion and continues security and developing human capabilities, respectively , as dimensions of quality of work life have multiple correlated with job satisfaction

Yavari et al, 2008 [24]

Comparing the quality of work life and its subscales among the faculty of physical education and state universities

There is a significant relationship between age and teaching experience of faculty and some dimensions of quality of work life. And difference in dimension of work life social dependence, between men and women, has been significant

Momeni and Jafari, 2009 [25]

Investigating the implementation of customer relationship management in Iranian hotel industry

Among customer relationship management factors, effective factors in applying knowledge, using technology, systems integrating in organization, services personalization, personnel and top

management, the factors of top management has had the highest average.

3. The Quality of Work Life

In 1970s, most of organizations that were task design through traditional Taylorism, in order to compete against the Japanese organizations, were looking to improve the condition of working environment. Therefore the concept of quality of work life, mainly is affected by Japanese human resource management that emphasize psychological aspects of both phenomena, personnel participating in decision making and equipping personnel with scientific, ethical and participatory capabilities [15].

The quality of work life can be described from two points of view:

1. The quality of work life in objective point of view is a collection of real work situation in an organization, such as salary and benefits, facilities, health and safety, participation in decision-making, democracy, supervision, diversity and job enrichment etc. [12].

2. The quality of work life in subjective point of view is individual image and his/her attitude about quality of work life in particular. In other words, the quality of work life for any person or group of people with their own culture and attitude will reflect a particular concept. In general, we can say the quality of work life is personnel image and perception of physical and psychosocial utility of their work environment. “Walton” divides main components of quality of work life into four parts. He believes effective factors on the quality of work life include: fair and adequate payment, safe and healthy working conditions, proper opportunities to develop human capabilities, proper opportunity promotion and continues security, the importance of work in society, job lawfulness, work‟s social fit [11]

Therefore we can conclude from above mentioned points that the total goal of an effective quality of work life plan is improving work conditions, particularly in personnel point of view, and organizational effectiveness particularly in employer‟s point of view.

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3.1- The tasks of Managers’ Leadership In Relation To the Quality of Work Life in the Organization

 Defining goals and organizational bias

 Ensure that the goals and expectations have been provided, i.e. high supervising to ensure that the desired objectives have been reached.

 Analyzing the performance of organization, and doing improving action based on it

 Developing an attractive organization and working environment, where people enjoy their work.  Collecting customer ideas

 Ensuring employee participation

 Providing motivation, hope, energy among employees

 Appreciating hardworking employees to energize other personnel  Providing individual honest and accurate feedback

3.2- The Parameters of Quality of Work Life

Performed researches, despite different perceptions of quality of work life, show that some indicators (parameters) are common in most communities. Some of these common parameters that are often referred to them are power, salaries and benefits, insurance health and welfare services and pension etc. [28]; scientists and scientific institutions have introduced different parameters to the quality of work life that are shown in table 3.

Table 3. Parameters of Quality of Work Life

Experts Accepted Indicators

Walton Fair and adequate payment, safe and healthy working conditions, developing human capabilities, continuous promotion and security, being important in society, labor lawfulness, labor‟s social fit, meaningful and challenging work (Mir Sepas)

Casio Salaries and benefits, health and safety facilities, participating in decision making, democracy, diversity and jobs enrichment , feedback of results (Casio, 1992)

American Management Association

Salary, job security, lack of job tension, participating in decision making, democracy, profit sharing, insurance, and pension, services and facilities, four business days per week (griffin, 1996)

Mouton Salaries and benefits, work schedule, nature of job, physical aspect of jobs, , the internal and external institutionalized aspects of business, political, social, economic factors, (Davoodi, 1998)

Tattle Safety and security, equality in payment, opportunities of developing skills, continuous learning, democracy, participating in decision making (Mir Sepas , 1993)

Desler Having valuable job, adequate salary and benefits, safe working conditions, job security, competent supervision, existence of feedback, positive social situations, having training opportunity, (Jozee, 1996)

Lewis et al Reducing workload, rationalization and organizational commitment, positive communication, independency, justice, clarifying the monitoring system, professionalization, advancement development opportunities, fair payment (Lewis et al, 2001).

Recent researchers

Organizational familial support, emotional commitment ,weekly intensive work, flexibility in the work place, social and informational supports, flexibility in working time, paying attention and supporting all responsibilities (koppelman et al 2006)

4. Customer Relationship Management

As a result of intensive business and marketing campaigns, organizations to outstrip each other have paid attention to the most important and valuable thing to organizations that is customer. In this regard, organizations instead of relationship marketing and managing unique customer relations have added an added value to their product or services that was more profitable than relationship marketing, and this involves long term relationship with customers that has led to discussing a new discussion as Customer Relationship Management [5]

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VOL 4, NO 11 ARCH 2013 There are different attitudes about customer relationship management, which are illustrated in table 4:

Table4. Different Perspectives of Customer Relationship Management

Attitudes Some Definitions

Process " The overall process of making and maintaining relationships with customers and the provided profitability by customer satisfaction superior value " (Kotler and Armstrong, 2004)

Strategic “Developed business strategies for managing development of company, attracting and retaining

customers and providing long-term value among them." (Jackson, 2005)

Philosophy A business philosophy that aim to achieve company's centralized customer "(Hasan, 2003)

Capacity "The ability of changing the behavior toward the customer, based on what the customer tells you and other things that you know about the customer" (Peppers et al, 1999)

Technology "An instrument to business management, develop, influence and promote customer‟s knowledge, and to reinforce and maintenance of profitable relationships" (Raman et al, 2006)

Therefore, from what has been expressed, "customer relationship management" is taken into account in two stages. First one is the stage of learning skills by paying attention to customer„s characteristics and classifying them according to this well- known phrase that “80 percent of an organization‟s profit are achieved just through 20 percent of customers”; in fact, it is “transition from a product-center process to a customer-center one, and concentrating on needs of customers more than their characteristics. At the second stage, mentioned principles at the first stage are investigated; organization at this stage should not restrict itself just in existent advantages, instead, it should address developing customer-driven by methods and instruments of "customer relationship management" [1]. Perhaps you think "customer relationship management” is merely a technological solution, but this perception is incorrect [3]. In fact, "customer relationship management" needs moving toward customer driven and determining market strategies; this process is introduced as “customers‟ life cycle "that includes attracting new customers, increasing customer, and ultimately maintaining profitable customers [2].

4.1- Dimensions of Customer Relationship Management

“Swift”, “Parvatiyar”, in 2001 have categorized customer relationship management to four basic dimensions that are identifying customers, attracting customers, retaining customers, developing customer; these four dimensions can be considered as a closed-loop of customer relationship management [7].

 Identifying Customers: Customer relationship management starts with identifying customers [3]. This phase consists of targeting populations who their possibility of being our customer is high or is profitable for the organization. The components of this phase are identifying customers, analyzing target customers and classifying customers. Analyzing customers includes searching sections and reminding customers by their main characteristics; however classifying customers includes customer‟s division of work to groups and smaller parts of customers that consist of relatively similar customers in each group [7].

 Attracting Customers: At the second stage, organizations after identifying potential customers, can address attempt and direct resources to attract customers [3]. One of main factors to attract customers is direct marketing. Direct marketing includes the process of upgrading that motivating customer to make order through different channels; for example, direct E-mails or distributing examples to direct marketing. [7]

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VOL 4, NO 11 ARCH 2013  Retaining Customers: In third phase, that in fact is the main argument of customer relationship

management; customer satisfaction that refers to customer expectations and perceptions of satisfaction is basic clause to customer retention [3]. Elements of retaining customers are person to person marketing, which is referring to person marketing that support by analyzing, detecting and predicting changes in customer. Loyalty program includes supporting activities aimed at long-term relationships with customers in particular, analyzing dissatisfaction customers, credit rating, and the quality of services or satisfying of the loyalty program. [4]

 Developing Customers: This phase includes plurality of transactions, the value of transaction and profitability of customers [3]. The elements of developing customers can be Cross Selling, Up Selling, and including analyzing the value of customer lifetime [2].

4.2- Operational Scopes of Customer Relationship Management

In aspect of various operational scopes, customer relationship management can be divided into four categories of strategic, operational, analytical, and interactive.

 Strategic Customer Relationship Management

Strategic customer relationship management is part of a customer relationship management system that is trying to review strategy of businesses which are in form of attitudes and targets statements, by customer-centric approach and requirements of this approach [4]

 Operational Customer Relationship Management

This type of customer relationship management involves all areas that provide direct relationship with customer; these areas that sometimes are called contact points, and in fact, the relationship between customer and organization will be in these points [13].

 Interactive Customer Relationship Management

Interactive systems based on customer participation are looking for providing more and proper communicating channels between the organization and the customer, by using appropriate infrastructure and instruments. In fact, these systems are trying by increasing communicating channels between the organization and the customer and improving the quality of these channels during life cycle of relationship between customer and organization, increase customer valuation [14]

 Analytical customer relationship management

Analytical customer relationship management tries to analyze organization data and information so that according to the results of these analyses can determine Management strategies of organization [4]. One of the most popular instruments of analyzing the customers function and behavior is data analyzing [1]. Many organizations have achieved profitability and stability in contestable market, by storing customer data and analyzing their results.

Now, we can conclude that "customer relationship management”, in fact is processes and technologies that organization applies them to access a comprehensive prospective in relationship management through concentrating on maintaining and developing relationships with customers, and finally a proper understanding of customers' needs. 4.3- The Advantages of Using Customer Relationship Management (CRM)

Advantages of using CRM in an organization can be summarized by purpose of customer satisfaction and survive in a competitive environment as follows:

 Quick response to customers‟ demand  More efficiency through automation  Customer deeper recognition  Reducing advertising costs

 Increasing marketing and sales opportunities

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VOL 4, NO 11 ARCH 2013  Receiving customer feedback that will improve providing services and producing products.

 Preventing high costs to low-value customers or low cost to high- value customers. 4.4-Key Factors of Implementing a Successful CRM

A. Training Personnel

Personnel of organization should be taught the specialized and applied courses, in the field of interaction and contact with customers, to be able communicating effectively with customers and in addition, having the ability of using new technologies.

B. Reviewing Processes and Designing New Process

Organizations cannot achieve their goals without a logical and well-designed process. Organizations should define their needs and business goals, and improve and expand processes related to CRM to access these needs. Business reengineering process (BPR) is one of the most efficient instruments in this part.

C. Using New Technologies

Implementing CRM requires changes in organization infrastructure and using new technologies such as new business rules, databases, information technology, etc. These changes will lead to effective and useful variations in the organization

5. The Impact of Employee Quality of Work Life on Customer Relationship Management

In order to better investigate the impact of employee quality of work life on the customer relationship management, dimensions of employee quality of work life based on Walton model, and dimensions of customer relationship management according to classifications of performed researches have been used.

Research Conceptual Model

Employee quality of work life in organizations includes three levels that are:

1. Organizational levels: at this level of quality the goal is foreign customer satisfaction.

2. The process level: At this level, the goal is relationship between the internal and external customers; in other word, chains of suppliers and customers are important.

3. Individual level: The goal is that each person in the organization knows his/her next customer, and then tries to fulfill their demands.

As it is mentioned, Customer satisfaction is a subject that has been revealed in all levels of employee quality of work life. Again, as it is mentioned before, customer relationship management are looking for attracting, maintaining, expanding, relations with customers that is one of instruments and technologies in the field of customer relationship management. For example, providing proper strategies to customer relationship management, using new instruments in interactive technologies of customer relationship management such as telephone or E-mail among organizations and customers, analyzing collected data from customers by instruments of Customer Relationship Management, an analysis to help organization top managers in order to proper and effective decision-making toward organizational objectives, collecting customer data from different sections by personnel of organization‟s various units, all these steps require the help and assistance of all employees in different organizational units that require increasing employee quality of work life, so that they can help organization in order to achieve its goals.

Conclusions

It can be concluded that the issue of quality of work life and its relation with customer relationship management is one of important and critical issues in modern organizations. On the other hand, organizations as dynamic entities are born in environment and are developing by necessary facilities. They will supply environmental needs through providing valuable products and services and will facilitate the process of growth and prosperity of communities. Increasing customer relationship management is not a one-dimensional action, instead it is a continuous work that in addition to components of employee quality of work life are influencing other critical producing factors such as: involving employees, developing and empowering them , ensuring organizational justice, and professional security etc.

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