A Comparison of Independent and Chain Hotels and their Organisational Responses to Complaints and Service Recovery

Abstract

1.0 Executive Summary

This paper aims to examine the effectiveness of organisational responses with regards to service failure, with an investigation to find the opinions and attitudes of front-line hotelier employees who implement these responses within their day to day work. It aims to outline any similarities or differences of opinion found when ruling which responses are deemed most effective for complaint handling, and the importance of the responses, using employee perspectives who have worked in chain and independent hotels. The objectives of the paper are to describe what service recovery is and why it is an issue for customer retention, why front-line employee training is imperative to be able to handle customer complaints and ensure effective service recovery, and to investigate the organisational responses posed through literature. This paper offers a new framework, based on the results found from the research and can be used to carry out further research based on service recovery, organisational responses and justice theory.

The literature review begins by discussing what service recovery is and the impact it has on businesses success, with emphasis on hospitality businesses as there is a high degree of interaction between guests and employees. It then further explains the importance and benefits of having customer retention within the service industry, including the ‘service recovery paradox.’ Employee training and retention is also described, as poor training can mean poor customer service, which in turn may increase the guest’s dissatisfaction. The literature has shown that complaint handling is linked with the ‘Justice Theory’ framework which is also discussed. Finally the review examines the organisational responses that this study is based on, and the gap in literature found.

This paper comes to the conclusion that the primary research indicated weak similarities and differences of opinion between independent and chain employees with regards to organisational responses. What has been found however is that the front-line training given to employees was a major influence of complaint handling. Within this study, the primary research has shown a distinct lack of training and complaint handling procedures within hotels and details the employee opinions and the consequences of this. The study also details the employee and customer perspectives of the organisational responses, which has been linked with Justice Theory, and a new service recovery model has been proposed in accordance to the results found.

1.1 Key words

Service failure

Service recovery

Complaint handling procedures

Employee training

Organisational responses