Measuring customer satisfaction and employee performance in modern business

Customer Satisfaction

Importance of customer satisfaction

The effect of customer satisfaction on a firm's profitability

Why measure customer satisfaction

How to measure customer satisfaction

The affective measures of the degree of customer satisfaction

Employee performance

The need for measuring employee performance

The contemporary business environment which is dynamic and highly competitive requires firms to have a high level of business intelligence. In this paper, we explore the concepts of customer satisfaction as other internal business processes such as employee performance. The aim is to explore how these constructs and parameters are measured as well as the need for their accurate measurement.

The contemporary business environment which is dynamic and highly competitive requires firms to have a high level of business intelligence. In this paper, we explore the concepts of customer satisfaction as other internal business processes such as employee performance. The aim is to explore how these constructs and parameters are measured as well as the need for their accurate measurement.

Customer satisfaction

Farris et al. (2010) defined customer satisfaction as the total number of customers or the percentage of the total customers whose narrated experience with a given firm or the ratings for their services exceeds the satisfaction goals that are exceeded.

Importance of customer satisfaction

Several researchers have investigated the importance of the concept of customer satisfaction to the success of businesses. The concept of customer satisfaction was defined by Kotler (2000) as an individual's feeling of pleasure or even disappointment that results from a comparison of the perceived performance of a given product in relation to the individual's expectations.

Hoyer and MacInnis (2001) indicated that satisfaction is a concept which can be associated with a feeling of acceptance, excitement, happiness, delight and relief. Several factors are indicated to affect the level of customer satisfaction. Hokanson (1995) mentioned that these factors include but not limited to friendly staff, courteous staff, accurate billing, timely billing, competitive pricing, high quality service, good value as well as billing clarity.

The need for measuring customer satisfaction

The measurement of the concept of customer satisfaction is important since it may enable firms to understand the degree to which customer satisfaction is influenced by parameters beyond its control (HM Government,2007) like the media as well as to differentiate between what individuals say may influence their level of satisfaction.

Why measure customer satisfaction

The measurement of customer satisfaction therefore helps businesses identify what they can as well as cannot control. But most importantly, the concept of customer satisfaction helps businesses to better focus on their customers. It also galvanizes the owners of the business, staff dealing with clients, research and strategy staff and the senior management towards the aim of improving the degree of customer experience.

How to measure customer satisfaction

The concept of customer satisfaction can be measured on the basis of customer satisfaction index (CSI) (Bhave,2011). This can be gauged via special customer satisfaction surveys. The customer satisfaction surveys must at least satisfy the following objectives; the importance to customer's priorities, the perceptions of customers of the performance of suppliers, the performance of an organization relative to the customer's priorities as well as the priorities for organizational improvements.

The affective measures of the degree of customer satisfaction

The fact that the attitude of a consumer towards a given product can emanate from any experience or product information which is perceived or be real means that any meaningful measure of the attitude of the customer towards a given product or service.

The cognitive measures of the degree of customer satisfaction

The cognitive element in this case is defined as the conclusion that a given product was indeed useful, fitted or did not fit a given situation or even exceeded or failed to exceed a given situation.

Behavioral measure of the degree of customer satisfaction

Dissatisfaction is indicated to be synonymous with disappointment or regret. These behavioral measures as expressed verbally or otherwise may help in measuring the degree of customer satisfaction.

Employee performance

Several companies strive to perfect the measurement of the level of employee performance prior to rewarding their employees. The study by Deloitte indicated that senior managers observed that they were able to affectively employ metrics that are related to the financial performance in order to gauge the level of employee performance (Leibs,2007). The nonfinancial performance proved a little difficult to measure.

The need for measuring employee performance

The level of employee performance has been linked with improved profitability (Huselid,1995).The level of employee performance can be measured effectively by the identification as well as tracking of the progress made against the set organizational goals and targets, identification of opportunity for possible improvements as well as a comparison of the company's performance against the internal as well as external standards.

Ripley (1999) noted that the level of employee performance can be improved by looking for the right information, resources as well as applying incentives, capacity, skills and knowledge and employee motivation.

Conclusion

The internal businesses processes form an integral element of any organization. Every business must therefore make efforts to ensure that these processes and especially customer satisfaction and employee performances are monitored and improved over time in order to allow organizations to achieve better profitability in their future operations.