Fun and surveillance': the paradox of high commitment ...high commitment management in call centres Nick Kinnie, Sue Hutchinson and John Purcell Abstract Much of the research into

Int. J. of Human Resource Management 11:5 October 2000 967-985

'Fun and surveillance': the paradox ofhigh commitment management in callcentres

Nick Kinnie, Sue Hutchinson and John Purcell

Abstract Much of the research into telephone call centres has focused on the coerciveemployment systems which are adopted in these organizations. This appears to contrastwith the high levels of customer service and satisfaction which are often required forthem to be successful. Our research, which is based on two case studies of call centresstudied in depth, challenges this 'satanic mills' image. We explore the ways in whichboth companies sought to balance the pressures in the product and labour markets andemployee needs to develop strategies which combined elements of commitment andcontrol. They developed sophisticated human resource practices, which resembled thehigh commitment management approach, while, at the same time, maintaining a highlycontrolled and measured work environment. Consequently, there was a greater alignmentbetween their HR practices and control systems, the needs of employees and the highquality of interactions with customers expected. This suggests that high commitmentpractices are not automatically associated with extensive employee discretion, as hasbeen argued in the manufacturing sector. HR practices of this kind can be used to offsetsome of the worst features of call centre working. These findings illustrate the variety ofHR practices in call centres and suggest some possible reasons for this diversity.

Keywords Call centres; employee commitment; management control.

Introduction

Telephone call centres are one of the fastest growing parts of the service sector inEurope, with employment in the UK alone set to rise, according to one prediction, tohalf a million by 2001 (Datamonitor, 1998). Although much of the expansion has beenin financial services, other growth areas include utilities, retailing, transport and travel,and telecommunications and IT. They range from relatively simple customer informa-tion provision, mail-order and direct sales operations to more sophisticated telephonebanking and customer service centres. This fast growth has attracted much attention inthe media and a growing number of academic studies are now appearing (Bain andTaylor, 1999; Batt, 1999; Belt et al., 1999; Deery et al., 1999; Frenkel et al., 1998,1999; Korczynski et al., 1996; Korczynski, 1999; Taylor and Bain, 1999a, 1999b;Femie and Metcalf, 1998; Knights and McCabe, 1998). Much of the research and manyof the press reports have focused on the coercive employment systems adopted in theindustry, especially in the low-pay, short job-cycle time end of the business. Here calllength is measured in seconds with an array of overt and covert performance

Nick Kinnie, Sue Hutchinson and John Purcell, Work and Employment Research Centre,School of Management, University of Bath, Bath BA2 7AY, UK.

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surveillance measures in place to ensure employee conformity to strict standardoperating procedures.

These characteristics have led to call centres being accused of 'harbouring a 1990sversion of Taylodsm' (Arkin, 1997) whereby the 'industrial' or control model drawnfrom mass production has been employed (Schlesinger and Heskett, 1991: 74;MacDonald and Sidanni, 1996: 6). Typically in these call centres there are minimalselection cdteria, low wages, rudimentary training, few opportunities for involvementor advancement, and very low levels of job or task discretion (Batt, 1999: 541), Mostoperate around the clock or have extended operational hours so shift systems and'unsocial hours' working is required. The work of the customer service representative(CSR) is often tightly scdpted, repetitive, mentally and physically demanding andstressful. Absence rates and labour turnover are high and well above the norm for anoffice-type environment. There is widespread use of contingent labour seen in shortduration fixed-term contracts and a heavy reliance on temporary labour supplied bylabour agencies. This can be up to three-quarters of staff in some of the larger callcentres. Student holiday or evening jobs and extensive use of part-time labour iscommonplace. Much of the growth of the industry in the UK, aided by governmentregional development grants, has been in areas of high unemployment. Call centres areaccused, therefore, of re-creating the 'sweat shops' or 'the dark satanic mills' of theindustdal revolution (Wylie, 1997; IDS, 1997) and provide the ideal environment forthe exercise of 'Panoptican' control over virtually every aspect of employee behaviourat work (Femie and Metcalf, 1998),

Taylor and Bain (1999a: 109) charactedze call centre work as an 'assembly line inthe head' and detail the intensive control systems commonly applied. Typical 'hard' orquantitative measures, routinely and regularly collected for each CSR and the workteam, include time to answer, call length, the abandoned call rate, accuracy andadherence to script and salutation greeting, and wrap-up time (dealing with recording ofcall details and subsequent actions required). Measures are collected as part of theautomatic call distdbution (ACD) system. In addition, calls are often recorded and bothteam leaders and 'remote' managers 'observe' by listening in on calls. The use of thesecontrols results in a situation where, according to Femie and Metcalf, 'the agents areconstantly visible and the supervisor's power has indeed been 'rendered perfect' - viathe computer monitoring screen - and therefore its actual use is unnecessary' (1998: 9).A recent stdke in one of the largest providers of call centres in the UK, British Telecom(Lamb, 1999) indicates, as Taylor and Bain (1999b) have argued, that employeeresistance has not been eliminated.

This type of surveillance through quantitative measures of performance finely andcontentiously collected, taken together with the type of low-pay, low-skill, contingentlabour, is indicative of a cost-minimization, command and control employment system.Other performance measures, however, emphasize the actual delivery of service andseek to monitor, evaluate, and control the quality of the interaction between the CSRand the customer (MacDonald and Sidanni, 1996: 4; Leidner, 1996: 34). Thus, CSRsare monitored for their tone of voice, helpfulness, and enthusiasm (Taylor and Bain,1999b: 12; Deery et al, 1999: 3), Indeed, it is commonly asserted that these types ofbehaviour are crucial in a service-driven company (Schlesinger and Heskett, 1991), butto obtain these the service company must adopt commitment odentated human resourcesystems (Schneider and Bowen, 1993). There appears, therefore, to be a contradictionbetween the ways employees are managed and controlled and the type of emotionallabour required for high levels of service and customer satisfaction.

Kinnie et al.: 'Fun and surveillance' 969

The very rationale for call centres is that they provide high levels of customersatisfaction and convenience in a cost-effective manner, especially when compared withtraditional centres of customer service in the High Street branch or shop. They providethe opportunity to reinforce brand messages on a one-to-one basis and potentially allowrelationships to be built and managed, making the customer feel valued (White, 1998:23). When the only contact a customer has with an organization is via the telephone, thequality of that interaction becomes critical and is often the only criterion by which theproduct and perhaps the whole organization are judged. As Schneider and Bowen argue,'it is the way, style or manner with which the service is delivered that contributes tocustomers' overall impression of service quality' (1993: 40). Consequently, this serviceinteraction provides a means of gaining a competitive advantage and attracting and,critically, retaining customers. 'Products, technology and price are vulnerable toemulation by competitors. Thus many companies choose to differentiate themselves bysomething they assume is less easy to copy: quality of customer service' (Rosenthal etal., 1997: 481). Similarly, Schlesinger and Heskett argue, 'the more technologybecomes a standard part of the delivery service, the more important personalinteractions are in satisfying customers and in differentiating competitors' (1991:74).

This combination of direct contact with the customer, an emphasis on service qualityand a tightly controlled work environment places great demands on employees and canlead to emotional burnout and high labour turnover (Deery et al., 1999). Knights andMcCabe highlight 'the contradictory position in which staff are placed, being tasked asthey are, with providing a high quality customer service while management limit theirability through work intensification to provide such a service' (1998: 182—3). They goon to argue that 'by placing too much emphasis on quantity, and keeping staff levels toa minimum, management may directly undermine customer service'. They add that '[I]tis ironical, however, that concern with customers does not seem to be matched with anequal concern with employees, but perhaps the greatest irony is that the two are seen asdistinct' (Knights and McCabe, 1998: 188). Pfeffer also draws attention to thisparadox:

One might wonder, in an era in which there is increasing emphasis on building employeecommitment, on working in teams, and on devolving responsibility . . . how there can bea concomitant increase in electronic and other surveillance activities - a practice thatresearch indicates often produces effects opposite those being sought by the highcommitment work practices so frequently discussed.

(Pfeffer, 1997: 115)

What is required, it is argued, is a 'new model of service' with a distinctive type ofhuman resource management which 'puts frontline workers first and designs thebusiness systems around them' (Schlesinger and Heskett, 1991:71). For example,Schneider and Bowen assert that 'what employees experience at work gets transmittedto customers' and therefore 'the key to managing the customer's experience of servicequality is to manage employees' experiences within their own organisation. And whenit comes to managing employee experiences at work, HR management is crucial' (1993:40). Their banking study shows a clear positive association between how employeesfeel about their HR practices and customers' perceptions of service quality (1993: 47)and they suggest that 'HRM practices should be designed contingent upon [the]particular customer definition of good service' (1993: 48).

The type of employment or HR system proposed resembles what is variously knownas high commitment management (HCM) in the UK or high performance work systems.


or high involvement work systems in the USA (see Purcell, 1999, for a discussion).HCM typically involves 'recruitment practices which aim to attract and select highlycommitted and flexible people, internal labour markets which reward commitment andtraining with promotion and job security; and methods of direct communication andteamworking' (Wood and de Menezes, 1998: 488). There is evidence of elements ofHCM being utilized in some call centres, especially where longer job cycles andinteractive relations with customers were required (Frenkel et al., 1999: 102-7). Batt(1999: 551-6) found that self-managed teams were associated with improved sales andquality in call centres compared with traditionally supervised work groups. Similarly,Batt and Appelbaum found that teams have a 'strong, significant and direct effect onperceived performance' and that 'teams appear to help workers through greater sharedlearning and problem-solving in handling customer relations' (1995: 372). Moreover,others have argued that a successful balance can be struck between the needs of theconsumer and the employee by careful attention to recruitment methods (Davis, 1999;Whitehead, 1999) and improvements in pay and conditions (IDS, 1999). Crome (1998)advocates moving from 'battery farming' towards the 'free range' approach withchanges in training, job design, teamworking, involvement and the recognition ofemployee contributions.

There are good reasons, however, to hypothesize, following work in manufacturing,that HCM would not be cost-effective in an environment of high surveillance and littlejob or task discretion. Youndt et al. (1996), for example, in their study of 512manufacturing plants showed that HCM (or what they called 'human-capital-enhancingHR systems') was appropriate in production circumstances where scope flexibility,involving production variety and non-standard orders, was required. In a similar vein,Arthur (1994) observed in steel mini-mills that the adoption of commitment-type HRsystems occurred where flexibility in product grade, quality and shape was required.MacDuffle's large-scale study of the world auto industry noted that HCM was foundwhere flexible production and new forms of work organization were necessary. Heshowed that this type of performance-inducing HR system was especially relevantwhere 'employees are motivated to apply . . . skill and effort through discretionaryeffort' and where this effort is crucial to the firm's business strategy (1995: 199). Formost call centres discretionary effort has been designed out, as much of the researchquoted earlier has shown. Youndt et al. (1996) describe the alternative to HCM as'administrative HR', while Arthur (1994) refers to it as 'control' HR, following Walton(1987). Arthur showed that 95 per cent of mini-mills with a cost leadership businessstrategy, operating with little variety in product quality, shape, or size, opted for acontrol HR system. Significantly, Youndt et al. noted that 'administrative HR systemsare . . . very appropriate in a strategic context that emphasizes reducing cost andeliminating uncontrollable behaviour' (1996: 859). While this research was done inmanufacturing companies it could easily be applied to call centres.

This dichotomous analysis of a fit between low discretion, rigid task work andcontrol HR systems, on the one hand, and high-discretion flexible task roles with HCM,on the other, is intuitively appealing. However, it is based on an assumption that thefirm has free choice in the labour market and a capacity to manage all aspects ofemployee behaviour if it wishes to, as is implied in the Panoptican control systemsuggested by Fernie and Metcalf (1998). We studied two call centres in 1997-8 basedin an area with a rapidly tightening labour market and a high level of demand for officeworkers, especially for call centre staff. In both, trade unions were recognized in thewider organization and product market forces had led to an emphasis on improvedcustomer service levels. Although performance measures were extensively used and

Kinnie et al.\ 'Fun and surveillance' 971

jobs were tightly scripted with very little task discretion allowed, the firms began tointroduce a form or variety of HCM in response to pressures in the labour market andthe need to improve customer satisfaction to remain competitive. Our findings challengethe bleakness of the 'satanic mills' imagery and explore how both companies respondedto employee dissatisfaction by developing more sophisticated human resource manage-ment practices while, paradoxically, maintaining a highly controlled and measuredwork organization.

We identify the ways in which our companies evolved so there was greater alignmentbetween the HR practices and control systems adopted, the high quality interactionsexpected with the customer and the needs of employees. The ability to manage thesepotentially conflicting pressures in this fast-changing environment is seen to be one ofthe key factors in exploiting the potential benefits to be gained from this new way ofworking. We find that our cases manage these pressures by a mixture of strategiesdesigned to maximize employee commitment and to control employee behaviour,especially in areas concerned with customer satisfaction. This combination is not, initself, novel since it has been widely reported in studies of Japanese manufacturingplants (Delbridge, 1998; Graham, 1995). However, it is the distinctive characteristics ofthe front-line worker (Frenkel et al., 1999: 7; MacDonald and Sirianni, 1996: 6)spanning the public-organization boundary with a closely integrated supply chain andan IT intensive internal environment, together with a fast moving and complex externalenvironment, which are likely to make these conflicting pressures particularly intense.In the words of the HR Manager in one of our organizations, her role was one ofensuring a combination of 'fun and surveillance'.

The research reported here is part of a larger study sponsored by the Institute ofPersonnel and Development in the UK into the people management implications ofleaner ways of working. Data were collected intensively in two case studies during Mayand June in 1997, Interviews were conducted with 15-20 people in each organization,including CSRs, team leaders, and senior managers. These respondents were chosen toinclude a cross-section of functions including operations, customer services, IT, andHR, The Call Centre Manager in each case was interviewed on two occasions, as weresome of the HR professionals and particular attention was given to collecting the viewsof team leaders or team managers and their deputies or 'coaches'. CSRs wereinterviewed using a semi-structured interview schedule to allow a wide range of issuesto be discussed and to assess employee reactions to working in a call centreenvironment. Union representatives on both sites were also interviewed. The semi-structured interviews lasted around an hour and were tape-recorded and transcribed. Inaddition, quantitative data relating to performance were collected and relevantdocuments analysed. Two focus groups were also held involving a number of managersfrom six other call centres. The findings from the case studies were presented tomanagers in each call centre, leading to further refinement, A more detailed discussionof the research methods and findings is published in Hutchinson et al. (1998),

This paper now provides a detailed analysis of the two companies studied. This isfollowed by a discussion of the emerging issues and a conclusion which considers therelevance of this discussion for managing human resources in these organizations.

Analysis

We now consider our case study evidence to examine the extent to which the HRpractices adopted were aligned with the changes made to CSR jobs as a response todesired changes in interactions with customers. This discussion proceeds thematically.


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looking at the background of the cases, the changes in work organization and controlsystems, the HR practices employed and the outcomes of these changes. Table 1provides a brief summary of the main points.

Background and pressures for change

The RAC employs approximately 4,000 staff and in 1997 was Britain's second largestmotoring organization, with around 6 million members. The customer service centre atBristol, where the research was based, was moved from a city-centre location to agreenfield site in 1995 and employed approximately 200 permanent staff. Unionmembership in the RAC as a whole is around 50 per cent, but much less than this in thecall centres. The local labour market has grown much tighter in recent years, withbusiness parks and office development, and a number of other call centres have openedin the neighbourhood.

Since the mid-1990s the RAC's market share of individual membership has beenunder pressure from new and existing competitors. Membership retention was essentialto the long-term success of the business but was relatively poor, for example in 1996they lost three-quarters of a million customers. Customers found it easy to movebetween competing providers and were increasingly making comparisons in terms ofconsistency, professionalism, responsiveness, accessibility and convenience. In 1995/6service quality for existing and potential customers was seen as the key to achieving thegroup's business strategy of improving membership retention. Attention thereforefocused on the customer service call centres. External audits and an internal reviewrevealed that the organization was not sufficiently customer focused, since there were240 external telephone numbers and seventeen separate work groups dealing withdifferent issues, for example, sales, service, insurance and information, which meantthat customers were often passed around the organization, contributing to poormembership retention. In addition, overheads were high and there were inflexibleworking practices. Following this, the RAC set itself a series of objectives which werefocused on the key aim of improving service quality and increasing customersatisfaction, with the principal task of ensuring that 80 per cent of calls were dealt withat the first point of contact. The objectives were to develop a single call centre, changethe call centre culture by reviewing the management structure and modifying the rewardand recognition system and increase fiexibility by introducing multi-skilling for staff.This meant, for example, that a new multi-skilled position of customer adviser, whichdealt with sales and service and replaced the old position of tele-administrator, wascreated for front-line staff.

The Banco telephone centre was established in September 1994 on a greenfield siteand was considered to be the bank's pilot site for telephone banking in the UK.Operating on a 24-hour basis, the site employed 404 staff, including 220 in the callcentre. The majority of staff were full-time, with the biggest percentage of part-timersworking in the call centre (where 35 per cent of the workforce were part-timers). Likethe RAC, the call centre is located in an area of low unemployment and rapiddevelopment in the service economy in two nearby towns.

Banco was also experiencing a number of competitive pressures and in 1994 decidedto centralise some of its branch activity by establishing telephone banking centres. Theprimary motives of this were to improve the quality and consistency of services, givecustomers access to 24-hour banking and reduce overhead costs. This was triggered, asin the RAC, by the need to retain customers, many of whom were switching to newentrant firms exclusively using telephone banking. The importance of service quality


was demonstrated in two ways. First, a series of tough service-level targets were set forthe centre, including an abandoned call rate of 2 per cent for routine calls and 1 per centfor the key customer group, 90 per cent of calls to be answered within 15 seconds and90 per cent of calls to be dealt with at the initial point of contact. Second, a relationshipmanagement team of eighty was established to provide a high level of service andadvice to key account holders, including a named staff contact, in an effort todifferentiate Banco from its competitors. These changes were also designed to achievethe economies of scale enjoyed by new competitors, create a more aggressive sales andmarketing approach and offer a wider range of services. Banco, however, faced anumber of challenges almost from day one. These included considerable IT problems,an inexperienced management team (who were mostly from the bank's branch andregional network and lacked call centre experience) and centrally determined HRpolicies and procedures which were inappropriate for working in a call centre (andmeant, for example, rates of pay were below the market norm). Furthermore, althoughthe site was deemed to be a flagship for the bank's central strategy, there was no top-level champion among the bank's executive.

Work organization and control systems

In the RAC most of the changes in work organization were triggered by a newlyappointed Customer Services Director (CSD) who set out to achieve the aimsestablished by the internal review, particularly that of improving service quality. Theseinvolved introducing a flatter and more integrated management structure (replacing theold hierarchical and segmented structure based on seven layers, including supervisors,and seventeen separate workgroups), with radically changed roles for team leaders andthe new position of the customer adviser.

The team leader had responsibility for a team of ten to fifteen staff and they wereexpected to spend around 80 per cent of their time with team members, coaching,reviewing performance, providing feedback on individual and team performance andidentifying training needs. The team leader was also expected to provide leadership,build motivation and morale and bring some 'fun' into the working environment by, forexample, introducing spot prizes or raffles, as discussed below. From March 1997 allthe teams had names, such as 'The Untouchables' and 'The Pioneers' which werechosen by the team members. It was envisaged that the teams would change every yearso that the team managers had new challenges and the teams themselves did not getstale.

The performance of customer advisers was measured against minimum standards,which had to be met before a bonus was paid, using various criteria: the number of callsper hour, the ratio of talk time to available time, an index of customer satisfaction (orCSI), the rate at which calls were converted into sales and the average revenue for salesstaff. In addition to these quantitative measures there were a number of qualitystandards such as close adherence to the scripted call structure and attendance. Teamleaders produced a daily report displaying openly performance measures for eachemployee in a format agreed by the team. Performance was averaged over the monthand the standards of performance were perceived as clear and easy to understand.

The process of change was slower within Banco as local management recognised thatchange was imperative but fought an uphill battle with the bank's head office to changethe structure and take ownership of key policies and procedures. The managementstructure of the call centre was unlike that found elsewhere in the bank: there was amanagement team for the centre, headed by the Centre Manager, which discussed local


policy issues and was comprised of Section Heads, Teamworking was introduced,together with a new post of Customer Service Operator (CSO) which was multi-skilled.

Each team comprised a maximum of fifteen people and was named after a famousachiever chosen by the team themselves - such as Cromwell, Darwin, Nelson, Kipling,Nightingale and Dickens, Team members were encouraged to mix socially outside workto encourage team building, although the extent to which this happened varied. Therewas an element of competition between teams - each month, for example, there was anincentive award for the team with the highest sales performance. In addition to the teammanager, each team also had a deputy although this was not a recognized level withinthe hierarchy and was an added responsibility taken on a voluntary basis by a teammember. Development and communication were key roles for team managers, whowere expected to develop their team members as quickly as possible, to coach and trainthem, and keep them motivated.

The team manager reported to a Customer Services Manager (CSM), who wasresponsible for motivating team managers and teams and analysing data for individualsand teams to measure and improve further their performance. The CSOs were skilled inone or more types of call, although new recruits initially handled only the most basictype of calls. Productivity and sales were measured daily on an individual and teambasis. All CSOs had sales and service targets, calls were monitored closely and dailysheets were displayed, showing the performance levels of individuals and teams. Forexample, all multi-skilled CSOs had to adhere to 90 per cent of the 'Top 10 standards'which related to the call structure and included a good salutation, not leaving thecustomer on hold for more than 30 seconds and identification. Scripting, which workedthrough the computer, helped the operators adhere to the standards. Other targetsincluded the length of the call and answering 70 per cent of calls 'one stop'. In addition,at the time of the research, 98 per cent of a CSO's time had to be signed on to the phonealthough the Centre Manager felt that the current level was probably too high andshould be nearer 95 per cent. As he explained:

We're trying to break away from the factory mentality of clocking in and clocking offwhere a 100 per cent of your time is being watched by some foreman, by trying to givepeople a small percentage of time to be their own time so they can do their own thingswithout invasion of privacy. You hear stories about, 'oh he's got to ask to go to thetoilet'; it shouldn't be happening and if it does it gets nipped in the bud?

HR policies and practices

Banco's slow pace of change to work organization and control systems was alsoreflected in the changes made to HR practices. In the first instance. Banco sought to usethe existing HR policies and practices devised centrally by the bank for the call centre.However, problems were soon encountered with recruitment, retention, and workorganization, as the call centre management team discovered that the HR policies andpractices designed for a stable branch-based environment were quite inappropriate in acall centre and did not fit with the work organization, the product market strategy, or thelabour market conditions. For example, rates of pay were relatively low, although somefringe benefits were good, leading to a remuneration structure based on the life-timeemployment of bank branch staff. This package was not suitable for a call centreenvironment where immediate earnings were more likely to attract and retain the typeof staff needed for the high quality service which Banco sought to provide to itscustomers. Additionally, the contractual working hours were considered inappropriate


to meet the cover requirements and staff received a shift allowance despite a delay in24-hour opening.

In 1995 a Head of Retail Telephony was appointed to the bank's executive whosupported the local management team in their programme for change, and in June 1995discussions began between local management, retail telephony, and the central HRfunction to move to HR policies and practices which were more appropriate for a callcentre working environment. Changes were made to the recruitment and selectionmethods so that nearly all telephony staff were new to the bank and came from a widevariety of backgrounds (for example, florist, policewoman, secretary, engineer, andcustomer service), which was in sharp contrast to staff with a traditional bankingbackground. External recruitment was initially conducted through two channels: thecentral HR function for permanent staff and agencies on a pilot basis. However, therecruitment of CSOs was changed so that it was managed locally by a full-time (buttemporary) manager plus a number of part-time casual staff. The Recruitment Managerin Banco neatly summed up the control and commitment philosophy when describingthe ideal CSO who 'will be able to conform but really have lots of extroversion andconfidence. Above all, they must have lifestyle experience which builds empathy withcustomer needs'.

The new terms and conditions of employment for CSOs, processing, team managers,and CSMs included spot rates, which were based largely on the local labour market andaffordability, plus a variable bonus which was paid to high performers. Individual rateswere determined by the level of skill and competence and the role undertaken. Bonuspayments were made three times a year from a 'unit pool' which was dependent uponthe unit's performance and the budget available. The rates were considered to be closeto the market norm and were reviewed regularly by local management (through exitinterviews) and the central HR function. In addition to the bonus, the call centre wasexperimenting with low-value 'fun' incentives such as spot prizes (which were at thediscretion of the team manager) and themed fancy dress days. The new terms andconditions of employment increased the centre's ability to recruit and retain staff andperformance standards improved. Other benefits included greater fiexibility, improvedcareer prospects and better communications in a friendly environment. As the CentreManager remarked, 'We want people to enjoy their time with Banco and to avoidbuilding a factory type environment as many call centres can be . . . anything that willachieve that then we'll give it a go'.

Training was initially co-ordinated by the bank's central training and developmentfunction but was handed over to the centre in August 1995 with the appointment of anin-house training manager. This led to the development of a six-week inductionprogramme for CSOs, which was followed up by monthly coaching sessions conductedby team managers who identified any further training needs. Team managers receivedtraining in leadership skills, team building and management by results. The uniquenessof the site meant that nearly all the training material was adapted by in-house trainingofficers and the training function was therefore developing a resource centre to facilitateself-development which was available to new sites.

The changes in HR practices in the RAC took place rather more quickly whencompared to Banco and there is clear evidence of high commitment managementpractices being adopted which reflected the demands of the external environment andcustomer expectations from an early stage in the establishment of the new site. Forexample, much of the responsibility for the day-to-day management of the recruitmentprocess was devolved to line managers. The HR function trained and coached managersto select their own staff and an agreed recruitment procedure was used under the

Kinnie e/a/.: 'Fun and surveillance' 977

guidance and support of the HR function. The new structure in the call centrenecessitated a massive recruitment drive and involved the adoption of new moresophisticated techniques, including radio advertising and telescreening, partly becauseof the need for cover and partly because of local labour market pressures. Although,traditionally the RAC employed a lot of temporary staff in the call centre, the morerecent philosophy was to reduce the reliance on temps and cut this down to a minimumfor the summer peak period only (when around 30 per cent extra staff were employedon a temporary basis). Temporary staff received induction training and were expectedto be skilled only in sales. They were employed on less favourable terms and conditionsthan permanent staff but were expected to abide by the new standards of performance.In the long term, the aim was to have a pool of employees who varied their hours overthe year, such as students who could work longer hours in the summer.

The RAC recognized that training had been poor in the past and therefore establisheda new customer service training team. In addition, new procedures were developed toensure that their customer advisers attained and retained the required performancestandards to meet customer expectations. This included training for new products andcomputer systems which was carried out on the job during quiet times. This representeda change with the past, as the HR Account Manager noted, 'Traditionally you would seepeople reading a magazine when there was a break, even doing a bit of embroidery. Butyou wouldn't now - we are changing so much'.

Training for team managers was initially less adequate, partly because of thedemands on their time made by their heavy workloads. Consequently, they were slowto develop and experienced difficulties in their new roles. This issue was addressed withregular workshops and team managers' performance subsequently improved. Graduallythe older, ineffective style changed, as one ex-supervisor explained: 'I was justmanaging the business not managing individual performance. I wasn't really involvedwith the development of people or identifying reasons why people were or were notperforming'.

As in Banco, team bonding was encouraged by social events and there were constantattempts to make the work more fun and varied. These include additional rewards in theform of spot prizes or raffles (a prize might be a bottle of wine or a box of chocolates),themed dressing-up days, and ad hoc bonuses - one month, for example, each employeeon the call centre floor received a bonus of £100 because the abandoned call rate wasless than 5 per cent. There was also a suggestion scheme, called 'Bright Ideas', whichwas aimed at involving staff and encouraging them to think about ways of improvingthe business with raffle prizes for 'good ideas'.

Before the reorganization, terms and conditions of employment were inappropriatefor the call centre environment: salaries were low relative to the local labour market,there was no clear career progression route, there were additional payments forshiftworking and overtime was high, which, as the HR Account Manager noted, 'is anonsense in a telephone environment where people have to be fresh and buzzy'.

The reorganization resulted in the introduction of new terms and conditions,including a new reward package to reflect customer and business requirements. Thenew pay structure for customer advisers was designed to introduce common standardsof performance, focus on high performance, integrate reward, development, andperformance, balance basic and variable pay and reflect market rates (and thereby assistin the retention of staff). For customer advisers, there were five layers, with progressionbased on performance and a variable incentive for over-performance. The incentivebonus, which could be up to 20 per cent of salary, was based around a mixture ofqualitative and quantitative measures as discussed above. With the exception of


telesales staff, the new pay structure represented a pay increase of approximately 10 percent in the basic and a maximum of 30 per cent in total earnings. Market researchshowed that the new pay rates compared favourably with other organizations in thelocality. A new team manager's salary, including a bonus scheme based on teamperformance, which was considerably higher than the traditional supervisory pay, wasintroduced alongside the new roles in July 1997, Team managers were set qualitativegoals based on monitoring team members' calls and quantitative targets dependent uponthe performance of each team member. Individual team members had to achieve theminimum standards set for them before the team manager received their bonus, as oneteam manager noted: 'it doesn't matter how well your team is doing if you are notnurturing that through the way you manage your team then you don't receive abonus'.

Other changes included a reduction in working time for full-time staff from 40 to 35hours and set rostered working hours. Under the old arrangements there was no attemptto match call volumes with the supply of labour, however, a new computerized systemand the new working time arrangements meant that available resources could be moreclosely aligned to call volumes while extending the opening hours of the centre.

Outcomes and experiences

Following our discussion of the changes in work organization and HR practices, wenow turn our attention, briefly, to the outcomes and experiences associated with thesechanges.

In the RAC performance improved from the beginning of 1997, with a 20 per centincrease in productivity (during a fairly stable pattern of demand) and the CSI was thehighest ever achieved. Available time increased from 65 to 85 per cent and a salesconversion rate of around one-third was achieved. There was no detrimental effect onsales in terms of volumes and revenue and there was also an increase in revenue fortravel insurance. Labour turnover, which had averaged between 27 and 35 per cent overthe three-year period prior to the changes, reduced significantly and fell to 8 per cent bythe end of 1997 and absenteeism was halved.

In Banco, the centre delivered performance in line with the service-level agreements.Customers had a 'very satisfied' rating of 93 per cent, which, according to the CentreManager, was ahead of competitors. Absence was around 7 per cent which, althoughlow for a call centre environment, was high compared to the rest of the organization.Following the introduction of new terms and conditions of employment, labour turnoverfell from a peak of 25 per cent to 10 per cent, although at the time of the research it wasreported to be rising slightly.

In both organizations, there was clear evidence of employees enjoying their workmore. In the RAC the employee satisfaction index, based on MORI attitude surveys,increased sharply. However, there was also evidence of high levels of stress, especiallyamong team leaders. All team leaders interviewed felt positively about the new roledespite having to work much harder; they considered they were more empowered, hadgreater responsibility and welcomed the opportunity to concentrate on peoplemanagement skills and their pay was much better.

Earnings increased for the majority of employees and pay compared very favourablywith other call centres. Training and development opportunities increased, there wasmore job variety and greater line management support. Morale and commitment amongcustomer advisers improved and there was a greater feeling of job security. The moreopen style of management was welcomed by all staff, communications were felt to have


improved, mainly as a result of the removal of supei-visors, and customer advisers weremore empowered in terms of dealing with customer complaints. In the words of onecustomer adviser comparing the new arrangements with the old:

If I look back, when we first came out there was no motivation for me to come to work- no-one spoke to me, there was no team spirit, no training. Now there seems to be anair of we're going places. It's quite positive. Now I come to work, I enjoy it, I like towork on the PC, I like the advancement.

However, attitudes varied and some customer advisers considered the job to be morestressful and pressurized and the working day was now more strictly monitored andcontrolled. The main grievances, however, concerned the use of the call structure andthe sales aspects of the job. All staff used the call structure although there was a lot ofinitial reaction against it. Some regarded the script as too rigid and felt threatened byusing words written for them because it took away their individual personality. Thesales side to the job was seen by some to be a disincentive to moving up because thenew bonus scheme targets were much harder to achieve than before. Other frustrationsof the new role concerned the new work stations, working bank holidays and the lackof privacy.

The situation in Banco was similar. The new terms and conditions of employmentimproved the centre's ability to recruit and retain staff and performance standardsimproved. Nine out of ten CSOs initially received an increase in their annual salary ofbetween £500 and £1,000. In addition to pay, other benefits of the job included flexibleworking hours, the opportunity for promotion for some employees, variety, a friendlyworking environment, and improving communications. Furthermore, the CSOs reportedthat the call centre compared favourably both with other call centres and with the moretraditional banking environment. The workforce at the call centre tended to be moreoutspoken, more receptive to suggestions and more constructive. As an observer froma traditional banking background remarked:

There's more optimism here and a general feeling that the place is going somewhere. . . .There isn't the tension here that you feel in other departments. It's not so threatening -there's not the old school type of person here.

The union regional co-ordinator considered that working conditions at the site werebetter than many other areas of the bank, citing good career progression, ability totransfer across departments, the open style of management and constant review ofpractices as some of the benefits. As she explained, 'It's so different here to anywherein the bank. It has been managed very well. It's really like a flagship.'

On the downside, however, there was stress and pressure, as the Call Centre Managerexplained:

It's a very structured environment - both the physical and mental constraints. The factthat they have to perform all the time is quite stressful. The fact that they have customersshouting at them, members of staff being unhelpful is stressful . . . and of course the ITis stressful.

In addition, some employees disliked the sales aspects of their job, the strict monitoringand control, and the fact that the call centre was very time orientated. As one CSOobserved:

It's very time orientated because you're signed on for 400 minutes a day. If you have notreached 400 minutes then you've not been productive. If you're supposed to sign on at20 past you cannot do so at 22 or 21 minutes past.

980 The Intemational Journal of Human Resource Management

Following our discussion of the two cases we now stand back to consider some of theimplications of our findings.

Discussion

Call centres have attractions for organizations seeking to improve their customerservices in a cost-effective way; however, they find they have to balance carefully theneeds of customers and employees. Achieving this balance is especially difficult inthese organizations because of the direct exposure which employees have to customersfor long periods. The immediacy of the production process and its highly personalcharacteristics intensify and counterpose these conflicting demands in a way which isoften absent, camouflaged, or kept at arms length in organizations outside the servicesector. Indeed, as Schneider and Bowen (1993: 40) have noted, 'Service organisations,unlike typical manufacturing organisations, have only a flimsy and permeable boundarybetween themselves and their customers'. These conflicting demands are especiallynoticeable where CSRs engage in a form of 'relationship' work, utilizing their life-styleexperience to build empathy with customer needs.

In our two cases the employers sought to manage staff through a mixture of controland commitment strategies. Consequently, there are elements of the working environ-ment which are tightly controlled with high degrees of structure to the task, closemonitoring and measurement of performance against targets. Staff have their attendancerecorded down to the last minute and their behaviour monitored in every detail even, toa degree, their leisure activities. In these respects call centres resemble the white-collarfactories described by Taylor and Bain who found that 'even in the most quality drivencall centres it is difficult to escape the conclusion that the labour process is intrinsicallydemanding, repetitive and, frequently, stressful' (1999a: 110). However, this does notprovide evidence for the 'electronic panoptican' metaphor (Fernie and Metcalf, 1998),since the effect of these controls will vary depending on the detail of the scripting, thenature, relevance, and frequency of the measures used and the penalties for non-adherence. Moreover, their actual operation is influenced by the opportunities availablefor CSRs to create some 'space' for themselves (Knights and McCabe, 1998: 181), theexistence of employee opposition (Taylor and Bain, 1999b: 15) and the degree to whichteam leaders and managers use the data available to enforce the formal rules andstandards set (Frenkel et al., 1999: 141; Deery et al., 1999: 16; Taylor and Bain, 1999b:15).

This combination of tight controls and high quality standards may lead to employeesexperiencing tensions and contradictions when carrying out their job. We find, forexample, that CSRs are trusted to represent the company to the customer, to use theirinitiative, exercise some discretion, for example by granting refunds or an overdraftfacility, and provide a high level of service, but at the same time are closely monitoredby their employer. As we have noted earlier, Deery et al. (1999: 13) found that thiscombination was most likely to lead to emotional burnout and high labour turnover;however, they also identified job-related variables, of the kind seen in our cases, whichimproved emotional well-being and labour turnover.

Initially in both cases there was a lack of alignment between the high-qualitycustomer interactions expected, the close control systems, and the HR practicesadopted. But gradually HCM practices were used so that they were more aligned withexpected high-quality customer interactions and, to some extent, with the needs ofemployees. However, the close technical controls remained with the resulting low taskdiscretion when dealing with the customer. Managers, at different paces, were seeking.


in a variety of ways, to offset some of the more negative, de-motivating aspects of thecall centre working environment by making them more 'fun' and secure places to workusing high commitment practices. After a hesitant start, and a reliance on agency staffand contingent labour, both organizations became more sophisticated in their use of HRpractices.

Employees were encouraged to take responsibility for their own performance, andthat of their teams, and make suggestions for improvements. The pay systems werechanged to reward high performers and to encourage more short-term incentives, andteamworking was introduced. Teams were not required by the technical aspects of thejob since it could be carried out independently, but instead they were used to manageindividual performance more effectively, to seek to exercise normative control overattitudes and behaviour and to provide a social dimension both at work and,occasionally, outside work. In addition, there was careful attention to recruitment andselection, extensive training and development, including the use of personal coaches,the establishment of some type of career structure and attempts to improve workingconditions.

The RAC, when faced with a substantial loss of market share, sought to increasecustomer retention by improving service levels. This included developing the newmulti-functional role of the customer adviser and supporting changes in workorganization and HR practices. In Banco, however, we saw a different approach whichdemonstrated very clearly the tensions between the need to respond to market pressuresand existing HR practices. At first the bank sought to apply its existing pay structuresand methods of recruitment, although it soon became clear that these were inappropriateto the call centre environment. There then followed a period of adjustment during whichthe local call centre management took over responsibility for setting pay, including spotrates and for recruiting staff of a very different profile to normal bank branchemployees. Eventually these new procedures and policies were adopted and proved tobe much more successful than those used originally.

This response has parallels with an earlier study where call centre managersresponded to the demands for standardization and customization with mass customizedbureaucracy which involved a combination of close IT-based controls and strongbehavioural norms, referred to as 'info-normative control', and a series of highcommitment practices (Frenkel et al., 1998: 958, 967; 1999: 91). This contributed to asituation where CSRs were well aware of the controls and largely accepted them:around half were either satisfied or very satisfied with the methods of control used andapproximately three-quarters said these controls helped them to work better andendorsed the educational value of silent and side-by-side monitoring (Frenkel et al.,1998: 967), a finding which resonates with the 'disciplined worker' hypothesisdiscussed by Collinson et al. (1998). Similarly, Deery et al. (1999: 16) found that theperception of team leader support made a significant difference to the emotional well-being and turnover of CSRs. They were less likely to object to the level and form ofmonitoring, to feel under time pressure, or to give preference to quantity over qualityand were more likely to consider promotional opportunities were available. Frenkel etal. (1999: 89) noted that, although CSR jobs involved a lot of routine work, there werealso aspects of the work which were intrinsically satisfying, with limited opportunitiesto pursue challenges and express creativity. Overall, these jobs were perceived as lessstressful than the sales and knowledge working jobs which they also studied.Consequently, they argued that the CSR 'in our study did not fit the stereotype imageof the technologically incarcerated, regimented front line worker' (Frenkel et al., 1999:91).

982 The International Joumal of Human Resource Management

This combination of fun and surveillance, as we have termed it, has a widersignificance for the debate on the use of HCM practices referred to earlier. Mostdiscussions of HCM are based on research in the manufacturing sector and suggest thatsuch practices are associated with scope or task flexibility for employees. The paradoxin call centres is that, even where high-quality service levels are required for marketsuccess, we find tightly controlled, heavily monitored, and scripted work is combinedwith these high commitment practices. It would appear, in these environments, thatthese HCM practices were adopted to ameliorate a tightly controlled work environment.HCM is not therefore necessarily associated with high scope flexibility and can be usedto offset the worst features of call centre working. These practices were needed not onlybecause of the demands of the customers, but also because of the conditions in thelabour market which created a high demand for CSRs, although these pressures mightbe overcome by siting call centres in rural areas or moving to areas of highunemployment. It is unlikely, therefore, that HCM will be correlated automatically witheither high- or low-scope flexibility; rather these practices will emerge over time as aresponse to conditions in both the product and labour markets.

The use of these high commitment strategies can be seen as simply another form ofcontrol within the workplace, as has been discussed elsewhere in the manufacturingsector (Delbridge, 1998). However, these organizations distinctively combine theintensity of work found in lean manufacturing with the need to respond immediately tocustomer demands associated with the service sector and the close monitoring madepossible by sophisticated IT systems. For example, customer response times, whichoften form part of the competitive strategy (Schoenberger, 1997), are particularlypertinent and visible in call centres making the performance of the organization highlydependent upon variations in employee attitudes and behaviour. Other organizations inthe service sector adopt a similar combination of control and commitment, for examplethe use in supermarkets of sophisticated IT controls and moves towards empowermentand involvement (Rosenthal et al. 1997).

Conclusion

This paper has examined the ways managers have sought to adapt their HR practices tosatisfy both customers and employees within two fast-changing call centres. It rejectsthe simplicity of claims that call centres are either the dark satanic mills of the latetwentieth century or the home of the semi-professional empowered worker. Instead, itexplores the more subtle paradox, in a relatively new organizational form, of imposingtight technical and procedural controls and surveillance measures while simultaneouslyadopting high commitment practices in an environment where customers are becomingmore demanding and competition is increasing. Call centres, we argue, exhibitfascinating contrasts between satisfying customer need and motivating employees,between intensive surveillance systems and normative, fun activities, and between thedemands of the product market and the pressures of the labour market. Our companieshave sought to manage these potentially conflicting pressures by balancing fun andsurveillance, by using high commitment practices in an environment where employeesare tightly constrained. The cases demonstrate the problems of satisfying the customer,improving business performance and maintaining good relations with employees in ahigh-paced work environment.

More broadly, this paper raises issues concerning the impact of the management ofhuman resources on the performance of service workplaces and has indicated a possibleresearch agenda. Much of the existing research, with the exception of Femie and


Metcalf (1998), has treated all call centres as the same. We hypothesize, on the basis ofthis and other research, that there is a wide diversity of these organizations which needsto be explored. We propose that the concept of alignment or internal fit employed in thispaper needs to be extended to include consideration of the fit between HR practices andthe external environment in a wide variety of call centres. Future research mightdifferentiate between types of call centres and examine the impact of the fit betweenproduct market strategies, HR practices and control systems on the performance of thebusiness.

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