The Impact of the Indoor Environment on the Productivity of Call Centre Employees

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The Impact of the Indoor Environment

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<p>"</p> <p>Faculty of Business and Economics The English Language PhD Programme</p> <p>THE IMPACT OF THE INDOOR ENVIRONMENT ON THE PRODUCTIVITY OF CALL CENTRE EMPLOYEES</p> <p>By Uri Domn</p> <p>Submitted for the Degree of Doctor of Philosophy</p> <p>Tutor: Prof. Jozsef Vrs 2008</p> <p>THE TRUE THE BEAUTIFUL THE GOODThe three principles for this thesis - platonic dialogues</p> <p>RESEARCH POLICY</p> <p>'Know what you have to do and do it'(Critchlow, 1993)</p> <p>Uri Doman</p> <p>page 1</p> <p>Contents Abstract 1. Introduction 2. The Nature of Activity 3. Labour Force Break-down, HRM and Shift Policy 4. Attrition, Turnover and Absence Rates 5. Productivity Measurement 6. The Impact of Indoor Environmental Parameters (IEP) on the Performance and Productivity of Call Centre Employees 7. The Research Methodology 14 16 3 4 7 9 10 13</p> <p>8. Stepwise Regression for Satisfaction and Self-Assessed Productivity as a Dependent Variable 9. A Comparison between the Levels of Satisfaction with Indoor Environmental Parameters in Call Centres and Other 'White Collar' Segments 10. Findings 11. Conclusion 12. Recommendations 13. Summary References Appendix I Appendix II 22 23 24 24 26 27 30 34 19</p> <p>Uri Doman</p> <p>page 2</p> <p>What is a Call Centre? A coordinated system of people, technologies and strategies that effectively integrates organisational resources and multiple channels of communication to enable customer interactions that create value for customers and the organisation (Cleveland and Harne, 2004). Abstract Call centres are ubiquitous. The call centre industry is growing rapidly and permeating every segment of the 'white collar' industry and particularly the customer service sector. While most researches evaluate and dissect the centrality of non-physical determinants to the customer and employee satisfaction, organisations perceive the built environment as an expenditure that needs to be minimised. High attrition, turnover and absence rates are considered to be key issues and challenges not only confined to HRM but encompass the entire process of the design, construction and operation of call centres. This study uses data from the author's thesis to explore the interrelation between indoor conditions, employee satisfaction as a mediator variable and low productivity. The findings explicitly demonstrate low level of employee satisfaction with the built environment contributing to the chronic maladies of high attrition, absence and turnover rates. Five indices are used to represent the impact of the indoor environmental parameters (IEP) on employee well-being in general and productivity in particular and a set of recommendations are proposed as additional initiatives to offset current insufficient indoor conditions. The underlying assumption of this study is the service-profit chain concept. This approach links healthy workplace conditions to better employee satisfaction and increased productivity and consequently low rates and costs of attrition, turnover, recruitment and retention initiatives. The service-profit chain model can be interpreted as follows: employee satisfaction, productivity and loyalty drive customer satisfaction and loyalty and finally impacts organisational prosperity and profitability.</p> <p>Uri Doman</p> <p>page 3</p> <p>Keywords Call centres, HRM, Attrition, absence and turnover rates, Indoor environmental parameters (IEP), Productivity and Satisfaction. 1. Introduction Start with good people, lay out the rules, communicate with your employees, motivate them, provide adequate workplace conditions and reward them. If you do all those things effectively you cant miss. (Lee Iacocca Chrysler Corporation) Globalisation refers to the interrelation between states, societies, organisations and individuals that make up the world economic system (Acs, 2000). Globalisation, the transformation of information and communication technologies and the collapse of institutional barriers have worked to speed up change and have raised the value of the tacit skills needed to use codified knowledge effectively. The integration of call centres in the internationalisation and globalisation trends provides an efficient and effective platform for local and multi-national exchange of information and services. Advanced information and communication technologies (ICT) facilitate the effective exploitation of human resources (HR) regardless of geographic location and consequently lead to a reduction in unit labour costs (BA, HSBC and Norwich Union have all located their call centres in India, China and Malaysia, though their main business centres are in the UK.), (Hill, 2005). Multi-national companies such as Dell, transfer calls from one region to another around the globe, as an efficient technique to exploit time zone differences during peaks and lows (of call volume) (Hill, 2005). Call centres manifest the paradigm of the 'global village' in a sense that boundaries become transparent. It is estimated that approximately 3% of the total US labour force (more than 2,000,000 employees in 60,000 call centres) is employed in call centres (Mandelbaum, 2003; Krajewski, 2007). A similar percentage in the UK yields more than 800,000 employees (DTI, 2004). According to Dimension Data (Occupational Health, 2004) it is approximated that the UK alone loses more than 10 million working days a year, mainly due to high attrition rates and adverse working conditions.</p> <p>Uri Doman</p> <p>page 4</p> <p>The indoor environment can be defined by physical features of the environment such as lighting, colour, temperature air quality and noise (Baizhan, 1998). According to the Institution of Engineering and Technology (2005) nearly a third of people in the UK say they would leave their job due to the physical office environment and a further 23% have turned down a job offer due to a company's physical environment (IET, Engineering Management, June/July edition, 2006). It seems almost axiomatic that people perform better in a pleasant environment than in an unpleasant one (Lorsch and Abdou, 1994). Townsend (1997), in an article entitled How to Draw out all the Talents, states that 25% of the 'white collar' workforce enjoys their work, but the rest do not. Productivity suffers when the employee lacks a sense of well-being. Low level productivity shows up in many ways: in a higher rate of absenteeism, arriving late and leaving early, over-long lunch breaks, careless mistakes and frustration with the environment. Indoor environmental parameters (IEP) are seldom a meaningful consideration in the most basic building market transactions. The fundamental problem is that those who want and are willing to pay for improved indoor conditions do not ask for this during the market transaction, thus those capable of providing improvements are not motivated to do so (Mudarri, 2006). Research conducted in office buildings provides compelling evidence on productivity gains (or losses) of up to 15% due to improved indoor environmental conditions (Heschong, 2006; Wheeler and Almeida, 2006). A complete study of the effect of IEP on productivity should take into consideration not only physical but also non-physical factors such as organisational behaviour and culture, motivation socio/economic status and remuneration. Non-physical managerial issues in call centres such as organisational culture, emolument, etc are the subject of myriad publications. However the call centre industry lacks extensive research on the interrelation between building services such as acoustics, air-conditioning and ventilation, illumination, etc and the employee's well-being, satisfaction (as a mediator) and productivity. Extenuation of the contribution of building services to call centre employees productivity may also be attributable to massive investment in an information and</p> <p>Uri Doman</p> <p>page 5</p> <p>communication technology (ICT) platform which may not always be justified (see 'Beyond The Productivity Paradox' , by Willcocks and Lester, 1999).</p> <p>Noise Thermal comfort Lighting Internal settings Self control Ergonomics</p> <p>Physical factors Attrition Turnover rates Absence Staff retention Recruitment</p> <p>Measures of organisational system performance Productivity Profitability Effectiveness Efficiency Quality of service Quality of work</p> <p>Key issues in the call centre industry</p> <p>Non - Physical Factors</p> <p> Organisational culture Emolument, perks Job security Relations with others Work itself Autonomy Need for career structures</p> <p>Figure 1: Key issues in the call centre industry</p> <p>Uri Doman</p> <p>page 6</p> <p>2. The Nature of Activity Sometimes defined as ' electronic sweat shops', 'dark satanic mills of the 21st century' and 'human battery farms' (Fernie and Metcalf, 1998; Garson, 1988; IDS, 1999), call centres replicate a mass production attitude to customer service aiming to balance productivity components of effectiveness (the degree of accomplishment of objectives - output), efficiency (the degree to which the system utilized the "right" things- input) and the level of individual and organisational performance (Sumanth, 1984; Sink, 1985; Houlihan, 2002). Work performed by agents and supervisors is a good paradigm for many other kinds of multi-tasking. It is routinely timed with great accuracy and a high degree of concentration (Wyon and Wargocki, 2006). A significant determinant affecting the nature of activity is stress stemming from physical and non-physical sources. Stress has a decisive impact on attrition, turnover and absence rates. Working in a call centre is quite a stressful experience as agents and supervisors sit for several hours being bombarded with telephone calls and all sorts of requests some of which they cannot resolve. A typical call centre agent deals directly with customers representing varied education and income levels, age, nationality, etc. Work demands are multi-faceted and require patience, politeness and good verbal communications, logical thinking under time pressure and access to computer software and 'digital equipment farms'. Call centres are often perceived as having a negative impact on employee well-being emanating from the following determinants: (i) HRM practices; (ii) team leader support; (iii) job design;(iv) performance monitoring (Holman, 2002). Employment conditions are often highlighted as particularly stressful in comparison to other comparable sectors of 'white collar' industries. However, there is a paucity of studies that have examined the impact of non-tangible and tangible factors on wellbeing, satisfaction and productivity. Bordoloi (2004) conceives call centres as repositories of knowledge intensive operations. A competent labour force constitutes a pivotal pillar in sustaining and promoting productivity and organisational performance. HR planning and managing considerations reflect an ongoing and dynamic process rather than a stagnant one.</p> <p>Uri Doman</p> <p>page 7</p> <p>He asserts that emanating from operation management studies it is a flow of agents through a prescribed recruitment and promotion scheme which differentiate call centres. The call centre industry is divided into two groups of operation mode: inbound and outbound. In the inbound mode, the customer usually initiates a phone call and the agent provides the requested information, service, technical help desk, etc. In the outbound mode, the agent initiates the phone call with a broad range of objectives, commencing with marketing, selling, surveying, etc. Inbound call centres account for 80% of the total market share. Increased regulation and a negative customer attitude of outbound activity means that, this form of customer contact or 'voice to voice' interaction is constantly under pressure.</p> <p>Inbound Calls</p> <p>Outbound Calls</p> <p>Enquiries Help Reservation Appointment Order Payment 999</p> <p>Call Centre</p> <p>Sales Help Despatch Debt collection Appointment Sales leads Customer data</p> <p>Medium Voice Fax Email Internet Mall</p> <p>People Customer service/ support agent Centre support staff Selling agents Experts Internet/ Intranet/ Extranets Mall</p> <p>Technology Call management Databases Voice recognition Call distribution</p> <p>Figure 2: Call centre systems mode (source: Armistead et al, 2002)</p> <p>Uri Doman</p> <p>page 8</p> <p>3. Labour Force Break-down, HRM and Shift Policy HR considerations in call centres permeate the majority of managerial issues and constitute the following key challenges: (i) retention of staff ;( ii) recruitment; (iii) absence rate; (iv) turnover rate; (v) attrition rate; (vi) outsourcing; (vii) need for career structures. Armistead et al (2002) posits that day-to-day HR activities embrace the following areas: (i) creating supportive work teams; (ii) coaching teams; (iii) providing leadership; (iv) motivating. Retention of staff poses a major challenge, especially in the first three months of employment to ensure the ROI. According to the last IDS (2006/2007) survey, more than 30% of call centre operators encountered difficulties related to staff retention. Low image of the call centre industry constitutes a key factor in the recruitment of staff. Low benefits and high attrition rates discourage a competent workforce and create imbalances in the customer/employee satisfaction equation. Absence rates in call centres are considerably higher compared to other 'white collar' sectors. On average an absenteeism rate of 8% or more than 10 sickness absences per year represents a significant loss of revenues and poor productivity. Dean (2002) claims that the break down of the labour force in the call centre industry in terms of competences is heterogeneous and depends on traits such as customer segment, level of wages and inbound or outbound facilities. According to Brookes (1997) and IDS (2006/2007) a 'typical' agent is a female aged between 21-29 years of age, undergraduate, travelling by car from a dwelling in a radius of up to 10km. Data supplied by the UK Call Centres Association (2001) indicates that 10% of employees are temporarily employed through agencies, or are outsourced. In some sectors engaged with special assigned tasks the figure could rise to 80%. These findings correspond with the IDS (2006/2007) survey. Additional data provided by the survey indicates that 95% of the UK call centres employ part-time staff and the proportion of part-timers ranges from 0% to 83% with an average of 26%. Employees usually work staggered shifts to provide an ongoing service. There is, however, a misconception regarding the hours of operation. A survey by Brookes</p> <p>Uri Doman</p> <p>page 9</p> <p>(1997) discloses that only 19% of call centres are open round the clock, more than 60% employ less than 50 employees and only 4% employ more than 500 employees. The last Pay and Conditions in Call Centres 2006/2007 Survey (IDS, 2006), indicates a significant evolvement in call centre structure with an average of 636 employees and the median number being 344. Call centre retention policy embraces four categories (Communication Worker Union, 2004, www.cwu.org...</p>

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