Question:

A bank has a section of its business which has two functions:-

1. answering credit control queries from customers both by telephone and in writing;

2. investment business queries involving responding by telephone and in writing about surrender values, assignment of policies and maturity value quotations The staff are arranged in four workgroups one for each of four geographical areas. Each workgroup consists of 30 employees plus supervisor. Each employee is expected to answer telephone enquiries and a proportion of written enquiries for both credit control and investment business.

Flexi-time working is allowed and considerable overtime is paid in addition to a basic salary payment. There is a high backlog of written enquiries and customers have been complaining about poor telephone response times and quality of response.

High staff turnover exists and staff morale is low.

As a management accountant you are part of a team required to investigate and report on performance measurement and effectiveness of operations. Required:-

(a) Explain, giving examples of their incidence in the provision of the above services, the following

(a) intangibility

(b) heterogeneity

(c) simultaneity

(d) perishability

(b) Fitzgerald has identified six areas for which performance could be measured for key processes in the service sector. Explain the different areas and give examples of the indicators that can be used.