Performance management practices in construction business - a service recovery perspective

This paper studies how service recovery perspective can be utilized in order to improve performance management practices in construction industry in Finland. The purpose is to redesign service recovery encounters to better handle negative customer experiences when service failure or other problem has occurred. From performance management point of view, the key challenge is to manage negative customer experiences in order to avoid negative impacts on the performance of the company. The analysis focuses on how negative customer encounters can be used as a source of learning and thus, improving customer and employee satisfaction and the whole image of the industry.
Literature on service failure and recovery discusses various components of unsuccessful customer experience, their cognitive elements and ways of reacting to service failures. However, this discussion is separated from the business performance management literature. Theoretically the paper combines methods from service management and performance management and contributes with its holistic approach to the role of service quality in construction business.
Empirical data was gathered first by interviewing 16 employees and customer engaging to customer service in 4 construction companies. The purpose was to identify the key pitfalls and practices of service recovery encounters in three main phases of the customer journey: 1) buying and planning a new home, 2) construction period, and 3) living in a new home). After interviews, two workshops in two companies were organized to reflect findings and to improve and create new service recovery encounter practices.
As a result, three performance management practices were identified: 1) guideline for customer recovery encounters, 2) developing systematic service recovery process and related quality metrics, and 3) developing the service oriented attitude and recovery of employees.