Productivity
improvement is difficult in the service sector because of the
following reasons:
- Raising the number of
customers attended within a particular time does not help in
satisfying the customer because of which they are not likely to
return back. For example, If a salesperson in a TV shop rushes in
explaining the features of the TVs to a customer, the customer may
feel that his or her doubts about buying the product are not
answered and the salesperson is rushing in paying attention. Hence
the customer will go to the other shops that offer the best service
because the products are more likely to be the same.
- Measuring productivity
is hard in the service sector. For example, it is hard to rate the
productivity of a sales executive who sells a product worth$500 to
a customer compared to a sales executive selling $50 worth of
product to five customers in an hour. This is because both actions
are difficult and need good interpersonal skills and product
knowledge to deliver the service effectively.
- Productivity can be
increased in a non-service sector even by reducing the input
through reduction of wastes, changing the production method, etc.,
whereas in a service sector this is not possible because the input
given is people and it cannot be reduced by any means to provide
the service effectively.