Productivity Measurement in Service Operations: A Case Study from the Healthcare Environment

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Celebrate and record Productivity measurement in service operations: a case study from the healthcare environment Atul Gupta

The author Atul Gupta is a member of the Division of Professional Studies, The Richard Stockton College of New Jersey, Pomona, New Jersey, USA. Abstract Examines the issue of productivity measurement in service operations. Proposes a dynamic model for productivity measurement in service operations. This model is based on the idea that the intangible output for service operation is the quality of their services and the input is the level of skill of their employees. Both the skill level and the quality are measured on the same scale. Bases the measurement of service quality on the five dimensions suggested by Zeithaml and also bases the measurement of the skill level of employees on a six-dimensional instrument which is developed here.

The service sector is significant and is an important part of the US economy. Service accounts for approximately three-quarters of the gross national product and nine out of the ten jobs the economy creates[1]. It is also estimated that, by the end of the century, up to 90 per cent of the employees currently working in the manufacturing sector will be working in the service sector. Since service plays an important role in every organization, both service dominated and product dominated, service management takes on an immensely significant role in the 1990s. The service industry in this decade has seen a move away from quick-and-easy fast track solutions such as quality circles towards a more practical, comprehensive and management approach – service quality management. The health services sector is using service quality management extensively. Service quality management basically extends the standard of quality which people expect in clinical care into every aspect of a hospital’s services. Service quality management involves a pervasive, across the board integration of quality care, quality of services, and quality of an administrative system, synchronized to deliver ever higher standards of performance in everything a hospital does. Given that health-care organizations are undergoing these fundamental changes, it is essential to analyse the factors that constitute the effectiveness of service quality management programmes. This article addresses the issue of productivity measurement in a service quality management environment. To my knowledge no one has yet attempted to assess empirically the productivity of a service operation. This analysis could provide managers with additional information about the dynamics of service organization.

Traditional productivity measures
The majority of firms use traditional accounting measures to evaluate the performance of individual departments or work groups. In such cases, productivity may be simply defined as the ratio of what is given to the system and what is produced, or the ratio of output to input. In a pure theoretical form productivity measures are measures of physical phenomena, such as the transformation of energy into work or other surrogates. Ruch[2] represents productivity as a measure of the efficiency of the transformation process. 31

Managing Service Quality Volume 5 · Number 5 · 1995 · pp. 31–35 © MCB University Press · ISSN 0960-4529

Productivity measurement in service operations

Managing Service Quality Volume 5 · Number 5 · 1995 · 31–35

Atul Gupta

Traditionally, productivity measures have been categorized as either partial productivity measures or total productivity measures. Partial productivity measures represent the ratio of output to one input or some portion of inputs whereas total productivity compares all outputs to all inputs. Total productivity measures are more difficult to implement at the firm or work group level than at more aggregated levels, such as national or sectoral levels.

Why traditional productivity measures are not appropriate for service operations Although...
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