Human Resource Development Systems for Customer Care
Services Management in Telecommunications Companies:
A Comparative Analysis of Sri Lanka and Japan

Research reportpresented to theJapan Institute for Labour Policy and Training (JILPT), Tokyo, JAPAN
in fulfillment of the requirements for theLong-term Foreign Researcher Invitation Programby
Mudiyanselage Saman Dassanayake
Senior Lecturer in Management Studies, Faculty of Management and
Finance, University of Colombo, Colombo, SRI LANKA
E-mail: msamand@sltnet.lk

Counterpart Researcher: Mr. Haruhiko Hori
Researcher, Employment Strategy GroupThe Japan Institute for Labour Policy and Training (JILPT)
Tokyo, JAPANE-mail: hhori@jil.go.jp

March 2005

Acknowledgments
This research report is an outcome of a collective human effort with the application ofknowledge, experience, wisdom, insights, time, patience and generosity. As the total isvast, I must limit these acknowledgements to the people and institutions directly
involved in this research project at its various stages. Thus I would like to place on
record my profound gratitude to
z

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The Japan Institute for Labour Policy and Training (JILPT) for providing me withthe opportunity to undertake this study under its Long-term Foreign Researcher
Invitation Program
All members of the staff of International Affairs Department and other units of the
JILPT for creating a remarkably cooperative, supportive and friendly environment
where I could pursue my research interests with memorable happiness
Professor Hiroyuki Fujimura, Dean of Business School of Innovation Managementof Hosei University, Tokyo and my lifelong mentor and Mr. Haruhiko Hori,
Researcher of JILPT and my counterpart researcher for supervising me through theprocess of planning and executing this research project
Professor Akira Wakisaka, Graduate School of Economics of Gakushuin University,
Tokyo who is the academic supervisor of my PhD program there and lifelong
mentor for guiding me through the PhD research project which laid the real
foundation for this study. Though the scope of research that led to producing thisPhD thesis is different from the scope of this study most of the material in thisresearch report is drawn appropriately from this PhD thesis
Professor Kazunari Honda, Faculty of Economics of Kokugakuin University,
Tokyo for playing a vital behind-the-scenes role in building the infrastructure forme to conduct this study at JILPTAll the valued employees of Sri Lanka Telecom Limited (SLT), Nippon Telegraphand Telephone East Corporation (NTT East) and 116 Call Center of Kawasaki Kita
Branch of NTT Service Kanagawa Corporation for participating enthusiastically in
my data collection interviews, willingly sharing their precious knowledge,
experience, wisdom and understanding
Mr. Setsuya Kimura, former Head of the Group of Marketing and Internet Protocol
of SLT and presently at Nippon Telegraph and Telephone Communications
Corporation, Tokyo, Mr. Ajantha Seneviratne, General Manager/Head of Divisionof Sales of SLT, and Ms. Amali Kumarasinghe, Marketing Officer of SLT, forbeing instrumental in organizing all my data collection work at SLT
Mr. Hiroshi Ishizu, Director, Department of Negotiation and Policy, and Mr.
Kazumi Tanaka, Department of Negotiation and Policy, both of All NTT Workers’
Union of Japan, Mr. Syunsuke Tanabe, Senior Manager, Mr. Motohide Kitamura,
Associate Manager, and Mr. Kiminori Iwasaki, all of the Customer Service
Department of NTT East, and Mr. Kouhei Nishiwada, Associate Manager and Ms.
Seiko Inoda, both of the Sales and Customer Service Department of NTT East andMr. Minoru Ishii, Manager of 116 Call Center of Kawasaki Kita Branch of NTT
Service Kanagawa Corporation for arranging conveniently data collection
interviewsiiz All my colleagues and others of academic, administrative and academic support

staff of the University of Colombo, Sri Lanka, my wife, our daughter, my mother,siblings, brother-in-law, mother-in-law and other in-laws for their unstinting
cooperation and support for my progress.
Although the names of many other individuals and organizations who cooperated withme in this research project are not mentioned in these acknowledgments, my sincerest
appreciation and admiration are also extended to all of them.
I invite all readers of this research report to offer their criticism and comments tocontinuously improve the richness of my findings. That would enormously encourage
my lifelong drive to explore more of the fascinating world of human interactions.

Mudiyanselage Saman Dassanayake
March 10, 2005iii

Highlights
The telecommunications sector in Sri Lanka has experienced deep and remarkabletransformations since the mid-1990s. They include, inter alia, Sri Lanka Telecom
Limited (SLT), the state-owned telecommunications monopoly, forming a strategic
partnership with Nippon Telegraph and Telephone Corporation in Japan (NTT) under
its privatization program and many other telecommunications companies who areinternationally known commencing commercial operations in Sri Lanka’s telecom
market. Amid structural and regulatory changes, telecommunications companies, morethan other utilities, have dramatized a gradual paradigm shift from price to customer
service as the major source of building and sustaining a competitive edge for long-term
growth and survival. A central issue in the research presented in this report is theconfiguration of human resource management and human resource development (HRD)systems to support the delivery of customer service, maximizing customer retention.
This research explores predominantly what specific soft technologies or soft
management practices that Nippon Telegraph and Telephone Communications
Corporation in Japan (NTT Com) has transferred to SLT in the sphere of customer
service, human resource management and HRD and how such technologies contributeto SLT’s delivering better customer service. Taking two one-stop shops, i.e., Teleshops
of SLT and 116 call center of Nippon Telegraph and Telephone East Corporation in
Japan (NTT East), as the units of analysis, a comparison between the two was achieved
with particular reference to organization of customer service function, employee
classification system, job structure, staffing system, performance evaluation,compensation system and HRD system as they are applied to front-line customer
service employees. The data in this study were collected using mainly the field role ofobserver-as-participant and semi-structured in-depth personal interviews with front-line
customer service employees and various levels of management in firms and union
leaders of SLT. The significant reliance placed on the observer-as-participant method inthis study contrasts with the approach in much of the case study research in humanresource management and HRD.
The comparison between two units found many similarities and differences in terms oforganization of customer service function in each unit and their internal workorganization. Amongst them, the highest degree of transferability is evident in themanner in which jobs are defined broadly and its implications for skill formation offront-line customer service employees. Thus front-line customer service employees ofTeleshops perform a wide range of front-line and back office functions with regular job
rotation schedule decided by the manager of each Teleshop. This broad definition ofjobs has resulted in these employees perceiving themselves to be generalists capable ofhandling many interrelated tasks. From the perspective of the customer, broadly skilled
customer service employees could minimize the time and cost of searching for
information on new products and services as they are able to attend to a variety ofcustomer needs and requests. This study also found the high possibility of transferringcertain soft management practices from NTT to SLT with appropriate reconfiguration ofhuman resource management and HRD practices.

iv

Contents
Acknowledgments ------------------------------------------------------------------------Highlights ---------------------------------------------------------------------------------Index of Tables ---------------------------------------------------------------------------Index of Figures --------------------------------------------------------------------------Index of Acronyms and Abbreviations --------------------------------------------------

ii
iv
viii
x
xi

Section 1 - Introduction ----------------------------------------------------------------

1

1.1 Standpoint and Objectives of the Research ---------------------------------------1.2 An Overview of the Telecommunications Sector in Sri Lanka: A Macro
Economic Perspective ----------------------------------------------------------------1.3 Privatization of Sri Lanka Telecom Limited and the Involvement of Nippon
Telegraph and Telephone Communications Corporation: A Brief Overview -1.4 Research Issue: Importance of Customer Service and Human Resource
Development ---------------------------------------------------------------------------1.5 Empirical Setting of the Research: Sri Lanka Telecom Limited and Nippon
Telegraph and Telephone East Corporation ----------------------------------------1.5.1 Sri Lanka Telecom Ltd (SLT) -----------------------------------------------------1.5.2 Nippon Telegraph and Telephone East Corporation (NTT East) -------------1.6 Scope and Delimitations of the Research ------------------------------------------1.7 Organization of the Report ------------------------------------------------------------

1

10
11
12
13
14

Section 2 - Literature Review ----------------------------------------------------------

17

2.1 Skill Requirements --------------------------------------------------------------------2.2 Skill Formation Systems --------------------------------------------------------------2.2.1 On-the-Job Training (OJT or Formal OJT) --------------------------------------2.2.2 Informal OJT -------------------------------------------------------------------------2.2.3 Off-the-Job Training (OffJT) ------------------------------------------------------2.3 Incentives for Skill Formation -------------------------------------------------------2.4 Career Development ------------------------------------------------------------------2.5 Human Resource Development in Services Sector -------------------------------2.6 Originality of the Present Study ------------------------------------------------------

17
25
25
29
30
31
36
40
42

Section 3 - Research Methodology and Framework -------------------------------

47

3.1 Ontological and Epistemological Foundations ------------------------------------3.2 Research Strategy: Case Study Research -------------------------------------------3.3 Focus of the Study: Teleshops and 116 Call Center ------------------------------3.4 Purposive Sampling -------------------------------------------------------------------3.5 Methods of Data Collection ----------------------------------------------------------3.6 Triangulation and the Quality of Research Strategy ------------------------------3.7 Research Framework -------------------------------------------------------------------

47
48
49
51
53
57
59

v

4
8
8

Section 4 - Sri Lanka Telecom Limited ----------------------------------------------

63

4.1 Institutional Profile --------------------------------------------------------------------4.2 Organizational Transformation under the Management of Nippon Telegraphand Telephone Communications Corporation -------------------------------------4.3 Trade Unionism and Workplace Cooperation: Landmarks of Interactions
between NTT-style Management and Trade Unions -----------------------------4.4 Organization of Customer Service Function ---------------------------------------4.5 Teleshops -------------------------------------------------------------------------------4.5.1 A Brief Overview of the Evolution of Teleshops -------------------------------4.5.1.1 Marketing and Customer Service Function in Pre-privatization Era andChanges Introduced by NTT-style management ------------------------------4.5.1.2 Opening of Teleshops ------------------------------------------------------------4.5.1.2.1 Teleshops during the Period of the First NTT Services Agreement(1997-2002) ------------------------------------------------------------------------4.5.1.2.2 Teleshops since March 2003 --------------------------------------------------4.5.2 General Organization of and Workforce Distribution among Teleshops ----4.5.3 Employee Classification System of Teleshops ----------------------------------4.5.4 Job Structure of Staff of Teleshops -----------------------------------------------4.5.4.1 Job Content of Teleshop Staff ---------------------------------------------------4.5.4.2. Competency Requirements of Teleshop Staff --------------------------------4.5.5 Staffing System of Teleshops ------------------------------------------------------4.5.5.1 Recruitment and Selection of Staff of Teleshops -----------------------------4.5.5.2 Prior Experience of Staff of Teleshops -----------------------------------------4.5.6 Performance Evaluation System for Staff of Teleshops -----------------------4.5.7 Compensation System and Incentives for Competency Formation by Staffof Teleshops --------------------------------------------------------------------------4.5.8 Human Resource Development System of Staff of Teleshops ----------------4.5.8.1 Competency Formation System for Staff of Teleshops ----------------------4.5.8.2 Career Structure of Staff of Teleshops ------------------------------------------

63
66
72
78
80
81
81
84
86
89
90
93
94
94
97
104
104
107
108
112
116
117
122

Section 5 – Nippon Telegraph and Telephone East Corporation ----------------

126

5.1 Introduction --------------------------------------------------------------------------5.2 116 Call Center ----------------------------------------------------------------------5.2.1 General Organization and Workforce Distribution of 116 Call Center ----5.2.2 Employee Classification System and Job Structure of Staff of 116 Call
Center -------------------------------------------------------------------------------5.2.3 Staffing System of 116 Call Center and Prior Experience of Its Staff -----5.2.3.1 Staffing System of 116 Call Center ------------------------------------------5.2.3.2 Prior Experience of Telephone Advisors of 116 Call Center -------------5.2.4 Performance Evaluation System for Telephone Advisors of 116
Call Center --------------------------------------------------------------------------5.2.5 Human Resource Development System of Staff of 116 Call Center --------

126
127
127

vi

128
135
135
137
139
142

Section 6 – Comparison between Teleshops and 116 call Center ----------------

145

6.1 Variables for Comparison -------------------------------------------------------------

145

Section 7 – Concluding Remarks -------------------------------------------------------

153

7.1 Transferring Soft Technologies (Soft Management Practices) from NTT Com
to SLT -----------------------------------------------------------------------------------7.2 Transferred Soft Management Practices and Their Contribution to Delivering
Better Customer Service --------------------------------------------------------------7.3 Limitations of the Study --------------------------------------------------------------7.4 Directions for Future Research -------------------------------------------------------

153
156
158
160

Bibliography --------------------------------------------------------------------------------

162

Appendix A - Protocols for Semi-structured Interviews Conducted at
Sri Lanka Telecom Limited ----------------------------------------------

176

Appendix B - Protocols for Semi-structured Interviews Conducted at
Nippon Telegraph and Telephone East Corporation ------------------

182

Appendix C - Partial Organization Chart of Sri Lanka Telecom Limited(in post-privatization era) -------------------------------------------------

191

Appendix C1 - Partial Organization Chart of Sri Lanka Telecom Limited(in immediately pre-privatization era) ---------------------------------

192

Appendix D - Partial Organization Chart of Regional Organization of Sri Lanka
Telecom Limited -----------------------------------------------------------

193

vii

Index of Tables
1.1

1.2
1.3
1.4
2.1
2.2
2.3
2.4
3.1
3.2
3.3
3.4
3.5
3.6
3.7
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20

Cumulative Number of Licenses Granted by the Telecommunications
Regulatory Commission of Sri Lanka under Section 17 of the Sri
Lanka Telecommunications Act, No. 25 of 1991
Category of Service and Subscriber Base (cumulative)
Fixed and Cellular Telephony Service Providers in Sri Lanka
Business and Major Subsidiaries of NTT Group
Some Illustrations of Studies Examining Skill Requirements
Some Illustrations of Studies Examining Skill Formation Systems
Some Illustrations of Studies Examining Incentives for Skill
Formation
Some Illustrations of Studies Examining Career Development
Ontological, Epistemological and Methodological Assumptions of
Qualitative Inquiry
Teleshop Services
116 Call Center Services
Sample of Interviewees at SLT
Sample of Interviewees at NTT East
Areas of Work Covered as an Observer-as-Participant at Teleshops of
SLTDefinition of Variables in Research Framework (Part II)
Composition of Board of Directors of SLTGroup-/Function-wise Distribution of Workforce of SLT (as of June
2003)
Major Categories of Employees (Job Grade-wise)
Name of Trade Unions and Federations of Trade Unions in SLT (as ofAugust 2003)
Major SLT-Customer Interface Points and Types of Customers
Differences in Operations between RTOs and Teleshops
Regional and Provincial Classification of SLT Operations
Teleshop-wise Distribution of Workforce (as of September 2003)
Job Titles and Job Grades of Teleshop Staff
Classification of Teleshops and Ideal Type Job Grades for Teleshop
Managers
Work Content of Staff of Teleshops
Competency Requirements of Teleshop Staff
Number of Direct Exchange Lines per Employee
Criteria for Evaluating Teleshop Employees on M Grades
Overall Performance Grades and Corresponding Range of Marks
Criteria for Evaluating Teleshop Employees on Executive Grades
Points Assigned to Overall Performance Grades
Content of Orientation Program for Teleshop Employees
Order of Assigning Tasks to a Newcomer (from easiest to moredifficult)Areas Covered in OffJT Programs for Teleshop Employees andConducted at Training Centers of SLT

viii

4
5
6
12
24
32
37
41
47
50
51
53
53
55
62
65
66
66
73
80
89
91
92
93
95
96
103
105
108
110
110
112
117
118
120

4.21
4.22
4.23
4.24
4.25
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
6.1
7.1
7.2

Areas Covered in Training on Telecommunication BusinessConducted by NTT West, in Kyushu, Japan
Competency Formation System for Teleshop Employees
Criteria for Promotions for Teleshop Employees on Non-executive
GradesCriteria for Promotions for Teleshop Employees on Executive Grades
Average Points Required for Promotion Across Executive Grades
Major NTT East-Customer Interface Points and Types of Customers
Composition of Workforce of 116 Call Center Chosen for the Study
Job Titles and the Fundamental Nature of Work of 116 Call Center
Staff
Work Content of Telephone Advisors of 116 Call Center
Competency Requirements of Telephone Advisors of 116 Call Center
Types of Employees and Their Positions
Factors in Evaluating Total Performance of Telephone Advisors
Performance Grades for Telephone Advisors (Regular Employees)
Comparison between Teleshops and 116 Call Center
Teledensity in Sri Lanka
Internet and E-mail Subscribers in Sri Lanka

ix

121
122
122
123
125
126
128
129
130
134
137
140
141
146
156
157

Index of Figures
1.1
1.2
1.3
2.1
2.2
3.1
3.2

4.1
4.2
4.3

4.4
4.5
4.6
4.7
5.1
5.2
7.1

Number of Persons Employed in Telecommunications Sector
Growth of Teledensity in Sri Lanka
Structure of the Report
Operations of a Mass-Production Assembly LineClassification of Skill Formation Systems
Research Framework (Part I) - Institutional Relationships
Research Framework (Part II) - Relationship between Organization ofCustomer Service Function, Job Structure of Customer Service
Employees, Human Resource Management Functions and Their
Outcomes
Shareholding Structure of SLT
Scope of Responsibility of Regional Telecommunications Engineer(RTE) (before changes were introduced)
Scope of Responsibility of Regional Telecommunications Office
Manager (RTO manager) and Partial Organization Structure ofRegional Telecommunications Office (RTO) (after changes wereintroduced under NTT-style management)
Structure of Teleshops Section (until February 2003)
Organization of a Teleshop
Composition of Compensation for Non-executives and Executivesof Teleshops
Training for Teleshop Employees on Products and Services andEquipment Knowledge
Organization of Work in 116 Call Center
Employment Status of the Workforce of All 116 Call Centers of NTT
East
Theoretical Connection of Sub-variables Influencing Similarities andDifferences between Teleshops and 116 Call Center

x

5
6
16
19
24
60

61
65
83

83
87
95
115
120
130
135
154

Index of Acronyms and Abbreviations
DOT
GOSL
HRD
ILO
JICA
NTT
NTT Com
NTT East
NTTPC
NTT West
RTE
RTE Office
RTO
RTO manager
SLT
SuntelTeliaSonera
TRCSL

Department of Telecommunications
Government of Sri Lanka
Human Resource Development
International Labor Organization
Japan International Cooperation Agency
Nippon Telegraph and Telephone Corporation (in Japan)
Nippon Telegraph and Telephone Communications Corporation(in Japan)
Nippon Telegraph and Telephone East Corporation (in Japan)
Nippon Telegraph and Telephone Public Corporation (in Japan)
Nippon Telegraph and Telephone West Corporation (in Japan)
Regional Telecommunications Engineer
Regional Telecommunications Engineer's Office
Regional Telecommunications Office
Regional Telecommunications Office Manager
Sri Lanka Telecom Limited (in Sri Lanka)
Suntel Limited (in Sri Lanka)
TeliaSonera AB (in Sweden)
Telecommunications Regulatory Commission of Sri Lanka

xiSection 1
Introduction
1.1 Standpoint and Objectives of the Research
Many countries in the world have witnessed, over the last few decades, a dramaticchange in the importance of services and the role of service sector organizations(Edwards & Croker, 2001; Nankervis & Pearson, 2002; Sharma, 2002). The service
sector of the economy of Sri Lanka too has undergone deep-rooted changes in termsof its structural composition, contribution to the gross domestic product (GDP) andemployment over the past three decades. In Sri Lanka’s economy, services as aproportion of the GDP have grown from 42 percent in 1970 to 54 percent in 2002
(Asian Development Bank [ADB], 2002; Central Bank of Sri Lanka [CBSL], 2003a).
In addition, the service sector accounted for 38 percent of total employment in 1992
and 45 percent in 2002 (CBSL, 2002, 2003b). Liberalized economic policies
introduced in the late 1970s, the process of privatization of state-owned enterprises,
which gathered momentum from the latter part of the 1980s, and increased
participation of private, including foreign, investors in infrastructure development aresome of the factors that have contributed to this notable expansion of the service
sector in the economy of Sri Lanka (Dassanayake, 2003). Within the service sector,
wholesale and retail trade is the largest sub-sector, contributing on average 21.4
percent to the GDP during 1998-2002 (CBSL, 2003a). Despite the sectoralinterdependencies of the economy, the telecommunications sector has grownparticularly quickly since 1996, being one of the fastest growing sub-sectors within
the service sector. Its growth rate was 19 percent in 2002, reflecting the continuity ofits double-digit growth path (CBSL, 2003a).
A highly visible consequence of the phenomenal developments in thetelecommunications sector in Sri Lanka is the emergence of competition across thesector, stimulating different service providers to strategize innovatively for
penetrating the market whilst ensuring long-term growth and survival throughcustomer retention. Although there exist several means for building and sustaining
the competitive edge of a firm, the fundamental nature of the telecommunicationsindustry has prevented players in the market from employing traditional hard
technology-based mechanisms. Instead, customer service as a soft technology-based
mechanism has brought a new dimension to the cutting edge-related practices offirms functioning in the sector. Recent developments in the service industry and thegrowth of customer contact jobs have stimulated managers to perceive thesignificance of “the moment of truth,” because of its contribution to the formation of
the global image of the company and capability to influence future consumption
decisions of the customer (Korczynski, 2002). Adopting customer care as the sourceof competitive strength should necessarily be twinned with focusing on humanresources. Thus, customer service delivered through a competent, committed andmotivated workforce is believed to be capable of enhancing the competitiveness ofthe firm. The paramount importance of managing and developing, among others,

1

front-line customer service employees for delivering better customer service isequally emphasized, highlighting the close relationship between customer
satisfaction and front-line employee satisfaction (Korczynski, 2002). In explaining
the vitality of human resources in building, sustaining and continuously improving
the service quality, Korczynski wrote:
Quality customer service requires professional well-trained individuals that have job
security, compensation that reflects our skills and commitment to the company,
respect, career development opportunities, continued education and a voice.
Amazon.com cannot sustain the standard of excellence that it has attained withanything less than a true commitment to these core values. (CNN website, 16
November 2000) (Korczynski, 2002, p. 185).

Advances in the telecommunications sector, especially since 1996, mean that it has
been able to attract some internationally known telecommunications giants to Sri
Lanka. In effect, they have become stakeholders through substantial participation in
the equity capital and management of several telecommunications companies in Sri
Lanka. For example, Nippon Telegraph and Telephone Corporation in Japan(hereinafter referred to as “NTT”) bought shares in Sri Lanka Telecom Limited(hereinafter referred to as “SLT”) and also became its strategic partner in 1997.1
Similarly, TeliaSonera AB in Sweden (hereinafter referred to as “TeliaSonera”)
became the main shareholder in Suntel Limited in Sri Lanka (hereinafter referred to
as “Suntel”) and has participated in its management since its inception in 1996.
When a foreign company invests and participates in the management of a joint
venture in another country, it brings in management policies and practices from thehome company, which, in turn, influence strategic and operational level functions of
the joint venture (Takamiya, 1985). One of these policy and practice areas is inrespect of human resource management and human resource development(hereinafter referred to as “HRD”). The expansion of the service industry worldwide
has resulted in the inclusion of customer service as a significant policy and practicearea that foreign companies transplant in their joint venture operations overseas.
Given this scenario, SLT’s, for example, customer service, human resource
management and HRD could reasonably be thought of as being influenced bypolicies and practices of its major foreign shareholder and strategic partner. Each setof policies and practices in customer service, human resource management and HRD
that a foreign partner has brought in and that has been adopted in the host-country
firm, along with practices of its own, may render a variety of outcomes in terms ofcustomer retention and the quality of human resources. Through comparative
research, these phenomena could be explored and understood.
There are two types of objectives of this research, namely primary and secondary
objectives. Thus the present research aims at making clear and achieving the three
primary objectives outlined below through undertaking a comparative study between
SLT and Nippon Telegraph and Telephone East Corporation (hereinafter referred toas “NTT East”). The realization of these objectives is believed to be capable of1

NTT transferred its full share ownership in SLT to Nippon Telegraph and Telephone
Communications Corporation (hereinafter referred to as “NTT Com”) in March 2000.

2

contributing to set guidelines for creating a path towards further advancement of
human resource management and HRD for customer care services management in
SLT. This is clear, particularly in that SLT has already laid the foundation to develop
gradually a state-of-the-art call center that can respond to a variety of queries from
customers and potential customers (SLT, Annual Report, 2003). In addition, a
research undertaking of this nature carries the potential of offering many lessons forother companies in telecommunications and other sectors of the service industry in
configuring their customer service and human resource management and HRD todeliver a better service to the customer. In this regard, the “Telecom City” concept of
SLT, as a pioneering initiative to establish a hub that provides infrastructure,connectivity, learning facilities and technology for call centers is a good example thatreflects the significance of the expansion of operations of firms involved in theinformation and communications technologies sector (SLT, Annual Report, 2003).
Hence, the primary objectives of this study are to:(1) identify what specific soft technologies or soft management practices2 thatNTT Com, as the major foreign shareholder and strategic partner, hastransferred to SLT in the sphere of customer service, human resource
management and HRD for delivering better customer service(2) compare SLT and NTT East with respect to the organization of customer
service function and major human resource and HRD variables affecting
front-line customer service employees(3) assess how soft technologies transferred by NTT Com contribute to SLT’s
delivering better customer service.
The secondary objectives, as a means to achieve these primary objectives, are to:(1) explore the organization of customer service function(2) understand how the organization of customer service function affects major
human resource and HRD variables as they relate to front-line customer
service employees(3) understand how the management style of the major foreign
shareholder/strategic partner influences the organization of customer service
function and in turn how it affects major human resource and HRD variables
as they relate to front-line customer service employees.

2

The researcher’s selection of the word “soft technologies” vis-à-vis “hard technologies” refers to theintangible resources such as accumulated knowledge contained in systems, processes, policies andstrategies. At a practical level, employees of the host country firm need to exert more mental rather
than physical effort to acquire this knowledge through interaction with employees dispatched by theforeign partner as a mechanism of transferring technology. In contrast, physical labor plays asignificant role in absorbing hard technologies in tangible form. Researchers like Gill and Wong haveused the phrases “soft management practices” and “hard management practices” (Gill & Wong, 1998,
p. 119). An in-depth reading of their work finds that the meaning of these words correspond to themeaning of soft technologies and hard technologies, respectively.

3

1.2 An Overview of the Telecommunications Sector in Sri Lanka: A Macro
Economic Perspective
In recent years, the telecommunications sector worldwide has experienced an era oftransformation through the restructuring of individual firms, the liberalization andderegulation of markets, the privatization of state-owned telecom monopolies andrapid advancement in information and communications technology. Similarly, thetelecommunications sector in Sri Lanka has embarked on pro-competition
institutional reforms in concert with clearly visible expansion of
telecommunications-based services and the utilization of modern technology. From ahistorical base more than a century old, these institutional reforms since the 1980s
have resulted in changing the developmental and competitive dynamism of thetelecommunications sector, inviting the attention of the general public andresearchers alike (Jayasuriya & Knight-John, 2000; Samarajiva, 1993). In effect,
there has been an increase in the number of service providers, their subscriber base,the array of products and services offered and the number of persons employed in thetelecommunications sector (see Tables 1.1 and 1.2 for the number of service
providers and their subscriber base, respectively, and Figure 1.1 for the number of
persons employed in the telecommunications sector).
Table 1.1
Cumulative Number of Licenses Granted by the Telecommunications Regulatory
Commission of Sri Lanka under Section 17 of the Sri Lanka Telecommunications Act, No. 25
of 1991
Category of service
Number of licenses granted(as of the first quarter of2003)
3
Fixed access telephone service (fixed telephony)
Cellular/mobile telephone service
4(cellular/mobile telephony)3
6
Data communications (facility-based)
Data communications (non-facility-based) and Internet
23
service providers
4Radio paging
1
Trunk mobile radio
1
Leased circuit providers
2
Licensed payphone service providers
30
External gateway operators
74
Total
Source: Economic Division, Telecommunications Regulatory Commission of Sri Lanka(TRCSL), 2003.

3

Words such as cellular telephony and mobile telephony are used interchangeably in this report asthey are identical in terms of the meaning conveyed.

4

Table 1.2
Category of Service and Subscriber Base (cumulative)
Year
Fixed telephony Cellular telephonyInternet andRadio paging
E-mail
121,3881990
1,800
125,834
1991
2,644
135,504
1992
14,687
157,774
1993
29,182
180,724
1994
51,316204,350
1995
10,721
2,504
71,029255,049
1996
10,82910,195
114,888341,622
1997
10,511
18,984
174,202523,529
1998
10,30025,535
256,655
669,113
1999
7,009
40,497430,202
767,411
2000
6,178
61,532
667,662
827,195
2001
3,541
73,468
931,580
883,108
2002
Source: Economic Division, TRCSL, 2003.
Notes: (1) TRCSL has published statistics of wireline and wireless local loop operators (asone category) separately since 1996.
(2) Figures appearing under fixed telephony contain the number of subscribers of both
wireline and wireless local loop operators.
(3) The decrease in the subscriber base for radio paging may be due to the growth of cellular
telephony.
Figure 1.1
Number of Persons Employed in Telecommunications Sector
Number of Persons Employed

Number of
Persons

14000
12000
10000
8000
6000
4000
2000
0
1996

1997

1998

1999
Year

2000

2001

2002

Source: Economic Division, TRCSL, 2003.

Overall, these developments have contributed substantially to the growth ofteledensity4 in Sri Lanka in both fixed and cellular telephony categories of services
4

Teledensity is a measure of the number of phone lines per 100 of population. Between 40 and 50
lines per 100 of population indicates what is considered fairly good density whereas under 10
indicates fairly poor density (Newton’s Telecom Dictionary, 2003, p. 792).

5

over the past eight years (see Figure 1.2). Thus, the telecommunications sector is
emerging, today, as a vital facilitator of the socio-economic development of Sri
Lanka, while turning itself gradually into a demand-driven enterprise as opposed toits supply-driven status of many years ago.
Figure 1.2
Growth of Teledensity in Sri Lanka
Fixed Telephony
Cellular Telephony
Total Teledensity
12

Lines per 100
of Population

Number of Phone

10
8
6
4
2
0
1995

1996

1997

1998

Year

1999

2000

2001

2002

Source: Economic Division, TRCSL, 2003.

Among the various changes that have occurred in the telecommunications sector, themost significant historically was the expansion of the number of fixed telephony andcellular telephony operators maintaining their own public switched telephone
network (PSTN).5 Until 1988, SLT was the only fixed telephony service provider
operating in Sri Lanka and the entry of operators providing cellular telephony and
fixed telephony services into the telecommunications sector began in the late 1980s.
Table 1.3 presents some basic information on companies currently operating fixedand cellular telephony networks in Sri Lanka.
Table 1.3
Fixed and Cellular Telephony Service Providers in Sri Lanka
Name of the company
Category of service
Sri Lanka Telecom Ltd (1991)

Fixed telephony(wireline operator)

Suntel Ltd (1996)

Fixed telephony(wireless local loop
operator)

5

Main shareholder/
strategic partner
Government of Sri Lanka/NTT
Communications Corporation in
Japan (strategic partner)
Overseas Telecom AB in
SwedenPSTN (Public Switched Telephone Network) refers to the local, long distance and international
phone system which we use every day (Newton’s Telecom Dictionary, 2003, p. 643).

6

Table 1.3 continued …
Lanka Bell (Private) Ltd (1996)

Fixed telephony(wireless local loop
operator)

Transmarco Ltd in Singapore

Mobitel (Private) Ltd (1993)

Mobile telephony

Sri Lanka Telecom Ltd

Lanka Cellular Services(Private) Ltd (1992)

Mobile telephony

Hutchinson Telecommunication
International Ltd in Hong Kong

MTN Networks (Private)
Ltd/Dialog GSM (1993)

Mobile telephony

Telekom Malaysia in Malaysia

Millicom International Cellular
Mobile telephony
Celltel Lanka (Private) Ltd
S.A. in Luxemburg(1995)
Source: Author’s records.
Note: Figures in parentheses show the year in which the license was issued to the operators.
However, it should be noted that there is a gap between the year of the issuance of thelicense and the year of commencement of operations. Thus, the year of commencement ofoperations of SLT was 1880; Mobitel commenced in 1994, Lanka Cellular Services in 1997,
MTN Networks in 1995 and Celltel Lanka in 1988.

Another vital development that took place in the telecommunications sector in Sri
Lanka during the past decade was the establishment of the Telecommunications
Regulatory Commission of Sri Lanka (hereinafter referred to as “TRCSL;” thisabbreviation appeared earlier in sources and notes for Tables and Figures). The
gradual liberalization and deregulation of telecommunications and the newenvironment that emerged can be seen as the factors that stimulated the establishmentof this new organization in 1996. TRCSL is a statutory body established under the
Sri Lanka Telecommunications Act, No. 25 of 1991, as amended by the Sri Lanka
Telecommunications (Amendment) Act, No. 27 of 1996 as the successor to the officeof the Director General of Telecommunications. The main responsibilities of TRCSL
include the following:(1) to provide policy advice and license recommendations to the Minister ofTelecommunications(2) to maintain the spectrum resource in optimal condition as its sole manager(3) to provide fair, transparent, prompt and effective decision processes tooperators(4) to ensure that the different parts of Sri Lanka’s telecommunications networks
work properly by ensuring standardization(5) to create safeguards to protect consumers from the excesses of market power(Sri Lanka Telecommunications [Amendment] Act, 1996; TRCSL [no date]).

7

1.3 Privatization of Sri Lanka Telecom Limited and the Involvement of Nippon
Telegraph and Telephone Communications Corporation: A Brief Overview
Sri Lanka has a history of state ownership with a major expansion of state-owned key
enterprises in the post-independence era, i.e., especially from the 1950s through the1970s. Until the late 1970s, state intervention was widely accepted and practiced in
Sri Lanka as a development policy and strategy in combination with importsubstitution. Liberalized economic policies introduced since the late 1970ssignificantly transformed the economy, creating an environment for private sector
participation in major activities of the economy. The origins of privatization, as avital socio-economic development strategy, in the postindependence era date back to
the 1980s driven by the macro-economic rationales of reducing the government debt
burden, an inability to raise capital to meet rising demand for services and pressing
social needs. During the 1980s and 1990s many state-owned enterprises wereprivatized, allowing both local and foreign investors to participate in equity capitaland management of those enterprises. An example of this is the privatization of SLTin the 1990s through the divesting to NTT of 35% of its ownership of SLT by theGovernment of Sri Lanka (hereinafter referred to as “GOSL”), which was the sole
shareholder of SLT as a public limited company. It did this through a competitive
bidding process in August 1997 (SLT, Annual Report, 2002). Two agreements
between the GOSL and NTT were signed in relation to this investment, theShareholders Agreement and the NTT Services Agreement. The former made NTT ashareholder of SLT whilst the latter allowed NTT to become the strategic partner of
SLT (SLT, Annual Report, 1997; SLT, Offering Memorandum, 2002). Thus a
distinctive feature of NTT’s involvement in SLT was the former becoming thesecond major shareholder cum strategic partner of the latter. The implications ofthese two agreements are detailed in section 4.1.
1.4 Research Issue: Importance of Customer Service and Human Resource
Development
There is some agreement that since the mid-1990s the telecommunications sector in
Sri Lanka has witnessed a shift to a newly competitive landscape characterized by
growth of operators, changes in technology, the expansion of services provided,changes in the structure of firms and changes in the organization of industry andwork. The opening up of the international voice telephony market through theissuance of external gateway operator (EGO) licenses, 6 further liberalization andderegulation (including tariffs), fast growth of cellular telephony, the issuance oftechnology free (service-based) licenses, and growing concern for and debate about
the convergence of telecommunications, media, data and information in an era of
information and communications technology have been at the forefront of driving thetelecommunications sector to undergo a paradigm shift in the nature of competition(Dissanayake, 2002; Kasturisinghe, 2003). Furthermore, the potential for theintensification of competition in the industry is high, due in large part to plans for6

SLT enjoyed a monopoly in international voice telephony over many decades, from the beginning of
telecommunications in Sri Lanka to August 2002.

8

implementing a calling party pay (CPP) system in the cellular telephony sector, plans
for the setting up of communications facilities in rural areas of the country and rapid
adoption of the Internet in many public and private sector organizations. Amid
growing competition, telecommunications service providers are constantly striving todeal with the challenge of identifying and maintaining sources of competitive
advantage.
Business literature is replete with discussion and debate on the sources of sustainedcompetitive advantage of firms. In this regard, much has been written about thedistinct and hard-to-imitate nature of resources and capabilities as the source inwhich competitive advantage lies (Ray, Barney & Muhanna, 2003; Sako, 1999).
Several studies have documented product features, cost, quality, delivery
convenience and customer service as mechanisms that can be used to differentiateoffers by companies in a highly competitive marketplace. However, product features
are frequently and rapidly copied, thanks to the diffusion of information technology(Batt, 1996; Bennion, 1987; Payne & Frow, 1999). Thus, the central argument of thisresearch is that the competitive advantage of a telecommunications service provider
emanates from customer service and from the providers ability to manage theemployees who drive the customer service function. There is considerable support
for this argument. Telecommunications, in particular, as a service-providing industry,has classically been regarded as an industry with a little or no product differentiation(Partnering for prosperity in global IP, Financial Times, 2004). Entrepreneurialism
and innovation at the point of customer contact, in contrast, produce a source ofsustained competitive advantage that cannot be imitated easily by competing firms.
Thus, creating a best-in-class customer experience can secure a vital position incorporate business. In this context, customer service includes activities that can takeplace prior to, during or after the actual transaction, not only with existing customers
but also with potential customers and ex-customers (Batt, 1996; Kyj, 1987; Witt,Henry & Emberger, 2003). It has been claimed that companies that provide low
customer service lose 2% of their market share per year while those that offer highcustomer service gain annually 6% of market share despite charging feessignificantly higher than the market average (Telia Academy AB, 2000).
The emphasis on customer service as a distinct and hard-to-imitate asset, rather thanon product features or technology, points to the need to rely on the competence andcommitment of front-line customer service employees, complemented bycoordination with back office staff of the organization. Hence, the building ofintellectual capital (employees) to deliver better customer care services becomes the
key human resource activity within the context of the evolving role of humanresources in organizations, regardless of the industry in which they function (Bartlett& Ghoshal, 2002; Dassanayake, 1999). The ability to relate to customers and provide
them with a better service determines the success of the organization, while thequality of investment in attracting, retaining and developing its employees
contributes to the company’s sustained competitiveness. Thus, the existence of aloyal, committed, competent and motivated workforce could be viewed as a sine qua
non of creating, maintaining and continuously improving a culture of customer
intimacy in an organization.

9

The quality of interaction between customers and front-line customer service
employees is critically influential in determining the ability of the organization toretain existing customers. Several studies have documented that it costs much more
to attract a new customer than it does to retain an existing customer (Peppard, 2000;
Rust & Zahorik, cited in Witt et al., 2003). Drawing on relationship marketing, Berry(1995) also noted that service firms can increase their market share by attracting newcustomers, doing more business with existing customers and reducing the loss ofexisting customers. In particular, relations built with existing customers would be a
powerful force for attracting more new customers to the organization. Thus, acompetent, committed and motivated workforce undoubtedly acts as a catalyst for
creating and sustaining a relationship-based customer community in the organization.
On the other hand, as found in much research, retention not only of externalcustomers but also of internal customers (employees) has an important bearing onsales growth of the company. For example, Batt (2002) reported that in customercontact settings, a high turnover of employees not only increases the cost of
recruitment and selection but also negatively affects sales growth, as it takes time for
new employees to learn the job. Firm-specific skills and knowledge, together withrelationships built up with customers by long-term employees of the company, areneeded to serve loyal customers who are critical to the sales growth of the company.
Thus, retention of employees is as vital as retention of customers.
1.5 Empirical Setting of the Research: Sri Lanka Telecom Limited and Nippon
Telegraph and Telephone East Corporation
This study employs two cases, each being treated as an independent source of data, toexplore first, customer service function and then, human resource and HRD, covering
front-line customer service employees. These case studies are based on two
telecommunications companies, of which one is located in Sri Lanka and the other inJapan. Both companies are identified by their real corporate names instead ofpseudonyms. Thus, the companies that form the empirical setting are:(1) Sri Lanka Telecom Ltd in Sri Lanka(2) Nippon Telegraph and Telephone East Corporation in Japan.
There are several reasons for choosing SLT as the research setting for this study. Itslong history as a state-owned enterprise serves to show how the marketing andcustomer service functions existed in pre- and post-privatization eras. The investment
made by NTT in SLT is a notable achievement of the privatization program of the
GOSL in recent times. Apart from them, the atypical employment practices of NTT
East provide a fruitful ground for examining how typical and atypical employees are
distinguished from each other from a human resource management and HRD point ofview, which is not addressed in previous research.
With regard to these two companies, the researcher carried out bona fide empirical
work (with his physical presence) through participant observation and semistructured in-depth personal interviews at SLT, whereas such work at NTT East waslimited to semi-structured in-depth personal interviews complemented by direct10observation of operations of a one-stop customer contact point. The following section
briefly introduces the two research sites, elaborating their implications for the rest of
this report.
1.5.1 Sri Lanka Telecom Ltd (SLT)SLT is regarded as the oldest telecommunications service provider in Sri Lanka, withmore than 120 years’ history of operations. Claiming a unique pattern oforganizational evolution, SLT is the successor to the Department of
Telecommunications of the GOSL. The organizational form of SLT was changed inseveral stages until it was privatized in 1997, allowing NTT to become the foreign
shareholder cum strategic partner. Thus, the company is owned by the GOSL (being
the largest shareholder), NTT Com and the general public. More details of theinstitutional profile of SLT are presented in section 4.1.
From the technological and operational point of view, SLT is a fixed line operator
that uses mainly wire line7 technology for the provision of services. The company isalso authorized to utilize wireless local loop 8 and radio local loop 9 systems to acertain extent, as approved by the GOSL. As the only fixed wireline telephony
operator, SLT is involved in the provision of a wide array of services including but
not limited to, voice, data and Internet. In contrast to the other two fixed line
operators in Sri Lanka, Suntel and Lanka Bell (Private) Ltd, the tariff of SLT is
subject to approval by the TRCSL. Suntel and Lanka Bell (Private) Ltd are required
only to notify their tariffs to TRCSL for documentation purposes. Thus, it is realistic
to state that in the fixed telephony sector there is less competition based on tariff (astariff has its own limitations emanating from costs and benefits), and therefore
customer care and value-added services significantly determine the competitive
strength of operators. Another vital feature of SLT was the monopolistic status it
maintained in the provision of international voice telephony until August 2002. It
was also the only fixed wire line telecommunications service provider in Sri Lanka
until that too was phased out in the same year. In contrast, Suntel and Lanka Bell(Private) Ltd are protected by their licenses to retain their status as a duopoly in the
fixed telephony sector using wireless local loop technology until 2005.
SLT employs 8,274 persons islandwide, belonging to different categories such as
junior staff, clerical and allied staff, middle level technical staff, executives,
marketing, contract employees and drivers (see Table 4.3 for proportions of each in
the total employed). Yet another noteworthy feature of SLT is the prevalence ofmany trade unions and trade union federations.
7

Wireline communications require a physical connection, such as wires or cables, between users. Thisis another name for a telephone company that uses cables, not radio (Newton’s Telecom Dictionary,
2003, p. 893).
8
Wireless local loop is a means of provisioning a local loop facility without wires usually employing
low power radio systems running in the microwave range (Newton’s Telecom Dictionary, 2003, p.
892).
9Radio local loop means systems within which transmission at the local loop level (for certain rural
areas) is by radio signal rather than through cable (SLT, 2002, Offering Memorandum, p. A-2).

11

In the context of the case study based on SLT, the one-stop customer contact point
known as Teleshops10 has been chosen as the unit of analysis. Although there aremany other SLT-customer interface points in the company, Teleshops are regarded as
an innovative change introduced by NTT-style management in 1998 with uniquefeatures in terms of serving mainly walk-in customers with a different work andhuman resource organization. Furthermore, it is apparent that the involvement of
NTT Com in SLT as a shareholder and strategic partner has extended implications
for management practices and operations within SLT. For example, Teleshops
resemble the 116 call center of NTT East, both being one-stop shops. Hence, thisstudy hypothesizes that the management style of NTT (hereinafter referred to as“NTT-style management”) impacts on the management practices and operations of
SLT.
1.5.2 Nippon Telegraph and Telephone East Corporation (NTT East)
NTT East is a subsidiary of the NTT (Nippon Telegraph and Telephone) group in
Japan. This group comprises 430 companies in total including NTT which functions
as the holding company. NTT has undergone many changes in its organizational
form over nearly two decades since it was established in 1985 following theprivatization of Nippon Telegraph and Telephone Public Corporation (hereinafterreferred to as “NTTPC”). However, the major organizational change that was
introduced to NTT in the post-privatization era occurred in July 1999. NTT
operations were reorganized into a holding company structure and its business wastransferred to three new wholly owned subsidiaries. Thus, NTT East, one of the newsubsidiaries, was established on July 1, 1999. The business of the NTT group isdivided into four categories; the major subsidiaries belonging to each category are
shown in Table 1.4.
Table 1.4
Business and Major Subsidiaries of NTT Group
Business
Regional communications

Major subsidiaries
NTT East Corporation
NTT West Corporation (see note 1
below)

Long-distance and international communications

NTT Communications Corporation

Mobile communications

NTT DoCoMo Inc.

NTT Data Corporation
Data communications
Source: http://www.ntt.co.jp/about_e/group.html
Notes: (1) Hereinafter referred to as “NTT West”.
(2) NTT Data Corporation and NTT DoCoMo Inc. (previously NTT Mobile
Communications Network, Inc.) started operations in 1988 and 1992, respectively(http://www.ntt.co.jp/about_e/corporatedata.html).

10

The meaning of the word “Teleshops” covers 23 Teleshops operating from different geographicallocations in Sri Lanka.

12The principal lines of business of NTT East are focused on regional communications(intra-prefectural) services in the eastern areas of Japan. 11 Thus, the company is
involved in the provision of telephone services, broadband access services,
broadband applications services, leased circuit services and business solutions(www.ntt-east.co.jp). As of March 31, 2003 the total number of employees of thecompany was 18,100 persons (www.ntt-east.co.jp).
The “116 call center” of NTT East serves as the unit of analysis for the study of NTT
East.12 Although there are different NTT East customer interface points, the 116 callcenter functions within the framework of a one-stop shop. Social and economic
development in Japan in the post-war era has contributed to the use of the telephone
as a major medium of communications across the country. In effect, the 116 callcenter has become a popular and widely used contact point, existing in parallel tosales counters for existing and potential customers. Documentary evidence showsthat the contribution of the 116 call center and sales counters to the total sales valueof major network-related products in 1999 was 30 percent and 9 percent, respectively.
The contribution of other major methods of selling included selling through sales
agents (31 percent), corporate sales by account managers (8 percent) and residential
sales by visiting customers (20 percent).13 The selection of Teleshops from SLT andthe 116 call center from NTT East for comparison was stimulated by the apparent
similarity between the two, both serving as one-stop shops for mainly residential
customers. The broader intention of this comparison is to understand the impact ofNTT-style management on the work and human resource organization of Teleshops.
1.6 Scope and Delimitations of the Research
The aim of this section is to define the boundaries of the study or to enumerate how
the researcher has narrowed down its focus. Customer care, as a business concept
and a practice, has become much more fashionable over the last few years, appealing
not only to the world of business but also to customers themselves. Literature on thesubject is also increasing, an indication of the growing importance attached tocustomer care. While there have been many perspectives from which the meaning ofcustomer care can be explained, it is apparent from observed business practices that
customer care is the bridge or the linchpin between the service provider and customer.
In this research, customer care is recognized as a generic term that conveys themeaning of handling a wide range of services, including but not limited to, customer
problems, customer questions, customer orders, customer complaints, customer
campaigns and telemarketing. Hence, in the present study customer care (or customer
service) is viewed as a broad phenomenon that is related to different stages of the life
cycle of customer management, such as pre-sales, activation, maintenance, payment
11

The Eastern areas of Japan, as defined by NTT East, include Hokkaido, Tokyo and the prefectures of
Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima, Ibaraki, Tochigi, Gunma, Saitama, Chiba,
Kanagawa, Niigata, Yamanashi and Nagano (www.ntt-east.co.jp).
12
The meaning of the word “116 call center” entails 116 call centers operating from different
geographical locations in eastern areas of Japan, as elaborated in the preceding footnote.
13
Document prepared by NTT East exclusively for discussion with the researcher in November 2000
was used as reference. Thus this document is not available for public use.

13

processing and retention (Telia Academy AB, 2000). Framed within thisconceptualization, the researcher has deliberately established three delimitations forthis study as briefly explained below.
First, although there are altogether seven fixed telephony and mobile telephony
operators in Sri Lanka, this study focuses on the fixed telephony sector only, taking
SLT as the case research setting in Sri Lanka. As shown in Table 1.2 and Figure 1.2,
the mobile telephony sector is growing fast. Even though fixed telephony companies
and mobile telephony companies are different from each other in terms of technology
used, it is assumed that there is no great difference in the work organization ofcustomer service except for the nature and type of maintenance work. Further, in the
Sri Lankan context, the fixed telephony sector has a long history and it claims a
relatively high level of maturity compared with the mobile telephony sector. Anothertwo obvious reasons for choosing SLT emanate from its relationship with NTT Com
and both SLT and NTT East are known as providers of the fixed telephony categoryof service.
The second delimitation involves the unit of analysis of the study. As presented indetail in Sections 4 and 5, both SLT and NTT East provide customer service througha number of major customer interface points (customer contact points). Although thesignificance of all customer interface points is acknowledged, this research focuseson one major customer interface point only of each company, that is, the Teleshops
of SLT and the 116 call center of NTT East, respectively. This focus allows theresearcher to explore the phenomena of interest with substantial depth. However,doing so limits the ability to apply the findings generally to similar companies in theindustry.
Finally, the third delimitation relates to the time frame for addressing related
phenomena at SLT and NTT East. Rapid advances in information andcommunications technology have prompted telecommunications companies tochange their structures, processes and systems continuously, to keep up withdemands of the emerging marketplace. Nevertheless, due to logistics-related
concerns of this research, the operations of SLT covering the period from the mid1990s to August 2003 only are taken into consideration. The time frame referred toin case of NTT East is from November 2000 to November 2004.
1.7 Organization of the Report
The main body of this report comprises seven sections. Its structural organization ispresented in Figure 1.3. The introduction that comprises Section 1 provides a
glimpse of the study, focusing on the context in which the research is positioned, theprimary and secondary objectives of the study, an overview of thetelecommunications sector in Sri Lanka, the relationship between SLT and NTT Com,the research issue and empirical setting of the research. It also provides an account ofdelimitations vis-à-vis limitations that the researcher has set for defining theboundaries of the study.

14Section 2 contains a review of past research on the topics covered in this study. In
this section, some important findings of past studies are outlined, while attention ispaid to their methodological concerns. A special feature of this literature review isthe emphasis placed on bringing to the fore findings of human resource and HRDrelated research conducted in various countries within the framework of international
comparisons. The immediate purposes of Section 2 are setting the point of departureand building the originality of the proposed study.
The research methodology and framework of the study are presented in Section 3.
Key areas addressed therein include the ontological and epistemological standing of
the inquiry, the case study research strategy employed, units of analysis, the methodof sampling, methods of data collection, triangulation and the quality of researchstrategy and the research framework. The foundation for this study as developed in
the preceding two sections leads to the development of a conceptual framework as apiece of original work of the researcher, which has strengthened the researcher’s
endeavor to contribute to the existing body of knowledge on the subject.
As shown in Figure 1.3, Sections 4 and 5 belong in a cluster that deals with thethematic organization, presentation and analysis of data collected in the empiricalsetting of the study. Thus, these two sections, in general, introduce case studies.
Accordingly, Sections 4 and 5, which are based on SLT and NTT East respectively,
are devoted to encapsulating an array of common phenomena. Accordingly,
description is provided of organization of customer service function, generalorganization and workforce distribution, employee classification system, job
structure, staffing system, performance evaluation system, compensation system, andHRD system as they are pertinent to customer service employees of Teleshops (in thecase of SLT) and 116 call center (in the case of NTT East).14 It should, however, beemphasized that Section 4 contains three other sections that are not relevant for
Section 5. Firstly, the nature of the relationship between SLT and NTT Com prompts
examination of the highlights of the organizational transformation of SLT underNTT-style management. Secondly, the unionized character of SLT. Thirdly, theevolutionary character of Teleshops is presented briefly, illustrating the marketingand customer service philosophy of SLT as a state-owned enterprise and how it haschanged over the years under NTT-style management. It also positions Teleshops asa new type of SLT-customer interface point that, with its walk-in customer facility,
has revolutionized many aspects of the front-line operations of the company.
Following the pattern of clustering sections, as shown in Figure 1.3, Section 6 isdedicated to comparison. Hence, Section 6 presents the similarities and differences
between Teleshops and116 call center, with special reference to the organization ofcustomer service function, employee classification, job structure, staffing,
performance evaluation, compensation system and HRD.15
14

The research framework of this study is presented in Figure 3.2, with definitions of the variables
therein given in Table 3.7. However, in compiling Sections 4 and 5 in substantial depth, the researcher
tended to focus beyond on the variables in the research framework.
15
This comparison is made placing the emphasis exclusively on variables in the research frameworkand their definitions as shown in Figure 3.2 and Table 3.7, respectively.

15

The findings and concluding remarks of the study are presented in Section 7. In thissection there is also an endeavor to make an assessment of the extent to which soft
technologies transferred by NTT Com to SLT in the areas of customer service,human resource management and HRD contribute to SLT delivering better customer
service with special reference to the nature of the evolution of thetelecommunications sector in Sri Lanka. The latter part of this section documents
limitations of the study, inviting the attention of academics, researchers, scholars andpractitioners to understand how they could plan future research taking cognizance of
these limitations. Potential research would essentially contribute to broadening thehorizons of the body of knowledge and wisdom on managing human resources fordelivering customer care services with a difference and promoting the potential
development of customer care services management as an academic and professional
discipline.
Figure 1.3
Structure of the Report

Section 1
Introduction

Section 2
Literature Review

Section 3
Research Methodology andFramework

Thematic Organization, Presentation andAnalysis of Data
Section 4
SLT

Section 5
NTT East

Comparison
Section 6
Teleshops and116 call center

Section 7
Concluding Remarks

Source: Researcher’s original construction.

16

Section 2
Literature Review
Over the past two decades, considerable research attention has focused on HRD of
blue-collar workers as well as white-collar workers. Widespread interest in this areaof research was aroused by many factors. First, there were significant changes intrade and investment patterns, especially foreign direct investment across nations.
Second, the transferability of management technology of companies in investor
countries to their overseas affiliates raised the issue of the appropriateness of suchaction and the extent to which transferability could be achieved. Third, identifiableorganizational transformations occurred with the introduction of new work systems
and practices for achieving higher levels of productivity (Hejazi & Pauly, 2003;
Ichniowski, Shaw & Prennushi, 1997; Nakamura, 1999; Shibata, 1999, 2001). With
these phenomena in the background, the research literature on HRD took two
directions. The first research stream dealt with the question of skill requirements of
employees doing various jobs, how skills are formed in them, incentives these
employees have for skill formation and their career building patterns. The second
research stream centered around international comparisons of human resource
management and HRD practices covering a wide range of variables.
This literature review has three main intentions:(1) It presents the explorations of previous researchers on subject areas including,but not limited to, skill requirements, skill formation, incentives for skill
formation and career development.
(2) It then deals with the methodologies employed by previous researchers to
conduct such studies.
(3) It also creates a platform for building on the originality of this study andthereby contributing to the existing body of knowledge on the subject.
2.1 Skill Requirements
Before presenting findings of past scholarly research, it is important to establish a
broader meaning of HRD at enterprise level. Several studies that have covered, interalia, the meaning of HRD have found several interrelated variables to be involved.
With few exceptions, such studies have suggested that HRD represents training anddevelopment specifically aimed at developing the skills of the bottom line for
ensuring the survival and growth of individual enterprises (Wood & Sella, 2000).
Ashton and Felstead (as cited in Wood & Sella, 2000, p. 452) found further thatfirms without a systematic training strategy, which depended largely on the external
labor market, regarded labor as a cost. Taking a somewhat different stance, Koike(1998a) and Morishima (1998a) broadly defined HRD to cover the nature and thecontent of skills, skill formation systems, incentive systems for skill formation,
career development, promotion systems and compensation plans. The core conceptthat could be derived from the variety of the meanings of HRD is skill.

17

Skill is defined in the literature from diverse perspectives and in a variety of ways.
Thursfield (2001), for example, asserted that skills are tangible, quantifiable andmeasurable, allowing comparisons between individual employees and groups withrespect to the types and levels of skills possessed while Stasz (2001) identified four
broad areas of skill, academic or cognitive skills, generic skills, technical skills andwork-related attitudes. School disciplines seem to play an important role in helping
people to acquire knowledge about various subjects, and this knowledge is expected
to be broadly transferable across a wide range of situations and circumstances.
Standardized tests are employed for assessing these skills. Generic skills such asproblem solving, communications and teamwork, on the other hand, are believed to
be broadly transferable across work settings, with variations engendered by work
setting-specific processes. Stasz further stressed problem solving, as a general term,
representing a particular competency, the meaning of which differs across tasks andsituations. For example, in educational settings problem solving could mean solving
mathematical problems whereas in a factory environment it may carry the meaningof spotting the causes of defective products and diagnosing and eliminating suchcauses. Green and James (2003), exploring differences between managers' andemployees' perceptions of skill, supported to a certain extent this composition ofgeneric skills, including verbal, physical, problem-solving and planning skills. Their
view suggested that these skills give a mix of the academic, non-academic andorganizational elements. Thus the word “generic skills” is broader in meaning andmakes concrete sense only when it is placed in a specific work context. In contrast,
technical skills are the specific skills needed in an occupation, and are usuallycodified in job descriptions.
Work-related attitudes or soft skills are very different from the preceding three
categories of skills. In particular, there is no methodology to conceptualize them.
Motivation, volition and disposition are regarded as soft skill constructs that are mostoften judged through personal impressions or knowledge of an individual. In acomprehensive review of dictionary definitions of skill, Attewell (1990) concluded
that (1) the core of all definitions is the idea of competence - the ability to dosomething well, and (2) competence encompasses both mental and physicalproficiency and the latter also contains physical dexterity. Thus, Attewell found skill
to be synonymous with competence. More recently, Rodriguez, Patel, Bright,
Gregory and Gowing (2002) explained this point further. They presented acompetency model of integrated human resource practices. The US Office of
Personnel Management (as cited in Rodriguez et al., 2002, p. 310) defines acompetency as a measurable pattern of knowledge, skill, abilities, behaviors, andother characteristics that an individual needs to perform work roles or occupational
functions successfully.16 In light of this definition, it can be concluded that soft skills
16

It is common wisdom among scholars that there is a difference between competence andcompetency. The former is a work-related concept that refers to areas of work at which the person iscompetent whereas competency is a person-related concept that refers to the dimensions of behavior
lying behind competent performance (Armstrong, 2001, p. 302). He also asserted that at the practicallevel organizations in UK adopt a hybrid approach, incorporating both people-based competencies andwork-based competences; these are referred to generally as competencies. Following this trend, thisstudy regards competencies (the plural form of competency), as including both people-based

18

such as interpersonal skills and teamwork are as important as traditionally recognizedknowledge, skills and abilities in determining the ultimate work success of individual
employees. Technology, management innovations and competition in both the local
and global marketplace profoundly affect the kinds of knowledge, skills and attitudes
required for successful employment and work performance (Stasz, 2001).
Another significant notion of skill is based on its tacit nature. Accordingly, its
meaning appears to be difficult to articulate in a formal manner, in light of threeimportant considerations: (1) people acquire skills through experience, (2) skills areunconscious and internalized, and (3) skills are specific to particular situations.
Hence, the forward planning of tasks become difficult and a conscious considerationis required to perform unfamiliar tasks (Thursfield, 2001).
In sharp contrast to the manner in which skill was defined in earlier studies, Koike
and Inoki (1990) and Koike (1994, 1997) presented different interpretation of themeaning of skill by coining the term “intellectual skills”. They proposed a typology
of classifying operations of a mass-production assembly line, based on in-depth
research covering blue-collar employees at the shop floor level of manufacturing
plants. Their proviso was that one must observe operations of the assembly line forlonger than a couple of hours. Figure 2.1 shows the classification with its constituent
elements.
Figure 2.1
Operations of a Mass-Production Assembly LineOperations of a mass-production assembly line

Usual operations

Unusual operations

Dealing with changes

Handling problems

Sources: Koike (1994, 1997) and Koike & Inoki (1990).

The nature of usual operations is characterized by routineness, repetitiveness andmonotony. Thus, a little skill is required to perform these operations. On the other
hand, unusual operations require dealing with changes and handling problems.
Changes that may be encountered include, for example, variations in product mix,
production volumes, production methods, new products and labor mix. Handlingproblems on the assembly line requires three types of skill:competencies and work-based competences. How competencies are defined in this study is explained
further in the latter part of this chapter. The use of the term “competencies” is popular (see forexample, Ulrich, Brockbank, Yeung, & Lake, 1995).

19

(1) skill for detecting the problem(2) skill for diagnosing the source of the problem(3) skill for eliminating the cause of the problem to facilitate the smooth runningof production operations.
Giving due consideration to unusual problems, Koike and Inoki (1990) and Koike(1994, 1998a) defined intellectual skills as the skills required to deal with uncertainty,
or to deal with changes and handle problems. Further facets of the meaning ofintellectual skills in the assembly-line context are:(1) the ability to carry out many jobs in a particular workshop(2) broad knowledge of the structure, functions and mechanism of the equipment,
products and the production process itself (Koike & Inoki, 1990).
This perspective of Koike and Inoki resembles the notion of tacit skill by Wood (ascited in Thursfield, 2001, p. 505), which states, “An example of tacit skill is an
intuitive understanding of how a task relates to the wider production process”.
Organizational theorists like Nonaka and Takeuhci also lend support to further
understanding of the meaning of tacit skill, distinguishing between explicit
knowledge and tacit knowledge. Thus, tacit knowledge (knowledge of experience) isbelieved to be personal, context-specific and hard to formalize or communicate
whereas explicit knowledge (knowledge of rationality) is transmittable in formal,
systematic language (Nonaka & Takeuchi, 1995). However, Koike and Inoki arecredited for their original scholarly work of defining the meaning of intellectual skillsin the labor process on the shop floor of manufacturing companies.
The scholarly work of Koike and Inoki has expanded further to include somesignificant phenomena for a broader understanding of the meaning of intellectual
skills. One such phenomenon is indicators of skill. Two indicators of skill or skill
development mentioned in their literature are breadth of experience and depth ofexperience. In simple terms, breadth of experience covers the number of jobs an
employee can conduct in a particular workshop and the employee's ability to instructinexperienced colleagues to conduct work in the workshop. This breadth
encompasses usual or routine responsibilities. Depth of work experience, on the other
hand, consists of the know-how to deal with problems, the know-how to deal withchanges and the ability to take responsibility for handling difficult parts of the job(Koike 1997; Koike & Inoki, 1990). The work of Tezuka (1997) could also be related
to the further understanding of Koike and Inoki’s interpretation of breadth and depthof experience. Thus, he concluded that job descriptions of blue-collar employees andmanagers in Japanese companies was vague and imprecise, giving them a wider
scope for helping colleagues, making suggestions and implementing improvements.
Another phenomenon that has received much attention in the research of Koike andcolleagues is “integrated versus separated systems”. Koike (1994) put forth two
proposals regarding the issue of whether production employees always conduct
difficult and unusual operations that require the application of intellectual skills. The
first proposal was to standardize unusual operations and prepare a manual as a20

guideline for employees to handle such operations. The second proposal was todevelop integrated rather than separated systems for allocating jobs. A careful
examination of these proposals shows that they have limitations at the practicalimplementation level. In respect of the first proposal, limitations exist because of thevariety in the nature of potential problems and the difficulty associated withincorporating all such problems into a written manual hampering quick response to
problems. Further, the proposal does not take into account the unpredictability ofpotential problems. These limitations prompt consideration of dealing with unusual
operations as an integral part of the job of production employees, causing ambiguityof job definition in Japanese companies. In contrast, separated systems create a clear
distinction between production employees and engineers and technicians. In a
separated system the former are entrusted with handling usual operations and thelatter two categories of employees are responsible for handling unusual operations.
But integrated systems make it the responsibility of production employees to handle
both usual and unusual operations on the spot. Given that production employees havethe aptitude to acquire the necessary intellectual skills, integrated systems are
considered capable of contributing more to the efficiency of the shop floor as
opposed to separated systems (Koike, 1994; Koike & Inoki, 1990).
Shibata (1999), using the concepts and framework developed by Koike forclassifying operations on an assembly line and understanding the concept of
integrated versus separated systems, found that the personnel who handled unusual
operations distinguished between Japanese and American unionized workplaces.
Shibata studied maintenance employees in three plants, and found that they spent
about 70-100 percent of their actual maintenance working time on breakdown
maintenance and about 0-30 percent of their actual maintenance working time on
preventive maintenance. He further found that American firms outsourced theirpreventive maintenance work. In contrast, in two of the three Japanese plants Shibata
found that maintenance employees spent 4.7-14.5 percent of their actual maintenanceworking time on breakdown maintenance and 85.5-95.3 percent of their actual
maintenance working time on preventive maintenance. Within this context, Japanesemaintenance methods resulted in fewer stoppages of production lines compared withthose in American companies. This finding of Shibata is consistent with theperspective of Koike and Inoki (1990) on the capability of integrated systems tocontribute more to the shop floor efficiency than separated systems.
Koike (1998a) led a research project team comparing HRD of professional andmanagerial workers of the industry in Japan, the US, the UK and Germany, under the
auspices of the Japan Institute of Labor. In his introductory remarks of the research
report, Koike asserted:
It is not sufficiently clear, however, even from the case studies what are the characterand the content of the crucial skills needed to handle uncertainty (Koike, 1998a, p.
12).

This view is exemplified by the availability of much literature on skill formation
systems, incentives for skill formation and career development. However, there have21

also been some attempts to examine the skill requirements of some selected groupsof employees. One such example, in Japanese context, comes from the research
conducted by Wakisaka (1988, 1997), engaging in fieldwork on general merchandise
stores, i.e., a vegetable/fruits shop and a women’s garment shop, in 1985. Focusing
particularly on female employees in the latter research site, Wakisaka found tasks
including assorting (selecting) and ordering goods, assorting and ordering goods notunder one’s own charge, selling goods not under one’s own charge, dealing withclient’s complaints such as returned goods, training new employees and part-timers
as tasks, that were performed by most of them. Another example is the study
conducted by Batt (1999). The subjects for her study consisted of customer service
representatives handling service inquiries and sales requests from residential
customers through incoming telephone calls. The services these customer service
representatives handled were billing and product information, and the sales theyhandled consisted of basic services, transfers, internet services, upgrades, voice mail,call waiting and so on. A characteristic feature of the work of customer service
representatives is their simultaneously interacting with the customer on the telephone
and inputting information directly into the computer. The skill requirements for thejob of customer service representatives include customer interaction skills, keyboard
skills, knowledge of procedures, products, services, legal regulations and technicalproficiency in programming languages. Moreover, another example could be
provided through a research study of bank executives and managers in the US andGermany, undertaken by Keltner (1995). Hence, he found that broader product skills,
better knowledge of customers, and improved service quality were crucial for
employing a relationship-oriented strategy to build and sustain competitive
advantage. One dominant feature of Keltner’s study was his attempt to distinguishbetween relationship-orientation and transaction (volume)-orientation strategies ofbanks and its implications for staffing and skilling. American banks were found to
employ transaction-oriented strategy over 1980s and into1990s, while German banks
endeavored to building up their capabilities for pursuing relationship-oriented
strategy in 1980s. Thus, stable workforce and broad skilling were perceived as
constituent elements of relationship-orientation compared with unstable workforce
and job-specific skilling as elements of transaction-orientation (Keltner, 1995).
Drawing on research conducted in call centers with front-line employees as subjects,
Frenkel, Tam, Korczynski and Shire (1998) concluded that customer service
representative used two types of knowledge, lower-order contextual knowledge andhigher-order contextual knowledge and skills to accomplish their tasks. Lower-ordercontextual knowledge was made up of knowledge about company-specific products,
procedures, software, practices and people with whom they maintained relational
coordination for serving the customer. Higher-order contextual knowledge wasassociated with a conceptual understanding of different packages offered by thecompany, and knowledge of the market and industry trends. Frenkel et al. also
divided skills into two categories, computer skills and social skills. Computer skills
are related to entering information into computers, word processing and navigating
through several systems or windows, whereas social skills include the ability toremain calm under pressure, having a friendly, positive and tactful attitude, listening,
the ability to clarify customer requirements, sales skills and so on. The findings of22

Batt (1999) and of Frenkel et al. (1998) in respect of the knowledge required ofcustomer service representatives are consistent with the claims of Russell (2002) that
product knowledge was the most important aspect of training provided to customer
service representatives. However, Michel (2001), based on telephone interviews with
100 randomly selected call center enterprises in Germany, suggested that
communication skills and service orientation formed the main basis of call center
agents' job requirements, with technical competence and product knowledge coming
second. In addition to these skills, front-line employees on call centers are required tohave social competence, telephone praxis, outbound marketing skills, multimedia
knowledge, language and manual skills. Callaghan and Thompson (2001), whose
study was based on a Scottish call center that dealt with only inbound calls, describedskill requirements of customer service employees that were more or less similar to
those described by Batt, Frenkel et al. and Michel. Callaghan and Thompson listed
those skill requirements as business awareness, business development,
communication - verbal and written, customer service, decision-making, initiative,
numeracy, planning and organization, teamwork and leadership, the use of systems
and work standards.
The debate regarding the skill requirements of various categories of employees
continues. An innovative contribution comes from the work of Rodriguez et al.
(2002). They used the word “competency” rather than “skill”, perceiving skill as justone component of the broader concept, competency. Rodriguez et al. analyzed
clerical and technical jobs into four competency-based clusters: information support,
administrative, technology and programs, and financial. Two sets of competencies
were defined: those competencies that were the core to the broad occupational group,i.e., clerical and technical occupations, and those competencies core to a smaller
subset of similar occupations within that group, i.e., an administrative cluster.
Examples of competencies of the former category are integrity/honesty, technicalcompetence, flexibility, memory, teamwork, conscientiousness, interpersonal skills,
self-esteem and self-management. Examples of competencies required particularly
for the administrative cluster are reading, writing, speaking, listening, and customer
service. By accounting for different components of competency, Rodriguez et al.
provided a guideline that differed markedly from other definitions of skill for
analyzing broadly competency requirements of various job clusters. Other
researchers who have employed the term competencies rather than skills are Finegold
and Wagner (2002). Although they focused on managers and specialists in thebanking sector in Germany, not on front-line customer service employees, they
identified four types of competencies required of these two categories of employees:
expertise in banking (technical skills, industry knowledge, risk management);
performance-enhancing behaviors (work organization, personal initiative, ability tolearn rapidly and on an ongoing basis, problem solving); social behaviors (team skills,
strong ability to communicate with colleagues and customers) and leadership(readiness to define aims for themselves and others, ability to delegate tasks, ability
to give good feedback).

23

Table 2.1
Some Illustrations of Studies Examining Skill Requirements
Author(s)Wakisaka

Year
1988

Focus
Identification of skill requirements of front-line employees (women) in a
garment shop through analyzing their tasks

Koike and Inoki

1990

Contents of skill - skills for dealing with changes and problems

Koike

1994 & 1997

Intellectual skills – the ability to deal skillfully with unusual operations which
are not described in operation manuals for shop-floor level employees

Batt

1999

Skill requirements of customers service representatives handling incoming
telephone calls – customer interaction skills, keyboard skills, knowledge ofprocedures, products and services and legal regulations and technicalproficiency in programming languages

Thursfield

2001

Dimensions of skill – tangibility, quantifiability and measurability of skills andthe possibility of comparing skill levels of individuals and groups

Stasz

2001

Skill areas – academic or cognitive skills, generic skills, technical skills andwork-related attitudes or soft skills

Rodriguez et al.
Source: Researcher’s original construction.

2002

Introduction of the broad definition of competencies

2.2 Skill Formation Systems
A growing body of research has documented systems of forming skills in employeesof organizations in various fields (Brown & Reich, 1997; Finegold, Wagner &Mason, 2000; Koike, 1994; Osterman, 1995; Riding & Mortimer, 2000; Shibata,1999; Wood & Sella, 2000). Becker (1964) argued that two broad types of skills are
imparted through firm-based training for incumbent employees, namely general andtransferable skills and specific and non-transferable skills. A broad classification of
firm-based skill formation systems, drawing on these studies is presented in Figure
2.2.
Figure 2.2
Classification of Skill Formation Systems
Skill formation systems

On-the-job training (OJT)

Formal OJT(Structured)

Off-the-job training (OffJT)

Informal OJT(Unstructured)

Source: Researcher’s construction based on past studies stated under section 2.2.

2.2.1 On-the-Job Training (OJT or Formal OJT)The classification of firm-based training systems varies among countries. For
example, in the US context, formal training refers to OffJT whereas informal training
means OJT. But in Japanese firms, both structured OJT and OffJT are perceived tobe methods of formal training (Brown & Reich, 1997). Carefully planned andimplemented OJT is regarded as the major method of skill formation of employees inJapanese companies (Kawakita, 1996; Koike, 1998a; Sato, 1995; Yahata, 1994).
Although the Japanese system provides OffJT too, the major component of training
occurs on the job. Every supervisor and manager is responsible for the OJT of
incumbent employees. This is in sharp contrast to companies in the US, where theexistence of the free-rider problem is believed to have led to the under-provision of
firm-based training (Brown & Reich, 1997) because employers are reluctant to invest
in employee training that imparts general and transferable skills. Drawing on
research conducted using banking sector in the US, Keltner and Finegold (1996) too
concluded that poaching created a strong disincentive for firms to invest in trainingof employees. In addition, they found that poaching had implications forundermining attempts to build strong relationships with clients. The practice of
hiring employees with previous experience is prevalent among American firms thatare less likely to provide training (Osterman, 1995).

25

In Japanese companies it is the custom for new employees to learn the ropes under adesignated instructor. Thus, new employees acquire the firm-specific knowledge
content of skill by following the work pattern and style of the instructor who isdesignated to train them (Koike & Inoki, 1990). Shibata (1999), who studied three
Japanese unionized manufacturing plants and three American unionizedmanufacturing plants, has made a worthwhile contribution to the literature on
differences between the skill formation systems in the two countries. In Japaneseplants, Shibata observed, employees, group leaders and assistant and first-line
supervisors have the role of teaching skills to new employees, and also oftroubleshooting. In American companies, employees and group leaders rather thansupervisors play a similar role, with a low emphasis on troubleshooting skills.
Employees who undertake this instructor role have an incentive to teach their skills
to new employees; that is, their ability to teach trainees is measured and recognized
in a skill formation plan sheet. Such instructors are employees who have at least four
to five years of experience on the job and who are capable of giving person-to-person
guidance to new employees. A practice of this kind results in senior employees
playing dual roles, as an employee doing his/her own job and as a teacher for junioremployees. The instructing employee's role decreases as the trainee's skills increases(Koike, 1994; Yahata, 1994). In studying managerial careers and management
development in Britain and Japan, Storey, Okazaki-Ward, Gow, Edwards and Sisson(1991) found that role models and mentors were influential in career development ofmanagers in Japanese companies as compared with British companies. They also
explored the prevalence of a system in British firms, that exposed managers tochallenging experiences through “sink-or-swim” approach to management
development, which contrasted sharply with the Japanese way of allowing the new
employee to systematically progress up the job ladder under a senior employee.
Other characteristic features of OJT in Japanese companies include the assignment oftasks in order from simple to difficult, gradual promotion to higher positions, job
rotation, small group activities, training given to supervisors to train others, the useof skill formation charts and skill certification. OJT itself is an expensive practice. In
order to lessen these costs and the inefficiencies produced by newly joined
employees during their initial OJT, an experience path is designed for the new
employee by supervisor or the manager. This experience path first assigns simple oreasily explained tasks to the new employee. The level of difficulty increases
gradually, with new employee assigned more and more difficult tasks that are all
related to each other in job content. Koike and Inoki (1990) asserted that this way ofassigning tasks to new employees leads to the formation of a career ladder.
Furthermore, the extent to which the employee has developed skills is indicated by
two related phenomena, breadth of experience and depth of experience. The former
refers to the number of related jobs or positions in a particular production unit thatcan be filled by an employee, and to his/her capability to instruct fellow-workers,
whereas the latter deals with the ability to handle unusual problems. The skill
formation plan sheet, also called the job matrix, is used in Japanese companies

26

periodically to evaluate the skill level of blue-collar employees.17 Assistant first-line
supervisors are responsible for filling in a skill formation chart that is visible andtransparent to all employees in a particular workshop (Koike 1998b; Shibata, 2001).
Deployment practices are another vital factor that affects OJT. Job rotations andtransfers feature methods of deployment. Osterman (1987) used four phenomena todefine the internal labor market for a set of occupations: job classification,
deployment, security and wage rules. Within this framework, deployment refers torules governing how employees in a firm may be moved from one job to another.
Two rules exist in this connection: seniority and discretion of the management. In a
comparative study covering the US, the UK, Germany and Japan, Koike (1998a)
concluded that job rotation was the mechanism commonly used in Japanese firms forallowing employees to move within the organization. In another study, Koike (1994)
compared, inter alia, HRD of blue-collar employees in Japan and Sweden. He foundsome similarities between the two countries. In both countries, there was an emphasison broadening the experience of employees; particularly in Sweden an explicit policy
to this effect exists. Job rotation is also a feature common to both countries. On theother hand, a posting and bidding system determined intra-organizational moves of
employees in US and UK firms. The posting and bidding or job bid system provides
the employee with the opportunity to indicate his or her own intention in careermaking. In Japan job rotation does not provide freedom for the employee to decide
where he or she would like to work next; it is the manager or supervisor who makes
the decision on behalf of the employee (Storey et al., 1991). The work of Shibata(1999) confirmed the findings of Koike. In the three Japanese plants he studied,assistant first-line supervisors managed job rotations. The rule governing job rotation
was putting the "right person in the right place", rather than equity. In the three
American unionized plants limited job rotation existed that was neither systematic
nor reflective of employees' skills. First-line supervisors or teams managed the few
job rotations that occurred. Concerning transfers, assistant and first-line supervisors
had the authority to decide on who would become temporarily or permanently
transferred in Japanese plants. Shibata identified a variety of methods to transfer
employees in the three American plants. First-line supervisors, job bid and seniority
rules or teams decided on which employees to transfer temporarily to fill shortages in
the workforce. However, for permanent transfers of employees, a system of threeelements, job bid, seniority rules and skill checking, was used in the American plants.
Brown and Reich's (1997) work contributes significantly to the literature on job
assignment in Japanese and US firms. They wrote:
In Japan, the importance of job assignment in skill development is acknowledged,
and a manager is in charge of assigning jobs and developing careers for those under17

The term “Skill Formation Plan Sheet” was drawn from Shibata (2001). Koike and Inoki (1990)
used the terms “Job Span Map” and “Job Depth Map”. The former was meant for indicating the spanof experiences of employees across jobs whereas the latter showed their depth of experience inhandling unusual operations. However, in his single-authored publication in 1994, Koike used theterms “Job Matrix: Breadth of Experience” and “Job Matrix: Depth of Experience” to convey thesame meaning.

27

him or her. In the U.S., employees usually are included in the job assignment
decision, often through a post-and-bid system. In most workplaces, a set of rules
delineates how job assignments and promotion or upgrade decisions are made. The
rules usually include a skill requirement (before training), employee "bids"(applications for specific job openings), and a role for seniority in ranking equallyqualified candidates (Brown & Reich, 1997, p. 128).

The locus of decision-making for job assignment has implications for the skill
formation of employees. Integrated skill formation exists in Japanese firms, where
supervisors manage job assignment while employees have no say. Attempting to findthe relationship between employee skills and plant productivity, Shibata (2001)
established a relationship between weak integrated skill formation and low plant
productivity in a Japanese transplant in the US where individual employee choice
regulated job assignment. He argued that the job-bid system prevailed in theJapanese transplant he studied in the US, preventing integrated skill formation.
Shibata used the expression "independence with job instability" to explain why the
job-bid system prevented integrated skill formation. He claimed that independent
unionism, distrustful relationships among managers, engineers and employees, an
unstable job environment, and detailed job classification and specialization prevented
integrated skill formation in employees. On the other hand, "integration with
employment stability", a key characteristic of the Japanese workplace system,
contributed to integrated skill formation in employees in Japanese plants. There,
assistant or first-line supervisors were usually involved in systematically designing
job rotations and transfers of employees that were based on the precept of having theright person in the right place rather than on equity (Shibata, 1999). In other words,
the employee did not have a voice in the process of determining the pattern of his or
her skill formation. Case study research conducted by Koike (1998a) also confirms
the frequent utilization of de facto rotation in Japan and of the posting and bidding
procedure up to middle management level in the US and UK. De facto rotation aspracticed in Japanese firms leaves human resources departments with no control overplanning and implementing job rotation, while decisions about employee movement
rest with the directors.
It is appropriate to review the findings of some comparative research at international
level on skill formation systems in service occupations. Research conducted by
Finegold, Wagner and Mason (2000) serves this purpose. Their study focused on
skill formation systems and career paths for service employees in hotels in the US,
Germany and the UK. They reached several conclusions regarding apprenticeshipstyle training within the broader context of vocational education and training.
Finegold et al. documented that the training of hotel employees in Germany under
the apprenticeship system was broad, covering all the vocational skills required forwork in the hotel sector, as well as a variety of general education subjects. National
level skill certification systems ensured the standardization of apprenticeship training
programs. In the UK, apprenticeship schemes were designed to provide young people
with a broader skill foundation, even though these schemes lacked general education
content. Skill certification systems in the UK were competency-based, individuals
being assessed solely on the basis of the tasks they can perform. It was also not arequirement to undertake any training. In effect, when compared with the German

28situation, the very specific skills assessed by skill certification systems in the UK
were significantly narrower in scope. In the US, it was rare for individuals toundertake vocational preparation for the hotel sector before entering employment.
However, collaborations existed between hotels and educational institutions to recruit
students as part-time or full-time employees.
Finegold et al. (2000) reported that in the hotel sector in Germany, employees newly
hired to full-time front-line and back office positions were required to havecompleted an apprenticeship or have some higher-level qualification. Moreover,Finegold and Wagner (2002), in their study covering banks in Germany, documented
that the apprenticeship system was a mechanism that alternated between academic
education and the workplace. Nevertheless, the importance of OJT in Germany was
not undervalued (Michel, 2001). OJT, at all times, was a powerful method of skill
formation that imparted the practical knowledge of the job and service-oriented
communication. Keltner’s (1995) work contributes significantly to support thispractice in Germany. He wrote:
As the experience of German banks would suggest, the key to achieving relationshipbanking is lowering levels of employee turnover and creating strong internal labormarkets … At the core of the German system of relationship banking is thecommitment on the part of each bank to developing its skill needs internally. As theGerman bank executives describe it, their firms have “Japanese-style employment
relations.” Employees start in entry-level positions, take progressive steps along theskill hierarchy, and raise their earning potential as they move upwards (Keltner,
1995, p. 66).

In contrast, in the US and the UK, vocational qualifications were not mentioned as anentry-level requirement, whereas prior experience in a customer service industry wasadvantageous for new employees. Another significant finding of the study ofFinegold et al. (2000) is the relative importance of forms of training given to frontline and back office staff of hotels in three countries. Hotels in the UK provided more
OJT and OffJT than their counterparts in Germany and the US. Provision of crossjob training, that is, across various departments to front-line and back office
employees, was a characteristic feature of hotels in the US and UK. These findings
are consistent with those of Raper et al., Stern and Sommerlad, and Tregaskis andBrewster (as cited in Lloyd, 2002, p. 76), that in the UK there is a shift away from
OffJT and externally provided training towards greater OJT and in-house training(Lloyd, 2002).
2.2.2 Informal OJTInformal OJT, as the term implies, is unstructured and not time-bound. Whereas
formal OJT is characterized by assigning instructors to train employees, setting
standards for evaluating the training and so on, informal OJT does not entail suchfeatures. But informal OJT is considerably more important than formal OJT, because
it can occur as a normal part of the employee’s work life. For example, employees
who encounter and handle non-routine operations discuss their experience atoccasional meetings held on the shop floor. This experience-sharing could increase29

the confidence of fellow-workers to handle similar situations when they arise. In
explaining informal OJT, van Zolingen, Streumer, de Jong and van der Klink (2000)
wrote:
Unstructured, unplanned OJT also occurs at the workplace. This involves informal
methods of learning (non-intentional learning, learning as a by-product of the dailyscheduled tasks). A plan or training arrangement is non-existent and employees learn
by, for instance, imitating experienced workers (van Zolingen, Streumer, de Jong &van der Klink, 2000, pp. 209-210).

Informal OJT may be understood by referring to the work of Koike and Inoki (1990)
and Wood (as cited in Thursfield, 2001, p. 505). Tacit skills that are difficult toarticulate in a formal manner are acquired through continuous interaction with fellow
employees. More importantly, these tacit skills are unconscious and internalized andare specific to circumstances. Hence, to create a learning organization there is a needfor employees to share their unique experiences within it. Limited attention has been
paid to the practice of informal OJT in past research on training, and in the present
study there is an attempt to explore various informal OJT practices among customer
service employees in the firms that comprise the sites for this research.
2.2.3 Off-the-Job Training (OffJT)
OffJT, as the term implies, takes place at a place other than the shop floor. In
Japanese companies, OffJT is regarded as a supplementary method of developing theskills of employees (Koike, 1994). OffJT that occurs from time to time between OJT
has an orientation where employees get the opportunity to theorize and systematize
the hands-on experience they are gaining at shop floor level. OffJT programs may be
conducted both in-house and outside the organizational premises, with the use of inhouse trainers or outside consultants or both. Cumulative research over the years has
documented the practice of OffJT in various types of firms (Finegold et al., 2000;
Ichniowski et al., 1997). Ichniowski et al. studying the effects of human resource
management practices on productivity, described human resource management
systems with traditional and innovative practices, where OffJT in technical skills andproblem-solving was an important element of innovative human resource
management practices. Finegold et al. described various forms of OffJT for front-line
and back office staff of the hotels they studied in the US, Germany and the UK.
Examples of OffJT included off-site seminars paid for by employers, off-site courses(degree credits) paid for by employers and off-site courses paid for by employees.
From a comparative perspective, Finegold et al. concluded that British hotels
provided significantly more of their employees with OffJT than their American andGerman counterparts, sending twice as high a proportion of their front-line and backoffice employees to external courses. In British hotels, OffJT is believed to provide
front-line and back office employees with some or most of the skills they use in theircurrent job, in contrast to their counterparts in the US. However, in terms of thenumber of days of OffJT paid for by employers, the US, Germany and the UK wereequal.

30

In Japanese firms, Shibata (1999) reported mixed findings about the existence of
OffJT programs in the unionized Japanese plants he studied. Two plants had short
OffJT programs and one plant placed a significant emphasis on planning andorganizing OffJT programs for its employees. In this plant, employees were required
to take an examination for technical certification after each OffJT program in which
they participated. Moreover, employees had to pass these certification examinations
to be considered for the next promotion. Assistant and first-line supervisors decided
when workers could take an OffJT program. In contrast, in unionized American
plants there was only initial and legally required training such as safety training.
Koike (1998b), in a comparative study of HRD at workshops in New United Motor
Manufacturing Inc., a joint venture of General Motors and Toyota in the US, and the
Takaoka plant of Toyota in Japan, found some similarities between the two in thecontent of OffJT. Maintenance staff and blue-collar employees in both plants werethe main recipients of OffJT. The main topic in OffJT for operatives was problem
solving, and the training was mostly designed as a part of upgrading courses.
However, Koike argued that short OffJT courses could not be the main way offorming intellectual skills, because of the unpredictability of the unusual problems
occurring on the assembly line.
2.3 Incentives for Skill Formation
Incentives are considered an essential mechanism for promoting HRD, that is,
intellectual skill formation of both blue-collar and white-collar employees (Koike,
1994, 1998a). There are three central measures in incentives for skill formation:compensation plans, promotion or upgrading, and performance evaluation (Koike,
1998a; Nakamura, Husodo & Hadiwijoyo, 2001). To function as an incentive forskill formation, compensation plans need to involve job grading systems, 18 yearly
increments and individual performance appraisal. A growing body of literature
documents the use of pay systems for employees (Koike, 1994; Wallace, 2000).
These pay systems include pay-for-job, pay-for-job grade or pay-for-skill and payfor-performance. Koike has consistently defended the relevance and theappropriateness of the pay-for-job grade system as the most effective in promoting
skill formation in individual employees (Koike, 1994, 1998a).
Koike has argued that pay-for-job and pay-for-performance systems do not properly
address the central features of intellectual skill attainment, such as broad experienceand the ability to handle problems. In a pay-for-job system, employees performing
difficult jobs are paid more; in a pay-for-performance system employees who
produce more are paid more. Koike's argument about the inappropriateness of these
two methods of payment is based on the following reasons:18

According to the viewpoint of Japanese scholars, Koike uses the word Shokuno Shikakau Seido in
his writings in Japanese, which is equivalent to the word “Grading System” and not “Job Grading
System” in English. Further, in Japanese, Shokuno means skill and Shikaku means grade or rank. Thus
it is reasonably assumed that the word “Job Grade” in Koike’s writings in English refers to “Skillbased Job Grade”.

31

Table 2.2
Some Illustrations of Studies Examining Skill Formation Systems
Author(s)

Year

Focus

Koike and Inoki

1990

Role of designated instructor in training new employees in Japanese companies

Storey et al.

1991

Influence of role models and mentors in career development of managers inJapanese and British companies

Yahata1994

Planned OJT as the major method of skill formation of employees in Japanesecompanies

Sato

1995

Planned OJT as the major method of skill formation of employees in Japanesecompanies

Kawakita

1996

Planned OJT as the major method of skill formation of employees in Japanesecompanies

Brown and Reich

1997

Structured OJT and OffJT as methods of formal training in the context of US

Koike

1998a

Planned OJT as the major method of skill formation of employees in Japanesecompanies

Shibata

1999

Role of employees, group leaders, assistant and first-line supervisors in teachingskills to employees in Japanese companies and the role of employees and groupleaders in teaching skills to employees in American companies

Source: Researcher’s original construction.

(1) The broad experience of an employee cannot be assessed simply by his or her
current job. An employee who can fill many positions in a workshop, instruct
newcomers and so on, is believed to contribute much more to efficiency thanan employee who is deployed on the same position but is unable to fill otherpositions in the workshop or instruct newcomers. It is evident that the former
employee needs a higher wage as an incentive to perform many tasks. But the
pay-for-job system treats all employees deployed in the same position alike.
(2) Under the pay-for-performance system employees tend to raise their skill
level only enough to perform the job on which they are currently deployed,
not making any effort to elevate their skill to encompass broader experience.
Also, these employees may be reluctant to instruct newcomers because it may
affect their performance level on the current job.
(3) Handling problems requires broader experience over time (Koike, 1994).
The job grade is supposed to reflect the breadth of experience or the skill level thatan employee has accumulated over a period of time. The payment-for-job grade
system, in turn, facilitates paying for the employee for the gradual acquisition of
intellectual skills whilst progressing along a clearly defined number of job grades.
Income Data Services, as cited in Wallace (2000, p. 718) defines pay-for-skills or
skill-based pay as "a payment system in which pay progression depends on theacquisition by the employees of new skills." The rate of payment associated witheach job grade thus enables the employer to distinguish between payments for
employees with broad experience and those with relatively narrow experience.
However, most importantly, a small number of job grades is believed to encourage
the development of skills. A large number, such as 50 or 60 job grades, makes a pay
system that does not promote healthy incentives for skill formation.
The skill-based job grade system is a common feature of Japanese human resource
management. Employees belong to a particular job grade and are promoted up grades
over time. These job grades appear to correspond to specific job positions and makea significant impact upon employees’ wages (Shibata, 2002). The remuneration
system of Japanese companies warrants close study to understand how the job grade
affects employees’ wages. Case studies carried out by Koike (1994, 1998b) on major
car manufacturers serve the purpose of improving understanding of the compositionof the pay. In his comparative study of HRD at workshops in the New United Motor
Manufacturing Inc., a joint venture between General Motors and Toyota in the US,
and the Takaoka plant of Toyota in Japan, Koike documented pay systems (Koike,
1998b). At the Takaoka plant the basic wage for blue-collar employees consisted offour parts:(1) the main rate, contributing 40% of the basic wage depended on theemployee's job grade and was affected by annual increments subject to merit
rating(2) job grade pay, contributing 20% of the basic wage was determined by the job
grade of the employee and partly by merit rating33

(3) productivity pay, contributing 20% of the basic wage was characterized by
job grade-based rates, with four years of pay increments reflecting skill
improvements and the group bonus plan(4) age rate, contributing 20% of the basic wage.
According to this case study of the Takaoka plant's practice, the job grade, merit
rating and the length of service significantly influenced determination of the basic
wage. Also, the main rate, job grade pay and productivity pay depended on the job
grade and merit rating, affecting all parts of the basic wage except the age rate. In
addition, the length of service determined the yearly increments in the main rate. In
another case study again of a major car manufacturer, Koike (1994) found that the
job grade system influenced the determination of more than three quarters of
remuneration. Similarly, Shibata (2002), who studied wage and performanceappraisal systems of unionized Japanese and American firms, pointed out that
personal wages and skill-based wages of Japanese employees were determined by theemployees' skill-based job grades, performance appraisals and seniority. In contrast,
both hourly wages for blue-collar employees and weekly or annual wages for whitecollar employees in unionized American firms were based on job attributes. Hiltrop(1991), focusing on human resource management in banks in Europe presented afinding that contrasts with both Japanese and American cases. He, referring
particularly to the pay system of banks in Belgium, concluded that European banks
used historically seniority-based pay along with other methods such as private
pension schemes and payment for overtime work. However, the changes that
occurred in the European banking industry in 1990s provoked them to rely more on
performance-related payment systems. He also noted that this transition to linking
pay to performance was not free of the resistance from trade unions. Hiltrop’s
findings were consistent with those of the research conducted by Keltner (1995).
Hence, bonus schemes were at a severely underdeveloped stage, if only for paying an
extra half-month pay across the board in the years of healthy profits. Interestingly,
since the 1990s there had been a positive trend among managers to see thesignificance of performance-based incentives.
As noted earlier, the major method of skill formation in Japanese companies is OJT,with OffJT being used to supplement this learning-by-doing. It is common thatJapanese firms define jobs broadly, so that an employee in a Japanese firm needs tolearn a larger number of skills than a similar American employee. Given this reality,
pay-for-job grade or pay-for-skill encourages employees in Japanese firms to learn
skills over many years of their career. In effect, it takes many years for an employee
to advance through the entire skill-grade hierarchy in a firm (Morishima, 1995).
Individual claims by Shibata (2002) and Tezuka (1997) of the non-existence of fasttrack promotion systems for high performers or a dismissal system for poor
performers lend much support to Morishima's findings. Shibata also found that
unionized American firms maintained a fast-track promotion system for highperformers and an occasional dismissal system for poor performers with a grace
period granted for improving their performance (Shibata, 2002). The internal labormarket perspective of Japanese firms suggests that hiring people directly out ofschool or university means that they undergo extensive OJT and periodic OffJT;

34

these employees, once they join a company, have few opportunities to advance theirskills quickly. Promotion systems in Japanese companies assess what the employee
is capable of performing rather than what the employee actually performs. All these
phenomena have implications for the significance of cumulative on-the-job
experience and internal training, which produce much steeper wage-tenure profiles
for Japanese employees compared with other advanced countries (Koike, as cited inMorishima, 1995, p. 623). A few examples of this can be drawn from the work of
Koike (1994) and Brown and Reich (1997).
Brown and Reich (1997) pointed out the existence of impediments in American firms
in both union and non-union sectors to forming a career ladder for employees inconcert with gradual broadening and deepening of skills over a series of jobs. These
impediments included relatively flat age-earnings profiles for front-line employees,
frequent use of job evaluation schemes that attach pay to jobs rather than toindividuals, the use of posting and bidding systems to fill vacancies inside the firm,
and narrow job classifications with a small number of well defined tasks. Suchfeatures appeared to create inadequate training incentives and ineffective careerdevelopment (Brown & Reich, 1997). In their opinion, the compensation systemitself acted as an incentive for skill formation among employees of Japanese firms,
with OJT being regarded as integrated with the job assignment and compensation
system. Koike (1994), in a comparative study of HRD and incentive systems forblue-collar employees in Japan and Sweden, reported some mixed conclusions. In
one case in Sweden there was no increase in the basic wage after the employee hadcompleted the initial few years of service. Nor did any merit rating system exist.
Nevertheless, a collective bargaining system existed for revising the basic wage rate.
However in another Swedish case, Koike's observation suggested the existence ofyearly increments and a merit rating for machinists (blue-collar), with a relatively
small system of wage increases for skill development. In contrast, Koike found in a
Japanese case the practice of paying for gradual skill improvement of employeeswith the implementation of merit rating. For white-collar employees in the twocountries, Koike found some similarities as well as differences in HRD and incentive
systems. In both countries, a job-grade-based remuneration system prevailed, with asmall number of job grades, yearly salary increments for a long period and merit
rating. The small number of job grades in both countries suggested that job grade did
not exactly coincide with a particular job. The two countries differed in terms of thepeak age in payments of the age-salary profile. The peak of the age-salary profile
was reached at the age of 50-54 for salaried male employees in Japan, whereas in
Sweden the corresponding age was 45-49. Wallace (2000) found some interesting
phenomena in respect of blue-collar employees in a Volvo plant in Sweden that may
to a certain extent strengthen Koike's findings as regarding blue-collar employees in
Sweden. In comparing the development of competence payment systems in Volvo's
commercial vehicle plants in Sweden, Belgium and the UK, Wallace documented theexistence of a competence ladder and competence development for blue-collar
employees in the Volvo plant in Sweden.19 Every employee who joined the company
19

The terms “Competence Payment Systems”, “Competence Ladder” and “Competence
Development” are used here as they appear in the work of Wallace (Wallace, 2000). It should also be
noted that the term “Competencies” also appears in this work, depending on the context.

35

started at a specific position on the competence ladder and then progressed up theladder. Employees were paid for the competence level they had achieved rather thanfor the particular job that they did at a particular time. Job rotation ensured thateveryone who had reached a particular level of competence was given theopportunity to articulate their skills. This job rotation, in effect, contributed tosharing out the "shitty jobs" among all members of the team (Wallace, 2000).
Another significant area addressed by past research in the context of incentives forskill formation is screening. Screening is a process that identifies employees to bepromoted to higher positions in an organization's managerial hierarchy or upgradedto higher job grades in pay (Koike, 1998a). Several international comparisons of the
HRD of professional and managerial workers in industry have documented practicesof screening of employees for promotions and upgrading in different countries. In
Japanese companies screening does not usually occur during the early years of the
career of employees, whereas early screening prevails in the US, Germany and the
UK (Koike, 1998a; Storey et al., 1991). Honda (1998) also documented similarfindings in his study of HRD in large retail chains in Japan and the UK. A generalmerchandise store that was the case site in Japan had the practice of screening
employees in the marketing function in the latter years of their career. In the financefunction, screening occurred even later. In the electrical goods store that was a casesite in the UK, screening of employees in finance function occurred earlier than in
the Japanese counterpart. This late screening practice in the Japanese firm seemed toprovide the company with the opportunity to evaluate staff over a longer term and toselect employees more effectively.
2.4 Career Development
Career development begins with gaining access to employment. Past studies haveinvestigated the extent of direct recruitment to white-collar positions, with due
consideration given to external experience. In their study focusing on skill creation
systems and career paths for front-line and back office employees of hotels in the US,
Germany and the UK, Finegold et al. (2000) found differences in recruitment
practices among the three countries. Although all three countries were similar intreating social and interpersonal skills of individuals as the most important factor in
determining whom to be hired for front office positions, German hotels rarely hired aperson for a full-time position unless the person had finished an apprenticeship or
higher level qualification. However, in case of US and UK hotels, vocational
qualifications were not deemed necessary for new employees, and those who had
graduated from high school (in the US) or obtained some general school-leaving
qualifications (in the UK) were preferred. Moreover, hotels in the US and UK
strongly considered prior work experience in the customer service industry as anentry-level requirement for front-line and back office positions. Drawing on research
conducted in German banks with apprentices as subjects, Finegold and Wagner(2002) concluded that large banks adopted the practice of developing and retaining
the most able apprentices after their initial apprenticeship, through offering theminternal programs of further training and career progression. These programs were
believed to contain an element of internal career ladders, facilitating those who

36

Table 2.3
Some Illustrations of Studies Examining Incentives for Skill Formation
Author(s)

Year

Focus

Hiltrop

1991

Performance-related pay systems in European banking industry

Koike

1994

Pay-for-job grade as the most effective system in promoting skill formation in
individual employees

Koike

1998a

Compensation plans, promotion or upgrading and performance evaluation as
central measures in incentives for skill formation

Honda

1998

Late and early screening systems of employees

Wallace2000

Pay systems

Nakamura et al.

2001

Impact of wage and promotion policy on skill formation of employees

Shibata

2002

Wage and performance appraisal systems in unionized Japanese and American
firms

Source: Researcher’s original construction.

participated earning promotions through additional work experience, and completing
in-house and external technical and more general courses.
The career progression of these employees occurred through job changes with slow
advancement in Germany, and through job changes within and between hotels incase of the US and UK. Koike (1998a) also noted the practice of recruiting managers
and directors directly from other companies in the US and Germany, while there
seemed to be the least developed external labor market for managers in Japan.
Koike's observations are consistent with findings of the study on the nature and scopeof career development of managers in Japan, the US and Germany conducted by
Morishima (1998a). According to Morishima, the great majority of Japanesemanagers had never worked for any firm other than the current one, whereas the
majority of managers in the US and Germany had previously worked for at least one
other company. Japanese managers’ behavior in this regard is strongly correlatedwith the younger age at which they joined the company, and with the trend to spend
many years there before promotion to the present position. Morishima postulated
three reasons for these phenomena:(1) greater firm-specificity of skills required by Japanese managers incomparison with their US and German counterparts, and the vital role of OJTin Japanese managers’ acquisition of firm-specific skills(2) the importance of observation of managers' on-the-job performance as amechanism to discern their innate ability as a manager in Japanese firms(3) the function of career concerns as an incentive to induce the desired level ofeffort on the current job in the case of managers in Japanese firms.
Kato (1998) drew upon his study covering managers in accounting/finance,
marketing/sales and human resource management/personnel of large firms in Japanand the US. He also concluded that Japanese managers generally had never worked
for any firm other than the one they were presently working for, whereas US
managers had work experience in at least one other firm before they started working
for the present company. Another area of agreement between Morishima (1998b) and
Kato (1998) is the uncommon nature of cross-functional career development in Japan,
the US and Germany (in Morishima's study) and in Japan and the US (in Kato's
study). Both researchers argued that the technological links between the skills
required for marketing/sales, human resource management/personnel and accounting
and finance were not sufficiently strong to permit significant cross-functional skill
development. However, in US companies there was a broader scope of careerdevelopment compared with Japan and Germany (Kato, 1998; Morishima, 1998a).
The research of Storey et al. (1991) supports the findings of Morishima and Kato. As
such, they found that managers in engineering and banks in Britain experienced agreater number of different functions than their counterparts in Japan. However, thecase was different for managers in public utility companies in Japan, who had
experienced more functions compared with their British counterparts. In conclusion,
Storey et al. emphasized that it would be wrong to see wide functional experience as
central to Japanese practice, despite the fact that functional thinking was arguably
more prevalent in Britain.

38

In a related study of career development of Japanese and US managers with specialreference to differences in career breadth, Morishima (1998b) identified two career
dimensions: horizontal and vertical. The vertical career dimension includes job
sequences up or down the organizational hierarchy, while the horizontal dimension
indicates lateral movement across functional areas within the organization.
Examining comparatively three occupations, marketing, finance and human resource
management, Morishima pointed out that managers in both the US and Japan tend to
be rotated through a number of different job areas within one function, and thus thebreadth of job areas appeared to be equally large for managers in the two countries.
However, in terms of diversity of functional assignments, a larger breadth prevailed
for Japanese managers than their counterparts in the US. Another notable finding of
this study was the emphasis placed in Japan on cross-functional assignment over a
few different functions, whereas the emphasis for US managers was placed on
rotating through multiple job areas in one or two functions. In the light of this insightMorishima's findings in his later study (1998b) should be carefully compared withthose of earlier studies by him (1998a) and Kato (1998), since much opportunity forcontradiction could exist.
There are several other studies of career development of white-collar employees inGermany, such as those of Inoki (1998) and Nakamura (1998).20 Inoki focused onlarge retail stores in Germany. He identified a narrowness of experience and productknowledge acquired by the employees in large-scale retail stores. Store managers anddepartment managers from whom he collected career data had specialized in a few
products, and therefore skills of the sales-people were closely related to technicalknowledge of products per se. Very limited transfers among sales departments
appeared to be one prominent reason for this effect. Another important phenomenon
Inoki explored was the practice of promoting to the position of store manager
university graduates who had not experienced the work in the position of department
manager. These store managers' experience of business planning and OffJT provided
by headquarters of the retail store chain had resulted in the emergence of a fast-track
for a small number of store managers. However, screening of employees for the fasttrack promotions occurred not at the time of hiring but a few years after they
completed their study program at the university when they re-entered the firm with ahigher educational background. Nakamura (1998) also found that university
graduates in sales and marketing rather than in personnel or accounting and financereceived quicker promotions than those with other educational attainments.
Furthermore, he recorded a practice of early identification of candidates for future
executive positions in German companies. This identification took place some timeafter the employee's entry into the company, not at the time of entry. Anotherinteresting observation made by Nakamura concerned the inaccuracy of perceiving
German managers as specialists, as managers in accounting and finance vis-à-vis
personnel had a variety of experiences. Further, Kakabadse and Myers (1995), who
studied the qualities of senior managers in the manufacturing sectors in the UK,
France, Germany, Sweden, Ireland, Austria, Spain and Finland have made a20

There are two well-known economists in Japan whose family name is Nakamura. One is Professor
Keisuke Nakamura and the other one is Professor Megumi Nakamura. This citation refers to Professor
Megumi Nakamura’s work.

39

significant contribution to the understanding of those managers’ specialist vs. generalmanagement orientation. In manufacturing sectors in France and Austria, Kakabadse
and Myers, found that senior managers placed emphasis on specialist orientation,
while French managers in particular indicating that technical/specialist side of theirjob as the source of satisfaction. In contrast, the German managers prefer to havethemselves considered as experts and value being members of a profession.
Some of the research on career development deals with front-line employees of callcenters. There have been attempts to shed light on the career development of callcenter employees, with some findings that differ from those presented earlier in thischapter. Several authors have recently observed that call centers have a flat hierarchy
that consists of a few levels, such as call center manager, team leader, and agent or
customer service representative (Belt, 2002; Deery, Iverson & Walsh, 2002).
Researchers focusing on call centers in the UK, Ireland and Australia have reported
little opportunity for either vertical or lateral movement in call center jobs. The stricthierarchical order in call centers has resulted in a high degree of competition for
promotions. Another impediment to call center employees' promotion to managerial
positions is the tendency of organizations to recruit from outside in order to obtain
new insights and ideas for survival in the competitive and fast-changing environment
in which call centers function. Women, who make up the majority of the call center
workforce, prefer to move up the hierarchy within the call center itself, whereas men
prefer to move outside the call center but within the same parent company (Belt,
2002).
2.5 Human Resource Development in Services Sector
There is a growing body of literature exploring various phenomena relating to humanresource management and HRD. Relatively speaking, most of the published researchcontributing to the literature has its roots in the manufacturing industry as opposed tothe service industry. In the service industry itself, the literature on the work of frontline employees is sparse (Korczynski, Shire, Frenkel & Tam, 1996). It is clear from
Section one that this study is situated in the telecommunications sector, which isregarded as a vital part of the service industry worldwide. Service work is deemed tobe different from the production of goods in several respects. The key attributes that
distinguish service from manufacturing are intangibility, perishability, variability,
simultaneous production and consumption, and inseparability (Korczynski, 2002).
Moreover, service work involves primarily symbolic interactions, which take theform of interchanges with other people that covey intangibles such as information,knowledge, attitudes and emotion (Frenkel, 2000). People (popularly referred to as"front-line employees") who are involved in service production and delivery with
face-to-face or voice-to-voice interaction with the customer are said to be acting as
the interface point for the service provider. These front-line employees are thelinchpin or bridge between the service provider and the customer. In elaborating on
the difference between services and goods producers with special reference to thevital importance of the role of front-line employees, Redman and Mathews noted:

40

Table 2.4
Some Illustrations of Studies Examining Career Development
Author(s)

Year

Focus

Storey et al.

1991

Cross-functional experience of managers in Japan and Britain

Kakabadse and Myers

1995

Specialist vs. generalist orientation of managers in manufacturing sector in UK,
France, Germany Sweden, Ireland, Austria, Spain and Finland

Koike

1998a

External labor markets for managers in the US, Germany and Japan

Morishima

1998a

Career development and prior experience of managers in Japan, US andGermany

Kato

1998

Cross-functional career development of managers

Finegold et al.

2000

Career development practices of front-line and back office employees in hotels
in Germany, US and UK

Finegold and Wagner

2002

Developing and retaining apprentices in German banks

Belt

2002

Career development patterns of customer service employees in call centers

Source: Researcher’s original construction.

In services the organizational form is an inverted pyramid with a large number ofindividuals (the majority in most service organizations) coming into direct contact withthe customer. In contrast, a goods producer typically has only a small handful ofpeople – often only the salesforce – who routinely engage in customer contact(Redman & Mathews, 1998, p. 58).

The symbolic behavior of the service provider is depicted in the attitudes, speech,
dress and interactive style of these front-line employees, whose performance cannot
easily be determined independent of the customer (service recipient). In thesecircumstances, the customer inevitably becomes a co-producer of service production,
service delivery and service quality (Frenkel, 2000; Hyde and Davies, 2004; Skaggs& Youndt, 2004). In other words, the presence of the customer in the labor process
constitutes a dominant characteristic of the service provision, extending implications
for designing human resource and HRD practices differently compared with
manufacturing settings (Korczynski, 2002). In the case of manufacturing concerns,
there is a certain time lag between production and consumption, not permitting thecustomer (or ultimate consumer) interacting face-to-face or voice-to-voice with those
who are engaged directly with the production process at the shop floor level. Thus
interacting with the customer simultaneously with production work does notconstitute a significant dimension of HRD in the case of production employees.
Another phenomenon that distinguishes service work from manufacturing isgrounded in the labor process of front-line employees. Particularly, in call centers thefront-line customer service employees who deal with either inbound or outboundcalls perform emotional labor as they are required to display, to a great extent,
appropriate telephone manners and behaviors (Deery & Kinnie, 2002; Taylor & Bain,
1999). These requirements, on the other hand, tend to make those employees hide
their real feelings when they interact with customers. Furthermore, a notableassertion by Korczynski (2004) regarding the nature of service work is the boundaryspanning role of front-line customer service employees. Through direct interactions
with customers these employees gather information on many facets of customer
behavior and communicate them to back office personnel for relevant action. Thus
the nature of the labor process and the boundary-spanning role of front-line customer
service employees extend implications for HRD in service providing firms,
characterizing its uniqueness compared with that in manufacturing organizations.
2.6 Originality of the Present Study
Stiff competition in the service industry has made it indispensable for front-line
employees to treat the customer with due respect, honoring them as human beingsand empathizing with them while taking prompt action in conjunction with processcompletion and follow-up work. Managing moments of truth, therefore, becomes a
crucial aspect of the job of front-line employees. In explaining the strategic
importance of front-line employees in service firms, Korczynski et al. (1996, p. 72)
noted:
It is now commonplace within the management literature to read of the importancewithin service work of the `moment of truth` (Carlzon, 1987), ie of the time when a42customer or a potential customer interact with a firm's employees. It is argued that aservice company must organise itself around customers' needs and that this places
the front line service worker in a position of strategic importance.

In the semi-structured interviews conducted by the researcher with, inter alia, frontline customer service employees of Teleshops of SLT and 116 call center of NTT
East, the word “attitudes” was repeatedly used to describe what matters most in
determining the nature and quality of interaction between these employees and thecustomer. Intensive participant observation work by the researcher at Teleshops also
gave rise to a profound sense of the significance of the role played by the attitudes offront-line customer service employees in interacting with the customer. Past researchon human resource management and HRD in manufacturing organizations, as well as
the little existing research on these subjects in service organizations, has often lacked
specificity regarding the attitudes of employees. The research that has touched uponskill requirements of employees in service organizations has been focused more on
identifying skills and knowledge and not on the nature of attitudes required of
employees. This scant attention to the attitudes of front-line employees constitutes alimitation of research to date. In this study the researcher attempts to contribute to theliterature by exploring and detailing not only the nature of knowledge and skills, butalso the nature of attitudes that are required of customer service employees who form
part of the front-line of SLT and NTT East. Framed within this expectation, theresearcher has chosen the term "competencies" to include knowledge, skills andattitudes. The prime motivation for this choice comes from the work of Rodriguez etal. (2002) that was described in the preceding literature review. It is, therefore,
relevant and appropriate in the context of this study to understand broadly themeaning of competency.
Several authors have presented definitions of competencies. In one of the definitions,as cited in Armstrong (2001, pp. 302-303), Spencer et al. wrote that competencies
consist of the following elements:(1) motives(2) traits(3) self-concept - the individual's attitudes or values(4) content knowledge(5) cognitive and behavioral skills.
Armstrong further described two broad types of competency; (a) work-based or
occupational competencies and (b) behavioral or personal competencies. Armstrong
elaborated:
Work-based or occupational competencies refer to expectations of workplace
performance-what people should be capable of doing-and the standards and outputs
that people carrying out specified roles are expected to attain. Behavioral or
personal competencies are individual's personal characteristics which they bring totheir work roles (Armstrong, 2001, p. 326).

Armstrong's definition of competencies has valuable implications for treating
attitudes as a constituent of competencies. Mathis and Jackson (2000) also
contributed to explaining the meaning of competencies. Their work suggested two
types of competency, visible and hidden. Hidden competencies are regarded asperhaps more valuable in that they can enhance performance. Framed within theconceptualization of competencies by these authors, in this study competencies arebroadly defined to consist of three components: knowledge, skills and attitudes. As
The New Encyclopaedia Britannica explains
Attitudes in social psychology, a predisposition to classify objects and events and toreact to them with some degree of evaluative consistency. … they are manifested inconscious experience, verbal reports, gross behavior, and physiological symptoms(The New Encyclopaedia Britannica, 1994, p. 687).

The nature of the attitudes required of customer service employees and theirimportance among other components of competencies are explored and detailed inthis study, together with an exploration and detailing of knowledge and skills.
However, it should be clearly noted that there is no intention in this study to measuresuch attitudes as well as knowledge and skills.
A significant amount of the limited existing research into the skills and knowledge
required of front-line employees draws mainly upon the operations of call centerswhere customer service employees interact with customers on the telephone, notface-to-face. This study, in contrast, offers an opportunity to study the skills,
knowledge and attitudes required of customer service employees who interact
predominantly with walk-in customers. This interface distinguishes, to a certain
extent, between the skills, knowledge and attitude requirements of customer service
employees interacting with customers by telephone and of those who interact withcustomers face-to-face. The researcher believes this perspective provides anothercontribution to the knowledge in this area.
In this research, the researcher extends the past work of Koike and Inoki (1990),
Koike (1994) and Shibata (1999) by developing the argument that comparing
integrated systems to separated systems need a different interpretation in the case of
the front-line work of customer service employees. In the extensive shop floor levelresearch by these authors focusing on blue-collar employees in manufacturing,
integrated systems featured production employees carrying out maintenance work
such as mechanical troubleshooting. The work of front-line customer service
executives also involves a service production part as well as a maintenance part.
However, this maintenance part is not equivalent to the physical maintenance work
undertaken by production employees in manufacturing organizations. Maintenancework within the job requirements of customer service employees is related to theircontribution to the customer retention efforts of the service provider. This newinterpretation of maintenance work is another contribution that this study makes to
the knowledge in the area. The framework developed by Koike and Inoki (1990) for
classifying operations of a mass-production assembly line into usual and unusual
operations is used in concert with the new interpretation of maintenance work to

44

exploring the in-depth competencies required of front-line customer service
employees.
Nonstandard or atypical work arrangements, which include inter alia, hiring
temporary employees via temporary work agencies (employee dispatching service
companies) are gaining popularity in many countries as a prominent way oforganizing work (Kalleberg, 2000; Koene, Paauwe & Groenewegen, 2004; Olsen &Kalleberg, 2004). The utilization of contingent labor is clearly evident even in callcenters (Callaghan & Thompson, 2002; Deery & Kinnie, 2002). The 116 call centerof NTT East exemplifies this phenomenon, creating a path for exploring
systematically on similarities and differences between human resource managementand HRD systems for two types of front-line employees who work there as telephoneadvisors, regular employees and dispatched employees. Though past studies on callcenters have touched upon temporary employment arrangements, there seems to be adearth of empirical evidence and inadequate conceptual frameworks that explain
deeply the issue of comparison between these two categories of front-line employees
from a human resource management and HRD point of view. Factors that include
essential differences in terms and conditions of employment contract allow for theexamination of the differences between regular and dispatched employees withspecial reference to skill formation, performance evaluation and career formation
patterns even though the content of their job, in some cases, is identical. Global
economic trends have prompted nations to be competitive not only in terms of
quality but also in the cost of their products and services. One likely consequence ofsuch a competitive atmosphere is that many countries, including developing ones,
will move to promote largely nonstandard employment. The current study attempts tofill an important gap in knowledge by exploring the differences between regular anddispatched employees who are similar in terms of job content, offering lessons formany countries for operating atypical labor markets.
Existing research on HRD of front-line customer service employees, and in somecases of blue- and white-collar employees, in manufacturing firms seems to lack aconcerted effort to explore the types of informal OJT that occurs in organizations andhow annual performance evaluation systems are designed and implemented. In thisstudy consideration is given to how informal OJT occurs among customer service
employees and how annual performance systems are designed and implemented withspecial reference to performance factors.
In Sri Lanka there is little existing research on the telecommunications sector and on
various practices in the industry covering technology, strategy, human resource
management, HRD, and so on. Most of the research to date has paid exclusive
attention to the liberalization and privatization of the telecommunications sector, andrelated issues (Jayasuriya & Knight-John, 2000; Samarajiva, 1993). The growth
patterns of the service sector in general and the telecommunications sector inparticular demonstrate the necessity of in-depth research into customer care services
management practices. Therein lies the cutting edge for service providers. Thus thepresent study has the potential to set the platform, at least, for further research into45

customer services management and the related human resource management andHRD.
A literature review by the researcher demonstrated that most previous research on
human resource management and HRD of blue- and white-collar employees has been
based on questionnaires, in-depth interviews, document analysis and observation.
None of the studies has been based on the researcher’s intimate involvement as anactive participant observer in the organizational processes of the research sites. In
contrast, the present study uses intense participant observation along with in-depth
interviews and analysis of company documents at SLT, where the researcher worked
for some time as a part of this research project. This innovative methodology allows
the researcher to explore the practice of customer service management and related
human resource management and HRD concerns in a real organizational context. The
researcher's face-to-face interactions with both walk-in and telephone customers gave
him much confidence in progressing through different interrelated tasks of thisresearch project.

46

Section 3
Research Methodology and Framework
3.1 Ontological and Epistemological Foundations
This research study can be located within the broad category of social science
research employing a substantially qualitative tradition of inquiry. The fundamental
objective of any social science research is considered to be exploring the underlying
social reality. Thus, researchers in social science disciplines are required to have ageneral understanding of the nature of reality that exists in their research setting,which in turn has an important bearing on the output of the research (Hopper,
Annisette, Dastoor, Uddin & Wickramasinghe, 1995; Wickramasinghe, 1998). Froma broader point of view, the philosophical assumptions of social science research
address phenomena including beliefs about the physical and social reality (ontology),
beliefs about knowledge (epistemology and methodology) and the relationshipbetween knowledge and the empirical world (Chua, 1986). Ontological,
epistemological and methodological assumptions that guide a researcher vary
according to the nature of tradition of inquiry, i.e., qualitative or quantitative. In
explaining qualitative versus quantitative research, Denzin and Lincoln noted:
Qualitative researchers stress the socially constructed nature of reality, the intimate
relationship between the researcher and what is studied, and the situational
constraints that shape inquiry. Such researchers emphasize the value-laden nature ofinquiry. They seek answers to questions that stress how social experience is createdand given meaning. In contrast, quantitative studies emphasize the measurement andanalysis of causal relationships between variables, not processes. Proponents of suchstudies claim that their work is done from within a value-free framework (Denzin &Lincoln, 2000, p. 8).

This opinion typifies some essential differences between the two traditions of inquiry,
indicating the necessity of giving due consideration to setting clearly the ontological,
epistemological and methodological position of the research undertaking.
Accordingly, an inquiry of a qualitative nature assumes the following position (seeTable 3.1).
Table 3.1
Ontological, Epistemological and Methodological Assumptions of Qualitative Inquiry
Ontological assumptions
Epistemological assumptions Methodological assumptions
Exploring and discovering
Reality is socially
Knower and known aresocial reality or theory
constructed and subjective
interactive and inseparable.
and multiple realities exist
The researcher is a part of development occurs throughthe context of the research an inductive process.
setting and tries to minimize Inquiry is value-bound andthe distance between himself context-specificor herself and those being
researched
Sources: Chua (1986), Cresswell (1998), Humphrey & Scapens (1996).

47

In contrast, the quantitative tradition of inquiry assumes that reality is objective andsingular, and the researcher is independent of what is being researched. Also, the aimof such an inquiry is to test theory pursuing a hypothetico-deductive approach (Chua,
1986; Premaratne, 2002). However, after careful analysis of the nature of theresearch issue, the objectives of the study, the research setting and the actors therein,
it becomes clear that the overall strategy and methods of this study rest on the
ontological, epistemological and methodological assumptions of qualitative inquiry.
Thus theory development vis-à-vis theory testing is done from empirical evidence.
The influence of previous knowledge on the subject on new theory development is
not undervalued during the process of research (Flick, 2002).
3.2 Research Strategy: Case Study Research
The research strategy chosen for this inquiry is case study research. This selection
was much influenced by the exploratory and descriptive nature of the objectives ofthe study that, in turn, demand depth of analysis rather than surface breadth. The casestudies selected for this research allow a detailed analysis of a number of focal points
as they are pertinent to research sites. Examples of such focal points are organizationof customer service function, employee classification, job structure, staffing,
performance evaluation, compensation system and HRD, as they relate to customer
service employees. Research strategies available for social researchers include
experiments, surveys, archival analysis, histories and case studies. Nevertheless,selection of the strategy for a particular research study is constrained by several
conditions: the type of research questions posed; the extent of control an investigatorhas over actual behavioral events; and the degree of focus on contemporary as
opposed to historical events (Yin, 1994). Yin further contended that several featurescharacterize a case study as an empirical inquiry:••••

it investigates a contemporary phenomenon within its real-life context.
it copes with a technically distinctive situation in which there will be many morevariables of interest than data points.
it relies on multiple sources of evidence, with data needing to converge in atriangulating fashion.
it benefits from the prior development of theoretical propositions to guide datacollection and analysis (Yin, 1994, p. 13).

The objectives of this study, in general, are presented mostly in "how" form. This is areflection of the exploratory and descriptive nature of the study. There is no aim toexercise control over the research setting and the behavior of its actors whilst paying
attention both to past and contemporary events. Furthermore, the theory is discoveredfrom data systematically obtained from numerous actors in the research setting, withsubsequent analysis following the practice of grounded theory (Glaser & Strauss,1967). Eisenhardt's (1989) "building theory from case research" is also relevant forthe case research strategy used for this study. Overall, case studies enable theresearcher to explore and study a variety of phenomena through detailed and deep
insights, with much consideration given to qualitative data gathered from many
actors in individual case sites (Kodama, 2003). Multiple-case design, consisting48

mainly of two units of analysis representing SLT and NTT East, respectively, is usedin this study to gain a holistic understanding of each case and subsequently tocompare them.
Despite the usefulness and richness of case research, there has been criticism of casestudy as a research strategy. This criticism emanates mainly from its lack ofstatistical reliability and validity, inappropriateness for testing hypotheses andmaking statistical generalizations (Gummesson, 2000; Yin, 1994). However, there is
no attempt in this study to use its findings, based on empirical data analysis, formaking any generalizations across populations or universes. This research isdesigned to draw an analytic conclusion rather than a statistical generalization.
Moreover, steps are taken appropriately to establish the reliability and validity of theresearch strategy by applying triangulation and other tactics, such as having theaccuracy of the content of chapters that contain thematically organized and analyzed
data checked by different actors in the research settings.21
3.3 Focus of the Study: Teleshops and 116 Call Center
The research design for case studies comprises five components: (1) the study'squestions; (2) its propositions; (3) units of analysis; (4) the logic linking the data to
the propositions and (5) the criteria for interpreting the findings (Yin, 1994). Twofront-line units, namely Teleshops and 116 call center representing SLT and NTT
East, respectively, were selected as the units of analysis of this study. The rationale
for this selection was based on several factors:(1) Teleshops and 116 call center are regarded as one-stop shops where
customers are believed to be able to obtain all their telecommunicationsrelated needs under one roof22(2) front-line customer service employees who work in Teleshops and Suntel
Centers occupy a boundary-spanning role. Boundary-spanning employees ofservice organizations act as co-producers of services with the customer.
Customers rely, to a significant extent, on the behavior of these employees toform a global image of the quality of service and its provider. Hence, to thecustomer, the front-line customer service employees with whom they interact
are the firm. Furthermore, these employees play a major role in gathering
information about customers (Chung & Schneider, 2002).
Thus, complying with objectives of the research, a meaningful comparison between
the two units is possible along several dimensions and specifically on the following:
21

This was limited to SLT.
One can possibly build an argument showing a marked difference between Teleshops and 116 callcenter. The majority of customers of Teleshops are walk-in customers whereas all customers of 116
call center are telephone customers. This difference carries implications for making a slight distinction
between competency requirements of front-line customer service employees working at Teleshops and116 call center. Though NTT East operates sales counters for walk-in customers, these counters are
not considered important strategically as compared with 116 call center due to the wide diffusion of
telephone facilities throughout Japan.

2249

(1) organization of customer service function(2) employee classification system as it applies to customer service employees(3) job structure (content of job and content of competency requirements) as it
applies to customer service employees(4) staffing system as it applies to customer service employees(5) performance evaluation system as it applies to customer service employees(6) compensation system as it applies to customer service employees(7) HRD system as it applies to customer service employees.
The nature of the operations of Teleshops suggests that they are involved in theprovision of various marketing (mainly selling) and customer care services as amajor front-line unit of SLT. Customers (both existing and potential) of SLT,
irrespective of their place of residence, can obtain these services at any of 23
Teleshops currently operating from different geographical locations in Sri Lanka (seeTable 3.2).
Table 3.2
Teleshop Services
Services provided to customers
Sale of telephone apparatus and other telecommunications equipment
Registration of persons for new telephone line connections
Acceptance of fault reporting and handling of complaints
Acceptance of all types of payment
Registration of persons for ISDN23 and ADSL24 new connections
Registration of persons for the provision of international direct
dialing (IDD) facilities
Sale of enhanced services or value-added services
Sale of pre-paid telephone cards
Acceptance of applications for transfer and removal of telephones
Registration of persons for the provision of Internet and e-mail services
Sale of video-conferencing calls
Organization of demonstrations for Internet, ISDN and ADSL
Sale of telephone directories
Customer education
All types of customer care work
Sources: http://directory.slt.lk/real/eteleshop.asp
SLT, Offering Memorandum, 2002.

Similarly, 116 call center is engaged with marketing (mainly selling) of various
services in addition to the provision of customer care services as a major front-line
unit of Suntel. Nevertheless, it does not involve in accepting payments from
customers. Existing customers as well as potential customers can obtain these
services at 116 Center (see Table 3.3).
23

ISDN (Integrated Services Digital Network) is a set of international standards formulated by theInternational Telecommunications Union for a circuit-switched digital network that supports access to
any type of service such as voice, data and video over a single, integrated local loop from thecustomer premises to the network edge (Newton's Telecom Dictionary, 2002, p. 398).
24
ADSL (Asymmetric Digital Subscriber Line) is an evolving high-speed transmission technology(Newton's Telecom Dictionary, 2002, p. 38).

50

Table 3.3
116 Call Center Services
Services provided to customers
Telephone service applications and changes- installing a new telephone line
- moving a telephone line to a new location- changing the name on the subscription rights- temporary suspension of telephone service- change of address etc.
Useful (value-added) services- call waiting- call forwarding- nuisance call blocking etc.
Services for Internet access and multimedia use- ADSL- ISDN etc.
Selling telephone equipment (especially with new telephone lines)
Billing inquiries
Discount options
Customer education
Source: http://www.ntt-east.co.jp/product_e/guidebook/index.html
Note: For detailed billing inquiries customers can contact the billing
center pertaining to the area where they live. 116 call center handles
only simple billing queries.

3.4 Purposive Sampling
Giving due consideration to the objectives and focus of the study, the nature of theinquiry being employed and the research strategy being adopted for this study,organizational actors of both research sites were chosen who were most closely
associated with the process of provision of customer care as front-line customer
service employees. In addition, organizational actors who were involved in designingand implementing human resource management and HRD policies that influence thecareers of, among others, customer service employees were chosen. Though all these
actors, i.e., in customer service and human resource, occupy various levels of theorganization, they all collectively hold a stake in customer care services management.
Also, these various actors characterize both homogeneity and heterogeneity inperspective due to the nature of their jobs, length of experience and career histories.
In explaining the relationship of purposive sampling (or theoretical sampling)25 toresearch employing qualitative inquiry, Silverman (2000) quoted the earlier work of
Denzin and Lincoln to explain:
Many qualitative researchers employ … purposive, and not random, sampling
methods. They seek out groups, settings and individuals where … the processes
being studied are most likely to occur (as cited in Silverman, 2000, p. 104).
25

Purposive or theoretical sampling can be contrasted with statistical sampling. The former is
employed to discover categories and their properties, thereby suggesting interrelationships within atheory. Statistical sampling is performed for obtaining accurate data on distributions of people orevents to be used in descriptions or verifications (Glaser & Strauss, 1967, p. 62).

52

From this perspective it is clear that the sampling method can have a significant
impact on the reliability and relevance of the areas or dimensions covered in the
study. Bryman (1988) also explained that qualitative research follows a theoreticalrather than a statistical logic as it generalizes cases to theoretical propositions rather
than to populations. Accordingly, selecting individual organizational actors andprocesses to study on the basis of the relevance of their work or jobs to the objectivesof the study is meaningful. However, purposive sampling demands critical thinking
about the characteristics of the actors and processes in which the researcher isinterested, and choosing the sample carefully to meet the requirements of the study.
The purposive sampling procedure used in this research for conducting intensive
interviews for collecting data consisted of the following steps:(1) choosing, at the fist stage, organizational actors at headquarters level of NTT
East who were engaged with strategy and policy formulation work in respectof customer care services management, human resource management andHRD of customer service employees(2) choosing organizational actors at one particular 116 call center who wereinvolved in front-line customer care service work26(3) choosing customer service employees working at Teleshops. As theinterviews were progressing, the other actors who were involved in strategy
formulation and policy-making in the sphere of customer care services
management, human resource management and HRD as they are related tocustomer service employees were chosen and interviewed. Inputs for
identifying these actors were obtained from interviews with customer service
employees.27
This procedure enabled the researcher to study focal phenomena within the context inwhich they operate, to collect and analyze data and decide what data to collect next
and where to find it, in order to develop theory as it emerged. Interviewing
organizational actors on different occasions paved the way for the researcher to
identify other important stakeholders in the process and thereby approach them forcollecting data. As Glaser and Strauss (1967) pointed out:
Beyond the decisions concerning initial collection of data, further collection cannot
be planned in advance of the emerging theory … The emerging theory points to thenext steps (p. 47).

The sampling of organizational actors in this study ceased when the researcher
reached theoretical saturation, with no additional data being found. Tables 3.4 and26

The headquarters of NTT East chose this 116 call center for the researcher for his intensive
interviews with manager and telephone advisors.
27
One difference in the order of choosing interviewees at research sites is commencing interviews
with organizational actors who were not on the front-line of 116 call center at the time they wereconducted. On the contrary, interviews at Teleshops started with front-line employees. Fieldwork theresearcher had completed assuming the role of observer-as-participant at Teleshops earlier made it
possible for him to approach directly those front-line customer service employees.

53

3.5 indicate the number of interviewees from whom data was collected at SLT and
NTT East, respectively.
Table 3.4
Sample of Interviewees at SLT
Category of employees/job title
Teleshop staff (except Teleshop managers)
Teleshop Managers
Staff of Teleshop Headquarters (except Head of Teleshops
section and managers)
Manager - Products and services (at Teleshop headquarters)
Manager - Teleshop administration (at Teleshop headquarters)
Manager - Systems (at Teleshop headquarters)
Engineer - Manpower planning
Head of Section (Deputy General Manager) - Teleshops
Head of Division (General Manager) - Human resources
Head of Division (General Manager) - Industrial relations andwelfareHead of Division (General Manager) - Corporate strategy
Assistant Manager - Industrial relations and welfare
Trade union leaders
Source: Researcher's diary.
Table 3.5
Sample of Interviewees at NTT East
Category of employees/job title
At 116 call center
Telephone Advisors- regular employees- dispatched employees
Manager
At NTT East Headquarters
Sales Planning Officer – Customer service department
Sales Planning Officer – Front service department
Associate Manager – Customer service department
Associate Manager – Sales and customer service department
Senior Manager – Customer service department
Source: Researcher's diary.

Number of interviewees
35
16
5
1
1
1
1
1
1
1
1
1
2

Number of interviewees

2
2
1

1
3
1
1
1

3.5 Methods of Data Collection
The data in this study were collected using mainly participant observation and semistructured in-depth personal interviews (intensive interviews). However, the research
approach adopted in this study is in marked contrast to the approach applied in muchof the existing case study research in human resource management and HRD. Rather
than being based on the collection of data only by interviews, documentation andarchival records, as they are commonly used in case study research, this study relied53significantly on intensive participant observation28 or fieldwork. Flick (2002) notedthat in qualitative research, the researcher and his or her communicativecompetencies are important so that the researcher cannot adopt a neutral role ininteracting with people involved in the research process. Hence, this intensive
participant observation enabled the researcher to gain hands-on work experience ofinteracting with customers in the real work setting of Teleshops, in addition tocollecting data through talking informally with other customer service employees andobserving directly their work. Atkinson and Shaffir (1998), citing the work of Webb
et al., quoted:
Field research commits the observer to learning to define the world from theperspective of those studied and requires that she gain as intimate an understanding
as possible of their way of perceiving life. To achieve this aim, the field researcher
typically supplements participant observation with additional techniques inqualitative research, such as semi-structured interviews, life histories, document
analysis, and various nonreactive measures (as cited in Atkinson & Shaffir, 1998, p.
44).

Among various methods of data collection, no single method can be seen as superior
to the others, as each method has its own strengths and weaknesses. Invariably, thisgives rise to the use of multiple sources of evidence for building good case studies(Marshall & Rossman, 1999; Yin, 1994).
The researcher’s gaining exposure to the customer service function of NTT East in2000 characterized the first stage of fieldwork. During this phase the researcher
observed directly some key operations in two call centers,29 also collecting data byconducting semi-structured interviews to supplement these observations. At thisstage, the researcher identified himself as an observer and intervened in neither thesocial nor the decision-making process. This is in contrast to the observer-asparticipant role played at Teleshops. In effect, the researcher was able to acquire abasic understanding of how the customer service function of NTT East wasorganized and of human resource management and HRD aspects as they related tocustomer service employees, particularly of the 116 call center, as a pre-requisite to
studying customer service function at SLT under NTT-style management, at a laterstage.
Guided by the understanding of customer service operations of NTT East, the second
stage of fieldwork consisted of the researcher taking an observer-as-participant role,
28

The methodology of “participant observation" involves a flexible, open-ended, opportunistic
process and logic of inquiry through which what is studied is subject constantly to redefinition basedon field experience and observation (Jorgensen, 1989, p. 23). In the process of participant observation
the researcher can play either a covert or an overt role leading to identification of four field roles:
complete participant, participant-as-observer, observer-as-participant and complete observer(Atkinson & Shaffir, 1998, pp. 56-57). Differences among these roles depend on the extent to which a
researcher participates in the social and decision-making processes of the research setting.
29
Two call centers, 116 and 113 are involved in providing various services to customers as a one-stop
shop and a fault clearing unit, respectively. A detailed account of 116 call center is provided later inthis report to establish the relationship between SLT and NTT-style management.

54

at Teleshops of SLT every Saturday over a period of six months. The reason forchoosing Teleshops for this exercise derived from Teleshops being a new dimensionof the emerging culture of SLT under NTT-style management, and their similarity toa great extent with the 116 call center of NTT East. The process of gaining access to
SLT and obtaining the required permission to work at Teleshops was undertaken
through contacts that the researcher had already built up with the All NTT Workers’
Union of Japan, which has its national headquarters in Tokyo. There simply was notenough time for the researcher to build the relationships necessary for gaining accessto SLT, as he had virtually no contacts at that time with the Sri Lankans and Japanese
expatriates working there. Therefore, it must be acknowledged that the All NTT
Workers’ Union of Japan shortened the process of gaining access to SLT, enabling
the researcher and his counterparts at SLT to build a trustworthy relationship fromthe start.
During this half-year the researcher was able to work at three Teleshops for nearly
two months each. However, before the commencement of work the Head of
Teleshops section, who was the researcher's main point of contact at SLT, provided
the researcher with some planned lessons from which he gained a preliminary
understanding of the Teleshops concept and its gradual evolution within SLT. Areas
covered during this period at the three Teleshops included front-line as well as backoffice functions. Furthermore, informal interviews were conducted with members ofstaff of these Teleshops depending on their availability and volume of work (seeTable 3.6).
Table 3.6
Areas of Work Covered as an Observer-as-Participant at Teleshops of SLTName of Teleshop
Location of Teleshop
Areas of work covered
Operating cash register, issuing
World Trade Center Main business district ofvarious applications to customers,
Colombo (metro)
assisting staff with back office
work, attending meetings withstaff and observing interactions
between staff and customers
Kalutara

Outskirts of Colombo(regional)

Observing interactions between
staff and customers and assisting
staff with back office work

Kotte

Suburbs of Colombo (metro)

Observing interactions between
staff and customers, issuing
various applications to customers,
assisting staff with back office
work and attending training

Source: Researcher's diary.

Additionally, in between the schedule of participant observation work, the Head of
Teleshops section continued to facilitate the researcher's reflections on key learning
points and permitted the researcher to attend a monthly meeting of Teleshop
managers and the annual meeting of Teleshop managers with a major consignor of55

telephone apparatus and other telecommunications equipment to Teleshops. These
actions on the part of the Head of Teleshops section supplemented the researcher's
understanding of the operations and work organization of Teleshops.
The data in this study were also collected using semi-structured in-depth personal
interviews with 67 organizational actors of SLT and 12 organizational actors of NTT
East which includes five employees of a 116 call center (see Tables 3.4 and 3.5). All
these organizational actors are believed to be associated with the provision of frontline customer care services, human resource management and HRD aspects ofcustomer care services function. As shown in Tables 3.4 and 3.5, more than a half of
the interviewees at SLT and a little more than a 40% of interviewees at NTT East
were customer service employees working in Teleshops and 116 call center,
respectively. The predominant objective of these interviews was to address a range ofsubjects in detail, including the nature of front-line customer care work, workorganization of customer service function, employee classification, job structure,staffing system, performance evaluation system, compensation system and HRD
system, as they were pertinent to customer service employees. The interviews also
covered perceptions of the meaning of customer care, the way in which customer
care work differed from other work in the organization, and the educational andcareer history of customer service employees, data that are presented appropriately inthis thesis. Rich descriptive data of this nature cannot be obtained by the use ofquestionnaires, but planned conversations in the form of intensive interviews withthose involved in the provision of front-line customer care, human resource
management and HRD aspects of customer service organization enabled theresearcher to gather broader insight of the experience of interviewees. Quoting
Lincoln and Guba, Hines, McBride, Fearnley and Brandt justified the use ofinterviews as a data collection method:
They allow the researcher and researchee to move back and forth in time; toreconstruct the past, interpret the present and to predict the future (Hines et al., 2001,
p. 65).

Thus, the organizational actors interviewed were able to share their knowledge,
experiences and comments on subjects addressed in this study, building further
richness into data collected by participant observation. It is noteworthy that intensive
interviews allowed the researcher to probe beneath the surface of data that otherwise
may be accepted at face value. In some cases, interviewees may even tend not todisclose information requested by the researcher unless the researcher moves backand forth during the course of conducting the interviews (Lewis, 1998).
All interviews were conducted according to interview protocols that contained both
structured and open-ended questions (see Appendix A [SLT] and B [NTT East] forinterview protocols).30 These were conducted by the researcher at the interviewees'
workplace or a place designated by persons who coordinated logistics for interviewsat research sites. The vast majority of interviews were conducted on a one-to-one
30

Circumstances that emerged during intensive interviews led the researcher to contact many otherorganizational actors from whom data were collected by conducting format-free interviews.

56

basis in face-to-face mode, but a few especially at Teleshops, were conducted using
telephone and video-conferencing. The interviews at NTT East were organized
during four time periods, November 2000-March 2001, June 2004, August 2004 andNovember 2004. The average time per interview was one hour. 31 Likewise theinterviews at SLT were conducted during three time periods, August-September
2002, January-March 2003 and July-September 2003, and the average time spent
with an interviewee in each period ranged from 45 minutes to one hour. Data
gathered in all interviews were taped and then transferred to written notes. In
addition, throughout the data collection phases ongoing analysis was aided by notes
taken during interviews and listening to interview tapes. This, in effect, provided aframework for subsequent interviews for addressing topics concerned at a practicaland searching level. The qualitative data presented in this thesis are organized on thebasis of recurring themes from the content of these written notes. Sections of notesthat were sought particularly in respect of SLT and NTT East included the following:organization of customer service function and human resource and HRD aspects offront-line customer service employees of Teleshops and 116 call center, including
employee classification system, job structure, staffing system, performance
evaluation system, compensation system and HRD system.
Throughout the various phases of participant observation and data collection
interviews the researcher also engaged in an analysis of documents and archival
records belonging to the case sites. The majority of the documents and archival
records analyzed were in unpublished form. However, this documentary analysis andsearch of archival records as supplementary measures contributed towards
confirming the validity and relevance of evidence collected by participant
observation and intensive interviews.
3.6 Triangulation and the Quality of Research Strategy
Case study research, as a strategy, has earned a mixed recognition due to thestrengths as well as weaknesses of theory building from cases. Strengths emanate
from, among others, its likelihood of generating a novel theory, the testability ofemergent theory, the empirical validity of the theory, and the development of aholistic view of phenomena being researched. Criticisms leveled against case study
research include its lower statistical reliability and validity, the lack of simplicity oftheory built from it, and the possibility that this theory in turn may tend to describe
idiosyncratic phenomena (Eisenhardt, 1989; Gummesson, 2000). In general,
empirical social research employs four tests for establishing quality: constructvalidity, internal validity, external validity and reliability. These tests are also
relevant to case study research (Yin, 1994). Yin further explained what each test
entails, specifying the following:
31

The interview with the Associate Manager – Customer Service Department in 2000 lasted for about
two and a half hours whereas the interview with Manager of the particular 116 call studied took twohours in total on two separate days on two closely related interview protocols. The interview with theManager on the second occasion provided broader insight of the distinction between regular
employees and dispatched employees who work as telephone advisors, from a human resource
management and HRD point of view.

57

(1) construct validity - establishing correct operational measures for theconcepts being studied(2) internal validity - establishing a causal relationship as distinguished fromspurious relationships32(3) external validity - establishing the domain to which a study's findings canbe generalized(4) reliability - demonstrating that the operations of the study can be repeatedwith the same results (Yin, 1994, p. 33).
This study addressed three of these four tests using several tactics depending on thephase of the research project. 33 To establish correct operational measures for theconcepts being studied, the researcher used triangulation, establishing a chain ofevidence and having key informants read the written materials, during the datacollection and composition phases. Triangulation was achieved through collecting
data from various organizational actors who dealt directly or indirectly with theprovision of front-line customer care service, human resource management and HRD
aspects of customer service function. The use of multiple methods of data collection
also contributed to the triangulation process. In addition, some questions in theinterview protocols were repeated with the same interviewee at different stages ofdata collection interviews. In most cases one interview led to the establishment of theidentity of who should be interviewed next, thus creating a chain of evidence to findconsistency of the content of subjects covered in the study, as mentioned earlier.
Furthermore, the researcher could obtain the assistance of some key interviewees,
particularly of SLT, to read interim notes that he prepared based on data collected,
allowing him to make necessary changes in their content.
Intensive interviews were guided by interview protocols, with a few exceptions when
the opportunity arose to meet particular interviewees with appointments arranged
suddenly when planned interviews were being conducted. Also, a case study
database was developed using written notes prepared from audiotaped interviews, sothat the researcher could retrieve them at a later date. The two measures, interview
protocols and case study database, were influential in building the reliability. Theinterview protocols, in particular, made an important contribution to the preparatory
work of interviews.
With research employing case strategy, it is commonly claimed that the caseresearcher is unable to raise the level of generality of the resulting theory (Eisenhardt,
1989). Within the context of external validity, whether the findings of this study are
generalizable beyond the case sites chosen remains an important issue. Nevertheless,the comparison between Teleshops and 116 call center does shed some light on how
32

Yin (1994, p. 33) argues that internal validity is an important consideration in explanatory or causal
studies and not in descriptive or exploratory studies.
33
The objectives of this study are mainly of an exploratory and descriptive nature. As such, internal
validity is not a critical concern because it involves establishing causal relationships whereby certain
conditions are shown to lead to other conditions as distinguished from spurious relationships (Yin,
1994, p. 33).

58

differences in organization-specific variables can impact on the internal context ofthe organization of customer service function, human resource management and
HRD aspects related to them. Apart from this contribution, this study is believed tobe capable of demonstrating lessons on what can be learnt from soft management
practices of an internationally known telecommunications company in Japan. Theselessons on organizing customer service function, good human resource and HRD
practices contributing to delivering better customer service would prove of greatvalue to SLT in formulating strategies and policies to enhancing its capability togrow and survive in an ever-expanding telecommunications sector in Sri Lanka. The
extent to which these lessons are beneficial to organizations in similar and different
industries in Sri Lanka deserves exploration in further research. Furthermore,international comparisons of HRD are now a well-established research area. While
there has been a wealth of studies, the majority appear to emphasize the
manufacturing sector, covering the comparison of HRD practices mostly indeveloped countries. International comparative work in this area of research isparticularly useful for building networks of researchers in developed and developing
countries who can collaborate to provide broader insights through further research.
3.7 Research Framework
The research framework used in this study draws on the dominant management styleof the main foreign shareholder/strategic partner that is believed to impact
significantly on the operations of SLT. Particularly, the impact of management styleon the organization of the customer service function and on the manner in which thecustomer service function is organized affects job structure. The study also addresses
how systems such as employee classification, staffing, performance evaluation,compensation and HRD support this job structure. Taking theory development, a stepfurther, the study develops two paths to customer retention (organizational
performance).
Figures 3.1 and 3.2 present the overall research framework employed in this study.
Institutional relationships are depicted in Figure 3.1 (part I) whereas Figure 3.2 (partII) illustrates the organization of customer service function, its relationship to the job
structure of customer service employees and how various human resource
management functions support this job structure. To supplement Figure 3.2, Table
3.7 presents definition of variables in the research framework (part II). The
remaining vital part of Figure 3.2 illustrates the two paths leading to the final
outcome of customer retention:(1) Path 1 - reaching the final outcome, through structuring the jobs of customer
service employees with the support of human resource management functions.
In this path, it is assumed that job structure impacts on the actual behavior ofcustomer service employees (interim outcome), which in turn affects the final
outcome of customer retention.
(2) Path 2 - reaching the final outcome, through forming and improving
competency level of customer service employees with the proper applicationof human resource management functions. In this path, it is assumed that the59competency level of customer service employees influences their actual
behavior (interim outcome), which in turn determines customer retention.
Within the context of these relationships the research proceeded as follows. First, theorganization of the customer service function of SLT and 116 call center was
explored. Second, the manner was examined in which the organization of thecustomer service function impacts on the job structure of customer service
employees. Third, the study demonstrated how this job structure of customer service
employees was supported by systems consisting of employee classification, staffing,
performance evaluation, compensation and HRD. Finally, the relationships between
human resource management functions, job structure, behavior of customer service
employees and customer retention on the one hand and between human resource
management functions, competency level of customer service employees, behaviorof customer service employees and customer retention on the other hand, were
established. Although customer retention seems to be a crucial variable, this study
does not intend to address how customer retention is achieved by pursuing these twopaths. The confidentiality of the data on customers and length of their relationshipwith service providers concerned prevented the researcher from gaining access tosuch data at research sites. From methodological point of view too, a meaningful
analysis of how these two paths lead to customer retention requires the utilization ofquantitative data showing the length of relationship between customers and researchsites, the length of service of customer service employees interacting with thesecustomers, etc.
Figure 3.1
Research Framework (Part I) - Institutional Relationships

SLT (Sri Lanka)
As a majorchangeintroduced byNTT-stylemanagement

Teleshops(One-stop shop)

Relationship in terms ofshare ownership andstrategic partnership

NTT Com (Japan)

Relationship assubsidiaries ofNTT
Impact ofNTT-style management
Comparison(see Figure 3.2 for detail andTable 3.7 for definition ofvariables)

Source: Researcher’s original construction.

60

116 call center of
NTT East(One-stop shop)

Figure 3.2
Research Framework (Part II) - Relationship between Organization of Customer Service Function, Job Structure of Customer Service Employees, Human
Resource Management Functions and Their Outcomes
Organization of Customer Service Function

Outcomes

Job StructureInterim Outcome

Final Outcome

Behavior of Customer
Service Employees(Actual Behavior)

Customer Retention(Organizational
Performance)

Human Resource Management Functions
Staffing
Interim Outcome

Performance Evaluation
and Compensation
SystemCompetency Level ofCustomer Service
Employees(Performance in terms of
the Quality of Human
Resources)

Human Resource
Development (HRD)

Infrastructure for Human Resource Management

Path 1 to Final Outcome

Employee Classification

Path 2 to Final Outcome

Source: Researcher’s original construction.

61

Table 3.7
Definition of Variables in Research Framework (Part II)
Variable name
1. Organization of customer service function

Variable description
Area of authority and autonomy, type and number of customer interface points, number of staff
per outlet, reporting relationship, hours of business and array of service provision

2. Job structure

Content of job (by job title) and content of competency requirements – what customer service
employees are expected to do with what type of competencies

3. Staffing

Recruitment and selection (method of staffing), prior experience, gender composition, type of
employment and assigning employees to jobs (job assignment)

4. Performance evaluation

Format, key results areas/targets, assigning weight to performance factors and overall
performance grades

5. Compensation system

Basic pay, annual increment and incentives for competency formation

6. Human resource development (HRD)

Competency formation system (formal OJT, informal OJT and OffJT) and career structure(vertical career, horizontal career and speed of promotion)

7. Employee classification

Job titles and job definition

8. Behavior of customer service employees

How customer service employees interact with customers in actual work setting – what customer
service employees really do

9. Competency level of customer service employees

Level of knowledge, skills and attitudes of customer service employees – what customer service
employees can do

10. Customer retention

Percentage of customers who continue to be connected to the network of the service provider.
For example, the number of customers who makes repeat purchases divided by total number ofcustomers in a given length of time

Source: Researcher’s original construction.

62

Section 4
Sri Lanka Telecom Limited
4.1 Institutional Profile
Study of the evolution of the telecommunications sector worldwide suggests thattelecommunications services were historically founded and operated for many years
by the governments of respective nations as state-owned (government-owned)
monopolistic enterprises (Frempong & Atubra, 2001). The history oftelecommunications in Sri Lanka and that of SLT as well date back to 1858 when thefirst telegraphic circuit was established between Galle, the modern capital of thesouthern province of Sri Lanka, and Colombo. The first international telegraphcommunication was also established between Sri Lanka and India in the same year
(www.slt.lk; Sirimane, 2003). In tandem with the global pattern, postal, telegraphic
and telephone services were managed as a state-owned enterprise on a monopolistic
basis in Sri Lanka from the start, and that arrangement lasted until the end of the
1980s when Sri Lanka embarked on a policy of deregulation and liberalization of
telecommunications. Thus 1980 marks a milestone year as the beginning of a series
of institutional reforms in the telecommunications sector of Sri Lanka (Samarajiva,
1993).
Built up by a dramatic series of changes in the form and ownership of theorganization over more than 100 years, SLT has an identifiable evolutionary
character. The first step in the institutional reform program of thetelecommunications sector in Sri Lanka was the separation of telecommunications
from postal services. In effect, the operations and management oftelecommunications were transferred to the newly formed Department of
Telecommunications (hereinafter referred to as "DOT"). With this organizationalchange DOT functioned as a normal department subject to the financial andadministrative regulation of the GOSL. The International Bank for Reconstruction
and Development (World Bank) actively encouraged bifurcation of the Departmentof Posts and Telecommunications in 1980 whilst pledging financial assistance fordeveloping the telecommunications sector, as the potential of telecommunications as
a viable income earner for the Government was high (Samarajiva, 1993). The
prevailing circumstances before the bifurcation further signaled the possible financial
dependency of the postal services in the country on the income generated bytelecommunications. The next step of institutional reform of the telecommunications
sector was the conversion of DOT into a fully state-owned corporation called "SriLanka Telecom".34 Following the provisions of the State Industrial Corporations Act,
34

Financial regulations of the GOSL require all Government departments to remit the total revenue
earned to the Government Treasury and to obtain financial resources for meeting their capital andrecurrent expenditure from the Government budget. Given this context, the level of freedom andflexibility available for a Government Department to manage financial resources for its further
development is considerably restricted. But, when compared with Government departments, stateowned corporations have greater autonomy in financial management as they can utilize the income

63No. 49 of 1957, Sri Lanka Telecom was established in February 1990. Subsequently
all the property, rights and liabilities of DOT were transferred to Sri Lanka Telecom
under the Sri Lanka Telecommunications Act, No. 25 of 1991 (SLT, Annual Report,
2002).
Several phenomena that emerged between late 1990 and 1996 were influential inpushing Sri Lanka Telecom as a state-owned corporation into the next stage of its
evolution. At the forefront of these was the renewed attempt by the GOSL toprivatize Sri Lanka Telecom as the national telecom operator and the gradualintroduction of competition into the telecommunications sector by issuing licenses
for cellular services, paging services and fixed wireless local loop operators. The
Government then proceeded gradually to convert Sri Lanka Telecom into a totally
Government-owned public limited company called Sri Lanka Telecom Limited, as anintermediate step on the path towards the eventual privatization of the national
telecom operator. Consequently, Sri Lanka Telecom Limited, as a totally state-owned
public limited company, was established in September 1996 under the provisions ofConversion of Public Corporations or Government Owned Business Undertakings
into Public Limited Companies Act, No. 23 of 1987 (SLT, Annual Report, 2002).
The most striking event in the recent history of SLT was the divesting of 35% of its
ownership of SLT by the GOSL, which was the sole shareholder of SLT as a public
limited company. It did this through a competitive bidding process to NTT in Japanin August 1997 (SLT, Annual Report, 2002). This development was the result of the
Shareholders' Agreement into which the GOSL and NTT35 entered in August 1997.
In connection with this investment, the GOSL and NTT entered into the NTT
Services Agreement in August 1997 for a period of five years, for the provision ofoperational plans, technical know-how and technical assistance services including
secondment of employees of NTT to fill key management and technical positions of
SLT (SLT, Annual Report, 1997; SLT, Offering Memorandum, 2002).36 Though theinitial period of the NTT Services Agreement expired in August 2002, SLT and NTT
Com entered into the NTT Secondment Agreement in October 2002. Thissecondment agreement allows NTT Com to second executive personnel to thepositions of Chief Executive Officer and Chief Financial Officer until December
2004 and December 2003, respectively, for engagement by SLT on a full time basis(SLT, Offering Memorandum, 2002). The original Shareholders' Agreement that the
GOSL and NTT entered into in August 1997 was amended in November 2002. As ageneral rule, pursuant to the original agreement NTT Com nominates up to four
members of the board of directors of SLT and the GOSL nominates the other six
members including the Chairman. NTT Com also has the power to designate thethey generate for further development of the corporation. Growth in demand for telephones in 1980s
was also a factor in converting DOT into a state-owned corporation.
35
As mentioned earlier, NTT transferred its full share ownership in SLT to NTT Communications
Corporation in March 2000.
36
The NTT Services Agreement for the period covering August 1997-August 2002 made provisions
for NTT to be considered as the strategic partner of SLT because NTT was entrusted with the
management of the company.

64

SLT's Chief Executive Officer who is responsible for the overall operations of thecompany and operates under the authority granted by the board of directors.
Since its privatization, SLT has undergone some significant changes in its corporate
identity as a public limited company in Sri Lanka, including the following:(1) obtaining a listing from Colombo Stock Exchange(2) issuing unsecured redeemable five year debentures(3) the GOSL divesting a further 12% of its stake by an initial public offer(4) commencing trading SLT shares publicly on the Colombo Stock Exchange(SLT, Annual Report, 2002).
With these developments in its corporate identity SLT has now become a public
listed company with limited liability. Figure 4.1 and Table 4.1 present information on
the company’s shareholding structure and the composition of its board of directors asof December 2002, respectively.
Figure 4.1
Shareholding Structure of SLT
General Public,
15.3%

Government of
Sri Lanka,
49.5%
NTT
Communications
Corporationin Japan,
35.2%

Source: SLT, Annual Report, 2002.
Table 4.1
Composition of Board of Directors of SLTName of shareholder

Number of nominees
on board of directors
6 (including Chairman)
4 (including Chief Executive Officer)none
10

Government of Sri Lanka
NTT Communications Corporation
General public
Total
Source: SLT, Annual Report, 2002.
Note: ‘General public’ includes employees of SLT, corporate institutions andindividual citizens.

65With regard to the workforce, SLT employed 8,274 persons37 islandwide as of theend of June 2003. The gender ratio of the workforce remains 25% female and 75%
male. Tables 4.2 and 4.3 summarize the strength of the workforce in terms ofgroups/functions of the organization and major categories based on job grades,
respectively.
Table 4.2
Group-/Function-wise Distribution of Workforce of SLT (as of June 2003)
Function
Number of employees
As a percentage of total
number of employees
5.79
479
Administration
0.60
50
Corporate strategy
15.78
1,306
Customer services
1.85
153
Finance2.79
231
Human resources
1.20
99
Information technology
2.48
205International
3.86
319
Marketing and Internet protocol
2.86
237
Network planning and engineering
15.33
1,268
Metro
19.13
1,583
Region 1
21.15
1,750
Region 2
5.79
479
Region 3
1.39
115
CEO, Chairman and other
Source: Researcher's diary.
Table 4.3
Major Categories of Employees (Job Grade-wise)
Job category
As a percentage of total
number of employees
45
Junior staff
27
Clerical and allied staff
12
Middle level technical staff
5
Executives
2
Marketing5
Contract4
Drivers
Source: Researcher's diary.

4.2 Organizational Transformation under the Management of Nippon
Telegraph and Telephone Communications Corporation
Japanese investment in Sri Lanka has a long history (Board of Investment of Sri
Lanka, 1996). But the year 1997 occupies an important place in this respect as it wasat this time that NTT entered the telecommunications industry in Sri Lanka with a37This figure includes both permanent and contract employees.

66US$ 225 million investment in SLT, 38 becoming the single largest foreign direct
investor in Sri Lanka up to that time (Jayasinghe, 1997). As mentioned in thepreceding section, with this investment NTT became the strategic partner of SLT bybuying 35 percent of its stake in addition to entering into an agreement (NTTServices Agreement) with the GOSL to supervise day-to-day operations of SLT,
initially for a period of five years. The NTT is considered one of the largest
telecommunications conglomerates in the world, having investments in many
countries such as Indonesia, Thailand, and the Philippines. Many factors influenced
NTT to invest in Sri Lanka. In this regard, it is worth quoting at length Hideaki
Kamitsuma, the first Chief Executive Officer of SLT under NTT-style management:
NTT's strategy, firstly, is focused in Asian countries. Other mega telephone
operators are looking at different areas in the globe whereas NTT's main focus is in
Asia. Secondly, NTT's desire to enter into the domestic market of these countries
and to improve and develop telecom services in their chosen areas, from the groundup. Thirdly, NTT intends to develop and maintain a friendly relationship withcountries they invest in and fourthly, they intend to provide international services
between these countries. Apart from that, NTT took advantage of a very good
opportunity the Sri Lankan Government gave them to invest in this country. NTT's
investment in Sri Lanka is one of the many interests they have in this region such as
Indonesia, Philippines, Thailand, India etc. So, NTT sees Sri Lanka as a country withlots of opportunities (Business Today, September 1997; interviewed by Dilki
Wijesuriya).

Kamitsuma also believes ardently that there is strong demand in thetelecommunications market in Sri Lanka and that there is, therefore, considerable
potential for NTT to reap the benefits of its investment on a long-term basis:… (T)he penetration rate in this country is very low - less than 300,000 lines up until
now. Sri Lanka has a huge potential therefore, for sustainable growth in the future.
One of the main potentials I see for Sri Lanka is for it to become a hub in South
Asian region like Hong Kong is in mainland China and Singapore in the South East
(Business Today, September 1997; interviewed by Dilki Wijesuriya).

Of paramount importance in NTT's investment in SLT, for the objectives of thisstudy, is the content of the NTT Services Agreement (or Management Agreement)
into which the GOSL entered with NTT for a five-year period from August 1997 toAugust 2002, and the NTT Secondment Agreement that was entered into
subsequently by SLT and NTT Com after the expiration of the first agreement.
Pursuant to the NTT Services Agreement, NTT is required to manage day-to-day
operations of SLT according to the annual business plan, to assist SLT to develop thequality of its services and technical capabilities, to provide SLT with consultancy
support, technology support, technical support, information systems and management
expertise, to exchange NTT personnel with SLT and to exploit synergies between
two companies (SLT, Prospectus of SLT Debentures, 2000). This management38

NTT's investment in SLT came under the purview of the Public Enterprises Reform Commission(PERC) of the GOSL. PERC is the statutory body responsible for formulating and implementing theprivatization and public enterprise reform program of the GOSL (www.perc.gov.lk).

67

agreement immediately resulted in NTT dispatching its personnel to SLT upon
privatization in 1997. During the first three to four years of management contract,
NTT (and NTT Com) dispatched, on average, 15 to 20 of their personnel in total towork in SLT in various functions. Even at the time of the completion of the
management agreement in August 2002 there were 12 expatriates of NTT Com
working at SLT. This number had been reduced virtually to three by August 2003.39
Given the relationship between SLT and NTT Com, these expatriates are a majormeans of technology transfer, while the management contract serves as the vehicle
for technology transfer (Grosse, 1996). An analysis of positions held by and the work
content of these expatriates reveals that some occupied senior management positions(at strategic level) while others held key positions just below senior managementlevel of SLT, in areas including network planning, network maintenance (switching,transmission, power, etc.) and marketing. In particular some expatriates dispatchedby NTT immediately after the privatization of SLT in August 1997 were assigned to
the following senior management positions:(1) Chief Executive Officer (CEO)(2) Chief Financial Officer (CFO)(3) Chief Operations and Technical Officer (COTO)(4) Chief Marketing Officer (CMO).
One possible reason for appointing personnel dispatched by NTT to hold four senior
management positions immediately after privatization of SLT was the crucial need
perceived by NTT-style management to change the culture that had prevailed at SLT
for more than a century as a state-owned enterprise that had enjoyed monopolistic
status. Support for this view is the comment below:
The need for a major reorganization of SLT, in order to transform it from agovernment corporation to a private company working in a different business culture
was understood very early, and work on this began in earnest (Chief Executive
Officer's Review, SLT, Annual Report, 1998, p. 8).

The involvement of Japan in the telecommunications sector in Sri Lanka is not just ofrecent origin. The association of the government of Japan with thetelecommunications sector in Sri Lanka is illustrated by its support for improving
this vital sector in Sri Lanka through funding a development study andtelecommunications network improvement project in the greater Colombo area fromthe late 1980s to the early part of 1990s. As this work proceeded, the government ofJapan dispatched a preparatory study team of the Japan International Cooperation
Agency (hereinafter referred to as “JICA”), at the request of GOSL, to revise andupdate the master plan of telecommunications in the country in 1994. Subsequently
SLT and JICA agreed to conduct the study in two phases: (a) phase I focused on
formulating a master plan for the development of telecommunications networks in
Sri Lanka up to the year 2015, and (b) phase II revolving around conducting afeasibility study for identifying priority projects which would be implemented by the39

Depending on needs and requirements, the board of directors of SLT has vested powers to callexperts from NTT Com for consultancy services at any time.

68year 2000 in conjunction with phase I. JICA contracted out this study to be
conducted jointly by Nippon Telecommunications Consulting Company Limited(NTC) and Japan Telecommunications Engineering and Consulting Service (JTEC).
Thus the study was carried out from the end of March 1995 to mid-May 1996 and thefinal report was submitted to JICA in 1996 (JICA, Final Report 1996 [Volume I Summary], pp. 1-5). This study recommended the following courses of action for Sri
Lanka Telecom:(1) strengthening of organization of the headquarters of SLT, especially for
finance, accounting, corporate planning and marketing/public relations(2) decentralizing the organization to cope with huge network expansion(3) establishing regional organizations for appropriate managerial areas for future
network(4) establishing job assignment in each organizational level(5) strengthening customer services(6) expanding management information systems (MIS) throughout theorganization (JICA, Final Report 1996 [Volume I - Summary], p. 33).
The process of transformation of SLT from a bureaucracy to a private company
under NTT-style management began with the introduction of a lean and flatorganization with horizontal sharing of functions, which replaced the multi-layered
and complex entity that existed earlier. During the period that SLT functioned as a
totally state-owned public limited company the managing director, being the Chief
Executive Officer, was assisted in his duties by five directors who reported directly
to him. The entire organization was divided into five directorates, each consisting ofseveral units under general managers who reported to directors and deputy generalmanagers who reported to general managers. The five directorates in existence at thattime were for network development, international and support services, operations,administration and procurement and finance. General managers who were in chargeof switching and transmission, outside plant and suppliers credit project also reported
directly to the managing director (see Appendices C and C1 for partial organization
charts of SLT in the post- and pre-privatization eras, respectively, for comparison).
By any measure this organizational structure could not be perceived as conducive tofunctioning in a competitive and rapidly changing business environment. The
following opinions expressed and the complaint stressed by the first Japanese Chief
Executive Officer of SLT merit quoting (Wickramasinghe, Hopper & Rathnasiri,2002):
This was clearly not a system suitable for a private company (opinion).
This system is always loyal to rules, not to duty. Everybody is not really producing,but wasting their time on paper work. Nobody creates anything. You can’t survive incompetition (opinion).
Layers of administration, no proper definition of functions and responsibilities, aswell as an in-built seniority system for promotion and individual advancement(complaint).

69

The report issued in 1996 from the study conducted jointly by Nippon
Telecommunications Consulting Company Limited and Japan Telecommunications
Engineering and Consulting Service, as mentioned earlier, clearly stated the necessityof strengthening the organization of headquarters of SLT, with decentralization oforganization and establishment of regional organizations for appropriate managerial
areas. This report also emphasized the inappropriateness of the old line organization,even though some line and functional combinations existed, for creating a serviceoriented organization which needs vertical and lateral procedural communication.
More specifically, this report recommended the following measures to restructureSLT:(1) organizing operations and maintenance activity into four levels offunctionality such as at headquarters level, provinces and metro level,
regional telecommunications engineer’s level and district inspector of
telecommunication level(2) defining tasks and functions for each level and the associated resources(3) setting up procedures for coordinating projects and operations(4) redefining functions and associated procedures of the Regional
Telecommunications Engineer’s Office (JICA, Final Report 1996 [Volume II- Master Plan], pp. 13-13 & 13-14).
With this background, it is interesting to note that it was under NTT-style
management that the organizational configuration consisting of groups (Bu in
Japanese), divisions (Ka in Japanese) and sections (Kakari in Japanese) was
introduced, with the Chief Executive Officer being in overall charge of theoperations of SLT. In this new organizational configuration some new senior andjunior management positions were also introduced, such as heads of groups, heads ofregions, heads of provinces, heads of divisions and heads of sections to assist theChief Executive Officer in performing his duties. These heads of groups, heads ofdivisions and heads of sections were equivalent, to a great extent, to director, generalmanager and deputy general manager positions, respectively, under the system that
had existed immediately before privatization of SLT (SLT, Annual Report, 1998).
One major purpose of configuring the organization according to the group, divisionand section model was to facilitate better communication between the Chief
Executive Officer and senior managers, while creating a structure for better control
and coordination. Moreover, NTT-style management noted the apparent lack offlexibility in decision-making processes in the organization, due to the tendency of
SLT personnel to follow the financial and administrative regulations of the GOSL.
Addressing this as an impediment to changing the organizational culture, the first
Chief Executive Officer of SLT under NTT-style management took a remarkable
step in issuing a circular on cutting red tape. As some interviewees stated:
One of the critical steps that the first Chief Executive Officer of SLT, as a privatizedcompany, took without any hesitation or fear was issuing a circular (CEO Circular)
to the effect of cutting the red tape in 1997…
(Interview records of the researcher)70

For instance, the traditional human resource management policies of SLT requiredthat seniority of employees be the criterion for promotion and individual
development. These policies, in effect, had created a barrier for many employees of
the company who aspired to reach higher levels through promotions based on merit.
Another significant change brought into SLT culture under NTT-style management
along with cutting bureaucratic red tape was introducing a target/performanceorientation to individual work areas through visible and transparent procedures. Inline with a target orientation, NTT-style management took significant steps during
the early years of post-privatization of SLT that included, but were not limited to,
implementing a new performance evaluation system, streamlining promotion criteria,
introducing a hidden (or covert) salary system for executives, arranging payment ofsalaries of employees through their bank account and introducing a performancebased bonus payment scheme. Furthermore, on the HRD front, substantial emphasis
was placed on modifying the training centers of SLT and providing training toemployees to cope with the changing competitive landscape of thetelecommunications sector in Sri Lanka especially since 1996. All in all, the new flatand lean organization structure emphasized sharing knowledge among organizational
members in addition to defining clearly their roles and responsibilities. Managers
could now share opinions and knowledge with the Chief Executive Officer, who
generated ideas for improving day-to-day work, allowing employees to work in a realbusiness environment whilst dealing effectively with contingencies (Wickramasinghe
et al., 2002).
Another major and immediate concern of NTT-style management immediately after
becoming the strategic partner of SLT was to design and improve processes ofmarketing and customer care. Among the various changes introduced under NTTstyle management, innovations in respect of marketing and the provision of customer
care were initiatives that gained and maintained the highest visibility from theviewpoint of customers. Although a marketing unit under a deputy general manager
had existed even during the era of SLT as part of a totally state-owned public limited
company, the scope of operations of that unit was limited to a few activities such as
sales promotion, tariff revision, forecasting new services, advertising and preparing
annual reports (JICA, Final Report 1996 [Volume II - Master Plan], p. 13-7). As aninterviewee remarked:
SLT as a Government enterprise stayed in that way for more than 100 years. SLT
pursued a strong technical orientation prior to privatization and lacked marketing.
Engineers who were experts in developing products but not marketing them held all
key positions earlier.
(Interview records of the researcher)

By any measure, it could be argued that NTT-style management focused heavily onbuilding the marketing function of SLT gradually from August 1997, identifying theabsolute necessity of such a course of action amidst the changes in competitiveenvironment for the telecommunications sector that gained momentum in the same
year. This observation is strengthened further by the fact that an expatriate
dispatched by NTT was appointed as Chief Marketing Officer immediately afterNTT became the strategic partner of SLT. As information gathered from various

71sources shows, the principal courses of action that NTT-style management took in
respect of building the marketing and customer care function during the early yearsof post-privatization of SLT were:(1) establishing a corporate customer division(2) opening Teleshops(3) restructuring the Regional Telecommunications Engineer's Offices(4) introducing mobile services for selling voice lines(5) bringing some customer service hotlines such as 121 (for fault reporting)under centralized control(6) employing more staff to strengthen marketing and selling functions(7) gradually establishing a marketing group within SLT.
Of particular relevance to this study is the Teleshops that were opened in 1998.
Before privatization the only customer interface of SLT for walk-in customers was
the Regional Telecommunications Engineer's Office, which represented the whole
image of SLT in the eyes of the customer. Given this context, Teleshops were an
important mechanism for transforming a slow moving, unfriendly and bureaucratic
image of SLT into a customer-friendly organization (SLT, Annual Report, 1998).
Data collected from almost all interviewees suggest that Teleshops are one of the
predominant and highly visible changes brought into SLT under NTT-style
management.
4.3 Trade Unionism and Workplace Cooperation: Landmarks of Interactions
between NTT-style Management and Trade Unions
A characteristic feature of trade unionism in SLT is the multiplicity of trade unions.
The history of this movement dates back to the preceding stages of the evolution of
SLT during when it was under state control for more than a century. The
developments of trade unionism in Sri Lanka in general, during both pre- and postindependence eras, seem to have had identifiable implications for the evolution of
trade unionism in SLT. Among them, the multiplicity of trade unions, the affiliationof trade unions with political parties in the country, and the rivalry among tradeunions are commonplace. Influenced by these historical developments, the present
structure of trade unions at SLT includes 31 trade unions and two federations of tradeunions (see Table 4.4). In keeping with the country’s style of trade or professionbased trade unions, the majority of the 31 trade unions at SLT identify themselves as
telecom unions, while others maintain the identity of postal and telecom unions.

72

Table 4.4
Name of Trade Unions and Federations of Trade Unions in SLT (as of August 2003)
Name of trade union/federation of trade unions
Number ofmembers200
Telecommunication Engineers' Union (Telecom)
753
Telecommunication Officers' Union (Telecom)
967
Telecom Clerical and Parallel Services Union (Telecom)
800
Union of Post and Telecommunication Officers (Postal)
263
Telecommunication Government Servants' Union (Telecom)
352
Telecommunication Engineering Diplomates' Association (Telecom)
1,468
Sri Lanka Telecom Employees' Union (Telecom)
1,804
All Ceylon Telecom Services Union (Telecom)
154
Telecommunication Employees' Union (Telecom)
24
The Association of Professional Accounting Technicians of SLT (Telecom)
1,958
Jathika Tappal ha Viduli Sandesha Sevaka Sangamaya (Postal)[National Postal and Telecommunications Employees' Union]
23
Graduates' Organization of SLT (Telecom)
13
The Maritime Officers Association of SLT (Telecom)
457
Sri Lanka Telecom Accountants' Association (Telecom)
85
Sri Lanka Telecom Workshop Engineering Workmen Association (Telecom)
91
Sri Lanka Tappal ha Viduli Sandesha Seva Sangamaya (Postal)[Sri Lanka Postal and Telecommunications Services Union]
79
The Post and Telecommunication Storekeepers Union (Telecom)
190
Eksath Tappal ha Viduli Sandesha Sevaka Sangamaya (Postal)[United Postal and Telecommunications Employees' Union]
26
Sri Lanka Telecom Draughtsman's Union (Telecom)
1,267
Sri Lanka Viduli Sandesha Engineru Podu Seva Sangamaya (Telecom)[Sri Lanka Telecommunication Engineers Common Services Union]
124
Sri Lanka Nidahas Tappal ha Viduli Sandesha Seva Sangamaya (Postal)[Sri Lanka Nidahas (to mean freedom) Postal and Telecommunications
Services Union]
307
All Ceylon Post and Telegraph Workers' Union (Postal)
357
The Telecommunication Motor Drivers' Union (Telecom)
739
United Telecommunication Engineering Workers' Union (Telecom)
265
Jathika Sevaka Sangamaya (Postal)[National Employees' Union]
186
Ceylon Mercantile, Industrial and General Workers' Union
157
Sri Lanka Telecom Computer Professionals Union (Telecom)
70
Telecom Teleshop Officers' Union (Telecom)
52
Management Graduates' Services Association (Telecom)
50
Telecom Administrative Officers' Union (Telecom)
200 (approx.)
Lanka Telecom Service Union (Telecom)
Joint Organization of Telecommunication Trade Unions - JOTTU (Federation)
Sri Lanka Telecom Trade Union Front - TTUF (Federation)
Source: Weerathunga, 2003, opening page.
Note: Words in parentheses show the trade on which union is based, whereas words inbrackets are a rough English translation of the name of trade union.

Of particular significance for accomplishing the objectives of this study is
identification of the way NTT-style management has dealt with the trade unions in
SLT through the process of its organizational transformation, and the strategies used73

in this regard. A careful analysis of trade union activism in SLT reveals that tradeunions have had a bigger voice since the GOSL appointed a high level committee inthe mid-1980s to recommend measures to rectify the situation of general publicdissatisfaction with telephone system in the country at that time (Wickramarachi,
2001). Although the GOSL had the eventual objective of converting DOT into a
company, resistance from trade unions which prompted the government to abandon
such efforts on several occasions in 1980s. One noteworthy occasion was when tradeunions were heavily involved in safeguarding the benefits and privileges of
employees of DOT at the time of converting it into Sri Lanka Telecom as a stateowned corporation in 1990. The second wave of resistance from trade unions started
to emerge when the GOSL declared in 1995 that SLT was to be privatized. As
Wickramarachi remarks:
When the Government declared in 1995 that SLT was to be privatized, there was ahuge uproar by the employees. The Unions were determined to STOP the
Government's move at any cost. They kept on threatening with abusive slogans,leaflets etc. against the Government and the management. It was no easy taskrunning the services in that atmosphere while at the same time taking steps toprivatize (Wickramarachi, 2001, p. 6).

This quotation provides some understanding of the salient features of trade unionismthat prevailed at SLT prior to privatization. Apparently linked to the traditional
industrial relations model, trade union militancy led to a division between tradeunions and the management. Consequently discussions between trade unions andmanagement were adversarial and of a confrontational nature. Furthermore, tradeunions tended to look at management decisions with suspicion, employing hostile
media for communication with management, including slogans, posters and placards.
Another blatant pattern of behavior by the trade union leadership was creating anger
among employees with the management. Amidst these circumstances, the GOSL
persevered with the process of privatization of SLT, and measures were taken to
make trade unions feel important, and believe their blessing was paramount in theexercise of privatization (Wickramarachi, 2001). Some key measures that the GOSL
took in this respect include the following:(1) selecting a few trade union leaders and sending them to Chile and Mexico in
1996 to see for themselves the operations of privatized telecommunications
companies that were earlier under state-ownership and control. These tradeunion leaders met trade union leaders and customers of those companies in
addition to sharing experiences with regulatory agencies intelecommunications in those countries. The Ministry of Posts andTelecommunications, the International Bank for Reconstruction andDevelopment (World Bank) and the Public Enterprises Reform Commission(PERC) jointly organized this study tour
(2) directing leaders of Joint Organization of Telecommunication Trade Unions(JOTTU) in 1996/1997 to discuss and negotiate with PERC on preparing aframework for privatization of SLT. The major content of discussions
between JOTTU and PERC over a six-moth period focused on the necessity
for change in SLT in light of the growing competition in the74telecommunications sector in Sri Lanka, the nature of the privatization
program, and the intention to sell a portion of SLT shares to a leadinginternational telecommunications company and protecting existing privileges
and benefits for employees.
The resistance of trade unions to privatization reached a peak in 1996-1997, but these
two measures taken by the GOSL, especially the second one, resulted in lessening
the subsequent magnitude of such resistance (SLT, Annual Report, 1997). At thetime of privatization of SLT in August 1997, two categories of trade unions were in
existence. One category strove to improve relations with NTT-style management
whereas the other category was always in opposition to the management. Despite thisdivision in the trade union movement at SLT, NTT-style management took somesignificant actions to enlist the support of all trade unions for organizational changes
while making a platform for building cordial relations with them. These actions
were:(1) listening to ideas presented by trade union leaders and implementing goodideas for organizational advancement(2) maintaining an open door policy where trade union leaders could meet theChief Executive Officer and Chief Financial Officer at any time(3) holding discussions and constant dialogue with trade union leaders(4) organizing a study tour in Japan for all trade union leaders. In two batches in
1998, 69 trade union leaders participated in two weeks of training in Japan,
focusing on areas including the organizational structure and operations ofNTT, visiting a media center and customer service center, and meetings anddiscussions with trade union leaders. These discussions involved the role oftrade unions in organizational advancement, how trade union leaders deal
with management, the human resource management system, welfare facilities
for employees and how trade unions won demands after the privatization of
NTTPC in 1985. In addition, five trade union leaders in the first batch had theopportunity to meet the then president and vice-president of NTT.
Out of these actions, the study tour to Japan seems to have brought about an
attitudinal change in trade union leaders towards management, to a certain extent, as
did the constant dialogue and discussions between the two parties. Key areas or
immediate concerns addressed in these discussions during the early years of postprivatization were protecting previous benefits and privileges for employees andincreasing salary and bonuses. In subsequent years, welfare facilities, promotion
schemes, introduction of new products and technology, and the status of the company
in growing competition were also added to the agenda for discussion. However, theyears immediately following privatization were not free from conflict between tradeunions and NTT-style management. Major conflicts that emerged immediately after
privatization concerned, inter alia, introducing hidden or covert salary scales for
executive staff, sending salaries of non-executives to their banks and introducing a
new performance evaluation system for both executives and non-executives. Throughits style of discussion and constant dialogue with trade union leaders, NTT-style
management managed these conflicts and others smoothly.

75

Another vital landmark in relations between NTT-style management and trade unions
was the commencement of a workplace cooperation program at SLT, bringing aparadigm shift to the traditional industrial relations model. Principally, the impetus
factor for commencing this program at SLT came from a project sponsored by theInternational Labor Organization (hereinafter referred to as “ILO”) on promoting
tripartism and sound industrial relations in Asia, called the South Asia Vietnam
Project on Tripartism and Social Dialogue in Action (SAVPOT). The main
objectives of the SAVPOT project were promoting problem solving at workplaces
through social dialogue, achieving goals through collective efforts and facilitating
everyone moving in one rhythm, ensuring an integrated effort for survival with teamcohesiveness and team spirit. In the Sri Lankan context, ILO selected fourorganizations for introducing the workplace cooperation program, among which SLT
was the only organization that represented the service sector. The first national
workshop on workplace cooperation was held in Colombo in March 2000 under
ILO's sponsorship, with the head of the division of industrial relations and welfare
providing SLT's representation. Evidence suggests that at the beginning, the senior
management of SLT showed no support for this program, due to the involvement of
the ILO. Nevertheless, having attended the first workshop on workplace cooperation
the head of the division of industrial relations and welfare convened a meeting toconvince trade union leaders of the significance of this program which had hitherto
met with huge resistance from some trade unions. Following this meeting, sometrade union leaders saw some positive aspects of the initiative and, later on,
supported the program a great deal.
An important turning point of industrial relations at SLT was the setting up of aworkplace cooperation task force in June 2002 that consisted of 12 members
including the head of the division of industrial relations and welfare, five members
representing management and six representatives of trade unions. 40 The ILO thenprovided training for all 11 members on the conceptual foundation of workplacecooperation and its practical aspects. The second national workshop on workplacecooperation was also held at the end of 2000 and this time, representatives of bothmanagement and trade unions participated in it. The principal aim of this second
national workshop was to educate representatives on the need to set up a steeringcommittee for implementing a workplace cooperation program at their respective
organizations, while taking the message to other organizations in the country. The
third national workshop was held in March 2001 and by that time senior management
was relaxing its earlier unsupportive stand on the initiative. Notably, pursuant to acircular issued by Chief Executive Officer, management in May 2001 formallyrecognized the workplace cooperation steering committee that had been set up in
April 2001. This steering committee consisted of 10 members including the head of
the human resources group, four heads of division (industrial relations and welfare,corporate strategy, legal and regulatory affairs) and five trade union representatives.
Eventually, the recognition by management, the workplace cooperation program was40

One representative of the trade unions was later absent from workplace cooperation task force
meetings, reducing the membership to 11 persons.

76

included in the annual business plan of SLT and had financial resources allocated forits various activities.
Among the first tasks handled by the newly formed workplace cooperation steeringcommittee was defining initial expectations of the workplace cooperation programand identifying common challenges to SLT. The initial expectations identified were:(2) improving dialogue between trade unions and management(3) enhancing teamwork and team spirit in work units(4) building up an efficient mechanism for handling employees’ grievances(5) improving work quality and productivity through "5S" and "Kaizen" activities(Weerathunga, 2003, p. 8).
Challenges to SLT as identified by the workplace cooperation steering committee
included:(1) changing the existing culture to a strong culture(2) creating a sense of belongingness of employees(3) sustaining market leadership and facing severe competition(4) enhancing profit levels(5) improving productivity(6) introducing new technology(7) improving customer satisfaction(8) creating a flexible workforce (Weerathunga, 2003, p. 7).
Over the past two and a half years this steering committee has conducted several
awareness programs for a number of employees of SLT, including directors (heads ofgroup), general managers (heads of division), deputy general managers (heads ofsection) and a wider cross-section of employees at regional levels. All awarenessprograms addressed the common theme of the necessity of and reasons for change.
Additionally, some mobile services for identifying employee problems and handlingtheir grievances were conducted within the broader framework of expectations of theworkplace cooperation program. Over the past two years this workplace cooperation
program has brought benefits not only to SLT but also to its employees. Improving
welfare facilities, increasing financial benefits, diminishing industrial disputes andprofessional arrogance, building a pleasant and friendly working environment aresome examples of benefits that the workplace cooperation program has brought for
employees so far. On the other hand, SLT as an organization has benefited from thisprogram in terms of increased employee commitment, improved managementemployee relations (there have been no serious industrial disputes since thecommencement of the workplace cooperation program), improved teamwork among
functional units, and seeking healthy ways for trade unions to solve problems.
Furthermore, the workplace cooperation program has received many accolades fromboth local and international organizations. On the international front, the ILO duly
recognized SLT's achievements in the workplace cooperation program, andrepresentatives of the Norwegian government have also praised these achievements.
Local awards received so far by SLT include a National Productivity Award and a77

National Human Resource Management Award (second runner up), and it canreasonably be concluded that the workplace cooperation program has contributed tothese accolades. The following citation of the National Human Resource
Management Award in the Year 2002 is evidence of the achievements of theworkplace cooperation program at SLT:A national company that accounts for a major share of infrastructure development, acompany that has successfully transformed a state-owned enterprise to a competitiveand leading private venture, and manages a highly unionized work force for better
productivity (Weerathunga, 2003, p. 11).

Certainly, the workplace cooperation program can be seen not as an event but as aprocess that needs to be improved continuously. Now that more than two and a halfyears have passed since its formal launching, there are few managers and trade union
leaders who still believe in the strength and usefulness of the traditional industrial
relations model that maintained a division between management and trade unions.
And also, institutionalization of the program is surfacing as a priority need forsustaining the workplace cooperation program as an organization-wide mechanism
for shifting from the traditional industrial relations paradigm.
Another vital phenomenon of relations between management and trade unions is theabsence of any formal collective bargaining agreements between the two parties.
Instead, issues are addressed and discussed circumstantially, and decisions reachedthrough discussions and negotiations are minuted and then distributed among tradeunions. The style adopted by management to negotiate with trade unions throughharmonious discussions and regular meetings between the two parties has resulted insettling a variety of disputes affecting employee motivation, well-being, welfare andorganizational growth (SLT, Annual Report, 1998, 2002). Two cases based on thedata gathered through intensive interviews are presented in section 4.5.7 to illustrate
how salary revisions were made and the amount of bonus was determined throughnegotiations between trade unions and management in recent years. The gradual
diffusion of workplace cooperation program across the organization could be viewed
as a potential mechanism for further improving relations between employees (tradeunions) and management with some innovative lines of thinking.
4.4 Organization of Customer Service Function
Built up by a dramatic series of organizational changes over 100 years, the customer
service function of SLT has an identifiable evolutionary character. As a state-owned
enterprise for more than a century while enjoying monopolistic status, SLT did notgive any substantial consideration to marketing and customer services until 1990
when DOT was converted into a state-owned corporation. The financial regulationsof the GOSL were the sole influence in defining the role of DOT as a service
provider and money earner for the government until Sri Lanka Telecom, as a totallystate-owned corporation, succeeded DOT in 1990 (Dassanayake, 2003). Concurrent
with this change in organizational form, Sri Lanka Telecom gained more flexibility
in managing financial resources compared with the earlier situation where DOT was
required to send all the money it earned to the Treasury of the GOSL. It was only78

after the parliament (the legislature of the Democratic Socialist Republic of Sri
Lanka) voted funding that the DOT was able to utilize it for development. However,the change in the form of organization that occurred in 1990 empowered Sri Lanka
Telecom to keep the money it earned. Backed by this significant change in managing
financial resources and loans granted by world-class donor agencies, including theWorld Bank, Asian Development Bank, and the Overseas Economic Cooperation
Fund of Japan,41 Sri Lanka Telecom gained momentum for further developing its
network and for beginning to provide of a better service to the customer. It was
during the Sri Lanka Telecom era that a customer service unit system was introduced
to the Regional Telecommunications Engineer's Office (hereinafter referred to as"RTE Office") as a project supported by the International Telecommunications
Union (ITU). Historically, the establishment of these customer service units in RTE
Offices could be viewed as the platform that Sri Lanka Telecom made for graduallydeveloping a marketing and customer service philosophy (Dassanayake, 2003).
RTE Offices functioned as the sole SLT-customer interface point or customer outlet
for walk-in customers, handling all types of customer care work, including
registering new customers for telephone lines, handling billing-related complaints
and enquiries, accepting requests for fault reporting, and handling other customerrelated problems and enquiries, until Teleshops were opened in 1998 under NTTstyle management. In addition, RTE offices were entrusted with handling certain
engineering and technical functions, including switching, transmission, cabledevelopment and outside plant maintenance. The new strategic direction of NTTstyle management resulted in introducing many changes to SLT, as explained in
section 4.2. Of these, the measures taken to strengthen the marketing and customer
service functions are of particular relevance to the subject of organization of thecustomer service function. Though there was a marketing unit under a deputy generalmanager at SLT even before privatization, its operations were limited to somecommercial and publicity-related activities rather than marketing per se. Significant
steps that NTT-style management took with regard to strengthening marketing andcustomer services include, inter alia, the following:(1) setting up a corporate marketing division(2) establishing a marketing and Internet protocol group within the neworganizational framework consisting of groups, divisions and sections(3) strengthening the sales and marketing workforce(4) opening of Teleshops(5) introducing a centralized fault reporting system(6) converting RTE Offices to Regional Telecommunications Offices (hereinafterreferred to as "RTO" in singular case and “RTOs” to mean plural) along withchanging the job title of Regional Telecommunications Engineer (hereinafterreferred to as "RTE") to Regional Telecommunications Office Manager(hereinafter referred to as "RTO manager"), who heads the RTO42.
41

The Japan Bank for International Cooperation (JBIC) is the successor to the Overseas Economic
Cooperation Fund (OECF).
42
Both Teleshops and RTOs are functioning as customer outlets for walk-in customers. However, atthe present time, Teleshops serve customers from any part of the country irrespective of their place of79

The present organization of SLT shows several sections of the marketing and Internet
protocol group and the customer services group functioning as SLT-customer
interface points alongside RTOs and Teleshops. Table 4.5 summarizes the major
SLT-customer interface points with the types of customers those interface points deal
with. Though not included in this table, there are a few other units of SLT, namely
the corporate marketing division, the Internet marketing and Teleshops section, andthe outside plant maintenance center (OPMC), that function as SLT-customer
interface points. However, it is Teleshops that make the area of this study in relation
to SLT, as explained in section 3.3.
Table 4.5
Major SLT-Customer Interface Points and Types of Customers
Interface point
Area of authority
Type of customers
Walk-in customers
Only within
RTOs
particular RTO
area
Walk-in customers
Whole island
Teleshops (one-stop shop)
Customer service hotlines:
Telephone customers
Whole island
100 Operator assisted calls (international)
Telephone customers
Whole island
101 Operator assisted calls (national)
Telephone customers
Whole island
121 Fault reporting
Telephone customers
Whole island
122 Billing inquiries
Telephone customers
123 Sltnet help desk for Internet and e-mail Whole islandusers
Telephone customers
133 Telegrams, fax o-grams, e-grams and speed Whole island
o-grams
Telephone customers
Whole island
134 Directory assistance (international)
Telephone customers
Whole island
161 Directory assistance (national)
Telephone customers
Whole island
555555 Telemarketing
Source: Researcher's diary.
Note: Though walk-in customers form the majority of customers with whom RTOs andTeleshops deal, there are cases where customers contact these interface points by telephone,facsimile or e-mail. But the proportion of such customers is not significant.

4.5 Teleshops
As elaborated in section 3.3, among the various customer interface points it is
Teleshops that are the focus of this study within the context of SLT. From this point
onwards, a detailed discussion of Teleshops is presented, with special reference totheir work organization, employee classification, job structure, staffing, performance
evaluation, compensation system and HRD of customer service employees working
there, following the research framework presented in Figure 3.2. However, it isappropriate to highlight, at the beginning, the evolutionary process of Teleshops.

residence whereas most operations (services) of RTOs are still limited to customers who reside in thearea of authority of a particular RTO. Furthermore, Teleshops are regarded as one-stop shops.

80

4.5.1 A Brief Overview of the Evolution of Teleshops
A meaningful examination of the evolution of Teleshops requires a look into thehistorical evolution of SLT as an enterprise over more than a century. Nevertheless,
it is presented only key developments in respect of marketing and customer service
function in two eras of ownership of SLT, as a state-owned enterprise and a
privatized state-owned enterprise, in this section. As elaborated in section 4.1, SLT
had taken various organizational forms such as a department, state-owned
corporation and a totally government-owned public limited company until it was
privatized in August 1997.
4.5.1.1 Marketing and Customer Service Function in Pre-privatization Era andChanges Introduced by NTT-style Management
Prior to the establishment of Teleshops in 1998, the RTE Office with its customer
service unit and the billing center, was SLT’s only interface point for walk-in
customers. The customer service unit and the billing center reflected the subscriber’s
image of SLT. Each RTE Office was under an RTE, and engineers played a powerfulrole as they held most of key positions in these offices. Other employees of RTE
Offices handled subscriber matters, with attitudes inherited from the departmental
and state-owned corporation era of SLT. Throughout its identity as a state-owned
enterprise for over more than a century, SLT did not consider customer care
important. Interestingly, it is worth quoting some interviewees about how they
perceived the customer and how the customer was treated, especially during stateowned corporation era and the short lived era of SLT as a totally government-owned
public limited company:
Customer was called not customer but subscriber. In conversations among
employees the word subscriber was abbreviated to sub or in its vernacular form,saba. When they wished to say that there was a subscriber waiting to see someone,
they would have said sabek avilla where the subscriber is referred to rather as a
nuisance.
From our point of view as the employees the subscriber was a nuisance and as suchthere was a tendency to avoid saba if one possibly could.
As employees, we would not go out of our duty list to serve customers. So,
customers were made to come behind us.
The customer was not important. The customer was therefore viewed by employees
from a negative attitude. The customer was not even provided with a chair to sit
when he/she came to the office and was made to wait standing until his/her turncame.
The customer was not respected and employees showed irritation dealing withcustomers.
Subscriber came to meet officers with fear in mind.

81Customers were allowed to meet high rank officers only on the day allocated for thegeneral public (as employees called it the 'public day').
Sri Lanka Telecom was the God and subscriber was at its mercy. RTE Office was
the powerhouse.
RTEs were the kings, not the subscriber.
No one was talking about customer care.
(Interview records of the researcher)

Indeed, as historical evidence suggests, customer care started to become important, toa certain extent, only after the changes introduced in the early part of the 1990s whencustomer service units were added to RTE Offices island-wide. Though thoroughlycompetent in engineering-related expertise, RTEs, were neither marketing-oriented
nor customer-oriented. Their educational and professional backgrounds as well as theorganizational circumstances that prevailed at SLT at that time were not conducive toproviding these engineers with any training in marketing and customer-orientation.
RTEs (as heads of the RTE Offices) had to look after not only the maintenance ofsubscriber telephone network but also switching, transmission and outside plantmaintenance. These multiple responsibilities of RTEs left them no time to attend
thoughtfully to subscriber needs, inquiries and complaints. Subscribers could meet
the RTE only on a designated day of the week called the "public day", whatever thegravity of the subscriber need. Subscribers with increasing frequency tried to meet
the RTE in person, as he or she played a powerful role in the organization. In effect,
the organization and subscribers were unable to meet each other's needs andexpectations in a mutually beneficial manner. Given these circumstances, it could
reasonably be concluded that the RTE Office was the power base of SLT as the onlyinterface point for its walk-in customers, and therefore it was in a position todominate the subscriber. One of the priority concerns of NTT-style management in1998 was to change this culture that had prevailed at RTE Offices for many years,
without antagonizing the engineers who held key positions in these offices. At thesame time, due to gradual expansion of SLT's customer base, RTEs also experienced
enormous difficulties with handling simultaneously the tasks of maintaining both thesubscriber telephone network and the telephone exchanges and transmission network.
Given this context, NTT-style management took two historic steps to restructure the
RTE Offices:(1) the conversion of Regional Telecommunications Offices (RTE Offices) into
Regional Telecommunications Offices (RTOs)(2) the replacement of the position of Regional Telecommunications Engineer(RTE) with that of Regional Telecommunications Office Manager (RTO
manager).
The conversion of the RTE Office to RTO was not mere ceremony but involved
significant change in the scope of responsibility of the RTO manager. The RTO

82manager was entrusted with maintaining the subscriber telephone network, while
exchanges, transmission network and so on were assigned to engineers who had
earlier reported to the RTE. Figures 4.2 and 4.3 show the scope of responsibility of
RTE before the changes were introduced and the scope of responsibility of RTO
manager with partial organization structure of the RTO after changes wereintroduced under NTT-style management, respectively.
Figure 4.2
Scope of Responsibility of Regional Telecommunications Engineer (RTE)(before changes were introduced)
RTE

Customer
Service Unit

Exchanges

Transmission

Cable
Development

MaintenanceSource: Researcher’s intensive interviews.
Figure 4.3
Scope of Responsibility of Regional Telecommunications Office Manager (RTO manager)
and Partial Organization Structure of Regional Telecommunications Office (RTO)(after changes were introduced under NTT-style management)
RTO Manager
Customer Relations Officer

Personal Assistant

AssistantAdministrative
Officer

Assistant
Commercial
Officer

Customer
Service Unit

Billing
CenterManagement
Assistant

Source: Researcher’s intensive interviews.

The differences depicted by these two diagrams show how much the scope of
responsibility of RTO managers changed from that of RTEs.43 It is noteworthy thatexchanges, transmission, cable development and maintenance, all of which are
43

Another area of work of the RTO manager is assuming the overall responsibility of operations ofTeleshops that are located within the RTO's area of authority. This point is explained later in thissection.

83

collectively called outside plant, no longer come under the purview of the RTO
manager.44 The engineers responsible for handling such work report directly to therespective heads of provinces, in the case of regions 1, 2 and 3 and the deputy headof region - facility management, in the case of metro (see Appendix D for partialorganization chart of regional organization of SLT). In effect, today, customers cancome and meet RTO managers regarding their needs, enquiries and complaints at any
time during normal hours of work. Furthermore, the RTO manager position haschanged from an engineering-oriented to a marketing and customer-oriented position
focusing much on commercial affairs. To assist and foster the RTO manager's rolewith this new orientation, the customer service unit and billing center of RTO, as
shown in Figure 4.3, act as interface points for walk-in customers.45 The functions of
the customer service unit include, inter alia, registering persons for new connections,calling for charges for new connections, issuing telephone numbers, issuing service
orders, selling products and services (for example, Sltplus [a package of value added
services], Sltnet [e-mail and Internet services], caller line identification, voice mail,etc.), attending to customers' enquiries and requests for reconnections, removals, andso on. The billing center of the RTO mainly handles billing queries of customers andpayments for telephone bills and other services.
Within RTO operations, another new dimension introduced by NTT-style
management was creation of the position of customer relations officer, a person who
acts as the receptionist of the RTO. This new position has apparently substantiallychanged the way RTE Offices deal with subscribers since the conversion of RTE
Offices into RTOs. For instance, the customer relations officer's role includes
receiving walk-in customers and providing them with proper direction for meeting
employees in other divisions of the RTO, depending on the nature of their need,enquiry or complaint. This enables customers to formulate their needs with a clear
focus and to have those needs met without wandering aimlessly inside the RTO as
could occur in the time of RTE Offices.
4.5.1.2 Opening of Teleshops
Interviews with those working in Teleshops as customer service employees conveyed
the impression that the establishment of Teleshops was one of the key changes that
NTT-style management introduced to befit the new business culture of SLT. The in44

Outside plant is the part of the local exchange carrier telephone network that is physically locatedoutside of telephone company buildings. This includes cables, conduits, poles and other supporting
structures, and certain equipment items such as local coils. Microwave towers, antennas, and cablesystem repeaters traditionally are not considered outside plant. Outside plant includes the local loops
from the local exchange carrier’s switching centers to the customers’ premises, and all facilities which
serve to interconnect the various switches (e.g., central office and tandem) in the carrier’s internal
network (Newton’s Telecom Dictionary, 2004, p. 606).
45
RTOs serve mostly customers who reside in their respective area of authority. This constraint stems
from the limited scope of the database that each RTO maintains. Usually this database is limited tocustomers who reside within its area of authority, and the RTO has no on-line access to the customer
databases maintained by other RTOs. However, issuing applications for customers for enhanced
services, and responding to their enquiries regarding products and services are handled by any RTO
irrespective of whether the customer resides in its area of authority or not.

84

depth semi-structured interviews clearly revealed that these Teleshops could be
regarded as a breakthrough or a new dimension in the provision of customer service
in the history of SLT. In explaining the establishment of Teleshops, the first Chief
Executive Officer under NTT-style management commented:
One of the most innovative steps in the field of marketing taken by SLT in 1998 was
the opening of Teleshops. These are special shops dedicated to the service of SLT
customers and other members of the public with regard to their transactions with
SLT, or other areas of telecommunication. It emphasizes the importance that SLT
attaches to good marketing of its services.… The design of the Teleshop is such thatit provides customer comfort and the general atmosphere is one of service andcare…. The Teleshop is one of the most important ways in which the slow moving,
unfriendly, bureaucratic image of the former government owned SLT has beentransformed into a Customer-Friendly organization (Chief Executive Officer's
Review, SLT, Annual Report, 1998, pp. 29-30).

Before the establishment of Teleshops, RTE Offices were the only interface point of
SLT for its walk-in customers. For the customer (or subscriber, as he/she was calledthen), RTE Offices, particularly its customer service unit and billing center, reflected
the total image of SLT. Due mainly to SLT being a state-owned enterprise for morethan a century, the RTE Offices operated under the purview of engineers with a set of
employees whose attitudes were those common to government departments. As
already mentioned, to the employees of RTE Offices, SLT customers weresubscribers or ‘saba’, as these employees generally called subscribers. The subscriber
was not treated with any respect.46 At its very inception NTT-style management felt
the crucial necessity and urgency of changing this prevailing environment within
RTE Offices and thereby attempting gradually to change the attitudes of customers
towards SLT. As one interviewee pointed out:
NTT management spent a large sum of money on rebuilding the image of SLT
without expecting to make profits but to change customer attitudes. Hence, SLT
introduced Teleshops as a brand new customer outlet chain in 1998.
(Interview records of the researcher)

The major purposes of NTT-style management in introducing Teleshops as a brandnew customer outlet chain for walk-in customers were to:(1) inculcate in the minds of subscribers that the SLT had enough capacity toserve them, thereby changing subscriber attitudes towards SLT(2) bring about a perceptible attitudinal change in the employees who interacted
directly with customers, as the state-owned era of SLT had not been
conducive to building customer-friendly attitudes(3) set an example for the rest of the company in building a new customer service
culture46

Customer service units that were introduced to RTE Offices in 1994 during the Sri Lanka Telecom
era reflect an advance from the earlier system in terms of the manner in which the subscriber wastreated.

85

(4) spearhead a marked paradigm shift in interacting with and treating
subscribers at a location with a new ambience and new outlook.
Accordingly, SLT's first four Teleshops (one in Colombo metropolitan and the otherthree in suburbs of Colombo) commenced their operations in May 1998. With thisdevelopment SLT started operating two kinds of customer outlet chains for walk-in
customers, RTOs and Teleshops. 47 At the beginning, the functions of Teleshops were
designed within a framework to act as additional counter desks of the RTO, operating
as a telephone equipment sales point, payment collection and occasional billing point,
telephone line registration reception point, service reception point, complaints
reception point and SLT information center (Memo issued by Head of Division ofMarketing in October, 1998 to heads of groups, heads of divisions, heads of sections,heads of regions, heads of provinces, RTO managers and related staff on the subjectof the opening of Teleshops).
Teleshops are organized and run on one-stop shop model that basically resembles
operations of the 116 call center of NTT East. However, the organization and themanner in which Teleshops are run at SLT have undergone significant changes overthe past two years. Therefore, the organization and modus operandi of Teleshops canbe described under two time periods:(1) during the time period of the first NTT services agreement (1997-2002)(2) since March 2003.
4.5.1.2.1 Teleshops during the Period of the First NTT Services Agreement(1997-2002)
During this period all Teleshops (23 in number) were under the Teleshops section of
the marketing and Internet protocol group.48 This section was headed by a higherlevel executive manager (head of section - Teleshops) who was equivalent in status
to a deputy general manager position within SLT before privatization. A centralized
structure with four executive level officers at Teleshop headquarters assisted the headof Teleshops section in the performance of his duties (see Figure 4.4 for the structureof the Teleshops section until February 2003).
The structure of the Teleshops section displayed in Figure 4.4 indicates that the
manager of each Teleshop had access to both the head of section/deputy generalmanager of Teleshops as their immediate superior and to three managers and theaccountant who reported to him. Usually Teleshop managers contacted the head ofsection of Teleshops as a last resort. Most of the time, Teleshops managers and other
employees of Teleshops communicated with the four subordinates of the head of47

It is worth noting that NTT-style management converted RTE Offices into RTOs and RTE was alsochanged into RTO manager before the opening of Teleshops in May 1998. The significant change
from May 1998 in the form of operating two customer outlet chains (RTOs and Teleshops) for walk-in
customers under NTT-style management could possibly be attributed to the increased competition
created by the entry of new players into the fixed telephony and cellular telephony market in Sri
Lanka.
48
The Teleshops section comes under the purview of the consumer marketing division.

86

section regarding enquiries about product information, equipment selling, training forthe staff, etc. Though Teleshops were started in 1998 with only four outlets their
number had grown to 23 outlets by February 2003. The monthly managers' meeting,held at the head office of the marketing and Internet protocol group in Colombo,
brought all 23 managers of Teleshops under one roof and were presided over by thehead of section of Teleshops.
Figure 4.4
Structure of Teleshops Section (until February 2003)
Head of Section/Deputy General
Manager - Teleshops

Manager
TeleshopAdministration

Manager
Systems

Manager
Products &Services

Accountant
Teleshops

Manager - Teleshop 1
Manager - Teleshop 2
Manager - Teleshop 3……….. - …………..
……….. - ………….
Manager - Teleshop 23
Source: Researcher’s intensive interviews.

Data collected by the researcher through participant observation and in-depth semistructured interviews with employees (especially those working in Teleshops andTeleshops headquarters) reveal that the word “customer” eventually replaced“subscriber” when Teleshops commenced operations in mid-1998. This itself is areflection of the beginning of a different culture of customer service at SLT underNTT-style management. Shifting the emphasis from subscriber to customer graduallybecame a part of the culture of RTOs as well, alongside the changes that NTT-style
management introduced to RTOs, including widening the scope of responsibility of
the RTO manager and the creation of the customer relations officer position in RTOs.
Not only these changes brought in by NTT-style management, but also the changing
competitive dynamism in the telecommunications sector in Sri Lanka that gained
momentum in the late 1990s, compelled employees of SLT to develop new attitudes
towards customers. Their importance as a critical group of stakeholders who
influence the survival and growth of SLT was realized at this time. Interviewees
presented the view that there was a marked and substantial change in the manner inwhich the customers were treated at SLT since 1997. However, this was not achieved
without intra-organizational conflicts. For example, as one interviewee explained:

87When I was applying for a managerial position in Teleshops in 1998 I had to get theapproval of my immediate superior to forward my application. He was so reluctant
and discouraged me saying “oyawage manajar la samuupakarawalath innava”(literally "that kind of manager is there even in co-operative shops"). Teleshops also
met with a lot of problems with other divisions. RTOs wanted Teleshops to sendcustomers to RTOs to register for new connections. RTOs discouraged customers
going to Teleshops with the fear that RTOs would be abolished. But, finally, we
could overcome this resistance through building cordial and harmonious
relationships with RTOs and other divisions.
(Interview records of the researcher)

Much effort went into training employees in both Teleshops and RTOs, particularly
in customer care. There was a high degree of commitment and dedication within
NTT-style management to provide such training to employees. These attitudes were
important in bringing about this change in SLT culture while resolving various intraorganizational conflicts. Overall, employees of SLT were under the impression that
SLT had changed a great deal across the board in respect of dealing with thecustomer, extending customer care and maintaining customer relations. Specifically,
the culture that has evolved in Teleshops has contributed significantly to altering theimage of SLT in the minds of customers and in changing the attitudes of employeesof RTOs. It is worth quoting some interviewees in this regard. There is a clear
difference between “now” and “then” in how SLT employees view and treat
customers:
We now understand the value of customer; value of his or her money, time anddignity. So, we are to treat him or her with love, loving-kindness (Metta in Pali),compassion (Karuna in Pali) and appreciative joy (Muditha in Pali).
Customer care is a very serious thing. We have to satisfy the customer. It is difficult;but nice.
We started using the word "customer". We call customer Sir or Madam. We havechanged the way of maintaining customer relations. We now offer a chair when thecustomer comes to our premises.
We depend on customer. He or she pays our salary. Therefore, we have to pay our
gratitude to the customer.
We are now trying to retain our customers. Customer is more knowledgeable today.
Those days the subscriber was not treated well. Today we treat the customer as aking.
We cannot survive without customers.
(Interview records of the researcher)This paradigm shift in viewing and treating the customer engendered an increase in
the popularity of Teleshops among walk-in customers. Teleshops came to be seen asa customer-friendly chain of customer outlets while gradually developing a new
brand name.

884.5.1.2.2 Teleshops since March 2003
Though Teleshops and RTOs are similar in terms of being chains of customer outlets
for walk-in customers, their levels of operation are not identical. Table 4.6
summarizes some of the key differences in operations between RTOs and Teleshops
up to February 2003. At that time, owing to the uneven distribution of RTOs andTeleshops and a lack of clarity in delineating the area of authority of respective
RTOs without giving due consideration to size of the customer base, customers still
had a tendency to walk into RTOs for their needs. Finally, this resulted in SLT
discriminating between its own customers by running two types of customer outlet
chains whose operations were at two different levels. Given these circumstances,
SLT decided to convert all RTOs to be run within the operational framework of aone-stop shop like Teleshops, to offer more convenience to the customer. This
strategic change was also influenced by the fast growing popularity of Teleshops
among SLT customers and the fact that Teleshops developed their own brand as acustomer-friendly one-stop shop for SLT customers from any part of Sri Lanka.
Table 4.6
Differences in Operations between RTOs and Teleshops
RTOs
Teleshops
Serving mostly customers who reside only in Serving SLT customers from any part of Sri
their respective area of authority; therefore Lanka regardless of their place of residence
SLT customers who reside in other areas
have only a limited access to services
provided by RTOs
Providing only limited services to customers. Serving customers from any part of Sri
For example, RTOs, in general have no Lanka as a one-stop shop
facilities to sell telephone apparatus andother telecommunications equipment
Source: Researcher's intensive interviews and observations.

In future, according to proposed changes, all RTOs become Teleshops. Ultimately,
Teleshops will become the only customer outlet for walk-in customers of SLT. SLT
has also planned to increase the number of these customer outlets based on
consideration of the size of the customer base in each RTO area. This process ofrestructuring RTOs will proceed through several stages. The process commenced in
March 2003 and the initial stages of the change process to date have resulted in theoccurrence of the following:(1) transferring the responsibility of Teleshop administration from head ofsection (deputy general manager) of Teleshops to RTO managers. Thus 23
Teleshops have been brought under RTO managers depending on theirlocation (see Appendix E). This development has ended the era of centralizedadministration of Teleshops by Teleshops section89

(2) changing the job title of head of section (deputy general manager) of
Teleshops to head of section (deputy general manager) of Internet marketing
and Teleshops (accordingly, the name of Teleshops section was also changed
to Internet marketing and Teleshops section). The job content of this new job
title includes handling the marketing function of both RTOs and Teleshops aswell as standardization of the look and feel of and the development of theoperations of Teleshops(3) changing the reporting relationship of Teleshop managers. All Teleshop
managers now report administratively to their respective RTO managers andstill report functionally to the head of section (deputy general manager) ofInternet marketing and Teleshops, due to the marketing function of both
RTOs and Teleshops now coming under him(4) placing Teleshop employees in a position where they can share theircompetencies in running Teleshops with RTO employees with a view todeveloping something of the same positive approach within RTOs. Evidence
suggests that some employees of RTOs are still driven by departmental era
attitudes in their views and treatment of customers. Bringing about asignificant change in attitudes of RTO employees is sine qua non of ameaningful restructuring of RTOs.
As the change process proceeds over time, SLT customers living in any part of Sri
Lanka will be able to address their needs at any Teleshop (as all RTOs will become
Teleshops) as one-stop shops. With this strategic change of restructuring thecustomer outlet chain, several key areas of concern have emerged for developing
competencies of employees of RTOs. The current composition of the staff of RTOs
includes employees on executive grades (A grades), middle-level technical staff (Bgrades) and clerical and allied staff (C grades). Though these employees are now
involved in limited selling and other customer handling work, their scope of work
will be enlarged to include extensive selling and other work to support marketing.
Simply, their job content will be characterized by need to be marketing-oriented. As
RTOs become Teleshops all employees who are working in RTOs will also be
absorbed into marketing staff (M grades).
4.5.2 General Organization of and Workforce Distribution among Teleshops
For operational purposes, SLT is divided into regions, provinces and RTO areas (seeAppendices C and D for a partial organizational chart of SLT and its partial regionalorganization, respectively.) Regional and provincial divisions, in turn, are largely
based on clustering of nine administrative provinces of the central GOSL.49 Table 4.7
presents the distribution of regions, provinces of each region and the number of
RTOs coming under purview of each region.

49

For administrative purposes, the GOSL has divided the country into nine administrative provinces.
However, SLT's framework for defining boundaries of provinces is somewhat different. Accordingly,
metro region consists of Colombo and its suburbs that come under Western Province. The boundariesof the Western Province overlap, to a certain extent, with the north Colombo area of region 1 and thesouth Colombo area of region 2.

90

Table 4.7
Regional and Provincial Classification of SLT Operations
Regions
Provinces/areas of the region

Number of RTOs in theregion7

MetroColombo and its suburbs

Region 1

Central province, Western Province (north),
North Western Province and North Central
Province

9

Uva Province, Western Province (south), Southern
Province and Sabaragamuwa Province

11

Region 2

Northern Province and Eastern Province
Region 3
Source: Annual Reports of SLT (various years).

7

The administrative hierarchy shows that head of each region (head of region/head of
metro) reports to the Chief Executive Officer and that all heads of provinces, in turn,report to the respective head of region. A number of RTOs come under the purview
of each head of province, and the respective RTO managers report to this head ofprovince. However, in the metro region there are two deputy heads of regions who
are on par with the heads of other provinces. One of these deputy heads is in chargeof commercial management work and the other is in charge of facility management
work in metro region. Within this hierarchical structure all Teleshops are positioned
under RTO managers, depending on their location and Teleshop managers are
required to report to their respective RTO manager. As such RTO managers oversee
operations, administration and human resource management concerns of both RTOs
and Teleshops. Nevertheless, the head of section (deputy general manager) ofInternet marketing and Teleshops (under the consumer marketing division of themarketing and Internet protocol group) is entrusted with the responsibility fordevelopment (including training and development of Teleshop employees andexpansion of the Teleshop network) and standardization of Teleshop operations andplanning and coordinating all marketing activities related to both Teleshops and
RTOs.
In the post-privatization history of SLT, Teleshops were first introduced in 1998 tofunction as additional counter desks of RTOs. In his annual review for the year 1998,
Chief Executive Officer remarked:
One of the most innovative steps in the field of marketing taken by SLT in 1998 was
the opening of Teleshops. These are special shops dedicated to the service of SLT
Customers and other members of the public with regard to their transactions with
SLT, or other areas of telecommunication (Chief Executive Officer's Review, SLT,Annual Report, 1998, p. 29).

91

The Teleshop system started with the opening of four Teleshops in mid-1998, but
over the past five years the number of these outlets has grown to 23, covering all but
region 3. The distribution of the workforce among the 23 Teleshops is presented inTable 4.8.
Table 4.8
Teleshop-wise Distribution of Workforce (as of September 2003)
Number of employees
RegionLocation of Teleshop
Male
FemaleTotal
Metro

World Trade Center
Liberty plaza shopping complex
Slave Island
Ratmalana
Nugegoda
Maharagama
Kotte
WattalaJa-ela

2
4
4
4
4
1
3
2
2

4
2
1
2
5
2
2
-

6
4
6
5
6
6
5
4
2

Region 1

Kandy
MataleNegombo
Katunayake
GampahaKurunegala

2
2
3
1
1
3

5
2
2
1
4
3

7
4
5
2
5
6

Region 2

Kalutara
Beruwala
Galle
MataraBandarawela
BadullaNuwaraeliya
Kegalle

3
3
3
2
1
1
2

2
1
2
3
2
4

5
3
4
4
1
3
3
6

Source: Researcher's intensive interviews and observations.
Note: Majority of customer service employees of Teleshops consists of non-executives.

All employees who work in Teleshops are permanent full-time employees50 and thegender ratio remains 52% male and 48% female. Interestingly, working hours aredifferent from those of other employees, Teleshop employees being required to signin 15 minutes before and sign off 15 minutes after the usual work hours. Moreover, it
is mandatory for all Teleshop employees to work a minimum of four hours on
Saturdays. These extended working hours are a joint effect of the nature of the work50

In some Teleshops there are trainees from the training planning section of SLT. These trainees havethe opportunity to gain some work experience at SLT over a period of six months owing to anunderstanding between SLT and educational institutions at tertiary level. SLT also promotes andfosters providing training to these trainees as a part of its social responsibility. These trainees are notpaid any allowance by SLT but are issued a valuable certificate upon successful completion of the
training period.

92

of Teleshop employees as customer service employees and Teleshops being outlets
catering to the needs of walk-in customers Monday through Friday and half a day on
Saturday. The head of section of Teleshops decides on the number of employees tobe assigned to each Teleshop.51 Major factors that are taken into consideration in thisdecision-making process include the number of transactions (or number of cash
register hits) performed by a Teleshop, its location (whether serving predominantly
residential or business customers), size of customer base of the RTO area in which
the Teleshop operates and the number of meetings that a Teleshop holds with walk-in
customers.
4.5.3 Employee Classification System of Teleshops
As a new type of customer outlet introduced to SLT under NTT-style management,
Teleshops use an employee classification system with two elements, because it
applies to staff involved in marketing and selling work and it also incorporates somecommon features that are applied across the board at SLT. The job titles of nonexecutive level employees are designated with the letter "M" to indicate their
engagement with marketing and selling work. The job titles of executives aredesignated with "A", as is usual for all executive level employees of SLT. Employees
currently working in Teleshops belonged to different divisions, sections, offices andunits of SLT before they were hired to staff Teleshops, and their job grades earlier
were either "B" (middle level technical staff) or "C" (clerical and allied staff). All
these employees were absorbed into new grading system (M grades) and assigned
new designations from early 2001. Table 4.9 presents the full range of job titles withrespective job grades applicable to Teleshop employees.
Table 4.9
Job Titles and Job Grades of Teleshop Staff
Job title
Job grade
A3/A4
Head of section
A4
Senior manager
A5Manager
A6
Assistant manager
M1
Senior marketing officer
M2
Marketing officer
M3
Junior marketing officer (Class I)
M4
Junior marketing officer (Class II)

Level of job grade
Executive
Executive
Executive
Executive
Non-executive
Non-executive
Non-executive
Non-executive

Source: Researcher's intensive interviews.
Notes: (1) There is an organizational norm at SLT according to which A6 level, the lowest of
executive grades, job titles essentially carry the adjective "Assistant". When the executive
concerned is promoted to A5 level the adjective is removed from the job title.
(2) Analysis of job grades of customer service employees who are working in Teleshops
reveals that the highest executive level officer was on A5 grade as of September 2003. This
51

This was the case before Teleshops were brought under RTO managers in March 2003. But, this
scenario may undergo some changes in time to come whereby the relevant RTO manager may decideon staffing requirements of Teleshops in consultation with the head of section of Internet marketing
and Teleshops.

93

officer held the position of manager of a Teleshop. The head of section of Teleshops was on
A3 grade.

Fundamental but vital differences between executive grades and non-executive
grades exist in the levels of financial authority, administrative authority andempowerment that employees of each grade can exercise. A manager on A5 grade isauthorized to approve payments for various logistics-related expenses of theTeleshop up to a certain limit. An assistant manager on A6 grade has no suchfinancial authority, even when he or she functions as the manager of a Teleshop. In
contrast, this assistant manager on A6 grade is authorized to decide on the number ofovertime hours that should be allocated for members of staff who are on nonexecutive grades.52 Nevertheless, in practice, even Teleshop managers on A6 or M1
grades are informally delegated authority to handle such matters in spite of therulebook, due to the necessity of facilitating convenience for the customer. On theother hand there seem to be no significant differences among M grade employees interms of authority, responsibility, accountability and empowerment because all are
required to perform similar functions as customer service employees in Teleshops.
Of particular relevance to the organizational transformation under NTT-style
management is the addition of the A6 grade to executive cadre of SLT. Until thisdevelopment occurred, there were only six executive grades: A5 (engineer,
accountant, legal officer), A4 (engineer, accountant, legal officer), A3 (head ofsection/deputy general manager), A2 (head of division/general manager), A1 (headof group/director) and A Special (Chief Executive Officer/Managing Director).53 As
explained in more detail in section 4.5.5.1, members of the staff of Teleshops wererecruited and selected from within SLT and subsequently were absorbed into M
grades following the criteria set by the human resource division.
4.5.4 Job Structure of Staff of Teleshops
The job structure has two parts, content of the job (by job title) and content ofcompetency requirements.
4.5.4.1 Job Content of Teleshop Staff
The organization of work in a Teleshop is characterized by teamwork. All employees
in a particular Teleshop are organized into a work team, with one Teleshop manager
and one assistant manager for every Teleshop. Other members of the team consist of52

Another important difference between executives and non-executives is that only non-executives
are entitled to payment for over time work.
53
Prior to the privatization of SLT, the organizational configuration of SLT as a totally state-owned
public limited company had designated senior management and junior management positions with thejob titles of managing director, director, general manager, deputy general manager. Among the firststeps taken by NTT-style management to change the culture of this state-owned enterprise wasrestructuring the organization and introducing the group (Bu), division (Ka) and section (Kakari)model in 1997. Alongside this, the new job titles for senior management positions such as Chief
Executive Officer (for managing director), head of group (for director), head of division (for generalmanager) and head of section (deputy general manager) were introduced.

94

senior marketing officers, marketing officers, junior marketing officers (class I) andjunior marketing officers (class II)54 (see Figure 4.5).
Figure 4.5
Organization of a Teleshop
Teleshop Manager(A5, A6, M1 or M2)

AssistantManager(A6, M1 or
M2)

SeniorMarketing
Officers(M1)

Marketing
Officers(M2)

JuniorMarketing
Officers[Class I](M3)

JuniorMarketing
Officers[Class II](M4)

Source: Researcher’s intensive interviews and observations.

The Teleshop manager, as displayed in Figure 4.5, is the head of Teleshop who
reports to the RTO manager of the respective RTO area. All other members of theTeleshop staff report to Teleshop manager. The titles of Teleshop manager andassistant manager of Teleshop are designated exclusively for those running
Teleshops. Such managers and assistant managers do not need be on A5 or A6
grades, respectively. According to the mainstream job titles of employees on
executive level job grades of SLT, an employee on A5 grade could function as
Teleshop manager and an employee on A6 grade could function as assistant managerof the Teleshop. The Teleshop section, as the centralized coordination unit of all
Teleshops until Teleshop administration was brought under RTO managers,developed a conceptual framework for assigning managers to each Teleshop. This
framework placed due emphasis on the number of transactions (number of cash
register hits), number of customer meetings, location of the Teleshop and its
customer base in deciding on assigning an employee to work as the manager of aparticular Teleshop. Table 4.10 presents this framework with the ideal type of the job
grade of the Teleshop manager.
Table 4.10
Classification of Teleshops and Ideal Type Job Grades for Teleshop Managers
Teleshop category
Ideal type job grade for Teleshop manager
3 star Teleshop
A5
2 star Teleshop
A6
1 star Teleshop
M1
Source: Researcher's intensive interviews.

However, in reality, there are Teleshop managers who are on A6, M1 or M2 grades
and assistant managers also on M1 or M2 grades. As such, these titles are not in line
54

In some Teleshops there are two kinds of employees depending on their job grade, employees on
executive level job grades (A) and employees on non-executive level job grades (M). But in other
Teleshops the entire staff consists of employees on non-executive level job grades (M).

95with the mainstream job titles and job grades of SLT.55 Nevertheless, the Teleshop
managers and assistant managers play a significant role in running Teleshops, andfrom the viewpoint of customers these titles reflect the relative status of those
officers within a particular Teleshop.
All members of the Teleshop staff handle selling and other work to support themarketing function of SLT, on full job rotation that occurs on a daily, weekly, biweekly or monthly basis depending on arrangements made by managers of individual
Teleshops. For instance, contributing to marketing (such as promoting new products
and channeling information to other sections for marketing planning) is typical of thework that occurs to support marketing. Moreover, all members of Teleshop staff are
required to handle all functions assigned to that particular Teleshop, by interacting
mostly with walk-in customers and also with other relational coordination points
within SLT. Performance of functions in this manner has become possible owing to
the belief that Teleshop staff members are multi-skilled. Interestingly, Teleshop
employees are required to have specialized knowledge of marketing as a business
function in which selling plays a substantial role, and they also gradually deal withissues relating to marketing mix as they progress up the career ladder. Table 4.11
summarizes the work content of staff of Teleshops including both front office andback office operations.
Table 4.11
Work Content of Staff of Teleshops
Work content
Selling telephone apparatus and other telecommunications
equipment such as caller line identification adaptors, ISDN
equipment, ADSL equipment, etc.
Selling prepaid cards
Selling leased lines, dial-up services, enhanced services, voice mail,etc.
Selling/registering persons for Internet/e-mail, ISDN and ADSL
services
Registering persons for new telephone connections
Accepting all types of payments and handling the cash register
Handling customer queries and complaints including fault reporting
and billing-related matters
Organizing demonstrations for Internet, ISDN and ADSL services
Organizing facilities for video conferencing
Accepting requests for equipment repair
Supporting sales campaigns
Customer education and counseling
Handling back office work, i.e., preparing reports
Source: Researcher's intensive interviews and observations.

55

One possible reason for this phenomenon may be the relatively young age of the marketing andInternet protocol group that was started only after the privatization of SLT in 1997, and the lack ofsufficient time available for employees in this group to develop their careers vertically in marketing.

96

In general, Teleshop managers also handle these functions at operational level. As
well, they have some managerial functions: (a) to be in charge of overall operationsof the Teleshop; (b) to prepare schedules for job rotation and assign employees
accordingly; (c) to supervise the work of others and coach employees to improvetheir performance; (d) to deal with unusual cases of customer handling referred by
the staff; (e) to evaluate staff performance and to attend other human resource
management needs of the staff; and (f) to communicate and attend meetings with the
RTO manager. The assistant manager of the Teleshop is authorized to act on behalfof the manager when the manager is on leave or engaged with work-related
assignments outside the Teleshop.
4.5.4.2 Competency Requirements of Teleshop Staff
Conceptions of competency have often proved to be ambiguous in their definition. In
most cases, these conceptual differences are the effect of the compound nature ofcompetencies and the difficulty of measuring them. A great deal of research in theservice sector has documented the factors determining service quality and theirimplications for maintaining relationships with customers (Coulter & Coulter, 2002;
Sureshchandar, Rajendran & Anantharaman, 2002). Such elements as core service orservice product, the human element of service delivery (the customer service
employee's ability to deliver the service and the customer service employee's
personal characteristics), the non-human elements of service delivery such asprocesses, procedures, systems and equipment, tangibles of service and social
responsibility, are considered prominent influences on the quality of service andcustomer retention. Of particular relevance to this study is the human element ofservice delivery. Analysis of the work content of customer service employees in both
Teleshops and Suntel Centers reveals that their job involves not only a set oftechnical functions or tasks but also some complex social and economic dimensions.
Thus in this study the researcher defines competency as a cluster of knowledge, skills
and attitudes required of customer service employees to enable them to act as thefront-line human interface point for the customer.
Emphasizing the competency requirements of customer service employees is an
secondary objective of this study. To understand and detail them in substantial depth
the researcher employed the conceptual framework developed by Koike and Inoki(Koike, 1994, 1997; Koike & Inoki, 1990) for defining operations in a manufacturingconcern. These two authors have documented two major categories of work on the
shop floor, namely usual operations and unusual operations. Usual operations entail
repetitive and monotonous work, whereas unusual operations are concerned withhandling changes and solving problems of a non-routine type. These authors further
contributed to this framework by coining the term "intellectual skills" to describe theemployees’ ability to handle these unusual operations. Giving due recognition andconsideration to using this conceptual framework developed by Koike and Inoki withextensive field research experience, this study makes an attempt to expand theelements of the framework by adding features that are embedded in the work ofcustomer service employees in service firms vis-à-vis manufacturing concerns.

97

In the service context, unusual operations involve handling difficult customers withminimum or no support from the manuals for conducting usual operations. Difficult
customers who walk into Teleshops and Suntel Centers are of several types,
depending on their requirements. Some need answers and solutions for technicalfeatures and technical defects of systems, products and services, whereas others havebilling complaints, seek expedited lead-time for service provision, wish to rectify
over-payments made, and so on. In certain instances, customers walk into thesecustomer outlets to check the level of knowledge and skills of customer service
employees who serve them. Their educational and professional backgrounds
persuade them to compare their level of knowledge and skills relating to products
and services with those of customer service employees. Another important aspect ofhandling unusual operations is customer retention, or minimizing the “churn”. In theservice context, customer retention is a maintenance function of the job of customer
service employees. Highlighting the difference between integrated systems andseparated systems, Koike and Inoki (1990), Koike (1994) and Shibata (1999) have
explained that under integrated systems, production employees undertake not only
usual production work but also diagnosis and resolution of mechanical problems as apart of maintenance work. Similarly, the job of customer service employees also
includes such maintenance functions in the form of contributing to customer
retention programs on behalf of their employer as an organization-wide strategy.
Thus, customer retention work in the service context could be viewed as equivalent
to the physical maintenance work undertaken by production employees in a
manufacturing firm.
The methodology employed in this study to develop a deep understanding of thecompetency requirements of customer service employees of both Teleshops andSuntel Centers involved collecting data relating to cases of difficult customers
handled by the customer service employees with little or no support from written
manuals. The questions that the researcher raised in this respect during semistructured interviews with Teleshop managers and other members of Teleshop staff
were as follows:(1) Could you please explain your current job to an amateur like me? You may
focus on tasks and functions (the content of work) of your current job, thenature of customers with whom you deal and kinds of needs/demands raisedby customers.
(2) Do you face any troubles/problems when you deal with customers? If so,
what kind of troubles/problems (with some examples)? How do you
tackle/respond to these problems (with some examples)?
(3) Do you have any written manuals available for handling your work? Whenyou face troubles/problems in dealing with customers, do you refer thesemanuals? If you cannot get any support from these manuals, then how do you
handle such situations (with some examples)?56

56

A significant emphasis was placed here on generating data on cases of handling unusual operations
that were escalated to the Teleshop manager by his/her staff. This escalation process seems to have
proved the capability to explore intellectual skills (competencies) of customer service employees.

98Cases developed by the researcher using only a portion of data collected in responseto these questions from Teleshop managers and other members of Teleshop staff(including a combination of junior marketing officers [grade I], junior marketing
officers [grade II], marketing officers and senior marketing officers) are presented
below:
Case 1 – based on the experience of a Teleshop manager
When I worked at another Teleshop several years ago a foreign entrepreneur cameand demanded a telephone connection at that time itself. This brought me a big
surprise as well as a challenge as there are no guidelines given in manuals forproviding a voice connection to a customer within a day. … Customer kept himself
demanding the connection within a few hours during the same day itself.
As this conversation was going on there was a linesman in our Teleshop who used tovisit us whenever he attends to some maintenance work in the vicinity of ourTeleshop. This linesman knows very well about loops and distributory points in thatarea. While excusing the customer who was in front of me I started contacting RTO
manager in our area and got his advice needed for proceeding with honoring therequest of this customer. Then, I spoke to this linesman on exploring the possibilityof giving the telephone connection. Within few minutes he checked the availabilityof facilities required for giving the connection and informed me of the possibility. …
Then, again, I contacted RTO manager and on his advice I myself prepared theinvoice and charged the customer for new connection ... However, according to themanual or guidelines I cannot prepare an invoice as it is usually done by RTO. But
we gave him the connection the same day.
Finally, the customer said that it is not possible at all even in his own country to geta new telephone connection within a day and praised the effort that we all madecollectively to meet his demand.
(Interview records of the researcher)

Case 2 – based on the experience of a Teleshop manager
One day a customer visited our Teleshop with a CLI (Caller Line Identification)
adapter which he purchased at our Teleshop some time ago. He first spoke to amember of my staff, complaining about the poor performance of the equipment andasking for a new one. In Teleshops we are not generally authorized to issue new
equipment but to collect them for repairs during the warranty period given to thecustomer. We send collected equipment to our suppliers for repairing. Suppliers
charge the customer for such services, if only it occurs after the expiration of thewarranty period. However, my staff member escalated the case to me as thecustomer insisted us on issuing a new CLI adapter.
What I did first was to check the performance of the equipment with our Telephoneline and found it working. Then, I checked with the relevant exchange about the CLI
facility and that too confirmed its existence. Regardless of all our efforts, customer
refused to take back his equipment and then we issued him a new CLI adapter. Then,after two months, the same customer visited our Teleshop with the same complaint.
We followed the procedure that was similar to earlier occasion. Besides, we
contacted the supplier and requested him to go to customer’s premises and install a99new CLI adapter. We found later the customer was happy and thanked me and mystaff for attending to his complaint.
After the lapse of about three months the same customer made the similar complaint
to Head of Section (Internet Marketing and Teleshops) and this time we decided toissue him a different model and to deliver it to his premises.
(Interview records of the researcher)

Case 3 – based on the experience of a Teleshop manager
One of our customers had purchased a pre-paid telephone card at our Teleshop formaking IDD (International Direct Dialing) calls. As usual, he rubbed the specificarea of the card and found the card number. Later he found the card cannot be used
for generating calls from his home telephone as the recording confirmed him of his
card having been used earlier. He then rushed to our Teleshop and presented his caseto a member of my staff. However, he could not handle the problem within the limitsof his authority and responsibility and referred the customer to me.
What I did first was to tally with our records that the card was sold by our Teleshop.
Then, I contacted the relevant call center for details about this card (calling numbers,
duration of calls generated and dates). Also, I got some information from stores
regarding the date of issuance of this card to our Teleshop and finally I was assured
that the card was used beforehand. This was a unique case to me too and theninformed all details to the relevant Deputy General Manager and on his advise andguidance I not only issued customer a new pre-paid card but also apologized for thistechnical fault on our part. Subsequently, I made my staff and the relevant sectionsof the company aware of this incident.
(Interview records of the researcher)

Case 4 – based on the experience of a Teleshop Manager
A regular customer walked into our Teleshop and started speaking to a marketing
officer in my staff, complaining about a significant discrepancy in the amount of his
telephone bill. The customer was so furious with this situation and his cumulative
total where the bill describes with many more narrations than ever before. This case
was a complicated one and then my staff member invited my attention to the case.
I personally addressed this customer and listened well to his story and thenapologized him for the inconvenience caused. Gradually I got into analyzing the
problem and found that with the introduction of 10 digit telephone number systemcertain amount was transferred to the October bill whereas certain amounts were
duplicated in the September bill of 2003. Also, I contacted Deputy Head of Region(Commercial) and the Accountant (Metro), explaining them the situation anddifficulties that customers as well as we would face in the future. On their instruction,
I promised the customer to take off the repeated figure and requested him to pay
only the initial amount. My superiors also communicated me that solutions will be
provided for the confusing narrations and complicated wordings in the bill.

100This incident made me and all other members of the staff of our Teleshop involvedin a worthy learning process. In effect, we can now successfully handle similar caseswith high confidence.
(Interview records of the researcher)

Case 5 – based on the experience of a member of a Teleshop staff other thanTeleshop manager
A customer who has been enjoying the ADSL (Asymmetric Digital Subscriber Line)wanted to apply for a POP3 mail server option. However, mistakenly the customer
had made a payment to our Teleshop for “Mail Server Proxy and DNS Server”
installation where the payment of the DNS Server installation of Rs. 2,400/= was notnecessary. Customer referred his case back to our Teleshop and argued that we
charged him for unnecessary services.
In the case of when a customer filled the application by himself/herself for a service
and he/she made the payments, he/she does liable for the details written in the
document. We charged according to details written in the document. Nevertheless,the customer demanded a refund of Rs. 2,400/= we charged him. Within theauthority I have been delegated I cannot deduct an extra payment from the bill of thecustomer and consulted my manager for his advice and instruction. Since we havealready entered the data to our billing system, he advised me to get the approval
from Head of Section/Deputy General Manager – Internet marketing and Teleshops,
before sending the deduction data to the billing department. According to his
approval, we deducted the extra charge from his total bill, including the new service.
After all the customer understood that he had done the mistake and he was very
happy about the action taken from SLT side.
Once a customer is always a customer.
(Interview records of the researcher)

Case 6 – based on the experience of a member of a Teleshop staff other thanTeleshop manager
There was a customer who needed four new telephone connections and Internet andE-mail facility to his company within a maximum of three to four days. Then I
explained him that I cannot confirm four new lines within three to four days without
checking the loop availability but the Internet and E-mail connections could be
provided. This was a matter that I could not handle without seeking the advice andinstructions of our Teleshop manager. Thus on her advice I contacted the relevant
exchange and checked the availability of loops. Then the exchange confirmed methat new lines could be provided to this location within the maximum of two weeks.
Having received this information, I communicated the customer of the practicaldifficulties associated with giving four new lines within three to four days, giving
justifications. However, I emphasized that he could get Internet and E-mailconnection within 24 hours. Finally, he understood my point and applied for the newtelephone line connections and Internet and E-mail connections.
(Interview records of the researcher)101

Case 7 – based on the experience of a member of the staff of Internet marketing
section57
There was a customer who came up with a requirement of hosting a web site, which
may contain more than 100 Mbs (mega bytes) capacity. Once I explained theexisting charges of web hosting, he was really worried about the amount he should
pay monthly since the capacity of the web site is relatively large. He was looking fora special discount out of this total monthly rental. Since I was not in a position to
give him a discount without a higher management approval, I forwarded this request
to my immediate superior. Then he using his authority decided on offering thecustomer a special package and forwarded the details of this special package for theapproval of his superior at Deputy General Manager (DGM) level. After obtaining
DGM’s approval, my immediate superior referred the case back to me for doing theneedful for fulfilling the customer’s requirement. Customer was satisfied too.
(Interview records of the researcher)

Case 8 – based on the experience of a member of the staff of the Internet marketing
sectionThis customer runs a business with a network of 36 branches and head office.
Requested E-mail accounts to all branches and both Internet and E-mail connection
to the head office. On his requirements I prepared a proposal with two options andcharges associated with them. After studying the proposal, customer requested aconcession as this transaction involves a huge amount of money. As I cannot takeany decisions on offering discounts to customers, I referred the case to myimmediate superior and then he too sought the approval of his immediate superior at
DGM level.
In view of the total revenue this customer could generate for SLT, DGM gave his
approval for a 50% discount on the total registration fee of the package he chose.
Finally, I reverted back to the customer and gave our plan for the concession withwhich he happily agreed.
(Interview records of the researcher)

From the analysis of these cases, the knowledge, skills and attitudes that emerged ascompetencies required of Teleshop staff members to act as customer service
employees are detailed in Table 4.12. Though all cases are not presented here, theircontents were duly taken into consideration in preparing this table.

57

Cases 7 and 8 are based on the experience of the marketing officers in the Internet marketing
section on handling customers as front-line customer service executives. Some of these employees hadeven worked for some time in Teleshops. These two cases prove to be useful as they provide richexamples for handling customers’ special requests.

102

Table 4.12
Competency Requirements of Teleshop Staff
Knowledge
SkillsClear communication
Products and services of SLT

Attitudes
Willingness to respect andserve the customer

Rules, regulations andprocedures of SLT

Attentive listening and giving
feedback

Preparedness to serve thecustomerTechnical specification of
products and their features

Talking with a cheerfulvoice

Willingness to enhance theimage of SLT

Equipment sold on
consignment basis andtheir technical features

Building a close andpersonalized relationshipwith the customer

Ambition to solve customer's
problem

Tariffs of SLT and that ofcompetitors

Exercising patience andmaintaining a cooltemperamentWillingness to learn new
developments in products
and services and technology

Telecommunications industry
and competition therein

Negotiating

Treating all customers
equallyWork handled by other sections Prospecting and convincing
the customer
of SLT and the staff who
handle it

Willingness to retain
SLT customers

Relational coordination points;
forward coordination

Understanding customer's
problem/enquiry accurately
and taking quick action

Readiness to sharework-related experiences withcolleagues

Languages other than mothertongueEmpathizing with customers

Team spirit

Demonstrating how to use
equipment sold on
consignment basis
Quickly
records

tracing

customer

Building personal
relationship with employeesof other sections who are
working at relational
coordination points
Developing close contacts
with equipment suppliers
Ability to speak in languages
other than mother tongue

103

Table 4.12 continued …
Computer literacy
Source: Researcher’s intensive interviews.

Further analysis of the competency requirements of Teleshop staff members based on
the cases presented above and cases that are not presented here but are contained in
the researcher’s records reveal the following phenomena:(1) attitudes are of crucial importance, over and above knowledge and skills inserving the customer. Given the right attitudes, customer service employees
can acquire the knowledge and skills required to serve the customer better.
Therefore attitudes form the base for acquiring other components ofcompetencies. In short, this can be seen as adapting to the mind-set ofcustomers, Teleshop employees must leave their egos behind while serving
and this is vital for interacting with the customer and acquiring knowledge
and skills needed for work.
(2) given the crucial importance of attitudes, the second factor that most affects
the work of customer service employees is their knowledge of SLT products
and services and technical features of equipment sold on consignment basis.
(3) the knowledge and skill level of Teleshop employees varying according tolocation of the Teleshop. For example, some Teleshops serve largely
residential customers whereas others serve mostly business customers (small
and medium enterprises). Also there are differences across Teleshops in terms
of products and services offered to customers.
(4) the types of attitudes required by Teleshop employees to serve customers do
not necessarily vary according to the location of Teleshops. But the level ofknowledge and skills do.
(5) finally, although there are variations in the knowledge and skill levels
possessed by Teleshop employees due to the location of Teleshops and thedifferences in products and services, it can be concluded that Teleshop
employees, in general, are required to have a common set of competencies
because full job rotation occurs in each Teleshop.
4.5.5 Staffing System of Teleshops
4.5.5.1 Recruitment and Selection of Staff of Teleshops
As described in section 4.3, SLT is a unionized organization, having 31 trade unions
and two federations of trade unions. One of the important commitments that both the
GOSL and NTT made to these trade unions and employees at the time ofprivatization was to follow a “no retrenchment - no recruitment” policy (SLT,Annual Report, 1998). There has been much of employee and trade union resistanceto privatization generally in Sri Lanka, mainly due to fear of the loss of jobs andprivileges enjoyed in the pre-privatization era. However, the main thrust of
privatization of SLT, especially for the no recruitment element of the noretrenchment - no recruitment policy, emanated from the large number of excess staff

104

in the company and the necessity to improve productivity. The following remarks of
the Chief Executive Officer substantiate this further:
The aim of SLT's human resource policy from the time of privatization has been to
improve productivity through optimum staffing, pay employees according to theirproductivity and help to build up a contented and satisfied workforce (Chief
Executive Officer's Review, SLT, Annual Report, 1998, p. 32).

Table 4.13 presents the productivity level of SLT, in terms of the number of direct
exchange lines per employee, for some years before privatization occurred in 1997.
Table 4.13
Number of Direct Exchange Lines per Employee
Year
1991
1992
1993
Number of direct
exchange lines
per employee
18
18
21
Source: SLT, Annul Report, 1998.

1994

1995

1996

24

27

30

The study conducted jointly by Nippon Telecommunications Consulting Company
Limited and Japan Telecommunications Engineering and Consulting Service, basedon a contract with JICA, also emphasized improving productivity, call completionrate, fault clearance speed, training and staff work efficiency in urgent operations andmaintenance activities (JICA, Final Report 1996 [Volume I - Summary], p. 26).
Adhering to the no recruitment policy, the human resource requirements ofTeleshops, which started in May 1998, were met by hiring employees from within
SLT employing a posting and bidding system, and this has been the practice ofstaffing Teleshops since then. 58 Data gathered through intensive participant
observation and semi-structured interviews indicate that employees of Teleshops
have the opportunity to bid only at the stage of their joining Teleshops. Other
postings, such as job assignment inside the Teleshop and appointment to the head ofsection position after promotion to A4 level on the executive cadre, are decided by
the Teleshop manager and senior management, respectively. Comments made by aninterviewee on another reason for staffing Teleshops from within are worth
mentioning:

58

This posting and bidding is implemented through the issuance of a circular from the office of the
Chief Executive Officer (CEO circular), communicating to employees vacancies available inTeleshops and requirements they are supposed to meet for application. In response, employees could
apply for positions in Teleshops at their will through their immediate superior. The recruitment andselection process consist of two stages, receiving applications through the immediate superior of theemployee concerned and the selection interview. No written test is included in the selection process.
Accordingly, employees who were on executive staff (A grades), middle level technical staff (Bgrades), clerical and allied staff (C grades) earlier were hired to staff Teleshops based on theirperformance at the selection interview. Interestingly, employees who joined from the latter two staff
categories were regraded with M signifying their affiliation with the marketing and Internet protocolgroup. Executives continued to carry A grade even after joining Teleshops.

105

There was only a simple but … complicated promotion system at SLT at the time ofits privatization. Employees did not know how they were selected for promotions.
Basically, employees were promoted on the basis of seniority and academic
qualifications. NTT management wanted to introduce a new remuneration system
based on performance and capabilities shown in their position within some period.
Thus we simplified the promotion system by institutionalizing a new way to bepromoted. For instance, it sounds strange for me that only some professionals likeengineers, accountants and lawyers have been promoted. Employees without
professional qualifications were not promoted. Even good graduates who do notpossess professional qualifications could not find their proper position in theorganization. That is one of the reasons for setting up Teleshops.
(Interview records of the researcher)Analysis of the composition of the workforce of 23 Teleshops reveals that they weredrawn from various sections, units and offices of SLT including RTE Offices. In
effect, the Teleshops workforce is a mixture of employees who had been on either
executive grades (A grades), middle level technical staff grades (B grades) or clericaland allied staff grades (C grades). A further analysis of that workforce demonstrates
that there are five categories of employees of Teleshops, depending on the era ofownership of SLT during which they first joined. These five categories are:(1) employees who joined SLT during the era of Department of Posts andTelecommunications(2) employees who joined SLT during the era of DOT(3) employees who joined SLT during the era of Sri Lanka Telecom(4) employees who joined SLT during the era of Sri Lanka Telecom Limited as a
totally state-owned public company(5) employees who joined SLT after its privatization.
Consequently, the length of service of Teleshop employees at the time they joined
Teleshops varied substantially within the range from one to 34 years. Nevertheless, atthe time of hiring employees for Teleshops little consideration was given to theirlength of service or their prior work experience. Key factors taken into accountduring the interview stage were, inter alia, checking the employee's ability tocommunicate, personal traits such as appearance, and flair for marketing. Remarks
made by interviewees suggest some interesting relationships between prior work
experience and current performance of Teleshop employees:
Those who have not had any work experience in RTE Offices perform much better.
Employees who joined Teleshops from RTE Offices still have the inclination
towards comparing the work and way of treating the customers during RTE Officeera and Teleshop era.
Employees who joined Teleshops from sections such as main stores perform muchbetter and they find speaking to and interacting with customers a new work
experience.
(Interview records of the researcher)106

Ultimately, recruitment and hiring from within SLT for staffing Teleshops has
resulted in a workforce that represents a diversity in terms of career history, length ofservice, age, educational and professional qualifications of its members.
4.5.5.2 Prior Experience of Staff of Teleshops
SLT’s no retrenchment - no recruitment policy, as mentioned in the preceding
section, resulted in staffing Teleshops with employees who were already with SLT at
the time of its privatization. These employees had work experience in at least one
aspect of clerical and allied services, technical work or a little marketing work at thetime they were absorbed into Teleshops. The data on career history reveals that someof these employees had performed a number of jobs in only one section, unit oroffice whereas others had performed various jobs in different sections, units oroffices of SLT for over many years. On the other hand, only a few had been involvedin marketing jobs in a small way, due to the low profile of the marketing function
before SLT's privatization. To understand career formation in depth the researcher
gathered data from Teleshop staff at operational level including Teleshop managers.
The researcher’s intensive interview with the Head of Section (Deputy General
Manager) of Teleshops was also influential in grasping concretely how careers areformed at SLT. Data on career formation from these three categories of employees
was collected by asking the following questions:(1) Could you please explain to me the history of your career with SLT. You may
focus specifically on the date and in what capacity (job title/position and job
grade) you joined SLT, your current job title, job grade,
educational/professional background and previous work experience.
(2) In what units, sections, division, offices, etc. of SLT had you worked before
joining Teleshops? Please explain briefly what type of work you did in each
unit, section, division, office, etc.
(3) Do you find any significant difference between the work you did earlier andthe work you have been doing since you joined Teleshops? If so, what are
they? (This question was used only for interviews with Teleshop staff
including Teleshop managers, along with other two questions.)
Overall, the following features of prior experience of Teleshop employees can be
identified based on analysis of the data collected:(1) some employees had worked in many sections or functions within either the
middle level technical staff category or the clerical and allied staff category
over a long term whilst others had been confined to work in one particularsection, subject or area within those two categories over a long term.
(2) some employees had limited experience in marketing over a relatively shorttime span.
(3) a majority of employees had no prior job experience that related directly totheir current selling and marketing work in Teleshops.

107(4) formal orientation and initial training given at SLT training centers played avital role in molding employees to acquire the competencies needed forhandling operations of Teleshops.
(5) employees had learned and been exposed to a new type of selling andmarketing job since they started working in Teleshops. In effect, these
employees have now become multi-skilled.
(6) a majority of Teleshop employees joined SLT after completing bachelor's
degree or diplomas, or senior high school or junior high school. Consequently,
most had no external job experience and their careers had been developed
within SLT itself.
Given the diversity of job careers, all Teleshop employees could now benefit from awell-defined promotion policy that enables them to develop their careers verticallywithin SLT. This is explained in more detail in section 4.5.8.2.
4.5.6 Performance Evaluation System for Staff of Teleshops
SLT evaluates the performance of its employees on an annual basis for determining,among other things, salary increments, bonuses, training and development needs andpromotions. Performance evaluation occurs in a three-tier system in which threeparties take part in the evaluation process: the employee (self-assessment), theemployee's immediate superior, and the evaluation committee. All employees are
divided into five categories for performance evaluation, namely drivers, junior staff,
supervising officers (those who supervise the work of a relatively large number of
employees), middle level technical, clerical and allied and marketing staff andexecutives. There are two different formats used for evaluating the performance ofTeleshop staff depending on whether the employee is in a non-executive or an
executive level job grade. Teleshop employees who are on M grades are evaluatedusing the format that is commonly applied to all middle level technical staff andclerical and allied staff. In contrast, the performance of executives working in
Teleshops is evaluated according to the format that is used commonly for all
executive level employees of SLT. Table 4.14 presents the criteria used to evaluate
Teleshop employees on M grades.
Table 4.14
Criteria for Evaluating Teleshop Employees on M Grades
Major items
Weight given to the
Performance factors
item
Attendance, punctuality, discipline, loyalty
25%
1. Discipline
and timely completion of jobs
2. Ability

Time management, accuracy and quality ofwork, knowledge of company rules andguidelines, job skills, knowledge of SLT
products and services, ability to utilize newtechnology to improve productivity, ability
to work with a computerized management
information system, written and oral

50%

108

Table 4.14 continued…
communication skills, analytical skills,
initiative and decision making
3. Customer relations

Customer relations and relationship withsuperiors and colleagues

15%

Contribution to 5S and Kaizen
implementation, ability to work with teamspirit and knowledge sharing
Source: Compiled from SLT data, " Performance evaluation form for middle level technicalstaff, clerical and allied staff and marketing staff (all "B", "C" and "M" grades), February
2003.
4. Team effort

10%

Results of the performance evaluation of M grade employees of Teleshop staff
determine the amount of performance bonus and approval for the annual salary
increment as immediate concerns. In addition, these results are used for deciding on
their training and development needs and promotions. Referring to Table 4.14, firstly,
each employee performs a self-assessment by giving a ranking on a scale of"outstanding", "satisfactory" and "improvement required" in respect of eachperformance factor, and then calculates summary marks for each ranking given andaverage marks according to the weight assigned to each performance factor.
Secondly, the immediate superior of each employee completes the evaluation form
using the same procedure. As an additional step, the immediate superior assesses any
exceptional contributions that the employee has made during the period ofassessment. Then both the employee and immediate superior are required to fill in acolumn provided for organizational situations that affect the employee’s performance.
Thirdly, the evaluation committee gives a ranking on the scale described earlier inrespect of each performance factor and then calculates the summary and averagemarks following the weight assigned to each major item. Upon completion of all
three stages, the evaluation committee sends the final report to the manpowerplanning section of the human resources division. This report shows the overall
performance grade that was awarded to the employee with the observations of theevaluation committee concerning performance factors. The evaluation committee,
taking into account the final marks, determines the performance grade. However,before deciding on the final marks, the evaluation committee has the option ofawarding bonus points (maximum 6) for any exceptional contribution made during
the period of assessment. There are six overall performance grades corresponding todifferent ranges of final marks (see Table 4.15).

109

Table 4.15
Overall Performance Grades and Corresponding Range of Marks
Performance gradeMarks range
100-91S (super)90-76
A (excellent)
75-61
B+ (very good)
60-41
B (good)40-21
C (needs improvement)
20-00
D (weak)
Source: Compiled from SLT data, " Performance evaluation form for
middle level technical staff, clerical and allied staff and marketing
staff (all "B", "C" and "M" grades), February 2003.

Finally, each individual employee is notified of the overall performance grade that heor she has earned.
Evidence suggests that the performance evaluation system of Teleshop staff members
who are on executive grades provides an opportunity to identify similarities anddifferences between them and Teleshop staff members who are on M grades.
Similarities can be found in the implementation of the three-tier system, ranking thescale of each performance factor, the definition of overall performance grades andthe range of marks, with final communication of overall performance grade to theemployee concerned. On the other hand, differences between two systems stem fromsetting objectives/targets, major items, performance factors, areas for which bonus
points are awarded and the inclusion of a performance evaluation interview. Table
4.16 summarizes the performance evaluation format for Teleshop staff members who
are on executive grades.
Table 4.16
Criteria for Evaluating Teleshop Employees on Executive Grades
Major items
Weight given to the
Performance factors
item
At least seven objectives/targets should be
50%
1. Achievement ofdecided at the beginning of each calendar
targets
year in line with the annual business plan of
SLT. These targets should be quantifiable
as much as possible and should also
have a time frame
2. Knowledge of thesubject

Fundamentals of management,
organizational management anddevelopment and strategic management,
costing and financial analysis,
information technology and businesseconomics and any five performance factorsthat are relevant to the field of work of theemployee

20%

110Table 4.16 continued…
3. Management skills

General management, managing
subordinates, managing self, and generalmanagement skills

30%

Source: Compiled from SLT data, " Performance evaluation form for executives (all "A"
grades), February 2003.

According to Table 4.16, 50% of the total weight is assigned to the achievement of
the targets/objectives of the executive officer concerned. These objectives,
employing the management by objectives (MBO) method, are agreed between
Teleshop employees on executive grades and the head of section (deputy generalmanager) of Teleshops. Setting objectives in this manner for Teleshop employees on
executive grades constitutes a major difference from the major items andperformance factors for Teleshop staff members who are on non-executive grades. At
the present time, the MBO method does not apply to them. Apart from this,executives are awarded bonus points for achievements and any improvements madeas well as any initiatives taken to implement changes. Also included are knowledge
development by conducting special lectures, seminars, workshops and training for
SLT employees, and additional work hours other than extra duty claims. All
members of Teleshop staff who are on A grades are required to present themselves inperson for a formal performance evaluation interview annually. This also marks adifference between M grade and A grade employees because this interview is notapplicable to employees of former category.
The performance evaluation of Teleshop staff members who are on A grades plays asignificant role in determining the immediate matter of the amount of theirperformance bonus and monthly allowance as a percentage of consolidated salary.
The evaluation also contributes to decisions on training and development needs andpromotions. To be eligible to apply for promotion to the next level in the executive
cadre it is essential for executives to maintain a certain average of marks assigned totheir overall performance grade. This average is calculated taking into consideration
the best three performance grades that the executive officer has earned within the last
five years and then averaging the total number of points assigned to each overall
performance grade. A possible reason for adopting a long-term perspective of five
years could be to minimize the unfavorable effects of uncontrollable events on theperformance of employees, motivating them to improve their work performance overa relatively long period of time (see Table 4.17 for points assigned to each overall
performance grade).

111

Table 4.17
Points Assigned to Overall Performance Grades
Performance grade
Number of points assigned
9
S (super)6
A (excellent)
4
B+ (very good)3
B (good)-1
C (needs improvement)-3
D (weak)
Source: Researcher's intensive interviews.

For overall performance grades a fixed distribution method is applied regardless of
non-executive or executive status of employees. Thus each superior who evaluates
the performance of subordinates is required to comply with the percentages set by
SLT for awarding overall performance grades. Accordingly, only 5% of thesubordinates under each superior are supposed to be awarded S grade, and only 15%
and 20% of them should be awarded A and B+ grades, respectively. Other B, C andD performance grades could be distributed among the remaining 60% of
subordinates. Conceptually, this distribution is supposed to be maintained at sectionlevel, division level, group level, and finally at the company level. Nevertheless, foradministrative convenience, the base unit is the individual superior and number ofsubordinates he or she evaluates, regardless of their executive or non-executive status.
Thus this fixed distribution method creates competition among employees to earn abetter overall performance grade, which carries implications for their annual salary
increments, monthly performance allowance, performance bonus, promotions andtraining and development.
4.5.7 Compensation System and Incentives for Competency Formation by Staffof Teleshops
The compensation (remuneration) system for Teleshop employees can broadly beclassified into two categories depending on whether they occupy non-executive or
executive grades. Prior to privatization there were two major components ofremuneration, basic salary and cost of living allowance. 59 The cost of living
allowance was then consolidated into the basic salary under NTT-style management(SLT, Annual Report, 1998). Monthly remuneration of Teleshop employees on nonexecutive job grades is mainly composed of consolidated salary, overtime payments,
a special allowance for extended working hours60 and a transportation allowance.61 In
59

Cost of living allowance was calculated employing the Colombo Consumers’ Price Index (CCPI),
published monthly by the Department of Census and Statistics of the GOSL. This index shows
fluctuations in prices of food, clothing, fuel and light, rent and miscellaneous items of a sample ofhouseholds in the city of Colombo (CBSL, 2003a). Institutions in the public sector in Sri Lanka
commonly employed this index to compensate their employees for fluctuations in consumer prices.
However, SLT ceased using this method in 1998 through combining the cost of living allowance withbasic salary, naming it consolidated salary.
60
All employees (both non-executives and executives) who are working in Teleshops are entitled to a
special allowance as the compensation for extended working hours owing to the nature of operationsof Teleshops as customer outlets. These extended working hours are explained in section 4.5.1. Nonexecutives are paid a certain percentage of consolidated salary for extended working hours and any

112addition, they are paid two kinds of bonus, a basic bonus (based on the performanceof the company as a whole) and a performance bonus (based on the annual overall
performance grade). The consolidated salary of Teleshop staff members on nonexecutive grades is directly connected with the job grade. For each job grade fromM4 through M1 there is a clearly defined salary scale with a starting salary point andfixed annual increment (step) over a predetermined number of years. All Teleshop
employees on M grades are entitled to an annual salary increment provided they earnan overall performance grade of B or above. The annual increment is withheld for
those who earn an overall performance grade of C and no increment is granted for
those who earn an overall performance grade of D. The consolidated salary also
increases when the employee is promoted across various M grades. However, there isa ceiling for the number of years during which the fixed annual salary increment isgiven. This system of annual increment has produced a situation where an employee
can experience stagnation due to the cessation of increments. To earn the next
increment the employee must win promotion to the next level on the non-executive
hierarchy. By any measure, this annual salary increment system as it is applied toTeleshop employees on non-executive grades can be seen as a certain incentive forthe formation of individual competencies. Otherwise the employee faces stagnationon the current job grade.
As mentioned in preceding paragraph, Teleshop employees on M grades are entitled
to two kinds of bonus, a basic bonus and a performance bonus. The basic bonus isdetermined by the performance of the company and the amount paid is calculated as
X months of consolidated salary. This method of calculation (or the rate) is applied
across the board of SLT regardless of the status of the employee, and all employees
are paid a basic bonus regardless of their overall performance grade for the previous
year. However, the latter type of bonus depends exclusively on the overall
performance grade earned by the employee for the previous year, and the amount ofbonus is calculated as a percentage of X months of consolidated salary. The value of
X changes from year to year and this value applies to both non-executives andexecutives. Employees become entitled to this performance bonus only if they earn
the overall performance grade of B or above. From a broader point of view thisvariable rate that is used for calculating the performance bonus contributes to
employees’ motivation to continuously improve their competencies, for two main
reasons:(1) employees who are on the same job grade have the chance of earning aperformance bonus in varying amounts, depending on their individual overall
performance grade
work done beyond these extended working hours is compensated by over-time payment. However, for
Teleshop employees on executive grades, there is only an extra duty allowance that is calculated as apercentage of consolidated salary per day for a maximum of 3 days (24 hours). The concept of overtime payments is not relevant for executives across the board.
Furthermore, Teleshop managers and assistant managers are not paid any special allowance forholding such positions. Nevertheless, these positions bring prestige and are a source of social status.
61
Transportation allowance is paid to all field officers (both non-executives and executives) who are
involved in marketing work. An important condition in this respect is those who travel by any mode oftransportation other than SLT vehicles are being entitled for this allowance, subject to a ceiling.

113

(2) in cases where an employee earns an overall performance grade that is below
the level of their grade for the previous year, the employee concerned gets alower annual performance bonus in the current year.
During various phases of data collection work through intensive interviews at SLT
the researcher experienced practical difficulties associated with gathering data andinformation on the remuneration system for executives. One strong reason for these
difficulties was the institutionalization of a hidden or covert salary code system forexecutives and the appointment of a “confidential accountant”, independent of theaccounting and financial function of SLT (Wickramasinghe et al., 2002), under NTTstyle management. The major task of this confidential accountant, who was hiredfrom outside on contract basis, is to calculate salaries payable according to rates andthe level of performance of executive grade employees. The contract between SLT
and the confidential accountant is believed to assure the confidentiality of individualsalary figures of executives. 62 In the broadest sense, the major purposes of
introducing this type of covert salary code system were (a) to give flexibility to the
management to reward employees who demonstrate remarkable performance, and (b)to attract the best talent from the external labor market for filling positions in theorganization where there exists a shortage of qualified people. Thus this system has
created competition among executives themselves for higher rates of pay(Wickramasinghe et al., 2002).
However, with the limited empirical data collected, the researcher finds somesimilarities and differences between the compensation systems for employees ofTeleshops on non-executive and executive grades. Similarities can be found in thepayment and the method of calculation of basic bonus and performance bonus, while
marked differences are found in the non-existence of any fixed annual salary
increments (steps) and the existence of a monthly allowance payment system forexecutives instead. This monthly allowance is calculated as a percentage ofconsolidated salary, and the amount an executive employee receives depends on theoverall performance grade earned for the previous year. Rates (percentages) for
calculating monthly allowance vary among different overall performance grades.
Most importantly, these percentages are decided at the strategic management level
and then applied across the board. No individual manager has the autonomy toreward a particular executive who has performed extraordinarily well because thepercentage employed for calculating his or her monthly allowance is similar to others
who have earned the similar overall performance grade. Executives who have earned
an overall performance grade of C or D are not paid this monthly allowance. The
higher the overall performance grade the higher the amount an executive officer
receives as a monthly allowance. The activation of the monthly allowance payment
system in this manner can be viewed, arguably, as an incentive for executive officers
62

Some clarification is needed here. Though salary scales and the size of the fixed annual increment
for non-executive employees are overt, their individual salary figures are private and confidential, as
are their overall performance grades. What makes the difference between executives and nonexecutives is the covert nature of executive salary scales which do not contain a fixed annual salary
increment but a variable monthly performance allowance. Thus the confidential accountant is
entrusted with maintaining the confidentiality of all executive salary figures.

114

to continuously improve their competencies, prompting improved performance insubsequent years. This contrasts sharply with non-executives, whose consolidated
salary is directly connected with their job grade, where each job grade consists of anumber of predetermined fixed annual salary increments (steps). The monthly
allowance paid to executives enhances their total salary figure. In effect, if an
executive earns a higher overall performance grade in the following year then that
increases his/her chances of having a higher monthly allowance paid as a percentage
of consolidated salary. Another incentive for individual competency formation by
executives is the due consideration given to overall performance grade in selecting
executives for overseas training opportunities. The social and cultural fabric of the
Sri Lankan society prompts recognition of such training opportunities overseas,
especially in countries in the developed world, as a source of status, honor andprivilege for the employee concerned. Figure 4.6 depicts the comparison between
non-executives and executives, working in Teleshops, on the composition ofcompensation.
Figure 4.6
Composition of Compensation for Non-executives and Executives of Teleshops
Compensation system

Non-executives

Monthly pay
Consolidated
salarySpecialallowance
Overtime

Executives

Bonus

Monthly pay

Performancebonus
Basic bonus

Consolidated
salaryMonthly
allowance
Specialallowance
Extra duty
allowance
Transportation
allowance

Transportation
allowance

Bonus
Performancebonus
Basic bonus

Source: Researcher’s intensive interviews.
Note: Consolidated salary for non-executives includes annual fixed salary increment whereas
monthly allowance for executives is not a component of their consolidated salary.

The process of revising salaries and determining the bonus based on company
performance is also worth examining, owing in great magnitude to the non-existenceof any formal collective bargaining agreements between trade unions andmanagement. As stated in section 4.3, major human resource management issues are
addressed through discussions and negotiations between the two parties, anddecisions made are then minuted and distributed among trade unions. Their

115

implementation rests upon the content of these minutes. The following twocomments came from an interviewee in answer to a question seeking examples of
how trade unions and the management work with each other in harmony to deal todecide on salary and bonus for employees. They provide insight into the negotiation
process in the absence of any formal collective bargaining agreements:
There was an agreement between the Government of Sri Lanka and NTT to increasesalary of employees by 5% annually for five years from 1997. Accordingly, in 2000
and 2001, annual salary increase was 5% of the consolidated salary for both
executives and non-executives. However, in 2002 and 2003, it was given an annual
salary increase of 8% of consolidated salary for both groups of employees. Thisdecision was arrived at after having more than four rounds of negotiations between
SLT management and representatives of trade unions. Two federations, Joint
Organization of Telecommunication Trade Unions (JOTTU) and Sri Lanka Telecom
Trade Union Front (TTUF) representing 16 and 8 individual trade unions,
respectively, participated in these negotiations. Seven trade unions were left out.
(Interview records of the researcher)
There are two trade union federations at SLT, JOTTU (16 individual unions) andTTUF (eight individual unions). Seven trade unions do not belong to any of thesefederations. Management normally arrange meetings with JOTTU and TTUF before
taking policy decisions on major issues such as salary increase, annual bonus andemployee welfare facilities. Other seven trade unions are also being invited tomeetings to discuss their individual grievances. Every year, in early March andNovember SLT management summons a meeting with JOTTU and TTUF to discuss
about bonus payment for the new year (in April) and end of the year. Twofederations usually demand more than what the management can give. Justificationfrom both parties, SLT management and federations, are encouraged. In 2003 there
was a conflict between the management and federations over the amount of bonus
paid on company performance. Surprisingly, a new alliance called Sri Lanka
Telecom Trade Union Alliance was emerged on ad hoc basis with the inclusion of
JOTTU, TTUF and other individual trade unions in 2003. They requested an equalbonus for all employees based on company performance. But the new alliance did
not justify its demand. Chief Executive Officer wanted the alliance to justify its
demand and after having more than 10 rounds of discussion between the
management and alliance, finally, the management was able to create awareness,changing the minds of representatives of the alliance. Hence, the management
decided to pay company performance based bonus as a number of times of monthly
salary of employees with a minimum value, for both executives and non-executives.
Minimum value condition was agreed to create a win-win situation in conflict
resolution between SLT management and the Sri Lanka Telecom Trade Union
Alliance.
(Interview records of the researcher)

4.5.8 Human Resource Development System of Staff of Teleshops
The HRD system of customer service employees of Teleshops is presented, focusing
on two areas, competency formation and career structure.

116

4.5.8.1 Competency Formation System for Staff of Teleshops
On-the-job training (OJT) and off-the-job training (OffJT) are the methods used forforming competencies of Teleshop employees. OJT can further be divided into
formal OJT and informal OJT. In addition, a majority of Teleshops employees haveparticipated in a formal orientation program in batches at training centers of SLT.
The duration of this orientation varies from one to three weeks, depending on the sizeof the batch, the timing of the program, the stage of the evolution of Teleshops andthe urgency of fulfilling manpower requirements of Teleshops. In general, orientation
programs utilize mostly in-house trainers who have had extensive work experience
with SLT. The content covered in such programs is shown in Table 4.18.
Table 4.18
Content of Orientation Program for Teleshop Employees
Content of orientation program
Company vision and mission
Teleshop concept
Functions of Teleshops
Company policies, procedures and circulars
Work done by other sections and divisions
Registration of customers for new telephone connections
Internet and e-mailSLT products and services
Billing and collection
Customer relations and customer care
Source: Researcher's intensive interviews.

The data collected further reveals that the focus of the orientation program haschanged over the years with the gradual evolution of Teleshops as a popular outlet
for walk-in customers. For instance, for the first few batches of Teleshop employees
a significant emphasis was placed on building awareness of the importance of thecustomer and customer handling because Teleshops were intended to build a new
culture as an SLT-customer interface point vis-à-vis RTOs. This focus later shifted toskill building, including computer training, Internet and e-mail and so on.
Formal OJT of Teleshop employees take several forms. One approach involves theassignment of tasks from the easiest one to more difficult ones from among tasks
listed and presented in Table 4.11 (work content of staff of Teleshops). Interestingly,
within Teleshops there is no system of assigning a newcomer to an experienced
employee for OJT, at least until the newcomer feels comfortable handling customers
independently. Instead, all members of Teleshop staff including the manager andassistant manager are involved in assisting newcomers who learn on-the-job.
Nevertheless, the manager of a particular Teleshop plays a vital role and assumes the
responsibility of assigning tasks to a newcomer according to a certain order thatallows the newcomer to learn and absorb at a comfortable pace. Though there can bevariation in the order of assigning tasks to newcomers depending on the nature andscale of operations of individual Teleshops and the way of thinking of Teleshop

117managers, Table 4.19 is an attempt to consolidate the views of interviewees (mostly
Teleshop managers) to the best extent possible.
Table 4.19
Order of Assigning Tasks to a Newcomer(from easiest to more difficult)Work content
Accepting all types of payments and handling cash register
Handling customer queries and complaints including fault
reporting and billing related matters
Registering persons for new telephone connections
Selling prepaid cards
Selling telephone apparatus and other telecommunications
equipment such as caller line identification adaptors, ISDN
equipment and ADSL services
Accepting requests for equipment repair
Supporting sales campaigns
Selling leased liens, dial-up services, enhanced services, voice
mail, etc.
Selling/registering persons for Internet/e-mail, ISDN and ADSL
services
Customer education and counseling
Handling back office work, i.e., preparing reports
Organizing facilities for video-conferencing
Organizing demonstrations for Internet, ISDN and ADSL
services
Source: Researcher's intensive interviews.

In all Teleshops, systematic job rotation seems to be a characteristic feature of OJT.
Though some variation is evident in practices among Teleshops, it is usually theTeleshop manager who prepares the work schedule for the staff on weekly, biweekly or monthly basis. Under the monitoring of Teleshop manager the rotation ofdifferent tasks among Teleshop staff members contributes a great deal to making
Teleshop employees multi-skilled. Another significant feature of OJT for Teleshop
employees is the provision of training at individual Teleshops (the workplace) bytrainers from Teleshop headquarters. Feedback given by Teleshop managers fromtime to time regarding the skill requirements of staff members and observation andmonitoring by Teleshop headquarters itself have been instrumental in organizing
such training of the employees at the workplace itself. Additionally, there exists a
system where employees are given training under special circumstances at Teleshop
headquarters. For example, when Teleshop headquarters finds that some employees
need to learn urgently how to operate certain telecommunications equipment suchtraining is organized within a short notice in consultation with relevant Teleshop
managers.
Of particular relevance to this study is the informal OJT that takes place in individual
Teleshops. Employees' experiences of handling unusual operations such as difficult
or exceptional customers are shared through short discussions either during business118

hours, before the commencement of business hours in the morning, or after businesshours in the evening. In some Teleshops it is a way of life for staff members to spend
a few minutes every morning discussing the previous day's work experiences, withspecial reference to exceptional circumstances they have faced in handling walk-in
customers. Further, some Teleshop managers have introduced a system where special
cases of handling customers by staff members are discussed during business hours
when rush hours are over. Taking a step beyond the physical location of Teleshops,
there are some Teleshop employees who share unique experiences with colleagues inother Teleshops over telephone. For such purposes some Teleshop employees havebuilt small networks, and members of such networks often communicate with eachother. Though there seem to be no financial incentives for sharing each other's
experience face-to-face at individual Teleshop level, almost all interviewees whotalked on the subject of incentives for knowledge and experience sharing hold thefollowing common view:
Each Teleshop is given monthly targets, in terms of revenue, for each product andservice it sells. We, as a team, work together to achieve these targets and once
achieved that brings pride all of us in our Teleshop. Our target achievement is givena wider publicity inside the company and we receive certificates and plaques. 63
Sharing of individual experiences contributes to reaching these targets as a team. In
addition, that fosters our mutual friendship and relationship as the circumstances that
one faces today may be the case for another colleague tomorrow. Experience sharing
helps us to prepare ourselves in advance to meet with such circumstances and handle
them with efficiency.64(Interview records of the researcher)

Another significant source of informal OJT was the Teleshop managers meeting,held monthly until February 2003 with the attendance of the head of section (deputy
general manager) of Teleshops and all 23 Teleshop managers. This meeting provided
participants with a forum for discussing various matters pertaining to operations ofTeleshops, including handling unusual customers and situations. It was the obligationof the relevant Teleshop manager to disseminate the knowledge of such operations
gained at the monthly managers meeting among members of his/her staff on thefollowing working day.
The operations of Teleshops demonstrate employees' knowledge of products andservices as the key to success of Teleshop activities. The work of Teleshop staff
essentially comprises selling and performing other work to support marketing.
Accordingly, all employees are required to have a thorough knowledge of the
products and services of SLT as well as of telephone apparatus and othertelecommunications equipment sold by Teleshops on consignment basis. Given thisreality, Teleshop headquarters assumes the responsibility of providing OffJT to
Teleshop employees in respect of products and services knowledge and knowledge
63

Teleshop headquarters has organized certain rewards in collaboration with equipment suppliers torecognize achievements of Teleshops in reaching monthly targets for equipment sales.
64
It should clearly be emphasized that individual Teleshop employees on non-executive grades are notgiven targets. Targets in this common view refer to targets given to Teleshops and not to individuals
working there.

119

of telephone apparatus and other telecommunications equipment. Figure 4.7 shows
the methods used by Teleshop headquarters to train Teleshop employees on products
and services and equipment knowledge.
Figure 4.7
Training for Teleshop Employees on Products and Services and Equipment Knowledge
Types of Training

Introductory training forTeleshop managers

Training Teleshop staff
based on the feedback
given by Teleshop managers

Training arrangedon the basis ofobservations ofTeleshopheadquarters
and customer
queries

Source: Researcher’s intensive interviews and observations.

On the other hand, the training centers of SLT play a significant role in forming othercomponents of competencies, such as skills and attitude building among Teleshop
employees, by organizing various OffJT programs from time to time, depending on
the needs and requirements of Teleshops. Areas covered in such programs are
summarized in Table 4.20.
Table 4.20
Areas Covered in OffJT Programs for Teleshop Employees
and Conducted at Training Centers of SLTAres covered in OffJT programs
Billing system
Time management
Computer literacy, e.g., Microsoft Excel, PowerPoint
Internet and E-mailCommunication skills
Negotiation skills
Equipment selling
Cable networking
Marketing
Leadership
Customer handling and customer care
Source: Researcher's intensive interviews.

The data collected on OffJT programs shows diversity among Teleshop employees interms of the areas covered in such training. Though some programs have catered to
all Teleshop employees, others have accommodated only selected employees of120

Teleshops on the understanding that those who participate in such training would act
as trainers for others in the same Teleshop.
Another important aspect of OffJT for Teleshop employees is the training that 12 ofthem received at NTT West, in Kyushu, Japan. These 12 employees received thistraining in two batches over a period of nearly two weeks, one at the end of 1998 andthe other one in early 1999. The training methods used in this program not only
involved lectures but also included field visits as experiential learning. The training
these employees received was on telecommunication business; therefore this can beseen as a prominent means of technology transfer in respect of selling and othercustomer service operations of Teleshops. The general areas covered in this training
are shown in Table 4.21.
Table 4.21
Areas Covered in Training on Telecommunication Business Conductedby NTT West, in Kyushu, Japan
Training content
Overview of NTT group
Importance of service marketing
Customer handling
Operations of 116 call center
Operations of 113 call center
Operations of customer service counters
Billing procedures, billing cycles and collection system
Public telephone system
Multimedia learning centers
Marketing and sales (sales promotion, corporate customer sales andconsumer marketing)Internal communications and marketing
Accounting and finance
Human resource development (training for new entrants, OJT, etc.)
Quality control
Safety control methods
Source: Researcher's intensive interviews.

The experiential learning component varied from trainee to trainee, since some were
exposed to customer service counters while others were exposed to visits toresidential or corporate customers. In addition to these 12 employees, some other
employees of Teleshops have participated in training programs in Japan on
information technology, quality management, enterprise-based unions, etc. However,the number of such employees remains small. Table 4.22 presents a condensed
version of the various methods used for formation of competencies of employees ofTeleshops.

121

Table 4.22
Competency Formation System for Teleshop Employees
Formal OJTInformal OJT
Orientation program for new Teleshop managers
disseminating the knowledge
entrants to Teleshops;
acquired at monthly meeting
major part of this program
is conducted at SLT training for Teleshop managers withhead of section (deputy
center and the rest at
general manager) ofindividual Teleshops
Teleshops among othermembers of staff of their
Teleshop

OffJT
In-house training programson products and services andequipment conducted atTeleshop headquarters

Training given by expertsof Teleshop headquarters
at individual Teleshops

Short meetings held at
individual Teleshop level toshare knowledge andexperience of handlingdifficult customers or
unusual situations

Training programs
conducted largely at SLT
training centers using
in-house and outside experts
for skill and attitude building

Training given by Teleshop
headquarters to selected
members of Teleshop staff
and these trainees act as
trainers for others working
in the same Teleshop

Small networks of
employees of different
Teleshops who share uniqueexperiences over the
telephone

Training programs organizedby consignors of equipmentthat are sold by Teleshops

Overseas training on various
Subjects
Source: Researcher's intensive interviews.

4.5.8.2 Career Structure of Staff of Teleshops
The current SLT promotion policy defines clearly the criteria for eligibility forpromotions for both employees on non-executive grades and those on executive
grades. Though these criteria vary among employees on non-executive job grades
there are common criteria for promotions for executives across the board. Thus two
sets of criteria are applied for promotion for employees of Teleshops, depending on
their job grades. Tables 4.23 and 4.24 summarize these criteria for Teleshop
employees on M grades and A grades, respectively.
Table 4.23
Criteria for Promotions for Teleshop Employees on Non-executive Grades
From what grade to what grade
Criteria applied
3 years of service on M1 grade plus
M1
A6
results of promotion test and interview(senior marketing officer to assistant manager)
M2
M1(marketing officer to senior marketing officer)

122

3 years of service on M2 grade plus
results of promotion test and interview

Table 4.23 continued …
7 years of service on M3 grade plus
M3
M2
(junior marketing officer [class I] to marketing results of promotion test and interview
officer)
4 years of service on M4 grade plus
results of promotion test and interview

M4
M3(junior marketing officer [class II] to juniormarketing officer [class I])
Source: Researcher's intensive interviews.

Table 4.24
Criteria for Promotions for Teleshop Employees on Executive Grades
From what grade to what grade
Criteria applied
5 years of service on A2 grade with
A2
A1
membership of a recognized corporate(head of division [general manager] to head ofprofessional body (plus interview)group [director])
A3
A2(head of section [deputy general manager] tohead of division [general manager])

5 years of service on A3 grade withmembership of a recognized corporate
professional body (plus interview)

A4
A3(senior manager/head of section to head ofsection [deputy general manager])

Becoming a head of section at A4
grade level and satisfying either one of
the following criteria (plus interview):- holding the membership of arecognized corporate professional
body with 3 years of service on A4
gradeor- holding a bachelor's degree with 5
years of service on A4 gradeor- completing 7 years of service on
A4 grade

A5
A4(manager to senior manager/head of section)

3 years of service on A5 grade plus
results of the interview

A6
A5(assistant manager to manager )3 years of service on A6 grade plus
results of promotion test and interview

Source: Researcher's intensive interviews.
Note: It appears that conducting the interview to decide on promotions is only a formality
and what really matters is fulfilling the other criteria and maintaining a better annual overall
performance grade on the part of employees.

123As Table 4.23 shows, vertical career development of Teleshop employees on M
grades takes place slowly over a number of years. It seems that the promotion system
is based to a large extent on seniority or length of service. The criteria for M grade
Teleshop employees for shifting to executive cadre at A6 level suggest a requirement
to complete a minimum of 17 years of service, among others. Although this seniority
or length of service criterion exists, by contrast, M grade employees (M4, M3 or M2)
working in Teleshops can expedite progress up the promotion ladder if they earn auniversity degree or a professional diploma related to marketing. 65 With suchqualification, M grade employees of Teleshops can sit for a special written
examination designed for selecting employees for promotion to management
assistant level, which is slightly above M1 grade. This process has reduced thenumber of years required for Teleshop employees on M grades to sit the examination
for A6 grade, the lowest level of the executive cadre. As a general rule, the annual
overall performance grade that the employee has earned is taken into consideration at
the interview stage. Nevertheless, M grade employees in Teleshops are not required
to obtain a minimum average point based on annual overall performance grades, as is
the case for executives, to be eligible to apply for promotion across M grades.
On the other hand, as Table 4.24 shows, criteria for the promotion of Teleshop
employees who are on executive grades exemplify some special features whencompared with the case for Teleshop employees who are on non-executive grades.
There are no restrictions for promotions up to A4 grade because promotions from M4through A4 grades are open cadre promotions. A major barrier comes into effectwhen an executive officer on A4 grade is promoted to A3 level. The main eligibility
in this case is holding a head of section position at A4 level, and then the officer
concerned becomes eligible to use both titles, head of section and deputy generalmanager, after promotion to A3 grade. Interestingly, executive officers of SLT cancross over to other sections within the same group or a different group upon
promotion to A4 grade. 66 This provision facilitates executive officers becoming
generalists rather than specialists as they climb the career ladder across A grades.
Furthermore, executive officers on A3 and A2 grades are required to holdmembership of a recognized corporate professional body to be eligible for promotion
to A2 and A1 grades, respectively. Prior to privatization, SLT had recognizedengineering, accountancy and law as professions, and therefore obtaining amembership of a prestigious body representing these professions, depending on thejob of the executive officer, is given the due consideration in promotions. 67 In
65

The diploma awarded by the Chartered Institute of Marketing in London or Sri Lanka Institute ofMarketing is an example for this.
66
Senior management of SLT has the authority to decide on the section to which the promoted
executive is assigned, depending on the vacancies available. Thus, the voice of the executive
concerned is very limited. Promotions up to A4 are open cadre promotions but several constraints, e.g.,number of vacancies to be filled, govern promotions thereafter.
67
In Sri Lankan context, the Institution of Engineers, Sri Lanka, the Institute of Chartered
Accountants of Sri Lanka and the Sri Lanka Law College are considered the premier national
corporate professional bodies, representing the professions of engineering, accountancy and law,respectively. First two institutions are established by an act of parliament of Sri Lanka and the latter
one was established in 1874 under the Council of Legal Education, before Sri Lanka gained her
independence from British colonial rule in 1948 (www.iesl.slt.lk; www.icasrilanka.com;

124

addition, developments within SLT since privatization in 1997 have resulted in therecognition of marketing and information technology as professions alongsideengineering, accountancy and law.68
Promotions for executives are constrained by their annual overall performance grades
and the points assigned to each one of them, as shown in Table 4.17. For each
executive grade (A6 through A2), a certain average is required, based on the overall
performance grades, for eligibility to apply for promotion to the next level.
Otherwise, executives are not considered for promotion even though they may havecompleted all other requirements as presented in Table 4.24. The average points
required for an executive officer to making application for promotion across various
executive job grades is calculated taking into account the three best annual overall
performance grades earned for the past five years and then averaging the total marks
assigned to each overall performance grade (see Table 4.25).
Table 4.25
Average Points Required for Promotion Across Executive Grades
From what grade to what grade
Average point required
6.0
A2
A1
4.5
A3
A2
4.0
A4
A3
3.5
A5
A4
3.5
A6
A5
Source: Researcher's intensive interviews.

Criteria for promotion of Teleshop employees, among others, restrict their horizontal
career building within the marketing and Internet protocol group. Promotional
opportunities for employees on M4 through A4 grades in the marketing and Internet
protocol group (including Teleshop employees) are confined to within the group, andthey can also obtain transfers only among various sections in this group. However,any employee in the marketing and Internet protocol group who is promoted to thepost of head of section may be transferred to another section of the same group or
any other group, at the discretion of senior management.69 Accordingly, after being
promoted to the post of head of section on A4 grade, executives in the marketing andInternet protocol group are able to build their vertical as well as horizontal careeracross sections or divisions in the same group or other groups, leading to thedevelopment of a generalist type of career.
www.apli.org/ftp/sllc). These professional institutions conduct examinations, which qualify
individuals for the admission to the membership and related professional practice. For example, theInstitution of Engineers, Sri Lanka conducts a professional review examination for graduate engineers,
to qualify them as chartered engineers. A chartered engineer is a fully fledged professional who isentitled to use the abbreviation of C.Eng. with his or her name (www.iesl.slt.lk).
68
It is still under consideration to what extent human resources could be added to the list of
professions and, if that is done, which institutions would be recognized as representatives of thehuman resource profession.
69
One possible reason for imposing these restrictions may be the necessity of retaining these
employees within the marketing and Internet protocol group itself to support its gradually expandingrole in SLT.

125

Section 5
Nippon Telegraph and Telephone East Corporation
5.1 Introduction
NTT East, as a major subsidiary of the NTT group, has undergone structural reforms
especially since 2002 with a view to establishing a sound financial foundation in
response to sudden changes in earnings structure and the shrinking scale of the fixedline telephone market (NTT, Annual Report, 2003). One highly visible reform is thecreation of outsourcing companies, within the broader framework of NTT group,
related to equipment and facility management, marketing and customer service, andadministrative affairs, enabling those companies to adapt their business to local needs(NTT, Annual Report, 2003). For example, NTT Service Hokkaido Corporation and
NTT-ME Hokkaido Corporation are two regional outsourcing companies of NTT
East, which manage sales and customer service, and construction and maintenanceservices, respectively, in Hokkaido, one of the 17 eastern areas of Japan whichcomes under the purview of NTT East. Likewise, sales and customer service in eacharea is handled by an outsourcing company for that particular area, carrying the area
name with the generic name of NTT Service Corporation, e.g., NTT Service Chiba
Corporation and NTT Service Aomori Corporation. In a similar vein, construction
and maintenance work in each area is managed by an outsourcing company for thatspecific area, carrying the area name with the generic name of NTT-ME Corporation,e.g., NTT-ME Chiba Corporation, NTT-ME Aomori Corporation (www.ntt.co.jp).
Since the introduction of these structural reforms, from a broader perspective thecustomer service function of NTT East as a whole for residential customers consistsof the following NTT East-customer interface points (see Table 5.1).
Table 5.1
Major NTT East-Customer Interface Points and Types of Customers
Interface point
Type of customers
Walk-in customers
Sales counters (Eigyo madoguchi in Japanese)
Telephone and Web customers
116 call center
Telephone customers
113 call center (fault reporting and clearing)
Telephone customers
Billing center
Telephone customers
114 call center (busy signal verification service)
Telephone customers
Various operator-assisted services
Source: Researcher’s intensive interviews.
Note: In addition to these interface points there is a Foreign Language Consultation Center(NTT information). This center provides interpreting assistance for the 116 telephone
number for those who cannot communicate in Japanese. However, the hours of business of
this center differ from those of 116 call center in that the former operates only on weekdays(excluding holidays) from 0900 h to 1700 h. In contrast, 116 call center provides daily
services except during the New Year holiday season, from 0900 h to 1700 h(http://www.kiea.jp/Telecommunications.html).

1265.2 116 Call Center
As explained in section 3.7 and depicted in Figure 3.1, among the various customer
interface points it is 116 call center that is the focal unit of this study within thecontext of NTT East. Exploring the work organization and human resource
management and HRD as they pertain to customer service employees of 116 callcenter lays the foundation for understanding the relationship between SLT and NTTstyle management. Overall 36 sales counters, existing in parallel to 116 call center
serve predominantly walk-in customers and operate from 1000 h to 1700 h only on
Monday through Friday except holidays. In terms of services provided, both 116 callcenter and sales counters are alike to a great extent except the medium by which
existing or potential customers contact customer service employees working there,
extending implications for making a slight difference in skill requirements of thosecustomer service employees. For example, customer service employees at 116 callcenter are required to be adequately skilled in telephone etiquette when comparedwith that of customer service employees at sales counters. The importance of sales
counters is gradually diminishing and 116 center has emerged as a strategicallysignificant one-stop shop. Thus a discussion of 116 call center is presented here,
giving due consideration to its work organization, employee classification system
and job structure of the staff, staffing system and prior experience of the staff,
performance evaluation system for telephone advisors and HRD system of the staff
working there.70 However, it should be emphasized that this discussion is not as indepth as that for Teleshops, due to constraints in accessing data. Among interviewees
at NTT East there were present as well as former employees of 116 call center who
had gained the experience of handling customers as front-line customer service
employees. The intra-firm mobility system (Jinji ido in Japanese) as it applies tothese employees results in their transfer to various other units of the company at thediscretion of management. It is customary in most Japanese companies to transfer
employees internally at the behest of the company, allowing them to broaden theircareer breadth whilst learning new skills in each position (Fujimura, 2004).
5.2.1 General Organization and Workforce Distribution of 116 Call Center
Regional outsourcing companies of NTT East manage, among others, operations of
116 call centers functioning in their specific geographical area of authority. For
example, NTT Service Tokyo Corporation is entrusted with running a number of 116
call centers, each being an independent unit, located within metropolitan Tokyo.
Overall 45 116 call centers conduct operations in 17 geographical areas in the
Eastern part of Japan, handling about 20.5 million calls a year generated by 30
million subscribers of NTT East and others who are either potential or ex-customersof the company. Business hours are from 0900 h to 1700 h year-round, excluding
New Year holidays. The nature of the operations of 116 call centers is that they are
involved in the provision of marketing (mainly selling) and customer care services
70

Two areas that are not included in this discussion in detail are compensation system and incentives
for competency formation by the staff of 116 call center and their career structure. This omission,owing to constraints on gaining access to relevant data, carries implications for the comparison
between Teleshops and 116 call center.

127

within the framework of a one-stop shop as shown in Table 3.3. Though the size of
the workforce varies across 116 call center located in various parts of the area of
authority of NTT East, the composition of the workforce of the 116 call center thatwas chosen for this study is presented in Table 5.2.
Table 5.2
Composition of Workforce of 116 Call Center Chosen for the Study
Type of employment
Number of
employees
Regular employees (Shain in Japanese)23- reemployed (Saikoyo in Japanese)- temporarily transferred (Shukko in
40
Japanese)
Dispatched employees (Haken rodo inJapanese)
Temporary employees (Rinji in Japanese)
Source: Researcher’s intensive interviews.
Note: 60% of the workforce consists of females.

46
2

An interesting feature of the 116 call center is the possibility of performing its workin a location-independent manner. For example, 116 call centers, which come under
the purview of NTT Service Kanagawa Corporation can handle each others work
under special circumstances. Redistribution of work among call centers in thismanner depends on the size of the customer base in each area and contingencies
encountered by call centers from time to time. The similarity of work performed by
front-line customer service employees across call centers and the standard procedures
they are required to follow have made this redistribution of work possible to meetsituational demands. In such circumstances, front-line customer service employees
can process certain requests from customers without having particular knowledge
and understanding of the local situation. Remarks made by an interviewee suggest
some interesting relationship between the ability of customer service employees andwork redistribution:
Since calls requesting the transfer of a phone line is the same whether they are from
Otaru (a city in Hokkaido)) or from Nakano or Suginami (two localities or wards inTokyo metropolitan area), the work can be generalized, and since 116 was originallycentered on the transferring of phone lines, there is no need to understand local
situations. Since the system will select the proper facilities as long as the address isclear, we select areas with a number of residential customers when distributing
services.
(Interview records of the researcher)

5.2.2 Employee Classification System and Job Structure of Staff of 116 Call
Center
The organization of work in the 116 call center is characterized by teamwork. All
front-line customer service employees are organized into eight groups, with a groupleader for each group. The maximum number of members per group remains 8

128including the group leader. However, each center enjoys autonomy in deciding how
to organize its work, the number of groups and the size of each group, meeting
service level requirements. Veteran employees possessing a wide variety ofexperience of handling front-line operations are usually appointed as group leaders
whose role is to assist those who are on the front-line in handling their work andcoaching their performance to maintain a smooth flow of answering calls from
customers. Table 5.3 and Figure 5.1 present the job titles of 116 call center staff andthe organization of work in form of groups, respectively.
Table 5.3
Job Titles and the Fundamental Nature of Work of 116 Call Center Staff
Job title
Fundamental nature of work
Head of center (General manager)
Overall administration of the center
Manager (Center chief)Overseeing operations of the center,monitoring performance of the center
through a computerized control system,
management reporting, providing support tosupervisors and group leaders to deal withcustomers
inspecialcircumstances,answering customers with very exceptional
circumstances and evaluating performance ofregular employees

Supervisor (Sub-manager or deputy chief)

Monitoring performance of groups according
to standards, resolving problems encountered
by groups, answering customers withspecial circumstances and evaluating
performance of dispatched employees

Group leader

Assisting group members, coaching andadvising them, handling customer enquiries
when telephone advisors are having
difficulties, sales management, setting
numerical targets for sales and overallmanagement of the group

Telephone advisors

Front-line work of answering the phone
Staff (personal computer operators) 71
performing back office work entering
customer information and order content into
the computer and placing the order to install
the NTT line (and answering customers on
the phone when it is necessary)

Source: Researcher’s intensive interviews.

71

The exact job title of the staff performing back office work is ambiguous.

129

Figure 5.1
Organization of Work in 116 Call Center
Head of the Center

ManagerSupervisor

Group 2

Group 3

Group 4

Grou
Groupp11
Group
GroupLeader
Leader
TA
TATA
TATA
TATA
TA

Source: Researcher’s intensive interviews and observations.
Note: TA – Telephone advisor

Depending on the case, there are other telephone advisors who are assigned,
specifically to handle back office work. Although their main job is to handle backoffice work, under the instructions of the manager, supervisor, or group leader they
will even undertake the task of answering customers on the telephone when othertelephone advisors are busy. However, answering the telephone is not their main job.
In contrast, these other telephone advisors, as bona fide front-line customer service
employees, are entrusted with answering customers on the telephone. Table 5.4
summarizes the work content of telephone advisors.
Table 5.4
Work Content of Telephone Advisors of 116 Call CenterWork content
Providing information on products and services
Selling products and services
Attending to customers’ requests for value added services
Answering some billing-related queries
Inputting data into systems while answering the phone
Finishing off customer orders by dealing with other people
Customer education and counselingSource: Researcher’s intensive interviews.

Group leaders, supervisors and managers also handle these functions under special
circumstances such as when cases are referred to them by telephone advisors. Each130

individual 116 call center is authorized to make decisions regarding the assignmentof jobs to those who work there. Thus the head of center and manager of the 116 callcenter studied assign employees to various jobs inside the center. In doing so, major
criterion adopted is the actual performance of the employee and not his or her
seniority. All newly hired employees, regardless of status of employment, arerequired to work first, as an operator at least one time to have firsthand experience ofthe basic operations of the call center. In this way, the management can evaluate theaptitude and ability of the employee and then decide on whether he or she is suitable
for a front-line job or back office work. The authority to appoint group leaders isvested in the head of the center and the manager. The candidate is not required to be
on a specific job grade to become qualified for the appointment as group leader. It is
possible for telephone advisors on either a general career track or expert career track,
regardless of their rank, to be promoted to group leader level depending on theirsuitability, career development needs and the necessity of improving managerial
skills.
Regular employees working at 116 call center studied belong to various job clusters
such as general career track (Ippanshoku in Japanese), specialized career track(Sogoshoku in Japanese) and management career track (Kanrishoku in Japanese).72
Interestingly, regular employees those who are reemployed have been given different
job titles such as business qualification (equivalent to rank 1 of general career track)and business leader (equivalent to rank 2 of expert career track). Among telephoneadvisors there are regular employees on general career track and specialized career
track. A characteristic feature of employee classification system of NTT is that job
title reflecting the employee’s capability. Thus the employee’s current job
assignment may not necessarily reflect his or her skill level. For example,
temporarily transferred employees who are on various ranks of specialized career
track are assigned to work as telephone advisors. In reality, they are capable ofperforming a job that entails more responsibility, authority and accountability ascompared with telephone advisor’s job.
According to the research framework depicted in Figure 3.2 and the definition ofvariables given in Table 3.7, job structure is defined in terms of both content of thejob (job title) and content of competency requirements. The researcher was able tocollect many cases of handling unusual operations by telephone advisors of 116 callcenter, employing a similar methodology explained in section 4.5.4.2 for identifying
their competency requirements. A few such cases, collected not only from present
telephone advisors but also from other interviewees at NTT East headquarters andthe manager of the 116 call center studied are described here:72

An explanation of the difference between Ippanshoku and Sogoshoku facilitates a better
understanding of this classification. Ippanshoku are not subject to transfers and so employees on thiscareer track can commute from their home to the workplace. It is usual for regional units of firms tohire these employees. In contrast, Sogoshoku are hired by headquarters and employees on this career
track experience transfers from one geographical location to another at the behest of the employer.
Sogoshoku are believed to possess high potential for being promoted to Kanrishoku.

131Case 1 – based on the experience of a former manager of a 116 call center
If we were to answer almost all the calls here as much as possible, I think we could
prevent customers from waiting on the phone. The only way we could do that would
be to call them back. I think it’s a tradeoff between immediacy and accuracy. Giving
customers inaccurate or vague information is the worst thing we could do, so I think
we must end the call in that case, after apologizing for not knowing, and then havesomeone who does know call the customer back at a time that is convenient for thecustomer. It is probably really difficult for the telephone advisors to tell customers
that they do not know something, because providing information is their job. I think
it is a matter of if they do not want to say they do not know, then they must
memorize the necessary information.
(Interview records of the researcher)

Case 2 – based on the experience of former manager of a 116 call center
There was a 50 year old telephone advisor who really did not stand out. Being how I
am, I did not sit at my desk very much, but rather I walked around the employees
talking on the phone and asking them how it was going or telling them to keep it up.
One day I heard her recording a complaint from a customer. I went to her and asked
whether she could handle it, and she said do not worry. I thought it would not begood to stand by her and listen, so I listened from where she could not see me. She
told the customer that “I must first eliminate the inconvenience you are experiencing,so please tell me what it is. Our center manager likes to talk, so we can switch to him
at anytime. Eliminating your inconvenience is the first priority, and even if you tell
the section manager, it will be me who end up doing the work, so please just tellme.” I really saw the light after she correctly isolated the essence of the problem andeven dealt with it. I think she probably learned such a response from experience, but
it is the best way not to escalate a situation. There are people like me who are terrible
at output, so even though telephone advisors have knowledge, I think it is a matter ofwhether they can communicate getting their point across properly.
(Interview records of the researcher)

Case 3 – based on the experience of a former manager and former telephone advisorof a 116 call center
Interviewer: There are instances where the customer first calls your center for getting
information about products and then calls again after comparing your information
with that of other companies. In such cases, it may not be the telephone advisor who
answered first making the sale but someone else. When this happens, naturally thesale is not attributed to the person who took the call first time, isn’t it?
Interviewees: Strictly speaking it is not. However, if the telephone advisor who takes
the call first time is on her toes and thinks that the customer is promising, then she
will give the customer her direct line number and tell him/her to call once he/she
makes the decision. Or send the information with our name.
(Interview records of the researcher)132

Case 4 – based on the experience of manager of the 116 call center studied
In the most recent case, there was a gap between the customer order and our records.
To be more precise, there are several types of services for our most advanced opticalcable service called B Flet’s. This customer asked for service A, but we provided
service B. When the service began, the customer realized that he did not get the
speed and quality that he wanted. So he phoned and asked us to give him what hehad ordered immediately. We are a call center and we only give instructions to othercompanies. These companies include those who actually conduct the initialconstruction work and …. which order and contract the construction work. We had a
lot of difficulty in finding ways to arrange the work the customer requested. In theend, it took one and a half days to solve the problem.
(Interview records of the researcher)

Case 5 – based on the experience of a group leader of the 116 call center studied
There have been an increasing number of crank calls and harassing calls in recent
years. They have become a social issue. Customers often ask us to find out who aremaking these calls, tell them to stop calling or do something about it. They are so
desperate that they would ask anyone to do something to stop these calls. They ask
us to find out the telephone number of the caller and tell the person to stop. It is very
difficult for us to explain to customers that NTT East is not in a position to make acall and ask someone to stop making unwanted calls. Today, there are othercompanies that provide telecommunications services, but many customers still thinkthat NTT is the only telecommunications company. So, it is very difficult to makecustomers understand that as well.
(Interview records of the researcher)

Case 6 – based on the experience of a telephone advisor (dispatched employee) of the
116 call center studied
There are many telecommunications companies other than NTT. Together, they offer
MYLINE Career Selection Service to allow customers to pre-select the telephonecompany that they want to use. I handled a case in which customer agreed to preselect some telephone company, as he was led to believe that he was talking to an
NTT person on the phone when he was persuaded to select that company. I do mybest to handle such cases. But, I would ask my immediate boss or deputy chief totake over when I have determined that I can no longer handle the call on my own.
(Interview records of the researcher)

An analysis of these cases (and those collected but not presented above) and direct
observations of the work of telephone advisors by the researcher provides theopportunity to identify some key competencies required of all telephone advisors to
act as front-line customer service employees regardless of where they work.
Although this is not a comprehensive list compared with similar cases for Teleshops,
it gives some idea of the competency requirements of telephone advisors (see Table
5.5).

133

Table 5.5
Competency Requirements of Telephone Advisors of 116 Call Center
Knowledge
SkillsAttitudes
Empathizing with customer
Clear communication
Products and services
Special features of products
and services

Memorizing important
information

New additions to existingproduct lines

Responding quickly tocustomer requests

Procedures applied to theprovision of various services

Maintaining high level ofaccuracy of information
provided to the customer

Commitment to retain
existing customers andattract new customers
Preparedness and willingness
to apologize to the customer
when it matters

Prospecting
Computer literacy
Avoiding, as much as
possible, the escalation ofcases
Following-up the progressof promises given to thecustomer
Coordination with others(Relational coordination)
Stress management
Sources: Researcher’s intensive interviews and direct observations; Dassanayake, 2001.

A characteristic feature of competency requirements of telephone advisors is theprominence occupied by attitudes as opposed to knowledge and skills. The following
remarks of two telephone advisors evidence this phenomenon at customer-telephoneadvisor interface level:
When you are talking with customers on the phone, the tone of voice determines
almost everything. I think that a cheerful voice appeals more to customers than agloomy voice. This makes me feel that attitude is the most important.
We can build up knowledge and skills if we study hard. But our attitude reflects thekind of person we are. In my experience, if we try to listen to customers sincerely,
they often accept a situation regardless of our skills or knowledge. So, I feel that
attitude is the most important.
(Interview records of the researcher)1345.2.3 Staffing System of 116 Call Center and Prior Experience of Its Staff
5.2.3.1 Staffing System of 116 Call Center
A vital feature of the Japanese labor market is the clear distinction between typical or
regular employees/workers (Seishain in Japanese) and atypical, non-standard or nonregular employees/workers (Hiseishain in Japanese). Regular employees are those
who are covered by an indefinite contract of employment. Among non-regular
employees there are part-time workers, dispatched workers (Haken rodosha inJapanese) and contract workers (Fujimura, 2004; Iwata, 2004). Given thisphenomenon, the workforce of all 116 call centers of NTT East is a combination ofregular and dispatched workers (see Figure 5.2).73
Figure 5.2
Employment Status of the Workforce of All 116 Call Centers of NTT East
Total workers(5,200)Regular workers(3,700)

Dispatched workers(1,500)From employee
dispatching service
company in NTT
group

From outside
employee dispatching
service companies

Source: Researcher’s intensive interviews.
Note: The researcher finds the use of the term “Temporary Labor Agency” in place of“Employee Dispatching Service Company” by Japanese researchers. In either case, theequivalent word in Japanese is Hakenmoto/Hakengaisha.

The mix of regular and dispatched workers differs among 116 call centers. Callcenters located in the Tokyo metropolitan area employ more dispatched workers thanregular workers, whereas call centers in outlying areas employ more regular workers
than dispatched workers. The principal reasons for the utilization of dispatchedemployees are low cost and the routine nature of work performed by telephoneadvisors.
73

Part-time workers are also hired especially during the telephone line transfer season, i.e., April andOctober. Their number is very small and they are usually assigned to handle back office work and not
to answer the telephone.

135

A highly visible phenomenon of the structural reforms introduced in 2002 to NTT
East and NTT West was the obligatory retirement of regular employees aged 51 andover from these two companies, and their subsequent reemployment at outsourcing
companies at wage levels 15%-30% lower than before (NTT, Annual Report, 2003).
The following remarks contained in this annual report explain this further:
The NTT group is outsourcing to adapt to the challenging operating environment,characterized by a shrinking fixed-line business. In conjunction with a sweeping
outsourcing program, the NTT group is undertaking a reorganization of its
workforce through retirement packages and reemployment initiatives. In addition,
NTT has implemented a variety of employment models such as compensation
packages that reflect current regional and industry standards and has completed areview of work contracts, including fringe benefits. NTT is striving to implement
structural reform of its business activities through enhanced flexibility and mobilityof approximately 100,000 of its workforce (NTT, Annual Report, 2003, p. 8).

In effect, the majority of regular workers (including telephone advisors) are now
those who were retired and were reemployed by outsourcing companies (within NTT
East). In Japanese, these employees, called Tensekishain, are now in their 50s. On theother hand, regular employees aged 50 or below are temporarily transferred fromNTT East. In contrast, dispatched workers in 116 call centers are generally in their
20s and early 30s.
The particular 116 call center studied illustrates the utilization of different types of
employees who occupy various positions ranging from managerial to front-line level.
Though it is a typical case in that it employs both regular and dispatched employees,
this call center is characterized by the utilization of temporary employees as well
who are hired by the call center itself. In contrast, senior management of theheadquarters or head office (or upper organization) of the relevant outsourcing
company under which a particular call center is run has the authority over theemployment of dispatched employees. As such there is a restriction on the number of
employees obtained from employee dispatching service companies instigated by thenecessity of maintaining management efficiency. After this upper organization
decides on the number of employees to be assigned to each 116 center, then it
discusses directly with the relevant employee dispatching service company on the job
requirements, conditions and qualifications of the candidates including what types of
personnel are required.
The communication of job requirements between a particular 116 call center andemployee dispatching service companies carries important implications fordetermining the amount of hourly wages of dispatched employees and content of the
training to be given to them before they are dispatched to the call center. The hourly
wage for these employees varies according to the job requirements. For instance, theworkload of telephone advisors is larger than that of other positions in the back officeso that a somewhat higher wage level is set for telephone advisors. According to thecontract the upper organization signs with an employee dispatching service company,
there are ranks given to dispatched employees ranging from A through G, for which
different hourly wages are stipulated. Nevertheless, at the starting point, all these136employees are placed on a similar rank and compensated at the same hourly wage
rate. With a view to raising their level of motivation, the hourly wage is increased
based on their performance. It is the performance evaluation through which the rankof dispatched employees is determined.
There are no apparent differences in the job content of dispatched employees who
work as telephone advisors and that of regular employees.74 Nevertheless, the job
titles of group leader, supervisor, manager and head of center are held only by
regular workers. Although there are many differences between regular workers anddispatched workers in terms of working conditions, pay and other human resource
management considerations, both regular workers and dispatched workers who
perform the work of telephone advisors are involved in such work on a full-timebasis. Table 5.6 depicts the relationship between various types of employees andtheir positions at the 116 call center chosen for fieldwork.
Table 5.6
Types of Employees and Their Positions
Regular employeesType of employees
ReemployedTemporarilytransferred
Position held

Head of centerzManagerz

SupervisorzzGroup leaderz

Telephone advisorszzz

Dispatched employees
From theNTT groupcompanyz

Fromcompanies
outside NTT
group

z

Source: Researcher’s intensive interviews.
Note: There are two employees working in this call center who were hired directly by thecenter itself. Thus they are not considered dispatched employees.

5.2.3.2 Prior Experience of Telephone Advisors of 116 Call Center
The personnel management system of NTT as a group applies to managing thehuman resources of the holding company and its subsidiaries. As mentioned earlier,there are three categories of career tracks for the employees, namely general career
74

However, it was the opinion of interviewees that there should be a clear distinction between the job
content of regular employees and dispatched employees, who perform the front-line job of telephoneadvisors. Ideally, dispatched employees could be entrusted with answering as many calls as possible
and selling as much as they can. It is the job of the regular employees to cover for the dispatchedemployees when they have trouble in some aspects of their job.

137

track (Ippanshoku in Japanese), specialized career track (Sogoshoku in Japanese) andmanagement career track (Kanrishoku in Japanese), each having several ranks. After
graduation from senior high school or university, new employees first join thecompany on the general career track, their rank being determined by theireducational background. There is no one specific rank for employees who areassigned to 116 call centers, because of the prevalence of intra-firm mobility.
Data collected reveals that regular employees of 116 call centers have worked
previously in sales or some other functions related to dealing with customers on thefront-line. In general, it is rare for newly hired employees to be assigned directly to a
116 call center after completing their initial training as new entrants to the company.
It is worth quoting some interviewees about how their career developed after joining
NTT East:
My orientation program lasted for three months. At the beginning, I worked outside
the office (in the field) with a Senpai (“senior colleague” in English) for one week.
Then, started visiting residential customers and small business firms to introduce
new and discount products myself. The last month was spent in a 116 center
observing its operations. I was assigned to 116 call center after completion of thisthree-month period and then continued to work there, answering customer queries on
the phone for one year (Dassanayake, 2001).
I joined the company in 1984 when it was still Nippon Telegraph and Telephone
Public Corporation (NTTPC). I spent the first three years disbursing funds fortelephones materials and doing material control. At NTT, I was in customer relations
for seven years. After that, I moved to a 116 call center and stayed there for about
three years. Then, three years in general affairs. After that, I was transferred to a callcenter. It has been four years since I came here, and this is the second time for me towork at a call center.
I joined Nippon Telegraph and Telephone Corporation (NTTPC) as a research anddevelopment personnel in 1979. I played the role of an auxiliary personnel orassistant for about five years there. After that, I was in charge of general affairs forabout four years at a section that sells business phones and fax machines to smalland medium-sized companies. Then, I spent a year in customer relations. I wastransferred to a call center when the first 116 call center was established. It has been
16 years since then. It has been only four years since I came here, so I am still doing
the same job.
First I worked in delivering telegrams for one and a half years and then transferred tosales counter. There I exposed myself to various operations such as selling various
products and services, taking customer complaints on telephone faults, etc. Later I
got the opportunity to work at 116 call center for some time. For the past three years,
I have been in charge of sales planning and coordinating the work of all 116 callcenter points.
(Interview records of the researcher)

Dispatched employees who work as telephone advisors have a certain priorexperience in customer handling. The following remarks of two telephone advisors
dispatched to the 116 call center studied are useful for gaining an understanding of138

their career formation until they commenced working at this call center. Both areuniversity graduates.
After graduation I joined a company as a regular employee. I was a full-time sales
representative there and was paid according to sales performance. This performancebased pay system made it difficult for me to earn enough money. Having seen the
job advertisement for this call center I got in touch with an employee dispatchingagency. This agency offered me a few opportunities including the work at this callcenter. It was, finally, me who decided to work here as a dispatched employee.

I was a full-time contract employee of a securities firm. My job was to handle
incoming telephone calls. Then I got myself registered with an employee dispatching
service company four years ago. I was a university graduate at that time and worked
at customer service at NTT. I came here when NTT abolished its customer service
operations. My employee dispatching service company offered me this job anddispatched me to this center.
(Interview records of the researcher)

All these cases clearly show that both regular and dispatched employees working as
telephone advisors have had exposure to dealing with customers either face-to-faceor on the telephone. The authority for job assignment at 116 call center studied isvested in the management. Thus regardless of the type of employment, all newly
hired persons are required to work as an operator at least once to have firsthandexperience of the basic operations of the call center. This also serves as training. In
this way the call center management evaluates the aptitude and ability of employees
and decides on their suitability for front-line or back office work. It was a commonly
held opinion among interviewees that those who have had work experience at sales
counters or 104 call centers (directory assistance) of NTT East are better suited forworking as telephone advisors at 116 call centers. Another vital feature of the priorexperience of 116 call center employees who are at the manager level is theirpossessing experience especially in sales, along with skills of teamwork, leadership,organizational operations and customer control.
5.2.4 Performance Evaluation System for Telephone Advisors of 116 Call
Center
The nature of the job of telephone advisors has resulted in their work performance
being monitored in real time as well as off time. The former is backed by the service
level requirement of answering the phone within a specified number of seconds tominimize customer waiting time. The following four parameters are used to measuretelephone advisors’ performance in respect of answering the phone:(1) waiting (standing by but no calls coming in)(2) call taking (dealing with customer on phone)(3) post-processing (filling in documents for connecting with support personnel
or when talking with in-house personnel or the customer, whoever made the
call)

139

(4) logged out (away from the desk).
These parameters enable the manager, supervisor, and group leader to monitor theservice level of telephone advisors at any given time and to take immediate action
such as instructing them to postpone post-processing work and answer the phone.
However, this response rate is only one indicator of the performance of telephoneadvisors.
Broadly speaking, there are two kinds of evaluations, performance evaluation andoverall evaluation of the work of telephone advisors who are considered regular
employees. These evaluations are conducted two times a year on a semi-annual basis.
Factors considered in each kind of evaluation are presented in Table 5.7.
Table 5.7
Factors in Evaluating Total Performance of Telephone Advisors
Performance evaluation
Overall evaluation
Job performance
Sales
Quality of service (response rate, customer
satisfaction surveys, etc.)

Leadership
Harmony and cooperation
Organizational skills
Other (for example teaching new things to
fellow workers)

Source: Researcher’s intensive interviews.

At the particular 116 call center studied, the performance evaluation of telephoneadvisors (regular employees) is a two-tier process, primary and secondary evaluation.
The manager of the call center is responsible for conducting this evaluation, taking
into consideration the performance of individual telephone advisors working at his
center, not by comparison with the performance of telephone advisors at the otherthree 116 centers under the purview of the upper organization (regional outsourcing
company). At the beginning of each fiscal year, the management and individual
telephone advisors sit together and discuss how much the employee plans to achieve
and how much management expects him or her to achieve. The primary evaluation
conducted by the manager is an absolute judgment. A performance grade fromamong five grades is given to each telephone advisor concerned depending on thelevel of achievement of these goals. Performance grades for telephone advisors who
belong to the regular employee category and their meaning are shown in Table 5.8.

140

Table 5.8
Performance Grades for Telephone Advisors (Regular Employees)
Performance grade
Meaning
Super excellent performanceSA
Excellent performanceA
Exceeded the level of expectation by theBmanagement
Achieved the level as expected by theCmanagement
Performance below the level ofD
expectation by the management
Source: Researcher’s intensive interviews.

It is clearly evident in the data collected that there is no fixed distribution method
applied for allocating performance grades at the primary evaluation stage. Once theprimary evaluation is completed, performance records are submitted to the upperorganization for the secondary level evaluation. This appraisal is conducted by an
employee called “task head” at director level of the upper organization under whichfour 116 call centers are run. This evaluation requires a comparison of theperformance of telephone advisors of each 116 call center with those of other threecenters and considers where the performance of the concerned employee can bepositioned and the degree of such employee’s capability. In effect, a fixed
distribution method is employed at secondary level evaluation in determining thefinal performance grade of telephone advisors.
The performance evaluation system for dispatched employees who work as telephoneadvisors is markedly different from that of telephone advisors with regular employee
status. At the 116 call center studied, there is a supervisor who oversees the work of
dispatched employees. Their performance is evaluated by him every quarter and thecriteria comprise sales performance, attendance, work habits and frequency of taking
leave or being absent from the workplace. Performance grades range from A throughG. Subsequently, the 116 call center concerned informs the relevant employee
dispatching service company of its recommendation of how much the hourly wage ofa particular telephone advisor should be increased giving recognition to theirperformance grade. Generally, when an employee has earned a performance gradethat is better than the one earned previously, it is recommended that his or her salaryis raised. In contrast, if an employee’s performance has dropped when compared withthat of the previous occasion, then the call center management decides either to wait
and see until the employee improves his or her performance or to recommend aslightly lower hourly wage. The reason for doing so is to motivate telephone advisors
and reward them for good performance on the one hand and, on the other hand, toencourage those who have not done well to do better next time.
The results of the performance evaluation of regular employees are used for two
major purposes, determining the amount of bonus paid and making rank-up(promotion) decisions. The major components of compensation for telephoneadvisors (regular employees) consist of a wage according to job qualification,achievement-based added remuneration, duty/assignment allowance, other141allowances and bonus. Among these, the wage for job qualification is the baseline.
Prior to the changes introduced, there was an age-based salary system that was
abolished later. The wage for job qualification reflects the employee’s current
position and represents a part of the old age-based wage system. Overall evaluation,
as explained earlier, plays a vital role in determining the rank of the employee. NTT
also uses a point system to grant employees some job qualifications. Somequalifications are granted upon employees attaining a certain point, whereas
employees are required to take certain tests for earning other qualifications. The
wage for job qualification represents the largest factor among the components ofcompensation in absence of a periodic mandatory pay raise in accordance with thejob grade and job duty. Under the new system, employees wage goes up when theirrank goes up. Bonus, as a part of compensation, is paid twice a year. The total
amount of bonus is composed of two components, a fixed amount portion for thecertain number of months at the monthly average salary, and an evaluation portion.
The latter increases by performance grade. Additionally there is an incentive plan for
telephone advisors. This is paid on a quarterly basis to telephone advisors whoachieve a high level of sales.
5.2.5 Human Resource Development System of Staff of 116 Call Center
This section deals only with the competency formation system of telephone advisors,
both regular and dispatched employees, of 116 call center owing to theinaccessibility of data on their career structure. Limited data collected throughinterviews reveal that NTT East has placed significant emphasis on continuous
development of its human resources for delivering better customer care services. As
one interviewee put it:
We are deeply committed to develop our people who deal with delivering customer
service (Dassanayake, 2001).

Both OJT and OffJT play a vital role in employees’ training. One striking generalcharacteristic of the OffJT activities of NTT East is the training model which covers
all employees of the organization. All employees are divided into three groups,
general employees (Ippanshain in Japanese), managers (Kanrisha in Japanese) and
top management (Yakuin in Japanese). Then, the training provided for employees iscategorized into training for skill-up (skill improvement) and self-learning. Training
for skill improvement is designed for general employees including new entrants,
whereas help for self-learning covers employees of all three types. In skill-up
training, areas covered include technical training, training on new technology andnew services, etc. Another stream of skill-up training fosters general employees
becoming experts in a selected area. Self-learning takes many forms, such as lifelong
learning, attending evening courses offered by universities, attending seminars
outside the company, and participation in academic programs offered by foreign
universities.
OJT, which occurs at individual call centers, seems to play a powerful role inmolding the way telephone advisors perform their duties. Once employees are

142

assigned to 116 call centers to work as telephone advisors, their formal OJT begins
with learning about products and services. This is usually supplemented by one weekof classroom lectures. The 116 call centers have instructors who are qualified to train
telephone advisors. Before they actually begin to answer the phone, new telephoneadvisors study under instructors by listening to their conversations with customers
using an inter-phone system. Then gradually new telephone advisors begin to answer
the phone on their own, under the supervision of the group leader. An importantconsideration in this context is that no new telephone advisor is assigned directly toanswer the telephone; this occurs only after they accumulate some knowledge andexperience of products and services and their selling. Various skill courses offered at
center level also help telephone advisors to improve their competencies.
Apart from this formal OJT, several forms of informal OJT are available fortelephone advisors. One example is the creation of specialized knowledge teams,
each consisting of two or three telephone advisors, who are dedicated to learning
about new products and answer customer queries during the introductory andtransitional periods of new products. In general, members of these specialist teams
are regular employees, but sometimes, depending on requirements, dispatchedworkers are also chosen for these teams. The prime task of these teams is to help
other telephone advisors increase their knowledge and skill levels in handlingcustomer inquiries related to new products. They conduct study sessions for others,
using case studies developed from their experience. There are also knowledge andscript compilations concerning sales, customer complaints, etc., by telephoneadvisors. These scripts are fed into a computer system, enabling others to learn fromthem.
The pattern of the traffic of incoming calls to 116 call centers also allows telephoneadvisors to participate in some study sessions (Benkyokai in Japanese) during the day.
Incoming calls reach their peak just before noon and toward the evening finishingtime of the call center, i.e., 1700 h. Thus telephone advisors spend off-peak hours in
the afternoon learning about new products and services and sharing their knowledge
and experiences with each other.
The training system for telephone advisors with “dispatched employee” statusdeserves a special attention as it differs significantly from the training system forregular employees described earlier. Dispatched employees receive basic training at
the agency to work as telephone advisors at 116 call center before they aredispatched. The contents of this classroom training are product knowledge,
terminology, information security and what they should do and should not do whenworking as telephone advisors. This classroom training is followed by mock
telephone training at the 116 call center using the actual terminal. They play the roleof a customer calling and the role of a telephone advisor of NTT East receiving thecall. Then, they continue to learn simple manual talk for the preset operator services.
The types of inquiry calls they answer will be extended gradually to a certain point
where they can take calls by themselves. This is the extent to which the employee
dispatching service company gets involved in the training and 116 call center takes
over the training when those dispatched employees are able to take calls themselves.

143

An instructor of the 116 call center further educates them by giving advice so thatthey can continue to develop their competencies. Employee dispatching service
companies have developed a basic training manual in consultation with 116 callcenter. Thus these companies possess training know-how on NTT telephone services
and 116 call center provides them, from time to time, with new product and service
information.

144

Section 6
Comparison between Teleshops and 116 Call
Center
6.1 Variables for Comparison
As explained in Section 1, one of the primary objectives of this study is to compare
SLT and NTT East with respect to the organization of customer service function andmajor human resource and HRD variables affecting front-line customer service
employees. Teleshops and 116 call center, which are the units of analysis of thisstudy, are similar in several important respects. They both operate within the onestop shop framework, focusing a great deal on serving residential customers.75 Bothunits are run as independent organizational units headed by a management appointee.
Teamwork characterizes the front-line work of both one-stop shops where all
customer service employees practice a single reporting system. Commonalities withcustomer service employees in both Teleshops and 116 call center can be seen insome important variables in human resource management and HRD such as job
definition, job structure, performance evaluation and the competency formation
system.
The similarities between Teleshops and 116 call center, as briefly presented above,
give way to vital differences when the internal work organization is examined moreclosely. Thus the rest of this section deals with exploring the similarities anddifferences in the internal work organization with reference to research frameworkand variables therein as developed in section 3. To achieve greater clarity, thefindings are presented in tabular format (see Table 6.1).

75

It is usual for telecommunications companies to appoint corporate account managers who act as theinterface between the service provider and corporate customers, i.e., large and medium enterprises. In
some cases, these account managers are assigned the responsibility to act as the linchpin between
service provider and small enterprises. Obviously, the differences in type of work and type ofcustomers lead to distinguish between customer service employees interacting with residential
customers and those who deal with corporate customers.

145

Table 6.1
Comparison between Teleshops and 116 Call Center
Units of analysis
Variable

Teleshops

116 Call Center

Serving existing and potential customers from

Serving existing and potential customers

any part of Sri Lanka

only whose telephone numbers are assigned

Conclusion

1. Organization of customer
service function
1.1 Area of authority and autonomy

Differentto the center. But, location-independent
nature permits call centers to handle thework of other centers under special
circumstances

1.2 Reporting relationshipIndependent organizational unit headed by a

Independent organizational unit headed by amanager for each Teleshop called “Teleshop

head of the center for each 116 call center.

Manager”. Overall, all operations andOverall, all operations and employees are

employees are under his/her control

under his/her control

All customer service employees working in a

All telephone advisors, as front-line

particular Teleshop report to Teleshop

customer service employees, are organizedmanager

as groups and all of them report to theirrespective group leader

146

Similar

SimilarTable 6.1 continued …
1.3 Hours of business

Daytime Monday through Friday and half a

From 0900 h to 1700 h all around the year

day on Saturday (a few Teleshops work late

except during New Year holidays

Different

hours)
1.4 Array of service provision

Sale of voice, data, Internet services,

Sale of voice, data, Internet services,

telephone apparatus and othertelephone equipment, customer education

telecommunications equipment, acceptance ofand counseling and all types of customer

all types of payment, customer education andservicing work. No acceptance of payments

Similar and different

counseling and all types of customer servicing
work
2. Employee classification
2.1 Job definition

Broadly defined. Teleshop staff members

Broadly defined. Telephone advisors handle

handle both front-line and back office work

multiple tasks characterizing their generalist

characterizing their generalist type

type. However, scope of their back office

Similar and different

work is limited
There exists separate staff for handlingintensively back office work. But, this staff
is required to answer phone under special
circumstances
3. Job structure
3.1 Job content (by job title)

Selling and other work to support marketing,Telephone advisors performing selling andcustomer care and finance (cashiering)other work to support marketing and

147

Similar and different

Table 6.1 continued …
customer care work, but no cashiering
3.2 Content of competency
requirements

Common set of competencies as all employees Common set of competencies as all

Similartelephone advisors perform similar tasks

reporting to Teleshop manager

and reporting to group leader
4. Staffing
4.1 Method of staffing

Internal recruitment applying posting andSeveral kinds: re-employment of retired

bidding system

employees of NTT East, obtaining

Different

employees from NTT East on temporarytransfer basis and obtaining employees
through employee dispatching service
agencies. In either case, it is the 116 callcenter management that decides on the job
assignment
4.2 Prior experience

Only a few Teleshop employees have had

All telephone advisors have had someexperience in selling and interacting withexperience in selling and interacting withcustomers before they joined Teleshops

customers before they were assigned to

Different

work at 116 call centers
4.3 Gender composition

Nearly equal distribution of male and female

A significant majority of telephone advisors

employees and all work is handled by bothare females

male and female including cashiering

148

DifferentTable 6.1 continued …
4.4 Type of employment

4.5 Job assignment

All employees are permanent and work

Three kinds of employees, regular,

full-time. They are divided into executives

dispatched and temporary employees. All

and non-executives

employees work full-time

Multi-skilled staff and employees can be

All telephone advisors perform identicalrotated among various tasks. Full job rotation

tasks so that work re-distribution among callwithin each Teleshop, with manager of eachcenters is possible. But, no job rotation is

Teleshop deciding on job rotation schedule

applied to telephone advisors as they all do

Similar and different

Similar and different

similar work. Employees assigned to backoffice work are sometimes required toanswer the phone. Manager decides job
assignment

5. Compensation system
5.1 Basic pay and annual increment

All employees are covered by consolidated

Wage for regular employees consists ofsalary corresponding to the job grade andwage for job qualification,bonus; non-executives are entitled for a fixedachievement-based added remuneration,

annual salary increment whereas executives

duty allowance, other allowances andare paid a monthly allowance based on theirbonus; basic wage goes up when only

performance; all employees are paid aemployee’s rank goes up

performance-based bonus
Dispatched employees are paid a hourly
wage and overtime; performance grade is149

Similar and different

Table 6.1 continued …
used as the criterion for recommending theemployee dispatching service company toraise the hourly wage for them
6. Human resource development
6.1 Competency formation system

Orientation, formal OJT, informal OJT and

Orientation, formal OJT, informal OJT and

OffJT

OffJT employee dispatching service

Similarcompany providing training to employees
before they are dispatched to 116 call center
Common OJT and OffJT programs for

All telephone advisors (both regular andforming a common set of competencies

dispatched workers) are covered by OJT

Similarand OffJT programs with similar content forforming a common set of competencies
No specific instructors are assigned for

Availability of qualified and designatedhandling OJT for newcomers. All members of

instructors for training telephone advisors

Different

Teleshop staff are involved in assisting
newcomers’ on-the-job learning
No formal knowledge compilations by

Existence of formal system of knowledge

customer service employees as a mechanismand script compilations by telephoneof informal OJT. They share knowledge

advisors and feeding them into computer

through discussion

system for the use of other telephone

150

Similar and different

Table 6.1 continued …
advisors
7. Performance evaluation
7.1 Format

Separate formats for customer service

One common format for all telephone

employees depending on their executive oradvisors who are regular employees;

non-executive status; three-tier annual

two-tier performance evaluation process

performance evaluation process; performance

executed semi-annually; both quantitative

factors are mostly qualitativeand qualitative factors are considered

Similar and Different

Quarterly performance evaluation for
dispatched employees; one-tier process;both quantitative and qualitative factors are
considered
7.2 Key result areas/targets

Key result areas/targets are set for executives

All regular employees are given targets; noonly, on yearly basis

specific targets are set for dispatched

Different

employees; but their sales performance isconsidered in evaluating performance
7.3 Assigning weight toperformance factors

Different weight assigned to different
performance factors

151

No data available

No conclusion

Table 6.1 continued …
7.4 Overall performance grades

Six performance grades for all employees;

Five performance grades for regularapplication of fixed distribution method for

employees and seven performance grades

awarding performance gradesfor dispatched employees; application of aframe of control in awarding performance
grades only for regular employees

Source: Researcher’s original construction.

152

Similar and Different

Section 7
Concluding Remarks
As presented in Section 1, this study had both primary and secondary objectives. The
primary objectives were to:(1) identify what specific soft technologies or soft management practices thatNTT Com, as the major foreign shareholder and strategic partner, hastransferred to SLT in the sphere of customer service, human resource
management and HRD for delivering better customer service(2) compare SLT and NTT East with respect to the organization of customer
service function and major human resource and HRD variables affecting
front-line customer service employees(3) assess how soft technologies transferred by NTT Com contribute to SLT’s
delivering better customer service.
The secondary objectives, as listed in Section 1, were established as a means to attainthe primary objectives. The preceding sections, particularly Sections 4, 5 and 6, dealt
with setting the groundwork to achieve these secondary objectives, whilst developing
the infrastructure to directly address the primary objectives of the study. Hence
Section 7 is devoted to the following specific tasks:(1) elaborating on the soft technologies that NTT Com has transferred to SLT in
the sphere of customer service, human resource management and HRD fordelivering better customer service(2) making an assessment of how these soft technologies contribute to SLT
delivering better customer service(3) documenting the limitations of this study(4) proposing directions for future research.
7.1 Transferring Soft Technologies (Soft Management Practices) from NTT
Com to SLTThere are many similarities and differences between Teleshops and 116 call center,as presented in the preceding section. These are shown in Figure 7.1 which wasconstructed by using variables embedded in part II of the research frameworkpresented in section 3.7 and drawing on other information contained in Table 6.1.
Thus theoretical linkages between variables on the left side of Figure 3.2 have been
established. Given the theoretical connection between the left and right sides of the
Figure 3.2 in their global form, the researcher did not attempt to uncover empiricalevidence of how the final outcome of customer retention is reached following thetwo paths suggested in section 3.7. This is an important limitation of this study, but isa promising theme for future researchers to take up. On the other hand, Figure 7.1
lays the groundwork for a discussion on the main purpose of section 7.1.

153

Figure 7.1
Theoretical Connection of Sub-variables Influencing Similarities and Differences between Teleshops and 116 Call Center
Major Variable

Teleshops

116 Call Center(refers Figure 3.2)

(refers Table 6.1)

(refers Table 6.1)

Organization of Customer Service

Independent organizational unit andIndependent business unit andFunction

single reporting relationshipsingle reporting relationshipJob Structure

All members performing both front-line

All telephone advisors performing mostly

and back office tasks; one common

a set of common front-line tasks; one

set of competencies

common set of competencies

Human Resource Management Functions

Human Resource Management Functions

Human Resource Management Functions

Staffing

Full job rotation

No job rotation

PE andHRD

Comp. Sys.

Targets only

Medium level

Sales targets

Incentive forfor executives.

incentive for

only for regularlong-term HRD

long-term HRD

employees?

Infrastructure for HRM

Infrastructure for HRM

Infrastructure for HRM

Employee Classification

Broadly defined jobs; Teleshop staff members

Broadly defined jobs; generalist type

handle many tasks; generalist type staff

multiskilled staff

Source: Researcher’s original construction.

Note: PE - Performance Evaluation; Comp. Sys. - Compensation System; Mgr. - Manager

154

Figure 7.1 as well as Table 6.1 show many of the similarities and differences
between Teleshops and 116 call center. In a discussion centering on the transfer ofsoft management practices from NTT Com to SLT, the most important aspect is a
discussion on the similarities that exist between Teleshops and 116 call center.
It is clearly evident in this study that Teleshops and 116 call center are one-stop
shops which are run within a framework of independent business units. The
autonomy given to the management of each Teleshop, similar to the autonomy given
to each 116 call center, enables each manager to organize his/her Teleshop’s
operations and maintain flexibility in job assignment. In this context, flexibility in
job assignment refers to the extent to which individual managers can decide which
employees should be assigned to various jobs as well as their ability to evaluate an
employee’s ability to fill in for others who are absent. Changes in labor mix result inchanges in the deployment of employees. Koike (1997, 2002) asserted that the costof dealing with changes in deployment is less when there are more long-time
employees who can take over many positions. The goal of a one-stop customer
contact point can only be realized when there is flexibility in job assignment to meethuman resource-related contingencies. The single reporting relationship which exists
in both the Teleshops and 116 call center gives the managers a relatively high degreeof flexibility in assigning jobs.
The manner in which the jobs of front-line customer service employees are defined isevidence of a vital management practice that has been transferred from NTT Com to
SLT. The jobs of front-line customer service employees in Teleshops and 116 callcenter are defined broadly. Practically, the description of Teleshop jobs is broader
that those in 116 call center. Teleshops have an integrated system in which front-line
customer service employees are required to handle both front-line and back office
work on job rotation. In contrast, there is a separated system in place in 116 callcenter with a clear division of labor between the front office and back office.
Nevertheless, the broad definition of jobs has contributed to developing multiskilled
staff in the Teleshops and 116 call center who identify themselves as generalists
rather than specialists. This situation has resulted in front-line customer service
employees needing a common set of competencies to serve the customer.
Another significant management practice transferred from NTT Com to SLT stems
from the connection between the job grade and job content of front-line employees.
The empirical data on hand shows that the relationship between these two variables
is loosely defined in both the Teleshops and 116 call center. Thus with the exceptionof the manager, front-line customer service employees on different job grades
perform identical tasks in Teleshops. The manager must perform certain special tasks
in addition to the usual front-line and back office work. Likewise telephone advisors(regular employees) in 116 call center perform similar tasks irrespective of their job
grade or career track. In both one-stop shops, the job grade of front-line employees is
an indicator of their performance capacity. During the semi-structured in-depth
personal interviews, almost all Teleshop employees emphasized that a sensible
change brought into their job by NTT-style management was to train them to155perform any task on the service provider-customer interface level without being
constrained by the fact that they hold a particular job grade.
Turning to the variable of performance evaluation, the first noteworthy finding is that
all front-line customer service employees, irrespective of their status of employment,
fall under the performance evaluation system. Though there are many differences in
performance factors and targets, one common feature for employees in both
Teleshops and 116 call center is the application of frame of control in awarding
overall performance grades. The performance evaluation system introduced by NTTstyle management has transformed SLT’s ceremonial performance evaluation system
into a comprehensive and transparent one that holds implications for compensationand the career development of employees.
7.2 Transferred Soft Management Practices and Their Contribution to
Delivering Better Customer Service
Any discussion of how the soft management practices transferred by NTT Com
contributes to SLT’s ability to deliver better customer service must take into accountthe current developmental stage of the telecommunications market in Sri Lanka, thecurrent level of competition and potential for its intensification, the changes incustomer preferences and their level of knowledge of telecommunications-related
products and services. This section demonstrates how these practices could
contribute to deliver better customer service under a given set of circumstances. Thus
some of the more profound changes that have taken place in the telecommunications
sector in Sri Lanka in recent years are highlighted next.
First, regulatory and market changes in the telecommunications sector since the mid1990s have led to increased teledensity and competition among telecommunications
service providers (see Table 7.1 for Teledensity). For example, the abolition of
SLT’s monopoly in the international voice market in August 2002 and the issuing of
external gateway operator licenses to many companies obviously added a new
dimension to the competitive landscape of the telecommunications sector in Sri
Lanka. In terms of tariff for international calls, the difference between operators is
not significant: what makes a particular service attractive is the voice quality andconnectivity.
Table 7.1
Teledensity in Sri Lanka
Year
Fixed telephony
1.1
1995
1.4
1996
1.8
1997
2.8
1998
3.5
1999
4.0
2000
4.4
2001
4.7
2002
Source: Economic Division, TRCSL, 2003.

156

Cellular telephony
0.3
0.4
0.6
0.9
1.3
2.2
3.6
4.9

Second, advances in information and communications technology have enabled
telecommunications companies to introduce many new products and services inrecent years. One viable indicator of this trend is the gradually increasing number ofInternet and e-mail subscribers in Sri Lanka (see Table 7.2 for the growth of Internet
and e-mail subscribers in Sri Lanka). Simultaneously, there has been an increase in
the number of Internet service providers in the country from whom retail customers
can obtain a connection to use the Internet and e-mail facilities through their personal
computers.
Table 7.2
Internet and E-mail Subscribers in Sri Lanka
Year
Cumulative number of subscribers
10,1951997
18,984
1998
25,535
1999
40,497
2000
61,532
2001
73,4682002
Source: Economic Division, TRCSL, 2003.

Third, there has been a shift in customer demand patterns. Until around the late
1990s, customers mainly wanted a simple telephone line for voice communications.
However, since then, there has been a dramatic change in customer demand forvalue-added services, stimulated by aggressive advertising and promotional
campaigns launched by the various telecommunications companies. Also, thetelephone is gradually ceasing to be a luxury, compared to the situation that prevailedin Sri Lankan society from the 1960s through to the latter part of 1990s. Furthermore,plans to blanket remote areas with telephone networks will transform the lifestyle ofpeople in the rural and estate sectors.
Another vital development in the telecommunications market in Sri Lanka in recent
years has been an increase in the level of quality consciousness of customers. The
gradual expansion of telephone networks in the country has contributed to a change
in lifestyle and people find telephone and e-mail communications to be effective
methods of managing their time and saving their money. In effect, unusually long
breakdowns in telephone networks, e-mail servers, etc. stimulate customers tointeract with relevant service providers to minimize the adverse consequences ofsuch problems.
Given these market trends, telecommunications companies in Sri Lanka have
responded by improving the quality of their services, creating a paradigm shift fromprice competition to service quality-based competition. Thus telecommunications
companies put a premium on service quality and excellence. In this context, several
strategic alternatives would prove inevitable for telecommunications companies topursue, namely

157

(1) institutionalizing the one-stop service model for addressing a variety ofcustomer needs and requirements(2) giving customers convenient and customized service(3) building relationship orientation into the customer interface work performedby customer service employees.
These strategic alternatives had many implications for telecommunications
companies, which designed human resource management and HRD strategies toensure their survival in a fast changing and competitive market environment. One
such human resource strategy is empowering customer service employees toundertake a broad range of tasks, covering broad job responsibilities with manytransactions types that are not found in manuals. The one-stop shop model becomesreally meaningful only if customer service employees possess broad competencies tohandle broadly defined jobs. From the perspective of the customer, broadly skilled
customer service employees could minimize the time and cost of searching for
information on new products and services. Thus, given increased competition and thestrong possibility that the field will continue to become more competitive one could
argue that SLT’s high flexibility in job assignment is a good human resource practice.
This implementation of this system in each Teleshop, along with broadly definedjobs and job rotation, has enabled customer service employees to attend to a varietyof customer needs and requests. By allowing a single employee with a broad displayof skills to attend to all the needs of individual customers, Teleshops can deliver a
convenient and customized service.
In a highly competitive telecommunications market, operators would realize thatbuilding relationships with existing customers is a viable strategy to enhance thegrowth and long-term survival of their companies. In the case of service firms tobuild, sustain and enhance their strategic capabilities, the relationship between thecustomer and service provider is much more crucial than a similar relationship for
manufacturing firms. As explained in Section 1, customer retention is more
profitable than attracting new customers. Competitive pressures would also leadtelecommunications companies to value the significance of cross-selling to existingcustomers rather than approaching new customers through advertising andpromotional campaigns. A key human resource management concern in building
relationships with customers is minimizing a customer’s time by attending to his or
her needs within the shortest time possible. Front-line customer service employees ofTeleshops are trained to respond to all inquiries and needs of the customer
irrespective of their job grade. The loosely defined connection between job grade andjob content coupled with the integration of front office and back office work haveenabled those employees to deal with customers of different backgrounds. A
common set of competencies required of front-line customer service employees has
positioned them to serve the customer with no discrimination.
7.3 Limitations of the Study
There are several limitations to this study. Although it benefits from case study
research as the research strategy deployed, it is nevertheless vulnerable to some158

potential weaknesses that should be highlighted. More specifically, the empiricalsetting is based on only two telecommunications companies, one in Sri Lanka and theother in Japan. These two companies are not intended to be representative of
telecommunications companies in their respective countries. Thus, the findings of thestudy cannot easily be generalized beyond the particulars of these companies.
A second limitation involves the number of people interviewed during several stagesof data collection. Although the researcher explored in-depth the relevant phenomenaof Teleshops, a study of such magnitude could not be done at the 116 call center of
NTT East.
A third limitation concerns the relationship between human resource management
functions, job structure and outcomes, as shown in Figure 3.2. This figure
demonstrates two possible paths to reach the final outcome of customer retention(organizational performance):(1) Path 1 - reaching the final outcome, through structuring the jobs of customer
service employees with the support of human resource management functions.
In this path, it is assumed that job structure impacts on the actual behavior ofcustomer service employees, which in turn affects the final outcome ofcustomer retention.
(2) Path 2 - reaching the final outcome, through forming and improving thecompetency level of customer service employees with the proper applicationof human resource management functions. In this path, it is assumed that thecompetency level of customer service employees influences their actual
behavior, which in turn determines customer retention.
In both paths, the actual behavior of customer service employees constitutes aninterim outcome, which is directly associated with the final outcome of customer
retention.
The present study basically does not address these outcomes. Only human resource
management functions and job structure were studied to draw a comparison between
Teleshops and 116 call center. Thus a much of the right side of Figure 3.2 was left
unattended.
A fourth limitation stems from the fact that the researcher did not attempt to explore
why there are differences between Teleshops and 116 call center from theperspective of human resource management and HRD. A dearth of studies on humanresource management and HRD practices in organizations in Sri Lanka seems to be
an impediment in undertaking a meaningful study on this question.
A fifth limitation involves a lack of data on the customer point of view. As evident inthis study, semi-structured in-depth interviews were conducted only with employeesof SLT and NTT East research sites, and no data was collected from the customers ofthese companies. Because the customer is thought to be the ultimate decision-makeron the quality of customer services, the views and opinions of external customers are159

also vital in understanding how human resource management and HRD practices
contribute to delivering better customer service, as the customer is believed to be theultimate decision- maker on the quality of customer services.76
7.4 Directions for Future Research
The limitations of the present study, as elaborated above, set the stage for researchers
to address many related issues in the future. Future studies should attempt to replicate
this study with other organizations in the service sector. For example, the viability ofthe two paths to retaining the customer, as depicted in Figure 3.2, could be used with
employees assigned to customer interface points in banking, insurance, financial
brokering, hospitality companies, etc. These studies would benefit from using crosssectional data allowing for generalizations to be drawn, compensating for thelimitations of case research strategy.
Future research is needed to explore the linkage between the variables depicted in
Figure 7.1. In a related matter, researchers may also explore these interrelationships
in firms operating in various sub-sectors of the service sector to find how firm- andcontext-specific factors moderate such relationships. Samples should also be selectedfrom firms functioning in different service sector industries, so that the impact ofindustry-specific factors on the pattern of linkage between the aforementioned
variables can be explored. The use of quantitatively measured data with statisticalanalysis could prove to be of relatively high value in an exercise of this nature.
Fieldwork conducted at 116 call center of NTT East clearly revealed the differences
between two types of telephone advisors, regular workers and dispatched workers, interms of human resource management and HRD. A research project with the aim ofaddressing particularly these differences in substantial depth would prove much
valuable in contributing to the literature and to similar companies in other countries
which may employ both types of workers. For example, collecting data from
employee dispatching service companies would shed new light on the humanresource management and HRD aspects of employees who have been dispatched to
116 call center.
Recent developments in the customer service function of SLT suggest that SLT has
already begun to establish a single call center and to train staff to respond to a varietyof customer needs and requests which they can make by dialing a single number(SLT, Annual Report, 2003). This development is a clear indicator of the potentialthat SLT has for introducing a one-stop call center similar to 116 call center in the
future. Given this context, a study comparing customer service function and related
human resource management and HRD concerns of front-line customer service

76

The researcher firmly believes in the importance of collecting data from customers to better
understand good human resource and HRD practices. Although an attempt was made to explore thepossibility of collecting such data, it proved too difficult. On ethical grounds also, the researcher
always complied with the permission and assistance of authorities of research sites with regard tocollecting data from customers.

160

employees in two eras, i.e., before and after the introduction of a one-stop call center,would be valuable for the organization as well as for the customer.
Another worthwhile area for future research emanates from one of the limitations of
the present study. As stated earlier, because of the dearth of literature on humanresource management and HRD practices in Sri Lankan organizations, this study
made no attempt to explore why there are differences between Teleshops and 116
call center. Thus future research may address these phenomena enabling researchers
who undertake international comparative research to explore in depth on countryspecific reasons that affect such differences.
Finally, and perhaps most importantly, it is unclear from this research whatcustomers think about and how they define the quality of customer service, and theirrequirements of customer service employees. This is likely to become particularly
important in the coming years, as the vitality of customer service as a viable strategy
to retain customers is enhanced with the rapid diffusion of information andcommunications technologies, making customers more educated and aware of themarket. As such, research on HRD for customer care services management, covering
the customer side as well as that of the employee would greatly benefit the quality oflife of people in different countries. In this respect, collaboration among researchers
from various disciplines such as human resource management, HRD, marketing,industrial relations, labor economics, and sociology would prove more worthy thanpursuing research in the narrowly defined boundaries of their respective disciplines.

161

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Appendix A
Protocols for Semi-structured Interviews Conducted at Sri Lanka Telecom Limited
Interview Protocol A1 – For Teleshop Staff (excluding Teleshop managers)
1. Could you please explain to me the history of your career with SLT. You may focus
specifically on the date and in what capacity (job title/position and job grade) you joined
SLT, your current job title, job grade, educational/professional background and previous
work experience.
2. In what units, sections, divisions, offices, etc. of SLT had you worked before joining
Teleshops? Please explain briefly what type of work you did in each unit, section, division,
office, etc.
3. Do you find any significant difference between the work you did earlier and the work you
have been doing since you joined Teleshops? If so, what are they?
4. When you started working in Teleshops you probably felt a new work environment andworking conditions. How did your previous experience contribute to working in
Teleshops?
5. Could you please explain your current job to an amateur like me. You may focus on tasks
and functions (the content of work) of your current job, the nature of customers with whom
you deal and the kinds of needs/demands raised by customers.
Do you face any troubles/problems when you deal with customers? If so, what kind oftroubles/problems (with some examples)? How do you tackle/respond to these problems(with some examples)?
Do you have any written manuals available for handling your work? When you facetroubles/problems in dealing with customers, do you refer these manuals? If you cannot get
any support from these manuals, then how do you handle such situations (with someexamples)?
6. Assume that you have been assigned to train a new employee of your Teleshop. In whatorder would you teach different tasks of Teleshops to this new employee (first task you
assign, second task you assign, etc.)?
7. Skill formation:- content of your orientation program;- how did you learn to work in Teleshops? Did you have a mentor?
- how do you learn about new products and services as well as telephone apparatus andother telecommunications equipment?
- in what type of training programs have you participated away from your workplace? Any
training received in Japan?
8. Is there any system in place where Teleshop staff members could share their work-related
experiences with each other during or after normal work hours? If so, what incentives(monetary and non-monetary) are there for you to share your experiences?

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Interview Protocol A2 – For Teleshop Managers
1. Could you please explain to me the history of your career with SLT. You may focus
specifically on the date and in what capacity (job title/position and job grade) you joined
SLT, your current job title, job grade, educational/professional background and previous
work experience.
2. In what units, sections, divisions, offices, etc. of SLT had you worked before joining
Teleshops? Please explain briefly what type of work you did in each unit, section, division,
office, etc.
3. Do you find any significant difference between the work you did earlier and the work you
have been doing since you joined Teleshops? If so, what are they?
4. When you started working in Teleshops you probably felt a new work environment andworking conditions. How did your previous experience contribute to working in
Teleshops?
5. Could you please explain your current job to an amateur like me. You may focus on tasks
and functions (the content of work) of your current job, how they differ from whatmembers of your staff do, the nature of customers with whom you deal and the kinds ofneeds/demands raised by customers.
Do you face any troubles/problems when you deal with customers? If so, what kind oftroubles/problems (with some examples)? How do you tackle/respond to these problems(with some examples)?
Do you have any written manuals available for handling your work? When you facetroubles/problems in dealing with customers, do you refer these manuals? If you cannot get
any support from these manuals, then how do you handle such situations (with someexamples)?
6. How is the work of your Teleshop organized? How do you assign jobs to your staff?
7. When a new employee joins your Teleshop, in what order do you teach different tasks ofTeleshops to him/her (first task you assign, second task you assign, etc.)?
8. Skill formation:- content of your orientation program;- how did you learn to work in Teleshops? Did you have a mentor?
- how do you learn about new products and services as well as telephone apparatus andother telecommunications equipment?
- in what type of training programs have you participated away from your workplace? Any
training received in Japan?
9. Is there any system in place where Teleshop staff members could share their work-related
experiences with each other during or after normal work hours? If so, what incentives(monetary and non-monetary) are there for you to share your experiences?

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Interview Protocol A3 – For Head of Section (Deputy General Manager) of Teleshops
1. Could you please explain to me the history of your career with SLT. You may focus
specifically on the date and in what capacity (job title/position and job grade) you joined
SLT, your current job title, job grade, educational/professional background and previous
work experience.
2. In what units, sections, divisions, offices, etc. of SLT had you worked before joining theTeleshops section? Please explain briefly what type of work you did in each unit, section,
division, office, etc.
3. Could you please explain to me the differences between Regional Telecommunications
Engineer’s Office and Regional Telecommunications Office and then Regional
Telecommunications Office and Teleshops. You may focus particularly on their work andhuman resource organization and recent changes introduced to Teleshops.
4. What is the process of recruitment and selection of employees to staff Teleshops? To what
extent do you consider their previous work experience at the time of hiring?
5. Characteristics of workforce of Teleshops:- job titles, job grades and job description;- total number of employees and their Teleshop-wise distribution;- gender composition;-status of employment, i.e., permanent full-time employees and other categories of
employees;- highest educational standard reached such as university graduate, postgraduate diploma,
G.C.E. (Advanced Level) and G.C.E. (Ordinary Level).
6. How is the performance of employees of Teleshops evaluated? Is there any relationshipbetween their previous work experience and the current job? What is the policy of
promotions as it applies to Teleshop employees?
7. Could you please explain to me the remuneration (compensation) system for Teleshop
employees. You may emphasize particularly on how the basic salary is determined, othercomponents of remuneration and allowances that are applicable only to Teleshop staff (ifany). Please note that I do not wish to learn any figures of confidential nature.
8. Skill formation system for Teleshop staff:- content of orientation program;- how do they learn to work in Teleshops? Do they have a mentor?
- how do they learn about new products and services as well as telephone apparatus andother telecommunications equipment?
- what type of training programs (outside normal hours of work) are available for them?
Have they received any training in Japan?
9.Is there any system in place where Teleshop staff members can share their work-related
experiences with each other during or after normal work hours? If so, what incentives(monetary and non-monetary) are there for them to share their experiences?

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Interview Protocol A4 – For Head of Division (General Manager) of Human Resources
1. What are the major changes introduced to human resources function of SLT since NTT
was entrusted with management?
2. What was the job grade system that existed in SLT prior to privatization? What changes
have been introduced to job grade system under NTT management? How have job grades
been defined? For example, job grades based on job content, job grades based on
skill/ability to conduct the job, etc.
3. What were the career paths for SLT employees prior to privatization? What changes havebeen introduced to career development (paths) of SLT employees under NTT
management?
4. What was the promotion system for SLT employees prior to privatization? How has thispromotion system been changed under NTT management? You may focus specifically on
criteria for promotions from one grade to another before and after privatization,highlighting major changes introduced.
5. What was the case of performance evaluation system for SLT employees prior to
privatization? How has this performance evaluation system been changed under NTT
management, i.e., format used, purposes of the evaluation, were all SLT employees
covered etc.? Please provide me with one copy each of the performance evaluation format
used earlier and the format which is currently in use.
6. What was the remuneration (compensation) system of SLT prior to privatization? Youmay focus specifically on the various components of remuneration prior to privatization.
How has the composition (components) of remuneration changed under NTT
management? Please note that I do not wish at all to learn any confidential figureswhatsoever and the only area I would like to cover is how the composition of remuneration
has changed under NTT management.
7. I would be very grateful if you could assist me in obtaining the following data (nonconfidential type):- total workforce of SLT;
- gender composition of total workforce of SLT, i.e., number of male employees andnumber of female employees;- group-wise distribution of total workforce;- in each group, how many levels of ranks (job grades) are there;- year-wise distribution of total workforce (1990 - to date);- number of employees (expatriates) dispatched by NTT and then NTT Communications
Corporation since 1997, positions they held in SLT and their tenure of service at SLT.

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Interview Protocol A5 – For Head of Division (General Manager) of Industrial
Relations and Welfare
1. Could you please explain to me organization of trade unions in SLT with special reference
to the number of trade unions with their names, number of members of each union andclassification of trade unions.
2. Could you please explain to me the culture of trade unionism that prevailed at SLT prior to
privatization in 1997.
3. How have trade unions responded to changes introduced by NTT management since 1997?
What were the highlights of interaction (key areas addressed) between trade unions and
SLT management during the early years of the post-privatization era of SLT?
4. What type of strategies (or actions) did SLT management adopt to gain the support andcooperation of trade unions for introducing and implementing changes under NTT
management?
5. What type of incentives (monetary and non-monetary) did trade unions have for their
participation in the change process under NTT management?
6. Could you please elaborate on the Workplace Cooperation program of SLT with specialreference to stages of its evolution, key issues involved, response of SLT management andresponse of trade unions. Any documents of non-confidential nature that were exchanged
between SLT management and trade unions may be useful for me as secondary data.
7. What are the major achievements of the workplace cooperation program from theviewpoint of both SLT as an organization and its employees? What would be the nextstage of evolution of this program?
8. How do SLT management and trade unions deal with each other on subjects includingsalary revision, determining bonus and welfare facilities for SLT employees?

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Interview Protocol A6 – For Head of Division (General Manager) of Corporate
Strategy
1. Could you please explain to me the nature of relationship between SLT and NTT
Communications Corporation in Japan.
2. What resources has NTT Communications Corporation provided for SLT?
3. In your opinion, what resources has NTT Communications Corporation provided for SLT
in the areas of marketing and customer care services?
4. What are the main mechanisms that NTT Communications Corporation used for providing
these resources to SLT?
5. During the period 1997-2002 how many expatriates did NTT and NTT Communications
Corporation dispatch to SLT? What were the positions held by these expatriates? What
was their length of service with SLT as expatriates?
6. What were the key issues that emerged when these expatriates were working along withlocal staff when providing resources for SLT? How were such issues smoothed over for
better provision of resources?
7. I would be very grateful if you could assist me in obtaining the following data (nonconfidential):- breakdown of share ownership of SLT, i.e., percentage of shares owned by theGovernment of Sri Lanka, NTT Communications Corporation, employees of SLT,
corporate bodies in Sri Lanka and the general public;- composition of Board of Directors of SLT, i.e., number of members appointed by theGovernment of Sri Lanka and NTT Communications Corporation;- any data/information/documents concerning the main factors that influenced NTT toinvest in SLT.

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Appendix B
Protocols for Semi-structured Interviews Conducted at
Nippon Telegraph and Telephone East Corporation
Interview Protocol B1 – For Telephone Advisors (regular employees) of a 116 Call
Center
1. When did you start your career with NTT East Corporation? What is your current job title
and job grade?
2. Could you please explain to me the history of your career with NTT East Corporation? In
what units, sections, divisions, etc. have you worked before? Please explain briefly what
type of work you did in each unit, section, division, etc.
3. Could you please explain your current job to an amateur like me. You may focus on tasks
and functions (content of work) of your current job, the nature of customers with whom
you deal, etc.
4. What kinds of needs/demands do customers raise and how do you respond?
5. Do you face any troubles/problems when you deal with customers? If so, please give mean example. How do you tackle such problems?
6. Do you use any instruction manuals during your work?
When you handle unusual operations do you refer these instruction manuals? Are all typesof unusual operations covered in these manuals?
If some unusual operations are not covered in these manuals, then how do you handle
them?
7. How do you share your day-to-day work-related experience with other colleagues? What
incentive do you have for participating in such knowledge sharing?
8. What type of training (orientation) did you have before you were assigned to work in 116
call center? What type of training have you received since you started working in 116 callcenter?
9. What was the first task that you handled in 116 call center? Then, what was the next task?
Then, what was the next task? Did someone supervise your work during the orientation
program? Were you put under a senior or experienced operator after the orientation
program?

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Interview Protocol B2 – For Telephone Advisors (dispatched employees) of a 116 Call
Center
1. When did you start to work as a telephone advisor at 116 call center? What is the name ofyour job title and job grade (if any)?
2. Who decided on dispatching you to work at this call center? Did you have any say in thisdecision? What is the duration stipulated by your employee dispatching service company
for you to work at this call center?
3. Where else you had worked before you were dispatched to this call center?
4. When did you register with the current employee dispatching service company? At thattime what is the highest educational standard you have reached? What factors influenced
you to register with an employee dispatching service company?
5. Could you please explain your current job to an amateur like me. You may focus on tasks
and functions (the content of work) of your current job, the nature of customers with whom
you deal and kinds of needs/demands raised by customers.
Is there any difference between the work handled by you and other telephone advisors who
are not considered dispatched employees?
Do you face any troubles/problems when you deal with customers? If so, what kind oftroubles/problems (with some examples)? How do you tackle/respond to these problems(with some examples)?
Do you have any written manuals available for handling your work? When you facetroubles/problems in dealing with customers, do you refer these manuals? If you cannot get
any support from these manuals, then how do you handle such situations (with someexamples of the cases you escalated to group leader)?
6. Have you had any work experience of handling customers before? What type of training(including orientation) you had before you were assigned to work in this 116 call center?
How did you learn to work at this 116 call center? Please explain me who taught you, for
how long, and what he/she taught you?
What role your employee dispatching service company played in your training at the
beginning?
What type of training you have received since you started working in this call center?
7. What was the first task that you handled in 116 call center? Then, what was the next task?
Then, what was the next task? Did you have a specific instructor?
8. How do you learn about new products and services?
9. Is your work-related performance evaluated? If so, who evaluates your performance? Whatcriteria are used for evaluating your performance?

183

Do you find any differences between evaluating your performance and that of othertelephone advisors who are not considered dispatched employees?
10. After you complete your period of service at this 116 call center, where will you worknext? Who decides on your next place of work, i.e., your employee dispatching service
company or you?

184

Interview Protocol B3 (Day One) – For Manager in charge of a 116 Call Center
1. Organization of customer service function of 116 call center as a front-line unit.
2. What are the major operations of 116 call center?
3. Characteristics of workforce of 116 call center:- size, i.e., number of employees;- gender composition, i.e., number of male and female employees;- what type of employees are there in addition to permanent full-time employees, i.e.,
dispatched employees, part-time employees, etc.;- composition, i.e., number of permanent full-time employees, dispatched employees andcategories of employees other than dispatched employees such as part-time employees;- are there any part-time workers hired directly by your branch;- educational qualifications, i.e., highest educational standard reached such as university
graduate, junior college graduate, high school graduate, etc.
4. How is the work of 116 call center organized? For example, if the work is organized inteams/groups, then please explain following:- size, i.e., number of members per team and their job titles;- composition of teams in terms of number of permanent full-time employees, dispatchedemployees and categories of employees other than dispatched employees;- do all teams include dispatched employees and categories of employees other thandispatched employees;- who decides on the size of teams and their individual members?
- what factors influence selecting individual members for staffing teams?
5. Could you please explain to me the work content of teams, i.e., what they do in teams, isthere any job rotation system applied to their work, etc.
6. What are the job titles and job grades as they are related to employees of 116 call center?
Do you have any specific job descriptions for these employees?
7. For each job title and job grade of 116 call center employees, could you please elaborateon the following:- differences among job grades;- criteria for promotion from one grade to another (Job Class Assessment Table, if any);- when an employee is promoted from one grade to another what else of his/her
employment contract changes?
8. Performance evaluation of employees of 116 call center:- how often is performance evaluated?
- how is performance evaluated? i.e., real time performance evaluation, performance
evaluation based on some standard formats, etc.;- is real time performance evaluation applied to all types of employees such as permanent
full-time employees, dispatched employees, part-time employees, etc.?
- is performance evaluation based on some standard format applied to all types of
employees such as permanent full-time employees, dispatched employees, part-time
employees, etc.?

185

- do you apply a fixed distribution method in case of evaluating performance of permanent
full-time employees, i.e., is there any predetermined limit (percentage) for awarding
overall performance grades like "Excellent", "Very Good" and so on.
9. Remuneration system for 116 call center employees. For example, major components ofremuneration such as basic rate, age rate, job grade rate, merit rate, etc.
10. Skill formation system for 116 call center employees:- content of orientation program and who is responsible for organizing it;- on-the-job training, i.e., who is responsible, training evaluation, skill certification, useof job matrices, etc.;- classification of employees according to skill level;- order of assigning tasks to employees, i.e., from simple tasks to difficult tasks;- how employees learn about new products and services;- off-the-job training for operators, i.e., content of OffJT programs and duration;- any special training programs for dispatched employees and part-time employees.
11. Are there any manuals developed for 116 call center employees for handling unusual
operations? Do all employees follow these manuals?
If an unusual operation occurs that is not included in these manuals, then how do
employees handle such operations?
12. Is there any system in place where operators can share their work-related experienceswith each other during or after normal work hours? If so, what incentives are there forthem to share such experiences?

186

Interview Protocol B3 (Day Two) – For Manager in charge of a 116 Call Center
This interview aims predominantly to cover in-depth four areas of human resource
management of 116 center, employee classification, performance evaluation, remuneration
system and career structure as they are pertinent to telephone advisors who are notcategorized as dispatched employees.
1. Previous interviews have made it clear that there are two types of telephone advisors
working in your call center, typical employees (Seishain) and atypical employees (Haken
Shain). Seishain are classified further into Tenseki Shain and Shukkosha.
1.1 What job grades are these Tenseki Shain and Shukkosha belonged to? Please explain
me your answer with reference to various job clusters and job grades of each cluster as
they are visible in NTT East/NTT Service Kanagawa Corporation.
1.2 Are these job grades ability-based?
1.3 How upward movement of employees through different job grades are determined?
What criteria are used for making upgrading/promotion decisions?
1.4 How employee movements (horizontal) among various job clusters are determined?
1.5 Who takes the decision of who are assigned to a particular 116 call center to work as
telephone advisors, group leaders, supervisors, managers or head of center? To what
extent individual 116 call centers can decide on whom to be posted to work there?
1.6 Who appoint group leaders and on what criteria? Is there a specific job grade (orabove) applicable to these group leaders?
1.7 How dispatched employees are obtained for working at 116 call center? What are themain areas of emphasis between your call center and the relevant employee
dispatching service company in respect of obtaining employees for 116 call center?
1.8 What individual 116 call centers can do if they find a particular dispatched employee
does not fit well to work there?
1.9 Are there any job grade system applied to dispatched employees?
1.10 Is there any system in place for recommending high performing dispatchedemployees to NTT Service Kanagawa Corporation/NTT East to be hired as Seishain?
If so, what are the criteria for such recommendation?
2. Performance evaluation of telephone advisors (Tenseki Shain and Shukkosha)
2.1 How often performance is evaluated and for what purposes?
2.2 There are two stages involved in the performance evaluation process pertinent totelephone advisors and you can conduct first stage evaluation. What criteria(performance factors) are used for this evaluation? For what specific purposes you use
the results of this evaluation?
2.3 Task head who is a direct subordinate of the president of NTT Service Kanagawa
Corporation evaluates the performance of telephone advisors at the second stage. On
what criteria this evaluation is conducted and how they are different from the firststage evaluation criteria?
2.4 What is the meaning of comprehensive evaluation and what criteria are used for that?
For what specific purposes you use the results of this evaluation?
2.5 Is there a system in place for assigning weight to different performance factors? If so,how?
2.6 What final overall performance grades are used, i.e., how many and what is themeaning of each?

187

2.7 Do you apply a fixed distribution method in case of awarding final overall performance
grades? For example, ceiling (percentage) for awarding “High grade” and “Slightly
high grade”. If so, at what stage of the performance evaluation this method is applied,i.e., first stage or second stage? What are the ceilings assigned to each overall
performance grade?
2.8 Are similar criteria (similar to those applied for telephone advisors) used for evaluating
performance of group leaders at center level?
2.9 Deputy chiefs (supervisors) are responsible for evaluating the performance of
dispatched employees (telephone advisors) in your call center. Could you please
explain me how performance of these dispatched employees are evaluated with specialreference to criteria (performance factors), stages of the evaluation process, overall
performance grades, purpose of evaluation, etc.
2.10 What is the nature of the communication process between your call center andemployee dispatching service company in regard to performance evaluation of
dispatched employees?
3. Remuneration (compensation) system for telephone advisors(Please note that I do not wish to learn at all any confidential figures whatsoever of wages
and the areas I would like to cover are the composition of remuneration and the process ofdetermining the amount of each component.)
3.1 What are the major components of remuneration for telephone advisors? Please giveme the breakdown which includes allowances.
3.2 What is the weight assigned to each component (as a percentage of total earnings)?
3.3 Are group leaders paid a special allowance for playing the role as group leader?
3.4 Do managers of individual 116 call centers have any autonomy to decide on theamount of the wage for telephone advisors?
3.5 Are there any fixed or variable annual salary increments for telephone advisors? If it isfixed, then who decides on the amount? If it is variable, then who decides on theamount?
3.6 How bonus for telephone advisors is determined? What are the different kinds of bonus
paid to telephone advisors?
3.7 What are the major similarities and differences in remuneration for telephone advisors
who are either Tenseki Shain or Shukkosha and dispatched employees?
4. How dispatched employees are trained to work as telephone advisors at 116 call center?
What are the major similarities and differences in skill development system for telephoneadvisors who are either Tenseki Shain or Shukkosha and dispatched employees? What is
the role of relevant employee dispatching service companies in training these employees?
5. Based on previous interviews, I understand that there are two kinds of dispatchedemployees who are working as telephone advisors in your call center, employees
dispatched by employee dispatching service company in NTT group and employees
dispatched by employee dispatching service companies outside NTT group.
Is there any difference between these two types of dispatched employees in terms of- job content- training- performance evaluation- remuneration- career history.

188

6. From where, i.e., employee dispatching service company in NTT group or employee
dispatching service companies outside NTT group, you prefer to obtain dispatchedemployees? Why?

189

Interview Protocol B4 – For Associate Manager of Customer Service Department(Special note: Some of these questions were also used appropriately for interviews with sales
planning officers.)
1. Where is customer service division positioned in your organization? Please explainorganization structure and how many employees are assigned for working in the customer
service division.
2. Pick up one division that has direct contacts with customers and another division thatreceives calls from customers and then answer the following five questions:
2.1 Ratio of regular employees to part-time employees
2.2 Training for new employees and regular skill-up training
2.3 Efforts on delivering better customer service by sharing information based on dailyexperience
2.4 How are difficult questions and requests from customers handled?
2.5 How do you distinguish your organization from your competitors?
3. I understand that most of employees who are working at 116 call center are part-time
employees. I would like to know the criteria for hiring these employees. What are theconditions which govern hiring of employees through employee dispatching service
companies? Are these conditions similar for the hiring regular employees for 116 callcenter?
4. Who is responsible for educating newly hired employees? Please explain the content andduration of such training? When do you start giving these employees OJT? At the time of
beginning OJT, who becomes responsible for taking care of these employees?
5. How do employees learn about new products? Please explain training and seminars
relating to that.
6. I imagine that employees learn not only from normal training but also from theirrelationship with customers. How do employees share their experiences and what type ofexperiences they have shared this week?
7. I understand that you are trying not to let the customer wait for a long time when they wantto call you. And also, I understand that you are trying to persuade employees finish theircurrent work as soon as possible when a customer is waiting for getting across to them.
Please explain how do you make customers’ waiting time shorter?
8. Please explain how work is allocated among employees at 116 call center. What do you dowhen some employees commie absenteeism?

190

Appendix C
Partial Organization Chart of Sri Lanka Telecom Limited (in post-privatization era)
Chairman and Board of Directors

Company Secretary
Chief Internal Auditor
Chief Executive Officer

Legal Division

Senior Expert

Executive AssistantSecurity Consultant
Corporate Strategy

Metro

Customer Services

Marketing and IP

ITRegion 1
International
Services
Region 2

Region 3

Courtesy: Sri Lanka Telecom Limited (SLT), August 2003.

191

Network Planning andEngineering

Administration

HR

Finance

Appendix C1
Partial Organization Chart of Sri Lanka Telecom Limited (in immediately pre-privatization era)
Chairman

Secretary to the Board, Chief Legal Officer,
Chief Internal Auditor, Media Consultant,Industrial Relations Consultant

Board of Directors

Managing Director

Director
Network Development

GM
Planning&
Developm

GM
Projects

GM
Projects

Director
International &Support Services

GMInternationalGM
SupportServices

Director
Operations

GM
Metro

GM
Region１Note: GM - General Manager
GM - Switching & Transmission, GM - Outside Plant and GM - Suppliers
Credit Project were on par with other GMs.

Source: Japan International Cooperation Agency (JICA), Final Report 1996
(Volume I - Summary), p. 32.

192

GM
Region２

Director
Administration &Procurement

Director
FinanceGM
Human
ResourcesGM
FinanceGM
Procurement

GM
Mgmt.
Acct.

Appendix D
Partial Organization Chart of Regional Organization of Sri Lanka Telecom Limited
Chief Executive Officer

Head of Metro(1)

Deputy Headof
Region(Commercial
Management)(1)

Deputy Headof
Region(Facility
Management)
(1)

RTOs
(7)

OutsidePlant

Teleshops(9)

Head of Region 1(1)

Head of Region 2(1)

Head of Region 3(1)

Head ofProvince(3)

Head ofProvince(4)

Head ofProvince
(1)

RTOs
(9)

OutsidePlant

Teleshops
(6)

RTOs
(11)

Teleshops(8)

Courtesy: Sri Lanka Telecom Limited (SLT), August 2003.

193

Outside
Plant

RTOs
(7)

OutsidePlant

Faculty of Management and Finance
University of Colombo, Colombo, SRI LANKA.
Bachelor of Business Administration (Special) Degree Program/Bachelor of Commerce(Special) Degree Program
Methodology of Writing up Dissertation
SELECTED INPUTS FOR AN EXERCISE ON COMPILINGA REFERENCE LIST/BIBLIOGRAPHY USING APA STYLE
Chief facilitator: Dr. K. Kajendra, Senior Lecturer in Commerce, Faculty of Management
and Finance, University of Colombo, Colombo
Facilitator for the session: Dr. M. Saman Dassanayake, Senior Lecturer in Management
Studies, Faculty of Management and Finance, University of Colombo, Colombo/ Former
Visiting Professor of Business Administration, Hosei University, Tokyo, Japan
1.

Hettige Don Karunaratne, An analysis of long-term income inequality in Sri
Lanka, Sri Lanka Economic Journal, volume 1, number 2, 87-114, December
2000
Hiroyuki Fujimura, Managing the development of one’s own vocational skills inJapanese companies, Japan Labor Review, volume 1, number 3, 23-44, 2004
Akira Wakisaka, Promotion possibilities of female white collar workers in Japan,
Okayama Economic Review, volume 20, number 3, 79-105, 1988
Uditha P. Liyanage, Profiling the emerging Sri Lankan consumer, Sri Lankan
Journal of Management, volume1, number 2, 141-169, April-June 1996

2.

S. Jayasuriya and M. Knight-John, Sri Lanka’s telecommunications industry:from privatization to anti-competition? Sri Lanka Economic Journal, volume 1,
number 2, 22-57, December 2000

3.

Nelson Maina Waweru, Zahirul Hoque and Enrico Uliana, Management
accounting change in South Africa: case studies from retail services, Accounting,
Auditing & Accountability Journal, volume 17, number 5, 675-704, 2004
G. S. Sureshchandar, C. Rajendran and R. N. Anantharaman, The relationshipbetween service quality and customer satisfaction – a factor specific approach,
Journal of Services Marketing, volume 16, number 4, 363-379, 2002

4.

D. Wijesuriya, NTT: Sri Lanka’s single largest investor, Business Today, volume
2, number 5, 8-10, September 1997

5.

C. Dissanayake, IDD gateway liberalization: limit the market for two players –Suntel chief, The Business Standard, p. 1, August 23, 2002

6.

Kazuo Koike, The economics of work in Japan, LTCB International Library
Foundation, Tokyo, 1996

7.

Robert K. Yin, Case study research: design and methods, second edition, Sage
publications, Thousand Oaks, CA, 1994

8.

American Psychological Association, Publication manual of the American
Psychological Association, fifth edition, Washington, DC, 2001

9.

H. H. D. N. P. Opatha, Seva mandala kalamanakaranaya, H. A. S. R. Printers,
Nugegoda, Sri Lanka, 1995

10.

P. S. M. Gunaratne, Long term return reversals in the Tokyo Stock Exchange: an
examination of overreaction hypothesis, unpublished doctoral thesis, Universityof Tsukuba, Tsukuba, Japan, 1997
K. Kajendra, Customer orientation and organizational performance: a study of
selected Sri Lankan companies, University of Delhi, Delhi, India, 2003
M. Saman Dassanayake, Human resource development systems for customer careservices management in telecommunications companies: comparison of aJapanese-affiliated and a Swedish-owned firm in Sri Lanka, unpublished doctoral
thesis, Gakushuin University, Tokyo, Japan, 2004

11.

M. Saman Dassanayake, Transfer of a customer service culture to Sri Lanka by aJapanese company: a case study of Sri Lanka Telecom Limited, in W. D.
Lakshman, editor, The distant neighbours: fifty years of Japan-Sri Lanka relations,339-371, University of Colombo, Colombo, Sri Lanka, 2003

12.

Sri Lanka Telecom Limited, e-teleshop: the fastest way to buy online, retrieved
June 04, 2003, from http://directory.slt.lk/real/eteleshop.asp
Suntel Limited, Suntel services, Suntel packages, internet packages, tariffs,
connection charges and rentals, retrieved June 04, 2003, fromhttp://www.suntel.lk/pands