The fee tendering and service quality issue revisited

Abstract

Purpose

It is a little over 20 years since mandatory fee scales were abolished by UK professional bodies. During this period fee levels have fluctuated with economic demand, and new procurement strategies such as partnering have been developed, but there is still a widespread view in industry that fee levels are too low. This view is shared by many professionals, and perhaps more surprisingly by clients, even in the current construction and property boom. The purpose of this paper is to report research on the link between competitive fee tendering and clients' perceptions of service quality in the UK property industry. The main hypothesis is that there is a causal relationship between service quality and the method of appointment of the professional.

Design/methodology/approach

The research involved unstructured interviews with clients and professionals and a postal questionnaire study of one 133 UK based clients. The questionnaire study was a repeat of a similar survey conducted eight years previously in very different economic conditions. The public and private sector clients each assessed the service quality received from a professional using a measurement scale developed from the generic service industry instrument SERVQUAL. The scale is used to test the main hypothesis and four sub‐hypotheses. There were twice as many private sector clients completing the questionnaires as there were public sector clients and the largest group of professionals assessed were General Practice Chartered Surveyors.

Findings

The results of the recent study are similar to the earlier one (in that evidence of the predicted relationship is not provided by the data) but there are some interesting differences in the results of both studies – fee tendering has declined in popularity, direct appointment has increased, but less than 5 per cent of the commissions were let on a partnered basis.

Practical implications

Property managers and other professionals may wish to make use of the service quality measurement scale in order assess the service they provide to clients.

Originality/value

The research provides confirmation that clients do not perceive that a lower standard of service quality is provided for fee‐tendered commissions. It also extends the already substantial body of research based upon the SERVQUAL measurement technique.

Citation

Hoxley, M. (2007), "The fee tendering and service quality issue revisited", Property Management, Vol. 25 No. 2, pp. 180-192. https://doi.org/10.1108/02637470710741533