The Twenty Basic Principles for Ritz-Carlton's Employees - Case Study Example

Empowering Employees: The Ritz-Carlton Hotel Company Recently, an increasing number of organisations, particularly within the service sector, have preferred to implement empowerment and employee involvement strategies. Most of these business organisations are trying to improve their customer service reputation. Thus, the adoption of empowerment strategies has gained major importance within the service sector. Unluckily, several organisations chose empowerment strategies that are not appropriate to their particular business operations, needs, and circumstances. They were not able to form a suitable combination of the needs of their organisation and the most appropriate empowerment strategies. On the other hand, there are companies that were able to successfully adopt empowerment strategies, such as the Ritz-Carlton Hotel Company. The Ritz-Carlton Hotel Company was based on the ideals of innovative customer service and is widely known for pleasure-seeking comfort and luxury. The Ritz-Carlton is a pioneer in employee training. It has transformed the service industry by achieving the Malcolm Baldrige National Quality Award. It was the only hotel company to receive the prestigious award. Currently, the Ritz-Carlton Hotel Company is supervised by Marriott International, Inc., a top international hospitality company. Mr. Marriott has created an approach that places emphasis on their human resources and provide greater satisfaction and value for the company and its employees: “1. Get it right the first time, 2. Money isn’t the only thing, 3. Create a caring workplace, 4. Promote from within, and 5. Build your brand”. Empowering employees and improving customer service were the thrusts underlying the self-motivated and autonomous work teams at the Ritz-Carlton Company. After receiving the Malcolm Bardrige Award, the Ritz-Carlton Company realised that empowering their employees, especially their front-line staff, would further motivate the staff and create an excellent customer service. With these objectives in mind, the company’s executive group embarked on an empowerment programme. After a thorough assessment of existing processes in each department, the executive group discovered several management duties for potential reassignment to hourly staff. These involved projecting budgets, interviewing and choosing members of the team, collecting payroll accounts, and creating work schedules. The company created a mission statement that was approved by the entire staff. The front-line staff began the trial with self-directed activities by acquiring the duties of the front-office director. As an encouragement the company provided the employees with a higher pay. The programme was a remarkable success. Even though management positions were removed, nobody was laid off, and new designations were created for the executives and the self-directed, empowered employees. During the programme the managers tried to regularly talk with employees and keep them completely updated. The service sector prospers on making sure that all, or, if not, all of its customers are satisfied. Ritz-Carlton already realised that the key to excellent customer service is empowering its employees. The company believes that employees should be encouraged to think or decide promptly to successfully meet the demands of the most challenging customers. Employees should also have self-determination and liberty to take action. If there is something wrong, the employees cannot wait for the consent of the management to act. The staff should act right away. The chief operating officer of Ritz-Carlton, Simon Cooper, reveals that empowerment strategies have guided his company towards international success. He explains that their employees are called “ladies and gentlemen, because they are serving customers who are ladies and gentlemen. A majority of our guests are well-travelled, wealthy, well-informed, have high expectations, and can buy anything... So you train your ladies and gentlemen that the most important thing they can do is create a guest for life, and if that means that they must drop what they’re doing to help a guest,... they should do it.” The employees were granted the power to decide for the company. But the company does not recognise or reward this ability to make prompt decisions with monetary incentives. Rather, the company puts their faith in non-monetary recognition: “We believe ladies and gentlemen should be making each guest’s stay memorable because they want to do that, not because they get compensated for doing that.” Ritz-Carlton employs work teams to collect feedback, comments, or opinions to create ‘zero-defect’ customer service techniques. These strategies cultivate knowledge and understanding of the ways employees can strongly affect the quality of customer service. Employee perception of the firm dedication of the management to high-quality service is established through work teams. They express not just the confidence of the management in employee decision to resolve service issues but also that the company is eager to invest in its objective by compensating work time spent for employee training, involvement, and empowerment. Basically, the Ritz-Carlton focuses on culture, people, and in empowering employees for relationship-building. The company establishes principles for relationship management. It empowers employees to strengthen relationship activities. In an organisation where levels of employee retention are low, the value and trust the organisational culture endows its people is well-known. The Ritz-Carlton introduces The Twenty Basics principles for employees, majority of which are based on the value of relationships. For instance, the ‘employee empowerment value’ encourages quick response to customer complaints, not the possibility of passing them on to somebody else or to cower behind management authority. Valuing employees and motivating them is the main ingredient of Ritz-Carlton’s zeal and success. The hotel is definitely not for everybody. It specifically caters to the rich and famous. But to make sure all their guests have an experience greater than that of their rivals, the hotel highlights relationships between their customers and employees as the major way of creating such distinction and strengthens this through building a work environment favourable to it. The company knows that their people are the core component of relationship strategy as execution of these strategies can only take place through them. The service sector, particularly the hotel and restaurant industry, is usually linked to a rigid organisational hierarchy and low remunerations. These usually run counter to employee empowerment strategies which are a major component of relationship management. The Ritz-Carlton Hotel Company is, without a doubt, the leader in front-line staff empowerment. Every employee has flexible resources for resolving issues. Every employee has the power to offer bonuses like free meals, room upgrading, and other frills. When a customer has a problem or complaint, employees are both allowed and obliged to discontinue their routine tasks and promptly respond to their customers. To facilitate quality service, the decision-making must be immediately available to customers. The development and differentiation of rigidly organised service elements allow front-line staff to respond to customers more freely, that is, with less supervision. Empowering front-line staff to self-manage, rather than to constantly wait for the management’s decision, also liberates employees from concentrating entirely on simple transactions and motivates them to interact more sincerely with customers and have a stronger effect on the company’s profitability. Read More