Empowering Employees: The Ritz-Carlton Hotel Company - Case Study Example

Section A. 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 (Kusluvan, 2003). 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 (Champoux, 2010). 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 (Kusluvan, 2003, p. 447). 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” (Kusluvan, 2003, p. 447). 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 (Newell, 2010). 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 (Champoux, 2010). 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 (Champoux, 2010). 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 (Kurtz & Boone, 2008). 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” (Kurtz & Boone, 2008, p. 321). 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” (Kurtz & Boone, 2008, p. 321). Ritz-Carlton employs work teams to collect feedback, comments, or opinions to create ‘zero-defect’ customer service techniques (Ford, Sturman & Heaton, 2011, p. 410). 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 (Ford et al., 2011). 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 (Newell, 2010). 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 (Newell, 2010, p. 176). 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 (Newell, 2010, pp. 176-177). 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 (Kurtz & Boone, 2008). 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 (Ford et al., 2011). According to Kusluvan (2003), 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. Section B. The Function of Culture in Firms/Organisations Culture serves numerous functions in organisations. These different functions facilitate the successful adaptation of an organisation to its internal and external environment. Culture endows members of an organisation a sense of identity and enhances their commitment to the organisation’s objectives. When the members of an organisation understand and appreciate the values of the organisation, they feel personally rewarded by their tasks. Employee motivation and commitment are boosted (Alvesson, 2002). Culture also provides employees a way to understand the value or essence of organisational activities. Managers can apply organisational symbols to help other members of the organisation appreciate the evolving features of their organisational identity. This is particularly the case with an environment that is unstable (Sims, 2002). According to Alvesson (2002), at times symbols can stay unchanged to make sure that some factors remain stable in spite of shifting circumstances; but there are times when symbols must change to adapt to the new culture. Culture supports organisational values, such as continuous improvement. Moreover, culture functions as a mechanism of control for behavioural patterns in an organisation. Rules that regulate and orient behaviour are an element of culture (Sims, 2002). If the rule the organisation aims to encourage is cooperation, then its culture should support and strengthen that rule. The organisational culture should be embodied by teamwork, group cooperation, and open communication. In addition, culture can be exercised as a potent instrument to put off unpleasant and destructive behaviours within the organisation (Parker, 1999). Rules can communicate definite messages that specific behaviours are intolerable. Basically, organisational culture is the entirety of an organisation’s practices, language, and values. Waters (2004 as cited in Marquis & Huston, 2009) identifies organisational culture as “the source of motivated and coordinated activities within organisations, activities that serve as a foundation for practices and behaviours that endure because they’re meaningful, have a history of working well, and are likely to continue working in the future” (as cited in Marquis & Huston, 2009, p. 279). This definition expresses the value and intricacy of the functions of culture within an organisation. Culture is an organisation’s ‘operating system’ and steers the organisation and its operations (Marquis & Huston, 2009, p. 279). Hence, the leader should assume a dynamic role in developing the form of organisational culture that will guarantee success. The more embedded the behavioural pattern and culture, the more difficult the process of change is for an organisation. Because of this rootedness of culture, the successful development of a new culture usually necessitates new leadership and support through external assessment. Several leadership scholars argue that there are four important cultural elements that a leader can change. These are (1) mentorship, (2) consistency, (3) empowerment, and (4) trust and trustworthiness (Marquis & Huston, 2009, p. 279). According to Alvesson (2002), these elements are always present as leadership attributes, irrespective of the general culture existing in the organisation, and thus, leaders have a specific function in forming organisational culture for their people. Organisations, especially those large ones, also have numerous and opposing values that form subcultures. Consequently, these subcultures create beliefs, outlooks, and behavioural patterns and affect how their members perceive and perform their specific duties and functions. A major challenge therefore for the leader is to identify these subcultures and take the necessary steps to form shared goals and ideals (Parker, 1999). According to Wooten and Crane (2003 as cited in Marquis & Huston, 2009), “Defining a collective mission is a critical first step in creating the team efforts that drive collaborative and productive work and communication” (as cited in Marquis & Huston, 2009, p. 279). It should be conclusive from these arguments that some form of culture would arise from any group of people who embody themselves as an organisation. Members of an organisation are consolidated—strongly or weakly, constructively or unconstructively—by their communication within the organisation as they make an effort to meet the organisation’s underlying objective, as well as their professional or individual objectives. An organisational culture develops from the intricate and unbroken system of communication among organisational members (Parker, 1999). Several scholars support a framework wherein organisation and culture overlap, with the process of organising taking place in culture and the process of building a culture taking place in organisations. These scholars also emphasises that culture is not a process intrinsic to an organisation. Instead, “culture making processes take place ‘inside,’ ‘outside’ and ‘between’ formal organisations,” (Parker, 1999, p. 82) leading to diverse forms of cultures. Organisational culture characterise the rewards and punishments that organisations can exercise. Several cultures deal with poor performance by declaring that the person is inappropriate for the job. These organisations transfer the individual to a new job and allow him/her to perform once more. Other cultures create particular punishments that involve dismissals and demotions (Sims, 2002, p. 304). Organisational cultures vary in the manner they employ reward mechanisms. Several reward mechanisms highlight an organisation’s overall performance, creating a sense that members belong to an intimate group. Other reward mechanisms emphasise individual performance, disregarding the bigger system; those organisations that use this type of reward mechanism create a feeling of individuality and self-determination (Sims, 2002, pp. 304-305). Furthermore, culture contributes to the integration of the processes and substructures of an organisation, which enables the organisation to successfully manage its different activities. Shared language arises inside a culture, facilitating communication. Theoretical factors emerge that sort out irrelevant aspects and direct emphasis on relevant concerns (Parker, 1999). Intuitive selection lessens the possibility that a person will become burdened by factors identified as irrelevant by the organisational culture. Moreover, the culture identifies group boundaries and conditions of group membership. Definite group boundaries boost group membership or feelings of belongingness in a group and commitment to the group’s objectives (Sims, 2002). Successful groups guide their members towards success. Organisational cultures characterise guidelines for power, guidelines for social structure, and how social status is established. Some cultures grant power and social status to high achievers. Other cultures grant power and social status to senior members (Sims, 2002, p. 307). Thus, the nature and value of interpersonal communications are characterised by the organisational culture. Furthermore, organisational cultures create and establish an ideology that identifies the organisation’s nature and objectives. An ideology is a group of fundamental principles that comprise the core beliefs entrenched in the organisational culture (Sims, 2002). The ideology comes out in narratives about previous accomplishments or depictions of organisation champions. The champions could still be inside the organisation or could have abandoned it a long time ago. Regardless, what each champion embodies gets embedded in the ideology and the organisational culture. The ideology is a powerful and at times overpowering push to action (Alvesson, 2002; Parker, 1999). Per se, the ideology is a vital component of an organisational culture that should be internalised and understood by the apprentice. All the functions of the organisational culture merge to fulfil an underlying function, which is the minimisation of unease, insecurity, and doubt in relationships. References Alvesson, M. (2002) Understanding Organisational Culture. London: SAGE. Champoux, J.E. (2010) Organisational Behaviour: Integrating Individuals, Groups, and Organisations. UK: Taylor & Francis. Ford, R., Sturman, M.C., & Heaton, C.P. (2011) Managing Quality Service in Hospitality: How Organisations Achieve Excellence in the Guest Experience. UK: Cengage Learning. Kurtz, D. & Boone, L. (2008) Contemporary Business 2009 Update. UK: Cengage Learning. Kusluvan, S. (2003) Managing Employee Attitudes and Behaviours. UK: Nova Publishers. Marquis, B. & Huston, C. (2009) Leadership Roles and Management Functions in Nursing: Theory and Application. UK: Lippincott Williams & Wilkins. Newell, F. (2010) Why CRM Doesn’t Work: How to Win by Letting Customers Manage the Relationship. UK: John Wiley & Sons. Parker, M. (1999) Organisational Culture and Identity: Unity and Division at Work. London: SAGE. Sims, R. (2002) Managing Organisational Behaviour. UK: Greenwood Publishing Group. Read More