Human Resources in the Ritz-Carlton Hotel - Case Study Example

1.0Introduction reference The Ritz-Carlton Hotel Company LLC (Ritz-Carlton) is a US-based hotel chain that has consistently topped several honors lists due to its acclaimed and unique service delivery unequalled within the service industry. The hotel chain has over 70 hotels in major cities within the US and 23 other countries is part of the Marriot International group the world largest hotel chain. Ritz-Carlton has evolved its service credo around its fabled Gold Standards that emphasize on excellent value service conspicuous among other rival firms in the industry (Michelli, 2008). The Ritz-Carlton legendary status of excellence unparalleled in the service industry has made the hotel chain bag two Malcolm Baldrige National Quality Awards in 1992 and 1999. Additionally the hotel has consistently topped Zagat Survey food service rankings (Ritzcarlton.com, 2010). Ritz-Carlton has also set up the Ritz-Carlton Learning Institute and Ritz-Carlton Leadership Center that train the company’s staff and other firm’s executives. The company was ranked top by Training magazine in the ‘Training Top 125 Winners’ list in 2007 (Michelli, 2008). Background The Ritz-Carton hotels were started in Paris by Cesar Ritz from Switzerland in 1898. With a vision of establishing, luxurious hotels esthetically designed with matching excellent service, Cesar Ritz later in 1900 opened several hotels starting with the Carlton hotel in London and others across Europe. He later franchised the Ritz-Carlton brand name with first US hotel opening in New York in 1910. However, the Ritz-Carlton hotels like other sumptuousness businesses were adversely affected by the great depression of the 1930s and World War II, leading to most of the US hotels going bankrupt with the exception of the Boston branch (Ritz-Carlton, 2000). In 1983, the US rights of the hotel chain were acquired by William B. Johnson a developer who immediately revived the Boston Ritz-Carlton to its former glory. In 1988, he acquired the global rights of the hotel chain and used a team led by hotelier Horst Schulze to revive the rest of the hotels. Schulze had initiated a number of reforms centered on the hotel’s established ideals of excellent service grounded on equitable employee and customer relations that instantly paid dividends as it emerged from its doldrums (Regani, 2007). The Marriot International group later purchased the hotel in 1996 acquiring 49 percent stake and in the entire holdings in 2000 when Schulte left the group. Objectives This report is aimed at exploring how the Ritz-Carlton hotel chain has managed to sustain its acclaimed high standards of service unparalleled in the service sector and how they manage to retain the loyalty of their staff that often amazingly inject extra hours and service all without suffering revenue setbacks or employee fatigue all through the hotel chain. US Hotel Industry A Datamonitor Report (2007) on the US hotel industry based on a 5-year period of 2002-2006 revealed that the sector registered robust growth at 6.9 percent with a moderate rate of 8.9 percent in 2006. The US hotel sector has been valued at $133.7 billion, which is more than 27 percent of the total global valuation (Meloun, 2009). The largest firms in the industry include Cendant Corporation, Marriott International, Inc. encompassing Marriott, Ritz-Carlton, Courtyard, Renaissance, Fairfield Inn hotels and Hilton Hotels Corporation. The Marriot Group has the highest number of employees (150,000) followed by the Starwood Hotels & Resorts Worldwide (110,000) (Datamonitor, 2007). Table 1: US Hotel Industry: Leading Corporations Hotel Group Hotels Employees Cendant Corporation (Avis, Budget and Ramada) 84,000 Starwood Hotels & Resorts Worldwide Inc. (Sheraton, Westin, Four Points, W, Meridian, St. Regis), 110,000 Marriott International, Inc. (Marriott, Ritz-Carlton, Courtyard, Renaissance, Fairfield Inn) 151,000 Hilton Hotels Corporation (Hilton, Doubletree, Embassy Suites, Hampton) - Source: DataMonitor (2006)/Meloun, 2009 The Development of Ritz-Carlton Quality Service With a rich tradition of excellent service, the Ritz-Carlton brand was doubly enhanced after the engagement of Schulze in 1988. Schulze recognized that though the hotels had good service record, it was rather inconsistent both in service and employee behaviour. He detected a lack of clear sense of orientation among the staff as not all were passionate about their duties and no clear standardisation could be established. There was also no clear uniformity between diverse hotels in the level of service with each hotel having its own unique culture and standards. This made Schulze term them ‘the best of a poor lot, but clearly not god’ (Regani, 2007, p. 5). Schulze therefore embarked on measures to establish conformity and standardisation of service across the hotels while aiming for even higher levels of service. This required initiating austere principles for the service presented to the customers and instituting the mannerism acceptable from workers towards customers and among individually (Cornell University, 1993). The Ritz-Carlton Gold Standards The pinnacle of these reforms was the establishment of the Ritz-Carlton Gold Standards that outlined the company’s Motto, Three Steps of Service, The Employee Promise and The 20 Ritz-Carlton Basics[Appendix 1,2,3 & 4] (Michelli, 2008). Apart from establishing employee standards, Schulze reformed the recruitment criteria of company staff with the revamping of the human resource departments. The fresh initiatives included intensive training programmes for the new and older employees with greater emphasis on customer-oriented programs. Staff Selection To ensure the hotel would recruit the best employees, the Ritz-Carlton management has created specific blueprints that guarantees only the correct calibre of staff are employed. Those chosen are instantly inducted into a thorough two-day familiarisation tour and subsequently in training programs (Ritz-Carlton, 2000). In this orientation stage, the staff is instilled the company’s ethos and culture including appreciation, rewards and official recognition process. The employees are trained in solving hotel guests hitch at whatever cost even if not directly responsible. Ritz-Carlton employees are carefully selected through a ‘benchmarking’ criterion, which means that a preferred candidate is matched against the best performer in a department from within their ranks or other comparable firms, to obtain the ideal employee. After selection of potential candidates, a mannerism-questionnaire is administered to ascertain their character. Ritz-Carlton team-building ideals are instilled subsequent to further induction with a departmental trainer for active on job training (Cornell University, 1993). Problem solving is stressed, as the new worker is allowed to handle some tasks, while client service is underpinned as the firm’s forte. Conventional formal salutations like ‘Good Evening’ or ‘Good Day’ are the dictum while contemporary informal greetings like ‘Hello’ or ‘Hi’ are severely curtailed. Similarly, in case of fine performance, phrases like ‘You are Welcome’ rather than ‘ok’ were deemed the norm (Regani, 2007). This altitude heavily imparted to staff has made Ritz-Carlton have one of the highest loyalty levels among its clientele ranked at over 51 percent for repeat customers (Lampton, 2003). The Ritz-Carlton management led by Schulze researched on companies that had successfully implemented outstanding service reforms including Rank Xerox and Motorola to learn how to enhance their quality standards Continuous Training and Appraisals All employees are held responsible for the wellbeing of the guests and are continually assessed accordingly. Nevertheless, the management also quantifies the contentment of staff including satisfaction and motivation levels. Staff training programmes are conducted for 21 days after which the candidates are re-tested before being fully absorbed in the hotel. Nevertheless, the staffs are later assessed after one year to be retested as more training is conferred (Cornell University, 1993). Training is synchronized by the Ritz-Carlton Leadership Center, School of Performance Excellence which has training programs for each category or department that are continuously administered. One of the most incredible on job training strategies is the roll call prior to every shift change, conducted three times a day and reinforced every Monday among all the global branches. This seemingly arduous task for outsiders is nonetheless considered critical as management keeps in touch with its staff enhancing cultural and work ethic basics. Empowerment Ritz-Carlton allows every employee a maximum of $2,000 expense to solve client’s complaints at own discretion without seeking authorisation (Ritz-Carlton, 2000). Employees are encouraged to seek out any probable hitches solving them before they erupted into major catastrophes. This has enhanced the ideal of taking due responsibility for shortcomings personally. Ritz-Carlton management prides in empowering employees, delegation, and not being apprehensive of them making mistakes (Davis, 2007). Ritz-Carlton emphasis on internalised cultural cohesion among its staff in addition to empowerment has made it one of the most popular employers despite the rigid standardised rules on customer service. Employee development is actively practised with most promotion coming from the ranks while management mingle openly with other staff hence dispelling the rigid rules existing in the organisation. Criticisms Jarnagin and Slocum (2007) have asserted that the legendary passionate employee loyalty displayed by the Ritz-Carlton Hotel staff to the Mythopoetic-Leadership Model advocated by, Joseph Campbell. This model alleges that organizations and their leaders evoke an enchanted culture about the firm’s traditions, achievements and status that instilled into the staff to ensure a sense of shared community attainments. This becomes part of their ‘DNA’ of the staff embodied in a culture of ‘who we are and what we do’. (Jarnagin and Slocum, 2007). The Ritz-Carlton has nevertheless made customer service a major competitive edge by going the extra mile in personal service and efficiency. Other critics have alluded to the intense much pressure on staff because of the rigid ‘suffocating’ rules. This is said to produce robotic individuals only rehearsed into conforming to the rules instead of spontaneous natural outlook. It is therefore argued that it may be difficult to maintain a stability of personal and professional consistency (Regani, 2007). Extreme standardization has also been criticized as client service should be based on particular situation and bearing f the customer rather than falsified affability. This also is strenuous on employees forced to ignore divergent solutions and strictly follow the guidelines. (Regani, 2007). Conclusion The Ritz-Carlton hotel group is one of the best examples of excellent customer service that does not compromise employee benefits and dignity. Its blend of dignified, standardised, and invariable service embodied in its motto, are Ladies and Gentlemen serving Ladies and Gentlemen that is not only advanced to the customers but entrenched within its employee relations has made it an attractive employer and host for its many admirers. Nevertheless, there is a need to balance the many strict guidelines with flexible rules that can ease the strain of the workers in the organisation. Read More