The Ritz-Carlton Difference - Case Study Example

At the Ritz-Carlton, employees are not separated from the company but are immediately apart of the company as soon as they are hired. According to the hotel's motto employees are considered as valuable and important as the customers they serve, “We are ladies and gentlemen serving ladies and gentlemen” (McDonald, 2004). The company believes that its employees are its greatest assets and should be treated as such.

The hotel is very selective in hiring employees that they believe will be suitable for the job. They take into consideration the perspective of employees' personalities and attitudes rather than just hiring based on experience. This method allows the hotel to select employees who not only will provide excellent customer service but will also be happy with the job they are doing. According to a director of training at one of the hotel's locations, “If you want to achieve service excellence, you must select people who want to go with you” (Lampton, 2003). After they are hired, the hotel provides all employees with extensive training that prepares them to face any difficulties that they may encounter on the job. It is estimated that the Ritz-Carlton spends an average of $5000 training each new hire (McDonald, 2004).

The secret to Ritz-Carlton’s high employee retention rate is not high wages or perks. Wages and benefits are equivalent to any other luxury hotel. The key to the company’s high retention rate is creating an environment in which employees feel that they are valued members of a dedicated team and are treated with respect. Employee birthdays are celebrated along with employment anniversaries (McDonald, 2004). Hotel leaders have high expectations from each staff member but do not expect them to perform tasks that they cannot accomplish. These methods are proving to be very effective since the annual employee turnover rate in Ritz-Carlton hotels is 25% while other luxury hotels have a rate of 44% (Lampton, 2003).

Employees are involved in the process of change rather than having it forced upon them by hotel management. For example, at some hotel locations employees are videotaped performing everyday duties such as setting tables. Later, participating employees watch the videotape with management and discuss ways in which their service can be improved (Lampton, 2003). In addition, every employee has the power to spend up to $2,000 to resolve a guest’s problem without having to ask management for approval. This hands-on method results in a high employee satisfaction rate by giving employees more control over their profession and motivates them to do a better job by involving them directly in the change process (McDonald, 2004).

The hotel has an open-door policy when it comes to accessibility. Dissatisfied employees can easily talk to hotel managers about any problems that they may encounter on the job and ask for guidance. On a routine basis, employees are involved in 15-minute daily talks in which they discuss the core values of the hotel such as excellent customer service. This method enforces enthusiasm among the employees because they have a chance to share their work experiences. The Ritz-Carlton is one of the very few large companies that focuses attention on core values daily (McDonald, 2004).

Although the hotel does an excellent job at making employees, feel valued and provides excellent training at times its methods can be a little aggressive. The hotel follows a method referred to as immediate corrective action meaning that mistakes are fixed as soon as they are caught. For example, employees are encouraged to be constantly on the lookout for Mr. Biv. This refers to mistakes, rework, breakdowns, inefficiencies, and variation in work processes. Employees are expected to immediately report any mistakes they witness. Under this mindset, employees may feel pressured to report the mistakes of other employees, which could lead to internal conflict rather than fostering a healthy work environment (Lampton, 2003).

To help employees feel less pressured, the hotel should consider a less aggressive problem-resolution method. For example, instead of expecting to report minor errors immediately a weekly log should be set up. At the end of each employee’s workweek, they should write down any minor errors they may have witnessed. This approach will help employees relax and perform their daily duties more efficiently because they are under less pressure.

The Ritz-Carlton also has a strong policy when it comes to employee failure; “The employee who gets off track ethically is out. There is no coming back, no compromise” (Lampton, 2003). This rigid policy can cost the hotel the loss of valued long-term employees who made one error in judgment. The hotel should treat the errors of its employees on a case-by-case basis rather than following such uncompromising policies. By treating each case separately, the Ritz-Carlton can strengthen its philosophy of treating Read More