The Ritz-Carlton Hotel: Investigating Working Relationships Within A Hospitality Organisation In The UK - Essay Example

The Ritz-Carlton Hotel: Investigating Working Relationships within a Hospitality Organisation in the UK Introduction Hospitality is the most expeditious industry on the rise (Nashoba Valley Technical High School, December 2009). This paper aims to investigate the working relationship within an avant-garde hospitality organisation such as the Ritz-Carlton Hotel in London. The objective is to study the proper application of hospitality management theories and principles in cultivating, maintaining and utilizing human resource for the purpose of achieving their organisational targets. In addition, it gears to better understand the strategies governing such successful hospitality organisation—its goals, visions and mission, employee benefits and incentives among other things. Hospitality Management is the administration of people and services that is essential in the tourism industries in all parts of the world (The Ohio State University at Lima, n.d.). It is a multi-disciplinary major that provides proficiency and competence for the administration, marketing, and above standard operations skills in the accommodations, food, travel and other tourism services to people apart from their homes (Bureau of Economic Analysis, n.d.; MyMajors, n.d.) whereby uninhibited application of irrefutable management theories and principles is implemented (Degree Directory, n.d.; The Ohio State University at Lima, n.d.). It entails indisputable competence in the diverse features of a global business which is comprised of strategic planning, design and construction, finance and marketing, administration, supervision and operations (MyMajors, n.d.). Hospitality managers usually concentrate on specific areas of specializations which cater to particular functions. These could be human resources, food services, guest services and information systems. Nevertheless, top-level managers and executives should have an across-the-board knowledge and skills required for the effective operations of various departments and how they draw together (Degree Directory, n.d.). The Ritz-Carlton Hotel The legacy began with the distinguished Swiss hotelier Cesar Ritz known as the “King of hoteliers and hotelier to kings” who valiantly changes the definition of “luxury hotel experience" in Europe. With his personal philosophy of service and innovation, he commenced the Ritz-Paris and Carlton-London during his time. As a consequence, since the time of its commencement, the Ritz-Carlton Hotel Company, L.L.C.—more popularly known as The Ritz—is one of the most progressive luxury hotel groups in the world. The first branch was the Ritz-Carlton in Boston, Massachusetts set off on 1927 with a room rate of $15 per night. This had been the benchmark for all their other hotels and resorts worldwide due to its high standard and quality of service, dining and facilities; thus, become the hotel of kings and queens, movie stars and rich gentlemen. At present, the hotel group has 66 hotels with a total of 18,475 guest rooms in 23 countries—Bahrain, China, Egypt, Indonesia, Japan, Korea, Malaysia, Qatar, Singapore, the United Arab Emirates, the United States Chile, Jamaica, Mexico, Canada, Russia, Germany, Grand Cayman, Italy, Portugal, Spain and Turkey. Plans for further expansion are being considered. The Ritz-Carlton Hotel is an autonomous division of the Marriott International, Bethesda, Md. Other branches include The Ritz London, Hotel Ritz Madrid, Milan, Italy, BULGARI Hotels and Resorts. Financial Statements of certain companies are hard to come by mainly because it is very confidential in nature. They only give out a little information on the subject like the total revenues of the company and the rooms’ average occupancy which is 65.3% for a certain period (PR Newswire Association LLC, n.d.). And that is only for some branches of the company. In every business, profits come mainly from the customers. The more customers you get, the increase in profits is undeniable. This is true for the Ritz-Carlton hotel too. They are known for their customer satisfaction rule where they do whatever it takes to make a guest happy. They treat their customers like kings and queens. Corporate Culture The Ritz-Carlton is governed by the so-called Gold Standards comprised by the Credo, Motto, 3 Steps of Service, 12 Service Values, 6th Diamond and Employee Promise. The Credo affirms that ultimate mission of The Ritz-Carlton Hotel facilitating care and comfort to their guests by means of providing the first-class service. Their motto—“Ladies and Gentlemen serving Ladies and Gentlemen" epitomizes the excellent service provided by highly trained staff members. The 3 steps of service include a warm and sincere greeting; anticipation and fulfilment of each guests needs; and fond farewell. Ritz-Carlton believes in addressing the guests by their first name (The Ritz-Carlton Hotel Company, L.L.C., 2009). 12 service values are written in a laminated card carried by every manager and front-line employee and designed to form the aura that catch the attention of luxury travellers. Examples of these values are “No. 1: I build strong relationships and create Ritz-Carlton guests for life” and “No. 10: I am proud of my professional appearance, language, and behaviour” (Gallo February, 2007). The 6th Diamond symbolizes a new scale in the hospitality industry as well as the 3 levels for attaining both employee and customer commitment—the mystique, emotional engagement and functional. The Employee Promise encompasses that the Ladies and Gentlemen or the staff members of Ritz-Carlton are considered the central resource of their service commitment to their guests (Ritz-Carlton Hotel Company, L.L.C., 2009; The Ritz-Carlton Club, 2007). Organisational Structure and Practices A hotel organisational structure outlines the responsibilities in addition to the activities that should be carried out by the departments of the hotel. It is essential to have a hotel organisational structure as it warrants optimal profitability from every facility of the hotel—the rooms, restaurants and bars. In addition, this structure aims to bring orderliness in the entire hotel operation starting from the front desk service until the human resources department (School of Applied Technology and Management, n.d.). The Ritz-Carlton organisational structure focuses on its employees and guests. Since the success of a hotel relies chiefly on the quality of employees, only employees with the required the talent and perseverance and have the same values and passion as the hotel are hired. As per the Employee Promise, employees are provided with the most advanced training and workshops and are given the opportunity to become innovative and creative as far as enhancing their jobs are concerned (Ritz-Carlton Hotel Company, L.L.C., 2009; The Ritz-Carlton Club, 2007). Moreover, incentives and rewards are available for employees who excel. The organisational structure of Ritz-Carlton Hotel is very much similar to the outlined made by School of Applied Technology and Management (n.d.) (see Appendix A). Rooms Department. According to the 1995 statistics conducted by the U.S. Lodging Industry, margin of hotels revenues are generated from room sales. It is normally consists of five departments—the front office, housekeeping, reservation, telephone and uniformed services. Food & Beverage Department. The 1995 U.S. Lodging statistics shows that next to room division, F&B Department is the also a revenue generator. This consists of banquets, bars, catering functions, clubs, coffee shops, lounges, quick service, specialty restaurants and table service. Sales & Marketing Department. The Sales & Marketing Department of a typical hotel includes advertising, convention services, public relations and sales. Then again, this department might be placed under the reservation department in cases when group arrivals, hotel size, staff size and volume business is considerably low. Accounting Department. Monitoring the financial activities of the property, the Accounting Department undertake various activities— accumulating operating data, compiling financial reports, collecting amounts owed, distributing unpaid statements, making bank deposits, paying of outstanding invoices, processing payroll, securing cash loans and other control and processing functions. Engineering and Maintenance Department. The proper maintenance of the structure of the property and the electrical and mechanical equipment is the chief concern of this department. It is sometimes tagged as Maintenance Division, Property Operation or Maintenance Department. Security Department. This department is usually manned by security officers or retired police officers who are screened from in-house personnel. They are in-charged in assuring guests, visitors, and employees of their safety and security, guarding supervision equipment and patrolling the premises. Human Resources Department. The duties and responsibilities of the HRD includes administration of employees paperwork, attendance monitoring, computation of employees salaries and wages, incentives and withholding taxes, regulation of employees safety and healthy working conditions, maintenance of good relations with labour unions aside from the external & internal recruitment. Other Departments. Some graded hotels can possibly have additional departments such as casinos, conference centres, recreation facilities and retail outlets. Ritz-Carlton practices the Strategic Development whereby hotel managers are allowed to make wiser decisions. This is a three-way procedure that consists of Planning Process, the Macro-Environment Analysis and the Deployment Process. During the planning process, the foundation, mission, methods and strategies are either confirmed or modified and then strategic mandates are selected before formulating objectives and targets. Additionally, the macro-environment analysis process allows hotel managers to forecast the expected outcome and the potential state of the company. For these procedures, it is imperative to determine the needs of the customers and the market as a whole as well as analysing the issues that were presented to them such as the customer complaints and claims. Careful research and studies are helpful when addressing these problems (Baldrige National Quality Program 2001). Ultimately, the information gathered during the first two processes is put into action. This is the deployment process. All these procedures are systematically planned to guarantee that standards are met thus creating a profitable market. They conduct market researches that converge on the quality of the hotel development and its operations. Problems are identified through the submission of daily quality production reports drawn out from the data submitted by staff members assigned in different department across the hotel system. And, a weekly group meeting is also set to re-evaluate the products and services being offered by the hotel in conjunction with the market growth and development and the hotel revenues. Through the utilization of these measures, problems are guaranteed to be avoided first-hand (Baldrige National Quality Program, 2001). Ritz-Carlton recognizes its staff members during staff meetings and on the communication bulletin board posted by the Human Resource Department. They are referred to as “Ladies and Gentlemen serving the Ladies and Gentlemen” and treat them as colleagues. Through the principles of trust, honesty, respect, integrity and commitment, the hotel cherishes and cultivates the talent of the staff members for their own benefit as well as the company. Its organisational structure rests basically on their employees and how they treat them with care so as to ensure that they do their job well plus the hospitality they give to their customers. All of it will also reflect on the hotel guests. Likewise, compliment cards are passed between staff to acknowledge excellent service rendered by their colleagues (Financial Times, n.d.). Known for excellent customer satisfaction, they abide by the principle “the customer is always right.” In the emergence of unlikely customer encounters, they are expected to act appropriately on first notice in spite of whatever problem or the customer complaint. Also, other staff members are encouraged to make themselves available in case their colleagues need assistance (Baldrige National Quality Program, 2001). They are also specially trained to take note of the likes and dislikes of some customers and then input the data in the hotel information system under the historical profile of these customers for the purpose of providing personalized service in their future visits. Two Essential Positions in a Hotel The hotel managers handle very critical job responsibilities as they are the ones responsible in providing leadership skills required by the organisation in order to facilitate decision making; judging performances based on the effectiveness of supervisors in terms of stimulating motivation and giving instructions; organisational planning, coordinating and channelling efforts and resources in order to meet financial goals; and assigning, communicating, controlling, directing, and organising to produce competent staff members. Moreover, they are also accountable for the employees’ training, review and ensure quality hospitality service, upholding of the hotel equipments and systems, manage the inventory of rooms in terms of sales and budgets department finances (School of Applied Technology and Management, n.d.). General Manager. The General Manager handles very critical job responsibilities as they are the ones responsible in providing leadership skills required by the organisation in order to facilitate decision making; judging performances based on the effectiveness of supervisors in terms of stimulating motivation and giving instructions; organisational planning, coordinating and channelling efforts and resources in order to meet financial goals; and assigning, communicating, controlling, directing, and organising to produce competent staff members. Moreover, they are also accountable for the employees’ training, review and ensure quality hospitality service, upholding of the hotel equipments and systems, manage the inventory of rooms in terms of sales and budgets department finances (School of Applied Technology and Management, n.d.). Front Office Manager. A Front Office Manager paramount task is assigning staff for the Front Office. The schedule of employees should be based according to business volume, seasonality, and available staff in hand. Normally, the Traditional Scheduling scheme is applied in assigning workforce. This scheme presupposes that every employee have a 40 hours a week work schedule. Since hotels guarantee 3 shifts per day, each shift is comprised of 8 hours (Gultek, n.d.). Organisations such as hotels that has a round the clock staff schedule, the actual character of the personnel is basically irrelevant provided that there is the presence of different combinations of skills and the number of staff available on-site is predetermined. Most often than not, the operation begins with a definite set of schedule, however, it becomes completely altered in order to accommodate staff requests specially during holidays and time off (C-Desk Technology, 2005). The initial step the Front Office Manager should take is to make a guesstimate or forecast regarding the needs of the department for a specified time period. This can be achieved through a thorough analysis of the sales history of preceding events, recent functions and reservations, and anticipated number of walk-ins, stay-overs, and check-outs. This will help in determining labour requirements. Secondly, the Front Office Manager should cater to the requests of the hotel as well as the needs of the staff. The third step is to compute for the expected payroll. This will require the Front Office Manager to review each employee category. Ultimately, he/she should prepare a costing summary according to category for the purpose of comparing projected income for the anticipated room sales versus the anticipated payroll (Gultek, n.d). Factors that Hotels Should Consider in Employing Subcontractors There are instances when Ritz-Carlton needs to engage in subcontracting in order to supply the hotel with the appropriate manpower. Subcontractors are specialty companies or agencies providing highly trained employees to big companies that require additional manpower to carry out a particular scope of work. Because of their specialized feature, subcontractors more often than not can provide highly trained individuals who are capable of producing more superior quality of work and in such a manner that is considerably more cost effective (Vogel, 2007). At the in an Annual Conference held in 2007 by the International Society of Hospitality Consultants (ISHC)—a professional society with 190 members in 21 countries, members took part in a succession of roundtable debates in order to distinguish the ISHC Top Ten Issues in the Hospitality Industry. They cited more than 100 various issues and one of these issue is the subject on why companies such as Ritz-Carlton hire subcontractors to fill in different positions in their hotels. The discussion concluded with the top 10 reasons—labour & skills shortages or the lack of competent and experienced employees, construction costs which refers to the rapid increase of cost of construction and renovation which can also be weigh against the cost in performing the actual process of hiring and training, the rapid change of technology whereby hotels can hardly keep up, the changing demographics and their impact on travel trends which is defined as the continuing retirement of the population, uncontrolled globalization and its impact on business travel, the future of hotel profits with respect to the balancing of the rising hotel expenses and the necessity to increase rates, branding or the justification of consumer perplexity over brand propagation and the concerns of investors over cross brand effects, the rapid growth of the distribution revolution which is fuelled by the growing popularity of web-based organisations, the impact of travel restrictions to the travel industry, the global emerging markets which greatly affects the wave of travel patterns and the capital availability which points to the confidence of investor and lender to invest in hotels e-Hotel Services (2006). There is a great difference between regular employees and subcontract employees. This depends on the company’s entitlement to manage and command the employees. This includes behavioural control, financial control, and relationship of the parties categories. Behavioural control indicates whether the employer have the right or the power over the manner the work is done; thus, proper training and instructions provided to the employees are vital factors to be considered. The financial control category specifies whether the employer is entitled to direct control of the cost-effective aspects of the job at hand. Things to be considered under financial control are sizeable cash outlays, expenses and opportunity to gain or shortfall of revenues. The relationship of the parties category refers to the how each participants deem their relationship. Under this category, the employee benefits and written contracts are discussed. Employee benefits for subcontractors would consists suitable working environment, accident insurance and supplementary training among others while written contracts mainly serves as evidence of the terms and conditions of the working relationship as well as the rights of both parties as far as the job is concerned. Conclusion Indeed Ritz-Carlton management values their employees. Not only that it helps staff members develop the skills required to achieve the objectives of the hotel, they also assure that they become the best in their fields; thus, creating a truly positive experience for the employees to become part of the Ritz-Carlton Hotel Company, L.L.C. The hotel group must have a highly structured hiring and assessing system as they are able to hire people with great motivation. These people are then, trained, given an encouraging environment to perform their jobs and, most importantly, provided with the freedom and opportunity to perform the jobs and enhance their skill. Many companies nowadays do not consider their employees’ well-being that is why they don’t usually succeed. Seeing how the Ritz-Carlton is growing every day makes one think of working for that company. The kind of management skills employed by the hotel managers of Ritz-Carlton is very efficient as it not only generates high income revenue for the hotel but also creates excellent customer experience and employees satisfaction. Managers are always aware of the issues encountered by the staff members and they keep track of things that will aid the hotel maintain its standards, reputation and revenue. Like other organisations, hotels like Ritz-Carlton also require subcontractors to fill in their manpower due to various reasons such as labour & skills shortages construction costs, rapid change of technology, uncontrolled globalization, the future of hotel profits, branding, the rapid growth of the distribution revolution and the impact of travel restrictions to the travel industry. However, in subcontracting the behavioural control, financial control, and relationship of the parties categories should be put into consideration to ensure that the purpose is not defeated, that is, to provide high quality service and customer satisfaction. References Baldrige National Quality Program, 2001. The Ritz-Carlton: a snapshot. http://www.quality.nist.gov/Ritz_Carlton_Hotel_Co.htm, Date accessed December 29, 2009. Bureau of Economic Analysis (n.d.) Leisure and hospitality: U.S. Department of Commerce. Degree Directory (n.d.) What is hospitality management?, http://degreedirectory.org/articles/What_is_Hospitality_Management.html, Date accessed December 26, 2009. e-Hotel Services (2006) Top Ten Issues in the Hospitality Industry for 2007 International Society of Hospitality Consultants: London. Financial Times (n.d.) The Portman Ritz-Carlton: Setting up our ladies and gentlemen for success. http://media.ft.com/cms/5aa22940-74a7-11db-bc76-0000779e2340.pdf, Date accessed December 29, 2009. Gallo, C. (February 2007). How Ritz-Carlton maintains its mystique. http://www.businessweek.com/smallbiz/content/feb2007/sb20070213_171606.htm, Date accessed December 29, 2009. Gultek, M.H.M. (n.d.) Case Study 201-The Art of Supervising Employees: Plattsburgh State University. Internal Revenue Service (n.d.) Subcontractors: United States Department of the Treasury. MyMajors (n.d.) Hospitality management major, http://www.mymajors.com/majors/HOTL_major.html, Date accessed December 26, 2009 Nashoba Valley Technical High School (December 2009) Hotel restaurant management, http://www.nashobatech.mec.edu/education/components/scrapbook/default.php?sectiondetailid=1320&linkid=nav-menu-container-4-24, Date accessed December 26, 2009. PR Newswire Association LLC (n.d.) FIRST AND FINAL ADD -- AQW180A -- Strategic Hotels & Resorts Earnings: United Business Media. Ritz-Carlton Hotel Company, L.L.C (2009) Gold Standards. http://corporate.ritzcarlton.com/en/About/GoldStandards.htm, Date accessed December 29, 2009. School of Applied Technology and Management (n.d.) Rooms Division Department: Bilkent University. The Ohio State University at Lima (n.d.) Careers in Hospitality Management, from http://www.lima.ohio-state.edu/academics/hospitality.html, Date accessed December 26, 2009. The Ritz-Carlton Club (2007) Our Culture and Gold Standards. http://careers.ritzcarltonclub.com/standards.asp#diamond, Date accessed December 29, 2009. The Ritz-Carlton Hotel Company, L.L.C (2009). About us, http://corporate.ritzcarlton.com. Date accessed December 29, 2009. University of California Berkeley (n.d.) The Lodging Industry - Ritz-Carlton Naples, Florida, haas.berkeley.edu/Courses/.../BA280-1/handouts/hotelpres.ppt, Date accessed December 29, 2009. Vogel, P. (2007) Fundamentals of a Construction Project: Emory University. Appendix A Ritz-Carlton Sample Organisational Chart Sample Hotel Organisational Chart Read More