Advantages and Disadvantages of Ritz-Carltons’ Training ...



University Centre “César Ritz“

Ritz-Carlton’s Human Resource Management Practices

and Work Culture

Submitted on

Wednesday, 10th December 2008

by:

182538

182520

182515

Word Count:

1.575

Submitted to:

Mr G. Cocker

MGT 351 Organizational Behaviour

Executive Summary:

• The first Ritz-Carlton opened in 1898 in Paris and since then a lot of changes took place which led the company to the nowadays success.

• Training methods and the introduction of globally accepted standards are important to ensure quality

• Advantages are high customer and employee satisfaction

• Disadvantages are the lack of individuality and high costs

• Training reduction would support employees individuality

Table of Content:

Introduction - 4 -

Short Historical Overview - 4 -

Ritz-Carlton’s Training Methods - 5 -

Advantages and Disadvantages of Ritz-Carltons’ Training Methods - 7 -

Conclusion - 9 -

Reference-List - 10 -

Introduction:

Ritz-Carlton, belonging today to Marriott, implemented a lot of different training strategies during the last 30 years which led the company to success with increasing customer satisfaction, lower employee turnover and even winning prices for their training. The Case-Study “Ritz-Carlton’s Human Resource Management Practices and Work Culture” introduces exactly these training methods and focuses on the advantages, but disregards the disadvantages which could have a huge impact on the future success of the company.

With this report we want to point out these training methods, both sides of the medal with advantages and disadvantages and come at the end to a realistic approach for a solution.

Short Historical Overview:

The history of the Ritz-Carlton Hotel goes back to 1898 when Cesar Ritz, a Swiss hotelier, founded the first Hotel in Paris. He wanted to create perfect service combined with extraordinary luxury. In 1910 he established his first American hotel in New York with the help of the Ritz-Carlton Management Cooperation (RCMC) which is an organisation supporting franchise of the company. The RCMC helped to introduce the hotel to the American hospitality market but with the economical crisis and the Second World War from 1920 to 1950, the business declined and a lot of hotels had close down. The situation in the United States was very serious and the only surviving hotel was the Ritz Carlton in Boston.

With investing $75.5 million in 1983, Johnson Property bought the establishment in Boston, the label and in 1988 the global rights of Ritz-Carlton. The next big change for the whole organisation proceeded ten years later, as Marriott owned 99% of Ritz-Carlton. Since 2007, 63 hotels in 21 different countries all over the globe exist, representing high quality service. The credo of the company “Ladies and Gentlemen serving Ladies and Gentlemen” is exceptionally implemented with the help of a lot of training sessions to fully use the employee’s potential.

Ritz-Carlton’s Training Methods:

Being the first in the “Training Top 125 Winners” ranking, which Ritz-Carlton achieved 2007, reflects a really good training and recruitment way. The luxury hotel chain is interested in good recruitment to standardize and unify the norms and culture between all properties. Ritz Carlton needed a homogenous organism metaphor to overcome the problems and congenial the goal within the entire chain. A better understanding of the interconnectedness of the different departments was required to fulfill the goal of high customer satisfaction. (Rollinson, 2005)

The first action to reach this was the introduction of Gold Standards with a credo, a motto (“Ladies and Gentlemen serving Ladies and Gentlemen”), three steps of service, employee promise and the 20 basics. The fact that employees are called “Ladies and Gentlemen” intensifies the feeling of cohesiveness towards the company. Quality leader were engaged to put their improvement ideas and different standards into action to implement an “exceptional service culture” (Ritz-Carlton, 2007). A world wide database, called CLASS, and the later version “Mystique”, where all customer preferences as well as complaints were saved, was introduced to reach this goal.

The pre-selection of future employees starts already on the phone. Ritz Carlton has an ideal profile applicants have to fulfill, before getting invited to an interview. They look for empathy, passion, and if the candidate emphasize similar values as the company. Personality traits are essential to find the right job for the right person, to guarantee the best quality of service and to forecast future behavior (Rollinson, 2005).

Newcomers have to undergo a couple of training sessions. They start with two-day training and get to know the Gold Standards. The integration into the team is one of the most important parts within this time.

The On-the-job training and the “Day 21” Certification are further steps within the recruitment process. After 21 days going with a co-worker and getting to know the requirements, he/she gets feedback from an adviser. Recruits finish this on-going training with a certification about the Ritz-Carlton culture and the technical skills required for the department.

After a year, there is a second written test to certify “loyal service” and ongoing training-sessions of 100 hours per employee per year which costs the company $5000.

Ritz Carlton offers not only quarterly recruitment programs; they train their staff on a daily basis for 15 minutes before every shift change. Actual news and one of the 20 basics are discussed in these meetings.

On Mondays, they discuss the “Monday Wow”, what is about going the extra mile for motivating the employees. Another motivator, used by Ritz Carlton, is empowerment. Every worker has $2000 for coping guest problems and complaints. By making successful ideas for improvements, employees get extrinsic rewards in form of benefits within their “employee recognition program”. (Ritz Carlton, 2007; Rollinson, 2008, p.191)

Because of the customer transformation there was a modification of training programs within Ritz-Carlton. According to Chi, Director of HR in a Ritz-Carlton hotel, they are “more casual, informal and younger” (Ritz-Carlton, 2007).

The introduction of the 12 Service Values, compared to 20 basics, and more personalized and tailored service emphasized on emotions, instead of standardization, were the result.

Advantages and Disadvantages of Ritz-Carltons’ Training Methods:

All these above mentioned training methods bring a lot of advantages along which are not just influencing the customers’ perception but also the employees working attitude.

First of all, the employees’ communication improves with the ongoing training sessions and the daily line-ups ameliorating the team coherence. Due to the fact that the training is done in every hotel, standardization takes place and makes it much easier for employees to get relocated but still perform in high standards. The training reflects also the whole motto “Ladies and Gentlemen serving Ladies and Gentlemen”, because employees feel important and well treated which motivates them and as a result the service will improve. This motivation can be seen in tremendous changes regarding the employee turnover. During 12 years the turnover rate declined about 70%, from 90% to 30%. This decrease is a huge advantage because employees staying within the company stay with their knowledge about the guests. This knowledge cannot be transferred to new employees and therefore the “old” employees create value for the company.

But not only are the employees satisfied because of the significant training methods, but the guests are as well. For them the standardization means that their expectations are met due to the fact of consistently high quality service. With “guest-data-bases”, such as CLASS or Mystique, the guests’ preferences are saved and transferred to every location of Ritz-Carlton which helps increasing the customer satisfaction with “customer customization”. This can be seen in following numbers: From the 1980’s to 1992 it improved about 6%, being now at a present customer satisfaction of 97%.

The customer and as well the employee satisfaction, which are results from the enormous training sessions concerning service quality lead to the outstanding reputation of Ritz-Carlton.

Its work culture is a prime example for service excellence all over the world and several quality awards proved the efficiency of the company’s human resource processes. However, there is a downside of the highly standardized service methods

at Ritz-Carlton.

The amount of standards used in every service procedure leaves very little space for spontaneity and puts pressure on the employees. Although Ritz-Carlton tried to loosen up the standardization of procedures to emphasise on the emotional side of service, the focus on standards still constraints employees’ personality and service style. Repetitive rituals such as the daily line-up or the emphasis on the 12 rules of service values induce monotony and might even give an impression of a brainwash ritual. Due to the fact that Ritz-Carlton treats its employees very well and provides a strong organizational culture, the company also reserves the right to expect an employee commitment above average. Just according to the principle “Work Ritz-Carlton - Live Ritz-Carlton“ employees are expected to internalize the standard procedures and service values like a prayer and carry their value cards like a bible. For outsiders analyzing the company, Ritz-Carlton’s methods might seem terrifying, capturing and according to statements of ex-employees, the required commitment is extreme. The disadvantages for the company itself, concerning their strong culture and emphasis on standards, are the costs for establishing and maintaining these standards including training and constant development of the methods. Additionally the extreme internalization of the standards results in an inelasticity and loss of employees’ personality. As the implementation of the new service values showed, it is difficult to put new ideas and procedures into practice. Extreme standardization and an all-embracing service culture automatically result in a number of disadvantages, however, these have to be seen in relation to the advantages which made Ritz-Carlton known for its service excellence.

Conclusion:

All in all, Ritz Carlton’s implemented training methods are essential for the high quality and their success regarding increasing customer and as well employee satisfaction. The Gold Standards, the daily line-up and the quality control through quality leader are some of the important factors which gave the company the reputation they have nowadays. Analysing these methods does not only show the positive sides of the strict standards but clearly emerged also the disadvantages. Due to the strict regulations the pressure on employees rises tremendously and leads to a lack of individuality and missing spontaneity. Also the high costs of $5000 per employee per year should not be left out but highlighted as negative aspect. To use their opportunities Ritz-Carlton should retain their training programs but retain them a bit to keep the employees individuality, spontaneity and naturalness which would help to adapt to the changing customer profile.

Reference-List:

Rollinson, D. (2005). Organisational Behaviour and Analysis, An Integrated Approach. (ed.3). England: Pearson Education Limited

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