The Ritz- Carlton Hotel Company Akanksha Kalra MBA 513
ABSTRACT
The HR functions of Ritz Carlton hotel are analyzed in this case. The Ritz-Carlton hotel chain is famous for its excellent service and for providing customers with the ex perience of a lifetime. Sucher describes techniques used by b y the company to train employees with its special service philosophy. New employees are chosen for their particular qualities – including including a willingness to serve others, drive and enthusiasm, and an optimistic attitude. Each employee always alwa ys carries a fold-out card, covering the company‟s Gold Standards – an an array of service principles. p rinciples. Training sets about bringing these principles to life and giving them meaning and the 7 day countdown procedure use to train new employees. ABOUT RITZ CARLTON CARLTON
James McBride is the general manager of the new Ritz -Carlton Hotel in Washington Dc .He is a proven expert of luxury hotel chain’s across Asia. The Ritz –Carlton –Carlton in Kala Lampur, won the title of the “Best hotel in Asia Pacific” and for two consecutive year “Best Business Hotel in Malaysia” is his recent achievements. For the first time Ritz –Carlton was opening a hotel that was a part of multiuse facility owned by Millennium Partners located in Washington DC. Ritz– Ritz–Carlton company had also signed contracts to signed five other hotels for millennium Partners. Christopher Jeffries came with the idea of luxury Hotel therefore targeting the Ritz– Ritz–Carlton and Four seasons, the two recognized hotel operators serving at the highest end of the market. . Following is the hierarchical chart of Ritz R itz Carlton and Millennium Partners. The Ritz Carlton Horst Schulze President and COO
Leonardo Inghilleri Vice President, Human Resources
Jean Cohen, Bill Rhodes, Jim Veil Regional Vice Presidents
Patrick Mene Vice President, Quality
James MC Bride General Manager Washington, D.C
Marie Minarich Director of Human Resources Washington, D.C
Nikheel Advani Executive Assistant Manager Food and Beverage Washington, D.C.
Janet Crutchfield Director of Quality Washington, D.C.
Millennium Partners Christopher Jeffries Philip Aarons, and Philip Lovett Founding Partners
Brian Collins Partner, COO Millennium Hospitality Partners, President
Steven Hoffman Partner
Ed Burns Owner Representative Washington, D.C.
Quality at the Ritz –Carlton
Partick Mene the chief quality officer at Ritz –Carlton in 1990 has a primary mission to and gives priority to the values and concepts of the Malcolm Baldrige National Quality Award criteria at Ritz –Carlton hotels. So Mene also had to convince Horst Schulze, the COO of Ritz –Carlton since 1984 of the importance of human recourses and (TQM) total quality management. Moreover the company designed more programmers to meet the customer needs such as safety protocol to protect the children of guests, and the service Quality indicators(SQIs). Service Quality Indicators (SQIs) Key Production Process
Service Quality Indicators
Measurement Location
Reporting Requirements
Individual and Group Reservations
Abandoned Calls: those that are not answered and the customer hangs up
Reservation Office
Send daily to department of Quality (DOQ) by close of
reservation Office
Warm Welcome/ Check-In
At point of Check-In
Send daily by end of second shift to DOQ
Guest Room Assignment
Unready guest rooms: any guest room that is not immediately ready for the guest when they arrive to register, regardless of the time of day; includes room re-locations during guest Check-In Room changes: guest requests repairs of room after Check-In
Front Office
Send daily by end of second shift to DOQ
Guest Room Condition
Room condition: customer requests repairs to their guest room
All departments
Send daily by end of second shift to DOQ
Hotel Cleanliness
Unacceptable Appearance of Public Area: identified during the Morning Process Missing or Damaged Guest Property/ Accident: number of claims/ incidents for the disappearance or damage of guest property(i.e., vehicles, vehicle keys, luggage, clothing, jewelry, valuables, etc.) or accidents involving a guest or employee that require care from a medical professional.
Public Areas
Send immediately after daily inspections to DOQ Send to DOQ immediately after each incident
Problem Resolution
At the time the incident is reported
Dilemma
Collins question that whether the seven day time frame limited the hotels ability to open at higher occupancy rate and to reach 80% occupancy in a shorter amount of time. Since the seven day countdown was only a small part of the pre-opening budget, the cost might well be worth the benefits. He questioned whether extra training would help the employees to further polish their service skills It was difficult to train new hires to meet the high expectations of the Ritz Carlton service standards in only seven days, but that was how the Ritz Carlton worked. “Service” can be elusive concept. What is the essence of The Ritz-Carlton experience? What is The Ritz-Carlton selling?
Ritz Carlton is basically selling the service as Schulze explained the Ritz Carlton philosophy to the new employees during their first day of orientation: “We are not in the hotel business. The hotel business is about selling rooms, selling food, selli ng the bar. We do those things incidentally, but our business is service. We charge for service. Our commitment to our customers is excellence in service. Service is our profession. “
“We are Ladies and Gentleman serving Ladies and Gentleman”
This is the motto of Ritz Carlton Company. Having a conversation with anyone who works there, and you will hear this phrase. Their challenge is to remember constantly to lift themselves up to the level at which they have placed their customers! We serve Ladies and Gentleman; let us act like Ladies and Gentleman. By visiting any of the Ritz Carlton locations around the world and you will sense this treatment. Every day at the Ritz Carlton begins with the “line up.” This process is the beginning of the shift for every employee of the organization, from the CEO on down. The concept is very simple: About ten minutes at the beginning of the day is spent discussing what is going to happen that day as well as discussing one of the basics of the Ritz Carlton model of service. These basics are found on the card described above that each employee considers being a part of his or her uniform and that deals with everything from greeting guests to using their names. This is why you ask any employee within the Ritz Carlton organization how often they talk about customer’s service; the answer is going to be the same: “Every Day.” The credo of the company consists of three statements: 1. The Ritz Carlton hotel is a place where genuine care and comfort of our guests is our highest mission. 2. We pledge to provide the finest personal service and facilities for our guests, who will always enjoy a warm, relaxed, yet refined ambience. 3. The Ritz Carlton experience enlivens the senses, in still well-being and fulfills even the unexpressed wishes and needs of our guests. The three steps of service are described as: 1. Give a warm and sincere greeting. Use the guests name if and when possible. 2. Anticipate and comply with guests needs. 3. Bid a fond farewell. Give guests a warm Good-bye and use their names, if and when possible. The Ritz Carlton “Basics” comprise a definitive list of guidelines that provide clear instructions for employees in dealing with their guests. For example, one of these reads, “Be an ambassador of your hotel in and outside of the workplace. The respect to the employees is the key factor of success as the Ritz Carlton show to their employees and it is also reflected in their policies, their diversity, and their understanding of the needs of the families that make up their companies. They are indeed extensions of a family with a corporate name. The selection committee of Malcolm Award in 1987, comprised of 300 experts in quality and business, named the Ritz-Carlton Hotel Company as a recipient twice in 1992 and 1999. No other entrant in the service division has been successful more than once. More recently, J.D. Power and Associates, a global marketing information services firm basing its awards upon survey responses from millions of customers internationally named the Ritz-Carlton Hotel
“Highest in Guest Satisfaction Among Luxury Hotel Chains” for 2003. The Ritz-Carlton led “in each measure of guest satisfaction.” For the two preceding years, the Ritz-Carlton had ranked second, competing for the top spot with Four Seasons, Fairmont Hotels and Resorts, and InterContinental Hotels. Additionally, the Ritz-Carlton merits fourth place ranking among the “strongest brands in the world,” according to Gerard van Grinsven, Vice President/Area General Manager, and Ritz-Carlton of Dearborn, Michigan. He has contributed significantly to the strength of the brand, leading the Ritz-Carlton Dearborn to become the most improved hotel in the system for 2002, according to monthly customer satisfaction ratings conducted by Gallup. Today fifty-six hotels, scattered from San Francisco to Seoul, Korea, from Boston to Bali, display the Ritz-Carlton logo. As every guest knows, you move f rom one Ritz-Carlton hotel to another without noticing a transition. You encounter no surprises, and certainly no disappointments. The hotel replicates its perfection, regardless of locale, climate, or language. HOW DOES THE RITZ CARLTON CREATE “LADIES AND GENTLEMEN” IN ONLY 7 DAYS?
Every successful organization have some plans and procedure to train new employees so in that very way they become well aware of their duties and responsibilities that what the Ritz Carlton do. They actually train there employees in 7 days so effectively, so then they are able to produce effective results. They use 7 day countdown to train new employees, the seven day countdown was a result of the revolution and refinement of the hotel-opening process, with standardization brought greater efficiency and relieved some of the burden placed on new managers and the leaders responsible for ultimately running the hotel. Individuals first encounter themselves as employees occurred over a month after they have been hired, when they showed up for the beginning of the seven day countdown. The first two days were devoted entirely to orienting employees to the Ritz-Carlton environment and the remaining five days involved more specific skills training and trial run of service delivery. James McBride response to Brian Collins’s request:
In the training and development process, employee orientation plays a very important role which helps introduce employees to the jobs, colleagues and organization culture. Orientation can achieve significant cost saving(Exhibit 1) and can also reduce the nervousness of new employees. It can help improve the relationship between the management and the new employees. Through the 7 day orientation process Ritz Carlton was able to provide a standard training to every employee so as to be established in what they do best- „Personalized Service‟. The 7 day countdown orientation should be lengthened due to the following reasons: As it is evident from the case “My week as a room service waiter at Ritz” the seven day orientation was fast paced and there was still a lot of ambiguity about how to deliver the service. By increasing the number of days in the training program it would help the employees understand the process a little more. The 5% dissatisfied customers can be turned into satisfied customers by a simple lengthening of the training. It would also increase the occupancy from 80% to 88% due to increase in satisfaction level translating to $300 million.
It would project a positive attitude about the company towards the employees. The annual turnover would also decrease this way. More number of days in training will add value to their learning curve. In addition, Millenium Partners will be much more satisfied with the service
An assessment of 7-days VS 14-days training program
Average Daily Rate
For First Three Months occupancy occupancy @ @50% 80% $ $ 305.00 305.00
Room Nights Available Nights sold
27900 13950
Revenue (ADR*Nights sold)
$ 4,254,750.00
Forteen Days cost= 2* seven day cost
Seven Day Cost
27900 22320
presentation cost trainers
5000 40000
$ 6,807,600.00
pep really
5000
chefs table
2500
Employee Cafateria
15000
$ 149,000.00
Food shows Total
7000 $ 74,500.00
Conclusion:
Its evident from the exhibit that the cost of training is much lower than the increase in revenues that we can generate after increasing the occupancy rate from 50 to 80.In this industry the employees will play a vital role in increasing the output of the company since they are serving the customers. Hence the customers would be much more satisfied staying at such a hotel. The additional profit would be 6,807,600 - 4,254,750=$ 2,552,850 which is a lot by just spending extra $ 74,500. Thus additional training of seven more days would be very beneficial. This would also give time to employees to adjust in a new environment and they will be more prepared to new challenges when they come. Ritz-Carlton management should take the following steps to ensure best quality: 1. 2. 3. 4.
Rigorous employee selection process, Employee orientation, employee training certification, and Continuous coaching.
