The Ritz-Carlton Hotel Company L.L.C.

The Ritz-Carlton Hotel Company L.L.C is known in the hotel industry as the "king of hoteliers". It is best known for its exemplary and extraordinary service.

The principles behind its service are largely driven by the legacy of Ceaser Ritz, whose philosophy of service and innovations redefined the standards of service, dining and facilities for luxury in a hotel. In order to maintain its positioning in the market, the company has strived to enhance its core competencies and preventing them from becoming rigidities.

The report aims to outline and illustrate how the Ritz-Carlton has used and could adopt Human Resources Management strategy to propel it to a higher level in the industry.

BACKGROUND AND ESSENCE OF SERVICE:

The Ritz-Carlton Hotel Company L.L.C is a leader in the hotel and hospitality industry that specializes in the development and operation of luxury hotels for others. It currently has operations in the three major regions; Asia/Pacific, Europe/Middle East and the Americans and Caribbean.

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(see Exhibit 1)Today the company is renowned for its exemplary and extraordinary service and painstaking attention to detail The key driver of it success was the legacy of Ceaser Ritz, whose philosophy of service and innovations redefined the standards of service, dining and facilities for luxury in a hotel setting endured long after his demise through his son Charles Ritz, who was an active board member of The Ritz-Carlton until his death in 1977.

As one would expect the measure of the satisfaction derived from personalization available is totally in the control of the clients.

The Ritz-Carlton group realized this long time ago and has since developed an aggressive and proactive approach to innovation of it delivering of services to consistently exceed the expectations of the guests. As a result, the company has received all the major awards the hospitality industry and leading consumer organizations can bestowThus in order to maintain its positioning in the market, the company has strived to enhance its core competencies and preventing them from becoming rigidities by constantly refining its processes to ensure sustainability and proactive evolution of it values and standards of service. The company's guiding principles are embodied in the "Gold Standards" which encompass the values and philosophy by which it operates. They provide a guideline for the operational management of the hotels.

Actions taken by Ritz-Carlton for the fulfilment of these standards include Total Quality Management (TQM) philosophy that permeates the organization, customized programs, establishment of Service Quality Indicators (SQIs) and Corporate Social Responsibility initiatives. However; the heavy emphasis on human resources is probably the most critical component of it strategy. It based on the four aspects of Human Resources Management:1.Planning2.Recruitment3.Development4.Review and appraisalRitz-Carlton's main product is guest experience that is personalize and beyond expectation.

JOINING THE RITZ-CARLTON TEAM

The motto at Ritz-Carlton Hotel Company, L.L.C. is, "We are Ladies and Gentlemen serving Ladies and Gentlemen." This motto exemplifies the anticipatory service provided by all staff members for which they receive a 7 day orientation starting on their first day at work.

Ritz-Carlton completely integrates human resources and operations. Here the human resources and operations work together to select, orient, train and certify employees. They also ensure that the employees are highly empowered and remain deeply involved in running the business.

During these first seven days, employees are trained and sensitized on the key competencies required and the applicable ground rules to successfully perform their duties. Emphasis is put on understanding and embracing the "golden standards" and any other factors that would affect the satisfaction of the guests with the services provided to them by the hotel.

The seven days programme aims at fundamentally altering the employees' behaviour by adapting to the standard required by the company in order to achieve their business strategy as well as creating a memorable event. Ritz-Carlton believes that employees have to feel responsible for customer satisfaction, participate in developing the company's vision, strategies and plans, ultimately becoming a part of the Ritz-Carlton "mystique"To lengthen the training days before hotel openingAt the end of it, all the freshly hired employees are expected to understand and easily apply the company standards which include problem solving, detailed grooming, housekeeping and safety.

Ritz-Carlton believes that only the finest ladies and gentlemen can maintain the company's distinguished Gold Standards. Therefore it puts a lot of emphasis on the selection of the first class candidates for its staffing requirements and it follows a Quality Selection Process (QSP) that involves conducting research with employees, customizing interviews, identification of candidates who are most likely to be the best performers in specific roles.

Ritz-Carlton pays a lot of attention to the tracking and appraising of employees' performance, reviewing and improving systems and procedures based on internal and external analysis. Then the first class selected candidates follow an ongoing training program that is as much part of the company Gold Standard target.

In the hospitality industry, most of the hotels have a soft opening and a real operation starts after a few weeks but it is different in Ritz-Carlton hotels. Ritz-Carlton aims to have everything right when the door opens to the first customers.

The seven day countdown process is not just a training course for the candidates. It is actually a Ritz-Carlton standard procedure set before opening a new property. The first two days are the orientation days and the candidates become certified by attending a five days training course which runs by the prepared employee trainers.

I believe James McBride should not expand the seven day countdown process as it will increase the cost of the hotel at it will postponed the opening days. The seven day countdown is a standard procedure which has been used in many Ritz-carton hotels and it worked properly in the other hotels.

HOTEL OPENING PROCESS

The Seven Day Countdown process was recognized as Ritz-Carlton's best practice. However, this process was challenged by Collin, who represents Millennium Partners. The underlying challenge comes in two folds:First, can Ritz-Carlton open at higher occupancy rate (i.e. higher than 50% during the first month)?Second, can Ritz-Carlton reach to 80% of occupancy rate in a shorter amount of time (i.e. instead of 3-4 months)?Collin questioned that 7 days may limit to reach these targets (i.e. higher open occupancy rate and shorter time to reach 80% occupancy rate). It is difficult to acknowledge whether or not 7 days is the limiting factor to achieve the target.

Perhaps, it is more pragmatic to carry out research to study the root causes that contribute to these effects, instead of changing the best practice without considering the various repercussions (e.g. cost, reputation, organization process change etc.). The consequences of changing the current best "recipe" may alter the business result, hence, impact the bottom, if not carefully plan and execute.

Let's summarize the key activities of each days in Seven Days CountdownDay 1: Orientation:Day 2: Departmental VisionDay 3 - 4: Technical training - Handling Guest DifficultiesDay 5 - 7: Technical trainingSome areas of recruitment and selection can be further streamlined, e.g. a 2 days job fair can be reduced to 1 day, by changing some of the recruitment process, e.g. offer online registration, pre-interview online screening process. Besides, to meet the service quality, the HRP (Human Resource Planning) needs to closely integrate with the organizational strategy, i.e. the forecast of occupancy rate, the time of recruitment and selection, training and development etc.

To meet the targets as above-mentioned, it is paramount to plan in feed-forward approach, i.e. to set target of above 50% in first month, and to reach 80% occupancy rate in, say, 2 months. The HRP and marketing team needs to work hand on hand to match the supply and demand, of both customers and workforce sides. The HRP might forecast the headcount needs to match the higher occupancy rate, e.g. in forecasting workforce number, by the deployment of both quantitative and qualitative methods.

Besides, the demographic of the location and employees mobility might be the important factors to consider in this planning and execution process, e.g. the availability of skill-set in particular location. Any constraints in the availability of skill-sets may restrict the capabilities to match to the target sets. To enhance the training and achieve consistent quality of Ritz-Carlton, it is also possible to relocate the existing workforce from another location to the newly opening Ritz-Carlton, this will increase the quality and flawless in services.

To achieve higher level of quality service and to reach to the higher occupancy rate in opening and subsequent months, the HRP may integrate the past experience of opening new hotels into current training session for employees. For example, the issues encountered in the past, from the very beginning stage, such as recruitment and selection, retention, to 7 days countdown of employees training, can be documented, and integrate in HRIS (Human Resource Information System), and translate into a practical case study, and to be used in the 7 days countdown process, as real case study will shorten the learning curve and stimulate learning process.

Besides, to meet quality level, and foster learning, it is paramount to maintain high retention during the period from selection, and job offering to 7 days countdown. This can be achieved through the current best practice (Exhibit 9), and also, providing employees the self-training material, such as CD, booklet, online training web portal.

Conclusion

In a nutshell, Ritz-Carlton is selling "experience", not selling hotel rooms, as such, to maintain the "gold standard", it is important to embed the culture prior to full-occupancy level. Besides, the true nature of hotel business is about service, and more importantly, service business is perishable (not inventories), and intangibility, both the hotel artefacts, and also services, will influence the customer's experience.

Reference list:

1.Ritz-Carlton Hotel Company - Wikipedia encyclopaedia (http://en.wikipedia.org/wiki/Ritz-Carlton_Hotel_Company)2.http://www.quality.nist.gov/PDF_files/RCHC_Application_Summary.pdf3.More details can be found at (http://www.ritzcarlton.com/corporate/about_us/gold_standards.asp).

4.Harvard business School case study5.Ritz-Carlton's Gold Standard Service (http://www.epmsonline.com)Appendix1:The Golden Standards - Summary•The CredoThe Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instils well-being, and fulfils even the unexpressed wishes and needs of our guests.

•MottoAt The Ritz-Carlton Hotel Company, L.L.C., "We are Ladies and Gentlemen serving Ladies and Gentlemen." This motto exemplifies the anticipatory service provided by all staff members.

•Three Steps Of ServiceA warm and sincere greeting. Use the guest's name. Anticipation and fulfilment of each guest's needs. Fond farewell. Give a warm good-bye and use the guest's name.

•Service Values:I Am Proud To Be Ritz-Carlton; I build strong relationships and create Ritz-Carlton guests for life; I am always responsive to the expressed and unexpressed wishes and needs of our guests; I am empowered to create unique, memorable and personal experiences for our guests; I understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique; I continuously seek opportunities to innovate and improve The Ritz-Carlton experience; I own and immediately resolve guest problems; I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met; I have the opportunity to continuously learn and grow; I am involved in the planning of the work that affects me; I am proud of my professional appearance, language and behavior; I protect the privacy and security of our
guests, my fellow employees and the company's confidential information and assets; I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

•The 6th DiamondMystique; Emotional Engagement; Functional•The Employee PromiseAt The Ritz-Carlton, our Ladies and Gentlemen are the most important resource in our service commitment to our guests. By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company. The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened.