Ritz Carlton Hotel company
Introduction
The Ritz Carlton is a Hotel Company management company that builds and also runs luxury hotels that are designed to attract the needs and wants of its primary customers, who include leisure travelers, corporate events, and independent businesses. The headquarters of the company is in Atlanta, Georgia and operates resorts and hotels in all around the world. The company has over a million customers worldwide and thousands of workers across the globe. Under the leadership of its president, Horst Schulze, The Ritz Carlton brand has over the years managed to uphold and magnify its image of convenience and luxury.
Service cycle success
The employee cycle begins with a lengthy selection process to determine which candidates are worthy of working at a Ritz Carlton hotel. This is called a quality selection process. Employee training is critical as it ensures each trainee has the skills necessary to maintain their high standards of service.
Empowerment
An important step that the Ritz Carlton Hotel Company undertook to manage quality was empowerment. Empowerment entails giving employees more responsibilities and powers to solve the problems that guests were experiencing. The company realized that empowering employees to deal with simplistic difficulties that guests encountered helped in having faster and convenient service. Management found the guests felt better if a junior employee solved their problem immediately than a senior manager or director at a later date. Empowerment helped the company to deal with emerging issues promptly which cut costs and also increased guest fulfillment. Empowerment means that employees can solve dilemmas even if those problems were not within the employee’s line of duty. The management also promoted teamwork in solving guest problems. The hotel ensured that excellent customer service remained a priority and the responsibility of providing these services rested with the employees. Factoring in all of these measure has caused high employee satisfaction which has lead to loyalty being reciprocated by their employees.
Applying the Baldrige award to everyday issues
Ritz Carlton demonstrates that a hotel company can employ Baldrige-award criteria to shape a prosperous quality management program just like other companies in the manufacturing and service sectors. The central goal of ensuring the steady quality improvement required by the Baldrige award is empowering employees. By enabling your employees to make modest changes in routine procedures, especially in resolving a guest's complaint gives them a true sense of empowerment. Ritz-Carlton, for instance, allows each employee to spend up to $2,000 to satisfy a guest. Additionally, employee turnover rates are smaller than the competition. This saves time and money and makes sure the top employees stay at the Ritz.
Detailed Quality Planning
Ritz Carlton hotels are heavily involved in comprehensive planning. This involved corporate actions that included the background of strategic objectives and creation of action plans. This step also helped employees through the creation of teams that were responsible for setting quality certification standards, strategic planning and problem-solving. The comprehensive planning process was always apparent during the days leading to the opening of a new hotel. Unlike other companies that open a hotel in phases, Ritz Carlton guarantees that everything in place the minute its open.
Employee satisfaction leads to customer satisfaction
The satisfaction of an employee originates from the management’s treatment of their human resources as part of their workforce. If the administration unfairly treated its employees, disallowing them to participate in solving problems, and providing them with unsatisfactory benefits, most especially a lack moral support, it dissatisfies an employee. Conversely, if an employee views themselves as an asset and well-valued by the company, this boosts satisfaction towards that employee and their work. This idea indicates why employees being valued significantly more by the organization tend to provide quality work and service to customers. It is essential that customers gratify their satisfaction to ensure future quality service. The causal relation between employees and customers’ satisfaction is rooted on how the manager manages the organization. By applying suitable and practical strategies and approaches everyone is content.
Strategies to improve employees
There are various HR policies which are applicable and useful in any organizations. Of course, not all strategies have the same effect when it is implemented and applied. The effectiveness depends upon the organizational environment. HR strategies used by Ritz-Carlton gives a background on the use of Total Quality Management. TQM examines the organization as an assortment of processes, and that organizations need to strive to continuously improve these processes by incorporating the knowledge and experience of workers.
Allowing employees to take part in the company's planning process actively shows how the company trusts its employees’ capabilities and skills. Moreover, Ritz-Carlton’s strict adherence to uniformity and standardization in service bring structure as well as predictable and rehearsed behavior of employees to their guests and amongst themselves. This consistency of service given to the guests formalized in its “Gold Standards” The hotel business also developed a new human resource strategy on recruitment like benchmarking, necessary training, orientation, and employee empowerment.
DQIS
When pouring over the data showing Ritz Carlton's service, there were several pieces of information where the hotel business could focus their improvement efforts. For example, the highest occupancy day is Saturday. Occupancy rates then decrease every day until the following Saturday. Quality problems with defect show that a clean room is by far the most common issue that upsets Ritz- Carlton’s customers. Friday has the most amount of mistakes as the hotel staff are likely busy preparing for the busy Saturday and make silly errors. A bottleneck found in room reservation was on Wednesdays. One Wednesday had 14 incorrect room assignments which lead to frustration for consumers and a low retention rate. Additionally, there were 14 out of control days which lead to 105 defects. When analyzing these issues, a few factors are easy to see. The most substantial problem for hotel staff is room cleaning, and these difficulties worsen on the weekend. Meanwhile, check-in/checkout delays may be caused by leisure customers. The hotel needs to improve its reservation system to improve these delays and incorrect rooms. There are several steps the hotel can take to solve these issues. First, Sunday staffing is significantly low which creates unsatisfactory customers and a bottleneck in their service. Additionally, better communication is needed between the front desk and the staff to make sure all rooms are cleaned on time.
The Ritz can take on several initiatives to further deal with these issues. Room cleaning in teams of multiple people. This will lead to higher productivity and better quality. Additional the hotel chain can display an SQI (service quality indicator) throughout the hotel so employees can monitor real-time guest service processes. A final initiative is the Ritz can implement is customer loyalty satisfaction system. The hotel business could create a database across all of its hotels to foresee loyal customer’s preferences. These customers could demonstrate which services were most important to them and hotel managers would make sure these customers
had everything prepared to their liking
Improving operations
To improve operations, the Ritz-Carlton strives for a clean, fresh, fully stocked guest room and a method that could deliver faster, and cheaper housekeeping services with higher reliability.
A multi-functional team was formed containing employees from Housekeeping, Laundry, Engineering, and Total Quality Management, with a goal of decreasing cycle time by 50% and creating an error-free, consistent process, which could be normalized company-wide to better customer satisfaction. The team’s primary move was to make the existing process apparent to create a initial practice. The Ritz’s TQM team monitored room cleaning from several hotels. This helped to identify patterns in the workflow; distance traveled in cleaning a guest room, an average number of defects per room, cycle times per task and item usage.
This QFD activity benefited the team to understand significant customer-supplier relationships. The company found out there were mix-ups in which staff managed the laundry. This discovery was an imperative lesson because an inadequate supply of linen and towels was a company-wide problem. Data showed room attendants lost a significant amount of time daily in tracking down needed supplies due to mismanagement.
The team also found that administration of guest room supplies such as linen and towels was unreliable. This resulted in inefficiencies, variation, and discrepancies from room to room. The penalties associated with these mistakes included lost labor dollars from redundant work, wasted effort and travel, and lost business. The Cost of Quality was determined to exceed $460,000 annually for the entire housekeeping staff. Because this study was carried out before Modern QFD was developed, the hotel business resorted to building a classical House of Quality (HOQ) matrix to join customer requirements with supplier measures. The Ritz-Carlton team created an initial process to test and improve service. The process change resulted in a reduction in room cleaning cycle time to 65% or 8 minutes. Reduction in defects per room decreased by 42% to 3.7.3 Lastly, the overall decrease in time guests would be disturbed if occupying a room while cleaning is being provided.
The company also reported intangible benefits such as lowering the amount loneliness on the job. As well increased job enrichment and better communication between team members and guests. This additionally leads to a better customer-supplier relationship between Housekeeping and Laundry.
Impact on the Company from improving management process
The quality management processes initiated by the Ritz Carlton Hotel Company had several implications. One of the implications is that the company was able to achieve high-level quality improvement without using sophisticated techniques. Ritz Carlton used practical and straightforward methods to provide quality and customer satisfaction. Quality improvement made sure that 99 percent of the customers finished their stay with a memorable impression. This created increased customer loyalty and also improved the brand image of the hotel. Increasing the total quality management efforts created additional profitability. The increase in quality of service leads to guests recommending the hotel due to their satisfaction. The hotel chain did not have a difficult time convincing clients to use the services offered at the hotel. Therefore, quality customer service became a major selling point which helped the hotel to remain competitive, and also increased its profitability. Financial statements between 1995 and 2002 indicate that the company has been experiencing steady economic growth, in 1995, the company recorded total earnings of $11,951 which doubled the following year, when the business made gross returns of $20,882. By 2000, the company had hit gross profits of $53,195 which is more than 100% growth in less than four years. Financial information also shows that administrative costs have stayed low over the years, despite increase on the company’s returns on investments, indicating that total quality management has been a practical cost-saving strategy that has had a positive impact on the company’s bottom-line.
Suppliers
Ritz-Carlton is working with its suppliers to maintain quality management. The hotel organization has created a supplier certification that measures how frequently suppliers meet specifications on time, and well they improve their cycle time to delivery. Suppliers must have the willingness to do that, or the Ritz can no longer do business with them. The hotel company wants to see which suppliers are best able to meet quantity and quality needs by doing an internal assessment to ensure their products meet the high standards of the Ritz Carlton. The internal evaluation involves a rigorous 100-question internal audit of suppliers' capabilities and well as surveys completed by customers. Ritz-Carlton ranks the suppliers based on a score determined from the supplier audits and user surveys. The objective is to get suppliers to advance through a certification program to become a fully integrated partner that is happy to share their capabilities with Ritz Carlton to improve the relationship.
Inefficiencies in Hotel data
What Ritz discovered was hotel companies can achieve excellence in quality improvement without using the sophisticated statistical techniques associated with manufacturing companies. However, companies are required to collect and analyze information about customer satisfaction, cycle-time reduction, quality of products and services, and financial and employee-related performance, and to make comparisons with competitors and industry benchmarks. Interestingly, measuring quality is one spot where Ritz-Carlton encountered problems. Except for economic information, neither individual competitors or the hotel industry was tracking quality assessment data. It is necessary to change current systems of information gathering and analysis to focus more on quality and data related to customers satisfaction will be a challenge to other hotel companies in planning their quality programs. Ritz-Carlton's lesson was that it needed immediate response throughout the system and accessible to all employees, just to keep up with continuously changing consumer demands.
Why the quality approach is best
A quality approach to running a business is the most cost-effective, least capital-intensive path to profitability. The benefits of this approach more than exceeded any problems. The hotel industry today is being confronted by increased multinational competition and a more sophisticated customer so how these issues are approached could determine the difference between success and failure. While strategies to TQM can vary depending on the unique circumstances and characteristics of an organization, if success using TQM at Ritz Carlton can teach other organizations something, it's a focus on customer satisfaction needs to be built into the management processes of the business. Additionally, TQM strategies must be supported through a combined system of data analysis, total employee participation, training, and the constant effort to improve service and product quality.
Conclusion
To conclude, Ritz Carlton is a successful hotel chain because it offers high-quality hotels, high-quality service, and great staff. To sum up, its necessary competitive strength is its people and their ability to deliver on what is promised to justify the high price.