Student: XXXXXXXXXXX

Student number: XXXXXXXXXXXXX

Course: Human Resource Management

Date: 25 September 2010

Ritz-Carlton case study – part 1: individual work

Number of words: 1’310

Key concepts:

- Turnover rate
- Mutual respect
- Career development
- Staff retribution
- Employee training
Ritz-Carlton case study
Introduction

In the following essay I will compare the Ritz-Carlton Hotel Company’s Human Resources strategy
and tradition with an academic article as well as with two press reviews. The academic article regards
the different roles of corporate and unit level human resources managers in the hotel industry (Raub,
Alvarez and Khanna, 2006). The first press review relates to making human resources a science
(O’Connell, 2002) and the second review by Hill (2010) is an interview with Michelin-starred Chef
Michel Roux, Jnr, also the HRD of Le Gavroche restaurant in London. When comparing these texts I
will lay my focus on turnover rate, mutual respect, career development, staff retribution and
employee training. Furthermore I will analyze weaknesses and strengths of the Ritz-Carlton Hotel
Company in my conclusion.

Comparison

An astonishing number when reading about the Ritz-Carlton is their low annual staff turnover rate of
just 20%, comparing it with the hotel industry average of 100%. When reading more about the way
the hotel views its employees and understanding the effort it makes to create a good working
environment, the reason for this very low number becomes clear. According to Dave Kieffer
(O’Connell, 2002) companies know how to train new people well and how to select the right people
but he claims that one of the mistakes most companies are making is that they don’t take all the
parts of the system into consideration and that the way employees are being trained is useless if the
way they are going to get paid is not also factored.

Getting back to the staff turnover, this could explain why the rate lies between 20% and 25% in many
new hotels during the first 60 days (Sucher et S-E, 2005) not counting the new Ritz-Carlton’s. The way
the staff is managed in the Ritz-Carlton and the way the employees respect each other is an
important factor of running a successful hotel. The Ritz-Carlton motto “We are Ladies and
Gentlemen Serving Ladies and Gentlemen” clearly shows the mutual respect there is in the company
and is not just an insignificant motto. The COO of Ritz-Carlton, Horst Schulze, addresses all the
employees of a new hotel by explaining to them this philosophy and telling his staff that they are not
servants but also Ladies and Gentlemen and should be respected as such (Sucher et S-E). Even in a
very hectic and tough environment, like in Michel Roux Jnr’s kitchen in the Le Gavroche restaurant,
mutual respect is shown in different ways. While there is not time to say “excuse me, would you pass
me that please?” Michel Roux Jnr makes sure that his staff feels valued by dispensing hugs when it
seem right (Hill, 2010) or by looking after employees who get the lowest wages, the kitchen porters
for example (Hill, 2010). Michel Roux Jnr respects his kitchen porters for their lowly jobs and he will
not tolerate anybody not respecting them. This surely is a reason why two of the four kitchen porters
from the Le Gavroche have worked there for 10 and for 17 years.

Another way to motivate employees is by giving them opportunities for career advancement. While
for kitchen porters there is no real way up the career ladder (Hill, 2010) in Ritz-Carlton hotels there
are many examples of great career developments. Sucher et S-E (2005, p. 4) state that
“corporatewide, 25% of the organization’s managerial workforce began their careers at The Ritz-
Carlton as hourly employees, such as dishwasher, housekeeper, and restaurant server, or as hourly
supervisors.” But the career development is not just of high value for the employee, but also for the
company itself. Raub et al (2006) claim that is easier to develop people one has, rather than bringing
someone in, that is why career development is important but is also in the top of the list of problems
which worry hospitality executives (Raub et al, 2006).

When it comes to staff retribution The Ritz-Carlton goes a clear way; there are no retributions. In my
opinion this is a good strategy and really motivates employees to fix mistakes (theirs or not) because
they work in an environment where there is no fear of retribution. This seems to work great in the
Ritz-Carlton, Sucher et S-E (2005) states that they have never had a problem with people hiding
mistakes, because it is not the culture of the company. Michel Roux Jnr seems to share the idea of
not punishing employees, even though he claims to run his business almost in military fashion (Hill,
2010). If somebody messes up at the end of a busy evening, Mr. Roux Jnr will always have a word
with the employee and maybe put an arm around their shoulder, which surely is great for a good
working atmosphere. The Ritz-Carlton recognizes individual employees for outstanding work in a
variety of ways. Within departments small awards are given as well as larger rewards that occurred
at the level of the hotel.

An important step of enabling the employees of doing a good job is their initial training. Ritz-Carlton
has the Seven Day Countdown training to prepare the new staff for the upcoming task and it seems
like a good system and is not an inefficient ad hoc silo system like the one mentioned by O’Connell
(2002). During the Seven Day Countdown the employees get to know each other better and learn
how to work as a team. The focus of the training remains on the skills training, the staff has to get the
feeling of how it is to be working on the front lines of the company. This is where handling guest
difficulties becomes very important, an area in which the staff is also trained. The first few months of
the hotel being open could also be seen as a kind of training for the staff. During the first month of
operations the hotel will not pass 50% occupancy, and then the following months the Ritz-Carlton
will increase the occupancy slowly in order to protect their employees of being overwhelmed by
work. The Le Gavroche probably did not have this system at the opening and the staff is not specially
trained during one week but running a restaurant is also different then running a hotel. Some things
are the same, like that the costumer is king or like Mr. Roux Jnr would say “We have to do our
damnedest to make sure the customer’s happy” (Hill, 2010, p. 1) and some things are slightly
different, like when you are a three Michelin-star restaurant, have a waiting list of staff and employ
people 12 months in advance.

Conclusion

As a future manager in the hospitality busyness it was an inspiration to read about the history and
the philosophy of The Ritz-Carlton hotels. There are many strengths in the way the hotel and staff is
run and there are various innovative ideas in the system. The Seven Day Countdown seems like an
excellent way of preparing the staff for their jobs and the increase of the occupancy during the first
few months after the opening is a great way of setting the high standards immediately. The staff
seems highly motivated and well trained; this surely is one of the biggest strengths the company has.
Thanks to this, the system is constantly improving and the company is heading towards a bright
future. There is not much to criticize; the success and the good reputation of the Ritz-Carlton Hotel
Company proves that their system works and the comparison of the hotel with the other two texts
have not revealed any weakness as far as I am concerned.

More than a hundred years ago, a Swiss shepherd moved to Paris because he had a dream. He made
his dream come true by opening the grand hotel under his name, chapeau Mr. Ritz and thank you for
the encouragement!
References

Hill, A. (2010). Interview with Michel Roux Jnr, HR director of Le Gavroche.

O’Connell, P. (2002). Making Human Resources a Science. Bloomberg Businessweek.

Raub, S., Alvarez, L. & Khanna, R. (2006). Roles of corporate HR managers.

Sucher, S-J et S-E. (2005). The Ritz-Carlton Hotel Company.