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Critical Analysis of Malcolm Baldrige National Quality Award with regard to THE RITZ-CARLTON HOTEL COMPANY

By: Kumar Pratik

History
Established in 1983, the former owner, W.B. Johnson Properties, acquired the exclusive North American rights to the Ritz-Carlton trademark, the foremost name in luxury hotels. This status was largely due to the legendary Caesar Ritz who developed and operated two of the worlds best hotels in Paris and London. The hotels achieved such fame in the marketplace that they attained what is often referred to as The Ritz Mystique. In 1995, The Ritz-Carlton was jointly acquired by Marriott International Inc. to achieve their strategy of entering the luxury hotel segment of the industry; the takeover/merger occurred in 1997.

Three Steps of Service at The Ritz-Carlton


1. A warm and sincere greeting. Use the guest name, if and when possible. 2. Anticipation and compliance with guest needs. 3. Fond farewell. Give them a warm good-bye and use their names, if and when possible.

Warm reception at The Ritz-Carlton

PHILOSOPHY
We Are Ladies and Gentlemen Serving Ladies and Gentlemen

THE EMPLOYEE PROMISE


At the Ritz-Carlton, their Ladies and Gentlemen are the most important resource in our service commitment to their guests. By applying the principles of trust, honesty, respect, integrity and commitment, they 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.

THE CREDO
The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. They pledge to provide the finest personal service and facilities for their 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.

The Ritz-Carlton Experience

The Ritz-Carlton Experience

The Ritz-Carlton Experience

The Ritz-Carlton Experience

The Ritz-Carlton Experience

The Ritz-Carlton Experience

THE RITZ CARLTON BASICS


1. The Credo is the principal belief of the Company. It must be known, owned and energized by all. 2. Their Motto is : We are Ladies and Gentlemen serving Ladies and Gentlemen. As service professionals, they treat their guests and each other with respect and dignity. 3. The Three Steps of Service are the foundation of RitzCarlton hospitality. These steps must be used in every interaction to ensure satisfaction , retention and loyalty.

THE RITZ CARLTON BASICS contd...


4. The Employee Promise is the basis for the RitzCarlton work environment. It is honoured by all employees. 5. All employees need to successfully complete annual training certification for their position. 6. Company Objectives are communicated to all employees. It is everyones responsibility to support them.

THE RITZ CARLTON BASICS contd...


7. To create pride and joy in the workplace, all employees have the right to be involved in the planning of the work that affects them. 8. Each employee will need to continuously identify defects throughout the Hotel. 9. It is the responsibility of each employee to create a work environment of teamwork and lateral service so that the needs of their guests and each other are met.

THE RITZ CARLTON BASICS contd...


10. Each employee is empowered. For example, when a guest has a problem or needs something special , you should break away from your regular duties to address and resolve the issue. 11. Uncompromising level of cleanliness is the responsibility of every employee. 12. To provide the finest personal service for our guests , each employee is responsible for identifying and recording individual guest preferences.

THE RITZ CARLTON BASICS contd...


13. Never lose a guest . Instant guest pacification is the responsibility of each employee. Whoever receives a complaint will own it, resolve it to the guests satisfaction and record it 14. Be an ambassador of your Hotel in and outside of the workplace . Communicate any concerns to the appropriate person. Each employee is responsible for creating a safe, secure and accident free environment for all guests and each other. 15. Protecting the assets of a Ritz-Carlton hotel is the responsibility of every employee.

Malcolm Baldrige National Quality Award


Purpose:
To help stimulate American organizations to improve quality and productivity; To recognize achievements To establish guidelines & criteria that can be used by any organization in evaluating their own quality improvement efforts To provide specific guidance for other American organizations that wish to learn how to manage for high quality, etc.

Organizations involved in award administration:


Foundation for the MBNQA Established 1988 Primary purpose is to raise funds for Award program National Institute of Standards & Technology (NIST) Department of Commerce has responsibility for Award program NIST is part of its Technology Administration NIST Mission: To aid U.S. industry through research & services

American Society for Quality (ASQ)


Assists NIST in administration (under contract) ASQ identifies, communicates & promotes the use of quality principles, concepts & technologies

Board of Overseers
Advisory Board on the Award to the Department of Commerce

Board of Examiners
Evaluates applications & provides feedback Makes recommendations

The Malcolm Baldrige Quality Criteria


Embedded in each of these categories or dimensions the ideal is defined
Leadership Strategic Planning Customer Focus Information & Analysis Human Resource Development Process Management Business Results

The dimensions interact and demonstrate the systems approach fundamental to the Baldrige ideal Leadership creates vision, values, and high performance expectations that are translated into strategy and action plans through Strategic Planning and Customer Focus Focus. The strategy and action plans guide overall Human Resource Development and drive the development of Process Management to ensure achievement of desired Business Results. Results. Information & Analysis are critical to effective decision-making in all aspects of the organization.

Quality Criteria explained


Leadership
Examines senior leaders personal leadership and involvement in creating/sustaining values, direction, performance expectations, etc.

Strategic Planning
Examines how the organization sets strategic directions, how it determines key action plans, and how plans are translated into an effective performance management system

Quality Criteria explanation contd


Customer Focus
Examines how the organization determines customer requirements and expectations, as well as how it enhances relationships with customers and determines their satisfaction

Information & Analysis


Examines the management and effectiveness of the use of data and information to support key organizational processes and the performance management system

Quality Criteria explanation contd


Human Resource Development
Examines how the workforce is enabled to develop and utilize its full potential, how its aligned with the organizations objectives, and efforts to build and maintain an environment conducive to performance excellence, full participation & organizational growth

Process Management
Examines key aspects of process management, including customer-focused design, product and service delivery processes, and partnering processes involving all work units

Quality Criteria explanation contd


Business Results
Examines the organizations performance and improvement in key business areas, including customer satisfaction, attainment of performance goals/targets, human resource, stakeholder and partner performance, as well as operational performance

The Ritz-Carlton Business Excellence Roadmap


Approach Plan

Improve Act

MBNQA

Deployment Do

Results Check

Leadership
Approach Plan o A passion for excellence o The seven pyramid decisions (i) 10 year vision (ii) 5 year mission (iii) 3 year objectives (iv) 1 year tactics (v) Strategy (vi) Methods (vii) Foundation

Leadership contd
o Basic Empowerment Process

Leadership contd
Deployment Do
o All members of Senior Leadership personally ensure that each new hotels goods and services are characteristic of The RitzCarlton hotel company from the first day o The results of the seven specific decisions from the annual

strategic planning process are arranged in a Pyramid Concept and distributed throughout the organization. o The Gold Standards are reinforced daily in a variety of forums

Leadership contd
Results Check
Leadership effectiveness is evaluated (1) On key questions of their semi-annual employee satisfaction results (these questions reveal if the respective leader has gained the full support of the Ladies and Gentlemen regarding our Gold Standards) (2) Through audits on public responsibility (i.e. Life Safety Systems, Security Systems, Food Preparation and Alcoholic Beverage Service, Environmental Stewardship).

Leadership contd
Improvement Act Gaps in leadership effectiveness are addressed with development/training plans. For widespread

deficiencies , the corporate human resource function develops/improves courses, processes of facilities.

Strategic Planning
Approach Plan
A description of the three major components of our planning process, including the pre-work known as the Macro Environment Analysis, is show in Figure

Strategic Planning contd


Deployment Do

Strategic Planning contd


Results Check
Monthly performance reviews of the Strategic Plan are conducted by the upper managers at the corporate and hotel level. The framework of a typical review is shown in Figure, which focuses on the pre-established performance indicators of the Vital-Few Objectives as well as key processes.

Strategic Planning contd


Improvement Act The performance reviews are translated into

opportunities for improvement and innovation. These decisions are determined by process owners with assistance from the special organization of Directors of Quality.

Customer Focus
Approach Plan
At The Ritz-Carlton, customer and market focus concentrates on the information needed for hotel development and operation.

The many needs and sources of this information (i.e. market research) are summarized in the figure in the next slide.

Customer Focus contd

Customer Focus contd


Deployment DO The specific actions taken by our Sales and Marketing Leaders to deploy our Market Research conclusions consist of four major processes: (1) The 6 Ps Concept (2) Operation of the CLASS database (3) Complaint Resolution Process and (4) Standard Performance Measurements.

Customer Focus contd


Results Check The effectiveness of their customer focus is evaluated through reviews of their standard performance measures daily, monthly and annually.

Customer Focus contd


Improvement Act The daily and monthly reviews identify performance gaps to be corrected. The extensive analysis of the

Macro Environment drives confirmation or changes in marketing strategy, objectives and plans.

Information & Analysis


Approach Plan Two basic types of measurements are used at The RitzCarlton: (1) Organizational measurements for upper managers at both the corporate and hotel levels (2) Operational (i.e. process) measurements for planning, assessing and improving daily operations.

Information & Analysis contd..


Deployment DO The specific actions taken by Senior Leaders to deploy the information and analysis approach is based on the concept of individual process owners.

Information & Analysis contd..


Results Check Since they place such a strong emphasis on fact-based decision making, reliability of the data is critical. They rely on their highly trained Ladies and Gentlemen (including statistically trained at all levels) to insure data and information reliability. At the corporate level, they assign individual process owners to assure that the data can withstand scrutiny and provide background information. They also retain third-party specialists to provide independent reviews of information analysis and processes.

Information & Analysis contd..


Improvement Act Whenever their process owners and consulting specialists indicate that a change of plan is needed, the plans are rewritten, rebudgeted and reapproved. Their Ladies and Gentlemen, on a daily basis, identify and implement improvements in performance measurement as expected in their culture and facilitate through the training and performance management programs outlined.

Human Resource Development

Human Resource Development contd


Approach Plan Their Senior Leaders have decided to increase both the meaning and satisfaction their people derive from their work. This approach consists of three basic components: (1) Their Ladies and Gentlemen know what they are supposed to do (2) They know how well they are doing and (3) They have the authority to make changes in the process under their authority or their own personal conduct.

Human Resource Development contd


Deployment DO The specific actions taken to deploy our approach range across a broad spectrum, but most significant activities consist of: (1) The Quality Selection process and (2) Employee Education, Training and Development.

Human Resource Development contd


Their education and training is designed to keep individuals up to date with business needs.

Human Resource Development contd


Results Check Results of the selection, training and development of our Ladies and Gentlemen are checked at key stages of progression: (1) Quality Selection Process Measurement (2) Training Certification Review (3) Performance Appraisal Review Evaluation (4) Analysis of employee surveys.

Human Resource Development contd


Improve Act Improvement activities in Human Resources rely extensively on internal audits, site visits by Senior Human Resources Leaders and analysis of employee survey data

Process Management
Approach Plan Through our market research which concentrates on the quality of hotel development and operations, we have identified key production processes. In addition, they conduct formal discussions between: (1) Support and operations employees and (2) Internal and external customers to identify administrative and support processes which impact our hotel products and our companys mission.

Deployment DO
The specific actions taken to deploy our annual process management approach flow from our strategic planning process to every job level and category in our company.

Process Management contd

Deployment DO The specific actions taken to deploy their annual process management approach flow from their strategic planning process to every job level and category in their company.

Process Management contd


Results Check Although they control many sensory characteristics of the products they produce, they try to put it in numbers in their system of process measurements.

Process Management contd


Improvement Act Standing cross-functional teams at all levels use After Operations Measures and customer survey inputs to improve key processes. These improvements can come in two ways: (1) Major changes that require funding, resources and project management and/or (2) Incremental day-to-day improvements.

Business Results
Business result includes these aspects: Customer focused results Financial and market results Human resource results Supplier and partner results Organizational effectiveness results

Elegance without warmth is arrogance.

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