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Critical Analysis of Malcolm Baldrige
National Quality Award with regard
to to
THE RITZ-CARLTON®
HOTEL COMPANY
By:Kumar Pratik
History
Established in 1983, the former owner, W.B. JohnsonProperties, acquired the exclusive North Americanrights to the Ritz-Carlton trademark, the foremostname in luxury hotels. This status was largely due tothe legendaryCaesarRitz who developedandoperatedtwo ofthe legendaryCaesarRitz who developedandoperatedtwo ofthe world’s best hotels in Paris and London.The hotels achieved such fame in the marketplace thatthey attained what is often referred to as “The RitzMystique”. In 1995, The Ritz-Carlton was jointly acquired byMarriott International Inc. to achieve theirstrategy of entering the luxury hotel segment of theindustry; 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 thema warmgood-bye
and use their names, if and when possible.
THE EMPLOYEEPROMISE
• 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 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 serviceserving 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 Ritz-
Carlton hospitality. These steps must be used in every
interaction to ensure satisfaction , retention and loyalty.
THE RITZ CARLTON BASICScontd...
4. The Employee Promise is the basis for the Ritz-
Carlton 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 everyone’s responsibility to support
them.
THE RITZ CARLTON BASICScontd...
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 BASICScontd...
10. Each employee is empowered. For example, when aguest has a problem or needs something special ,you should break away from your regular duties toaddress and resolve the issue.
11. Uncompromising level of cleanliness is theresponsibility of every employee.
12. To provide the finest personal service for our guests ,each employee is responsible for identifying andrecording individual guest preferences.
THE RITZ CARLTON BASICScontd...
13. Never lose a guest . Instant guest pacification is theresponsibility of each employee. Whoever receives acomplaint will own it, resolve it to the guest’s satisfactionand record it
14. Be an ambassador of your Hotel in and outside of theworkplace . Communicate any concerns to the appropriateperson. Each employee is responsible for creating a safe,secure and accident free environment for all guests andeach other.
15. Protecting the assets of a Ritz-Carlton hotel is theresponsibility of every employee.
Malcolm Baldrige National Malcolm Baldrige National Malcolm Baldrige National Malcolm Baldrige National Quality AwardQuality AwardQuality AwardQuality Award
PurposePurposePurposePurpose:
– To help stimulate American organizations to improve
quality and productivity;
– To recognize achievements– 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:Organizations involved in award administration:Organizations involved in award administration: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)American Society for Quality (ASQ)American Society for Quality (ASQ)American Society for Quality (ASQ)
– Assists NIST in administration (under contract)
– ASQ identifies, communicates & promotes the use of quality principles,
concepts & technologies
• Board of OverseersBoard of OverseersBoard of OverseersBoard of Overseers
– Advisory Board on the Award to the Department of Commerce
• Board of ExaminersBoard of ExaminersBoard of ExaminersBoard of Examiners
– Evaluates applications & provides feedback
– Makes recommendations
The Malcolm Baldrige Quality Criteria
• Embedded in each of these categories or dimensions Embedded in each of these categories or dimensions Embedded in each of these categories or dimensions Embedded in each of these categories or dimensions ----
the the the the idealidealidealideal is definedis definedis definedis defined
– Leadership
– Strategic Planning– Strategic Planning
– Customer Focus
– Information & Analysis
– Human Resource Development
– Process Management
– Business Results
The dimensions interact and demonstrate The dimensions interact and demonstrate The dimensions interact and demonstrate The dimensions interact and demonstrate the “systems” approach fundamental to the “systems” approach fundamental to the “systems” approach fundamental to the “systems” approach fundamental to
the Baldrige idealthe Baldrige idealthe Baldrige idealthe Baldrige ideal
LeadershipLeadershipLeadershipLeadership creates vision, values, and high performance
expectations that are translated into strategy and action plans
through StrategicStrategicStrategicStrategic PlanningPlanningPlanningPlanning and CustomerCustomerCustomerCustomer FocusFocusFocusFocus. Thethrough StrategicStrategicStrategicStrategic PlanningPlanningPlanningPlanning and CustomerCustomerCustomerCustomer FocusFocusFocusFocus. The
strategy and action plans guide overall HumanHumanHumanHuman ResourceResourceResourceResource
DevelopmentDevelopmentDevelopmentDevelopment and drive the development of ProcessProcessProcessProcess
ManagementManagementManagementManagement to ensure achievement of desired BusinessBusinessBusinessBusiness
ResultsResultsResultsResults.... InformationInformationInformationInformation &&&& AnalysisAnalysisAnalysisAnalysis are critical to effective
decision-making in all aspects of the organization.
Quality Criteria explained
•• LeadershipLeadershipLeadershipLeadershipLeadershipLeadershipLeadershipLeadership
– Examines senior leaders’ personal leadership and
involvement in creating/sustaining values, direction,
performance expectations, etc.performance expectations, etc.
•• StrategicStrategicStrategicStrategicStrategicStrategicStrategicStrategic PlanningPlanningPlanningPlanningPlanningPlanningPlanningPlanning
– 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…
•• CustomerCustomerCustomerCustomerCustomerCustomerCustomerCustomer FocusFocusFocusFocusFocusFocusFocusFocus
– Examines how the organization determines customer
requirements and expectations, as well as how it enhances
relationships with customers and determines theirrelationships with customers and determines their
satisfaction
•• InformationInformationInformationInformationInformationInformationInformationInformation &&&&&&&& AnalysisAnalysisAnalysisAnalysisAnalysisAnalysisAnalysisAnalysis
– 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…
•• HumanHumanHumanHumanHumanHumanHumanHuman ResourceResourceResourceResourceResourceResourceResourceResource DevelopmentDevelopmentDevelopmentDevelopmentDevelopmentDevelopmentDevelopmentDevelopment
– Examines how the workforce is enabled to develop and
utilize its full potential, how it’s aligned with the
organization’s objectives, and efforts to build and maintainorganization’s objectives, and efforts to build and maintain
an environment conducive to performance excellence, full
participation & organizational growth
•• ProcessProcessProcessProcessProcessProcessProcessProcess ManagementManagementManagementManagementManagementManagementManagementManagement
– 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…
•• BusinessBusiness ResultsResults
– Examines the organization’s performance and
improvement in key business areas, including customer
satisfaction, attainment of performance goals/targets,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”
MBNQADeployment
“Do”
Results
“Check”
Improve
“Act”
Leadership
ApproachApproachApproachApproach “Plan”“Plan”“Plan”“Plan”
o A passion for excellence
o The seven pyramid decisions
(i) 10 year vision(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 ProcessBasic Empowerment ProcessBasic Empowerment ProcessBasic Empowerment Process
Leadership contd…
DeploymentDeploymentDeploymentDeployment “Do”“Do”“Do”“Do”
o All members of Senior Leadership personally ensure that each
new hotel’s goods and services are characteristic of The Ritz-
Carlton 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”Results “Check”Results “Check”Results “Check”
Leadership effectiveness is evaluated
(1) On key questions of their semi-annual employee
satisfaction results (these questions reveal if the respective leader 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…
ImprovementImprovementImprovementImprovement “Act”“Act”“Act”“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”Approach “Plan”Approach “Plan”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…
ResultsResultsResultsResults “Check”“Check”“Check”“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.the Vital-Few Objectives as well as key processes.
Strategic Planning contd…
ImprovementImprovementImprovementImprovement “Act”“Act”“Act”“Act”
The performance reviews are translated into
opportunities for improvement and innovation. Theseopportunities for improvement and innovation. These
decisions are determined by process owners with
assistance from the special organization of Directors of
Quality.
Customer Focus
ApproachApproachApproachApproach “Plan”“Plan”“Plan”“Plan”
At The Ritz-Carlton, customer and market focus
concentrates on the information needed for hotel development
and operation.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…
DeploymentDeploymentDeploymentDeployment “DO”“DO”“DO”“DO”
The specific actions taken by our Sales and Marketing
Leaders to deploy our Market Research conclusions
consist of four major processes:consist of four major processes:
(1) The 6 P’s Concept
(2) Operation of the CLASS database
(3) Complaint Resolution Process and
(4) Standard Performance Measurements.
Customer Focus contd…
ResultsResultsResultsResults “Check”“Check”“Check”“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”Improvement “Act”Improvement “Act”Improvement “Act”
The daily and monthly reviews identify performance
gaps to be corrected. The extensive analysis of thegaps to be corrected. The extensive analysis of the
Macro Environment drives confirmation or changes
in marketing strategy, objectives and plans.
Information & Analysis
Approach “Plan”Approach “Plan”Approach “Plan”Approach “Plan”
Two basic types of measurements are used at The Ritz-Carlton:
(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..
DeploymentDeploymentDeploymentDeployment “DO”“DO”“DO”“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..
ResultsResultsResultsResults “Check”“Check”“Check”“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(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..
ImprovementImprovementImprovementImprovement “Act”“Act”“Act”“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 contd…
ApproachApproachApproachApproach “Plan”“Plan”“Plan”“Plan”
Their Senior Leaders have decided to increase both themeaning and satisfaction their people derive from theirwork. This approach consists of three basic components:
(1) Their Ladies and Gentlemen know what they are(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 theprocess under their authority or their own
personal conduct.
Human Resource Development contd…
Deployment “DO”Deployment “DO”Deployment “DO”Deployment “DO”
The specific actions taken to deploy our approach range
across a broad spectrum, but most significant activities
consist of: 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…
ResultsResultsResultsResults “Check”“Check”“Check”“Check”
Results of the selection, training and development
of our Ladies and Gentlemen are checked at key
stages of progression: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…
ImproveImproveImproveImprove “Act”“Act”“Act”“Act”
Improvement activities in Human Resources relyImprovement activities in Human Resources rely
extensively on internal audits, site visits by Senior
Human Resources Leaders and analysis of employee
survey data
Process Management
ApproachApproachApproachApproach “Plan”“Plan”“Plan”“Plan”
Through our market research which concentrates on
the quality of hotel development and operations, we
have identified key production processes. In addition,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 company’s
mission.
Process Management contd…
Deployment “DO”
The specific actions taken to deploy their annual
Deployment “DO”The specific actions taken to deploy our annual
process management approach flow from our strategic plan-ning process to every job level and category in our company.
process management approach flow from their strategic
planning process to every job level and category in their
company.
Process Management contd…
ResultsResultsResultsResults “Check”“Check”“Check”“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…
ImprovementImprovementImprovementImprovement “Act”“Act”“Act”“Act”
Standing cross-functional teams at all levels use “After
Operations Measures” and customer survey inputs to
improve key processes. These improvements canimprove 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:
CustomerCustomerCustomerCustomer focusedfocusedfocusedfocused resultsresultsresultsresults
FinancialFinancialFinancialFinancial andandandand marketmarketmarketmarket resultsresultsresultsresults
HumanHumanHumanHuman resourceresourceresourceresource resultsresultsresultsresults
SupplierSupplierSupplierSupplier andandandand partnerpartnerpartnerpartner resultsresultsresultsresults
OrganizationalOrganizationalOrganizationalOrganizational effectivenesseffectivenesseffectivenesseffectiveness resultsresultsresultsresults