Training & Development Case Study - The Ritz-Carlton Hotel Group

What Is It That They Get So Right?

The Ritz-Carlton training and development system amply demonstrates what researchers in behavioural and cognitive science have shown for years, which is that adult learners engage or disengage as a direct result of how they feel – about their manager, their environment or the organisation (Callahan, 2004; Dirkx, 2006; Goleman, 2002; Lutz, 1988; Opengart, 2005). 

Their culture and values centre on the philosophy that, to paraphrase Aristotle, pleasure in the job puts perfection in the work.

Very few organisations have been as effective in realising such tangible business success from their training and development endeavours as the Ritz-Carlton Hotel Company.  In just the last two years, the organisation has been the recipient of over 16 international training and service awards.

​Every large organisation offers training, but the Ritz-Carlton treat their people as “the most important resource”, as evidenced through their dedication and care at each touch point – from the initial job fair, the immersive experience that is the Seven Day Countdown, the first 21 day review to their ongoing 384 hour annual training commitment (Aveling, 2009).

Getting companies to prioritise leadership and management training is not easy. One recent survey revealed that managers are America’s most neglected employees, with an alarming 62% of leaders claiming they are unhappy with their manager training programs (Root Manager Training Survey, 2014). The Ritz-Carlton training system begins encouraging leadership from the moment of appointment.

Their Gold Standards promote and encourage every employee to own and take action on issues and situations usually reserved for management.  Their service values are overflowing with sentiments such as empowerment, ownership, involvement, responsibility and responsiveness.  Moreover, each and every employee is at liberty to spend up to $2000, without approval, on each individual guest should they see an opportunity to do so (Reiss, 2009).

New recruits learn the culture, standards and values of the organisation not by reading a brochure, watching a video or completing an e-learning program, but through direct experience.  They themselves are treated as guests.  They are met with a warm welcome, escorted past beautiful music to partake of snacks and beverages, and fondly farewelled. 

Before they have even joined, they are immersed in the culture of service – treated as ladies and gentlemen.

 How Do You Balance Quality Standards Against The Need To Empower The Individual?

The Ritz-Carlton Gold Standards, which consist of The Credo, Motto, Three Steps of Service, The 6th Diamond, Service Values and The Employee Promise are rigidly upheld throughout 88 hotels in 29 countries.   For over a century the name has been synonymous with quality and service.  Without doubt, the adherence and commitment to quality standards, alongside the Ritz-Carlton “Mystique” – an enigmatic description of what amounts to a sophisticated customer database and wish fulfilment system – deliver a superior and aspirational level of service.

From top employee engagement rankings to line, supervisor and management turnover rates of 18% as against a luxury hotel industry average rate of up to 158% (Robison, 2008), the Ritz-Carlton’s training system is by any measure a success.   Research has also demonstrated that higher employee engagement leads to lower turnover, fewer safety incidents and higher profitability and productivity (Gallup, 2016).

In recent years, criticism has been levelled at the hotel chain for its ‘old-fashioned’, robotic use of phraseology among staff and its rigid adherence to tradition (Solomon, 2015).  It could be argued that such a clinical adherence to such standards robs individual employees of their creativity, freedom of expression and individuality. Research suggests that organisations open to individuality and self-expression benefit from increased retention and customer satisfaction (Cable et al, 2013). 

In this area, however, the Ritz-Carlton training methodology strikes a uniquely effective balance between quality standards and creative expression.  Although their Gold Standards are prescriptive in nature, the manner in which they are delivered rely on the creativity, innovation and individual judgment of employees.  For example, the fact that employees are given the freedom to spend $2000 to either enhance an experience or problem solve for guests boosts confidence, empowerment and intrinsic motivation (Gagne et al, 1997). 

Moreover, their use of First-Class Service cards, “Wow” stories and 5 Star Employee Rewards program are specifically targeted at the creative application of Service Values. 

Employees are rewarded and praised for anticipating guest needs and acting on them in their chosen style.  They receive this feedback daily in their pre-shift ‘lineup’, where teams gather to talk over incidents, messages and indicators.  In this way, the Quality Standards support and endorse the thoughtful use of creativity and empowered action.  “Individual aspirations are fulfilled” has been written into the Employee Promise for decades, and it appears to be working, with a 90th percentile ranking for customer engagement (Robison, 2008). 

Additional direct evidence is to be found in post-departure employee reviews, 837 of which now appear on Indeed.com.  The average rating sits at 4.5 stars.   
 
Would This Work For Other Industries?

The Ritz-Carlton have for decades now been refining and perfecting a training and development system that works.  Much contemporary research points to the fact that engaged employees deliver 70% higher financial results than their competition. (Fleming and Asplund, 2007).  

They have proven without question the correlation between what others dismiss as ‘touchy-feely’, and tangible business benefits (Roehl & Swerdlow, 1999). This approach demonstrably works for employees, customers and the wider organisation and, as a result, the Ritz-Carlton has much to teach the service industry.

Service industries such as banking, finance, healthcare, IT and consulting services all operate under the same conditions as the luxury hotel industry.  They have employees, staff and customers.  There is not one of the twelve Service Values that could not be applied to another industry.  When companies under-train their employees, three potential scenarios take place:  the employee will not be able to appropriately help a customer, the customer will be left dissatisfied, and/or the employee will be left frustrated and become disengaged (Ryan, 2008).  For this reason, the service industry would be wise to engage in a serious study of the Ritz-Carlton methodology. 

To date, over 3000 organisations have been trained in the Ritz-Carlton way, benefiting from attending the Ritz-Carlton Leadership Center, launched in 2000 after the parent organisation was awarded the Malcolm Baldridge Quality Award – twice.

The Ritz-Carlton approach aligns with the three characteristics of training today.  First, it is increasingly technology based.  Second, it is aligned to organisational performance.  Third, it deals with broader issues than technical prowess (Dessler, 2009).  Ritz-Carlton employees are provided with Palm Pilots, and they view video content and attend online courses.  Management communicates all company priorities to all levels of staff, and offers them the opportunity to contribute to a SWOT analysis and suggest innovations and improvements to systems – all of which is loaded into a database for immediate actioning. All staff, whether guest facing or not, are required to be trained in a broad array of communication, teamwork, responsibility and business subjects (Robison, 2008).

There is substantial evidence in favour of the Ritz-Carlton training and development system.  We know this because the results of their programs are measured and tangibly linked to quantitative and qualitative outcomes.  We know this also because other successful organisations such as Apple, Inc model their training and service standards on the Ritz-Carlton way (Furness, 2012).   We know this because the company engaged the Gallup organisation to survey both guests and employees, such was their commitment to ensuring they live up to their Gold Standards.  The results vindicated their commitment.  Gallup proved companies that score above the 50th percentile in both employee and customer engagement outperform those below by 240% (Robison, 2008).

Despite the obvious and proven benefits, organisations continue to pull funding from learning and development in times of economic hardship (Butcher, Sparks & McColl-Kennedy, 2009).  Companies that do so find themselves at a severe disadvantage in rebuilding internal expertise and capability (Kristick, 2009).  Successfully adopting a ‘training-led’ philosophy does not necessarily need to cost more.  With the advent of leveraged technological advancements, the service industry could easily adopt some of the more effective initiatives used by the Ritz-Carlton. Southwest Airlines replaced the traditional classroom with more interactive shared experiences similar to the Ritz-Carlton’s ‘lineups’ (Taylor, 2003).  Viacom developed the Manager’s Toolkit, a video series with executives from across the business sharing stories, akin to the “Wow” moments (Taylor, 2003), and NetApp taped all their seminars to allow their teams to listen online, reducing the duration of training by a third (Laff, 2008).

The Ritz-Carlton, like any organisation, are not beyond criticism and must continue to evolve their training and development program to meet ever-increasing demands and a changing business landscape.  They have, however, become the most awarded and respected brand in luxury hotels in the world, with most internal and external experts agreeing this is largely due to the way in which they train their people. 

Therefore, applying similar principles would seem a logical and sensible strategy for others in the service industry.  In the words of Diana Oreck, Vice-President of the Ritz-Carlton Leadership Centre, “I can assure you we would not be spending the kinds of money we do on training … if we didn’t think it was going to show us the money” (Furness, 2012).
 
 
References
 
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