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Introduction For the opening of The Ritz-Carlton hotel in Washington D.C. the company once again aims to achieve an excellent standard of service quality. Their excellent service is one of the main strengths and the company highly values its employees, recognizing them as one of their most important resources. The following paper will provide a thorough analysis of the case using theories that could help the Ritz-Carlton deciding on how to achieve their usual standard. Best-fit elements in Ritz-Carlton Every company has its own environment, its context in which to try and make operations as successful and rewarding as possible. Different countries, sectors, systems and employee groups are all part of it (Boxall and Purcell, 2008), while there is an increasing awareness that human resources are of high importance to a company’s performance. Considering the people of a company being such an important resource, the challenge occurs to align human resources with the company’s strategy at best possible, in order to reach its goals. This best-fit theory includes a horizontal fit, meaning the fit between different HR practices in order to establish one coherent HR system. It also includes the vertical fit, meaning the alignment of the company’s strategy with the HR practices throughout the company (Delery, 1998). The Ritz-Carlton management aims to be excellent in what they do: providing excellent service, which as they say accidentally occurs in the hotel-business. The company follows the practices of Total Quality Management (TQM) while focusing on guidelines of the Malcolm Baldrige National Quality Award as well as establishing Service Quality Indicators. Aspects that they focus on are the cost of poor quality, continuous improvement, quality planning, benchmarking, supplier certification and quality audits. The HRM practices of Ritz-Carlton start with their recruitment, selection and training process. It is a very strict process, searching for the highest quality of human resources concerning talent and motivation, while simultaneously searching for people that seem to fit the company’s culture. Speaking of best-fit practices, aligning the strategy towards becoming an excellent service provider with HR practices, they are showing that similar behavior works in both directions. While in the recruitment 3

phase, they treat applicants following the standards at Ritz-Carlton, considering them as potential guests. Management shows respects and gratitude during the recruitment process and is building relationships with its employees – as they try to do with guests – through pre-employment callbacks. What they create is an attitude according to the motto ‘what you give is what you will get in return’ by respecting employees, treating them very well, asking them for feedback, providing them with career advancement options and showing recognition for their work by giving rewards. In other words, the company treats them like ladies and gentlemen while they are expected to act like ladies and gentlemen towards guests at the same time, following the motto ‘We are Ladies and Gentlemen serving Ladies and Gentlemen’ (Sucher & Mcmanus, 2005, p.12). Work motivation As mentioned above, the Ritz-Carlton president and COO, Schulze, wants the RitzCarlton to focus on total quality management (TQM) while simultaneously emphasizing the importance of human resources (Sucher & Mcmanus, 2005, p. 5). This presents a challenging issue, since TQM usually hinders the process of how to motivate employees which is the main focus of human resources. The main focus of the Ritz-Carlton when discussing the topic human resources is the purpose their employees need to have when doing their job. “An employee is a human being who doesn’t only fulfill a function but should also have a purpose” (Sucher & Mcmanus, 2005, p. 5). When having a purpose, people are more likely to enjoy their work and know why they are doing their job. Therefore, The Ritz-Carlton wants to recruit employees based on their brains, hearts and souls (Sucher&Mcmanus, 2005, p. 6). In the self-determination theory this is called intrinsic motivation (Grant & Shin, 2011). Intrinsic motivation is ‘a desire to act based on interest and enjoyment on the work itself’ (Grant & Shin, 2011, p. 16). When employees are fulfilled in three psychological needs (autonomy, competence and relatedness), they are more likely to be intrinsically motivated and internalize external goals and objectives (Grant & Shin, 2011). This purpose is created in different ways. In the orientation phase and the first day of the Seven Day Countdown the first exercise is to teach the core values of RitzCarlton. The main opinion is that you can only change people in the first phase of the orientation process because then they are still open-minded and sensitive for changes.

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By focusing on the values they hope that people get intrinsically motivated to do their job. The self-determination theory also focuses on extrinsic motivation. Extrinsic motivation is a matter of degree, varying along a continuum of autonomous regulation (Ryan & Deci, 2000 in Grant & Shin, 2011). There are four types of extrinsic motivation: external, introjected, identified and integrated. By focusing on the values of The Ritz-Carlton, the employees are identified (based on consistency with a personal value) and integrated (assimilated into one’s system of values) extrinsic motivated. Grant and Shin (2011) argue that in particular the combination of intrinsic and identified-integrated extrinsic motivations is powerful. Grant and Shin (2011) argue that in particular the combination of intrinsic and identified-integrated extrinsic motivations is powerful. Another way to get intrinsic and identified-integrated motivated employees is to select staff that fit into their culture. The Ritz- Carlton management believes that a ‘successful business is one that is capable of enlisting an employee not only for his muscles and his labor, but also for his brain, his heart, and his soul’. (Sucher & Mcmanus, 2005, p. 6). The main purpose of a job is formulated for an employee by setting specific goals. At first glance it may seem that the Ritz-Carlton has only set one primary goal for its employees, which is to be the best, to be successful. However, further on in the orientation it becomes clear that the primary goal is based on many smaller goals. The motivational effects of goals are based in the goal-setting theory (Grant&Shin, 2011). This theory is based on the fact that conscious goals affect action (Ryan, 1970 in Locke & Latham, 2002). Locke and Latham (2002) found that specific, difficult goals led to higher performance compared to telling employees to do their best. The case does not make clear whether the common goal of the organization is specified enough for each employee. However, The Ritz-Carlton does focus on moderators, as feedback and self-efficacy, which are making the effect of goal setting even bigger (Locke&Latham, 2002). With adequate training and the opportunity provided to employees, to take their time to increase their productivity by starting with an occupancy rate targeted at 50 percent in the first month, the company creates selfefficacy. Self-efficacy is the belief of employees that they can attain the goal and it enhances goal commitment (Locke & Latham, 2002). The daily line-ups and observations that can lead to one-on-one training make the goals more effective.

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“People need summary feedback that reveals progress in relation to their goals” (Locke&Latham, 2002, p.708). By focusing on values, the purpose of working, setting goals, training and giving employees the feeling that they can achieve the goals, the Ritz-Carlton creates a good base to have motivated and committed ‘Ladies and Gentlemen’ at work. Leadership style and motivation at Ritz-Carlton From the two different types of leadership mentioned during the course of Theories of Leadership and Management - transactional and transformational/charismatic leadership – the latter is the one used in the Ritz- Carlton case. According to Den Hartog and Koopman (2001) a transformational leader has the ability to communicate high expectations of followers and show confidence in followers’ ability to live up to those expectations. Ritz-Carlton began to focus on the Total Quality Management (TQM) philosophy. The company established goals based on values and ideal standards of excellence. They focused for example on continuous improvement, quality audits, quality planning and benchmarking. The emphasis put on these aspects resulted in achieving outstanding quality standards and the RitzCarlton has won the Baldrige Award in 1992 and 1999 (Sucher & Mcmanus, 2005, p. 35). Never before was this award won when a traditional (transactional) leadership style was practiced. Meanwhile, the management team comes together every morning to resolve any difficulties that have arisen (Sucher & Mcmanus, 2005, p.44), which reflects the urge to continuous improvement: a characteristic of a transformational leader (House, 1977). A people’s focus is also something typical for a transformational leader (Den Hartog & Koopman, 2001). The transformational leader raises the level of conduct and the ethical aspiration of the people (Den Hartog & Koopman, 2001, p.174). Respect is something that is driven by The Ritz- Carlton leadership. The way The Ritz-Carlton sees its employees is highly moral: the company treat its employees as real human beings (Sucher & Mcmanus, 2005, p. 35). In addition, they create a workplace where employees understand that their responsibility is not only to fulfill functions but also to have a purpose (Sucher & Mcmanus, 2005, p. 36). This focus on purposeful work inspired many Ritz-Carlton employees to remain committed to the organization (Sucher & Mcmanus, 2005, p. 43).

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In the case, they also said that the new employees watched a video in which the CEO and others explained the hotel company’s history, values and philosophy. This is a form of role modeling that is typical for transformational leaders (Den Hartog & Koopman, 2001, p.174). When a new group of employees made its entrance, the hotel managers warmly welcomed each new member. This is a way to motivate people. The transformational leader also keeps a strong focus on vision and mission and motivates and inspires other people (Den Hartog & Koopman, 2001, p. 175). Ritz-Carlton’s leaders share their hopes and dreams with their employees, what is in their heart and soul and ask their employees to join in their mission (Sucher & Mcmanus, 2005, p. 43). This is how the leaders at Ritz-Carlton inspire and motivate the employees. In conclusion, the leaders of the Ritz-Carlton case have some important transformational leadership characteristics, for example the ability to communicate high expectations of followers, focusing on continuous improvements, motivating and inspiring people while focusing on vision, mission and people. Teamwork and culture at the Ritz-Carlton It is impossible to evaluate and analyze the teamwork at the Ritz-Carlton hotel without involving and describing their culture: at the Ritz-Carlton, these two aspects are highly interrelated. An important aspect in managing people effectively is the understanding of the culture and the workplace environment people operate in. All of the activities that revolve around recruitment, selection, training, socialization and reward systems require an understanding of how organizational culture influences present functioning (Schein, 1990, p. 117-118). Looking at the Ritz-Carlton hotel, value is placed on working cooperatively toward common goals to which all employees feel mutually accountable. As a team they are getting the work done. The essence of the Ritz-Carlton to successfully manage this is through a work environment of respecting each other (Sucher & Mcmanus, p. 13, 2005). You can see that within many aspects throughout the organization, for example ‘Day 21’ (process check after any new hire’s start date), opportunities for career advancement, different awards and their motto (Sucher & Mcmanus, 2005, p. 6,7,12). It is this philosophy that makes the ‘open, informal

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culture’ so special. They create a work environment for people in which it is exciting to make mistakes and discover how to correct them. The culture encourages openness. Individuals have the empowerment of solving problems that customers are facing. This creates a sense of ownership and responsibility toward the organization and this stimulates organizational learning, growth and renewal (Thomas & Ely, p.8, 1996). The employees understand that their responsibility is not only to fulfill a function, but also to improve the system as a whole (Sucher & Mcmanus, 2005, p. 7,15). The Ritz-Carlton is not primarily in the hotel business: their business is service. They are committed to their customers and their organizational goal is providing excellence in service. They have a service-oriented culture (Sucher & Mcmanus, 2005, p. 10, 13). The only way to effectively establish that is through paying attention to the core of their business and one of their most important resources: employees. When analyzing the numbers of Ritz-Carlton there are a few things that are interesting. First of all, the of employee turnover rate is relatively low. The Ritz– Carlton focuses, right from the beginning, on a person–organization fit. During the recruitment, selection and training they are looking for people who share their values (Sucher & Mcmanus, 2005, p. 9). Researches seem to agree that culture may be an important factor in determining how well an individual fits an organizational context (O’Reilly et al., p.487, 1991). Where values provide the starting point, selection and socialization are complementary means to insure person-organization fit (O’Reilly et al., 1991, p. 492). Congruency between an individual’s values and those of an organization is an important factor in maintaining employees over the long run. The person-organization fit is a significant predictor of normative commitment, job satisfactions and intentions to leave (O’Reilly et al., 1991, p. 507). Another positive outcome of sharing the same values and attitudes among employees is that work groups function more smoothly and can establish higher performance (Murnighan & Conlon, 1991). Second is the number of awards. Individuals and departments are getting awards for outstanding work. What is very important is that people in any kind of function get the feeling that their job contributes to the core goal of the company; deliver exceptional service to customers every single day. To accomplish that, people are externally driven through awards (Sucher & Mcmanus, 2005, p.7,9), but also internally through departmental ‘lineups’, which occurred at the beginning of every 8

shift. The underlying purpose of this is reinforcing the company’s philosophy. By repeating the foundation of the business over and over employees will deliver the highest level of service because of their own personal belief in it (Sucher & Mcmanus, 2005, p. 13). That is the main reason why Ritz-Carlton hotel is doing so well compared to other organizations in the same industry. They understand the value of their employees. A successful (hotel) business is one that is capable of enlisting an employee not only for his muscles and his labor, but also for his brain, his heart, and his soul (Sucher & Mcmanus, 2005, p. 6). As the Ritz-Carlton projects to the outside world: ‘You can join us, and not just work for us’ (Sucher & Mcmanus, 2005, p.13). Changing the Seven Day Countdown To be able to conclude whether Mr. James Mcbride should change the Seven Day Countdown, we will first discuss the potential benefits of the training program day by day, while simultaneously looking at the possibility, if necessary, of changing the Seven Day Countdown. The Seven Day Countdown is a training program, which was especially created as a first encounter between the Ritz Carlton organization and their newly hired employees. The individuals will take part in the mandatory orientation program, the Seven Day Countdown, to teach all the core values of the Ritz-Carlton organization. On the first day, there is a staff orientation, which focuses on an enthusiastic encouraging warm welcome to the Ritz-Carlton team. Following the encouragement session the new employees watch two different videos, one in which Schulze and others describe the company’s history, philosophy and values, followed by a second tape that describes The Ritz-Carlton’s milestones, including awards they had won and new hotels they had opened (Sucher & Mcmanus, 2005, p. 12). The main aim of the first day in Ritz-Carlton’s opinion is to change people in the first phase of the orientation process because they are still open-minded and sensitive for changes. By focusing on the values of the Ritz-Carlton they hope that people get intrinsically motivated to do their job. Day two of the training focuses on departmental vision sessions. These sessions introduce the employees with their new departments and promote the concept of team work/spirit. They try to get groups to come up with a main goal, which allows them to stimulate each other when the hotel has opened its doors to the public. The concept of self-teaching also has a high

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priority in order for an employee to see and realize how their position and attitude affect the customers (Sucher & Mcmanus, 2005, p. 13). The following five days the employees perfect their skill training, focusing on anticipation and how to handle the guest requests. Meanwhile, refining each department’s own philosophy and statement of goals while simultaneously looking at the big picture of all the departments together. Other activities include uniform fittings, personal grooming sessions and the introduction of employees to the daily lineup procedure (Sucher & Mcmanus, 2005, p. 15). Finally, to answer the question whether McBride should listen to Mr. Collins, who wanted to prolong the seven-day countdown and enhance the training to ensure that the service established was flawless and a real draw for potential condominium residents, we should look at Inghilleri’s quote. Inghilleri mentions a very important point in the case that allows us to understand why they use this specifically structured orientation schedule in the first few days. He says, “The size of the window of opportunity that the company has to drive home new concepts is limited. So if you waste the first few hours of the first few days discussing anything other than values, you’re wasting your opportunity. That is why in our orientation, the first thing we do is discuss values (Sucher & Mcmanus, 2005, p. 16).” Here we can clearly conclude that it does not depend on the overall time the countdown lasts, the crucial days are the first two, including those crucial motivational development moments. The employees will be able to learn everything else in the seven-day countdown. They could prolong the process, but the pressure on the employees will only become greater, causing anxiety and the scare to fail. At one point practice and training are no longer efficient and you need to go out in the real world. It is impossible to anticipate on every little thing that could possibly happen. Therefore, sometimes one just needs to start and go with what you as an employee feel is the best solution and take it from there. Therefore, we would advice McBride to decide against prolonging the sevenday countdown and focus primarily on the first critical two days with the encouragement from all the top-level managers.

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References Den Hartog, D. & Koopman, P., Leadership in Organizations. Handbook of Industrial, Work & Organizational Psychology – volume 2. 2001. SAGE Publication. 16 Feb. 2011 Grant, A.M., & Shin, J. (2011). Work motivation: Directing, energizing and maintaining effort (and research). Forthcoming in R.M. Ryan (Ed.), Oxford handbook of motivation. Oxford University Press. Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation. American Psychologist, 57 (9), 705-717 House, R.J. (1977). A 1976 theory of charismatic leadership. In J.G. Hunt, & L.L. Larson (Eds.), Leadership: The cutting edge (pp. 189–204). Carbondale, IL: Southern Illinois University Press. Murnighan, J.K., & Conlon, D.E. (1991). The dynamics of intense work groups: a study of British string quartets. Administrative Science Quarterly, 36, 165–86. O'Reilly, C.A., Chatman, J., & Caldwell, D.F. (1991). People and organizational culture: A profile comparison approach to assessing Person-Organization fit. Academy of Management Journal, 34(3), 487-516. Schein, E.H. (1990). Organizational culture. American Psychologist, 45(2), 109-119. Sucher, S.J., & Mcmanus, S.E. (2005). The Ritz-Carlton hotel company. Harvard Business School Case. The McGraw-Hill Companies, 9, 1-30. Thomas, D. A., & Ely, R. J. (1996). Making differences matter. Harvard Business Review, 74(5), 79-90.

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