Implications of the Ritz-Carlton Experience

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The Ritz-Carlton case demonstrates that the hotel industry can apply Baldrige-award criteria to develop a successful quality program just like other firms in the manufacturing and service industries. The chief mechanism for ensuring the steady quality improvement required by the Baldrige award is empowering employees, which means giving them the authority to identify and solve customer problems on the spot and to improve work processes. A corollary of empowerment is that employees should be able to make modest changes in normal procedures, especially in resolving a guest's complaint. Ritz-Carlton, for instance, allows each individual employee to spend up to $2,000 to satisfy a guest. As Patrick Mene so aptly put it, "Ritz-Carlton employees know that from day one they are empowered to break away from their normal routines whenever they see a problem to bring that problem under control." For empowerment to have a positive effect, however, employees must also have the knowledge and skills to use their authority well. That requires training not only in quality concepts and quality control tools and techniques, but also in how to do the job and how to work together as a team.(7) Another lesson learned from Ritz-Carlton's quality effort is that hotel companies can achieve excellence in quality improvement without using the sophisticated statistical techniques normally associated with manufacturing companies. Although many persons feel that the precisely measured Baldrige criteria favor manufacturing, the award does not require companies to use computer-generated statistical techniques. Companies are required, however, to collect and analyze information related to customer satisfaction, quality of products and services, cycle-time reduction, and financial and employee-related performance, and to make comparisons with competitors and industry benchmarks. In fact,

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