Incentive - February 2008 - (Page 36)

Aleem David, a bellman at The Ritz-Carlton, Dubai, is among those free to spend as much as $2,000 of the company’s money to be sure a guest is satisfied mpowerment may seem ingrained in the Ritz-Carlton culture. Training and standards were always exceptional, but no one uttered the word “empowerment” until the early 1990s when the company applied for the 1991 Malcolm Baldrige National Quality Award and didn’t get it. John Timmerman, vice president of quality and program management at Ritz-Carlton, in Chevy Chase, Md., says that one of the winners that year, a manufacturing company called Zytek (now part of Artesyn Technologies in Eden Prairie, Minn.) empowered its people to spend up to $1,000 to make good any problem. RitzCarlton borrowed the idea, setting “a number where an employee would never second-guess themselves,” says Timmerman, “and that’s how we came to $2,000,” which any employee can spend, without any supervisory approval, to resolve a guest problem. Ritz-Carlton did win the Baldrige in 1992 and again in 1999, to a great extent thanks to its culture of empowerment, and it has won every major travel award too. Four and five stars and diamonds have been sprinkled liberally over its decidedly deserving properties. Meanwhile, the journey toward full employee engagement continues to this day, with the newest emphasis being anticipating guest needs, not just resolving problems. Timmerman says that many companies that try to implement empowerment “come at it from the HR standpoint,” but “it needs to be part of the leadership system. That’s the secret code to unlock it all.” —J.B. E of the Ritz-Carlton Leadership Center, also in Chevy Chase. And employees learn on day one of their orientation that Ritz-Carlton walks the talk. In most companies, the underlying message at orientation as the facts and figures and—yes— rules are outlined, is “aren’t you lucky to be working for such a great organization!” At Ritz-Carlton, says Orek, new employees are greeted with a different message: “Aren’t we blessed that you have chosen us.” Empowerment is very motivating. It’s a validation by management of the decisions the employee makes as an individual. That gives the employee’s work meaning. But empowerment alone won’t produce good results for the company or the individual. It must be constantly taught, talked about, reinforced with tools and improved to meet new challenges. “We never use the word ‘motivation’ in our culture,” says Timmerman. “We select the right talent, [and then] it’s more a matter of bringing it out and aligning it in the organization.” Communication and training—practices such as the daily lineup—breathe life into the culture of empowerment. Orek calls the daily lineup “the golden thread that weaves the program together. It’s fifteen minutes, and every day everyone goes to the meeting. People really want to go.” Though Ritz-Carlton reinforces the same 12 values in every meeting, the script, written by the company’s senior manager of internal communications, changes every day. Even at Ritz-Carlton there is constant retooling. New training began last July to help employees solve problems in a less scripted way. The ultimate goal is a happy guest, and now the individual staff member has more responsibility to figure out how to attain that. The results of Ritz-Carlton’s enormous investment in training (10 percent of payroll, according to Training magazine) and its reinvention of a renowned service culture are impressive. Turnover, which SECRETS THE RITZ was at 50 percent at empowerment’s inception 15 years ago (versus an industry average of 150 percent) is now in the low 20s, says Orek, and the industry average has dropped to 85 percent. The company also measures employee engagement and customer engagement. Seven out of 10 benchmarks for the latter are also benchmarks for employee engagement, says Timmerman. The two are that tightly entwined. For every three points that employee engagement increases, Ritz-Carlton finds it raises customer engagement a further notch. Rogers, an expert in customer value, says that in a culture like Ritz-Carlton’s, “The compensation system is different You reward [employees] for creating value for the company,” which essentially means, did the employee’s actions make the guest more likely to return? Asked about incentives at Ritz-Carlton, Timmerman says that they are tailored to the positions. For instance, “waiters are incentivized based on great service and interacting with other departments Economics are important to aligning an organization. [But] when we look at things like empowerment, it’s not a program, it’s part of the DNA.” A Boost to Innovation Qualcomm is a San Diego–based company that sees its role as enabling the development of next-generation wireless communications. Allowing every employee to learn and develop, and to share their learning, is fundamental to that mission. And so, employees design their own jobs. “We don’t have job descriptions,” says Tamar Elkles, vice president of learning and organizational development. Empowered to create their work, employees learn what they need to know to solve a problem, or they might learn something either in formal training or in a conversation that changes the direction they are going. Growth and development happens organically in an empowered organization. “The number-one reason 36 | MORE Incentive FROM | February 2008 | incentivemag.com http://www.incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - February 2008

Incentive Magazine - February 2008 Editor’s Note: Archie and the Boys In The News Cover Story: On The Ball Incentives Incentive Primer: How to Use Sporting Events Incentive Interview: Jim Avery on Doing the Right Thing Employee Empowerment Motivates and Pays Dividends Hospitals, Nurses Win With Flexible Scheduling Legal Ease: Safety Programs and Unions Case Study: The Weitz Company Retains Its Boomers Potentials: Here and Now Star Power in the Kitchen Awards: Gift Card Trends for the New Year Travel News The Manhattanization of Las Vegas Classics Renewed: Monaco and France Advertiser Index Off The Cuff: Tumi’s Mike Landry

Incentive - February 2008

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