Strategic Human Resource Management at Ritz Carlton: A Case Study

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STRATEGIC HUMAN
RESOURCE MANAGEMENT
2019

Table of Contents
Introduction............................................................................................................................. 3
High Commitment Human Resource Management at Ritz Carlton..........................................4
Evaluation of External Factors and Their Influence on Strategic HRM at Ritz Carlton..............8
The HR Function of Ritz Carlton and Delivery of HR Practices and Policy...............................11
Conclusion.............................................................................................................................. 14
Reference List.........................................................................................................................15
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Introduction
The frequently changing business environment and fiercely competitive market scenario
have highlighted the importance of human resources. This prompted the organisations to
seek ways to make their manpower into their competitive advantage (Paauwe and Boon,
2018). The focus on customer service and satisfaction also indicated the need for getting the
best out of employees through the implementation of relevant human resource
management practices. This has led to the evolution of the field of human resource
management. The Strategic Human Resource Management is an aspect of effective HRM
that focuses on managing the human resources of the organisations so that it aligns with the
organisational aims and objectives (Paauwe and Boon, 2018). The expected outcomes of
implementing strategic HRM are enhanced innovation and flexibility along with the
competitive advantage for the organisation. High Commitment Human Resource
Management or HCHRM is a strategic HRM concept that has gained recognition for its
positive impact on organisational performance. It focuses on enhancing the performance of
the organisation by minimising employee turnover and absenteeism while promoting
improved employee productivity, attitude, and work quality as a means of enhanced
customer service (Boon and Kalshoven, 2014).
The report will focus on the evaluation of organisational HR practices of Ritz Carlton in the
context of the concepts of HCHRM, best fit HRM and hard and soft HRM. It will also analyse
the external forces that affect organisational HR practices. Another avenue that will be
explored will be the organisation of the HR function and its delivery.
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High Commitment Human Resource Management at Ritz Carlton
The high commitment to human resource management is a concept of strategic HRM that
consists of certain practices that can positively affect organisational performance. The
following are the best practices suggested under the High Commitment Human Resource
Management for improving the organisational performance (Boon and Kalshoven, 2014)
1) Selective Hiring and Sophisticated Selection
2) Employee Participation
3) Extensive Learning, Training, and Development
4) Employment security and internal labour markets
5) Teamwork or self-work management
6) Performance-based Higher Employee Wages
7) Career Development and Performance Appraisal Management
8) Harmonisation
9) Work-life Balance
Some of the above mentioned best practices that are incorporated in Ritz Carlton and
Starbucks are discussed below.
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Source: High Commitment Human Resource Management
Selective Hiring and Sophisticated Selection
This involves focusing on selecting exceptional talents suitable for designated roles from the
onset. This can be a tool for maintaining a sustained competitive advantage. After the
organisation has acquired suitable talent training them properly results in a pool of experts
that are suited for effective execution of their designated organisational function (Boon and
Kalshoven, 2014). The practices that can be employed towards this end can include creating
a job specification suitable to attract suitable candidates, scrutinising applications judiciously
to screen in the eligible talents, and creating suitable employment test and specialised tests
like psychometric tests as an added tool for achieving the objective of selective hiring and
sophisticated selection (Hauff, et al., 2014).
Source: High Commitment Human Resource Management
The practice of Selective Hiring and Sophisticated Selection was adopted by the Ritz Carlton
as per their organisational makeup. Their recruitment process is focused on selection
instead of hiring. They have a well-defined recruitment and selection process based on
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benchmarking. Benchmarking can be described as the ideal profiles based on the top
performers within the Ritz Carlton handling different roles and responsibilities. These
profiles formed the basis of the job description and person specification utilised in the
recruitment and selection process. This process allowed the company to select best-
qualified candidates that suit their designated roles perfectly. Another benefit of this
process gained by the Ritz Carlton is the lower employee turnover (Hauff, et al., 2014).
Extensive Learning, Training, and Development
The high performance of employees in any organisation is dependent on their skill and
knowledge levels that define their effectiveness in job execution. To make the employees
self-confident, effective, high performing, and efficient they need to have a thorough
understanding of their designated role as well as the ability and knowledge to correctly and
efficiently execute their work. Organisational training practices play an important role in this
regard (Lamba and Choudhary, 2013). The learning environment and development practices
of an organisation affect the expertise, and performance of its employees as well as their
motivation levels along with the loyalty to the organisation.
Ritz Carlton has a standard framework that looks after the training, learning and
development of employees within the organisation. The new entrants have to mandatorily
go through two-day long orientation programs that are attended by the management
representatives such as the General Manager to highlight the importance of the orientation
programs to new entrants (Lamba and Choudhary, 2013). The Hotel employs a full-time
director for overseeing training and development operations as compared to other hotel
companies that employ a vice president for every 15 to 20 hotels. The Hotel considers the
orientation as a tool for introducing the new employees to company culture. Post
orientation, the new employees are assigned their separate departments and their
individual departmental trainers from the pool of experienced employees within the
departments. This on the job training lasts for three weeks and it allows the new employees
to understand their roles and responsibilities in a practical manner (Lamba and Choudhary,
2013).
Employee Participation
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The importance of employee participation that makes it one of the best practices of HCHRM
can be understood by its impact on the organisation. Employee participation promotes
communication-related to strategy, finance, and operations, within and between the
organisational functions. It also allows the employees access to information that allows
them to work effectively and provide a suggestion that can enhance organisational
efficiency and productivity. This helps an employee feel empowered and become a part of
the organisational framework. Enhanced employee participation also helps in faster
grievance handling (Sanders and Yang, 2016).
Ritz Carlton enhances Employee participation and involvement through various methods.
The employees are expected to be responsible for the cleanliness of the hotel premises
irrespective of their roles within the organisation. The employees are promoted and
supported by the organisation to take part in the decision-making process of their
respective departments. The hotel believes in empowering its staff so that they can be
proud to be a part of Ritz Carlton and feel inclined to be responsible for the things
happening in the hotel premises. As part of employee participation, the employees are
expected to deal with customer complaints with alacrity (Sanders and Yang, 2016).
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Evaluation of External Factors and Their Influence on Strategic HRM
at Ritz Carlton
The external factors like stakeholder interest and situational factors are a major influence on
the strategic HR strategy of the organisations (Daley, 2012). The Harvard Model of Human
Resource Management explains the flow of strategic decision making of human resource
management (Bratton and Gold, 2017). According to the Harvard model, the human
resource of an organisation is specialised resources that differ from other resources at the
disposal of the organisation. So, human resource requires a different method of handling so
that they are aligned with organisational aims and objectives. The stakeholders of the Ritz
Carlton include its parent company Marriot International along with its shareholders,
employees, management, suppliers, etc.
Source: Harvard Model of Human Resource Management
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The following external factors are the major influence on the organisational human resource
strategy at the Ritz Carlton
Employee Engagement - The role of an employee within the organisation defines their
engagement levels. When an employee has a repetitive role such as in housekeeping then
his level of engagement is low (Bratton and Gold, 2017). Ritz Carlton employs low skilled
employees for profiles like lower roles in housekeeping, cleaning etc. The company employs
highly skilled people for profiles like chef, manager etc.
Legal Environment - The unionisation is a major influence on the organisational decisions
pertaining to their employees although in spite of limited union influence Ritz Carlton
considers their influence for strategic Human Resource decisions. Also, the presence of
regulatory framework and employment laws like minimum wages law makes them a major
part of the strategic HR decision-making process (Bratton and Gold, 2017).
Psychological Contract - The Hotel groups like Ritz Carlton focus on long term employment
due to the cost involved in the implementation of HCHRM practices. The HCHRM practices
incorporated by the company enhance the trust level and loyalty of the employees. The size
of the company also allows it to offer various career progression alternatives to its
employees along with highly lucrative wage structure allowing the establishment of a
psychological contract between the employees and the company. The Ritz Carlton also uses
substantial contractual and outsourced resources (Guest, 2017).
Employment Patterns - The Ritz Carlton has a mixed employment pattern that includes part
time, full time, and contractual employees along with outsourced service vendors. The
company limits the use of part-time workers and contractual worker to specific roles so as
to maintain a high service standard for which the company recognised by its customers. The
high skilled and better-trained employees form the senior hierarchy of the company (Guest,
2017).
Political Factors - The presence of Ritz Carlton at a number of countries makes it susceptible
to the political environment of its host countries. The action of local governments in terms
of changes in taxation, employee laws and regulatory framework for the hotel industry
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influences the organisational strategy and the strategic HR decision making is not an
exception in this regard (Bratton and Gold, 2017).
The Recruitment and Selection strategy of the Ritz Carlton is based upon the Employment
Patterns, Psychological Contract, and the Employee engagement although the influence of
the legal environment and the political factors is also undeniable. It can be surmised that
the above mentioned external factors along with the stakeholder's interest play an
important role in defining the Strategic HR decision of the Ritz Carlton (Guest, 2017).
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The HR Function of Ritz Carlton and Delivery of HR Practices and
Policy
The Human Resource maturity scale proposed by Paul Kearns helps in the determination of
the maturity level of the Human Resource function of an organisation (Kearns, 2012). In
terms of the HR maturity scale, the HR function at Ritz Carlton is at the sixth stage where it
works for hand in hand with other functions to achieve the organisational aims by devising
the strategy and implementing it in a manner that the workforce of the Ritz Carlton
becomes its competitive advantage. The focus of the organisation in the training and
development of their "Gentlemen and Ladies" as the employees at Ritz Carlton is called in-
house, indicates the profound role HR plays in the organisational strategic decision making
(Kearns, 2012).
Source: Human Resource maturity scale
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The focus of HR on employee work quality and incorporation high commitment HRM
processes and policies has restricted the outside influence in the Human Resource function
of the Ritz Carlton. The Ulrich's HR Model proposed by David Ulrich can be seen at play at
Ritz Carlton (Mamman and Al Kulaiby, 2014). David Ulrich defines four key roles that can be
played by an effective HR of an organisation. These roles are an HR Business partner, change
agent, administration expert, and employee advocate (Mamman and Al Kulaiby, 2014). The
HR at Ritz Carlton plays the role of HR business partner by representing the HR strategically
in front of internal clients that are other business functions. It facilitates knowledge transfer
and seamless workflow to effectively achieve the organisational goals. As a change agent,
the HR at Ritz Carlton enjoys the trust of employees and work as a part of change
management by communicating and assisting in implementing relevant decisions (Reilly and
Williams, 2016).
Source: Ulrich's HR Model
The HR at Ritz Carlton has a strong grasp of employment laws and relevant organisational
and industrial guidelines. It also facilitates grievance management along with management
of HR data thereby executing the role of administration expert (Reilly and Williams, 2016).
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