MGT cases

There is a great line from a Dilbert cartoon suggesting that you do not need a motivation program to get people to eat a chocolate chip cookie—and Dilbert is right. That is, there is no great magic in motivating highly paid people to do what they love, or to get great athletes to play hard in the championship game. The real test of motivation is getting ordinary people to provide extraordinary performance, and in the absence of any great pay or job excitement. Examples of exactly that phenomenon occur daily at Ritz-Carlton hotels.

Known worldwide for consistently delivering an excellent hotel experience, Ritz-Carlton managers have the difficult challenge of motivating their staff—ordinary people paid a relatively modest wage—to consistently deliver extraordinary levels of customer service. Among the strategies they employ are the following.

Sharing “wow stories.” Every day, employees of every department in every Ritz-Carlton hotel around the world gather for a 15-minute staff meeting where they share “wow stories.” These are true stories of employee heroics that go above and beyond conventional customer service expectations. In one, a hotel chef in Bali found special eggs and milk for a guest with food allergies in a small grocery store in another country and had them flown to the hotel. In another, a hotel's laundry service failed to remove a stain on a guest's suit before the guest left. The hotel manager flew to the guest's house and personally delivered a reimbursement check for the cost of the suit. Telling stories in these pep talks accomplishes two goals. First, it reinforces the high standards of customer service the hotel strives to provide its guests. But most importantly, it gives employees instant “local fame.” Employees want to be recognized in front of their peers, and giving them public recognition is a powerful motivator.

Demonstrating passion. Moods are contagious. Managers who walk around with smiles on their faces and who demonstrate passion for their jobs have an uplifting effect on others. Enthusiasm starts at the top. For example, at a recent staff meeting the supervisor was dressed impeccably in a blue suit, white shirt, purple tie, and shined black shoes. His wardrobe communicated respect for his job and his staff. “Good morning, everyone,” he said enthusiastically. The housekeepers returned an energetic greeting. This manager was all smiles and showed respect for his team. He said they returned his commitment through their hard work.

1. Why do employees at Ritz-Carlton, who are not paid significantly more than people at other retail establishments, work so hard to provide remarkable customer service?

2. As a manager, what lessons can you draw from the Ritz-Carlton example regarding how to get people to go the extra mile?

3. Are those that go the extra mile generally paid the highest, and do such firms have the highest labor costs? If it is not just about the money, what is also at stake?

CASE

Maintaining Employee Motivation

When Gamal Aziz became president of MGM Grand Hotel & Casino in 2001, the huge hotel was doing ex-tremely well—as was Las Vegas. The challenge for Aziz was to take something good and make it even better. Under Aziz, revenue zoomed, and along with the Bellagio, the MGM Grand became one of the most profitable hotels on the Las Vegas strip.

But ask Aziz what was the single most important factor in the jump, and he won't talk about twirling acrobats or signature dishes such as free-range quail stuffed with foie gras. His answer is the employees. Now with times getting tougher in Las Vegas as tourism drops and gambling revenues fall, Aziz says his people have become even more critical to the company's success.

Cost-Cutting Moves

“Employee engagement in times of difficulties and severe economic climate is far more profoundly important now,” says Aziz. “Employees are willing to give their all when they are well-treated, appreciated. And the ability to unlock that potential is a competitive distinction.… It's their decisions, their actions, their attitude that really make the difference. Imagine taking 10,000 employees, and each and every one of them wanting to give more. That's really the difference between [us and] a company that has its employees just punching the clock and trying to get through the day.”

But Aziz, like all managers, is under pressure to justify every cost. Although his hotel still had high occupancy rates, groups are canceling, and those that do come are spending much less per visit. That's forced Aziz to reduce costs associated with some of these successful programs. He still does regular employee appreciation dinners for top performers, but he's spending about half as much this year as last. He's started recruiting managers from other properties to attend his MGM Grand University as a way to reduce the costs of training his own top managers. And he's put on hold one program that trains next-generation line managers.

Rank-and-File Insight

Aziz shares with employees the challenges he's facing. Employees, the CEO says, were what got the hotel to the next level, and they are the key to pulling through hard times. “We will get through this, we will survive,” says Aziz. “Once we get through this, the employees will be the ones who have gotten us through.”

When Aziz arrived in 2001, he quickly sought out rank-and-file insight into the hotel and how it could improve. A survey of the hotel's 10,000 employees made clear that very little was being communicated to the staff about the events going on in the hotel on a daily basis, including such basics as who was staying there, and what the hotel had to offer those particular guests. Employees sometimes didn't even know what conventions were at the hotel. That made it difficult for the staff to give the level of service that would affect customer loyalty, return visits, and spending in the hotel.

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Aziz came up with a simple fix. There is a short meeting now at the start of every shift in which every employee is given the rundown of what's happening in the hotel that day. It's a simple concept based on meetings that restaurants have long held to get waiters up on the daily specials. But rolled out across 10,000 employees a day, it's a major undertaking.

MGM Programs

The MGM Grand made other moves to help employees grow. In his recent book, Closing the Engagement Gap, co-author and Towers Perrin Managing Director Don Lowman highlights many MGM programs, including the MGM Grand University that offers dozens of classes on an invitation-only basis for high achievers. The MGM Grand Leadership Institute is a 24-week program for executives. And REACH! is the hotel's six-month course on basic supervisory skills for ambitious hourly workers. All this investment in the staff, along with recognition dinners and other rewards, has led to more than 90 percent of MGM Grand employees saying they are satisfied with their jobs, and 89 percent saying their work has special meaning. According to the book, 91 percent report they are proud to tell others where they work.

“One of the ways we'll get through this dire economic circumstance we find ourselves in is if leaders set this tone that we're all in this together,” says Lowman, who worked with a multitude of companies as a consultant at Towers Perrin and ranks MGM Grand among the best at connecting with employees. “It's very easy to say ‘Let's just whack 15 percent of the company.’ You can immediately take a lot of costs off your books. But that has a big cost both on the people doing the whacking [and on the company] in the long term, when you'll need those people [you let go] again.”

In the book, Lowman sites a finding from the firm's survey of tens of thousands of employees in six countries—including the U.S., China, and India—that the No. 1 thing that engages employees is senior management's interest in their well-being. That trumped career advancement, relationship with one's direct supervisor, and even pay. Visiting the MGM Grand, Lowman says he found evidence of that connection in spades. Aziz was impressive, Lowman says, for his tendency to ask questions and listen to the answers. Engagement starts at the top.

Discussion Questions

1. Using what you learned about rewards, identify some powerful rewards mentioned in the case and explain why they are so powerful.

2. Apply the expectancy theory of motivation to the case and explain what Gamal Aziz is doing well. Now, pick another theory discussed in the chapter and apply it as well. Can multiple theories provide insight about why Aziz is successful?

3. Instead of focusing on cutting employees, this case argues that there are other routes to success (even in difficult times). Why do you think this is true? Can you think of cases where it may not be true?