Case Study: Portman Ritz-Carlton in Shanghai, China

In the following interview, Mark DeCocinis, general manager of the Portman Ritz-Carlton and regional vice president, Asia-Pacific, of the Ritz-Carlton Hotel Company, shares his successful formula with Arthur Yeung, Philips Chair Professor of Human Resource Management at the China Europe International Business School. Arthur Yeung: The Portman Ritz-Carlton has been consistently selected the Best Employer in Asia. What's your secret to success in people management? Mark DeCocinis: The secret is constancy in execution. Our priority is taking care of people. We're in the service business, and service comes only from peo- ple. It's about keeping our promise to our employees and making that an every- day priority. Our promise is to take care of them, trust them, develop them, and provide a happy place for them to work. The key is everyday execution. Arthur Yeung: The idea is to set up people for success so they have pride in their jobs. But in China, where employees have relatively poor service attitudes and skills, what management practices do you put in place to help them succeed? Mark DeCocinis: The key starts with selecting the right people.

Our selection focuses on talent and personal values because these are things that can't be taught. Our culture is special, and we can't expect to bring someone into this culture if they don't have the same values and purpose. We focus on a person's theme. What do they enjoy? What's their purpose in life? What motivates them? We look for people who genuinely enjoy contact with people and helping others. It's not about being introverted or extroverted; it's about caring for and respecting others. You can work at the front desk or behind the scenes, but you must enjoy contact with others, whether they are guests or other employees. Arthur Yeung: How many people are promoted from within? What's the average tenure of employees here? Mark DeCocinis: Many senior positions are filled from within the hotel or within the company, approximately 70 to 80 percent of the leadership positions. We took over management of the hotel in January 1998. Over 60 percent of the employees have tenure of more than five years, and over 30 percent have tenure of eight years or more. Arthur Yeung: Besides the selection process, what else does the Ritz-Carlton do to motivate its employees to provide excellent service? Mark DeCocinis: We spend two days of orientation with new employees before they come into contact with any guest. They must understand our cul- ture and philosophy.

The general manager, the executive team or guidance team, and HR are all involved. Each of them explains our Credo (we are here to take care of our guests); our Employee Promise (we are to take care of you); our 20 Basics; and our Motto (we are ladies and gentlemen taking care of ladies and gentlemen). Then they receive 30 days of training with a certified trainer from the department. Following that, we have reinforcement training on the 21st day, and we get feedback on how we can improve our training program for future retraining and recertification. Then, throughout the year we provide a minimum of 130 hours of training for every employee, including specific training for their department and training on culture, language, and computer. Arthur Yeung: You start with a philosophy that employee satisfaction leads to guest satisfaction, which in turn leads to good financial results. How do you know such a relationship really exists? Mark DeCocinis: I'll give this hotel as an example. Our employee satisfaction rate is 98 percent. In the last five years, it's been 95, 97, and 98 percent. Our guest satisfaction is between 92 and 95 percent. If employee satisfaction were to decrease, I guarantee the other factors would decline. Let's say the employ- ees are happy but the guests are not, that means we are not balanced.

1. How do selection, retention, and training practices work together at the Portman Ritz-Carlton?

2. Which of the HR strategies do you think the Portman Ritz-Carlton is pursuing?

3. Why do you think employee satisfaction leads to customer satisfaction?