RAMADA DEMONSTRATES IT’s PERSONAL BEST

RAMADA DEMONSTRATES“ IT’s PERSONAL BEST TM ”

RAMADA DEMONSTRATES“ IT’s PERSONAL BEST TM ”

Background to the Research Problem

• Ramada is a franchisee system related to hospitality industry.

• According to this case study, mid tier hotel and Ramada all has reached at the stage of stagnant in delivering customer services.

• According to Tim Pigsley, director of operation management in Ramada Franchisee System (RFS), industry is facing this problem before time. It is essential for Ramada Franchisee System to identify the various alternative solutions to resolve the problem.

Key Issues

• As per (Cooper & Schindler, 2003), management of RFS knows that the main issue behind this problem is related to :

– Selection process of appropriate employees

– Their motivation to work with zeal and enthusiasm

Problem Statement

• Management of RFS to identify actionable plans to improve satisfaction among customers by improving employee’s performance and motivation.

Research Objectives

• To improve customer satisfaction

• To improve employee attitude and motivation levels

Research Questions

• What can management do to improve customer satisfaction?

• How is employee attitude and motivation connected to customer satisfaction?

• Should their be revision in employee incentives with regards to increased customer service ratings

• Should their be modifications in hiring and training procedures?

• Ramada’s management dilemma stems from downward trend in perceived customer service. Three critical areas for study are:

(a) Hiring practices

(b) Training

(c) Motivation

Literature Review

• Simons and Hinkon in 2003 did the analysis on the following research question.

Research Question : How much does hotel employee turnover cost? Does this cost vary with the price level of the hotel?

Findings: Employee turnover was strongly associated with decreased hotel profits (r = -.46, p < .01)

Top reasons for:• Involuntary attrition : Excess absenteeism, poor job performance, frequent

tardiness, frequent guest complaints, and other issues such as theft or job abandonment.

• Voluntary attrition: Better pay/career opportunities in the market, personal/family reasons, intra-company transfer/promotion.

• It is therefore very important and beneficial that one of the areas of concern to Ramada was employee retention.

Literature Review

• The role of exploration in Ramada’s research is important. First, it was not a random exploration. Random exploration is widely regarded as inefficient. The exploration played a role in helping Ramada focus on the exact areas that needs improvement. This process not only helped the management to focus, it was also cost effective.

• The role that secondary data played in the exploration phase of the research were savings in time and money as Ramada used the work that someone else has already done the time-consuming work (finding respondents, convincing them to answer the questions, collating and coding all the data). Secondary data helped Ramada during the exploration phase because it is relatively easy to get access to good data.

• Secondary data played a significant role as there are far more really interesting data sets available to Ramada than any one person or group would ever have the time or money to accumulate. Because secondary was provided to Ramada it allowed the management to spend all of their time on analysis.

• Ramada contracted outside suppliers and hence its control over research and investigative questions in processes were limited.

• The research process decisions that were made were:– To use outside suppliers to study successful organizations like Disney, Southwest

Airlines, and Carlson hospitality.

– To visit 900 sites within six-month period using a 24-researchers for a face-to-face employee input. (Qualitative Research – Interviews Methodology)

– Because outside research suppliers like D. K Shifflet through his survey of customer satisfaction in the hospitality industry showed a downward trend in customer service perception, Ramada made good research process decisions in areas of hiring, training, employee retention and motivation.

Research Design

• This case employed a judgmental sampling methodology. It is appropriate even though Statisticians criticize it for its theoretical weakness. Market and opinion researchers however, defend it for its cheapness and convenience. It is appropriate for Ramada’s case because it is cheap, convenient, specific and direct, quick reply, and administratively easy in solving the problems. The decision to hire outside suppliers is the judgmental sampling. How these outside suppliers carried out their processes may not be judgmental.

• Since there was a judgmental sampling where Ramada chose the companies it wished to study, it can be rightly said that the research design is quasi-experimental. Quasi-experimental is one that looks a bit like an experimental design but lacks the key ingredient, which is random assignment. One of the strengths is that they are easily and more frequently implemented than their randomized cousins.

• They are less costly. They are administratively easy to implement. It has a quick reply and does not need any sampling frame.

Research Design

• However, they often appear to be inferior to randomized experiments. Estimates of standard deviations are not possible. It is also difficult to establish internal validity as the approximate truth about inferences regarding cause-effect or causal relationships. However, internal validity is only relevant in studies that try to establish a causal relationship. It's not relevant in most observational or descriptive studies.

• Part of the success of the study can be attributed to the ability of corporate management to convince property owners and managers to buy in to the proposed changes. However, property owners/managers played an important role for the success of the project in that they provided needed answers to the surveys designed in Likert Scales in following intervals for evaluating training programs effectiveness:1- Very Poor, 2- Poor, 3- Average, 4- Good and 5- Very good.

Research with employees also revealed that the current training approach was boring and ineffective.

Research Design

• While Ramada may always have been encouraged to participate in research, the new non traditional, party-like atmosphere aims to help researchers and Ramada fine-tune research plans and make them more competitive for internal and external use. This will create synergy through open communication by using non traditional research settings. It is good that Ramada encouraged non traditional research atmosphere especially in such service-oriented projects that benefit the property owners’ community and serve to strengthen the relationship between corporate, franchisees and workers.

• Among others, there will be a reduction of barriers to getting straightforward answers to this survey. The use of non traditional, party-like atmosphere forges trust between researcher and the respondent

Research Design

• Finally, the research findings reflected in the ultimate management decisions in areas of hiring practice. Ramada property managers now screen prospective employees for characteristics revealed by Predictive Index.

• Another area the research had an impact in the ultimate management decision making is training. The old training practices was scrapped and replaced with interactive, CD-based, multimedia training.

• The newly devised motivation program takes into consideration reward for employees. The rewards can be received if customers send out letters of service satisfaction or when a supervisor nominates an employee or when an employee receives a peer nomination.

Research Reporting

• The adoption of this newly devised program was the right move considering that:

“A recent study of 1,750 participants from various companies gives the following top five responses to the question, "What keeps you here?” By the way, surveys suggest that 89% of managers think retention is mostly about money”.

1. Exciting work and being challenged--------------54.6%

2. Career growth, learning and development------51.1%

3. Working with great people and relationships---46.9%

4. Fair pay and benefits----------------------------------31.8%

5. Supportive management-----------------------------20.6% (Walsh, 2003, p.3)

Research Reporting

• Management decision-making is not made in isolation. Ramada saw the downward trends in customer service. They also saw the exploding employee turnover.

• They sought help in stemming the tide of below par service by adopting new training procedures and a different approach in employee motivation which ultimately turned their fortunes for the better. Most organizations will ultimately do better by identifying and solving problems through well-researched surveys.

• Thus, this case study can be seen as a best example of business research methods because of scientific thinking of management, utilization of effective research methodologies to collect information and make decisions to enhance the satisfaction both employees as well as customers

Management Decision

• Educational Institute (EI), the American Hotel & Motel Association (AH&MA), and KPMG Peat Marwick.

• Simons, T., & Hinkin, T. (2004). The effect of employee turnover on hotel profits: A test across multiple hotels. Retrieved March 16, 2004, from

http://www.hotelschool.cornell.edu/chr/research/inbrief/empturnover.html

• Walsh, T. C. (2003). Retention in the workplace: some reflections. Retrieved March 8, 2004 from http://www.grenell.com/whitepapers/Retention.pdf

References