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Case Study: Club Med

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Autor:  anton  05 January 2011
Words: 1449   |   Pages: 6
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HBS Case Study: Club Med

Turnover is a normal part of any business, and is to be expected. For some, it is common matter, and for others, it can be become a real burden. The idea is not to necessarily eliminate, but minimize the effects of turnover. Turnover can be either voluntary or involuntary. It is the job of managers to come up with solutions to motivate their employees to not only want to stay, but also to help develop them to their full potential.

The current organization at hand is Club Med. Started in 1950 by a group of friends, Club Med has since then gone from a nonprofit sports organization to the ninth-largest hotel company in the world. As the size of the association grew, managing it also became more and more complex. It was in 1954, newly appointed managing director, Gilbert Trigano, saw a commercial opportunity in the concept of turning the association into a business. By 1985, the Club, also known as, Club Mediterranee had become a publicly owned company on the Paris Stock Exchange and encompassed 100 resort villages that could host up to 800,000 vacationers.

In the organization, each resort village is made up of one “Chief of the Village” (general manager) and seven assistants called “Chiefs of Service” whom each oversee the activities of 80 congenial hosts – also known as GOs – who handle all jobs outside of house and grounds keeping. One of the biggest problems the organization faces is with the increasingly high turnover rate of newly recruited GOs. Turnover is now at 50% with North America at twice that of Europe. In the American zone, differences in culture and language have set barriers of communication between the North Americans and Europeans, frequently with French-speaking GOs and American GMs – congenial members. Thus the importance of American GOs is crucial for quality customer service. We will be assessing the dilemma of turnover through thorough analysis of the recruiting, selection, training, and appraisal system processes.

The first issue was that some village chiefs fired two or three times as many GOs as other chiefs. To resolve the problem, it has been proposed that the village chiefs take part in the recruitment process, so that they see how hard it really is to find quality GOs. There are a few problems here. For example, it is harder to assess résumés in America than in Europe because of discrimination laws barring both requests for photo and age. This makes screening applicants that much more difficult when certain demographics are ideal, especially for European’s who are not familiar with American practices. Also, Americans tend to be more “creative” with their résumés, so as to attract attention, and though not always, most of the time, these résumés tend to be very misleading. All in all, the entire recruitment process is very tedious and time consuming especially when cultural differences work as a restricting factor for something as simple as screening candidates for interviews. And though I strongly believe that village chiefs should have a say in the recruiting process, I also believe that American village chiefs may be better qualified when assessing the needs of its American subordinates because of their similar outlook on life than that of someone from another country.

Motivation is a major component in effectively reducing turnover. Many American GOs feel that they are not getting proper feedback from their respective chiefs, and subsequently the European chiefs do not consider the need to provide that feedback either. This plays a huge factor in motivation because how will you know what you are doing wrong when your supervisor does not tell you. The current system solely uses a rating system that rates technical ability and attitude and comportment with GMs. Though the appraisal system allows for feedback in the comment box, most chiefs were not inclined to elaborate. Again with the differences in culture, European chiefs feel that the American GOs should just do what they are told without explanation, and American GOs are feel that European chiefs are being condescending. One employee complained that upon arrival, he was given no clarification of what was required of him; he was escorted to his room and told to “go on stage”. Not knowing what that meant, he went about his business, and two weeks later, he was disposed of. It is the responsibility of management to properly define tasks and expectations. I think that implementing a 360 degree assessment feedback plan will not only be beneficial to the GOs as a medium to voice their opinions and concerns, but it will also motivate their chiefs to respond to those needs as apart of their performance appraisal rating.

This brings me into my next topic of training. It almost seems as if, as soon as American GOs are being promoted to chief of service, they are being shipped off to manage European GOs without any ease of transition. It makes no sense of immediately placing someone into a job that has little or no experience without first being trained. Training, no matter what its form, can beneficial to the organization by preparing employees for future positions, enabling the organization to respond to change, reduce turnover, improve customer service, and meet many other goals. Training can be a key component in developing motivation. Employees will not be motivated in a job in which they feel helpless. I strongly agree with the idea of setting up a GO training school where GOs would be trained for a week or two before their first assignment. The only difference I would make though, is to have more than one school, to better accommodate the growing number of recruits in a larger area, as well as, reduce the effects of groupthink than if they were trained locally. Also, annual diversity training days should be put into place to better understand the root of problems that lie within cultural differences between GOs, GMs, and chiefs.

With the concept of rotation, I think that it hurts more than it helps. First of all, it requires GOs to have to constantly adjust to new surroundings, hindering their ability to create lasting relationships, as well as causing temporary dips in guest-satisfaction rating due to lead times for adjustment. Though I am not completely opposed to the idea of rotation. I think that rotations should be done by request basis. So that those who are content, in addition to those who feel they need more experience, will not have to be pressured to move. It is important to foster an environment in which your employees can develop their skills and abilities, while simultaneously giving them time to build a positive attitude, relationships, and motivation. Also the rotations can be used as positive reinforcement to motivate employees to work harder. The employees will value something they believe they have earned more than if it is just given to them.

Another concept that I am quite fond of is the idea of taking the time to meet and provide positive feedback to those GOs that consistently put forth exceptional customer service. Building interpersonal relationships will give the GOs a better sense of our commitment and interest in them. Letting them know that we acknowledge their hard work, may in turn, lead them to want to build a lasting career with the Club. People tend to stay in places where they feel they belong.

Through proper allocation of human resources, job design analysis, and the use of motivation, your employees can be used to gain a competitive advantage over your competitors, which is something rare and hard to duplicate. Developing training programs and performance appraisal plans will help the organization assess problems seen from all standpoints, subordinate and supervisor levels. This information will in turn, be used to better understand the needs of its employees and how to take proper measures in assessing those needs. Turnover is inevitable, and should not be taken lightly. High turnover can set a negative image of the organization, and may turn future potential employees away. Keeping an open mind, especially to cultural differences, is exceptionally important particularly since North American GOs are a big part of the future success for the internationalization of the Club. It is not for sure how long it will take to solve the problem of turnover, but with appropriate planning, it may come sooner than you think.

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