People Management

Ritz Carlton, the international hotel group has a very unique way of benchmarking, their argument is that they measure employee performance by the levels of customer satisfaction, every month the human resources department receives back from every department of the hotel a survey from customers with information regarding their satisfaction and overall experience in the hotel in emotional terms (Zimmerman 2003).

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Ritz Carlton calls this surveys satisfaction scores, and ever month the hotel group gets a very high score, the company has estimated that their customers are satisfied about 76% of the time, which is higher than any other hotel group (Stephenson as cited in Zimmerman 2003). It is clear that in this case, Ritz Carlton is the benchmark, and other hotel groups would be seeking to have a look at Ritz Carlton processes to adapt them to their own company.

At Ritz Carlton there is a very rigorous employee selection process regarded as quality selection process (QSP), this QSP states very clearly the qualities expected for each new hire, so when they are assessed it is very clear the criteria used to judge them (Zimmerman 2003). In another company, the Seattle based coffee roaster company; Starbucks takes a very different approach to benchmarking, their focus is based in job satisfaction of their employees, which according to a recent survey was of 82%, this translates into a low employee turnover, that according to the company is lower than most fast-food businesses (Hammers 2003).

The reasons that lie behind this high job satisfaction and low employee turnover are in first place, its reward system; each employee can buy shares of Starbucks at discount prices, which are discounted from their salaries, in second place, the benefits the company offers, medical, dental, vision and alternative services (Hammers 2003).

But not only the reward system and the benefits are responsible for making Starbucks the benchmark in job satisfaction and employee turnover, but also their strong corporate culture, like referring to their employees as partners, and making the work environment pleasant to every employee (Hammers 2003). It is clear that all these human resources issues improve the day-to-day operations of Starbucks, with and average increase in profits of 26% and the opening of various stores world wide in a daily basis (Hammers 2003).

Conclusion. Benchmarking in human resources is a process of investigating what other companies are doing in this field, analysing it and the modify it or come up with something new to implement it in the company’s own culture and values, all of this with the objective of creating a better work environment and conditions for the employees, this will result in an increase of the company’s performance, efficiency and productivity that will ultimately be reflected in an increase of profits.

Benchmarking, as it is know today, in a business sense started in the 70’s at Xerox, as part of a company effort to improve the quality of its products, although there are references of benchmarking that go back to the times of the Egyptians. Benchmarking can be used at a operational level in a wide range of activities, these include budget needs, absence levels, training costs, simplifying recruitment process and reducing costs, pay levels, union relations and discipline.

The benchmarking efforts of a company have to be in accordance with the strategic goals, some times to resolve an operational problem those not guarantee to work towards the strategic objective at all because the root of the problem might be within more deep cultural issues and not just operational. Ritz Carlton argues they are the benchmark regarding recruitment, presumably has the highest level of customer satisfaction among their competitors, they relate this to their employee selection practices, in other words the higher the customer satisfaction is, the better their selection process is, because they have the ideal people for every job.

Finally, another company that uses human resource benchmarking to maximize its profits is Starbucks, by benchmarking it reward system this company claims to posses the highest levels of job satisfaction within the fast food industry, their reward system consists of giving their employees to buy company shares at discount prices and giving them extended benefits like medical, dental and alternative services coverage, but not only their reward system is involved in their high levels of employee satisfaction, Starbucks has a very strong corporate culture and really worries about work environment issues.


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