Improving OrganizationalPerformanceUsing Survey-drivenDatabases                                      The search for organi...
O P E R AT I O N S          M A N A G E M E N Tcommitment, and (4) nurture a                Human resources. In 1997,compa...
Exhibit 1     Service–Culture Map™                 Phase I                                                             Pha...
O P E R AT I O N S     M A N A G E M E N T                                    Phase III                                   ...
losophy? What are our financial     Exhibit 2                                                                             ...
O P E R AT I O N S          M A N A G E M E N T   Step 1 suggests that the ultimate    dimensions thereby ensuring thatrea...
• Overall, the transition period with     Exhibit 3                                                                       ...
O P E R AT I O N S         M A N A G E M E N Tment.” Correlation coefficients went     sions of executive leadership andfr...
call). Regardless of what demo-     Exhibit 4                                                                            g...
O P E R AT I O N S            M A N A G E M E N Tprove individual—and thereforeorganizational—performance.                ...
department performance. The inter-     Exhibit 6                                                                          ...
O P E R AT I O N S          M A N A G E M E N T   Stretch targets are developed togenerate strategic, big-picturechanges i...
committee to compare notes and           members to listen to each other”                                                 ...
O P E R AT I O N S        M A N A G E M E N Tgood job. Since empowerment does         achieve peak performance and the    ...
team members receive for their                                                                                         wor...
O P E R AT I O N S       M A N A G E M E N Tmanagement team know their col-            perception. Measuring this percep- ...
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  1. 1. Improving OrganizationalPerformanceUsing Survey-drivenDatabases The search for organizational peak performance is considered by many to be the Holy Grail of the business world. A new process involving periodic employee and customer surveysby Gene Ference can help in that search and be the beginning of organizational-performance improvement. T he process of achieving orga- nizational peak performance is often thought of in the same way that Winston Churchill character- ized Russia: “… a riddle wrapped in a mystery inside an enigma.” Although achieving peak perfor- mance is, indeed, one of the most illusive of company goals, the situa- tion is not hopeless. This article describes how Station Casinos, a Las Vegas hotel-casino management company, uses a pro- prietary, trademarked process (called the Service–Culture Map) to en- hance its organizational perfor- mance. The Service–Culture Map, Gene Ference, Ph.D., is president of illustrated on pages 14–15, can be Connecticut-based HVS International/ used to (1) define an organization’s The Ference Group ( gference@ vision and decision guidelines, hvsinternational.com). (2) develop employee-performance measures, (3) gain team-member © 2001, Cornell University12 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  2. 2. O P E R AT I O N S M A N A G E M E N Tcommitment, and (4) nurture a Human resources. In 1997,company-wide culture that encour- Valerie Murzl, Station Casino’sages peak performance from execu- vice president of human resources,tives, managers, and employees alike. was hired to spearhead the develop- Organizational dimensions are ment of a company-wide human-clusters of related survey statements. resources program and to help sup-Using a combination of employee port Station’s goal of continuous Photo: Las Vegas News Bureauand customer surveys, the Service– growth. A human-resources veteranCulture Map measures six key with over 25 years of hotel-industryorganizational dimensions: (1) orga- experience, Murzl believed stronglynizational communication, (2) orga- in the value of measuring organiza-nizational teamwork, (3) executive tional culture through satisfactionleadership, (4) mid-management surveys, data analysis, and subse-practices, (5) job satisfaction and quent action planning. As it turnedmorale, and (6) training and career out, the Service–Culture Map wasdevelopment. Those organizational a good fit for Murzl’s philosophy,dimensions are broad functions style, and goals:through which senior executives can I believe the ultimate goal of themonitor and implement company- Service–Culture Map is quitewide strategies and objectives. The simple—the process develops self-surveys can be customized so that empowered people who are sincerely interested in bettering themselvesmeasurements are not limited to and their companies. The result isthose six dimensions, but can in- an organization that feeds on height-clude additional dimensions such as ened employee creativity and enthu-strategic-goal achievement, service siasm. When a company under-quality, and competitive positioning. stands where it is, versus where it wants to be, the process becomes “The goal of the Service–Culture Map is quiteIt may be helpful to refer to the simple—the process develops self-empoweredService–Culture Map throughout a powerful tool for providing the missing pieces, bridging the gap, people who are sincerely interested inthis article. bettering themselves and their companies.” and advancing to a higher level of —Valerie Murzl, Station Casino’s organizational effectiveness.Station Casinos corporate vice president The Service–Culture Map out- for human resourcesThe Station name was first intro- lines key steps needed to create aduced to Las Vegas in 1983 at Palace successful service company. TheStation. Since then the Station Casi- model focuses on employee satisfac-nos company has grown substan- tion, commitment, and customertially. Today it comprises nine sepa- responsiveness as the keys to arate gaming and entertainment strong return on owner investment.complexes and has approximately When measuring those factors the11,000 employees. The mission of Service–Culture Map identifies thateach Station property is to deliver an the drivers for empowerment, cre-array of entertainment and gaming ativity, and enthusiasm are at theoptions in an environment charac- hourly employee level, while theterized by quality and attention to drivers for commitment, teamwork,detail. To fulfill its mission, Station and communication lie at the ex-Casinos offers comfortable hotel ecutive level.rooms at an affordable price, gamingvenues, movie theaters, specialty Sunset Station: A Case Studyrestaurants, child care for employees, Sunset Station is one of nine hotel-live entertainment, and a variety of casinos in the greater Las Vegasfast-food venues. It may be said that community operated by StationStation Casinos properties are no- Casinos. It opened on June 10,table for their great value and per- 1997. Sunset Station offers 457sonalized service. April 2001 • 13
  3. 3. Exhibit 1 Service–Culture Map™ Phase I Phase II STRATEGIC THINKING SURVEY-DRIVEN DATABASE M Step 1: Master plan Step 2: Survey design Step 4: Reports • Corporate opinion • Structures: M Vision L M • Employee satisfaction —Multi-level Core values • Customer satisfaction —Multi-segmented L M • Alignment assessment —Cross correlations Mission statement • Data formats: M —Baseline L M —Comparative Credo or motto Step 3: Survey administration —Trend L M —Demographic Guiding management • Populations • Narrative commentary principles • Cycle times L M • Resources Standards Reassessing foundation basics Achieving peak performance Process re-evaluation: Renew the process with Steps 3–10 Steps 1–2 M M Step 10: Managing for continuous improvement Source: HVS/The Ference Group; TheFerenceGroup.com; gference@hvsinternational.com rooms and suites, 12 restaurants, 8 Don Marrandino opened the bars, a 600-seat night club, a 5,000- Sunset Station property as general seat amphitheater, 13 movie theaters manager. A strong believer in hotel- with a seating capacity of over 3,000 wide and department-level vision viewers, 3,000 slot machines, 50 and mission statements, coupled gaming tables, a 600-seat bingo with goal setting, Marrandino set room, and a 400-seat facility for out to establish a service culture betting on racing and other sporting based on creativity, commitment, events. Sunset Station also offers a and self-empowerment. In so doing, gym, pool, fitness center, and a he found the Service–Culture Map 6,000-square-foot video arcade for to be a useful tool. children. Sunset Station has 1,800 Baseline. HVS/The Ference employees (called team members), Group uses percentages to identify runs an annual occupancy over 90 company, employee, and customer- percent, welcomes 20,000 guests satisfaction ratings. The following and casino customers per day, and table is based on findings from over prepares 200,000 meals per month. 20 years of data collection and ap-14 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  4. 4. O P E R AT I O N S M A N A G E M E N T Phase III Phase IV TEAM DYNAMICS ORGANIZATIONAL CULTUREM Step 9: M Step 5: Data analysis Achieving peak performance • Historical performance M Step 6: Goal setting • Internal benchmarks Employee satisfaction • Industry norms • Types • Time frames L M • Gap and spread analysis —Systems —Immediate Customer satisfaction • Root-cause analysis —Processes —Moderate L M • Key-driver correlation —Relationship —Long range Employee retention • Overall satisfaction —Best practices L M M M —Stretch targets Market share and loyalty L M TEAMSTRATEGICS DAILY CYCLE Product and profit dominance Step 8: Relationship management Step 7: Feedback formats • Build team dynamics • Foster creativity • Pre shift • Cross functional M • Develop learning–coaching • Departmental communications environment • Visible management Return on owner’s investment • Measure performance • Focus groups • Leverage motivation • Executive-level meetings • Have fun • Workshops and retreats M M Competence — Commitment — Coherenceproximately 30 million survey re- ment, the employee-satisfactionsponses. The categories have been score was only 65 percent. In De-in use since the 1980s. cember 1999, after administeringEmployee-satisfaction Levels: the survey just three times and em-Excellence 86 to 100 percent ploying the Service–Culture Map for a little over two years, SunsetAbove average 79 to 85.9 percent Station achieved an employee-Average 73 to 78.9 percent satisfaction-survey rating of over 86Below average 66 to 72.9 percent percent, thereby achieving an “ex-Poor to failing ≤ 65.9 percent cellence” rating for employee satis- Sunset Station conducted its faction. Moreover, Sunset Stationfirst employee-satisfaction survey successfully elevated the departmentin December 1997. The property that scored lowest in the 1997 sur-achieved a rating of 79.1 percent. vey from 65 percent to 78 percent.This barely qualified the property In 1999 Marrandino was pro-for inclusion in the above-average moted from general manager tocategory. In one particular depart- president of Sunset Station. Cookie April 2001 • 15
  5. 5. losophy? What are our financial Exhibit 2 goals? Team-member satisfaction surveys ➔ I-CPN* = Credo or motto: Generally, a one-line 77.6% statement capturing the spirit and December 1999 36% 86.2% essence of the vision and mission (n = 1,507) statements. All employees should December 1998 understand, embrace, and re- 36% 80.8% (n = 1,437) member (if not memorize) the company’s credo or motto. December 1997 37% Guiding management principles: A set 79.1% (n = 1,222) of operational principles agreed 25% 50% 75% to by all members of an executive team. The principles focus on Tend to agree Strongly agree how employees manage them- selves on a day-to-day basis. The *Industry-Comparative Performance Norm (as determined by HVS/The Ference Group) guiding management principles encourage and direct employees to use their highest level of per-Dreschler was promoted from direc- ness, and creates overall success for sonal effectiveness in the pursuittor of finance to general manager. the company or brand. Working in of systematic and continuous While other hotels have achieved concert with each other, those ele- improvement. Just as a rising tidea rating of “excellence,” Sunset Sta- ments become a company’s master lifts all boats, an organizationtion is the first hotel-casino to reach plan. where individuals can achievethat highest category of employee Step 1—Master plan. The mas- their highest level of personalsatisfaction. Significantly, its score ter plan lays the foundation for cre- effectiveness is, by definition, aplaced 8.6 percentage points above ation of a company culture. Without company that is likely to achievethe Industry-Comparative Per- such a plan and the attendant ex- its highest level of organizationalformance Norm (I-CPN), which ecutive focus and action, an organi- effectiveness.is calculated from over 2,000 zation has no internal compass. If an Standards: There are two categorieshospitality-service properties world- organization doesn’t know what it of standards: technical standards,wide (hotels and casinos) that are is, it can’t have a clue what it wants which identify operational tasksincluded in HVS/The Ference to be. Experience from working specific to departments, and ser-Group’s normative databank. Ex- with successful service companies vice standards, which identifyhibit 2 illustrates the overall survey supports the premise that employees levels of interpersonal serviceresults for Sunset Station. at all levels seek direction and pur- provided by employees. Standards pose. A master plan, comprising a facilitate the creation of a consis-Phase I: Strategic Thinking company’s vision, core values, mis- tent and clear culture that per-Strategic Thinking (Phase 1 of sion statement, credo or motto, meates all company activities bythe Service–Culture Map) provides guiding management principles, codifying (1) how decisions arealignment of the elements necessary and standards provides that focus. made, (2) how the organizationalfor a successful company culture: The individual elements of the structure complements operatingvision, core values, mission state- master plan are defined below. principles, and (3) the desiredment, credo or motto, guiding Vision: What the organization wants long-term market position.management principles, and stan- to become. Once the master plan is success-dards. Those elements are critically Core values: Timeless principles that fully implemented, employees haveimportant if employees are to use employees believe in and upon the direction and sense of purposetheir knowledge, experience, and which companies are built. necessary for performance success.insights to improve performance. A Mission statement: A strategic docu- This is an important point. There issuccessful company culture enables ment identifying key constituen- a fundamental link between strate-employees to create new ways to cies. What business are we in? gic thinking at the senior-executivemanage systems and processes, en- What is our market? What is the level and the implementation ofsures that day-to-day standards are level of our product and service? those strategies at the front-line andmet, enhances leadership effective- What is our management phi- guest-contact levels.16 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  6. 6. O P E R AT I O N S M A N A G E M E N T Step 1 suggests that the ultimate dimensions thereby ensuring thatreason for the diffusion of any stra- survey statements are in alignmenttegic plan may be measured by with a company’s master plan. Well-comparing employee perceptions designed surveys measure what isof two organizational dimensions: important to all stakeholders. For(1) organizational communication instance, employee-satisfaction sur-and (2) training and career develop- veys should be designed to providement. For example, strong interde- for immediate operational insights,partmental communication allows employee empowerment, and moti-for rapid identification and imple- vation. Mechanisms that promotementation of new employee skills organizational communication arewithin a department. At Sunset paramount if teams are to becomeStation, the correlations between sophisticated enough to develop theorganizational communication and ability to think strategically.training and career development At Sunset Station, following thegenerally are moderately strong to steps of the Service–Culture Mapstrong (r = .500 to .590). Impor- has strengthened the interrelation-tantly, the correlations become ship between the organizational-stronger over the years of survey communication and organizational-administration. teamwork dimensions. Again, in our experience, the correlations becomePhase II: Survey-driven Database stronger as the survey is adminis-A company’s quest for continuous tered year after year.improvement requires the use of By the time the most recentquantitative data for problem solv- Sunset Station survey results were “Our team-member surveys have 42 questionsing, decision making, action plan- completed, in January 2001, the and focus on relationship management, which is all about communications, motivation,ning, and change. A high priority correlations between the dimensions teamwork, and leadership. In other words,must be placed on developing a organizational communication and we are measuring the cultural aspects of whatstrong database and gathering from organizational teamwork in many our team members create everyday throughit as much relevant information as instances ranged from moderately their actions and performance.” —Don Marrandino,possible to plan organizational and strong to very strong (including r = President of East Las Vegasoperational improvements. To build .755). Of the four organizational Operations for Station Casinossuch a database, the Ference Group levels, (executives, managers, super-is in favor of surveying employees visors, and hourly employees), theand customers to determine satisfac- correlations per survey statementtion levels. were consistently higher for hourly Step 2—Survey design. Effec- employees. This is to be expected.tive surveys capture timely informa- A significant part of front-line em-tion that can be translated easily ployee success depends on the ex-into action plans. Surveys encompass tent of organizational communica-a variety of designs and purposes. tion and organizational teamwork inFor example, they can measure: a company. For hourly employees, (1) Corporate opinion, for scope other high correlations with organi- and direction; zational communication and organi- (2) Employee satisfaction, for zational teamwork were: perceptions operational culture; of “team member mutual support (3) Customer and guest satisfac- and encouragement” and “manage- tion, for brand loyalty; and ment encouragement for employees (4) Organizational alignment, to listen to each other” (r = .618), for mergers, acquisitions, and “receiving objective and honest transitions; and for vendor information from the manager” and and owner relations. “management creating a good team Surveys are customized from core effort” (r = .645), and “performance April 2001 • 17
  7. 7. • Overall, the transition period with Exhibit 3 this company is working well. Sunset Station compared to industry norms Properly constructed surveys assist in executive decision-making Overall satisfaction 86% by imparting accurate, real-time 78% Organizational communications 82% insight into operations. Company 75% 86% executives are responsible for devel- Training and career development 80% oping and maintaining organiza- 90% Job satisfaction and morale 77% tional alignment. The support and Organizational teamwork 82% enthusiasm of executives and senior 74% 89% managers are integral to any com- Mid-management practices 79% pany initiative, be it the adoption of Executive-committee leadership 88% 75% a motto or the identification of a 25% 50% 75% company’s core competencies. Sun- set Station attempts to accomplish Sunset Station Industry norm this through what is called relation- ship management. This is discussedfeedback” and “management creat- way that allows employees to relate later in more detail. Using theing a good team effort” (r = .623). each statement to their own job Service–Culture Map, executives at Because of the array of survey responsibilities. Examples of Sunset Station made real gains instatements, we can gauge front-line employee-satisfaction-survey company alignment—ensuring thatemployee perceptions of “empower- statements are as follows: the elements of the master planment.” Empowerment is a function • Communication between depart- were understood and implementedof (1) the sophistication of commu- ments is effective. within all levels and functions of thenication mechanisms, where evolved • I am treated with respect by my property. Among those importantcommunication links effectively manager. gains were stronger correlationscarry vision, goals, and standards • Senior management places the right between executive-leadership andacross a company, and (2) the de- emphasis on both the quality of organizational-communication di-gree of teamwork, where a learning service and profit. mensions. For the property overall,environment encourages front-line Examples of guest-satisfaction- the correlation between those di-employees to rely on each other and survey statements are: mensions witnessed marked im-provide problem-solving direction • I felt welcomed upon arrival. provement, from moderately low toto supervisors. We ran correlations • The overall cleanliness and upkeep moderately strong ( generally up tobetween the “empowerment” survey of my room met my expectations. r = .600).statements and the two dimensions • The room-service menu provided Similarly, marked improvementorganizational communication and me with the selection and variety occurred when the executive-organizational teamwork. As before, I expected. leadership dimension was correlatedthe strength in the correlations in- Examples of corporate-opinion- with the dimensions organizationalcreased over the years so that the survey statements are: teamwork and training and careermost-recent results were generally • The company is achieving tangible development. Of importance heremoderately strong to strong (typi- results in improving the area of meet- is measuring how the executive-cally ranging from .530 < r < .660). ing sales and growth requirements. leadership dimension affects howThe most consistent correlations • Transfers between regions are encour- front-line team members perceiveinvolved gauging team members aged and carried out in a fair manner. their work. In both instances the“receiving objective and honest • Corporate senior managers work as great majority of correlations indi-information from the manager,” a team. cated moderately strong coefficients.“performance feedback,” and “ab- Examples of organizational- Consistently stronger and moresence of favoritism.” Those results alignment-survey statements are: prevalent correlations emerge year-indicate that careful survey design • I am proud to be associated with to-year in survey statements thatis at the heart of gaining insight this company. measure front-line employee per-into a company’s success factors. • I believe this company is concerned ceptions of “senior management’s Survey statements. Survey ques- about the quality of work life in this commitment to and understandingtions and statements are stated in a property. of the employee work environ-18 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  8. 8. O P E R AT I O N S M A N A G E M E N Tment.” Correlation coefficients went sions of executive leadership andfrom a range generally between .400 mid-management practices). Theto .460 in December 1998 to .500 most recent survey results for Sunsetto .570 in December 2000. More Station indicate consistent correla-important, correlations were highest tions in which the relationship isamong survey statements centering largely moderately strong to strong,on the ”absence of favoritism” in many instances ranging from(r = .509), “creating a good team .540 < r < .638.effort” (r = .572), and “recognition Step 4—Reports. It is commonof special efforts” made by front-line for senior managers to want a singleemployees (r = .572). number that tells them how the Step 3—Survey administra- organization compares to industrytion. The type of survey determines norms and to the local competition.how it is administered. For example, By comparison, employees want tosurveys that are completed by em- know what specific tasks need to beployees (i.e., corporate opinion, accomplished. Employee motivationemployee satisfaction, and company lies in actual achievement and op-alignment) generally can be handled portunities for improvement. Theinternally, usually with the help of discrepancy between the needs ofthe organization’s human-resources managers and those of department-department. Because the population level employees is unfortunate. Re-of company employees is known ports designed for executives andand manageable, all team members senior managers typically delivercan be expected to complete a sur- only broad company performance Sunset Station employees practice what they preach.vey within seven days. information. They avoid peeling off Customer- and guest-satisfaction organizational layers and reachingsurveys, on the other hand, should core data, where process successesbe administered by independent and failures can be identified. Suchsurvey professionals and conducted reports do not provide employeesvia mail, telephone, or electronically with the key data needed to en-(e.g., over the internet). Because the courage change.population of hotel guests and ca- To overcome the discrepancysino patrons is too large to survey in between what information manag-its entirety, random sampling is un- ers find useful and what informationdertaken, with care given to market employees find useful, the Stationsegmentation. Casinos survey reports the data by The survey is an invaluable tool organizational level, that is, by ex-to gauge front-line opinion and gain ecutives, managers, supervisors, andoperational insight into a company’s hourly employees. Those reportsday-to-day environment. A well- also featured data further segmenteddesigned survey can measure indi- by divisions and departments.vidual perceptions on topics such as Typically, data from the first sur-the “absence of favoritism” in a vey establish a baseline againstdepartment, “recognition of special which subsequent surveys are mea-efforts” by employees, “employee sured. The second survey establisheswillingness to ask for help from a comparative database that indicatespeers and supervisors” alike, “per- the direction in which surveyedceived fairness in the distribution topics are moving (that is, are issuesof work,” and “fair management improving or getting worse?). Thepractices.” The perceptions on the third and succeeding surveys moni-aforementioned topics can then be tor the direction and magnitude ofcompared to, or correlated with, those trends within the company,management style (i.e., the dimen- property, division, or department. April 2001 • 19
  9. 9. call). Regardless of what demo- Exhibit 4 graphic data are collected, there Gap analysis by job position (measuring hiring “fairness”) needs to be a specific, stated reason for doing it. That modest level of When job openings occur, the best-qualified people are usually chosen. disclosure adds to the sense of trust between employees and managers. Executive All survey reports should clearly 14% 86% outline the areas of employee satis- directors (n = 14) faction and dissatisfaction by depart- Managers and ment and job level. Looking at sur- directors (n = 49) 35% 61% vey results in this manner indicates Supervisors, what departmental strengths and 38% 40% assistant managers weaknesses deserve further atten- (n = 118) tion. For example, by focusing on Front-line (hourly) 43% 34% department and job-level results, team members executives at Sunset Station have (n = 1,251) been able to measure employee 25% 50% 75% perspectives on the effect that ex- Tend to agree Strongly agree ecutive leadership has on employee evaluations of job satisfaction and morale and training and career de- velopment. Indeed, over the years of There appears to be a handful of (1) Perceived absence of favoritism survey administration, those correla-key factors that influence organiza- within the department. tions have been gaining in strength,tional dimensions and department (2) Continuous and frequent per- in many instances increasing fromperformance. To identify these key formance feedback and recog- .340 < r < .440 to a current corre-factors at Sunset Station, HVS/The nition of special efforts made lation of .540 < r < .600.Ference Group first determined by employees. Survey-driven databases can helpwhich departments realized a statis- (3) Team members’ perceptions direct a culture where decisions aretically significant gain or loss in of middle-management’s fair- made by those closest to the work.team-member-satisfaction scores ness in dealing with all staff In such an environment, seniorfrom the second to third (most members. managers provide basic strategiesrecent) survey years. We discovered (4) Manager objectivity and and resources for getting a job donethat 33 of 47 departments experi- honesty in providing feedback well. At the same time, employeesenced a real change in score, where to and information about on the front lines are grantedthe confidence interval ranged employees. greater autonomy and responsibilityfrom > 95.0 percent to < 99.9 (5) Senior managers’ understand- for making decisions on their own.percent. Next, Sunset Station’s de- ing of the front-line work The goal is to train talented em-partments were grouped according environment. ployees in the organization’s missionto whether they experienced an (6) Mid-managers’ competence. and objectives, empower those em-increase or decrease in overall score. Concern over confidentiality and ployees to make appropriate deci-Testing between the two groups anonymity restricts one’s ability to sions, and then hold them account-identified those survey statements collect descriptive information on able for results.with the most-significant mean survey participants. Generally, only Within a company, the survey-differences. Those statements were an individual’s department and job report formats cut data at threemost responsible for a real increase level is identified. Depending on the levels, as shown below. As discussedor decrease in overall department level of trust within the organiza- earlier, the strength of peeling offscore. tion, however, it may be possible to organizational layers to reach the At Sunset Station, the drivers of collect additional demographic in- core, where processes can be as-department performance were the formation such as gender, ethnicity, sessed in their simplest forms, pro-same factors that had the largest shifts worked, length of service, and vides employees with ownership ofimpact on department morale. employee type (i.e., full time, part their respective job positions andThey follow, in descending order: time, flex time, temporary, and on the information they need to im-20 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  10. 10. O P E R AT I O N S M A N A G E M E N Tprove individual—and thereforeorganizational—performance. Exhibit 5Level 1: General-manager Year-to-year comparison (measuring team-member satisfaction) spreadsheets, I am recognized for the contribution that I am able to make to the success of this property.Level 2: Executive-summary overviews, andLevel 3: Strategic department profiles. December 1999 40% 40% (n = 1,475) Each department receives its ownmulti-segmented report with com- December 1998 40% 34% (n = 1,400)pany benchmarks, industry norms,and cross correlations. December 1997 39% 34% Areas of technical competencies (n = 1,178)are measured with statements such Cumulativeas: average 40% 36% • This hotel–casino is doing a good job of training managers. • My manager knows his or her job. 25% 50% 75% • Senior management places the right Tend to agree Strongly agree emphasis on both the quality of ser- vice and profit. Areas of human-resources prac-tices include the organizational di- As for team members themselves, dence and trust that managers hadmensions mentioned earlier. For in general they welcome an inclu- in them. We found that teams whichexample, organization teamwork sive performance- and feedback- experienced high levels of trustmeasures employee perceptions measurement process. People like from managers operated in an envi-regarding favoritism, assignments, being recognized for their efforts ronment where interpersonal com-support, and problem solving. State- and work done well. Moreover, a munication was valued and re-ments from the measurement of performance-measurement process spected. Correlations between theorganizational teamwork include: provides team members with infor- level of trust and statements measur- • Favoritism is not a problem in my mation about and closure on pro- ing fairness and open communica- department. grams, projects, and daily perfor- tion increased in strength signifi- • I feel the distribution of work is mance. A continuous-improvement cantly during the period between fair among team members in my approach to human-resources man- the first and most-recent survey. For department. agement that encourages teams to instance, when employee percep- • There is a high degree of cooperation be critical, energized, and aware of tions of “trust and confidence from among departments in this property. the give-and-take involved in com- managers” was compared to the • Employees in this property support municating should result in effective, “absence of favoritism,” the correla- each other in solving job-related systematic, and efficient problem tions increased from r = .373 to r = problems. solving by those teams. .460. When employee perceptions Step 5—Data analysis. Survey of “trust and confidence from man-Phase III: Team Dynamics data are often presented in both agers” was compared to “receivingA survey-driven database can pro- tabular and graphic formats. Because objective and honest informationvide the foundation for employee- the data are compared to previous from managers,” the correlationteam goal setting, feedback formats, performance, internal benchmarks, increased from r = .468 to r = .540.and relationship management. Mea- and industry norms, the formatting Organizational success dependssurement of those factors over time of results must lend itself to gap and to a large extent on teamwork andprovides managers with data regard- spread analysis, root-cause problem cooperative thinking. Employees ining strengths and limitations within solving, and overall-satisfaction- successful companies are expecteddepartments, divisions, units, and the acceptability ratings. to embrace a philosophy of creativeorganization at large. Note that this A component of the survey used problem solving. The survey-datais a short step away from identifying for Sunset Station measured em- analysis and follow-up that is rec-and monitoring core competencies. ployee perceptions of the confi- ommended encourages everyone to April 2001 • 21
  11. 11. department performance. The inter- Exhibit 6 relationship between the perceived Team members’ attitudes about job ➔ I-CPN* = “absence of favoritism” within one 78.1% department and “middle manage- 2000 annual survey 32% 56% ment fairness in dealing with all (n = 1,507) staff ” strongly correlated (r = .638). 1999 mid-year survey That correlation is of particular 33% 53% (n = 1,463) importance considering that those survey statements were most signifi- 1998 annual survey 33% cant in explaining mean differences 51% (n = 1,437) among departments with positive 25% 50% 75% and negative real changes in perfor- mance scores. (Refer to drivers of Tend to agree Strongly agree peak department performance dis- cussed earlier.) Relationship goals *Industry-Comparative Performance Norm (as determined by HVS/The Ference Group) are more complex than system goals and should be targeted forwork together productively instead customer). For example, breakfast moderate-term achievement.of at cross-purposes. The result is an cycle times for room service be- Best practices make use of histori-environment whereby problem tween order takers, kitchen, and cal performance data that may besolving and quality-improvement service staff—while scheduling for referenced to establish effectiveinitiatives take place as close as pos- elevator availability—is a process. product and service objectives. Sur-sible to the level where problems Process goals can be completed vey results provide a powerful tooloccur. within an immediate or moderate for delivering a snapshot of com- Step 6—Goal setting. Setting time frame. pany performance. The data can beattainable employee goals is crucial Middle managers, because of used, first, to pinpoint weak areasto creating a peak-performing orga- their direct daily involvement in and, second, to develop a plan fornizational culture. Using the survey systems and processes, are key to improvement. For example, middledatabase of employee- and guest- instituting clear performance direc- management’s singular effect onsatisfaction feedback, managers can tives and to maintaining existing front-line-employee performance,encourage employees to clarify per- principles, values, and standards set as discussed above, means theirformance issues, work smarter, and forth in the master plan. Because teambuilding skills are critical toengage in strategic thinking. To crucial customer contact occurs at department performance. At Sunsetfacilitate their implementation, goals the front-line level, an environment Station, the correlation betweenshould be associated with a time in which front-line team members “middle management fairness inframe: immediate, moderate, and are trusted and empowered to re- dealing with all staff,” and “teamlong-range. Listed below are differ- spond quickly, effectively, and with member mutual support and en-ent types of goals. high customer-perceived quality is couragement” increased from r = Systems are highly related intra- essential. Creating that environment .358 to r = .503 from Decemberor inter-departmental job duties while at the same time maintaining 1997 to December 1999. The cor-that, together, make up the simplest the goals set forth in the master plan relation between “middle manage-form of a complete job function. is the subject of the remaining goal ment fairness in dealing with allChallenges in such related systems types. staff ” and “employee mutual supportmay be addressed, such as the inter- Relationship goals improve team- to solve job-related problems” in-departmental handling of linens member interactions and enhance creased from r = .339 to r = .520,between laundry and housekeeping. team intra- and inter-departmental again from December 1997 to De-System goals are targeted for imme- communications. By working cember 1999. Thus, Sunset Stationdiate attainment. through the Service–Culture Map, was able to realize a gain in the Processes are interconnected sys- and using benefits derived from effect that middle managers had ontems that cross departments and survey-driven databases, Sunset Sta- team building at the front-line level.levels and that together complete a tion identified management prac- By definition, best practices goalsservice or a significant portion of a tices that aided and hindered effec- are at least moderate-range, and inservice (i.e., product delivery to the tive working relationships and many cases long-range goals.22 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  12. 12. O P E R AT I O N S M A N A G E M E N T Stretch targets are developed togenerate strategic, big-picturechanges in company performanceand can involve system and processredesign. The most complex typeof goal, they build on knowledgegained from the preceding four goaltypes. A chief objective of using theService–Culture Map is enhancingthe organizational dimensions “jobsatisfaction and morale” and “orga-nizational teamwork.” For SunsetStation, some of the most prevalentcorrelations existed between thedimension “mid-management prac-tices” with “job satisfaction andmorale” and “organizational team-work.” This confirms the increasingrole middle management plays inattaining those key company goals.In December 1997 the correlationswere generally low to moderatein strength, most ranging from no more than 10 to 12 minutes in Station Casino’s Palace Station..310 < r < .450. By December length, these meetings are held at1999, the results were markedly the beginning of a work shift anddifferent. Correlations generally are used to review operational issuesranged from .510 < r < .640. that can be anticipated during theMiddle management’s increasing day. They can also cover a “topic ofeffect on morale and teambuilding the day” in three minutes or less,was clearly evident. Stretch-target focusing on results and issues un-goals are long-range in nature. covered in the employee-satisfaction Step 7—Feedback formats. survey.Employees must believe that their Cross-functional meetings are de-contributions are important to the signed especially for various depart-success of their departments. As ments and levels to come togethersuch, adopting meeting formats that to work on issues of common inter-are supportive and respectful of est. For example, wanting to im-multiple viewpoints can help to prove awareness and acceptance ofcreate that understanding. Feedback company strategic goals, senior ex-lets all employees know how their ecutives at Sunset Station set out todepartment’s performance aligns increase organizational communica-with the strategic goals defined by tion throughout the company. Thesenior executives. By paying close result was that “management’s en-attention to the goal–feedback loop, couragement of property-widesenior executives can link the “top communication” correlated stronglyfloor to the service floor.” All the with employee perceptions thatmeeting types described below can “senior executives placed the cor-use survey data as a starting point rect emphasis on quality of servicefor discussion. versus profit” (r = .584). Pre-shift meetings can be used ef- Departmental communications meet-fectively to enhance daily commu- ings are usually held once a week ornication between managers and twice a month and are a chance forhourly employees. Designed to be department heads and the executive April 2001 • 23
  13. 13. committee to compare notes and members to listen to each other” prioritize goals. Such meetings gen- and the level of “mutual support erally are informational and focus team members give one another on administrative and management to solve job-related problems” in- items. At Sunset Station, the results creased from a moderate score of attained from departmental commu- r = .490 in December 1999 to a nications meetings strengthened the high score of r = .621 in 2001. correlation between “executive level Executive-level meetings are at- understanding of departmental tended by the executive committee problems” and the perceived “effec- and are chaired by the general man- tiveness of inter-departmental com- ager. These meetings are designed munications.” In December 1997 to focus on immediate operational this correlation measured at r = concerns, as well as on the big- .355, whereas by December 1999 picture areas of vision, mission, core it measured r = .511. values, and strategic long-range Visible-management meetings are issues. Included in these discussions one-on-one encounters between should be references to company executives and employees that typi- survey results. cally occur when executives walk Workshops and retreats are a useful through their company. When form of meeting and are usually greeting employees, executives ask held off-site. Although workshops about a specific survey result that and retreats can take various forms they know was agreed to as a new and have a variety of agendas, survey“Team members now look upon the survey departmental goal. Such walking results often provide a good pointas part of the on-going management process tours offer an opportunity for man- of departure to get participants dis-here. They actually look forward to not onlytaking the survey but to anticipating their next agement to recognize team-member cussing relevant issues and actionresults.” contributions to company success. planning. —Cookie Dreschler, vice president and This was particularly important for Sunset Station has used many of general manager of Sunset Station Sunset Station managers considering those meeting formats to its advan- the correlation between “recogni- tage, as illustrated in the examples tion of special efforts” and “em- above. Through those tools, senior ployee satisfaction with the review managers have carefully monitored process overall” (r = .659). In other organizational alignment and goal words, Sunset found that recogniz- implementation. The feedback com- ing employee contributions and ponent of the Service–Culture Map efforts significantly increases the has provided Sunset Station with likelihood employees will “buy the means to monitor organizational into” the performance review and alignment, stay grounded with re- feedback process. spect to customer needs, and facili- Focus groups are a forum for expe- tate employee peak performance. rienced members of two or more Paying close attention to achieving departments to meet and determine peak performance, Sunset Station how best to solve customer-service, solidified the links between open- employee, or departmental issues door management, and team leader– uncovered through survey findings. team member relations. Data from the surveys can be used Step 8—Relationship man- to resolve conflicting issues. At Sun- agement. Over the years, research set Station, the emphasis on focus by HVS/The Ference Group indi- groups to resolve various work is- cates that most people in service sues brought noteworthy results. organizations want to do a good job. The correlation between “manage- The challenge is to create a culture ment encouragement for team that empowers employees to do that24 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  14. 14. O P E R AT I O N S M A N A G E M E N Tgood job. Since empowerment does achieve peak performance and the indicated a moderately low relation-not mean free rein, survey results perceived level of “cooperation ship between the dimensions ofcan establish where team members among departments” (r = .577). organizational communication andneed to focus their time and energy. Those findings support the recipro- executive leadership. However, cur- Build team dynamics. For employ- cal nature of communication and rent survey results paint a differentees to become team members and teamwork—elements providing a picture. The dimensions of organi-complement each other, they need base for exercising creativity. Indeed, zational communication and execu-to understand their individual in assisting one another, team mem- tive leadership correlate moderatelystrengths and shortcomings. Facili- bers are not only better equipped to strongly to strongly in some in-tating such insights usually involves solve problems but can, through a stances. Keep in mind this organ-aspects of team dynamics. While concerted effort, draw attention to izational transformation occurredopinions, attitudes, feelings, prefer- issues at hand. in only two and one-half years,ences, and perceptions may be Develop a learning, coaching environ- from June 1997 to December 1999.viewed as subjective, they are never- ment. The application and develop- Key indicators such as “inter-theless “real” to the person who ment of relationship management is departmental communications”holds or experiences them. Teams, further fostered by establishing a compared to “cooperation amongtherefore, need ways to view their coaching-and-learning environ- departments” (r = .642), and theinternal functioning. This has a ment. Team, department, and perceived “follow-through onbroad, pervasive impact on effective- organization-wide meetings help executive-level commitments” com-ness. For teams to progress, the dy- achieve this providing there are pared to ”team effort” (r = .593),namics of teamwork need to be opportunities for true two-way are indicative of Sunset’s success atstudied as objectively as possible to communications. Discussions de- monitoring, targeting, and develop-develop improvement plans. Prop- velop commitment to and align- ing peak-performance initiatives.erly constructed survey feedback ment with shared goals by engaging Leverage motivation. An importantprovides a framework for those employees in ways that matter to by-product of enhanced organiza-plans. them and in which they can make tional teamwork is an increase in Foster creativity. Relationship valuable contributions. The benefits employees’ job understanding. Bymanagement permits tapping into Sunset Station realized were dem- job understanding I do not meanthe creative pool of team members onstrated in detail above under simply a team member’s ability orto develop core strategic values. Step 7 (feedback formats), and in- proficiency in completing a task orManagers can group survey state- cluded enhanced organizational related tasks. Instead, I refer to thements to measure the support net- communication, buy-in for the per- more-critical aspect of organiza-work necessary to facilitate a proac- formance review process, and the tional alignment, namely, appreciat-tive environment. Component increased support employees give ing the interconnected nature ofthemes include the level of support one another. activities and how this relates to anfrom colleagues, special recognition, Measure performance. Experience understanding of the big picturecommunication, trust, and coopera- with service businesses employing regarding how each individual con-tion. At Sunset Station, again, the relationship-management theory tributes to the total success of thestrength of the correlations in- indicates that the extent to which company.creased over the years the survey interpersonal relationships and their Information gathering andwas administered. Current results mechanisms are developed directly analysis is time lost without under-indicate moderately strong relation- affects performance. We have found standing the cause-and-effect rela-ships among those themes. Among that organizational teamwork is tionships of day-to-day job per-the more insightful correlations is reinforced or debilitated by the level formance. The focus here is forthe level of “trust and confidence of organizational communication managers to develop an awarenessfrom managers” that team members and executive leadership present. of what is involved in performingperceive and “management respon- Sunset Station seized on that con- front-line activities that meet cus-siveness to employee suggestions, cept and strove to enhance company tomer expectations. Employees,problems, and complaints” (r = results by turning leaders into listen- conversely, learn to view work-.571). Equally strong is the correla- ers. The data indicated that Sunset related issues in a context broadertion between “team member mutual Station managers had their work cut than just their own work responsi-support and encouragement” to out for them. Early survey results bilities. The flexibility of the survey April 2001 • 25
  15. 15. team members receive for their work (r = .582). Moderately strong correlations also exist between “management’s knowledge of prob- lems facing a department” and “management responsiveness to employee suggestions, problems, and complaints” (r = .562). Have fun. Relationship manage- ment has always been about how people get work done through people. Today, it is also about getting work done and having fun at the same time. It is about creating time to engage in different activities out- side of normal daily routines. A part of having fun is about creating a more interesting, energetic work environment. Whether directly or indirectly, all employees at Sunset are encouraged to have fun in the work environment. While we know that guests tire quickly from attitudes of indiffer- ence and that most of them likely will not return for another ho-hum experience, employees also tire fromAt Sunset Station, having fun is a core value. doing the same monotonous rou- provides a gauge for the degree of tines all day long. In seeking fun, job understanding. Survey state- they search for diversification. Ev- ments such as “recognizing team- eryone recognizes the importance of member contributions,” the percep- providing upbeat, energetic, playful, tion of “senior management’s and engaging experiences within commitment to and understanding the work environment. The days of of the employee work environ- stuffy, highly structured work envi- ment,” and the perception of “train- ronments are past. Employees today ing adequacy,” for example, can be seek engaging experiences among used to gauge job understanding. themselves as well as with guests. Sunset Station has made headway For employees, smiles should be in encouraging team members to more common than frowns, eye view their jobs as part of the entire contact more common than averted Station Casino corporate operation. glances, and conversations person- First- and second-year survey results able and engaging. Such behaviors indicated low and moderate correla- become part of ongoing guest– tions for those themes. More-recent employee performance and can be results, however, recorded manage- genuinely delivered only when em- ment’s increased responsiveness to ployees are having fun. front-line requirements. Now, mod- At Sunset Station, having fun is erately strong correlations exist be- a core value. All senior-managers’ tween “management’s knowledge of goals are written on a large chart problems facing a department” and and posted in the conference room. the “recognition of special efforts” Because members of the senior-26 CORNELL HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY
  16. 16. O P E R AT I O N S M A N A G E M E N Tmanagement team know their col- perception. Measuring this percep- tion, they must first be satisfied withleagues’ goals, they are able to sup- tion through surveys provides a and trust the manner in which feed-port each other. It is common to clear understanding of employee back is generated and provided.hear team members ask each other, and guest–customer satisfaction and Step 10—Managing forHow can I help you make your goals? dissatisfaction. Another key is un- continuous improvement. Em-Team members engage in catching derstanding the effect that indi- ployees who embrace the philoso-each other doing things right. Goal vidual perceptions have on em- phy of continuous improvementresults are posted, and if done well, ployee teams, guests, and customers. tend to be goal oriented, respectfula whole department might go to a The Ference Group’s findings con- of their colleagues, and understand-movie with pizzas and drinks. When firm that high employee satisfaction ing of their organization’s marketsexecutives are confronted with a leads to high customer satisfaction, and customers. Moreover, they un-sticky decision, company president employee retention, guest loyalty, derstand their own strengths andMarrandino is just as likely to take and market share. shortcomings.them to a basketball court to discuss The approach facilitated by the Success in continuous perfor-the situation as to sit around a con- steps in the Service–Culture Map mance improvement is due, in part,ference table. When employees need enables organizations to develop to gathering strategic data and shar-to stay late to cater a special event, a their own surveys to best suit their ing this data at all organizationaltable of food and drink is available specific needs. The requirements are levels. When survey results are pro-once employees have finished their that the format be continuous, ob- vided throughout the organization,shift. jective, goal oriented, and inclusive. employees know what specific ini- Measuring performance. Sun- tiatives to embrace to improve over-Phase IV: Organizational Culture set Station’s year-to-year survey data all performance and customer ser-Culture directly affects long-term demonstrate moderately strong vice. Such strategic data improvesustainability. In turn, the long-term relationships most consistently organizational performance.sustainability of a company is a where the drivers of departmentalmeasure of peak performance. High performance are concerned—fair- Recursive Cyclereturn on owner investment is the ness in job training, objectivity, Organizational peak performance isultimate goal and can be reached honesty in communications, and a difficult goal to obtain. Unfortu-through employee and customer frequency of performance reviews. nately, most who undertake thissatisfaction, market share and brand Moreover, analysis of Sunset quest give up far short of their desti-loyalty, and product and profit Station’s data reveals what team nation. They are seduced by short-dominance. It is no wonder that the members consider most important cuts that promise much but delivermost successful organizations ex- in the performance-review process, little. They are intimidated byhibit a distinctive “essence” that can as follows. countless departmental potholes,be described by company insiders • Frequent performance reviews overwhelmed by steep managementand outsiders alike. These findings are perceived to be more S-curves, and caught in thorny em-indicate that when people can pub- straightforward and honest than ployee briar patches. Without anlicly espouse a belief, they become sporadic performance reviews experienced guide, the travelermuch more likely to behave consis- (r = .589). should be prepared for more thantent with that belief. Moreover, • Regular feedback increases the a few wrong turns and some long,visionary companies do not merely likelihood that team members frustrating nights. There is, however,declare an ideology, but they also will judge that feedback as hope. Perhaps the greatest benefittake steps to make that ideology beneficial (r = .587). of the four-phase, ten-step Service–pervasive throughout the organiza- • Recognizing team members for Culture Map is its function as ation and to ensure that it transcends their extraordinary contributions guide. For the company with in-any individual leader. or efforts increases employees’ trepid leadership, the intelligent Step 9—Peak performance. overall satisfaction with the application of survey-driven data-When employees exhibit high en- performance-review process bases may be the first step in achiev-ergy levels, sincere commitment, (r =.652). ing organizational peak perfor-and true passion, peak performance In short, for team members to mance… a rich and rewardingis achievable. One key is under- reach their peak performance, and journey for management, employees,standing the power of individual thus positively affect guest satisfac- and stockholders alike. CQ April 2001 • 27

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