Case Study 2 – SHRM

Marriott Hotels - Making Engagement Work

In the words of J. Willard Marriott, "When you take good care of your people, they will take
good care of the customers, the customers will come back and the business will take care of
itself." This is the core value of Marriott Hotels.

This case study showcases Marriott's employee, or as it calls them 'Associates,' engagement
practices. Built strongly on its core value, Marriott takes 'Associate Engagement' to a level rarely
achieved by competitors in the industry. The engagement drivers emphasised by the organisation
include leadership excellence, personal growth, and quality of life at work, teamwork and total
rewards.

While Marriott uses several ways to optimise each of these drivers, this case study will highlight
a few unique and exemplary best practices, which could serve as a gold standard for the hotel
industry.

Business Context

The Marriott portfolio encompasses over 3,600 managed and franchised properties across 20
brands in 71 countries and territories spanning six continents. This includes more than 40 hotels
in India. At the end of 2010, Marriott had approximately 129,000 Associates and reported sales
of nearly $12 Billion.

Marriott is a hotel management company. It does not own hotels but takes the responsibility for
running them through long-term contracts with owners of the respective properties. Marriott
Associates are the key to consistent excellence in the delivery of service across the chain. Hence,
Marriott views its employees as the single most important factor for success. It invests seriously
on training, developing and mentoring its employees for future growth in the organisation.
Employee engagement leading to long-term employment with Marriott is a critical focus area
that can have a significant impact on business outcomes.

Challenges Faced by the Industry

One of the most common challenges faced by the hospitality industry is employee retention.
Often, the perceived glamour of the profession attracts people and compensates for the long
work hours and low pay in this industry. Marriott was quick to realise that this was not a
sustainable proposition and sought to address these concerns through the way it operates,
manages and engages its Associates.

Across all its properties, the "Marriott Culture" is driven through serving the Associates, the
customer and the community. The organisation believes that the key element in managing
Associates lies in defining simple values, which can be executed in their day-to-day work.
People first — the Core Value of Marriott's corporate culture is responsible for its success of
over 80 years because it recognises that Associates are not only important to the business but
they also give it an edge in a very competitive environment. The organisation-wide initiatives
focus on ensuring that the values translate into practices that can be followed and Associates
across the globe live the defined values.

Marriott's Associate Engagement Framework

Marriott uses the Hewitt Associates' definition of engagement: 'Engagement is the state of
emotional and intellectual commitment to an organisation or group producing behaviour that will
help fulfill an organisation's promises to customers - and, in so doing, improve business results'.

These observable behaviours can be organised into three categories:

• Stay - when employees have an intense desire to be a part of and stay with the organisation
• Say - when employees advocate the organisation by referring potential employees and
customers, are positive with co-workers and are constructive in their criticism; and
• Strive - when employees exert extra effort and engage in behaviours that contribute to
business success
• Fig 5.1: Marriott's Associate Engagement Framework

To achieve this state of commitment amongst Associates, Marriot has identified five drivers that
influence employee engagement. These are Leadership Excellence, Personal Growth, and
Quality of Life 3-Stage
at Work, Teamwork and Total Rewards. Marriott's engagement framework
Model of Engagement
1. Improving in driver areas will increase engagement
2. Engaged employees are more loyal and provide better guest service
seamlessly connects its engagement drivers and the organisation's financial performance through
3. Loyalty and guest satisfaction improve the bottom line

Associate engagement and loyalty that translates into guest satisfaction.

Leadership Excellence
At Marriott, Leadership Excellence is about living the core value stated by the Founder J. W.
Marriott - "taking care of your people." Leaders at Marriott continuously demonstrate and
communicate the value to every Associate through guiding principles like, an open door policy
where any Associate can reach out to senior management with their ideas and suggestions.
Although this sounds simple, care is taken to ensure that the policy is executed by putting in
place special channels of communication where Associates can actually contact and
communicate with senior managers. This policy extends beyond just hearing what the Associates
have to say. Leaders take responsibility to respond to the Associates. This communication is also
tracked and monitored to ensure that Associates are informed about the course of action. In an
industry where hierarchy is strong, this practice enables associates to feel valued and important.
The practice of addressing General Managers of properties by their first name also adds to this
value.

Leaders constantly coach and mentor Associates at the next level and potential candidates
for leadership positions with a focus on 'growing our own people.' This is another value,
which is applied across all properties. The rapid growth of Marriott has led to a pressing
requirement for a pipeline of leaders who understand the culture and values of the organisation.
It is a critical need for Marriott to maintain consistent quality of service across various
properties. Marriott firmly believes that employees who have grown through the organisation
will be able to live the values, effectively sustain growth and add to the organisation's bottom
line.

Personal Growth

Training programmes for every employee are given a high priority in Marriott. As a policy,
every hotel in the Marriott chain contributes $750 per manager, per year, into a fund, which is
controlled by the corporate office. This is mandatory. Thirty four hundred hotels with
approximately 100 managers in each hotel contributing $750 per manager, per year,
translate into a phenomenal budget available exclusively for training purposes. Major
training programmes are centrally created and rolled out across the globe. It is ensured that every
Associate at Marriott from the General Manager downwards gets a minimum of two full weeks
of training every year. The core value of "Growing your Own" is lived through this practice.
Considering that the industry benchmark for training of two full weeks every year happens only
for around 20-25 percent of employees, this practice is a strong differentiator in Marriott.

The organisation also deputes teams of employees from one hotel property to another for cross
exposure. The aim is to encourage sharing of expertise and learning from within the organisation.
The deputation ranges from one to ten weeks.

When Marriott came into India, it realised that Associates in India look for growth not only in
India but also globally. Marriott also realised that competitors could not deliver on this need,
either because they did not have a presence around the world or because they simply restricted
their focus to growth within the country. At Marriott, an Associate may move from India to
Indonesia, China or anywhere else after a certain time of being in the organisation. This has had
a strong and positive effect on talent attraction for the organisation.
Quality of Life at Work

When Marriott entered India 12 years ago, the biggest challenge was to provide Associates work
life balance in a profession and industry where to achieve results one has to work 24x7. Marriott
was the first in the industry to mandate a five and a half day workweek in India. This means
every other week, Associates are able to take two days off. When Marriott entered Hong Kong
and introduced the practice of a five-day workweek in a country where the hotel industry
traditionally worked for six days a week, the Hotel Association did not approve. However,
Marriott stood its ground as it had done in most countries, including India. Now, most hotels in
Hong Kong have a five-day workweek.

This value of providing its employees with an environment where they are able to experience
work life balance influenced other hotels to follow suit thereby creating a larger impact on the
industry.

Employee Empowerment

What works for Marriott is the autonomy given to every Associate to make a decision that affects
a customer directly. Even a front desk, line level Associate has the authority and power to give a
free room to a customer who has experienced major service issues in their interaction with the
Marriott group of hotels. This autonomy to make important decisions leads to immediate action
where the customer is attended to at the earliest. Although employees may make mistakes while
taking a decision, they are empowered with the responsibility to think through the situation
consciously and judiciously. This empowerment enables and encourages employee engagement.

Teamwork

Marriott defines success of the organisation by how well it is viewed in the community. It
promotes teamwork by encouraging Associates to engage with the community as core teams.
The spirit to serve the community is demonstrated everyday by associates and the organisation
by supporting local, national and global initiatives, through its CSR programmes. For instance,
the Marriott Chennai property is associated with a home for around 180 children, whose parents
have been affected by leprosy. The mission is to educate the children and train them for possible
employment with the properties after their school programme. All Hotels also contribute
monetarily to these programmes. The best practice is the belief that CSR engagement as teams,
enables Associates to bond with each other as "community citizens" while working towards a
larger goal, which in turn builds engagement and teamwork. This unique practice is in addition
to other popularly used interventions for team building.

Total Rewards

The rewards programme at Marriott is structured towards rewarding holistic performance and not
just the achievement of financial targets. This includes guest and Associate satisfaction. The
assessment of a manager's guest satisfaction scores and Associate satisfaction scores carry equal
weightage.

Marriott conducts an annual online Associate Opinion Survey across its properties worldwide.
The objective of this survey is to get Associate feedback on the various dimensions that predict
Associate Engagement and thereby improve unit performance. Marriott, along with Hewitt
Associates, has designed a new survey to ensure a high level of consistency, respondent
confidentiality, and data security. The survey measures Associate opinion on the five
engagement drivers of Leadership Excellence, Personal Growth, and Quality of Life at Work,
Teamwork, and Total Rewards. The Associate Opinion Scores (AOS) feed into reward practices
and future development plans at a unit or property. Low Associate satisfaction scores for a
manager affect the bonus of the managers and executive members who run the business
concerned.

Marriott leverages the reward programmes as a way to ensure that Associates achieve the
business standards and still feel rewarded. It begins with simple things like ensuring that
housekeeping Associates who clean rooms or serve food are able to guarantee that they meet
certain minimum standards of cleanliness or food quality. As part of its reward programme,
Marriott has put in place a practice that provides an opportunity for every Marriott Associate to
stay with their family at one of its properties on their birthday or anniversary. The idea is when
Associates actually stay at the hotel with their family they are more critical of what is
missing from a service or cleanliness point of view. These inputs and suggestions are shared
with fellow Associates and lead to an improvement on current standards and service
provided at the hotel.

Action Planning: The AOS scores are leveraged at Marriott to continuously improve its
engagement practices in a measurable manner. Every year, after the AOS scores, Rap sessions
are conducted at every unit to discuss the scores based on which "Action Plans" are created and
documented, appropriate action is taken and periodically tracked. If a property has very low AOS
scores, a review or Rap session is conducted within six months rather than on an annual basis for
closer monitoring. Progress on the action plans and employee satisfaction is monitored on an
annual basis through improvement on the AOS scores. If this fails, an investigation is conducted
and appropriate action is taken on the management at the property.

SHRM India's Conclusion

The core value of Marriott to take care of its Associates, who will take care of their customers
and thereby impact the business is a concept similar to "Employee First, Customer Second"
propounded by Vineet Nayar, CEO of HCL, in 2010. What makes this different is Marriott has
put this in practice from 1927 when J. W. Marriott and his wife started the Marriott hotels from
the humble beginnings of a root beer stand. The success of the Marriott approach is demonstrated
by the employee tenure in the organisation, which ranges between a minimum of 20 years to a
maximum of 51 years. At a time when organisations are struggling to retain their top talent,
especially in an industry known for its high attrition rate, this is quite an achievement.

The values though stated in a simple manner are tough to execute. However, leadership
excellence and the culture of the organisation are demonstrated in the belief in the values and
perseverance towards delivering them. This quality is expressed strongly across all the
engagement drivers starting with providing select channels of communication between the
Associates and senior managers; shortening the workweek despite resistance from the industry;
commitment to providing training opportunities for Associates, starting with making the required
budget available every year; and measuring and managing engagement through the Associate
Opinion Survey. Marriott establishes that how they conduct the business is as important as the
business itself. This is not only captured in their core value statement and intent but also put into
practice as demonstrated by their commitment to Associate Engagement.