Many studies have shown the definite link between HR competitiveness and productivity. The ability to manage human resources effectively, is vital for a business to thrive and survive, as decisions made by a company's HR department are essential for a company's long-term success. People are the competitive advantage to an organization's success. The strategic role of human resource management is an integral element of a company's overall success in accomplishing its mission and business strategy.
This essay will look at some of the HR practises, adopted by one section of the multi-billion dollar, Walt Disney company - The Walt Disney World resort. The Disney company is one of the most successful media and entertainment corporations in the whole world. It also rates as one of the top-performing companies in the world, in terms of customer satisfaction. Disney goes to great lengths to ensure its guests are happy and that they keep returning to Disney parks.
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The Walt Disney World Resort is a recreational resort covering 30,080-acres near Orlando in Florida and is the largest and the most visited resort in the world. Every year millions of people, from all across the globe, take their vacation there. The resort began in 1971, with the opening of the "Magic Kingdom" theme park, and has expanded considerably ever since. Today, it consists of four different theme parks, two water parks, 23 resort hotels, and multi kinds of recreational and entertainment venues. The resort was inspired by the dreams of Walt Disney and is the largest single-site employer in the United States, employing over 42,000 people.
Considered by many to be one of the most magical places on earth, the theme park continues to delight and thrill it's guests, nearly 40 years after it opened. The company represents the kind of success that many companies strive for. The secret to it's success is it's motivated, friendly and well-trained staff. The founder, Walt Disney believed that the only way to become successful was to have a great team on your side, and once said:
"You can dream, create, design and build the most wonderful place in the world but it requires people to make the dream a reality."
Human resources practices are considered "extraordinary", with guest & employee satisfaction being of the utmost importance. Because of the scale of the organization, HRM processes at Disney are very complex, and it's necessary for the company to employ an extensive HR department, with a high and detailed level of task specialisation.(Gunnigle et al, 2006, p23). It's very important that successful and effective HR policies are implemented into the everyday running of the company, for the continual growth and success of Disney.
In order to provide a superior service, the company aims to employ people with the proper skills and personalities, who are also motivated, with a clear knowledge of the company's marketing objectives and strategies. Staff must be polite, well dressed, energetic, enthusiastic, and people-loving, always serving guests whole-heartedly. Employees learn to promote risk taking and creativity in a fun environment, participate in activities, decision making, problem solving, and interact with one another and share a sense of accomplishment. It is very important for all of the employees to follow the rules and regulations to keep the company soaring
One of Walt Disney's main objectives (and one that still lives on in Disney to-day) was to always "Exceed Expectations." Walt inspired and empowered people to give more than what was asked of them. Disney is committed to employee empowerment. Empowerment enables employees to do certain things, within established limits and guidelines, to make the customer happy. For example, if a child drops ice-cream, seconds after buying it, employees are empowered to replace the ice-cream for free.
Employees are empowered to resolve all guest issues on their own, with managers only getting involved in extreme circumstances. Managers use service measurement teams to empower employees. 1 or 2 employees from each department take note of any service issues that might take from a guest's stay at the resort. By keeping records of every problem, and how it was dealt with, helps to reduce the chances of it happening again. To keep up-to-date with their guests expectations, Disney also collects huge amounts of data about guests from opinion polls, surveys, focus groups etc.
Always on Time
Marked to Standard
From this information, the company have learned that the "top three" guest expectations are for the parks to be fun, friendly and clean. Every worker knows these 3 expectations well, and is empowered to make them happen
Disney is renowned for being a fun and friendly place at which to work. Its ability to offer attractive incentives make it a desirable place to work and it is constantly evaluating the market to ensure their wages remain competitive. Disney recruit both internally and externally. College students make up a large number of the workforce. Recruitment staff also regularly travel to Puerto Rico, to recruit for positions in housekeeping, in the park, in bars and in restaurants.
All Disney employees participate in training programs that update them on the latest service techniques and technology being used in the parks. Disney believes in investing in its staff and provide various training programs and learning opportunities for employees to work their way up into higher positions. A lot of time has been devoted to designing successful employee 'universities', which train workers in the Disneyland philosophy. Walt Disney established the Disney University to teach these unique skills. The University provides cast members with free world-class training in diverse skills including computer applications, professional development, management/leaderships development, health & safety, interviewing, business, etc.
Disney nearly always promotes from within. Almost everyone, even managers, begin in an ordinary entry-level hourly job. There is a program to help hourly workers who want to become part of management, there is another that allows them to transfer, as apprentices, to the technical unions like plumbers or electricians. Disney also grant educational reimbursement to employees still at college.
Supervisors try to create a family-like atmosphere in Disney by offering flexible schedules and on-site day care programs for employees with children. The company also host numerous special events for its employees that are held in the theme park, after hours.
It is obvious that the Disney Company does whatever it takes to satisfy not only their guests but also their employees. However things were not always like that. HR practices were very poor in the early years of Disney. The Walt Disney Company originated back in 1923, when Walt and Roy Disney started their first animated recording studio. The first animation production was really hard, with tasks being divided out according to gender. By 1941, the Walt Disney Company employed 1,100 people. Ellwood (1998) describes Walt Disney as "a notorious workaholic, a perfectionist who pushed his staff relentlessly". Both "paternalistic and domineering" he rewarded loyalty and punished dissidents. During this time, no women or black people were ever promoted to senior positions, and in fact it was the only Hollywood studio, that had no union. Eventually, animators took industrial action in 1941, over poor conditions and lack of union representation. Soon the company came to the attention of the American Federation of Labour.
However, these early day working conditions and problems, didn't prevent the company developing into a massively-successful $23 billion media conglomerate, by the end of the 1990s.
The external labour market has possibly the most profound influence on HRM, especially in the area of recruitment, training and reward system. (Gunnigle et al, 2006, P 29). Quality cast members are a direct result of quality hiring practices (employees in Disney are called 'cast members'). Hr policies stress the importance of having people who have actually worked in different parts of the company, to do the recruiting. So the recruitment staff come from different parts of the organization, and work on 12-month contracts. Referral bonuses are paid to workers who refer successful, new hires. Job applicants are required to watch a short video, before being interviewed. The video describes the interview process and outlines what the company expects of them, if they're successful.
The HR department have 4 major employment strategies:
Hire the right people
Develop people to deliver service quality
Provide needed support systems
Retain the best people
Once potential employees have been identified, interviews follow. The skills and abilities that managers generally look for are:
Excellent communication skills
Good team player
Strong computer skills
Project management skills
Ability to handle expectations
Personal and professional style
Strong business judgment
Ability to facilitate and multitask
A guest service outlook
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Once hired, all new cast members have to do a 1Â½ day training program called Traditions. It's here they learn the basic rules of being good cast members, everything from Disney history and culture, to direction on how to meet and exceed guest expectations. Cast members are given 13 page manual of strict dress codes, known as the "Disney Look."
The "Disney Look" is a rigid code of appearance that imposes a clean, scrubbed, all-American look, that all cast members must abide by, and there is no room for non-conformity in it. The manual details the size of earrings allowed, down to the size of finger nails. Males are not permitted to grow any facial hair, and dyed hair, for either sex, is not allowed. Disney's strict grooming standards are vital, as employees are to be part of a wide cast of Disney characters.
Every employee is instructed in the "Seven Guidelines to Guest Service" which highlights the need to be happy and cheerful, when serving guests. From the very start, staff are encouraged to implement a "have a nice day!" mentality, and to smile the "Disney smile" all day. Cast members usually work 40 hours or more each week. There is no person in charge of quality service. It is the responsibility of every one to measure service quality levels, establish benchmarks and to set goals. Instead of one quality director, Disney has 42,000 of them.
(Paton S. M. Service Quality, Disney Style, Quality Digest)
Jobs are assigned according to age and appearance, a process officially known as "casting". The most "presentable" get the jobs that involve a lot of interaction with customers. For example:
Young and pretty workers usually get popular "front-line jobs"
Haitian women generally work in housekeeping;
Older women sell the merchandise
Older men work in security
African Americans work as stewards or cooks,
Africans are employed in the " Animal Kingdom", to lend "authentic flavour".
Puerto Recons work in housekeeping, bars or restaurants
Anyone who might appear "less 'presentable' work on night shifts
Cast Members receive some excellent benefits including:
Health, Dental, and Life Insurance
Complimentary Theme Park Passports
Learning and Development Opportunities
Paid holidays and sick leave
30% Discount on park merchandise
Employee Stock Purchase Program
Access to a Cast Member-only lake and recreation area with tennis, volleyball, and an Olympic-size swimming pool.
Cast Member Contests
Workers are represented by 34 unions, the biggest being the Service Trade Council Union (STCU), The STCU represents about 22,000 F/T and 5,000 P/T workers at Disney World. In the last two years alone, Disneyland Resort has successfully negotiated nine agreements with the union. These agreements included wage increases, sick pay and access to seven affordable and reliable health care plans offered through Disney's Signature benefits package for full-time cast members.
HR Management use performance appraisals and performance surveys, to measure internal service quality. The annual performance appraisal is designed to give the employee a broad perspective of his/her accomplishment from the previous year and to identify upcoming challenges. Another strategy employed by managers to deliver service quality, are monthly development action plans. (DAPs) (Zeithaml and Bitner, 2000)
The HR department realize the true value of retaining productive employees, and the annual turnover rate is only 20%. This low turnover is made possible by the extensive employees reward programs, on offer, and by the HR policy of treating employees like resort guests. Reward management strategies are used to keep employees committed and morale high. The goal of such programs is to motivate employees to engage in appropriate behaviors.
There are more than 50 different reward and recognition programs at Disney, with the most prestigious being the "Partners in Excellence" program. Any employee can nominate another for the award. However, the nominated employee must have excellent attendance and no disciplinary action record. Nominated employees are then invited to a special dinner ceremony, where they are individually congratulated by company executives, for their accomplishments. Then, they are all given bronze statues of the company founder, Walt Disney. Managers also use service pins, attendance awards, and Recognition-O-Grams (ROGs) to reward committed employees. Employees can receive attendance awards for perfect attendance, ranging from honorary certificates to a $2000 gift certificate.
Like many other industries in America, the theme park industry has been badly hit by the recession. In May of this, the Walt Disney company reported a 32% drop in net income for its fiscal first quarter of 2010, which it attributed to the downturn in the economy. The company was forced to introduce cost-cutting measures, which included the loss of 1,400 jobs from the Orlando theme park. Those laid off received a 60-day paid administrative leave, a severance package that is based on their years of service, extended medical benefits, and job placement.
This essay looked at the "extraordinary", human resource practises used by Disney in order to maximize the delivery of superior guest services. Reasons for the company's success include emphasis on customer service, and a focus on the elements of efficiency, courtesy and safety. Hr strategies at Disney lead to the attainment of exceptional service quality, and to large volumes of guests returning, year after year.
Disney HR department offers a competitive package of wages and incentives to it's staff, such as free park admission and discounts on park merchandise. They take great care with their recruitment strategy, regularly assessing new ways of recruiting and reviewing their pay packages..
In the past, Disney's theme parks seemed to be fairly recession-proof. But this year, fewer people found their way to the Magic Kingdom as profits were down from 2008-10. The company manages its operation based on demand, and like any other business it is subject to the ups and downs of the economy.
The actions of empowered employees have enabled Disney to continually exceed customer expectations and have helped develop lasting relationships with millions of guests worldwide. The Disney philosophy teaches that by allowing employees to take care of customers in a respectful way, the business will take care of itself.
It's important that management stress to workers that employee empowerment and development is an on-going process.
The human resource department must continually develop successful empowerment strategies and effective reward and recognition programs to maintain high morale and promote teamwork within the workforce. Strong and effective HR strategies are essential to retain a competitive advantage, and to keep the company soaring, especially in the current economic climate.