Mr. Branham

Human Resources, Recruitment & Training

The Secret to Being a Great Place to Work is... the Culture

By Leigh Branham, Founder & Principal, Keeping the People, Inc.

Remarkably, two hospitality companies were named among the ten Best Places to Work out of more than 2,000 that applied in competitions sponsored by business journals in 44 states throughout the U.S. Winners were determined by employees completing a 37-question employee engagement survey administered through third-party data collector, Quantum Workplace of Omaha, Nebraska. The two winning employers - Joie de Vivre Hospitality, which achieved the highest score on valuing employees, and Gaylord Hotels and Resorts, which tied for highest score on senior leadership, are very different businesses, but strikingly similar in their workplace cultures.

How Valuing Employees Makes a Difference at Joie de Vivre Hospitality

Started in San Francisco in 1987 by Chip Conley, Joie de Vivre Hospitality built a reputation for creating a unique collection of lifestyle businesses, now with annual revenues of $225 million per year. Joie de Vivre Hospitality is the parent company of Joie de Vivre Hotels and oversees all the other businesses beyond its 38 boutique hotels, including restaurants, spas, and affiliate hotels. JDV is expanding outside of California with its first project in Scottsdale, Az. and another soon to be announced in the Midwest.

Founder and Co-Chairman, Conley is determined to sustain an empowering business culture in spite of rapid growth. “Most companies lose their culture as they grow," he says, "but what Southwest Airlines taught us is that it’s all about empowering employees at the lowest level of the company as much as possible.”

Here are a few telling aspects of JDV's culture:

• All employees get to stay in JDV hotels for free.
• Property managers, who typically work long hours, receive one month paid sabbatical every three years, even during the economic downturns.
• An employee recognition week is held every June, featuring more than 100 events up and down the state of California at or near hotel properties, such as trips to Giants baseball games, theme park visits, and ice cream socials.
• At JDV's big end-of-the-year holiday party, leaders give out lots of awards. Their biggest award - Extraordinary Service Provider - includes an extra week of vacation, plus an extra week’s vacation at a domestic location of the employee’s choice). Deserving employees also receive the "Manuela Ramirez Back-of-the-House Service Award", named for an former employee now deceased, Rising Star awards, and an "Above-and-Beyond" award.
• When the great recession of 2008-2010 hit the hotel industry, Conley, then CEO, stopped taking a salary. Senior leaders all took 10 percent pay cuts for a couple of years, and salaried staff accepted pay freezes to avoid mass layoffs. “It was what we needed to do,” says Conley, “because we didn’t want to kill our culture in the process of suffering through what was our Great Depression.”

JDV's chief people officer, Jane Howard, said the company's journey to being a best place to work grew organically from Conley's own values about the way he sees and treats people. "We are just conscious of our values, and one of them is valuing employees highly. We are a very people-centric business, and our people are not as highly paid as in other industries or even sometimes as highly paid as some in the hospitality business. We are vulnerable because boutique hotels are the first to be hurt by a declining economy. So, we have to do something to keep a competitive advantage. For us, it is simple - we treat people well and they reward us with their loyalty."

"At JDV," Howard said, "we believe in the concept of emotional bank accounts and the importance of making regular deposits. As human beings, we need appreciation, so recognizing people is something we are committed to do, and not just for business reasons."

On JDV's yearly climate survey there is an item - “I have been recognized by my supervisors in the last two weeks.” The company takes note of which managers consistently score low on that statement and either coach them or come to a mutual decision that they are not a good fit. "Managers who don’t recognize their people usually don’t last long here," says Howard. When a culture is strong it spits out the people that don’t fit."

At the end of weekly executive committee meetings, leaders tell stories about employees who gave extraordinary service that week. One of JDV's executive chefs, for example, wanted a particular kind of turkey to be available at one of JDV's high-end resorts. She knew she would have to get the turkeys there overnight and that there was no other way to do it except to deliver them herself. So, she put ten frozen turkeys in the trunk of her car and that evening she drove them down to JDV's resort in Big Sur. In recognition of her incredible dedication, Howard sent her an e-mail acknowledging how much she cared and how much her dedication to giving above-and-beyond service was appreciated. The chef sent an e-mail back the next day, saying "Wow - you have no idea how well-timed that was... I was having a really bad day."

JDV managers are also taught that the people giving the most direct service to the customer need the most recognition. For us that means recognizing people at the lowest levels the most—those who clean the bathrooms and make the beds. "We want them to know their jobs have meaning," Howard says.

JDV attracts high-quality employees because they are known as fair and as a company that cares about its employees. Their tag line is “People Matter Here.” JDV staff are often sought out by competitors. "Sometimes employees will leave to accept an attractive offer elsewhere" says Howard, "but they often come back when they realize something important was missing in the new company."

JDV invests heavily in new manager training, emphasizing both the culture and the operational how-to’s. JDV University offers 150 classes per quarter, with a focus on enriching the whole person, offering art classes, sports classes, how to be a first-time homebuyer, an ESL program, personal financial management, and many others. JDV trains managers in how to keep employees engaged and make them want to stay. The company even offers a class that helps employees better understand their strengths, needs, and career goals.

JDV has an incentive program for employees who make their financial goals, but leaves the criteria and amounts up to the individual hotels. A room attendant might make an extra $50 if certain financial goals are met, such as efficient utilization of room supplies.

During the recent and continuing downturn in the economy, Joie de Vivre has made special efforts to communicate openly. "We practice open book management," says Howard, "which sends the message that we respect employees enough to think they deserve to know as much as possible about the business."

The result of all these employee-centered practices: Joie de Vivre enjoys a 25% total employee turnover rate - one third that of the hotel industry.

How Senior Leadership Makes a Difference at the Gaylord Resort and Spa

Gaylord Palms Resort and Spa in Orlando is a beautifully-themed 1,406-room luxury hotel located just one mile from Walt Disney World. This over-the-top resort features a variety of restaurants, two pools, spa club and salon, and a lavish glass-enclosed 4.5-acre indoor atrium. The atrium includes four sections, each representing a different region of Florida: Key West, St. Augustine, the Everglades and Emerald Bay. Without leaving the hotel, guests can wander through the misty Everglades, party on a boat in the Keys, explore a Spanish fort, or even watch live alligators being fed in the atrium waterways.

The Gaylord Palms was opened in 2002, the second of four upscale Gaylord Hotels in the United States, each with regional themes and attractions designed exclusively for that resort. The Palms, which has 1,400 full-time and more than 600 part-time employees, on-call temps, and/or contract partners, has received recognition as a Best Place to Work by The Orlando Business Journal for the past four years.

The Palms attained and sustained its premier-employer status by focusing on teamwork and hiring and developing leaders at all levels. "Finding great service-oriented talent is a big piece of the puzzle," says former Palms General Manager, Kemp Gallineau, now a senior VP at Gaylord's corporate office in Nashville. "Empowerment has special meaning for us. It's not just another management buzzword with us."

"We don't just say to our front desk agent 'you're empowered to spend up to $200 to take care of a customer's concern. We let our associates, or 'Stars' as we call them, make whatever decision they feel comfortable making and spend whatever amount it takes. We just let them know that they need to go to their manager if they don't feel comfortable making that decision. Customers don't care about your rules."

Keeping employees informed is a centerpiece of Gaylord's "Stars-first" culture. The Palms flashes customer service scores and customer comments, both positive and "constructive", on plasma screens in back of the house. Employees can also call into toll-free number to "Ask the CEO" Colin Reed anything they want, and they do. "We listen to our employees and respond to their concerns," says Gallineau. "We conduct an annual survey and follow up with feedback sessions by department." The Palms also holds once-a-month "leader's loop" meetings where as many as 180+ managers and senior leaders discuss objectives and key issues.

The Palms doesn't skimp on employee perks. It offers fitness centers just for employees and cafeterias that are second to none and on par with guest cafeterias. "We serve our stars healthy menu items, not leftovers from banquets," says Gallineau. The Palms offers classes to teach employees about personal finance, how, when, and whether to refinance their houses, how to manage their 401K investments, and many other topics. The perks list goes on--family movie nights, health and wellness fairs, mobile discounted mechanic service, and shuttle service if more serious auto service is required.

During the recession, the Palms opened a "Star-mart" in the hotel where staff could buy quality grocery items that the hotel buys in bulk at reduced rates.

Gallineau also gives credit to Reed's down-to-earth and approachable leadership style. "If you ask him a question he will answer it. He is honest, candid, and doesn't try to spin things. He meets regularly with employees to let them know what our business prospects look like. The other thing about Colin - he never penalizes a leader when someone below them in their unit calls with a complaint. He handles it in a constructive, not a critical, way. We are not a 'heads-are-going-to-roll' culture."

Gallineau describes his own style as open, human, and accessible. "I don't want employees to be intimidated by me," he says. "I dined with them in our cyber cafe, parked in no special place, and sat in no special place. They knew me as a human, a fellow adult with a different role."

Gallineau offered examples of the company's culture of caring:

• Coworkers chipping in with donations and helping other employees save homes that were being foreclosed on.
• An employee's father in Haiti died and didn't have enough money to go to the funeral, so coworkers stepped in and paid for that, too.

Placing employees in the right jobs has always been central to Gaylord's talent strategy. "When we first opened the hotel, says Gallineau, "we were trying to fill 200 positions. There were only so many management positions to fill and we know that not everyone who applies for a manager's job is cut out to be a manager. But they are often tempted by the higher pay or status. We always ask candidates for these jobs a question that helps us determine who is a fit and who isn't. The question is 'what was the best job you ever had and why?' A lot of the candidates responded by saying they were actually happier when they were working at lower-level jobs. So we moved some of them back into those positions where they could do the work they enjoyed, and kept them at their same pay level. Some told us they felt relieved. One was a director of rooms who preferred her previous role being in charge of executive housekeeping where she had enjoyed the daily interaction with the housekeepers."

Gaylord also gives quarterly bonuses based on guest-satisfaction scores, rating staff on three key criteria for each employee - friendly, helpful, and prompt.

Gallineau admits that The Palms occasionally makes a hiring mistake. "When that happens," he says, "we cut our losses and do it quickly. We had to let a restaurant manager go when it was clear he had misrepresented the facts of a situation. We have also had other kinds of bad leader behavior, such as yelling incidents. Our usual approach in these instances is to address the behavior directly, coach the individual, or get them into classes on managing anger, stress, or time.

As a result of its culture and practices, the hotel's voluntary turnover is the lowest in the entire industry - 28% at the Gaylord Palms and in the low 30's nationwide. Gallineau acknowledges that part of that has to do with the property itself and how impressive it is. "The Palms is in the number two hospitality market in the U.S. after Las Vegas. There are few openings because people don't want to leave, and when positions do come open, we try to fill them from the inside if we can, though hiring the best available candidate is the key. We promoted 167 people last year"

When three big, prestigious hotels opened properties nearby a couple of years ago, Gallineau and his leadership team knew they would lose some people who wanted to go to work at these other hotels. "We would have been naive to think we could offer the best fit and best opportunity for everyone when these other outside options were there for them. So, believe it or not, we decided to offer a resume-writing class to help them move on if that's what they wanted. To our amazement, only five who took the class left the hotel, and all five came back because the work experience at the new hotel wasn't what they thought it would be."

The most interesting thing was that in the course of helping current employees with their resumes, managers found talents they didn't know people had. "We hire people who come from various backgrounds and from other countries and many of them have received degrees or other training just based on economic reasons and then took whatever jobs they could get after that. We discovered some hidden talents."

If these two workplaces seem out of the ordinary, it's because they are. Most people go through their entire careers having never experienced a great workplace. Many are skeptical that such workplaces even exist. When I read the verbatim survey comments of employees at winning workplaces and compare them with comments from the wanna-be workplaces, the differences are stark. Employees at high-scoring companies say they are blessed and lucky, while employees at low-scoring and average companies are often cynical or disengaged.

The difference lies not in the pay and benefits, though these are important. Sound business strategy and business success are necessary ingredients as well. But the key difference, based on our analysis of 2.1 million engagement surveys (and 200,000 comments) from more than 10,000 employers is this: leaders who commit to creating a great workplace culture - and the employees and customers they serve - are the biggest winners.

Leigh Branham, SPHR, is Founder and Principal of Keeping the People, Inc., Overland Park, Kansas, a talent management consulting firm which helps organizations analyze root causes of turnover and employee disengagement, then develop and implement employer-of-choice strategies. His previous experience includes serving as Leader of the Talent Management practice for Right Management Consultants’ Heartland region. Mr. Branham has been interviewed on National Public Radio, published in The Harvard Business Review, and quoted in Business Week, The Los Angeles Times, The Chicago Tribune, and many others through The Associated Press, as an expert on employee retention. He publishes a quarterly e-newsletter—Keeping the People Report. Mr. Branham can be contacted at 913-620-4645 or LB@keepingthepeople.com Extended Bio...

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