Case Study: Club Med

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Case Study: Club Med

By | April 2008
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HBS Case Study: Club Med

Turnover is a normal part of any business, and is to be expected. For some, it is common matter, and for others, it can be become a real burden. The idea is not to necessarily eliminate, but minimize the effects of turnover. Turnover can be either voluntary or involuntary. It is the job of managers to come up with solutions to motivate their employees to not only want to stay, but also to help develop them to their full potential.

The current organization at hand is Club Med. Started in 1950 by a group of friends, Club Med has since then gone from a nonprofit sports organization to the ninth-largest hotel company in the world. As the size of the association grew, managing it also became more and more complex. It was in 1954, newly appointed managing director, Gilbert Trigano, saw a commercial opportunity in the concept of turning the association into a business. By 1985, the Club, also known as, Club Mediterranee had become a publicly owned company on the Paris Stock Exchange and encompassed 100 resort villages that could host up to 800,000 vacationers.

In the organization, each resort village is made up of one “Chief of the Village” (general manager) and seven assistants called “Chiefs of Service” whom each oversee the activities of 80 congenial hosts – also known as GOs – who handle all jobs outside of house and grounds keeping. One of the biggest problems the organization faces is with the increasingly high turnover rate of newly recruited GOs. Turnover is now at 50% with North America at twice that of Europe. In the American zone, differences in culture and language have set barriers of communication between the North Americans and Europeans, frequently with French-speaking GOs and American GMs – congenial members. Thus the importance of American GOs is crucial for quality customer service. We will be assessing the dilemma of turnover through thorough analysis of the recruiting, selection, training,...