Case Study: Club Med

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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, and appraisal system processes.

The first issue was that some village chiefs fired two or three times as many GOs as other chiefs. To resolve the problem, it has been proposed that the village chiefs take part in the recruitment process, so that they see how hard it really is to find quality GOs. There are a few problems here. For example, it is harder to assess résumés in America than in Europe because of discrimination laws barring both requests for photo and age. This makes screening applicants that much more difficult when certain demographics are ideal, especially for European’s who are not familiar with American practices. Also, Americans tend to be more “creative” with their résumés, so as to attract attention, and though not always, most of the time, these résumés tend to be very misleading. All in all, the entire recruitment process is very tedious and time consuming especially when cultural differences work as a restricting factor for something as simple as screening candidates for interviews. And though I strongly believe that village chiefs should have a say in the recruiting process, I also believe that American village chiefs may be better qualified when assessing the needs of its American subordinates because of their similar outlook on life than that of someone from another country.

Motivation is a major component in effectively reducing turnover. Many American GOs feel that they are not getting proper feedback from their respective chiefs, and subsequently the European chiefs do not consider the need to provide that feedback either. This plays a huge factor in motivation because how will you know what you are doing wrong when your supervisor does not tell you. The current system solely uses a rating system that rates technical ability and attitude and comportment with GMs. Though the appraisal system allows for feedback in the comment box, most chiefs were not inclined to elaborate. Again with the differences in culture, European...
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