Table of Contents
- Objective of the paper
- Benefits of Applying the EFQM Model
- Limitations of the EFQM Model
- Conclusion of Chapter
- Companies that have successfully implemented the EFQM
- Salford Royal Hospital
- Bedford College
- Headland Hotel
- Customer Results
- Society Results
- Peoples Results
- Key Performance Results
- Partnerships and Resources
- Policy and Strategy
- Related Business essays
The EFQM (European Foundation for Quality Management) Excellence Model was first introduced in early 1992. It proposed a framework that would be used to assess the applications for National and European Excellence Awards. Two decades down the line, the EFQM model is arguably the most popular organizational framework not only in Europe but also around the world. It has formed the basis for many of the regional and national excellence awards and of course the aforementioned European Excellence Awards. The model was revised in 2010. This was necessitated due to the dynamic commercial environment. However, the original concept was never affected (Jalaliyoon et al.).
The framework itself is based on nine criteria; five of which are “enablers” while the remaining four are “results”. The enablers essentially cover what the organizations and companies do while the results reflect what they achieve as a consequence. There is a cyclic connection between enablers and results; the enablers cause the results while the results are used to improve the enablers. The enabler criteria are leadership, people, policy and strategy, partnerships and resources and processes. The results criteria include people results, customer results, society results and key performance results. The underlying message of the model is that excellent results in terms of people, customers, performance and society are achievable when an organization’s leadership drives the policy and strategy that will be delivered via partnerships and resources, people and society (Dodangeh & Yusuff 2011).
Objective of the paper
The Squire Hotel Group has had the desire to extend its current market share. It has experiences a room occupancy rate average of 80% during weekdays but only 30% during weekends. The hotel chain’s main objective is to have an occupancy rate of almost 100% at all times, not just during the holiday seasons. Since the company wants to improve its organizational performance, the EFQM Model comes in handy. This is because the model, through its nine criteria, describes the key personnel, strategies and resources that should be used to ensure that it gets improved results. Therefore, the model is very appropriate. This paper will use this model to outline the strategies that Squire Management can use to improve its performance.
Benefits of Applying the EFQM Model
The EFQM has been universally accepted as a standard for quality management. As a result, it is useful tool when a company wants to assess its own performance. It can use it gauge whether it’s meeting the set out objectives or not. If the results are not satisfactory, the organization knows exactly the factors that have to be thoroughly looked into for possible restructuring: the enablers. This is certainly true for Squire Hotel Group as it desires a full occupancy rate at all seasons, a feat that has not yet been achieved. A self analysis can reveal why this is the case. Apart from self analysis, the model can be used to compare performances of competing organizations. This is borne out of the fact that many organizations are using the EFQM model. Therefore, Squire can use this analysis to compare with the results of other hotel chains (Watson 2002).
The EFQM Model explicitly discusses the organizational structures that are necessary for the excellent performance of the organization. This starts from the leadership. It is widely accepted that the leadership holds the key to the success of any company. Therefore, the EFQM Model is not way off the mark when it stresses that excellent results are only achievable when the leadership is competent enough to put forth policies and strategies as well as availing the necessary resources. Using this model, Squire can feel the necessity to make some leadership structural changes. The leadership can also use the model to define roles for its staff (Watson 2002).
The EFQM Model, when implemented properly, will lead to satisfied and loyal customers, successful leaders, motivated and engaged stakeholders and employees, a unified sense of purpose across the board, properly and planned transitions, continuous flow of ideas, efficient data usage and, above all, a strong financial performance (EFQM n.d). These benefits can be enjoyed by any organization.
Limitations of the EFQM Model
The EFQM Model is wholly an additive model where the variables and indices interaction effects cannot be subjected to any assessment. Popularly referred to as synergic effects, these interaction effects may be large in number, more than the total number of individual effects. In addition, there is an apparent tradeoff between the criteria that lead to the covering of a criterion’s weakness by the strength of the other. Since the main objective of the assessment in the EFQM Model is to evaluate how the model’s concepts are to be realized, this trade off rate has to be determined. For instance, when an organization is in the process of making promotions, it cannot sacrifice the satisfaction of its customers (Madjid et al. 2008).
The main purpose of the EFQM is to achieve the maximum 1000 points for all the nine criteria. However, there is no workable promotion strategy that a decision maker can get from the process. To put it simply, more often than not, there is a significant gap between the measures of the ideal unit and the evaluated unit. As a result, very limited useful information that can be used towards improvement of the performance can actually be obtained from the evaluation. Finally, the EFQM Model has nine criteria with other numerous sub criteria. Moreover, these criteria are measured qualitatively. Therefore, the probability of actually making wrong evaluations is high (Madjid et al. 2008).
Conclusion of Chapter
This chapter has discussed the fundamentals of the EFQM Model; its modalities, benefits and limitations. However, it has not yet touched on the implementation procedures. These procedures will be discussed later, with special attention given to Squire Hotel Group.
The EFQM Model was introduced in early 1992 as the standard framework for assessing businesses and organizations for the European excellence awards. It has since gained widespread popularity all over Europe as the basis for many regional and national excellence awards (Ho 1996; Urnabiak 2004; Burlikowska 2006). The model has been found to be an able tool for an organization’s self assessment while providing it with its strengths as well as areas that need to be improved (Harrington 2000). In addition, it focuses on what an organization is currently doing, or what it could do, so that it provides excellent products or its services to its customers, stakeholders or service users (Karkoszka & Roszak 2005). The EFQM model requires that organizations practice “the eight basic rules of excellence” (basically the fundamentals of Total Quality Management) which guarantee the organizational success, its strengthening in the market and its overall development (Michalska 2005; Whitmore 2000).
As the paper has already mentioned, there are many organizations that have implemented the EFQM Excellence Model as part of their Total Quality Management. Most of these organizations have benefitted from this strategy. In the same breath, there have been many studies conducted to link the benefits and consequences of self assessment and organizational performance. Wells (2001) believes that self assessment is so vital that it has to be integrated into an organization’s strategy framework. After conducting their own survey, Van der Wiele et al. (1996) also came to this conclusion. In their own analysis, Henderson et al. (1999) advised that operational and strategic plans have to be formulated if a business performance has to improve. Other scholars have stressed that long term strategic objectives, as well as short term performance goals, can only be ensured if there is careful planning that is achievable through quality improvement due to EFQM implementation (Munro- Faure & Munro- Faure 1994, pg. 254). Chin & Pun (2002) also argue that Total Quality Management should be part and parcel of the planning process and that it has to be integrated with the other organizational strategies. This stance is also supported by Conti 1997.
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Companies that have successfully implemented the EFQM
Salford Royal Hospital
Salford Royal Hospital had a preceptorship programme, for recently qualified, nurses that was aimed at developing their practice. The EFQM Model was used to monitor and assess the success, if any, of the programme. The programme was developed using a quality monitoring framework and was mainly meant to support the nurses as they take up on their new roles. The results from the assessment and evaluation of this programme were discussed by Leigh et al. (2005). The hospital, a seemingly acute NHS Trust, was badly in need of such a programme.
The researchers adopted an EFQM model that was specific to the programme. They used questionnaires to obtain evidence that was used to evaluate how the EFQM tool was used in the preceptorship programme. The preceptees were given the questionnaires before and after the programme while the ward managers were given questionnaires after the programme. After the self assessment, the hospital was able to recruit and retain more than before while the preceptees felt that a new sense of confidence. The use of the ERQM Model also gave the managers all the information that they required. As a result, the barriers have been broken down while areas of practice that were in need of change were identified (Leigh et al. 2005). The hospital has since applied the EFQM model for quality management
The Bedford College also adopted the EFQM Model in 2005 successfully. As a result, it was able to acquire a new education center as well as maintaining the teaching standards. For its efforts, the college received a five star recognition for excellence two years later (Pryce n.d).
Headland Hotel only discovered the EFQM Model in 2009 despite being the first organization in Cornwall to be awarded an ‘Investors in People’ accreditation. Since the realization, the hotel has been committed to quality programmes. As a result, the model brought a new sense of commitment which has led to the improvement of many projects at the hotel (Brown & Armstrong n.d).
This chapter has discussed some literary aspects of the EFQM Model and other scholars’ findings on the importance of self assessment for organizations. To underscore this importance, it has also outlined the specific examples of organizations that have successfully applied this model.
Improving Performance of Squire Hotel Group Using the EFQM Excellence Model
The EFQM Excellence model stipulates that for proper implementation, organizations should use‘RADAR’ logic. That is, the organization has to determine the results (both financially and operationally) that it desires to achieve; it has to come up with approaches that will facilitate the realization of these results; it has to deploy these approaches systematically for full implementation; finally, it has to assess and refine (where possible) these approaches after monitoring and analyzing the new results. It can thus identify, prioritize and implement improvements it deems fit. This paper will follow this RADAR framework in its analysis based on the nine criteria.
The Squire Hotel Group has the desire to perform at its optimum level. This simply means that its room occupancy rate has to be 100% or just about this highest optimum level. In addition, all its customers have to be satisfied if they are to be retained. An extremely high occupancy rate (in the regions of 100%) at all times (while keeping costs at the minimum) coupled with a satisfied customer base will translate to high profitability for the hotel chain.
Squire aspires to have a full occupancy rate for all of its hotels as opposed to the current weekday rate of 80% and weekend rate of 30%. This simply means that the measure of success in this category is a significant increase in the number of customers. For instance, a 120- bed hotel should have 120 clients or more almost every night. In addition, if there is a very high number of returning customers, then the hotel can be said to have achieved remarkable customer results. This also suggests that the customers are very satisfied with the hotel’s services; are willing to return and probably advise other people to come to the hotel. High customer numbers indicate that the hotel is generating almost a maximum value of revenues. This is the aspiration of Squire Hotel Group.
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This criterion measures the impact that the hotel has on the wider society. At the moment, the hotel has a policy of encouraging its managers to integrate and constantly be in touch with their local community. This is through Round Tables and Chambers of Commerce. These interactions are mainly meant to get an insight about the community’s view of the hotel while at the same time showing them that it actually cares. This forging of personal relationships with the local firms are also meant to encourage these firms to direct their visitors to the hotel. Squire hotels should desire to be the best amongst other local hotels. To achieve this, the hotel must have a societal backing; the society simply has to have a favorable view of the hotel. This will make the local people choose it over other hotels.
Squire hotels cannot survive without the people. Their opinions and suggestions have to be incorporated in all decision making. However, Squire Hotels have neglected this very important aspect as they have no formal ways of collecting information as pertains to quality. The fact that the people are denied such a platform to air their views about the hotel services does not reflect well on the hotel chain. The people that are associated directly or indirectly with the hotel chain have to feel that they are highly appreciated. One way of ensuring this is by incorporating their views.
Key Performance Results
The hotel chain desires to have a full occupancy rate at its facilities at all times. This simply means that its mission is to attract as many customers as possible. The underlying factor of all these endeavors is the making of profits. At the end of the day, the performance of the hotel is measured by its profitability. The amount of revenues has to be expanded while at the same time the costs have to be minimized. Since the hotel chain has yet to experience a full occupancy rate, it can be argued that its profitability is way below what the organization desires. Therefore, the hotel chain performance has to be improved. The strategies for the improvement are discussed in the next section.
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The current leadership structure of the hotel is composed of senior managers (based at the head office) and the hotel managers that are responsible for the running of the outlets. Each hotel manager comes up with his/her own annual financial targets that are reviewed at the end of each year. If the manager fails to meet this target without a proper reason why, he/she is subject to sacking. The hotel managers report their respective hotels performance (occupancy, staff costs, food costs and profits) to the head office on a monthly basis. Therefore, it is upon the hotel managers to ensure that their hotels are performing at an optimum level.
The head officers pay a visit to the hotels about twice per year. However, they have the biggest say in key budgetary and operational plans. Some of these decisions may not reflect the situation on the ground. In fact, there is a restaurant manager who believes that the head office was indeed out of touch with the reality. This simply means that the hotel chain leadership structure has to be altered in terms of key decision making personalities. Since the local hotel managers are better suited to meet the needs of the local people, they should be given sufficient freedom to make all the decisions that pertains to their hotels without interference from the head office; the head office can only monitor their activities. The hotels managers know best the likes and dislikes of the local people. Therefore, they are in a better position to ensure that their customers are satisfied. This will lead to improved customer and person results. In addition, when the needs of the local people are met by the hotel through the actions of the managers, the society results will improve. This will be reflected by the expansion of profits.
The employees of Squire have to be motivated well enough to go about their duties with the best of attitudes. The hospitality industry is all about treating clients well enough so that they feel compelled to return. Therefore, the importance of a motivated and satisfied workforce cannot be understated as they will strive to give the hotel’s customers the best service. The people provide the labor, the skills and the competences that are so vital for optimal performance of Squire Hotel Group. When the people are motivated, they will give the customers the best service. The customers will be satisfied and will come back in numbers, greatly improving the occupancy rate. Excellent service will enhance the position of the hotel in the society as well. All these factors will compel more and more customers to seek the services of the hotels. This translates to more profits.
The staff turnover rate at Squire is currently at 70%. This number has to be brought down as it means that a majority of them are not satisfied with the working conditions. Therefore, the hotel has to strive to ensure that it promotes an excellent working environment for all its workers. This may be through awarding bonuses for good service delivered, periodic and systematic wage increases and having a proper working schedule. In addition, the hotel manager has to ensure that the people are treasured in the organization by being friendly to them and seeking their opinions during decision making. This will motivate them to provide excellent service to the customers.
Partnerships and Resources
At the moment, the hotel has been partnering with local firms to encourage them to direct their visitors to the hotels. These efforts have to be lauded. However, a lot more has to be done. For instance, it has to partner with tour operating companies, the local authorities, nongovernmental organizations and such like organizations (non-competing) so that they direct their clients to the hotels. These firms and organizations can also help in promoting the hotel chain through advertisements. Moreover, Squire can team up with charity organizations so that they offer these philanthropic services together. The use of public relations is an effective way of marketing any company. This will ensure that it gains a good standing in the society amongst its competitors. Partnering with these noncompeting organizations will benefit all parties. The hotel chain will get very many customers as a result.
Apart from building external relationships, the hotel has to ensure that the resources within its control are properly maintained. The hotel rooms have to be immaculate at all times. The premises have to be clean. Other resources that are so vital for the performance of the company have to be well taken care of. This is the only way that the customers will be satisfied with the hotels services.
Policy and Strategy
The hospitality industry stresses the importance of quality services to the customers. This should be the main policy of Squire. Therefore, all its efforts will be directed at ensuring that excellent service is provided to the customers. As the paper has already mentioned, the hotel rooms have to be immaculate and should meet the expectations of the customers. The number of complaints for poor service has to be maintained at the bare minimum. For instance, most of the complaints are food and drink related. It cannot be lost that different people have different likes and thus one person may complain about exactly what the other has complimented. However, this does not mean that the hotel should ignore such complaints; each complaint has to be noted down so that appropriate measures can be taken. Giving each and every customer his/her exact taste should be the policy of the hotel. This will ensure that everyone is satisfied. Moreover, the serving of customers has to be prompt. Satisfied customers will return, bringing along other customers. This will increase the number of customers and thus raise the revenue of the hotel.
One of the strategies of ensuring quality performance is by getting feedback for the customers. This can be though surveys and questionnaires. This will give the hotel an insight of how the customers rate their services. The hotel can then improve the quality of their services based on these recommendations.
The hotels provide people with accommodation facilities as well as food and drinks. As such, the key strategy of any hotel is to ensure that it offers only the best of these services. However, providing quality services has always been a challenge. On the contrary, this provision can be facilitated if there is an open communication channel among the employees, managers, senior managers and the customers. This simply means that everyone is involved in the process of decision making in ensuring that only the best services are provided. As the paper has already mentioned, if the employees feel very much appreciated they will be motivated enough to offer the best services to the customers. In addition, if the customers’ tastes are met, they will be satisfied with the hotel services. As a result, their numbers will soon swell giving the hotel a sizable amount of revenues. Its profitability will expand. This is certainly true for Squire Hotel Group.
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This chapter has discussed the strategies that Squire Group can apply to improve its current performance using the EFQM Model. These strategies are workable if they are applied properly. With such a tool, the hotel chain can be led into more profitability.