Tipping at Arise, Case Study Example

Pay and Benefit

Employees feel that they are underpaid and tipping fell short of expectations

By May 2011, 63% of PWCs initially employed to the company had already left the company even after the increments of tipping by 20%. The tipping income of 25% was mentioned during the recruitment process which raised the employees’ expectations. However, tipping compensations was running 50% below the expected even following the increase of sales turnover in 2010’s first few months. Clients experienced with ARISE’s day culture were conversant with tipping. Culture is the collective programming of the mind that which distinguishes the members of one human group from another. Moreover, more prosperous clients were familiar with the policy of no tipping employed by the company’s rival such as Canyon Ranch (Beer and Clair 9). This amounted to different cultures between the day clients and the evening prosperous clients hence some gap in tipping. Additionally, customers seeking multiple services tipped low amounts with the great impact being felt to massage and skin cares experts whose income mostly lowered below their expected to 72.6% and 73.0% with the highest income being at 81.8% and 92.1%. As a result, most PWCs thought that the pay was too low given the expectations and that other spas would provide a better income. It should be noted that Pay Satisfaction does not increase linearly with pay. The cost of expectation surpassing the reality comes with 31% staff turnover. It is surprising how income prediction can discourage employees who earned higher than most employees in the industry. However, if the income can’t meet the expected in the first few months, this would stir up employees’ worries on whether the income would be constant and satisfying in the long run (Beer and Clair 7). To avoid future uncertainties, employees are more inclined to leave the company. The proposition of Security of pay directs, employees must have some assurance that pay will be consistent and long-term to be satisfied.

Employees undervalue health benefit

New employees expect to get benefits as illustrated by the hiring contract regarding pay, promotion, supervision and work satisfaction.  According to the Value Percept Theory, employees’ job satisfaction depends on whether you perceive that your job provides the things that you value. For instance, some employees value Job Promotion as a source of satisfaction. If any of the expectations falls short, it becomes a demotivating factor. The situation explains why the employees undervalue the health benefits they gain in the process of serving the clients. ARISE’s CEO Kristen Chamber highly considers employees health benefits so that they can serve as role models to the clients. This goal should have been changed to; ‘health and well-being to both the clients and employees matters to ARISE’s culture.’ Sometimes it is demotivating if employees are given some benefits for the sake of attracting clients (Beer and Clair 9). Instead, the company should illustrate to value the health and well-being of the company’s community. ARISE need consider that, the employees have different personalities, distinct structures and propensities inside individual workers people that explain their characteristic patterns of thought.

Health benefits are so attractive when the employees come to ARISE

The employees’ health benefit is ARISE’s creation, hence it is unique to the company. As a result, most new employees at the company are surprised that the company adds value to both the client and staff members. The workers thus find the work meaningful and view working at ARISE as something that counts (Beer and Clair 9). While most companies are likely to offer equal pay, other benefits motivate the employees to work. Equity of pay implies that, Pay must be equal to or above the industry average and/or what other colleagues who contribute similar effort receive.

Operational challenges

Why customers late to their appointments

PWCs encountered a critical issue with clients’ timely arrival to appointments. Client’s timely attendance to their sessions is impacted by other engagements in their daily schedules. For instance, clients who take lunch in the café experience delays with their orders and waiting for checks. Owing to the delays, some of the schedule crush with those of other PWCs leading to operational hitches (Beer and Clair 7). Some of the appointments such as facial therapies are aborted in the interest of time hence discouraging PWCs as they fear that they might not achieve the expected results.

Why employees fail to clean up between client sessions

The director of spa services, Danielle Dunn hard notified the PWCs that, their job specifications was inclusive of keeping the facility well stocked and clean. However, most PWCs though that these duties were entitled to the spa’s maintenance group. The maintenance group worked after the working hours to clean and prepare it for the following day’s opening. Consequently, the PWC faced challenges in seeking for supplies or clean up in the short breaks between clients leading to delays in picking the customers from the waiting bay. The issue could be as a result of confusing job description where PWC are also supposed to do some duties of maintenance (Beer and Clair 7). Telling the PWCs is not enough, the service director should have included it in the job description contract.

Why employee turnover is higher than managers projected

ARISE had a turnover rate of 17% for the first three quarters. The ratio grew to 31% by the end of the first year. Though low than the industry’s turnover rate of 75%, it was risky for the business as its strategy was founded on the assumption of a committed and stable workforce. Employees left the company after they failed to achieve their projected benefits hence feeling demotivated. The 25% tipping rate highly motivated new employees. The spa had put approaches to make the expected happen to the extent of including copies of tipping guidelines FAQ at its webpage, as well as, the front desk. However, most affluent clients had experience with spas that do not allow tipping. Other clients gave remarks that drove the management to remove these policies (Beer and Clair 1). The events primarily demotivated employees who opted to leave the company with hopes that they can earn higher in other companies.

Company Strengths

Why customer satisfaction is so high

The company CEO and founder established the business to tap the unmet niche. Consumers before had issues in experiencing the luxury far a destination on a regular basis due to inability or lack of will to devote ample finances and time for frequent spa retreats (Beer and Clair 2). ARISE came in as a “destination for a day spa” offering a superb environment, as well as, insisting on the health gains linked to spa treatments. Consequently, clients were very excited to have one of their long-lasting issue solved by ARISE. As much as they would think of comparing it to other companies, very few market rivals invested in the niche and so the consumers saw ARISE as a savior who came to rescue them in their dire need. Further, ARISE added tokens through which PWCs coordinated with others in advising clients seeking multiples services. The consolidation of clients’ packages made it seem like clients visiting ARISE was coming to a single place where all their health and wellbeing issues were all solved at one stop (Beer and Clair 3). Every PWC would focus on their expertise hence offering consumers just the best.

Why turnover is so much lower than at other spas in the industry

As much as tipping policy has not met the employees’ expectation, the Human Resource Management practices at ARISE are among the best in the industry. Driven by the interest of hiring the best HR personnel and maintaining them for less, ARISE has an exclusive HR management policy. The company’s HRM system integrates employee feedback, training and career development, rewards and compensation, staffing, job design, and work systems. The system ensures top employee performance who are highly committed to the company’s goals. While its rivals maintain low costs by employing contract of part-time employees, ARISE took the model of full-time salaried employees. Most workers seek a constant income inflow and so very few would be willing to leave a permanent job for a commissioned one. Additionally, ARISE only hired professionals who were licensed by the state and so is the income fair for the value offered. ARISE handles employees like professionals from whom professional services are offered in return. Salaries are paid with respect to the level of experience and skills of an employee (Beer and Clair 2). In addition to the tipping policy, employees at the spa earn higher than most in the industry. Given the benefits such as high pay, health benefit and six hours to work per day, ARISE offers work-life balance leading to Life Satisfaction. Employees have adequate resources and time for all aspects of life including work, friends, family, recreation and health. Few would be willing to leave such benefits to join a company where they would gain much less.

What is going right/wrong with the Personal Wellness Coach (PWC) service?

How the PWC service has impacted client satisfaction

Following the survey, 90% reported having been very satisfied with the services of the spa’s experience. The PWC offer the client’s expertise services with regards to individual needs. Despite the high turnover, clients did not report to have encountered challenges with the service quality. The services provided are professional and has been designed to satisfy an unmet niche. Therefore, clients are provided with quality services for a need that has long not been satisfied. 34% of consumers loved the services following which they gave immediate positive feedback and tipped the PWCs 20% to 30% (Beer and Clair 7). Feedback elaborates the level to which workers are provided with clear information about how well they are performing. In our case, the employees seem to have underperformed causing consumer dissatisfaction.

Why so few clients do “love” (from the survey) the PWC service

Following the eight months of operations, only 34% of consumers said to love the experience at ARISE. 60% were not mainly interested while 6% disliked the services. Clients who used several services reported to have received conflicting advices from the various PWCs. Clearly, the PWC experts did not consult with each other regarding individual client’s advice as recommended by the management. Additionally, the PWC causes delays of clients’ appointment linked to seeking supplies and cleaning up the rooms. Owing to individual interests for tipping, employees experience high tendency of Neuroticism which is the extent to which people are nervous, moody, emotional, insecure, and jealous. Instead of delivering services in the interest of clients, they do it to attract larger tips.

How the PWC service has impacted employee satisfaction and commitment

The PWC service job description is clear for individual employees. However, the spa lacks a clear procedure through which PWCs should consult each other when it comes to serving clients seeking multiples issues. Further, while most clients come late for their sessions, adding the stocking and cleaning practice to the PWCs’ assignment is too much given their professional engagement (Beer and Clair 2). Such issues may impact employees’ satisfaction with the work itself. Moreover, schedule crush highly affects Coworker Satisfaction where some workers whose schedule is crushed may wonder if their colleagues are even ready to assist them in case a need arise in the line of duty. The encounter might have been a key source of employees’ dissatisfaction.

What is going right/wrong with the All-Star Team plan?

Why scheduling is more difficult at ARISE

Clients have other daily engagement whose delays affect their timely seeking of scheduled spa services. Further, PWCs have more duties at their disposal which consume much time. These two issues cause delays which affect other PWCs’ and clients’ schedules (Beer and Clair 7).

Why employees do like the scheduling

Scheduling if followed to the later help in time management. Employees only work for six hours a day. There is a relatively short time for service delivery compared to the standard eight hours while still securing fixed salary (Beer and Clair 4). Staff can have time to engage in other personal activities hence more job satisfaction.

How do customers feel about scheduling? –Why?

Clients did not like the scheduling offered by ARISE spa. Clients had other daily engagements. If they were late for a session, it translated to late service conclusion or experiencing incomplete services. Clients experienced schedule glitches which might have been a main source of consumer dissatisfaction (Beer and Clair 7).

Works Cited

Beer, Michael and Lynda St. Clair. “ARISE: A Destination for a Day Spa.” 2012. 9-913-521.