When Gamal Aziz became president of MGM Grand Hotel & Casino in 2001, Las Vegas was on a roll—and so was the MGM Grand

Subject:ManagementPrice: Bought3

Share With

When Gamal Aziz became president of MGM Grand Hotel & Casino in 2001, Las Vegas was on a roll—and so was the MGM Grand. The 5,000-room hotel was ringing up $175 million a year. The challenge for Aziz: to take something good and make it even better. Under Aziz, revenue zoomed, and the MGM Grand became the second-most profitable hotel on the strip after the Bellagio. Some credit goes, of course, to a $400 million spruce-up of the hotel in which 36 restaurants were opened or remodeled and Cirque du Soleil was brought in as a headlining act. But ask Aziz what was the single-most important factor in the jump, and he won’t talk about twirling acrobats or signature dishes such as free-range quail stuffed with foyers. His answer is: the employees. Now with times getting tougher in Las Vegas as tourism drops and gambling revenues fall, Aziz says his people have become even more critical to the company’s success. “Employee engagement in times of difficulties and severe economic climate is far more profoundly important now,” says Aziz. “Employees are willing to give their allto unlock that potential is a competitive distinction. . . . It’s their decisions, their actions, their attitude that really makes the difference between [us and] a company that has its employees just punching the clock and trying to get through the day.” But Aziz, like all managers, is under pressure to justify every cost. Although his hotel is still running 96 percent occupied, groups are canceling, and those that do come are spending much less per visit. That’s forced Aziz to economize on some of these successful programs. He still does regular employee appreciation dinners for top performers, but he’s spending about half as much this year as last. He’s started recruiting managers from sister properties to attend his MGM Grand University as a way to defray the costs of training his own top managers. And he’s put on hold one program training next-generation line managers. Aziz shares with employees the challenges he’s facing. Employees, the CEO says, were what got the hotel to the next level, and they are the key to pulling through hard times. “We will get through this, we will survive,” says Aziz. “Once we get through this, the employees will be the ones who have gotten us through.” When Aziz arrived in 2001, he sought out rank-and file insight into the hotel and how it could improve. A survey of the hotel’s 10,000 employees made clear that very little was being communicated to the staff about the events going on in the hotel on a daily basis, including such basics as who was staying there, and what the hotel had to offer those particular guests. Employees sometimes didn’t even know what conventions were at the hotel. Aziz came up with a simple fix. There is a short meeting now at the start of every shift in which every employee is given a rundown of what’s happening in the hotel that day. It’s a simple concept, but rolled out across 10,000 employees a day, it’s a major undertaking. In his recent book Closing the Engagement Gap, Towers Perrin Managing Director Don Lowman highlights many MGM programs, including the MGM Grand University that offers dozens of classes on an invitation-only basis for high achievers. The MGM Grand Leadership Institute is a 24-week program for executives. And REACH! is the hotel’s six-month course on basic supervisory skills for ambitious hourly workers. This investment in the staff, along with recognition dinners and other rewards, have led to more than 90 percent of MGM Grand employees saying they are satisfied with the jobs, and 89 percent saying their work has special meaning. In the book, Lowman cites a finding from the firm’s survey of tens of thousands of employees in six countries: that the number-one thing that engages employees is senior management’s interest in their well-being. Visiting the MGM Grand, Lowman says he found evidence of that connection in spades. Aziz was impressive, Lowman says, for his tendency to ask questions and listen to the answers. SOURCE: Excerpted from Nanette Byrnes, “The Issue: Maintaining Employee Engagement,”

Questions

1. How did the MGM Grand use employee surveys to enhance employee engagement? Besides the applications described, how else could surveys support employee satisfaction and retention at the hotel/casino?

2. In meetings held at the beginning of each shift, employees receive information that helps them provide superior service because they know more about their guests. How could that information also contribute to employee satisfaction and retention?

3. Because of a decline in revenues, the MGM Grand scaled back spending on some employee recognition and development programs. Suggest a few less-costly ways the organization could strengthen employee retention in lean times.