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The Clark Fitness Centre Group Management Essay

The Clark Fitness Centre FC group presently works a HR strategy with a give attention to the High Commitment Model with the addition of High Engagement Work System being central to this. This is evidenced by the MD, who has pressured to the staff of CFC his need to see them view their careers in a strategic sense and how their jobs donate to CFC providing a superior product offering than that of their competitors. In this regard HR systems have been designed to improve the performance and rewards of employees of the CFC group, with HIWS being truly a key drivers in the development of these systems.

Clearly the business is aware of the importance of the HR systems in creating core competences with a view to providing a sustained competitive benefits for CFC, as it has generated management positions within the HR office to specifically dwelling address HR systems such as:

Elliot Ryan: Manager of Settlement and Benefits

Ann O' Byrne: Director of Training and Development

Samantha Lake: Recruiting Coordinator

The company gets the required HR systems set up that facilitate the implementation of the HR strategy throughout the company. However, poor customer support and substandard retention rates show a failure within the HR department to deliver on the mandatory objectives from the HR systems.

Therefore a HR plan that addresses these failures must be developed, and HR systems created, which will enable successful implementation of the new HR plan throughout the company. Ultimately, these systems should be designed in clusters, as a single system generally does not suit the many roles and employees with the whole organisation.

Review of the business enterprise Strategy in CFC

CFC Corporate Strategy from 2000 to 2008 has been one of quick enlargement and was income driven, which has resulted in a growth in market show. CFC opened up 17 fitness centres in this era, but the enlargement has slowed. This slowdown in development has come about by a change of target by the plank of directors towards increasing profitability of every centre, as they would like to improve the important thing performance of the company. Improved membership and retention will be vital to achieve this goal. This means that there needs to be an alteration in the CFC corporate and business strategic thinking, and to achieve the new corporate seeks, the SHRM strategies are going to have to be aligned to the business enterprise strategies.

CFC is plainly looking to put into practice a form of Best Fit HR strategy with organisational fit being the main of the strategy, which is the ability of management to mould their HR strategies to match other critical features of their particular business. An attribute of the HR management highly relevant to this company is the idea that HRM ranges across company life cycle levels, from birth, to progress, to maturity Baird & Meshoulam 1988. The change in Corporate Strategy from development (2000 to 2008) to a greater focus on profitability illustrates how companies change strategies depending on their life cycle, which is regular with the research of Goldham & Descartes1997, (source).

Detailed below by Schuler and Jackson (1987) is a framework which web links HR practices to the required competitive position of the business. In seeking to achieve a competitive advantage the company needs to develop the right mix from these parameters.

Desired competitive strategy of the firm

(Cost leadership, differentiation or concentrate)

The required employee skills and behaviours

(degree of predictability in behavior, degree of teamwork,

extent of concern for quality, propensity of risk raking)

The supportive HR practices

(Alternatives in staffing, appraisal, remuneration, training)

Expected HR outcomes

(Staff skills and behavior highly relevant to desired competitive position)

Source: Modified from Schuler and Jackson (1987

Porters 'Focus Strategy' (Source) is evidently in research here to help CFC achieve Competitive Advantage. The key concern is the organisational fit between competitive strategy and HR strategy, which needs to be consistent with their market position. CFC targets providing services to everyone, so will provide services that cover different market sections.

Michael Porter's typology of competitive strategies encompasses both aspects (Source), with cost authority extolled by virtue of your choice to stabilise set costs and maintain low varying costs, and differentiation by the decision to shoot for greater customer support and offer niche market services.

Having evaluated the exterior environment, and completed a SWOT evaluation and conducted market research in to the Fitness Centre market - Appendix 1 for environmental examination - it is clear that there's been a major transfer in the fitness market in recent years. MDB Market Research Market Forecast 2011-2015 states that

"Between 2011 and 2015, the UK market for health and fitness is likely to increase, peaking at 5. 18 billion (at 2010 prices) in the second option year. "

However, a lot of this growth has been around the budget end of the marketplace as the Weekend Times (July 2012) reports.

"A surge in the number of low priced fitness golf clubs has led to the largest variety of health clubs beginning since 2007. "

Competition is evidently intensifying in the fitness centre sector, with most competition in the reduced cost sector, with providers such as Pure Gym, Fit for less, and Easy Fitness center driving down pricing in this sector.

The Weekend Times (July 15th 2012) also reviews of new entrants in to the up-market sector, with the news that US company Equinox, a stylish US boutique gym chain, is planning to open a high end health club in Kensington London to cater for the blissful luxury end of the market. The CEO of Equinox explained, "The blissful luxury customer is still spending money"

As CFC has determined the high end of the market as their target market, they need to conform their HR ways of reach this target market.

A starting place: Desk Stakes

'Table stakes' which can be thought as a "group of goals, resources and suitable people who are appropriate to the industry concerned" (Hamel and Prahalad 1994) need to be attained at the very least for an operation to be a viable. The Weekend Times market research reports show so it is easy to build a low cost gym and get the budget customer, and viability can be obtained with a low cost, no frills strategy. However, as CFC does not operate in this end of the marketplace, just attaining viability is not an option for them.

( Do we need another Heading here) (Competitive advantages)?

CFC must produce a competitive advantage, that will differentiate them from rivals. To realize competitive advantage, CFC must develop HR strategies that will result in advanced customer enrolment and retention. Buy in from Standard Manager's is an essential part of the HR plan. Strategies developed at mature management level will have to be put in place locally by the GMs. Targets need to be practical and realisable, as often they'll be doomed to fail.

However, the overall Professionals may have a problem within that the tactical focus is on functioning in a niche market, but at the same time attaining success and minimizing costs. To accomplish competitive benefits and reach the success targets, the concentration in each gym will have to be on CUSTOMER SUPPORT and Customer Retention, and the HR strategy should be built around these seeks.

A volume of elements form the foundation of the HR plan, and they are addressed at length below.

Balanced Report Card

As CFC has multiple locations, and each gym has a local General Manager, the use of your business performance management tool is highly recommended to help the organisation reach its corporate and business goals. This dimension tool will give CFC senior and middle management more control over the running of the business enterprise, and therefore can make them better equipped to meet the strategic goals for each and every of the 17 gyms, that will in turn bring about the attainment of the commercial goals.

The Balanced Rating Cards is a performance tool that might be used for this purpose by measuring both company and specific fitness center viability and success. "Everything you measure is exactly what you get" (Kaplan and Norton 1992)

The Balanced Credit score Cards is a tactical planning and management system that aligns business activities to company goals, improves internal and exterior communication, usually through buy in, and screens organisational performance verses targets.

Four perspectives of the Balanced Report Card, to be able of top priority to CFC

Learning & Growth: Staff targets customer service & retention

Customer: retention/usage

Internal process All-in-one family program, usages and retention alignment

Financial: Stable set costs. No more expansion, adjustable cost management, and bottom line management emphasis. Dual aspect, preparing for possible takeover goal in the future

Prioritising these perspectives in importance CFC

alanced scorecard

Adapted from Robert S. Kaplan and David P. Norton, "Utilizing the Balanced Scorecard as a Strategic Management System, " Harvard Business Review (January-February 1996)

Under the well balanced scorecard system it is apparent that the performance drivers/leading indicators are all long-term results, everything expect financial in this instance, as the financials are lagging /short-term indicators and possibly a fair reflection that shareholders are considering a trade sales down the road.

So where is the balance? In this situation it is dual target, the financial bottom line and the learning and growth areas that are most significant, and in both areas, staff skills and satisfaction are critical to client satisfaction and financial results. The training and growth strategy requires that the intangible possessions allow organisational activities and customer relationships to be performed at a higher level. That is predicated on three principals, tactical competencies, strategic systems, and the cultural changes to permit the climate change.

The emphasis on the scorecard is to improve the quality of the execution of confirmed strategy, but how about the concept of "Meta planning'? This is the ability to assume new environmental directions, and turn to new competitive problems, which requires companywide versatility (Source). Another option to consider is bench marking against industry norms or main opponents. This is obviously an issue that has been highlighted by retention rates slipping 20% behind the industry norms.

Finally with any report card the complete emphasis is on the necessity to create a quality management team capable of implementing the business strategy. Recruitment, development, and team development need to be carefully been able. Management of the non-management labor force, creating a process of management, complimented by development with creative and adaptable thinking will be critical to attaining this

Strategic Man Resources

An important aspect of a proper plan for any organisation is the id of the human resources that are central to the proper competitive good thing about the company. Among the aims of the Human Resources Manager is to recognize these people that are unique to the business by possessing a unusual or valuable skill or knowledge. Strategies for retaining and relating these people are of paramount importance to the permanent agility of the business.

Leepak and Snell (1997, 2007) (cited in Boxall and Purcell 2011, p. 115) in producing their 'HR architectural perspective' note

"That some types of human resource gain count more on an elite group of employees than they do on the brilliance throughout the labor force".

The existing workforce is a simple strategic tool to the business enterprise. Hamel and Prahalad (1994) contend that collective understand how within a company is deemed to be always a center competence for the firm

Reward Strategy

A recognised strategy for improving customer service is a Reward Strategy. Worker and team rewards can result in significant successes in bettering customer support. Each fitness center will have targets to attain as a team, based on the balanced report card, and should be rewarded as a team for being successful. This compensation will maintain addition to salary and could be bonuses, incentives or other benefits wanted to employees.

A popular pay back construction is the Legend Model produced by Jay Galbraith in the 1960's. The framework is made up of 5 categories of design procedures to shape an organization and the behaviour of the individuals within it.

http://www. expertprogrammanagement. com/wp-content/uploads/2010/11/organizational-design-star-model. jpg

expertprogrammanagement. com

How the incentive system is organised can have a major impact on staff performance, satisfaction and may also influence the perception the worker has in the value placed in them by the employer.

The incentive strategy implemented should align with the corporate strategic goals and objectives. Therefore, CFC employees in each gym should be incentivised to offer high levels of customer support, with a view to acquiring new customers and retaining existing members.

Performance Management

Performance Management will form an integral component in the successful implementation of the HR plan. Performance can be seen as one factor of 3 elements, Capability, Determination and Opportunity.

P = f(A, M, O)

Employees must first be capable of perform the duties required, they must be motivated to execute these tasks plus they must be given the opportunity to complete the tasks. Performance of employees will be meticulously linked to the overall performance of the organisation and then the management of performance is essential to the entire success of the company in attaining the proper goals.

Performance appraisal systems are formal methods for planning and analyzing worker performance. Having an efficient performance appraisal system is an essential component to managing performance effectively, as it acknowledges the development needs of people as well as the company proper goals.

The balanced Rating Card can be utilized as an appraisal tool, as the targets and aims will be included in the score credit card. If the staff does not know what is expected of these, they cannot be expected to execute effectively. Likewise, if the overall Manager of the gym does not know what the performance indicators are, they can not examine if the employees are meeting their goals.

The performance appraisal should also be looked at as a way for two way communication presenting the employee the possibility to exhibit their views on their role and the company as a whole.

The performance appraisal should be carried out by the direct line administrator for the worker and each manager is in charge of the performance of their direct reports separately and collectively.

Work practices

The MD has explained that he wants the staff to be tactical in how they plan their work by considering how their jobs contribute to CFC supplying a more superior team experience than that of their competitors. This would signify a High Commitment Model (HCM) is searched for from the MD. To realize a HCM work system, which targets job enrichment, a higher participation work system (HIWS) would need to be developed. This would allow for the introduction of motivated employees, who would have an engagement in the design of work and implementation of these systems throughout the company. This would enable worker knowledge to be utilized to boost work systems, which in turn would result in the introduction of work systems, which would be aligned to the strategy of the business.

Staff Training and Development

Member reviews has indicated that there surely is a problem with the quality and degree of customer service being proposed by the personnel at the gyms. This matter must be resolved immediately as it is having a direct effect on how the business enterprise is being identified by the client and could have a major impact on the decision to renew account for existing users. This is a significant issue which could impact significantly on success. The MD has mentioned that he is willing to purchase HR initiatives that show a profits on return. The training of staff in attaining high degrees of customer service will achieve a profits on return. Exceptional customer support will add to the main competences of the company.

Initially a procedure for training, which targets the 'deficit model', should be put in place. This model focuses on bridging the spaces in performance. This will assist in working with the customer service issue regularly. However worker development should not be restricted to the deficit model over the future, it should turn to develop employee development and the firm's agility over the long run (Dyer and Shafer 1999). Long-term development ideas involve a more balanced mixture of formal training and education and casual coaching and team building (Boxall and Purcell, 2011).

With this in mind the company also needs to turn to the further development of executives, which equally enhance the primary competences of the firm. "The performance of companies will reflect the quality of their 'upper echelons'" (Hambrick 1987, 1995, Norburn and Birley 1988)


Communication will very much be dependent on the type of management style that your company has decided to adopt. Purcell and Ahlstrand (1994:177) determine Management Style

"As a unique set of guiding concepts which set variables for management action regarding the way employees are cared for and exactly how particular occasions are managed'.

As CFC is embracing HIWS, two-way communication from the company's senior management, to General Managers and specific employees in each gym, is likely to be critical to the success of the tactical plans. It can't be assumed that what top management seek in conditions of management of employee voice will actually be enacted by middle and lines professionals (Boxall and Purcell, 2011). While CFC management may expect certain performance benchmarks from employees, the overall Managers may choose a different plan, as they need to reach their specific focuses on. The role of the General Managers in having the strategic guidelines to life is increasingly recognized (Purcell and Hutchinson 2007) and this will be needed for CFC to meet their tactical goals.

Another area where communication can be of major gain to CFC is communication between CFC personnel and the customers. An area of concern for most Fitness Centres is Customer Retention, but CFC seems to have a higher than average turnover rate. Nuffield Health is a respected Fitness Centre company with 51 gyms throughout the UK. However, they experienced greater than average turnover rates. Nuffield Health unveiled a communication system between staff and customers that enabled them to lessen the turnover rate. (www. cogentanalytics. com). As CFC's turnover rates are 20% above average, a similar system could be introduced in CFC that has the potential with an immediate impact on bettering customer retention.


It is clear from the outset that CFC's initial desire/requirement is to secure the principal order strategic goal of viability. This is clearly defined by the development policy implemented since 2008 to ensure cover of the business bottom line and adds credence to the concept of a business preparing for a trade deal/amalgamation later on. The business strategy discussed is clearly evidenced in the Schuler& Jackson style of cost management and increased quality.

CFCs HR strategy is offered relative to a high commitment model with proposal enabling the cascading of strategy from management down, a higher road model. Their stated outcomes/goals of a reversal in below industry average retention and increased consumption is a clear representation of high involvement work system, seriously reliant on staff buy-in from the cascading top end down communication strategy. The mentioned effects of retention, increased consumption and superior service are further increased and shown in their individual tool systems.

CFC as an organisation has shown the differing cycles of the brief and medium term of these business and are now preparing for a significant switch in strategy, which underlines the necessity to employ human source of information management to align the HR plan with tactical goals. The perspectives utilized, which lean highly towards learning and expansion, are based on the introduction of core competencies, capability to meet customer requirements and encourage utilization and secure retention, with many of these elements leading to the primary point of view of financial viability.

Having considered viability and the strategic choices had a need to secure same, it is then that people can consider the high-end strategy of sustained competitive advantage, upon that your business is seeking a policy of differentiation. This, it is hoped, will secure a niche top quality market position that allows CFC to best utilise the resources open to the business, the physical facilities, the advanced equipment available, the family package deal and the staff fully consistent with both market and company demands.

Although evidence shows that a best fit model allows the business the introduction of the connection, in cases like this between competitive benefits, worker behaviours and HR methods, we may take it one step further and break down the fit, analyzing the resource centered view that may enable the organization to develop, incorporate and manipulate resources, both human and non-human, to accomplish success in a competitive environment. This point of view will summarize clear give attention to the grade of management process and office culture taking factor of tangible and intangible property. The launch of the balance score card, enabling performance management systems to be upgraded with the advantages of new KPI's and the intro of the short-term deficit model will all have the desired effect of integrating HR strategy into tactical goals. Sources:

Boxall, P. and Purcell, J. , (2011) 'Strategy and Individuals Resource Management'

3rd Model. Palgrave Macmillian

Dyer, L. and Shafer, R. (1999). ' Creating Organizational agility: implications for proper human reference management', in Wright, P. Dyer, L. , Boudreau, J. and Milkovich, G. (eds) Research in Personal and People Management (Health supplement 4: Strategic RECRUITING Management in the 20- First Century). Stanford, CT. and London: JAI Press.

http://www. expertprogrammanagement. com/2010/11/organizational-design-%E2%80%93-star-model/

Higginbottom K. (2002) People Management

Purcell, J. and Ahlstrand, B. (1994) Individuals Tool Management in the Multidivisionsal Company,

Oxford: Oxford University or college Press.

Purcell, J. and Hutchinson, S. (2007) 'Front -brand managers as providers in the HRM- Performance causal string: theory, analysis and research'. Human Reference Management Journal 17 (1) : 3-20.

http://www. cogentdataanalytics. com/nuffield-health. php

http://fitnesscenterdevelopers. com/customer-retention/

http://www. nuffieldhealth. com/fitness-and-wellbeing

http://www. mbdltd. co. uk/Press-Release/Fitness-Centres. htm

http://theptnet. com/fitness-industry/#ixzz2CZubohJo

expertprogrammanagement. com

Source: IBISWorld

Baird, L. , & Meshoulam, I. (1988). Controlling two matches of strategic human being source management. Academy of Management Review

Rutherford, Buller & McMullen 2003. Human being source of information management problems over the life circuit of small to mid-sized firms. Human reference management

Appendix 1 - CFC Environmental Analysis

SWOT analysis


Well recognized and founded gyms

Top school facilities available for members

Competitive membership rates

Personal Training & Exercise classes available

Modern or more to date equipment

Programmes to match all people


Lack of account retention/renewals

Poor attendance by customers

Poor customer service from staff


Continue to establish new gyms

Target more up market locations

Potential customers: concentrate on single people/Groups


Other Gym Competitors

Economic climate

Other options for keeping fit (Home Fitness/Walking/Bicycling)

PEST analysis


Government coverage - health initiatives to increase activity

Tax relief, bonuses or subsidies to increase participation



Location of Gyms

Luxury item?

Increased unemployment


Society's attitude on their personal wellbeing.

Increased focus on health and fitness, with an increase of personal responsibility


New solutions, online gain access to, CRM.

Advanced gym equipment

Higher end Gyms need better equipment

Five Causes Analysis

Threat of New Entrants

The threat of new entrants is high in the fitness center industry for many reasons. Low priced budget gyms require little capital investment and depending on location this type of service may suit the demographics of the area. There is no dominant player in the market and customer commitment might not exactly be high. New entrants can enter into the marketplace through acquisitions, privately held gyms or a hotel fitness center. You can find low switching costs involved for customers and also new entrants can get quick access to distribution stations.

Bargaining Ability of Suppliers

The bargaining ability of suppliers is relatively low as there are many players on the market supplying gym equipment therefore keeping the price of equipment down. Customers aren't fragmented therefore bargaining power is low from suppliers unless they can be dealing in hi-tech equipment.

Bargaining Vitality of Customers

Customers can easily leave one gym for another depending on the cost and what suits their budget, therefore going out of some already attempting gyms subjected to closure.

Threat of Substitutes

The fitness industry faces competition from many substitutes as customers move to alternatives such as exercise, exercise videos, boot camps and jogging clubs.

Competitive Rivalry

Low cost budget gyms have increased in quantity and this segment of the market is very competitive. Competition in the higher end of the market is less extreme, but the market is smaller.

Appendix 2 - Nuffield Fitness Centres

Success History: Customer Retention at Nuffield Fitness Centres


Nuffield Health is one of the leading health organisations in the country, with 51 gyms throughout the UK. However, they experienced a very common problem in medical and fitness market. Many of their members, having applied for an annual health club membership, lost determination and concluded their deal with only one month's notice.

But, by determining potential lapsers early on, a communications programme could be developed and an on-going relationship established, that could help them keep these users.


Our concern was to:

Build a model to forecast lapsing behaviour

Identify the people most in danger of lapsing

Provide useful figures and descriptions on why a member was at risk, predicated on behaviour at gym, where they lived, type of contract, get older, etc.

Identify the teams they should aim for for communications

Create a marketing communications strategy predicated on the predictive model


We carried out a data audit of transactional information by any means Nuffield gyms.

This viewed more than 20 variables - age, length of regular membership, gender, daily utilization, agreement type, etc - to recognize the factors that a lot of strongly indicated if a member was likely to lapse.

A score using the predictive model was reached for each specific, based on a blend of the most crucial socio-demographic, regular membership and transactional data packages.

A communications strategy - based on this credit score - with ideas on ways to keep associates loyal, was then provided for the client to use.


The model has an accuracy of any least 80% and helped to recognize behaviour that indicated whenever a member might lapse.

Our innovative marketing communications strategy helped to increase Nuffield's member retention calendar year on calendar year by up to 5%. Nuffield Health was extremely pleased with the results.

They said: We use the model to personalise our member contact strategy.

It allows us to tailor our messaging and offers depending on member's level of risk and probability to churn, and ensures we contact them at just the right time.

Services Supplied by Nuffield Health fitness Centres

Gym classes







Cycle (Content spinning)


Legs, Bums & Tums


Power Dish







Class categoriesMuscular conditioning and toningAerobic fitness and calorie burning

Extend, relax and re energise

Express classes

Themed classes

Swimming pools

Personal training

Sauna, steam and spa



Free health MOT

Health assessments





Nutrition advice

Private doctor service

Weight management programme

Meal plan

Weekly journal

Terms & conditions

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