The Clark Fitness Centre Group Management Essay

The Clark Fitness Centre FC group presently operates a HR scheme with a focal point on the High Commitment Model with the inclusion of High Involvement Work System being cardinal to this. This is evidenced by the MD, who has stressed to the staff of CFC his desire to see them see their occupations in a strategic sense and how their occupations contribute to CFC supplying a superior merchandise offering than that of their challengers. In this respect HR systems have been designed to better the public presentation and wagess of employees of the CFC group, with HIWS being a key driver in the development of these systems.

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Clearly the company is cognizant of the importance of these HR systems in making nucleus competencies with a position to presenting a sustained competitory advantage for CFC, as it has created direction places within the HR section to specifically address HR systems such as:

Elliot Ryan: Director of Compensation and Benefits

Ann O ‘ Byrne: Manager of Training and Development

Samantha Lake: Recruiting Coordinator

The company has the needed HR systems in topographic point that facilitate the execution of the HR scheme throughout the company. However, hapless client service and below mean keeping rates indicate a failure within the HR section to present on the needed aims from the HR systems.

Therefore a HR program that addresses these failures demands to be developed, and HR systems created, which will let for successful execution of the new HR program throughout the company. Ideally, these systems should be designed in bunchs, as a individual system by and large does non accommodate the assorted functions and forces with the full administration.

Reappraisal of the Business Strategy in CFC

CFC Corporate Strategy from 2000 to 2008 has been one of rapid enlargement and was gross driven, which has resulted in a growing in market portion. CFC opened 17 fittingness Centres in this period, but the enlargement has now slowed. This lag in enlargement has come about by a alteration of focal point by the board of managers towards increasing profitableness of each Centre, as they wish to better the bottom line public presentation of the company. Improved rank and keeping will be critical to accomplish this end. This means that there has to be a alteration in the CFC corporate strategic thought, and to accomplish the new corporate purposes, the SHRM schemes are traveling to hold to be aligned to the concern schemes.

CFC is clearly looking to implement a signifier of Best Fit HR scheme with organizational tantrum being the nucleus of this scheme, which is the ability of direction to model their HR schemes to suit with other critical characteristics of their peculiar concern. A characteristic of this HR direction relevant to this company is the impression that HRM varies across administration life rhythm phases, from birth, to growing, to adulthood Baird & A ; Meshoulam 1988. The alteration in Corporate Strategy from enlargement ( 2000 to 2008 ) to a greater focal point on profitableness illustrates how companies change schemes depending on their life rhythm, which is consistent with the research of Goldham & A ; Descartes1997, ( beginning ) .

Detailed below by Schuler and Jackson ( 1987 ) is a model which links HR patterns to the desired competitory place of the company. In looking to accomplish a competitory advantage the company needs to develop the right mix from these variables.

Desired competitory scheme of the house

( Cost leading, distinction or focal point )


The needed employee accomplishments and behaviors

( extent of predictability in behavior, grade of teamwork,

extent of concern for quality, leaning of hazard raking )


The supportive HR patterns

( Choices in staffing, assessment, wage, preparation )


Expected HR results

( Employee accomplishments and behavior relevant to want competitory place )

Beginning: Adapted from Schuler and Jackson ( 1987

Porters ‘Focus Strategy ‘ ( Source ) is clearly in grounds here to assist CFC accomplish Competitive Advantage. The cardinal issue is the organizational tantrum between competitory scheme and HR scheme, which has to be in line with their market place. CFC focuses on supplying services to the whole household, so will supply services that cover different market sections.

Michael Porter ‘s typology of competitory schemes encompasses both facets ( Source ) , with cost leading extolled by virtuousness of the determination to brace fixed costs and keep low variable costs, and distinction by the determination to endeavor for greater client attention and offer niche services.

Having examined the external environment, and completed a SWOT analysis and conducted market research into the Fitness Centre market – Appendix 1 for environmental analysis – it is clear that there has been a major displacement in the fittingness market in recent old ages. MDB Market Research Market Forecast 2011-2015 provinces that

“ Between 2011 and 2015, the UK market for wellness and fittingness is expected to increase, top outing at ?5.18 billion ( at 2010 monetary values ) in the latter twelvemonth. ”

However, much of this growing has been in the budget terminal of the market as the Sunday Times ( July 2012 ) studies.

“ A rush in the figure of low cost fittingness nine has led to the largest figure of wellness nines opening since 2007. ”

Competition is clearly escalating in the fittingness Centre sector, with most competition in the low cost sector, with suppliers such as Pure Gym, Fit for less, and Easy Gym driving down pricing in this sector.

The Sunday Times ( July 15th 2012 ) besides studies of new entrants into the up-market sector, with the intelligence that US company Equinox, a smart US dress shop gym concatenation, is be aftering to open a high terminal gym in Kensington London to provide for the luxury terminal of the market. The Chief executive officer of Equinox stated, “ The luxury client is still passing money ”

As CFC has identified the upper terminal of the market as their mark market, they need to accommodate their HR schemes to make this mark market.

A starting point: Table Stakes

‘Table bets ‘ which are defined as a “ set of ends, resources and capable people that are appropriate to the industry concerned ” ( Hamel and Prahalad 1994 ) demand to be attained at a lower limit for an operation to be a feasible. The Sunday Times market research reports show that it is easy to setup a low cost gym and pull the budget client, and viability can be attained with a low cost, no frills scheme. However, as CFC does non run in this terminal of the market, merely achieving viability is non an option for them.

( Do we necessitate another Heading here ) ( Competitive advantage ) ?

CFC will hold to make a competitory advantage, which will distinguish them from rivals. To achieve competitory advantage, CFC will hold to develop HR schemes that will ensue in improved client registration and keeping. Buy in from General Manager ‘s is an indispensable portion of the HR program. Schemes developed at senior direction degree will hold to be implemented locally by the GMs. Targets have to be realistic and realisable, as otherwise they will be doomed to neglect.

However, the General Managers may hold a trouble here in that the strategic focal point is on operating in a niche market, but at the same clip achieving profitableness and cut downing costs. To accomplish competitory advantage and make the profitableness marks, the focal point in each gym will hold to be on Customer Service and Customer Retention, and the HR scheme should be built around these purposes.

A figure of elements form the footing of the HR program, and these are addressed in item below.

Balanced Score Card

As CFC has multiple locations, and each gym has a local General Manager, the usage of a concern public presentation direction tool is extremely recommended to assist the administration make its corporate ends. This measurement tool will give CFC senior and in-between direction more control over the running of the concern, and hence will do them better equipped to run into the strategic ends for each of the 17 gyms, which will in bend consequence in the attainment of their corporate ends.

The Balanced Score Card is a public presentation tool that could be used for this intent by mensurating both the company and single gym viability and success. “ What you measure is what you get ” ( Kaplan and Norton 1992 )

The Balanced Score Card is a strategic planning and direction system that aligns concern activities to company ends, improves internal and external communicating, normally through bargain in, and proctors organizational public presentation poetries marks.

Four positions of the Balanced Score Card, in order of precedence to CFC

Learning & A ; Growth: Staff focuses on client service & A ; keeping

Customer: retention/usage

Internal procedure All-in-one household bundle, uses and keeping alliance

Fiscal: Stable fixed costs. No farther enlargement, variable cost direction, and bottom line direction accent. Double facet, fixing for possible coup d’etat mark in the hereafter

Prioritizing these positions in importance CFC

alanced scorecard

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

Under the balanced scorecard system it is apparent that the public presentation drivers/leading indexs are all long-run results, everything expect fiscal in this case, as the financials are lagging /short-term indexs and perchance a just contemplation that stockholders are looking at a trade sale down the route.

So where is the balance? In this case it is double mark, the fiscal underside line and the acquisition and growing countries that are most of import, and in both countries, employee accomplishments and satisfaction are critical to client satisfaction and fiscal results. The acquisition and growing scheme requires that the intangible assets allow organizational activities and client relationships to be performed at a higher degree. This is based on three principals, strategic competences, strategic engineerings, and the cultural alterations to let the clime alteration.

The accent on the scorecard is to better the quality of the execution of a given scheme, but what about the construct of “ Meta planning ‘ ? This is the ability to expect new environmental waies, and exchange to new competitory challenges, which requires companywide flexibleness ( Source ) . Another option to see is bench taging against industry norms or chief rivals. This is clearly an issue that has been highlighted by keeping rates falling 20 % behind the industry norms.

Finally with any mark card the whole accent is on the demand to make a quality direction squad capable of implementing the company scheme. Recruitment, development, and squad constructing demand to be carefully managed. Management of the non-management work force, making a procedure of leading, complimented by development with originative and flexible thought will be critical to accomplishing this

Strategic Human Resources

An of import component of a strategic program for any administration is the designation of the human resources that are core to the strategic competitory advantage of the company. One of the purposes of the Human Resources Manager is to place these people that are alone to the company by possessing a rare or valuable accomplishment or cognition. Schemes for retaining and affecting these people are of paramount importance to the long term legerity of the company.

Leepak and Snell ( 1997, 2007 ) ( cited in Boxall and Purcell 2011, p. 115 ) in developing their ‘HR architectural position ‘ note

“ That some signifiers of human resource advantage depend more on an elect group of employees than they do on the excellence throughout the work force ” .

The bing work force is a cardinal strategic resource to the concern. Hamel and Prahalad ( 1994 ) contend that this collective cognize how within a house is deemed to be a nucleus competency for the house

Reward Strategy

A recognized scheme for bettering client service is a Reward Strategy. Employee and squad wagess can ensue in important successes in bettering client service. Each gym will hold marks to make as a squad, based on the balanced mark card, and should be rewarded as a squad for being successful. This wages will be in add-on to salary and could be fillips, inducements or other benefits offered to employees.

A popular wages model is the Star Model developed by Jay Galbraith in the 1960 ‘s. The model is made up of 5 classs of design policies to determine an organisation and the behavior of the people within it.

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How the wages system is structured can hold a major impact on employee public presentation, satisfaction and can even act upon the belief the employee has in the value placed in them by the employer.

The wages scheme adopted should aline with the corporate strategic ends and aims. Therefore, CFC employees in each gym should be incentivised to offer high degrees of client service, with a position to geting new members and retaining bing members.

Performance Management

Performance Management will organize a cardinal component in the successful execution of the HR program. Performance can be seen as a factor of 3 elements, Ability, Motivation and Opportunity.

P = degree Fahrenheit ( A, M, O )

Employees must foremost hold the ability to execute the undertakings required, they must be motivated to execute these undertakings and they must be given the chance to finish the undertakings. Performance of employees will be closely linked to the overall public presentation of the administration and therefore the direction of public presentation is critical to the overall success of the administration in accomplishing the strategic ends.

Performance assessment systems are formal methods for planning and measuring employee public presentation. Having an effectual public presentation assessment system is a cardinal constituent to pull offing public presentation efficaciously, as it acknowledges the development demands of persons every bit good as the administration strategic ends.

The balanced Score Card can be used as an assessment tool, as the marks and purposes will be built into the mark card. If the employee does non cognize what is expected of them, they can non be expected to execute efficaciously. Similarly, if the General Manager of the gym does non cognize what the public presentation indexs are, they can non measure if the employees are run intoing their marks.

The public presentation assessment should besides be viewed as a method for two manner communicating giving the employee the chance to show their positions on their function and the administration as a whole.

The public presentation assessment should be carried out by the direct line director for the employee and each director is responsible for the public presentation of their direct studies separately and jointly.

Work patterns

The MD has stated that he wants the staff to be strategic in how they approach their work by sing how their occupations contribute to CFC offering a more superior nine experience than that of their challengers. This would bespeak a High Committedness Model ( HCM ) is sought from the MD. To achieve a HCM work system, which focuses on occupation enrichment, a high engagement work system ( HIWS ) would necessitate to be developed. This would let for the development of motivated employees, who would hold an engagement in the design of work and execution of these systems throughout the company. This would let for employee cognition to be used to better work systems, which in bend would ensue in the development of work systems, which would be aligned to the scheme of the company.

Staff Training and Development

Member feedback has indicated that there is a job with the quality and degree of client service being offered by the staff at the gyms. This issue needs to be addressed instantly as it is holding an impact on how the concern is being perceived by the client and could hold a major impact on the determination to regenerate rank for bing members. This is a major issue which could impact significantly on profitableness. The MD has indicated that he is willing to put in HR enterprises that show a return on investing. The preparation of staff in achieving high degrees of client service will accomplish a return on investing. Exceptional client service will add to the nucleus competencies of the company.

Initially an attack to preparation, which focuses on the ‘deficit theoretical account ‘ , should be implemented. This theoretical account focuses on bridging the spreads in public presentation. This will help in covering with the client service issue in a timely mode. However employee development should non be restricted to the shortage theoretical account over the long term, it should look to develop employee development and the house ‘s legerity over the long tally ( Dyer and Shafer 1999 ) . Long-term development programs involve a more balanced mix of formal preparation and instruction and informal coaching and squad edifice ( Boxall and Purcell, 2011 ) .

With this in head the company should besides look to the farther development of executives, which every bit add to the nucleus competencies of the house. “ The public presentation of companies tends to reflect the quality of their ‘upper echelons ‘ ” ( Hambrick 1987, 1995, Norburn and Birley 1988 )


Communication will really much be dependent on the type of direction manner which the company has decided to follow. Purcell and Ahlstrand ( 1994:177 ) define Management Style

“ As a typical set of steering rules which set parametric quantities for direction action sing the manner employees are treated and how peculiar events are handled ‘ .

As CFC is encompassing HIWS, bipartisan communicating from the company ‘s senior direction, through to General Managers and single employees in each gym, is traveling to be critical to the success of the strategic programs. It can non be assumed that what top direction seek in footings of direction of employee voice will needfully be enacted by in-between and line directors ( Boxall and Purcell, 2011 ) . While CFC direction may anticipate certain public presentation criterions from employees, the General Managers may follow a different program, as they have to make their single marks. The function of the General Managers in conveying the strategic policies to life is progressively recognised ( Purcell and Hutchinson 2007 ) and this will be indispensable for CFC to run into their strategic ends.

Another country where communicating can be of major benefit to CFC is communicating between CFC staff and the clients. An country of concern for many Fitness Centres is Customer Retention, but CFC seems to hold a higher than mean turnover rate. Nuffield Health is a taking Fitness Centre administration with 51 gyms throughout the UK. However, they suffered from higher than mean turnover rates. Nuffield Health introduced a communicating system between staff and clients that enabled them to cut down the turnover rate. ( ) . As CFC ‘s turnover rates are 20 % above norm, a similar system could be introduced in CFC that has the potency to hold an immediate impact on bettering client keeping.


It is clear from the beginning that CFC ‘s initial desire/requirement is to procure the primary order strategic end of viability. This is clearly outlined by the enlargement policy adopted since 2008 to guarantee protection of the company underside line and adds acceptance to the construct of a concern fixing for a trade sale/amalgamation down the route. The concern scheme outlined is clearly evidenced from The Schuler & A ; Jackson theoretical account of cost direction and enhanced quality.

Chlorofluorocarbons HR scheme is presented comparative to a high committedness theoretical account with engagement leting for the cascading of scheme from direction down, a high route model.A Their stated outcomes/goals of a reversal in below industry mean keeping and increased use is a clear contemplation of high engagement work system, A to a great extent reliant on staff buy-in from the cascading top terminal down communicating scheme. The declared results of keeping, increased use and superior service are farther enhanced and reflected in their human resource systems.

CFC as an administration has shown the changing rhythms of the short and average term of their concern and are now fixing for a important displacement in scheme, which underlines the demand to use human resource direction to aline the HR program with strategic ends. The positions employed, which lean strongly towards larning and growing, are based on the development of nucleus competences, ability to run into client demands and to promote usage and unafraid keeping, with all of these elements taking to the primary position of fiscal viability.

Having considered viability and the strategic picks needed to procure same, it is so that we can see the high-end scheme of sustained competitory advantage, upon which the concern is prosecuting a policy of distinction. This, it is hoped, will procure a niche high terminal market place which allows CFC to outdo utilise the resources available to the concern, the physical installations, the advanced equipment available, the household bundle trade and the staff to the full in line with both market and company demands.

Although grounds suggests that a best fit theoretical account allows the company the development of the connexion, in this instance between competitory advantage, employee behaviors and HR patterns, we can take it one measure further and interrupt down the tantrum, analyzing the resource based position which will enable the house to develop, integrate and manipulate resources, both human and non-human, to accomplish profitableness in a competitory environment. This position will sketch clear focal point on the quality of direction procedure and workplace civilization taking consideration of touchable and intangible assets. The debut of the balance mark card, leting for public presentation direction systems to be upgraded with the debut of new KPI ‘s and the debut of the short term shortage theoretical account will all hold the coveted consequence of incorporating HR scheme into strategic ends. Beginnings:

Boxall, P. and Purcell, J. , ( 2011 ) ‘Strategy and Human Resource Management ‘

3rd Edition. Palgrave Macmillian

Dyer, L. and Shafer, R. ( 1999 ) . ‘ Making Organizational legerity: deductions for strategic human resource direction ‘ , in Wright, P. Dyer, L. , Boudreau, J. and Milkovich, G. ( explosive detection systems ) Research in Personal and Human Management ( Supplement 4: Strategic Human Resources Management in the Twenty- First Century ) . Stanford, CT. and London: JAI Press.

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Higginbottom K. ( 2002 ) People Management

Purcell, J. and Ahlstrand, B. ( 1994 ) Human Resource Management in the Multidivisionsal Company,

Oxford: Oxford University Press.

Purcell, J. and Hutchinson, S. ( 2007 ) ‘Front -line directors as agents in the HRM- Performance causal concatenation: theory, analysis and grounds ‘ . Human Resource Management Journal 17 ( 1 ) : 3-20.

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Beginning: IBISWorld

Baird, L. , & A ; Meshoulam, I. ( 1988 ) . Pull offing two tantrums of strategic human resource direction. Academy of Management Review

Rutherford, Buller & A ; McMullen 2003. Human resource direction jobs over the life rhythm of little to medium sized houses. Human resource direction

Appendix 1 – CFC Environmental Analysis

SWOT analysis


Well recognised and established gyms

Top category installations available for members

Competitive rank rates

Personal Training & A ; Exercise classes available

Modern and up to day of the month equipment

Programs to accommodate all people


Lack of rank retention/renewals

Poor attending by clients

Poor client service from staff


Continue to set up new gyms

Target more up market locations

Potential clients: mark individual people/Groups


Other Gym Rivals

Economic clime

Other options for maintaining fit ( Home Fitness/Walking/Cycling )

Plague analysis


Government policy – wellness and fittingness enterprises to increase activity

Tax alleviation, inducements or subsidies to increase engagement



Location of Gyms

Luxury point?

Increased unemployment


Society ‘s attitude on their personal well-being.

Increased focal point on wellness and fittingness, with more personal duty


New engineerings, on-line entree, CRM.

Advanced gym equipment

Higher terminal Gyms need better equipment

Five Forces Analysis

Menace of New Entrants

The menace of new entrants is high in the gym industry for many grounds. Low cost budget gyms require small capital investing and depending on location this type of installation may accommodate the demographics of this country. There is no dominant participant in the market and client trueness may non be high. New entrants can come in the market through acquisitions, in private owned gyms or a hotel gym. There are low exchanging costs involved for clients and besides new entrants can acquire easy entree to distribution channels.

Dickering Power of Suppliers

The bargaining power of providers is comparatively low as there are many participants in the market providing gym equipment hence maintaining the cost of equipment down. Customers are non fragmented hence dickering power is low from providers unless they are covering in high tech equipment.

Dickering Power of Customers

Customers can easy go forth one gym for another depending on the cost and what suits their budget, hence go forthing some already fighting gyms exposed to closing.

Menace of Substitutes

The fittingness industry faces competition from many replacements as clients switch to options such as place fittingness, exercising picture, boot cantonments and running nines.

Competitive Competition

Low cost budget gyms have increased in figure and this section of the market is really competitory. Competition in the higher terminal of the market is less intense, but the market is smaller.

Appendix 2 – Nuffield Fitness Centres

Success Narrative: Customer Retention at Nuffield Fitness Centres


Nuffield Health is one of the taking wellness administrations in the state, with 51 gyms throughout the UK. However, they suffered from a really common job in the wellness and fittingness market. Many of their members, holding taken out an one-year gym rank, lost motive and ended their contract with merely one month ‘s notice.

But, by placing possible lapsers early on, a communications programme could be developed and an ongoing relationship established, that would assist them retain these members.


Our challenge was to:

Construct a theoretical account to foretell sinking behavior

Identify the members most in danger of sinking

Provide utile statistics and descriptions on why a member was at hazard, based on behavior at gym, where they lived, type of contract, age, etc.

Identify the groups they should aim for communications

Make a communications scheme based on the prognostic theoretical account


We carried out a information audit of transactional information at all Nuffield gyms.

This looked at more than 20 variables – age, length of rank, gender, day-to-day use, contract type, etc – to place the factors that most strongly indicated if a member was likely to sink.

A mark utilizing the prognostic theoretical account was reached for each person, based on a combination of the most of import socio-demographic, rank and transactional informations sets.

A communications scheme – based on this mark – with thoughts on ways to maintain members loyal, was so provided for the client to implement.


The theoretical account has an truth of a least 80 % and helped to place behavior that indicated when a member might sink.

Our advanced communications scheme helped to increase Nuffield ‘s member keeping twelvemonth on twelvemonth by up to 5 % . Nuffield Health was highly happy with the consequences.

They said: We use the theoretical account to personalize our member contact scheme.

It enables us to orient our messaging and offers depending on the member ‘s degree of hazard and likeliness to churn, and ensures we reach them at merely the right clip.

Servicess Provided by Nuffield Health fittingness Centres

Gym categories







Cycle ( Spining )


Legs, Bums & A ; Tums

Pontius pilates

Power PlateA®







Class categoriesMuscular conditioning and toningAerobic fittingness and Calorie combustion

Extend, relax and rhenium energise

Express categories

Themed categories

Swimming pools

Personal preparation

Sauna, steam and watering place



Free wellness MOT

Health appraisals


Life style



Nutrition advice

Private physician service

Weight direction programme

Meal program

Weekly diary

Footings & A ; conditions

Relaxation watering place