HR Practices at the Hotel

HR Practices at the Hotel Paradiso: Recommendations

Diagnosis of the current issues

Why is HR important to Hotel Paradiso?

Current diagnosis of HR practices

Theory X management

Specific critique of the Performance Plan

Best practices

Teamwork

Setting a motivation plan

Underlying assumption: Theory Y employees

Training

Specific recommendations for Hotel Paradiso

Teamwork

Motivation

Training

This paper reviews the current situation at Paradiso Hotel, outlines key issues, and proposes human relations solutions which take into account the best practices in similar resort hotels around the world. The management of Hotel Paradiso expects to have a first-class offering which is competitive both with local resort hotel competition, and a compelling offering when compared to southeast Asian and Pacifi offerings, such as Phuket and Fiji. This author regards a highly-motivated, customer-friendly staff as a prerequisite to top service, and the programs suggested here follow up on that theme.

The management of Hotel Paradiso faces a series of hurdles in overcoming current issues. It must develop a program which motivates employees, while taking into account guest needs. Any program must correspond to the differing goals of Australian law, of the hotel union, and of the employees themselves.

This paper is divided into three main sections: an analysis of the current problems to be solved, a study of best practices as recommended in the hospitality industry and by academic specialists, and a program tailored to meet the needs of this specific case at Hotel Paradiso. In the interests of time and focus, this paper will concentrate on three major HR opportunities, and recommend an implementation plan to management.

Diagnosis of the current issues

Why is HR important to Hotel Paradiso?

The Hotel Paradiso is subject to a series of new competitive pressures from domestic and international competition. Tourists have now increased their expectations, and service is a key differentiator in their decision on where to spend their vacations. It is also a key determinant of "repurchase," or the decision to return to the same hotel in the future. A well-functioning and attractive hotel views the service offered by its employees as a major attraction:

The tourist's perceptions of...contact and the services provided by industry personnel and members of the host population determine the overall perceptions of tourism product quality and tourist satisfaction. The best quality of... accommodation, transportation, amenities and activities will not attract tourists if (they) feel unwelcomed by the host population (Kanampully 2001).

Thus investment (in time, money and management attention) in hotel personnel motivation, skills and teamwork can result in substantial returns. The converse is also true -- unmotivated, unknowledgeable or individualistic employees can destroy guest satisfaction, and drive away trade.

Current diagnosis of HR practices

From the information given, it appears that the HR manager, Mr. Belmore, was facing a set of issues which have resulted in the following major concerns for management:

Absenteeism is relatively high, which adds to the costs of recruiting, training and replacing current employees.

Motivation is relatively low, particularly amongst the employees who are guest-facing. This may result in a less-than-ideal experience for guests.

There is opposition from the ALHMWU to the recent performance targeting system put in place in order to improve service. It is doubtful that the program can be implemented, as the union plans to protest any management actions as a result of deficient performance.

The new performance system attempts to resolve these problems, but generally takes a "stick" rather than a "carrot" approach. In the next section, this paper will deal with the underlying assumptions of this plan, and why they may not work.

Theory X management

Mr. Belmore's new program of performance management appears to be heavily skewed to Theory X management. Under this theory, proposed by McGregor in 1960, Theory X managers tend to take a negative, controlling attitude towards their employees (Chemers 1997). This attitude assumes that the employees:

Do not like their jobs

Shirk responsibility

Do not want to change.

Think more about themselves than the team, and Are not particularly creative, intelligent or worthwhile.

Indeed, if one uses the Theory X criteria outlined above, many of these elements correspond relatively well with the current demotivated employee team.

Theory X and Observations

Theory X

Observations at Hotel Paradiso

Dislike their jobs

High absenteeism (and assumed high turnover)

Shirk responsibility

Finger-pointing at the failings of customer service, particularly amongst guest-facing employees

Do not want to change

Resistance to the current performance plan's implementation

Think more about themselves than the team

Silo organisation, with employees from different groups pointing at others

Specific critique of the Performance Plan

Punitive. In analysing the new performance plan, each of the measures included is punitive. It sets targets (which have been determined by HR, not in consultation with the employees) and punishes if these targets are not met. The program's punishments are not graduated; rather, failure to meet two of six performance measures results in only two steps: warning, then dismissal. A more graduated plan would include several steps, with advance notice.

Do not relate to individuals. The targets themselves are difficult to relate to individual employees' actions. Of the targets, the following are related to smooth interoperability amongst the customer-facing teams:

Customer feedback

Employees' average handling for guests.

Supervisors' assessments of service quality.

Sales in dollars.

Only two elements are more specifically related to an employee's personal performance, and both are negative: i.e. adherence to work schedules and minimising unplanned absences.

Plans set without consultation. It is a violation of Australian labour law to put in place a plan which can result in dismissal without consulting with employees. Since the question of union representation is not settled at Hotel Paradiso, it makes little sense to put in place a plan which can act as a catalyst for ALHMWU success. At present, with only 12% of fulltime staff members of the union, it would not make sense for management to alienate employees and force them into the arms of the union; nor should the union be given an opportunity to intervene between labour and management on such an issue.

No incentives for teamwork. As made clear from the above points, many of the measures important to management can only be accomplished through teamwork. If employees feel separated and "siloed" by a performance measurement, it may provide the opposite effect.

No positive reinforcement. The employees are given a set of negative consequences for failing to meet guidelines, but no positive reinforcement for a job well done. As we will see below (Theory Y), employees, particularly in the service industry, respond well to clearly-defined, positive reinforcement.

Focus on labour costs. It is difficult to ask employees to limit their own costs. It may make more sense for management to focus on ancillary employee costs, such as recruiting new employees due to high turnover/absenteeism, handling employee legal actions, and lost custom due to poor customer interaction. By focusing on other HR issues, labour costs should come under better control.

Focus of this paper

There are a number of issues which need to be addressed by the new HR manager. This paper focuses on three primary goals: (1) improving teamwork, (2) setting a motivation plan which ties to management's objectives, and (3) improving customer training. In the author's opinion, focusing on these three elements will result in an improvement in customer satisfaction and rein in costs, both key concerns to management of the Hotel.

Best practices

In order to form a better plan for the Hotel Paradiso, this paper analyses best practices in teamwork, motivation and training. This section will deal with each in turn.

Teamwork

Hotels are composed of teams of employees, each of which attempts to present a cohesive experience to the customer. The customer doesn't know, when he/she encounters a person in the hallway, to whom that hotel employee reports, nor does he/she care. What is important is that the guest can rely on a certain sense of interoperability. If he/she asks the maid for a beer in his room, he expects that the maid will pass the instruction to the appropriate person.

There are many examples of such well-integrated service. The Renaissance Hotel in Cleveland, Ohio, is an example. This hotel belongs to Marriott's "premium" chain. As such, there is a high expectation for service. Push America, a youth group, stayed at the hotel and wrote about their experiences:

We found the hotel to be everything we had hoped for and more. When we arrived, the hotel staff was very courteous and understanding of the challenges that we've faced in cycling across the country. They ushered us into a dining room where we had the best "snack" any of us had ever seen. They told us it was a little something to "hold us over" until dinner. We all gasped when we saw that this "snack" consisted of prime rib, shrimp and mountains of other gourmet food. (Wood 2007)

While the author continues about the service, there were several elements of note: the hotel's service exceeded expectations, the guests' needs were attended to, and a personal touch assured guest satisfaction. Note that Marriott inculcates teamwork into everything that it does. For that reason, Marriott was rated by JD Power, a rating agency, as the top hotel for guest satisfaction in 2007. Bill Marriott, the hotel company's chairman, cites the reason as the staff's focus on customer satisfaction:

You may be interested in learning what I look for when I visit a hotel. Number one, and of great importance, is the people. Are they friendly? Are they helpful? Are they courteous? Are they anticipating my needs? (Marriott 2007)

Setting a motivation plan

Mayfield and Mayfield measured the effect of positive leader communication on worker performance and job satisfaction. They measured the impact of motivating language on full- and part-time employees. Their motivating language focused on three elements: direction-giving ("what should I do?"), empathetic ("speaking with understanding") and meaning-making ("transmitting the rules within the institution"). Thus, motivating language was interpreted in a more structured and job-related way than it is sometimes interpreted. As expected, both full- and part-time employees responded well in measurable performance and satisfaction elements.

Underlying assumption: Theory Y employees

Theory Y, the other half of McGregor's postulate, assumes that employees are naturally inclined to want to perform well. The underlying assumptions include:

Work is a natural element for employees

People want to perform well, given a chance.

Rewards should motivate key goals, such as self-fulfillment and a feeling of accomplishment.

Most people are creative and ingenious, and are willing to employ these qualities on the job.

Bernhardt and Bailey outlined research of the hotel industry in the U.S. In which unions and employers work together to improve employee motivation (Bernhardt 1998). The ultimate goal of the programs was to improve turnover and motivation. The primary motivators for employees were to give them several functions, and to give them positive feedback.

Training

Judy Siguaw and Cathy Enz of Cornell studied the best practices in hotel operations across the industry in the United States. They were particularly impressed by the ongoing training program for staff at Marriott's new York Marriott Financial Center Hotel. In addition to its formal employee training program, they instituted a program whereby each department gave monthly updates on the performance of their department, and how that department was helping to achieve the hotel's two main goals: improving guest satisfaction and employee morale.

Cross-training is particularly important. In the previously-noted study (Bernhardt 1998), an additional finding for motivation is that cross-training not only improved employee satisfaction, but it also increased teamwork. At the Ritz-Carlton in Dearborn, Michigan, cross-training is central to their success. Everyone from the PBX central exchange to the room service department is trained to greet the customer by name by referring to a specific customer document known as OSCAR.

Specific recommendations for Hotel Paradiso

Teamwork

At present, the diagnosis indicates that Hotel Paradiso employees work in "silos," which means that each function may have minimal interaction with others. Since the guests' expectations are to have a seamless experience (as with the OSCAR system at the Ritz-Carlton), it is important that the employees present a 'team face' to the customer.

For that reason, the hotel management needs to convey its overall goals -- customer satisfaction and employee satisfaction -- in a unified way. Rather than setting individual punishments for team goals not met, Hotel Paradiso should set team goals across functions. Towards that end, HR proposes a three-point program:

Establish teams across functions (for example, oriented towards shifts rather than functions).