IRISH HOTEL AND CATERING INSTITUTE
“Empower to Retain”
An overview of how
empowerment can be key
to retention
Donagh Davern
M.Sc., Dip., MIHCI
Introduction:
One of our greatest challenges in the
hospitality business is to select and
retain the right people. Recent figures
released by CERT indicate that the
Irish Tourism Industry will require
approximately 125,000 new recruits in
the next five years and around 100,000
of these will be as a direct
consequence of continuing labour
turnover.
Research performed by the Irish
Business Employers Confederation
through a number of research surveys
has revealed that on average only ten
percent of employees who leave a firm
cite pay dissatisfaction as their reason
for leaving. Therefore employers are
looking beyond pay, to concepts such
as employee empowerment, to
improve staff retention.
The concept of Employee
Empowerment is about allowing
employees to make decisions
themselves without management
consultation. It is about sharing
information with employees, so that
they can make informed decisions,
trusting them to make the right
decisions and rewarding them for their
efforts.
With the entry of international hotel
companies such as Four Seasons,
Westin, Hilton and Radisson into the
Irish marketplace, improved human
resource management practices are
evident and competition for staff has
increased. Research by the authors
Geary and Roche in 1999, proposed
that foreign owned companies are
much more likely to appoint a human
resource specialist, make greater
efforts towards employee
communication and involvement,
initiate employee suggestion schemes
and are more strategic in the selection,
development and training of
employees. In contrast, approaches to
management practice in Irish
hospitality industries have been more
traditional, leading to a number of
initiatives designed to improve human
resource practice, such as the Irish
Hotel Federation’s Quality Employer
Programme in 1997 and CERT’s
Benchmarking Report in 2000.
In 2001 I researched the area of
Employee Empowerment, with
particular emphasis on the 5 Star
market. The research involved
background research on the are of
empowerment and related fields. It
also involved interviewing a senior
member of management from sixteen
of the eighteen 5 Star properties in
Ireland, along with the analysis of
over one hundred questionnaires
distributed to employees of these
hotels. It also looked at a number of
successful empowerment programmes
established by hotel companies such
as Four Seasons, Ritz-Carlton and
Medallion Hotels, in an effort to use
these as a benchmark for the Irish
hotelier.
Empowerment and Staff
Motivation:
All the key motivation theorists have
referred to the need for employees to
feel part of an organisation, being
involved and sharing in its success.
Employee involvement in decision-
making has been seen as a key to the
implementation of change in an
organisation.
May 2002
Empowerment as a concept has its
roots dating back centuries, but is in
its current business usage since the
1980’s. It is seen to have developed
as a result of external challenges in the
form of greater competition, changes
in the workforce composition and
increased customer demands and as a
result of internal challenges in the
form of employee motivation,
retention and development.
Although empowerment has been
defined in many ways by the
multitude of authors who have written
on the topic, one of the most useful
definitions I have found is by the
authors Bowen and Lawler (1995)
who have written extensively on the
area of empowerment:
Empowerment = Power
x
Information
x
Knowledge
x
Rewards
The authors stress that if any of these
essential components are missing, then
true employee empowerment will not
exist.
An analysis of the management
interviews showed that although the
majority of 5 Star properties in Ireland
had Mission Statements, only one of
the properties involved employees in
its creation, with all others being
created at management or board level.
Although a number of properties had
put strategic plans in place for a set
number of years, none had a formal
Vision that they created and shared
with the employees.
All interviewees felt comfortable with
the concept of employees solving
guest’s problems at the point of
contact, without reference to a
manager, but the importance of
follow-up to minimise repeated
failures in service was emphasised.
One Irish chain of hotels has
established a customer retention
programme, where in the event of a
problem, employees set out not just to
satisfy guests, but also to ‘actually
delight them’. All of these instances
were recorded and the financial cost
noted, with action being taken on any
recurring issues. Employee
representative committees have been
established in a number of properties
to include employee representatives in
important decisions, while some are
part of social partnership committees
including members of management,
employee representatives and union
representatives.
About 50% of the surveyed properties
share information on budgets,
forecasts, profits, guest comments and
complaints with their employees, with
the remainder just sharing information
on guest comments and complaints.
It seems that most properties do not
have any form of customer compliant
handling training for employees, with
most of this training being done
through observation or practice.
Although Employee Empowerment
only features formally in only a few of
the Irish 5 Star hotels, many of the
hotels promote and discuss
empowerment during induction for
new employees.
Most of the managers interviewed
promoted the idea of setting limits on
employee discretion and spending
initially, so that employees felt
comfortable working within these
guidelines. These should then be
relaxed as the employees become
more confident.
Examples of how employees have
used empowerment include porters
using their own cars to transport
guests to the airport during a taxi
strike, repairing broken luggage for
guests and one employee who
organised a Leprechaun and a Tarot
Reader at 7am to aid an American
guests wedding proposal. All of these
guest empowerment actions created
memorable guest experiences, often
leading to a return guest.
The use of empowerment is becoming
more and more commonplace in
modern business. Companies such as
Electrolux and Saab-Scania have a
strong empowerment ethos. Glasgow
Airport, winner of the U.K. National
Training Award in 1999, implemented
‘empowerment zones’, where
employees could easily see the tasks
they could perform without formal
approval, leaving supervisors more
time to act as facilitators. Increased
training, information-sharing and
performance-related bonus schemes
saw the end of the confrontational
industrial relations, demarcation and
poor productivity that the company
was know for. The introduction of
employee empowerment in the award
winning Autoglass company in the
U.K. saw a transformation from an
image of poor customer service and
dissatisfied staff to a company where
higher performing staff were
recognised accordingly and had the
opportunity to contribute to the
management of the company, while
customer satisfaction scores increased
dramatically.
Some of the largest and most
successful companies in the world
have created an empowered
workforce. Chairman of Texas
Instruments, Mark Shepard, sees his
employees as “a source of ideas, not
just acting as a pair of hands”, while in
retail giant Walmart, Sam Walter says
that “our best ideas come from clerks
and stockboys”. In Boeing, they are
“proud of their ability to pull people
from several layers down in the
technical structure and put them in
charge of major projects, often with
higher salaried and more senior people
reporting to them”.
Outside of business teachers, parents
and coaches are using the concept of
empowerment successfully. Sven-
Goren Eriksson, the English Soccer
Manager, is a promoter of the concept,
listening to subordinates, encouraging
dissent, slashing hierarchies, reaching
decisions by consensus and above all
empowering. In a broader context
Mikhail Gorbachev’s policy of
Perestroika provided the Russian
people with freedom to think and
manage their own affairs, therefore
empowering them. The problem was
that they were so accustomed to being
controlled by their government, that
many had no idea what to do with this
new power.
Advantages of Empowering
Employees:
Authors on the area encourage
companies to value people for who
they are, if they are to extract their full
potential. Studies have shown that
Empowerment can speed up decision-
making and increase reaction times. It
releases the creative and innovative
capabilities of employees and leads to
greater job satisfaction, motivation
and commitment, while giving
employees greater responsibility and a
greater sense of achievement from
their work. It reduces operational
costs by eliminating unnecessary
layers of management, along with
reducing quality control and checking
operations.
Obviously, in the highly competitive
nature of the hotel industry today,
these areas are very important.
Firstly, there is competition for
employees and the creation of an
empowerment environment will add to
there job satisfaction and job
enrichment. Also, empowerment can
improve service creating a satisfied
customer and in turn more business.
Empowerment in the
Hospitality Industry:
Studies have shown that high
involvement industries such as hotels
are ideally suited to employee
empowerment. As the client is nearly
always physically present during the
transaction in the hotel, this increases
the importance of the employee
having the power and knowledge to
solve problems.
A study on best practices in the
lodging industry conducted by Cornell
University in 2000, highlights
Empowerment as one of the key
categories of best practice. The report
noted that to improve performance,
notable hotels changed their people
management model to reflect an
expansion in employee involvement,
employee authority and a greater
sharing of information, along with
improving training and introducing
cost containment strategies and
performance-based rewards for
employees. This resulted in many
cases in a reduction in employee
turnover, a reduction in costs,
increases in customer satisfaction and
increased employee confidence in
customer service situations.
We are all familiar with the
‘production-line approach to service’
where as in McDonald’s, employees
are taught to greet customers and ask
for an order by following a set script.
Then follows a set procedure for
setting up and delivering the order,
followed by further scripting for
saying thank you and asking the
customer to come again. This
approach makes customer service
interactions uniform and gives the
organisation control over them. But
who wants to here this robot-like
approach in a hotel and what if
something goes wrong and an
employee has to handle a complaint?
This is where the empowerment
approach to customer service
outshines the production-line
approach. Employees can personalise
their service and respond quickly to
customers needs. They can provide
quicker responses to dissatisfied
customers and employees feel better
about their jobs and themselves.
However, in a service firm where
customers a looking for cheap, quick
and reliable service, with no frills, the
production line approach may be
preferable to empowerment.
However, this does not rule out some
aspects of empowerment such as
employee suggestion schemes.
What is needed for
Empowerment to work?
• Training
Sufficient training must be
provided, as employees need a
framework to work within. All
employees must be adequately
prepared for their new
responsibilities if they are to
handle situations efficiently.
• Management Commitment
Managers must be able to release
control and let the employee
make decisions without fear of
retribution. Managers must also
be prepared for the fact that
employees may receive credit for
successes, rather than themselves.
• Information
Information needs to be shared
with employees if true
empowerment is to exist. This
includes information on the
financial state of the company
along with information on guest
comments and customer
expectations. To quote Ed
Carlson, the dynamic President of
United Airlines “nothing is worse
for morale than a lack of
information down the ranks”.
Regular feedback, encouragement
and the celebration and reward for
success are also essential.
Potential Barriers to
Empowerment:
Barriers to a culture of empowerment
include middles managers not
embracing, encouraging or fully
understanding the concept; a lack of
reward, reinforcement or guidance for
empowered team members and the
absence of links between the
programmes and the company’s
business objectives and performance.
Managers need to fight their natural
instinct of guarding information and
instead share information and
knowledge and trust employees.
Managers should also change actual
behaviour and not just make well-
intentioned statements about
empowerment with no real action.
Employees should also be informed of
the benefits of empowerment so that
they feel that it is not just the same
money for more effort.
Empowerment does not come without
its problems. Inevitably employees
will make some bad decisions, but it is
important that these are dealt with in a
way which guides the employee in the
right direction and not in a heavy
handed way, which might show the
end of the employees use of
empowerment.
Examples of Empowerment in
Action:
Examples of award winning
empowerment actions include hotels
such as the St. Paul Hilton Airport,
where line-level employees were
empowered to make guest satisfaction
decisions leading to improvements in
comment cards, ADR, occupancy and
cost savings; the Ritz-Carlton Tyson’s
Corner where line-employees were
empowered to set their own schedules,
select team members and prepare
forecasts, leading to a 22-percent drop
in employee turnover; and the Ritz-
Carlton Boulders Hotel where
empowered self directed housekeeping
teams allocated and inspected their
own rooms leading to greater
efficiency, employee motivation and
staff retention.
Ritz-Carlton’s empowerment
programme allows employees to
spend up to $2000 to immediately
correct a problem or handle a
complaint. Companies such as Ritz-
Carlton and Four Seasons are offering
their employees empowerment within
boundaries, which protects not only
the hotel, but also the employee. The
hotel knows that the employee will not
spend over a certain amount of money
in the name of guest satisfaction,
while the employee knows that they
can spend within certain limits without
fear of rebuke.
Medallion Hotel’s established its own
empowerment programme called ‘The
I Saved the Guest Programme’.
Through the use of this programme,
each employee was encouraged to
spend up to $100 to correct a problem
or satisfy a guest’s need. Employees
could pool their $100 together if a
particular situation needed more
money to address. The employee
completed a special form detailing the
issue and their actions, which was then
submitted to their manager. As a
reward they received a ‘Blue
Medallion’- a piece of paper which
could be placed in draws for prizes
such as holidays for their family, at
the quarterly meetings. At the end of
each month, a ‘Save of the Month’
was chosen at the department heads
meeting and a special award was made
to the employee involved.
An important aspect of the programme
was that no employee was ever
questioned about their ‘save’. Each
one was seen as a contribution to
overall guest satisfaction in the hotel
and the potential creation of a repeat
guest. The success of the programme
was evident in guest comments as well
as in the satisfaction expressed in the
employee survey.
Through this programme, employees
were able to deal with challenges on
the spot. They did not have to seek
the approval of a manager; they were
empowered to make the decision
themselves. Memorable uses of the
programme included the maintenance
man who removed all of the interior
doors of a suite, to accommodate a
disabled guest when no accessible
room was available and the waitress
who drove all over town to find a
frequent guests favourite cd. Often, as
in the first case, the employee actions
did not involve any monetary outlay.
Employee Views:
From the confidential survey I
conducted on a selection of over 100
employees in Irish Five Star hotels,
over 90% of employees felt that
receiving information on their hotels
performance was important to them,
with only 30% of employees feeling
that they were actually involved in the
hotels decision making process.
When asked about what motivates
them in the workplace, 72% of Irish 5
Star hotel employees mentioned Job
Satisfaction, with 22% listing money,
13% promotion prospects and 7%
each mentioning guest recognition and•
rewards.
81% of employees felt a sense of
fulfillment when they are able to•
satisfy a guest who had a complaint.
Only 32% of respondents felt that they
always had the power to solve guest
complaints, with 59% feeling that they
would sometime have the power to
solve guest complaints. Only 10% of
respondents felt that they would prefer•
not to take responsibility for guest•
complaints and instead refer them to a
manager.
Conclusion:
Although the primary research
indicates that no formal empowerment
programmes are currently in existence
in Irish Five Star hotels, the research
has shown that there is ample
evidence of either informal
empowerment or of components of the
empowerment process.
The influence of international hotel
companies on the Irish market cannot
be underestimated. International
companies have a more developed
human resource function and there is
no doubt that this influence has
extended to Irish hotels with six of the
management interviewees having
worked for companies such as Four
Seasons or Ritz-Carlton. Their
experience has seen the introduction
of components of aspects of their
previous employers programmes into
the hotels, which they manage.
Evidence of employee empowerment
in Irish Five Star hotels is clearly
visible. Although the research shows
that the Irish Five Star hotel does not
implement empowerment as formally
as its international competitors,
mission statements, some transfer of
power and information sharing are in
evidence in many of these properties.
With the evidence suggesting that
benefits included more motivated
employees and improved guest
satisfaction, empowerment is certainly
not a concept to be ignored. So, what
can be done to encourage employee
empowerment in your own hotel?
Establish a Mission Statement and
formal Vision for the hotels future
with the help of all employees.
Encourage employees to make
decisions and solve problems at
the point of guest contact without
reference to a manager. Later
have the employee relate the
problem to a manager so that
follow up action can be taken.
Communicate with employees the
challenges and successes of the
hotel and allow them to express
their opinions.
Personally, I have just started down
the road of employee empowerment in
my own workplace. But, already I
note greater satisfaction as employees
take it on themselves to recognise a
guest celebration by putting
chocolates, wine or a note in their
room.
They go out of their way to organise a
cake at short notice for guests
celebrating a birthday or anniversary.
They also try and solve any problems,
which guests may have immediately
and follow up to ensure overall
satisfaction. These are the actions,
which create satisfied return guests,
while allowing employees greater
freedom to participate, therefore
improving their personal job
satisfaction.
My research has shown that
empowerment on an informal level
exists within Irish hotels and that our
culture may encourage its use without
having to create a formal structure.
Further encouragement of this
empowerment culture can only lead to
greater success in both customer and
employee retention. However the
establishment of an empowerment
culture is neither a quick or easy
process, it requires the collective
dedication, skill, commitment and
patience of all involved.
About the Author:
Donagh Davern is currently General
Manager of the 5 star Killarney Park
Hotel. He has gained vast hospitality
experience having worked for Hyatt,
Hilton, and Marlfield House. After
working in Texas for the Medallion
Hotel Management Company, Donagh
returned to Ireland to take up a
management position with Sheen Falls
Lodge.
He joined the Killarney Park Hotel in
1999 and has just completed an
Honours M.S in Hospitality
Management at DIT. His thesis
entitled “Empowering Employees
towards improved performance”
examined current empowerment
practice in international hotel
companies in an effort to benchmark
these practices for the Irish 5 star
Hotel.
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