CASE ANALYSIS

THE PORTMAN HOTEL COMPANY

PROBLEM STATEMENT
In what ways Portman higher management could reformulate their HR strategy and thereby leverage its human resource towards fulfillment of the organizational objective of providing a personalized experience in the American luxury hotel industry.

PESTC ANALYSIS OF THE INDUSTRY:

y y Political: Not Applicable Economic:  Portman aimed at bringing Asian standards of hospitality in the U.S. which was labor intensive and involved high labor costs. The Personal Valet approach involved the labor cost which was three times as compared to Asia. Hence Portman Hotel Company would require more capital to hire labor.  Because of cheap labor, Asian hotels could afford three employees for every guest whereas America could manage only a 1:1 ratio. Hence Portman had to stay near this ratio to be cost effective. y Social:  The target consumers comprised of the luxury segment which needed customized service.  Customers were not accustomed to the culture of paying tips, when same was asked for.  Portman Hotel wanted to ensure a comfortable, convenient and personalized experience to its American customers.  Labor unions were not allowed to grow by the Portman management.  Employees were made to sign contract, which gave the employee due rights. y y Technological: NA Cultural:  The American culture revolves around the philosophy of self service and hence customer visit to hotels do not involve expectations on grounds of personal communication, service and extraordinary treatment. Whereas Asian culture is such which involves personal and customized treatment by the employees to give the guests a pleasant and memorable experience of their stay in the hotel. The Personal Valet would take care of all the needs and requests of the guests and ensure that they are taken care of well. Hence introducing the Asian culture of hospitality into America and implementing was a challenge for Portman.

SWOT Analysis:
INTERNAL STRENGTHS Ability to foresee the future and introduce the concept of a niche and luxurious service, which involved getting the Asian standards of hospitality to the U.S. Recognized the importance of Intangible psychic needs of the guests and hence wanted to satisfy that through a memorable experience through servancy. Realized the importance of Employee satisfaction and hence focused on personal as well as professional growth of the employee. INTERNAL WEAKNESSES Inability to keep the employees motivated and committed to work. Weak training skills and inability to focus on the employees needs and keep it satisfied all throughout. Absence of a proper HR structure and suitable rewards and efficiency check systems. Inability to be able to meet its long term strategy due to the gap between external alignment and Internal Alignment. Inability to successfully implement and ensure that the objectives and goals of each level of the hierarchy are achieved. The vision and mission of the company were successfully trickled down to the lower levels but no effort was taken to ensure that proper systems were introduced to help achieve these.

EXTERNAL OPPORTUNITIES Being the first hotel to come up with Personal Valets system and hence reap the benefits of being the first mover in the industry. To become the provider of a world class luxury experience to its guests by successfully implementing its strategy with a proper HR structure as its backbone.

EXTERNAL THREATS Fear of the continuing increase in attrition rate due to the inability to keep the employees contented to stay where they are. Fear of unacceptability of by the Americans of the new way of service and culture due to improper implementation of its goals and processes.

IMPORTANT QUESTIONS TO BE ADDRESSED:

1. Portmans market position and Market Competitiveness: Portman is currently the first to come up with the Personal Valets system, though there are two hotels that have recently come up that are trying to introduce the Asian style of service in the US market. Hence the market is less competitive and if Portman successfully introduces a proper structure and process, it can reap the benefits of being the first mover in the market.

2. Portmans strategy to compete successfully in the chosen market: This involves introduction of the niche- a revolution in guests service, which involved giving the guests an experience by professional, cheerful an immediate response to every request. 3. Attitudes, behaviors and skills expected from its employees to execute its strategy: This includes people who have the ability to do almost everything perfectly with positivity, focus, values and attention to detail. Employees who are friendly and are intrinsically motivated to perform and go the extra mile to keep their guests happy are needed in the organization. 4. Portmans practices with respect to: (1) Recruitment: Recruit people that are friendly and voluntarily ready to take initiatives and enjoy the work that they do. The hired Selection Research Inc.(SRI), to look for the people with the characteristics they were looking for. (2) Selection: They followed an extremely selective process. Select those who exhibited immense pleasure in serving guests and who did the work not just as a mere job but who felt like they were working for their own organization. Those selected were made to stay at the job for at least one year. (3) Compensation: The associates were made to expect as much as $200 a week as tip. Also, there were other extras like liberal reimbursements to outside courses, access to cafeteria, parties, $200 for the associate of the month and $1000 per week in the hotel for the associate of the year. (4) Training: Employees were given a 2 week training course wherein they were taught cleaning rooms and other skills needed on the job as well as to judge the guests and categorize them into lovers or rejecters. (5) Career Development and Career Paths: Employees at Portman were taught all the jobs necessary to take care of the guests from cleaning the bathrooms to mixing a drink. Hence this made them multi-tasking and made their work more interesting and less monotonous. But the employees were expected to be happy with their position and didnt have much scope to climb up the ladder. The PVs had to be contented with their position. (6) Feedback and Performance Appraisal: Not much attention was paid to this aspect hence Portman lacked in knowing the concerns of the ones who were in direct contact with their guests- the Valets. Also due to lack of a proper system of performance evaluation and appraisal, few valets didnt perform their jobs and others ended up making up for it which increased discontent amongst them.

CRITICAL FACTORS:
y y y y y Lack of a proper HR structure External Alignment and Internal Alignment Increasing attrition rate and disinterested employees Increasing costs of hiring and maintaining the Human Resource Achievement of its strategy to compete successfully in the market by taking care of the above mentioned critical factors

PROBLEM ANALYSIS:
1) Lack of Proper HR structure: What is lacking in Portman is the presence of a proper HR structure and policies. As far as recruitment is concerned, Portman does recruit and select the employees they feel suitable as per their expectations and also have an associate contract that needs to be signed by every employee which clearly defines their work boundaries and expectations that the organization has from them. But what is missing is the proper demarcation of work responsibilities and defining jobs. Also since there is no proper performance evaluation, appraisal and feedback system in place, PVs tend to take their responsibilities and their job more casually due to which some of them end up working to make up for the others. Hence implementation of these 2 systems is necessary to firstly, be able to evaluate performance of every PV so as be able to evaluate their efficiency and secondly, to make the employees feel a part of the organization by encouraging them to share their concerns, issues and give feedback on important issues. 2) External Alignment and Internal Alignment: What was also lacking in Portman was the gap in aligning the external as well as the internal resources and objectives. The internal alignment meant a committed and motivated workforce who enjoyed providing their guests with customized and a world class luxury experience, and aligning this with the companys strategy and objective. . This required support of a proper HR structure and process in place. The external alignment meant aligning your services as per the expectations of your customers and satisfying their needs and requests accordingly. Since Portman was introducing a new way of servicing customers, what was required is fulfilling and performing those services efficiently to give a pleasant experience to the guests.

External Environment: Changing external Environment, Managerial challenges

Managerial inter pretati on of des irable behavior

Inte rnal Environment: Aligning employee behavior to what is considered desirable as organizations act through employees
Aligning empl oyee attitude to des irable behavior

Managing Dynamics of individual behavior: Perception, Personality, Motivation and Learning

Also what needs to be aimed is achieving Organizational Citizenship Behavior (OCB) and Job Dedication out of the employees. The employees need to be satisfied themselves to be able to satisfy their guests.

3) Increasing attrition rate and disinterested employees: Portman was experiencing a gradual increase in the number of their dissatisfied employees and their motivation levels were declining drastically. The PVs felt that they were treated like more of maids rather than a group crucial to the business strategy. This could be related to the Pygmalion Effect which wasnt present in this case:

Also, Kelleys Attribution Model can also be applied in this case where specific information can be used to make specific social attributions for the behavior and outcomes of others: (1) Consistency: Here what could be observed is whether an employee at Portman behaves in the same fashion over time. The PVs who are not working efficiently, their behavior could be examined to establish if his behavior is consistent or not. (2) Distinctiveness: Here it could be observed if the employees behave the same in different situations. It could be possible that the current work structure and environment at Portman could be such that makes the employee behave in a particular way. By improving situations, the employee could probably work better and efficiently and thats what needs to be observed. (3) Consensus: Here it could be observed whether the other employees other than the target employee are also behaving the same way in a particular scenario. Application of this model would make it easier for the superiors to divide the causes of such behavior into three classes: person, stimulus or situation, which would have an important influence in processes such as reward distribution, performance appraisal or selection. Applying the concepts of Pay Dispersion and Equity, wherein minimum wages are paid to all but extra pay to those who are working efficiently could keep the employees motivated. Maslows need hierarchy model can also be applied here wherein the PVs when recruited are made to feel like an important part of the organization and hence they expect their self actualization needs to be satisfied. But since they end up spending more time in cleaning bathrooms than serving and catering to the requests of their guests, they end up dissatisfied and this causes discontent and reduction in their motivation and dedication levels. Hence satisfaction of this need in the triangle is also necessary to expect OCB from the employees. 4) Increasing costs of hiring and maintaining the Human Resource: Portman is experiencing increased costs of maintaining their human resource, which is of utmost concern to them now as they are approaching full occupancy and need to hire more resource to be able to meet his demand, in a cost effective way.

The employees are currently paid a minimum wage irrespective of occupancy and keeping the employees in the organization even when there is low occupancy is what is costing Portman a huge sum. Also keeping employees temporarily at the times of full occupancy is not a feasible solution as the commitment and dedication that is expected out of them will not be present as the employees wont feel a part of the organization. Hence a trade off needs to be achieved between these 2 ends. 5) Achievement of its strategy to compete successfully in the market by taking care of the above mentioned critical factors: The above mentioned factors that have been discussed need to be taken care of with a view to be able to implement the strategy and objective of Portman of bringing in Asian culture in the American market successfully. Hence all these need to be aligned to achieve this goal.

ALTERNATIVE SOLUTIONS:
y Recruit workers as per requirement: This alternative involves keeping employees during the busy months of the hotel and laying them off in the rest of the months when they are not needed. This would reduce costs considerably as the costs of keeping the employees are reduced. But the major drawback with this alternative is that if this solution is implemented, the employees would not display dedication and OCB, because in order to do that they need to feel a part of the organization and that is not achieved in this case. A similar conflict was experienced in Portman when floaters were employed to fill up the gaps of required workers during high demand. The permanent PVs were not able to relate to them and understand their way of working. Hence this alternative was not a very feasible one.

Introduction of a performance evaluation and feedback system: The current structure of Portman includes an HR team, and this could be utilized to introduce a performance evaluation system, wherein all the PVs are asked to sign a register after they perform every task wherein they need to fill in the details of the work done, the room in which it was done and the time. The register would be maintained by the Team Captain of the group and he would be accountable for the quality of service of the team. This would make it easier for the management to evaluate the performance of the employees and identify the inefficient as well as the efficient ones. The associate contract gives a right to the employees to know regularly about their performance and introduction of this system would facilitate providing proper feedback to the employees.

Also an employee feedback system needs to be introduced wherein the employees are asked to fill a feedback form on a regular basis where they are asked to share their views on the level of support services received in order to provide exceptional services to their guests and also encourage them to provide any suggestions to improve anything they feel lacks in the organization. y Principle of Equity (equity with differential wages): This principle of motivation states that employees are ensured not just equal wages to all but also equality on the basis of performance and that an employee is paid as much as the other is for doing the same work with equal dedication and commitment. Hence the PVs could be paid minimum wages and based on their efficiency could be paid extra. Also a system of Job Rotation could be implemented wherein the current system of work hours on the basis of seniority could be modified in a way that an employee that works for 40 hours this week and another employee who works for 16 hours could then work vice versa for the next week. This would ensure that employees are made to work for equal hours on an aggregate basis but are fluctuating throughout the year. Wages could be paid accordingly.

RECOMMENDED SOLUTION:
The recommended solution would be as follows:  Menes proposal of having Team Captain (TC) within every group could be implemented but their roles and job description would be slightly modified than the one mentioned by Mene, wherein every TC would be accountable for the performance of every PV in his group and he would be handling the job register wherein he ensures that every PV works as per the work assigned to him in the stipulated time and notes it in the register. Also the TC would keep rotating within the team on a regular basis (for eg. weekly, fortnightly, monthly etc.) so that every member in the team gets a chance to become TC which would not only motivate them in a way but make them feel as if theyre being promoted and given a chance to lead and be accountable for the performance of the people under them.  Rotation of employee work hours wherein during periods of low occupancy the employees are made to work for reduced work hours rather than laying them off

and similarly during busy schedules, allot them higher work hours. This would ensure that the workers are maintained in the organization all throughout the year and this would encourage OCB and Job satisfaction and Commitment as well as dedication towards work. Wages could be paid according to the work hours and a minimum wage rate would be fixed which would be paid irrespective of occupancy.  Implementation of Performance evaluation and appraisal, and a Feedback system, wherein via the job register and feedback by the Supervisors, the performance of each PV is evaluated both as a PV as well as a TC. Regular feedbacks are given to them and efforts are taken to find out the reasons if any, for any inefficiency found. Also, feedback from employees towards the current support services would make the organization serve the guest s better by providing the employees with the proper services and facilities needed to support this function. This up-down as well as down-up mechanism would ensure control as well as belongingness and accountability in the organization.

The Organization structure would be modified as follows:

SUPERVISOR

TC

TC

TC

PV

PV

PV

PV

PV

PV

PV

PV

PV

PV

PV

PV

Hence there would be 5 such supervisors who would have 3 TCs each under them which would keep rotating, and under each TC would be the 4 other members of the group as the TC would be one member amongst the team of 5. The supervisors would then report to the higher levels of the structure with each level in the hierarchy accountable for the performance of their subordinates.