HRM Case Study and Suggested Solutions Beachside hotel human capital dilemma

This is a case of two competing hotels, Sunrise Hotel and Beachside Hotel that are both located in a medium sized, tourismbased town in the Northeast U.S. The hotels are both competing for the same set of guests, as well as the same set of potential employees. They are both budget hotels, right next door to each other, with 60 guest rooms each and a view of the beach. The occupancy during peak season for the Sunrise Hotel is 98%, but during the winter months goes down to 65%. The Beachside Hotel has peak season occupancy of 90% and off peak occupancy of 50%. Joe is the General Manager of Sunrise Hotel and has been in his current position for 5 years. He has been with Sunrise Hotel for a total of 10 years. He worked his way up at Sunrise Hotel from front desk agent to front desk supervisor, and finally to Assistant General Manager before he became the General Manager. He does a good job of screening potential employees for his front desk area of the hotel because he realizes the importance of that area of the hotel, especially in tourist areas. He also has incentives set up for excellent performance of the front desk agents and training and development programs designed to give everyone information that will help them do their job better. There is a sense of teamwork at Sunrise Hotel and that helps everyone want to do a good job. His guest satisfaction ratings for his hotel are overall excellent. On a rating scale of 110, his hotel averages a 9. The average length of tenure of his employees is 4 years, and his current front desk supervisor was promoted from within, along with his Assistant General Manager. Because of the small size of the hotel, Joe is actually involved with all of the hiring decisions along at the Brian deals from hourly and with his helps to give team. high a of training The or that programs employee college himself, turnover and Hotel brought 6 leave else. and in leadership graduate Hotel General very hotel in for Manager the same different

the Sunrise Hotel is 25% employees Sunrise is with another the a

overall and school the career

is primarily when somewhere

Beachside Brian group was about

situation. hotel

months

ago. He was told by his boss that he needed to fix this hotel

so that and noted

it would return

start having better customer guests. seasons, Despite the off the peak fairly

satisfaction ratings high occupancy is occupancy

more during

peak

season

only 50%. Also noted by his boss, the occupancy should be as good as the Sunrise Hotel. Brian has been with his hotel group now for 2 years and he came out of the accounting and finance department with The short in well. desk. the turnover handed hotel not was owner in his old hotel. He has a great understanding of Beachside The the Hotel of job. is the numbers in the lodging human of and that hourly with was industry, but employees new put to at has not been involved

resource

aspects

120% and that means that Brian is constantly running the hotel employees. in the at Beachside because desk ago that year sure Hotel she very after she has been doing the hiring through a human resource practitioner the position the a really could Mary The handle promoted of the serving guests front

human

resources to

she had one too many altercations with the guests at the front hotel wanted make would not make any of the other guests angry, so he promoted her to a human resources practitioner. Since that time, she has been time often are and very when The at average the length is busy for trying to keep up with late, and the hiring she there and is are so she has had no training employees. to employees by new of Because busy, paychecks written

come out treated the

no policies trained not

down for employees to use as a guide for performance, customers badly and of a poorly do go of of the a front desk agents rating. employees, communicate everyone at Most else the of wrong. departments things tenure 6 out hotel everyone

effectively

therefore

blames

Beachside Hotel is 3 months and the customer satisfaction rating Beachside 10 possible the front desk agents that are hired come from other hotels in the area after they quit or are fired. Brian is not involved in the hiring for the hotel at all, and does not get involved with training and the development. financial He for spends the most hotel of and his days looking at daily reports analyzing average

rate, Brian he is to knows to goes making go

occupancy that the he has Sunrise happen. observe he Hotel Joe his is

rates, many to problems observe to

and to deal with over but things help, help discussion in in order the

REVPAR. and there so for

a while. He sees a happy crew and talks to Joe about how he that and happy can wants up Brian with Brian. questions to start Beachside back that or systems the employees first and come guide

ways Class 1. What changing Hotel?

specifically small should group Brian capital

implement practices

human

2. What could Brian learn from Joe in terms of the human capital aspects in and 4. the 5. by to How the of Beachside occupancy could a return in on Beachside What either help other the with Hotel Hotel in rates investment to trying resource Hotel overall running order to at compete a help with the help the or with be Hotel their hotel? turnover hotel? hurt Sunrise 3. How could training and development programs be implemented

perspective

Hotel? human Sunrise the initiatives or could of undertaken in order respective Beachside

performance

organizations?

This case study gives many examples of issues that could be improved upon in order to help with the human capital performance in the Beachside Hotel. The Sunrise Hotel offers many good practices that help to ensure a return on investment in their human capital practices. The low turnover, length of service of employees, and the positive ratings regarding guest satisfaction all point to the positive, human capital focused culture of Sunrise Hotel. The above questions give some discussion points that will help to focus students and practitioners on some of the positive actions that can be taken by Beachside Hotel to help improve performance and the tone of the company. Here are some partial solutions to the case study questions.

1. In order to start changing the human capital practices at the Beachside Hotel, there needs to be a serious shift in the culture there. Since Brian did not have any human resources background, he does not get involved in hiring, training, and ensuring that these functions are used to build a stronger service culture. Mary, the HR practitioner, was put into place because she could not work with customers, yet she is now in charge of the internal customers in the organization, the employees. Brian needs to get involved in building a stronger culture by making sure that he works with Mary to make sure that she is focused on people and creating a positive atmosphere. Investments need to be made in training and development of the people currently employed at Beachside Hotel and also in the new people to build a committed workforce. 2. Brian should start out by learning more about the human capital in his own hotel first and getting himself immersed in the people of the company. The service profit chain starts internal to the organization and then looks to the external guest. Brian could then observe some of the human resource practices that are being used at the Sunrise Hotel and apply them to his own hotel. Joe gets involved in all of the hiring at the Sunrise Hotel as well as the training there. Brian should implement more of a focus in the top management of Beachside Hotel in order to emulate Joes focus on developing a culture of service and in taking pride in the people that work for him. 3. Brian needs to focus on hiring the correct people for the various jobs at the Beachside Hotel and should then work with each person to determine what it would take to get them to be satisfied in their jobs. Training and development not only give people the skills that they need to be successful in their jobs, but also they help to develop people in other facets of their life, i.e., time management skills, money management skills, and even tuition reimbursement for college classes. These development classes help people feel a sense of connection with their jobs and would help them to be satisfied in their overall lives. The more satisfied employees are, the more that they tend to stay at a place of employment and the more they tend to satisfy the guest that they serve. Having the top management in a company get involved with the training and development of their people, helps them commit to their future growth and helps the employee feel that their employers believe in them. 4. Since Brians job is to fix the Beachside Hotel, there will need to be an initial investment in order to get the human capital practices to a point where there are some significant improvements. These improvements will hopefully drive the service level up at the hotel

and thus drive occupancy and repeat customers. There needs to be a return on investment focus for the hotel as they try to change the culture. It appears that currently, there is not a focus on investment in human capital at all and the cost is the low customer satisfaction scores, high turnover, and a lack of repeat guests. This hotel needs to encourage a focus on the human capital areas as well as focusing on the return on investment in this area. It needs to be noted that the return on investment may take a period of time to show a positive return, but hopefully the effort will be worth it. 5. Some of the other human resource initiatives that could be undertaken by either or both properties are: regular and thorough performance reviews, 360 degree feedback programs, round table discussions with employees to focus on their needs, incentive programs to reward employees for positive performance toward the objectives of the organization, offer reward programs for guests in order to boost the level of repeat guests to the hotels, more open communication regarding progress toward the goals of the organizations in order to keep employees in the loop regarding performance, top management needs to focus on having a focus on the service profit chain regarding the internal guest satisfaction as well as the external guest satisfaction.