BestPracticesinHumanResources                                    No hotel can have excellent operations without excellent ...
L O D G I N G          B E S T       P R A C T I C E SExhibit 1Overview of human-resources (HR) best-practice championsHR ...
Exhibit 1     Overview of human-resources (HR) best-practice champions (concluded)     HR champions             Practice i...
L O D G I N G          B E S T      P R A C T I C E SExhibit 2Human-resources (HR) best-practices cases, descriptions, imp...
Choice’s change. Choice as-         assignments. The Benchstrength            to become a general manager andsessed the co...
L O D G I N G          B E S T      P R A C T I C E SExhibit 2Human-resources (HR) best-practices cases, descriptions, imp...
munication and self-understanding,           The rapid growth of Arizona           costs, increased productivity, andand e...
L O D G I N G           B E S T    P R A C T I C E SExhibit 2Human-resources (HR) best-practices cases, descriptions, impl...
ployees perform their jobs and work     self-directed housekeeping teams to                                      with each...
L O D G I N G      B E S T   P R A C T I C E Straining general managers (using                   because they felt their a...
professional was out of the question.     Exhibit 3                                                                       ...
L O D G I N G     B E S T    P R A C T I C E Sthe following offer. Since most hos-     pitality industry, and the training...
Exhibit 4                                                                                                                 ...
L O D G I N G     B E S T    P R A C T I C E Sempowerment activities in the            changes in attitude or work culture...
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Best practice in hhrm

  1. 1. BestPracticesinHumanResources No hotel can have excellent operations without excellent employees—and thatby Cathy A. Enz and requires excellent human-resources practices.Judy A. Siguaw D esigning integrated human- resources systems is one of the most powerful ways to ensure the creation of value for customers this article we examine five catego- ries of HR best practices, focusing on the specific practices adopted by champions selected from this study and profitability for owners. In (see Exhibit 1). The five categories today’s competitive environment, of best practices are: high-performing organizations have (1) leader development, learned how to deploy human- (2) training and knowledge resources (HR) practices to enhance building, competitive advantage. The most (3) employee empowerment, successful firms create a bundle of (4) employee recognition, and employee practices that are cus- (5) cost management. tomer focused, are aligned with In addition, we present the prac- each other, and reinforce the organ- tices of three champions who de- ization’s strategic position. Innova- vised comprehensive practices that tive hotel companies are developing incorporated many different types their human-resources practices to of HR practices. We provide an help build and sustain organizational overview of the human-resources effectiveness. champions and their practices and In a comprehensive study on best discuss the practices’ benefits and practices in the lodging industry then conclude with the insights and conducted by professors affiliated with Cornell University’s hotel Cathy A. Enz, Ph.D., is the Lewis G. school, a select group of companies Schaeneman,Jr.,ProfessorofInnovation was identified as being notable for and Dynamic Management at the their human-resources efforts.1 In Cornell University School of Hotel Administration «», 1 The full study is available in: Laurette Dubé, where Judy A. Siguaw, D.B.A., Cathy A. Enz, Leo M. Renaghan, and Judy A. Siguaw, American Lodging Excellence: The Key to isanassociateprofessorofmarketing Best Practices in the U.S. Lodging Industry (Wash- «». ington, DC: American Express and the American Hotel Foundation, 1999). © 2000, Cornell University48 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  2. 2. L O D G I N G B E S T P R A C T I C E SExhibit 1Overview of human-resources (HR) best-practice championsHR champions Practice initiated, developed Measure of successAccor North America Combination of numerous integrated HR Lower employee turnover, higher employee-satisfaction scores, initiatives including work design, rewards, and “significantly” better performance; better career devel- feedback, and group process. opment and increased responsibility; customers report greater consistency and a higher level of service.The Boulders Resort Created three-person housekeeping teams Retention and morale of room attendants improved; rooms responsible for determining their own are readied faster; guests have fewer intrusions on their work patterns. privacy.Cendant Corporation Developed a comprehensive group of Executed franchise agreements for more than 50 hotels with diversity initiatives. minority franchisees; contributed over $1 million to minority- supportive organizations; received a B (highest grade awarded to any hotel company) in the NAACP’s 1998 grading of minority progress in the hotel industry.Choice Hotels Management training and development Has competent leaders in the pipeline and a reduction in em- International program using a competency model. ployee attrition; expects to save money by relying less on external hiring. Tighter brand standards and a stronger emphasis on maintaining brand equity are directly attributed to the building of critical competencies.Coastal Hotel Group Created a buddy system of loaning employees Profits are up, turnover is down, and operations improved; to acquired properties to help train new customers enjoy a better experience. personnel.Day Hospitality Group Mandates a sabbatical leave for GMs with five Used as a recruiting tool; anticipates reduced management years’ tenure. turnover and enhanced morale (first sabbaticals occurred in 1999).Disney’s Polynesian Trains employees using a values-based three- Noted improved performance, morale, and teamwork; received Resort module training program, entitled “Magic of fourth diamond 14 months ahead of plan; received WDW’s Polynesia.” RAVE award and the 1998 Diversity Spirit award.Four Seasons & Developed a designated-trainer program for Employees applaud the consistency of standards and access Regent Hotels the front-line employees complemented by to informed and experienced trainers; seventy-five percent and Resorts on-line training materials. of all promoted employees were designated trainers; in- dependent rating systems have recognized the company for its service standards; helps support rate leadership and high RevPAR.Hyatt Regency Created a community-based hospitality-training Provided the Scottsdale hospitality industry with qualified and Scottsdale program for local high-school students. skilled workers; customers have better trained service providers.Inn at the Market Outsourced HR needs to a part-time Employees have access to a full range of HR services at mod- professional. est cost; managers are informed and trained; provides employees with a confidential and impartial representative and additional guidance for self-improvement.Marriott International Develops future leaders through a management- Established consistent framework for developing leaders; development program. increased rigor of filling senior positions; customer should experience improved service.Minneapolis–St. Paul Line-level employees are empowered to make Dramatic improvement in guest-comment cards; increased Hilton Airport guest-satisfaction decisions. occupancy and ADR on the executive level; cost savings in training, advertising, and other expenses; boosted morale; guests expect immediate solutions to problems. Continued overleaf February 2000 • 49
  3. 3. Exhibit 1 Overview of human-resources (HR) best-practice champions (concluded) HR champions Practice initiated, developed Measure of success Motel 6 Employees are groomed for general-manager Created an internal pool for management positions; reduced positions. the costs of recruiting managers; reduced employee turnover by 10 percent; boosted guest satisfaction by 50 percent. Motel Properties, Inc. Employee-recognition program Increased employee retention; boosted revenues and improved profits; improved customer satisfaction. Ramada Franchise Employee selection, training, and satisfaction Increased retention and job satisfaction. Better-trained staff. Systems, Inc. initiatives Franchisees are happy with the guest-survey results. Ritz-Carlton Tysons Self-directed work teams Cut employee turnover in half from 1993 to 1994, falling Corner to 25 percent in 1998; reduced payroll costs; reduced manager-to-staff ratio (from 1:15 to 1:50); greatly improved employee-satisfaction ratings. Rodeway Inn Developed employee-satisfaction and -rewards Improved job performance and morale; became first International– program. Rodeway to receive Choice Hotels President’s Award Orlando for guest service. Sheraton–Denver West Two sales managers share one job. Ability to keep strong management talent and tap the energy and skill of two employees for the price of one. Simpson House Inn Focused a training curriculum on diversity. Increased morale; became first B&B to achieve AAA five diamonds. Sonesta Hotels Created a wholly owned training subsidiary Turned HR from a cost center into a revenue center. and unique training materials. Tamar Inns Created a self-funded health-insurance plan Kept cost per covered employee below the national average by developing a clinic and making alliances (saving over $37 million in ten years); provides enhanced with local health providers. medical service and expanded coverage to employees; reduced sick time and turnover. Towneplace Suites Cross-trained employees. Employees have high job satisfaction; guest service improved. by Marriott White Lodging Conducts pre-shift meetings for all departments. Improved communication and employee retention; received Services Radisson’s Presidential Award for four years running.advice of the practice champions to tice and the name and address of a Leadership-development Practicesassist those who may want to adapt contact person. The goals of the management-and improve a practice for the ben- The effort to improve perfor- development practices of Choiceefit of their own firms. mance usually requires organizations Hotels, Marriott International, In the best-practices study the to change their model of managing Motel 6, and Day Hospitality arelargest number of champions was in people and, hence, to alter their to ensure that their future leadersthe area of human resources. This management systems and augment develop essential skills and compe-finding is not surprising given the their leaders’ skills. To develop their tencies and, furthermore, that thecentral role that employees play in best practices, the champions ex- pipeline of future leaders remainssuccessful hotel operations. The panded employee involvement and full. Two of these champions—champions in human resources authority, boosted skill building and Choice Hotels and Marriott Inter-identified by peer organizations and information sharing, and imple- national—developed comprehensive,managers are listed in Exhibit 2, mented cost-containment strategies chain-wide leadership-developmentwith a brief description of the prac- and performance-based rewards. programs.50 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  4. 4. L O D G I N G B E S T P R A C T I C E SExhibit 2Human-resources (HR) best-practices cases, descriptions, implementation, contact people HR champion, Title of case Description of case Method of implementation Contact person Accor North America Created multiple practices, such as New practices involve the establish- Dale S. Wielgus, Internal Customer empowerment, bonuses, 270- ment of a task force with one vice president of Satisfaction degree feedback, and employee member typically being an out- human relations roundtables to achieve high levels side consultant. Trials are con- of motivation and retention. ducted for each practice before 914-725-5055 full implementation. Fax: 914-725-6147 The Boulders Creates self-directed, three-person First met with housekeeping supervi- Linda Heyman, housekeeping teams. Each team sors and staff, followed by training. director of housekeeping Self-directed Housekeeping Teams divides and interchanges all room Two test teams were used for three 602-488-7369 duties, chooses its own work months. Modifications were made Fax: 602-488-6767 areas, assumes responsibility based on team feedback. for quality, and self inspects. Cendant Corporation Launched comprehensive diversity Convened a series of meetings with Donna Dozier Gordon, Comprehensive initiative: (1) Franchise develop- leaders in the African-American (former) director of Diversity Initiative ment among minorities, (2) Sup- community. Senior management diversity development plier development, (3) Career developed the initiatives with a development, (4) Philanthropic strong commitment to a new ap- 973-496-8543 giving, and (5) Target marketing. proach for conducting business. Fax: 973-496-7307 Choice Hotels Created an integrated executive- Identified business challenges and Robert Barner, VP of International training and -development system competencies that would be criti- organizational develop- In-house Executive using a competency model that cal. Conducted focus groups with ment and learning Training and targets the core competencies director-level managers. Ranked Development required for effective performance. competencies and obtained execu- 301-592-6278 tive feedback. Created a composite Fax: 301-592-6161 model and integrated the model into the staffing and development process. Coastal Hotel Group Skilled employees are loaned to newly Corporate managers determine the Steven Brewster, Employees on Loan for acquired properties to help with buddy-needs-training timetable of public-relations manager Training with the Buddy training. The practice allows new acquired properties. The practice 312-654-2962; and System hotels to benefit from well-trained took three to six months for imple- workers, existing hotels to lower mentation. The HR director works Susan Evans, corporate their payroll costs, and the skilled with general managers to identify human-relations director buddy employees to broaden the best buddies. 312-988-9017 their experiences with different Fax: 312-988-9017 operations. Day Hospitality Group A 90-day paid sabbatical leave is The president and his partner Frederick Cerrone, Sabbatical Leave mandated for every general agreed to establish this practice president Program for General manager with five years’ tenure. based on the president’s personal Managers with experience. 770-446-1500 Experience Fax: 770-604-9682 Disney’s Polynesian A training program, “Magic of Key individuals, including an outside Clyde Min, general manager Resort Polynesia,” was designed to consultant, developed three mod- A Value-based Process facilitate employee understanding ules for training. These modules 407-824-1232 of Training and and commitment to the business have been integrated into an eight- Fax: 407-824-3174 Selection and values. hour orientation and training class attended by all cast members in their first 30 days.Note: The case titles correspond to the cases written on eachchampion in: Laurette Dubé, Cathy A. Enz, Leo M. Renaghan,and Judy A. Siguaw, American Lodging Excellence: The Key toBest Practices in the U.S. Lodging Industry (Washington, D.C.:American Express and the American Hotel Foundation, 1999). Continued overleaf February 2000 • 51
  5. 5. Choice’s change. Choice as- assignments. The Benchstrength to become a general manager andsessed the core competencies needed Management System provides the is provided with opportunities forby its future leaders and created an firm with a consistent approach to cross-training. Successful cross-integrated executive-training and evaluating leadership potential and training qualifies employees as can--development system. In particular, ensures that the company focuses on didates for the manager-on-dutywhen Choice shifted its business core capabilities that are key to fu- program. In this second phase of thedirection to become strictly a fran- ture success. program, employees use self-trainingchisor, the company realized that its A day in the sun. In a depar- manuals to prepare for the MODfuture managers would need a set of ture from traditional leadership de- role. A general manager from an-competencies different from those velopment, Day Hospitality Group other Motel 6 property then testsrequired when the company also (which operates a group of hotels the employee, who becomes a certi-operated a portfolio of hotels. To mostly under Marriott flags) devised fied MOD once he or she passes.identify competencies critical to the unusual practice of requiring a Finally, those employees who haveachieving its goals Choice relied on sabbatical leave for general managers completed phases one and two canthe competency-models research of when they achieve five years of ten- be appointed to full-time general-the Corporate Leadership Council ure in the company. The idea, says manager positions. Once this level is(a non-profit group in Washington, Day Hospitality president Frederick achieved the new general managerD.C.) and the Career Architect Cerrone, is to stress the importance receives a five week in-depth train-Portfolio sort cards developed by of a balanced life and to demon- ing program in one of the regionalLominger Limited. After ranking strate that there is “more to life than offices. By spring 1998 some 300competencies and gaining the input just work.” Cerrone instituted the Motel 6 employees had moved upof numerous executives via personal mandatory 90-day paid sabbatical the ranks to become GMs. Thus, thisinterviews, Choice devised a com- leave after he took time off from his employee-to-manager developmentposite model of competencies for own job for a trip to India. His ex- program has helped fill a need forthe four senior-most levels of the perience and reflection helped him qualified managers and serves as aorganization (senior vice president, return to his business with the idea practice that combines both em-vice president, senior director, and for a sabbatical leave program that ployee training and a path towarddirector). Then the company as- would permit managers to “unplug” leadership development.sessed the competencies held by top and spend time with family. Cerroneexecutives and compared those believes that the development of this Best Training and Knowledge-buildingcompetencies to the ones needed program for the company’s relatively Practicesfor the future. The next steps were young GMs will inspire them to Employee training and skill buildingdevelopment planning, coaching, return to work refreshed and replen- have become increasingly criticaland career-path mapping. Choice ished with a new frame of mind and areas of HR management for firmsnow uses its competency database their creative juices flowing. working to enhance service quality,for annual readiness assessments, Turning on the lights. While reduce labor costs, and increase pro-which are used in determining cur- all the leadership-development best- ductivity. Five best-practice champi-rent leaders’ capabilities and forms practice champions designed systems ons—Coastal Hotel Group, Disney’sthe basis for selection, promotion, in anticipation of the needs for fu- Polynesian Resort, Four Seasons &and succession planning. ture leaders, Motel 6’s approach Regent Hotels and Resorts, Hyatt Marriott’s bench. Marriott comprises the development needs Regency Scottsdale, and Simpsoncalls its system-wide leadership- of both employees and managers. House Inn—devised approaches todevelopment initiative the “Bench- Motel 6 created a three-step pro- training consistent with their spe-strength Management System.” This gram that makes every employee cific circumstances and challenges.set of tools and measures assists se- eligible for eventual consideration as Simpson House Inn, a bed andnior managers in identifying poten- a general manager. The three phases breakfast located in Santa Barbara,tial leaders and ensuring that those of the development program are California, devised the “Simpsonmanagers develop the skills and cross-training of employees, man- House University” as part of itscompetencies needed to carry the ager-on-duty (MOD) responsibili- training curriculum. The generalcompany forward. Using targeted ties, and a general-manager assign- manager, Dixie Budke, developeddevelopment plans, senior managers ment that includes training. In the training modules using a variety ofgive critical positions to high- first phase every hotel employee is innovative activities that promotepotential managers as “stretch” made aware of his or her potential understanding, improve staff com-52 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  6. 6. L O D G I N G B E S T P R A C T I C E SExhibit 2Human-resources (HR) best-practices cases, descriptions, implementation, contact people (continued)HR champion, Title of case Description of case Method of implementation Contact personFour Seasons & Regent Created designated-trainer positions A task force of corporate and field John Young, Hotels & Resorts within each department of the managers developed the on-line executive vice president“Designated Trainer” hotel, aided by an on-line training training program. The training Program for Front-line program in CD form. Materials are manager developed the content 416-449-1750 Employees used to make front-line employee and structure of the program with Fax: 416-441-4341 training as effective and consistent operating management in the as possible. Seattle hotel. After the training was fully evolved it was launched throughout the company.Hyatt Regency The hotel’s training manager designed The Hyatt formed a partnership with Denise Pruitt, Scottsdale and conducts classes in hotel the City of Scottsdale, the local training managerA Community-based management for junior- and school district, and academic senior-level students at the local institutions. The Hyatt worked 480-991-3388 Hospitality Training high school. closely with the school district to Fax: 480-483-5573 Program for High- school Students develop the curriculum. The pro- gram required six to seven months to plan. The partners meet quar- terly to discuss changes and projections for the future.Inn at the Market The inn retained a part-time The HR consultant was hired and then Joyce Woodward,Outsource Human consultant to manage its began to work with the GM who general manager Resources to Profes- HR activities. defined her job activities. sional HR Consultant 206-443-3600 Fax: 206-728-1955Marriott International This corporate-wide leadership- Marriott developed a system for identi- David Rodriguez, development initiative uses various fying and developing leaders using senior vice president,Leveraging Leadership assessment tools to ensure that external and internal research and staffing and development Capacity and Building future leaders develop the requi- best practices. Senior manage- Future Leaders site skills and competencies. ment evaluations are used to 301-380-8886 construct development plans and Fax: 301-380-4229 guide staffing.Minneapolis–St. Paul Empowers line employees to make First implemented at the front desk, Patrick Simpson, Hilton Airport any decision involving guest without trial or test period. The director of front-officeLine-employee satisfaction. practice was unconditionally operations Empowerment adopted and has spread to all of the guest-contact areas. (800) 637-7453 (612) 854-2100 Fax: (612) 854-8002Motel 6 Created an employee-development The HR team obtained support from Joe Eulberg,Training Employees for program that makes every em- the Motel 6 president and execu- senior vice president General Management ployee eligible for consideration as tives first. Implementation was a general manager. The practice gradual (over a five-year period) 972-702-6801 includes three different training and based on natural management Fax: 972-702-5996 programs: cross-training, manager attrition. Access to and expertise at on duty, and general manager. the regional offices was a major factor in implementation success at the property level.Motel Properties, Inc. Instituted a variety of recognition A management team developed the Janice Cook,Employee Recognition programs for employees begin- recognition concept, which is director of human Program ning from the time of the initial implemented and revised by resources interview. the HR department. 912-635-4715 Fax: 912-635-3230 Continued overleaf February 2000 • 53
  7. 7. munication and self-understanding, The rapid growth of Arizona costs, increased productivity, andand enhance self-esteem. Budke also tourism and the accompanying improved employee retention.developed all staff meetings and shortage of qualified hospitality em- While Coastal is no longer a smallother HR policies to enhance com- ployees caused the Hyatt Regency hotel group, it continues to use thismunication and reduce conflict. She Scottsdale to embark on a commu- practice, although its economicexplains the property’s philosophy as nity-outreach program. In coopera- benefit will most likely be greatestfollows: “Seamless, flawless, gracious tion with the Scottsdale School for small organizations.service can be given only by people District, the city, and local colleges A different training issue—who feel good about themselves and and universities, the Hyatt’s training consistency—drove the develop-what they are doing, and who are manager developed and taught edu- ment of the designated-trainermotivated intrinsically by their own cational programs at the local high position at Four Seasons & Regent.competence and sense of personal school. Intended to develop stu- A period of rapid growth causedmission.” dents’ interest in the industry, the inconsistent communication and Kinaole. A similar philosophy program includes college-level training regarding service standards.was the basis for the training pro- courses, field trips, and guest speak- To address this issue, the companygram at Disney’s Polynesian Resort, ers from local hotels. The curricu- created designated-trainer positions“Magic of Polynesia,” which was lum leads directly into the two-year within each hotel department. Thisdesigned to facilitate employee un- degree program at Scottsdale Com- is a joint effort between the proper-derstanding of and commitment to munity College or into the four- ties that invest in the designatedthe business. The resort created year program at the School of Hotel trainers and the corporate HR de-three training modules to assist em- and Restaurant Management at partment, which devised the on-ployees in learning about Polynesia Northern Arizona University. One line training materials. The desig-and to foster an alignment of per- challenge of this training initiative nated trainer, who holds a regularsonal and resort values. The first was coordinating an alliance among job assignment, follows a carefullymodule provides three hours of corporate, governmental, and educa- structured program of teaching andinstruction on the business of hospi- tional organizations. The results coaching with the help of an on-tality and the cultural elements of have thus far been positive, and the line training program (OLTP). ThePolynesian hospitality and entertain- practice has provided the Scottsdale OLTP comprises more than 100ment. Recognition and coaching are hospitality industry with qualified job-specific training manuals onalso used to help cast members (em- and skilled workers, many of whom CD. Regional training coordinatorsployees) become “perfect hosts” in have worked for Hyatt. helped implement the programsharing aloha with the guests. Mod- Coastal Hotel Group and Four hotel by hotel, and local managersule two seeks to align employees’ Seasons & Regent Hotels and Re- and training employees customizepersonal values with those of the sorts both use skilled employees to the materials to suit local job de-resort. Cast members are asked train newcomers. Coastal devised a scriptions and operating structures.questions that evoke personal reflec- buddy system for training employeestion, such as, What are the key driv- in newly acquired properties. The Employee-empowerment Practicesers in your life?; What do you think buddy system was developed when Enhancing customer service andyou are all about?; Who are you?; Coastal, being a small management motivating employees were theand What are the things that are company, could not afford the cost driving forces behind the self-important to you? The final module of a corporate training center. In- directed work teams at the Ritz-focuses on delivering kinaole (flaw- stead, corporate managers determine Carlton Tysons Corner and theless excellence in the highest de- the needs of an acquired property Boulders, the cross-training atgree) product and service to the and provide employee trainers with Towneplace Suites by Marriott,guest. In this portion of the training, the requisite knowledge and skills and the autonomous line-level de-values and service standards are inte- from existing hotels. All parties ben- cision making at the Minneapolis–grated. All cast members attend the efit from this practice because the St. Paul Hilton. Similarly, the pre-three training modules within 30 employees at the receiving hotel shift meetings developed by Whitedays of their being hired. In addi- gain knowledge, the lending hotel Lodging Services were developedtion, the values that guide the train- reduces payroll costs, and the trainer to share information and keep em-ing are reinforced and integrated is given an opportunity for personal ployees fully aware of the overallinto the hotel’s reward, accountabil- growth. This simple and effective operation. Each of these five cham-ity, and coaching programs. practice resulted in lower labor pions altered the way in which em-54 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  8. 8. L O D G I N G B E S T P R A C T I C E SExhibit 2Human-resources (HR) best-practices cases, descriptions, implementation, contact people (concluded)HR champion, Title of case Description of case Method of Implementation Contact personRamada Franchise Developed an integrated and compre- After managers were trained, training Tim Pigsley, corporate Systems, Inc. hensive set of employee initiatives segments were installed in local director of personal-Employee Selection, called Personal Best Hospitality. hotels. Thirty days after training, best hospitality Motivation, Training, Programs include prescreening for the employee-motivation compo- and Satisfaction selection, training via interactive nent was put in place. After six- 973-496-1568 CDs, employee-loyalty program, month shake-down, the guest Fax: 973-496-0322 and monthly guest-satisfaction survey was put in place. surveys.Ritz-Carlton Tysons Shifted decision-making responsibility With employees’ participation, identi- Marie Minarich, director Corner to hourly staff and eliminated fied tasks to transfer to staff mem- of human resourcesSelf-directed Work management positions. bers. Developed a trial at the front Teams, Job Redesign, desk. Success of trial led to full 703-506-4300 and Employee adoption. Fax: 703-917-6509 EmpowermentRodeway Inn Developed an employee-satisfaction A monthly budget of $100 to $150 Nick La Falce, International–Orlando program that rewards excellent was established to provide general managerRewarding Employee performance. awards, pins, and inexpensive Performance in an gifts to deserving employees. 407-996-4444 Economy Hotel Fax: 407-352-5806Sheraton–Denver West Two people share one full-time Located talented staff and agreed William Walp, director ofJob Sharing Between sales-manager position. on an hourly pay rate. Conducted sales and marketing Sales Managers a 90-day trial. 303-987-2000 Fax: 303-985-7545Simpson House Inn Simpson House University is a training General manager developed training Dixie Adair Budke,Hospitality Training curriculum that includes testing, modules. general manager Curriculum with an communication, language-skill Emphasis on building, and staff powwows. 805-963-7067 Respecting Diversity Fax: 805-564-4811Sonesta Hotels Created a wholly owned training Former operations managers are used Jackie Sonnabend,Creating A Profit- subsidiary called Training by for training. Training budget for executive vice center Training Design. Also devised a service- Sonesta is placed in HR, not oper- president hotels Operation training game. ating departments’ budgets, to encourage training. 617-421-5400 Fax: 617-421-5402Tamar Inns Operates its own self-funded Researched health-care options, Bob Cox, risk managerImplementation of health-care program, including obtained agreements with hospi- Self-funded Health operating a primary-care facility tals. Opened own medical office. 407-370-0776 Insurance and contracts with hospitals Negotiated prescription plans with Fax: 407-370-0931 and specialists. drugstore.Towneplace Suites Built a lean staffing model on Benchmarked other Marriott facilities. Erica Alexander by Marriott cross-training and efficient Devised a service-needs matrix.Cross-trained Staffing training approaches. Cross-trained managers and then 301-380-3019 Model as Driver of new employees. Continues to Fax: 301-380-3802 Revenue revise and adjust training.White Lodging Services Fifteen-minute pre-shift meetings Introduced concept and provided Mary Jo Dolasinski,Pre-shift Meetings for for all line employees in all important printed materials to all director of training All Departments departments. employees covering mission, steps and development to service, and standards of opera- tion. Celebrated the advent of the 219-769-3267, ext. 4347 new meetings with a big party. Fax: 219-756-2902 February 2000 • 55
  9. 9. ployees perform their jobs and work self-directed housekeeping teams to with each other, with the results of improve the work environment and improving guest service and boost- decrease the number of guest-room ing employee retention. entries. As was the case at the Ritz- After winning the Malcolm Carlton, managers at the Boulders Employees’ sharing expertise Baldrige Award in 1992, the Ritz- wanted to enhance customer ser- Carlton Company determined that vice and staff motivation. The re- and training with each other greater employee empowerment sort empowered three-person, self- would appeal to the staff and deliver directed housekeeping teams to helps to increase the overall even more-outstanding customer assign all room duties in a given service. To those ends, the Tysons block of rooms—in which they Corner hotel’s executive committee would choose their own work areas, skill level of employee teams decided to conduct an empower- evaluate room quality, and conduct ment project, starting by changing room inspections. After a training and spread responsibility its name to “guidance team” to set program for supervisors and team the tone for what was to come. leaders, the team leaders created for the total operation. After a detailed examination of cur- two trial teams of housekeepers rent practices in each department, composed of the most enthusiastic the guidance team identified a num- employees. The program was modi- ber of management tasks for pos- fied considerably after a three- sible transfer to hourly employees. month test period. At this writing, These included setting work sched- the Boulders has four teams func- ules, compiling payroll information, tioning with more being planned. interviewing and selecting team The resort’s managers view this members, and forecasting budgets. practice as being both more effi- The hotel called this effort the cient than previous operations and “Tysons Corner Project,” and devel- a better way to retain and motivate oped a mission statement that all room attendants. employees signed. Front-office em- Towneplace Suites by Marriott ployees were the first to experiment has developed a model for staffing with self-management by taking that empowers employees and also over the tasks of the front-office supports the low cost structure that manager for a year-long trial run. makes possible the brand’s core As an incentive the hotel offered concept. To maintain its strategic the employees half of the savings position as an affordable extended- that accrued from eliminating the stay brand, Towneplace needs to position—an amount that worked operate with low staffing costs. To out to about $1.00 more per hour accomplish this goal the company for each one. The project was suc- developed a model for staffing and cessful, and the hotel eventually training that provides a high degree rolled the practice out to the entire of accountability and responsibility hotel in June 1995. Although man- for all employees. The typical agement positions were eliminated, Towneplace hotel of 95 suites oper- no one was fired, and new titles ates with a service team of just 10 were devised for the remaining ex- to 12 associates. Examining activi- ecutives and the empowered hourly ties at Residence Inn and Court- staff. Throughout the implementa- yard by Marriott, the brand’s man- tion the managers made an effort to agers developed a matrix of some consult employees and keep them 20 typical service encounters. That fully informed. matrix became the basis for cross- Late in 1998 managers at the training the chain’s general manag- Boulders devised and implemented ers and employees. After hiring and56 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  10. 10. L O D G I N G B E S T P R A C T I C E Straining general managers (using because they felt their authoritycareful screening that employs as- might be compromised, and em-sessment tools), the company ployees were also cautious becausetrained a regional leader, the new they feared being criticized for theirGM, and the new employees to- decisions. The practice was imple-gether for three days. Finally, the mented, however, without a trial. Variable pay has emerged ascompany empowered employees to Instead, the managers held a meet-train each other in the skill areas for ing with the front-office staff and a way to reward employeeswhich they were highly rated. Em- assured them that they would notployees’ sharing expertise and train- be condemned for solving a prob- when performance leads toing with each other helps to in- lem right away. Critical to the suc-crease the overall skill level of the cess of the practice was the en-team and spread responsibility for dorsement of the general manager. organizational success.the total operation. The cross- The hotel began seeing dramatictraining model is strengthened with improvements in guest-commentvarious role-playing activities and cards within two months of imple-sharing service stories in daily mentation. As Patrick Simpson, themeetings. manager who championed the White Lodging Services also uses practice, observed, “The confidencemeetings to share information and of the employee so empoweredbuild a strong community. The pre- radiates in his or her guest-contactshift meetings for line employees in ability, which in turn gives the guestall departments helped increase confidence that his or her stay willproductivity, according to Mary Jo be a rewarding experience.”Dolasinski, the company’s directorof training and development. While Employee Recognitionsome employees initially resisted Compensation is a powerful com-this practice, the meetings have municator of organizational priori-proven to be an effective mecha- ties and a key component of suc-nism for improving communication, cessful performance improvements.goal-setting, training, and employee While employees’ base pay usuallyrecognition.2 reflects local competitive labor mar- Just do it. An interesting ap- kets, variable pay has emerged as aproach to employee empowerment way to reward employees whenis that of the Minneapolis–St. Paul performance leads to organizationalHilton, which allows its line em- success.3 The strategic use of vari-ployees to do whatever is necessary able pay is still in its infancy in theto satisfy guests. This practice was hospitality industry, and we founddeveloped originally for the front- only a few champions that offeredoffice employees, who were frus- any practices related to employeetrated by the delays in resolving compensation. One example is theguest concerns that occur as a result Houstonian Hotel, our overallof using the traditional chain of property-level champion in em-command. Some supervisors were ployee satisfaction, which pays ahesitant to embrace this practice standard rate to all employees but offers quarterly bonuses to all em- ployees based on the hotel’s suc- 2 For a discussion of the application of a bal-anced management scorecard at White LodgingServices, see Gregory A. Denton and BruceWhite, “Implementing a Balanced-scorecard 3 For more information on the strategic use ofApproach to Managing Hotel Operations: pay, the reader should consult: Jay R. SchusterThe Case of White Lodging Services,” on pages and Patricia K. Zingheim, The New Pay (New94–107 of this issue of Cornell Quarterly. York: Jossey-Bass, 1996). February 2000 • 57
  11. 11. professional was out of the question. Exhibit 3 Instead, the property contracted Self-funded health-insurance costs for Tamar Inns with a human-resources professional who provides the inn’s 57 employ- ees the expertise and counsel that Number Tamar National Tamar total they require. For this consulting of covered cost per cost per cumulative Savings Year lives covered life covered life savings percentage service, the hotel incurs a cost of $1,000 per month. 1989 436 $ 936 $2,700 $ 769,104 65% Work sharing. At the Sheraton– 1990 435 1,720 3,040 574,200 43% Denver West two experienced sales 1991 524 2,223 3,425 629,848 35% managers share one full-time sales 1992 1,014 745 3,710 3,006,510 80% position, permitting the company to 1993 1,240 871 3,784 3,612,703 77% get the energy and expertise of two 1994 1,382 1,384 3,383 2,762,894 59% seasoned managers for the price of 1995 1,513 1,256 3,533 3,445,752 64% one. The hotel instituted this job- 1996 2,301 913 3,897 6,865,632 77% sharing arrangement to accommo- 1997 2,471 1,033 3,924 7,143,760 74% date one sales manager’s need to 1998 2,830 1,080 4,315 9,155,050 75% work part-time. This practice re- sponds creatively to the employees’ Total 14,146 12,161 35,711 37,965,453 70% evolving work-and-family needs, is cost effective, and produces a posi-cess.4 Two champions, the Rodeway of the month and year), along with tive outcome for the customer.Inn International Orlando and Mo- such other rewards as special gifts The arrangement works chieflytel Properties, Inc., have developed a and star award pins. While the mon- because the two part-time salesvariety of ways to reward and ac- etary cost of such recognition is managers are in continual contact.knowledge line-level employees modest, the benefits in employee We believe that the advent of so-beyond a base salary. satisfaction and retention are no- phisticated information-sharing Faced with a low local unem- table. Perhaps the best indication is tools will make job-sharing arrange-ployment rate and a shortage of job the motel’s 99-percent occupancy, ments like this even more viable inapplicants, Motel Properties devel- which can be sustained only with the future, because customer infor-oped an employee-recognition the support of satisfied employees. mation can be carefully documentedprogram that provides rewards from and transmitted in a timely fashion.the time of the initial interview Cost-management Practices On its own. Ten years ago thethroughout the employment con- Many of the practices we have dis- escalating costs of medical care in-tract. The recognition program is cussed are motivated by efforts to spired Tamar Inns to implement asustained by continuous evaluation create competitive advantage self-funded health-insurance planand modification of the rewards and through differentiated service deliv- for employees at six of its propertiesby integrating recognition with the ery made possible by better-trained in Orlando. After careful study, thecompany’s operations and culture. and empowered employees. Another president, CFO, and risk managerAnother economy-segment pro- approach to establishing competitive decided that the key areas in whichgram designed to enhance employee advantage is through cost-efficient to achieve cost controls were pri-morale, efficiency, performance, and human-resources practices. That is mary care, in-hospital care, and spe-satisfaction was developed by the the tack taken by three best-practice cialist care. To handle primary careRodeway Inn in Orlando. This re- champions—Seattle’s Inn at the Tamar opened its own medical of-ward program includes traditional Market, Sheraton–Denver West, and fice, staffed with a doctor, nurserecognition practices (e.g., employee Tamar Inns. In an intriguing twist, practitioners, and medical assistants a fourth champion, Sonesta Hotels, in an operation that had a 1999 4 For a discussion of this practice champion,see: Laurette Dubé and Leo M. Renaghan, converted its human-resources budget of $550,000. The company“Strategic Approaches to Lodging Excellence: training from a cost center into a also put in place dental, prescription,A Look at the Industry’s Overall Best-practice revenue-producing department. and psychiatric counseling plans. ToChampions,” Cornell Hotel and Restaurant Admin-istration Quarterly, Vol. 40, No. 6 (December For the small Inn at the Market, control in-patient costs Tamar ap-1999), pp. 16–26. the cost of hiring a full-time HR proached Orlando hospitals with58 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  12. 12. L O D G I N G B E S T P R A C T I C E Sthe following offer. Since most hos- pitality industry, and the training perform the following roles: mod-pitals in the area were running an activity has become a revenue- erator, scribe, timekeeper, and con-average occupancy of 65 percent, producing operation. science. Responsibility for a particu-Tamar proposed “renting” the lar role is rotated among employeesrooms that no one else was using Comprehensive HR Initiatives from meeting to offering a capitated rate for in- At the beginning of this paper we Personal best. Ramada Fran-patient care based on the average noted that one of the overriding chise Systems is another best-35-percent unused beds. The offer goals of good HR practice is to practice champion that providesalso guaranteed payment on the assemble HR initiatives that an integrated set of HR activities,tenth of every month for the complement each other and are which is praised by licensees as oneagreed-upon capitated rate—thus driven by strategic objectives. While of the best things ever to come fromgiving the hospital a known cash many of our champions have fol- a franchisor. Ramada’s Personal Bestflow. Finally, to manage the costs of lowed this path, we feature three hospitality initiatives have the fol-specialists, the company devised two here because of the broad scope of lowing four major components:approaches. It worked out a flat rate their HR initiatives. They are Accor (1) a predictive prescreening test forwith four local dentists, with a guar- North America, Cendant, and selecting employees, (2) a traininganteed monthly minimum fee. For Ramada Franchise Systems. program that uses an interactive CD,other special care, such as gynecol- Managing well. Accor’s (3) an employee-reward program,ogy and pediatrics, Tamar made an founders believe that what leads to and (4) an independently adminis-arrangement with its selected hospi- growth and profitability is managing tered monthly survey of guests’ sat-tal to set up capitated specialists’ people well. Accor North America isfaction with employee service. Therates. As illustrated in Exhibit 3, designed a group of HR initiatives, first component, selection, is facili-Tamar’s cost per covered employee including empowerment, compen- tated by a pre-screening test calledhas remained below the national sation, performance evaluation, and the Predictive Index. This selectionaverage, resulting in a ten-year cost group-process feedback, to comple- instrument, designed by Arizona-savings of over $37 million. ment each other. The elements based Praendex, helps Ramada get In the 1980s Sonesta Hotels be- worked as follows. The empower- the right people into the right jobs.gan designing and delivering cus- ment program pushed decision The subsequent interactive CD-tomized service-training classes for making down to line levels. General based training is available in bothhourly employees. The training managers’ bonuses were tied to suc- English and Spanish. The companyprogram eventually expanded to cess on three measures: employee supports formal education through ainclude managers, supervisors, and satisfaction (30 percent), customer tuition-reimbursement program forupper-level executives. The training satisfaction (30 percent), and profit- employees. The third component isprograms, customized to the specific ability (40 percent). Managers’ per- a loyalty program for employees inneeds of each hotel, are taught by formance appraisals used a 270- which points can be earned forformer operations managers who degree review process that included participating in training and per-have credibility with the staff. As evaluations by peers, subordinates, forming special services. The pointspart of its training program, for in- and superiors. The company also has earned can then be redeemed forstance, Sonesta created a board an approach to new practices that gift certificates. Each month manag-game, “Personal Service,” that pro- involves developing a task force, ers nominate an employee “star” ofvides an innovative and engaging typically with an outside consultant the month, who receives extraplatform for instruction on service. as a member, and implementing points and special recognition fromWhat makes this HR activity new practices in one or two pilot the president of the company. Threeunusual is that, after a decade of hotels. of the stars are picked for thefine-tuning, Sonesta converted the Finally, the company established Ramada USA Today advertisingprogram into a wholly owned sub- employee roundtables so that all campaign. The final component ofsidiary, Training by Design, that employees can discuss issues. Those this program is a guest survey thatprovides line, management, and feedback sessions are particularly provides feedback results monthlyexecutive training for Sonesta and productive because they consistently on employee guest service.about 50 other companies. Cur- use a model that assigns the employ- Upgrades. Cendant’s com-rently, 60 percent of Training by ees certain group-process roles. At prehensive diversity initiatives,Design’s clients are outside the hos- each meeting designated individuals launched in 1997, illustrate the February 2000 • 59
  13. 13. Exhibit 4 NAACP’s 1998 report card on mi- Perceived practice outcomes nority progress in the hotel industry brought the company’s grade from a C- to a B, the highest grade for any 12 hotel company. Success of the Practices N u m b e r   o f   c h a m p i o n s 10 As we indicated above, all of the best-practice champions reported positive outcomes from the adop- 8 tion of their initiatives. A pattern of results is evident, as illustrated in Exhibit 4. As the exhibit suggests, 6 employees were the primary benefi- ciaries of the HR practices. Employee satisfaction and im- 4 proved morale were the most- frequently cited outcomes of the champions (mentioned by 52 per- 2 cent of the champions), followed by the reduction of turnover (44 per- 0 cent), and increased productivity cy sts n ice n e t r (35 percent). Employee opinion ten tio tio nc ofi ve is Co sf ac erv ac ma Pr r no surveys at the Four Seasons before ns s sf r Tu Co ati er ati rfo er s sto m es Pe and after the introduction of its m Cu lo ye sto mp designated-trainer program show Cu E higher levels of satisfaction and a clear appreciation for the improvedway in which a firm can develop and mentoring, and (5) target mar- clarity of standards in the wake ofintegrated HR activities around a keting to reach minority customers. the training program. Four Seasonsspecific corporate goal. Motivated In the area of career development has also found that 75 percent of allby the NAACP’s report card on and mentoring, the company line employees promoted to super-minority progress in the hotel in- opened a reservation center in visory positions have successfullydustry, Cendant’s senior managers Orangeburg, South Carolina, a city filled designated-trainer positions.felt they should take proactive that is home to two historically The Ritz-Carlton Tysons Cornersteps to enhance opportunities for black colleges, creating opportuni- experienced a 22-percent drop inAfrican-Americans and other mi- ties to recruit minority students. In employee turnover after introducingnorities. Cendant started by conven- addition to hiring some 200 em- self-directed work teams, whileing a series of meetings with key ployees from the schools, it also Motel 6 reported a 10-percent de-opinion leaders in the African- established an ongoing mentoring crease in turnover after it establishedAmerican community. What program between the schools and its training program.emerged were the following five the reservation center. Cendant Thirty-five percent of the cham-key diversity initiatives: (1) franchise further developed a corporate-in- pions cited reduced costs as an out-development among minorities via tern program in conjunction with come of their HR practices and 26financial incentives, (2) supplier Inroads, an organization that places percent mentioned increased profitsdevelopment with minority vendors talented minority students in in- as a favorable result. Motel 6 reasonsusing the assistance of the National ternships in Fortune-500 companies. that the $6,000 to $10,000 it typi-Minority Supplier Development The company’s franchise-develop- cally spends in hiring a new man-Council, (3) philanthropic giving ment efforts produced more than ager is saved through its policy of(more than $1 million in 1998) to a 50 hotel franchise agreements with promotion from within. Increases invariety of organizations that benefit minority entrepreneurs. As a first occupancy and ADR were citedminorities, (4) career development measure of Cendant’s success, the as outcomes from the employee-60 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY O N LH
  14. 14. L O D G I N G B E S T P R A C T I C E Sempowerment activities in the changes in attitude or work culture Based on their own efforts, theMinneapolis–St. Paul Hilton, and once their practices were put in best-practice champions also offerthe training program of the Simpson place. the following words of wisdom.House Inn. Finally, a philosophy expressed First, start sooner and go slower. Customers also experienced the by many champions involved a se- Several champions wished they hadvalue of these HR champions’ prac- quence of events that began with begun the practice sooner and hadtices, if sometimes indirectly. As the the design and implementation of been slower in the implementationgeneral manager of the Rodeway an HR practice. Practices typically process. For others, “sooner” meantInn International Orlando, Nicholas resulted in satisfied employees and getting staff involved earlier in theLa Falce, stated, “have a satisfied reduced employee turnover. These process. When developing self-employee and you have a satisfied changes in employee morale and directed teams, for instance, the di-guest.” Increased satisfaction and retention would then translate into rector of housekeeping at the Boul-overall service quality were often improved customer service. Satisfied ders wished she had implementedcited as important customer benefits customers would become loyal and her efforts at a slower pace withfrom the best practices. Disney’s increased profits would be the ulti- more realistic goals to help reducePolynesian Resort, for example, mate outcome. David Rodriguez, the resistance initially experiencednoted that its success is reinforced senior vice president of staffing and from room guests’ letters and comments. development for Marriott Interna- Second, managers emphasizedThe benefit to the customer of the tional, was one of many champions the importance of communication.Scottsdale Hyatt’s community-based who observed that profitability and “Communicate like crazy” was sug-student training was invisible, be- loyal relationships with customers gested by Choice Hotels’s expert forcause it helped keep up service are the results of the customer’s organization development. Many ofstandards, according to the Hyatt’s experiencing improved service. our champions noted the power andmanager who developed and taught The front-office manager of the impact of sharing information withthe course. Minneapolis–St. Paul Hilton, Patrick superiors, peers, and subordinates. Efficiency, consistency, career Simpson, echoed this sentiment by Often under-appreciated is the im-enhancement, fulfilling individuals’ observing, “The confidence of the portance of listening to those whompotential, and customer retention employee so empowered radiates in you wish to change and adjustingwere also listed as outcomes of his or her guest-contact ability, programs based on their feedback.implementing these HR practices. which in turn gives the guest confi- By using pilot tests and trials basedOne indicator of efficiency is the dence that his or her stay will be a on feedback, many of our champi-significantly reduced manager-to- rewarding experience.” ons were able to modify their prac-employee ratio that resulted from tices. In the case of Accor, the pro-the Ritz-Carlton’s empowerment Insights cess for communication was a bestefforts. The managerial staff went For those managers who are consid- practice in and of itself.from one for every 15 employees ering implementing similar prac- Finally, managers should remem-to one for every 50 employees. tices, the single most consistently ber that their projects are not likely Curiously, many of the champi- offered insight was to obtain the to be simple, quick, or easy. Goodons noted that the positive out- commitment of senior managers HR practice is long-term and re-comes were not directly measured, and critical decision makers. Indi- quires on-going adjustments andand few had established pre-practice viduals in large companies, such as tenacity. While frequently labeled asbaseline measures of either customer Accor, Cendant, Choice, Marriott, programs, the champions realizedor employee outcomes. For ex- and Ritz-Carlton, stressed the need that their initiatives were often newample, Coastal Hotel Group’s buddy for senior-level support. Much of approaches to doing business andsystem for employee training is not the success at Choice Hotels and sometimes radical departures fromdirectly tracked, but its managers Ritz-Carlton, for instance, was the how the work was done and howbelieve that it has contributed to result of initial sponsorship and en- people were treated previously.increased profits, decreased em- couragement by top executives. Through hard work, good research,ployee turnover, and overall im- Marriott’s contacts offer the advice careful measurement, pilot testing,proved operations. Many of our that the most important thing you top management buy-in, and con-champions spoke of the unseen, can do is get senior managers in- tinuous feedback, successful imple-unmeasured, and yet strongly felt volved and working together. mentation is possible. CQ February 2000 • 61