Holiday Inn London-Bloomsbury is situated off Russell Square in the fashionable West End of London. It is within walking distance of a number of world renowned theatres, museums, clubs and shopping centres of the city, as well as being close to offices and businesses of central London. The hotel stands opposite Russell Square underground station, which is on the Piccadilly Line and provides direct links to all Heathrow Airport Terminals (1-5), the Emirates Stadium and is approximately 7 minutes from significant travel connections such as Euston and Kings Cross tube stations and St. Pancras International Terminal for the Eurostar [1] . The hotel boasts 311 guest rooms, including business and executive suites, the Junction Bar and Restaurant and the Callaghan’s pub. It also has extensive conference and events facilities with 3 banquet halls which can hold up to 600 guests at a time, and 11 smaller sized meeting rooms. The property is one of the official hospitality partners for the 2012 London Olympic Games as part of Holiday Inn being one of the major sponsors of the event.
ORGANISATION STRUCTURE
The organisation structure of Holiday Inn London-Bloomsbury shows a comprehensive plan that depicts the duties and responsibilities of employees in each position within the organisation, who they lead and manage and who they report to. An efficient organisation usually has a straightforward organisation structure where each employee is aware of his/her tasks, responsibilities, rights and decision making abilities. Please see Exhibit A for a detailed plan of the organisation structure of the hotel.
HUMAN RESOURCE AT THE BLOOMSBURY
As part of IHG, the Holiday Inn London-Bloomsbury follows Human Resource policies laid down at the IHG head office is Denham, United Kingdom. Over the past year IHG has introduced a number of employee related changes in the company. To achieve their mission of creating ‘Great Hotels, Guests Love’ [2] , IHG highlighted some key factors to enable employees identify with the company. The five ‘Winning Ways’ which require each employee to be team focused, action oriented, passionate towards their jobs and savvy, are as follows:
Do the Right Thing
Aim Higher
Show We Care
Celebrate Difference
Work Better Together
From these policies it is evident that IHG follows a soft approach towards people management as opposed to treating employees like any other resource. According to Price (2000) the Harvard Model of Human Resource Management emphasises the ‘human’ element whereas the Michigan Model focuses on the ‘resource’ element. The Harvard Model addresses issues of motivating employees, developing an organisation culture, creating an effective reward system and monitoring employee influence in decision making, which are some of the main motives of IHG’s Human Resource policies.
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IHG took an important step towards planning its growth by determining the company’s Human Resource requirements. The company believes that effective Human Resource practices can provide a strategic competitive advantage for global growth. IHG tied up with Hewitt Associates LLC [3] to critically assess and analyse the company’s costs, resource allocations, technology, and delivery channels. This analysis by Hewitt enabled IHG obtain “a detailed and holistic picture of where HR works gets done; how efficiently and effectively it gets done; and where HR is currently focusing their time and attention.” (Hewitt…. check reference)
Hewitt Associates facilitated IHG prioritise tackling issues by aligning recommendations for their Human Resource strategy and organisational structure to their global business goals. This resulted in “specific changes to the HR organisation model and infrastructure that reduced both cost and risk while promoting a culture of growth and development through better talent management and associate engagement.” (Hewitt …….. check ref)
IHG’s new employee handbooks have paid special attention to giving employees their own space within the workplace. The company introduced advertisements which portray the workplace as a place where employees have ‘Room to Grow’ within the organisation through inter-departmental training, job sharing and shadowing senior members of staff. Another concept of ‘Room to Be Yourself’ allows employees to excel in areas other than their day-to-day jobs in the hotels, such as playing a musical instrument or leading the hotel’s football team in the regional hotels competition.
Equal Opportunities Employer
“Discrimination is defined as prejudice plus power, where prejudice is commonly viewed as the opposite of tolerance leaving underlying power relations unaddressed.” (Husband, 1991) According to Price (2000) discrimination creeps into an organisation when employees who have “the power to recruit, promote or reward other employees, choose to exercise their powers in ways which intentionally or unconsciously demonstrate a preference” for a particular individual or group against another. Holiday Inn London-Bloomsbury takes pride in being an Equal Opportunities Employer and is particularly strict in taking action against any reported incidents of discrimination within the hotel. One of IHG’s Winning Ways features is to Celebrate Difference since the company recognises the benefits of being an Equal Opportunities Employer.
Goss (1994) says that in the real world, organisations have a complex issue in their hands while dealing with attitudes towards equality of opportunity. Goss also states that another problem is typified by tokenism in certain organisations and Price (2000) suggests an example that is all too common in the real world where an organisation, in its efforts to demonstrate commitment towards promoting Equal Opportunities, appoints a woman in an all-male decision making body.
According to Molander and Winterton (1994) every organisation committed towards an effective Equal Opportunities environment, including IHG, should include some of the following policies:-
Allocate overall responsibility for policy to a specified senior executive
Agree with employee representatives
Communicate effectively with all employees
Base policies and decisions on a current and accurate employee survey
Audit Human Resource practices for equal opportunities implications
Set Equal Opportunities objectives within the Human Resource strategy
Allocate training and development resources to fulfil objectives
Human Resource Development
According to Price (2000), several organisations regularly focus on employee development programmes in an effort to locate star performers who are then groomed and developed for senior positions. Sadler and Milner (1993) declare that development programmes should include four distinct features for their most promising employees:-
A sense of mission within the organisation, which could motivate them more than monetary imbursements and job security
An organisation structure that encourages and embraces creativity
A performance management system that recognises and rewards individual and team efforts
A clear statement of purpose that links strategic objectives of the organisation with the desire to excel.
IHG focuses on creating a balance in employee development through the above mentioned star performer method and the more traditional recruitment of managers in other organisations or through their own management training programmes. An example of the application of the star performer development programme is evident in the Holiday Inn London-Bloomsbury where the Employee of the Year winner is slated for promotion each year, irrespective of the fact that they may be relatively inexperienced in management compared to management trainees in the hotel.
Performance Management
According to Armstrong and Baron (1998) there are two essential factors that justify performance management. Firstly, employees will try and perform better when they are aware of expectations and have been involved in specifying the same. Secondly, employees’ abilities to meet performance expectations are based on their capabilities, skills, support provided by the management and organisational processes, systems and resources available to them.
The authors Armstrong and Baron (1998) further state that performance management is critical to organisational effectiveness but is also a significant part of an employee’s career when there is a direct link between good performance and increase in payment, incentive and opportunities for career progression.
IHG has an extensive performance management process where employees are assessed and appraised twice a year and are required to set their own Development Plan for the subsequent 6 month assessment period. Apart from each individual’s Personal Development Plan, there are team goals and objectives set by Heads of Departments for their entire team to achieve. Such targets could involve upselling executive rooms, breakfast and room packages, gymnasium and internet usage offers and increasing Priority Club enrolments for the Front Office team, to selling expensive wines and cocktails, food and beverage packages and Christmas specials for the Restaurant, Bars and Conference Sales team.
HUMAN RESOURCE ISSUES AT THE BLOOMSBURY
In spite of the company’s best efforts, Holiday Inn London-Bloomsbury has a number of Human Resource issues which have still not been addressed or resolved effectively. Some of the key issues of staff management, change management and redundancy have been discussed below.
Restructuring and Redundancy
According to Price (2000), since the 1980s companies have been restructuring their organisation hierarchy in order to cut costs and increase efficiency. However, the most recent economic downturn has led to an unprecedented rise in downsizing workforce and delayering organisational structure. After all its efforts to follow a Harvard modelled soft style of Human Resource management, Holiday Inn London-Bloomsbury has had to resort to the Michigan modelled hard management style by making redundancies, cutting staff costs and reducing management levels in its hotels to stay in business. This approach contradicts its policies of caring for employees and grooming and developing them for promotion within the organisation.
Kettley, (1995) in his book titled ‘Is Flatter Better? Delayering the Management Hierarchy’ argues that restructuring and delayering in organisations upsets not only the employees who fall victim to cost cutting but also “unsettles skills, roles and relationships of employees” who remain with the company.
Staff Turnover and Alternative Staffing
The hospitality industry is perpetually plighted by a relatively high turnover of staff compared to other industries employing people. However there have been some companies (for example, Four Seasons Hotels and Resorts) that have regularly resisted the trend and continued to hold on to their employees for a lot longer than the industry average. Holiday Inn London-Bloomsbury on the other hand has been forced to invest heavily on recruitment and training due to high staff turnover. In the past 12 months there have been a total of 34 changes in top and middle management in hotel operations departments itself, including a new General Manager, Operations Manager, Front Office Manager and two Revenue Managers. Apart from being expensive, every change in management also disrupts workflow as newly recruited managers try to implement their own unique style in each job and expect employees to change their styles to suit new ideas. Being a global company, IHG also has a high percentage of employees being transferred internally between properties worldwide which make the Bloomsbury hotel a target for a number of work placements, management traineeships and internships, leading to a high flow of employees joining and leaving the hotel.
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In an attempt to stifle the high staff turnover and in order to cope with busy periods of the year, the management at Holiday Inn London-Bloomsbury often try to balance the conventional staffing methods with alternative staffing such as supplementary workers, agency workers, part-timers and zero-hour contract staff. Part time work tends to suit a lot of women with children and now is increasingly becoming more prominent amongst male employees who want to supplement their full time income elsewhere. Some supplementary workers are employed at the Holiday Inn to ease the load of full time workers instead of offering them overtime work. Another method of staffing the hotel uses is job sharing where part-time workers are hired to replace a full time job vacancy. Holiday Inn also uses various agencies providing trained, temporary personnel solutions for their conference and events facilities, restaurant and bars and housekeeping departments.
Change Management
IHG has initiated a global rebranding process for the Holiday Inn brand and intends to rebrand all existing Holiday Inns with new logos, brand signage, modern designs in hotel rooms, lobbies and restaurants and also provide new training programmes for all employees. The ‘Stay Real’ programme has been developed especially to aid staff training, measure performance and educate them about the hotels they work in, inform them about surrounding areas and improve guest handling skills. The Stay Real programme being a new IHG brand standard has to be completely implemented at Holiday Inn London-Bloomsbury by May 2010 making all employees and the hotel ready for the rebrand. Quality inspections, spot checks and online tests for employees are currently being carried out randomly by executives from IHG headquarters and external agents working for IHG to assess whether the hotel is ready for the change.
Overload of Brand Standards
Holiday Inn London-Bloomsbury is the flagship property for IHG in the city of London, and therefore is always under the eye of the parent company in terms of adhering to brand standards, following standard operating procedures and meeting targets. Quality inspections, Mystery Guest scores, Guest Satisfaction Tracking System (GSTS) scores, Priority Club [4] membership enrolment targets are just a few measurement indices that are continuously being monitored and every action of employees is scrutinised through reports, scores and online tests. In April 2010 IHG presented the ‘Hotel of the Year 2009’ award for all IHG hotels in United Kingdom and Ireland to the Bloomsbury hotel, thus giving inspectors more reason to check for faults in the hotel and its employees.
Poor Employee Satisfaction Survey Scores
TNS-Sofres Mode [5] conducted an Employee Satisfaction Survey to gauge satisfaction in their jobs and their future plans within the organisation. Having received a very high score for a similar Guest Satisfaction Survey, it was a surprise to find a relatively low Employee Satisfaction Survey score compared to other Holiday Inns in the city and also lower than its own scores in the previous two years. Such a situation could be attributed to a number of factors:-
The impact of the economic downturn which led to redundancies and consequently increased workload of employees who were retained in the hotel. There were also no pay rises as promised at the beginning of the previous financial year.
Being on track for IHG recognition awards in the regional level on the basis of Guest Satisfaction Scores, the management pressured employees to perform at their peak at all times, and any mistakes or misjudgements were dealt with stringently.
RECOMMENDATIONS
Holiday Inn London-Bloomsbury has an impressive working environment, where employees are encouraged to take decisions and ownership of situations and solve them independently. Employees are highly trained and skilled to be able to handle guest problems and other operational barriers. Managers are in sync with their staff and in most cases their relationships are amicable and trusted. Employees follow IHG policies of the Winning Ways philosophy by working together, helping and caring for each other, celebrating and embracing diversity, aiming higher at creating better stays for guests and a better working environment for colleagues and most importantly, always striving to do the right thing.
In spite of the best efforts of the global organisation, the hotel’s Human Resource department and senior management, there are various HR issues that still need to be addressed and have been discussed previously. This section highlights some recommendations to the problems that have been analysed.
Reward Management
Armstrong (1996) says that performance in the workplace and its relation to rewards is a complex, sensitive and controversial area of management which has been argued for and against “at both practical and theoretical levels.” He continues to state that reward management does not just involve compensating employees for their hard work, but is also essential to “attract, motivate and retain talented people.”
According to Torrington and Hall (1995) organisations require reward management for a number of objectives including:-
Prestige to be gained from being a star performer
To be competitive to ensure a sufficient supply of employees
For control over workers
To motivate and improve performance of employees continuously
To control costs.
The management at Holiday Inn London-Bloomsbury should look into creating an efficient and effective reward management system based on performance in an effort to retain the company’s best employees, motivate all staff to achieve set targets and create a competitive and high performance working environment. However, the management should also pay attention to employees who are underperforming or not performing at a consistent level, and provide extra training sessions, smaller, more achievable targets and more frequent appraisals, instead of just conforming to IHG’s set standard procedures.
Appraisal and Feedback
Feedback is essentially a report an employee receives at the end of a performance assessment period. Organisations have various methods of gathering information to form an opinion on an individual’s performance. However, Murphy and Cleveland (1995) have identified some drawbacks with the traditional feedback process where managers discuss their views of performance with junior employees. In a traditional feedback system, appraisees generally tend to ignore negative feedback and do not want to be “lectured on their own performance.” In some cases the appraiser could also have an uncomfortable task of acting as judge and counsellor simultaneously. According to Kettley (1996) feedback is more readily accepted by appraisees when it is focuses on development and is more effective when broad competencies are rated rather than individual job related abilities.
IHG could introduce the concept of a 360 degree feedback and performance assessment procedure which would help employees to receive a more wholesome report on their performance. Feedback from more than just the management’s perspective makes it more honest, genuine and is also taken more seriously by the appraisee. Apart from being more effective with junior employees, another important feature of the 360 degree feedback is that front line employees are able to present their views on management, which would help in overall development of the organisation. Kettley (1996) observes that with an initiative such as the 360 degree feedback, there may be problems of senior level management bureaucracy and other disadvantages of anonymity during the feedback collecting process with agitated employees being tempted to include intemperate comments.
Employee Retention
Price (2000) states that the two prime concerns for an organisation relating to high employee turnover are:-
The high cost of recruiting and training employees
The loss of key skilled, trained and talented personnel which could be highly disruptive to the organisations long term goals
Hill and Trist (1955) identified that employees tend to leave an organisation in the first year of employment rather than when they have completed a reasonable period of service. This pattern could be attributed to a few organisational procedures:-
Induction crisis – The first impression of the organisation upon a newly employed individual may be a deciding factor in whether he/she chooses to remain with the particular company for a long period of time
Differential transit – In the first year to 18 months, employees are usually on probation, assessed frequently and also gauging their own career prospects. At the end of this period, a second induction crisis could lead to further attrition.
Settled connection – Attrition rates after the second induction crises are much lower since employees are able to settle in their roles within the organisation.
The management at Holiday Inn London-Bloomsbury should concentrate on establishing a recruitment and selection process which targets individuals for long term employment, with a comprehensive growth and development plan, that would appeal mostly to employees who are looking to build a career in the hospitality industry, instead of hiring a majority of people who look at employment in the organisation as a temporary monetary solution.
From the various theories of Human Resource management styles and processes it is evident that IHG and Holiday Inn London-Bloomsbury have been able to successfully implement a number of best practices within the entire organisation and within the individual hotel itself. Being awarded the ‘Hotel of the Year 2009’ award by IHG in United Kingdom and Ireland, it is fair to say that the hotel has been improving constantly in its operational departments and supporting functions. Following the company’s Winning Ways policies and striving to create ‘Great Hotels Guests Love’ the Holiday Inn has identified its employees as the most important resource and the most potent weapon in its success. Keeping employees satisfied, rewarding their efforts and making every effort to reduce attrition rate of the organisation’s most valuable and skilful staff members has become their goal as the hotel goes into another year attempting to retain its status as one of the best in the city.
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