Reasons of the Issues Faced by Imperial Hotel in London
INTRODUCTION TO MANAGEMENT
With rapid growing of hospitality industry, roles and responsibilities of managers have also increased to a high extent. Failing to do so, can lead to creating various problems for the organization. Hence, the study involves identifying and analyzing the key reasons of the issues faced by Imperial Hotel, London. Beside different other problem, the organization is facing the high staff turnover rate due to inappropriate management of staffs. Therefore, the organization has hired a new general manager for finding effective solutions to the problem. The manager has suggested some solution to cope with the problems, based on which useful recommendations are made for Imperial hotel. The study analyses all the issues and suggestions with the help of different academic and hospitality theories, which helped to develop suitable recommendations for further improvement.
Teams need persistence, time and leadership. It is the most crucial job role performed by managers. Manager is accountable for identifying and fulfilling the needs of the employees in order to increase their morale and dedication toward the organization. Organizations must know that staffs are the most valuable asset of the firm, as without them it would not be possible to conduct the business activities efficiently (Blomme et al. 2010). Therefore, the study aims at discussing the staff-management related issues faced by The Imperial Hotel, London to identify the underlying reasons. Wang et al. (2014) stated that, one must know that hotel industry is highly dependent on their employees as this is a hospitality sector, which is based on providing good quality of services to the guests and tourists. However, at present time the organization is facing a number of issues including the high rate of staff turnover. Therefore, a new experienced general manager has been appointed for finding out the key reasons of the high employee-turnover rate.
In order to solve the issue, the general manger has provided some suggestions, which would be discussed using different theories for understating their effectiveness to staff management. Further, few significant recommendations would be provided along with justification those would be helpful for the firm to retain their staffs for life and decrease the turnover rate.
Analysis of the existing problem
Introduction and discussion of the problem- The Imperial hotel in London is a part of the international brand name Star Hotels, which has total 450 employees in 6 different departments among whom, 300 staffs are employed for full-time and rest are part-time. Since the year 1837, the organization is focused at offering an utmost quality of services, accommodation and value for money (imperialhotels.co.uk, 2017). However, at present time, due to lack of efficiency of the previous manager, the firm is facing a wide number of issues and high rate of employee turnover has become one of the most significant issues. The staff turnover rate has reached to 80% from different departments especially in front-line-employees, which possess a vital threat to operation management of the organization (imperialhotels.co.uk., 2017).
The first and most important reason that led to increased rate of employee turnover include the aggressive nature of the management. Apart from that, the employees are not satisfied with the work culture, wage and working hours. A survey with the leaving staffs revealed that the wage is very low comparing with though working hours. Hence, they prefer to join in other hotels, which provide better salary and working environment. Moreover, staffs complaint that there is no opportunity for career development within the hotel and they are not provided with required training. Some of the staffs faced difficulties in going back home from the hotel, as it becomes hard to get transport at night from the central part of London ad they have to bear high travelling cost. It can be seen that one issue creates another issue. For instance due to low staff morale and high turnover rate, the organization fails to provide high quality of services to the guests, which leads to customer dissatisfaction and low profit rate. Further, it increases the cost of the company of hiring new staffs and providing them training, which has a negative impact on the profit margin of the company.
Academic theories like McGregor’s theory X and theory Y may helps in understanding the employee behavior and motivational factors at work. The theory X assumed individuals as lazy, who hate to take responsibilities and work and they love to have only security and reward. It can be seen in the context of the Imperial hotel that the staffs are not rewarded and there is either a very low or no chance of being promoted. Therefore, the employees fail to survive in the company (Kusluvan et al. 2010).
On the other hand, theory Y advocates that staffs want to be trained and work in their usual activity to the point they foster self-development and discipline. They love to attempt challenging tasks and being appreciated for doing so. Here, the role of the manger is to connect them with their desired activities that subsequently increase the overall organizational productivity. In Imperial Hotel, the previous manager fail to maintain an effective relationship with the staffs that made them feel demotivated (Markovic and Raspor, 2010).
Myung et al. (2012) stated that, Total quilt management is an important hospitality theory that is highly useful for the hospitality industry. Total quality management can only be achieved by cohesive working of all the departments of an organization. However, in Imperial hotel, it is identified that the management failed to motivate the employees to encourage in organizational decision-making and perform as an important part of the company. Due to which, the company had to face various issues related to quality management.
As compared to other hospitality sectors, staff turnover rate at Imperial hotel is the highest. Staff turnover rate in the hospitality sector increased to 72.1% in 2015 that was 66.7% in 2014. However, in 2007 the rate was very high 80.7%. As compared to present turnover rate, the turnover rate in Imperial hotel is much higher (thecaterer-magazine.co.uk, 2017).
Image 1: Employee turnover rate in hospitality industry
(Source: Thecaterer-magazine.co.uk, 2017)
Suggestions of Peter Farnsworth’s
In order to cope with the issues related to staff management, the new manager of Imperial hotel has put forward some suggestions those need to be analyzed before final implementation. Peter Farnsworth suggested attracting and retaining employees to the main managerial positions, which can be an effective step. However, for attracting employees, the organization needs to modify its work culture, redesign the payment structure, flexible working hours, and provide opportunities for promotion and career development. According to Niu (2010), employees should be treated as an important part of the business and the management should behave with them in a friendly manner so that they can easily discuss their issue with the management. This enhances employee morale and loyalty, which is mentioned in the theory Y. However, Tang (2014.) argued that besides reward, employees should get punishment for their poor quality of work, which is termed as ‘stick and carrot’ attitude supported by theory X. As per Herzberg’s two factor theory there are two important factors need to be considered for increasing employee motivation and commitment including motivators and hygiene factors. This theory supports that employee can be motivated and retained thorough providing them with safe working environment and reasonable pay.
Another suggestion made by the new manager is to offer bonuses and packages that encourage staffs to stay with the company. This suggestion can also be effective in reducing the staff turnover rate. As per Maslow, employees have four basic needs that must be considered and fulfilled by the employers including physiological, security, belongingness, esteem and self-actualization. Self-actualization is the upper most part of Maslow’s pyramid, where an employee can reach after having fulfilled all the needs of the other four sections (Trkman, 2010). Hence, providing fair and secure working environment, salary packages would be helpful for the Imperial hotel in retaining employees.
Benchmark pay scales can be highly effective for Imperial in staff retaining. In order to do so, the organization must identify the pay scale of its key competitors such as Emerald, Millennium Gloucestar, St James’ Court A Taj hotel and so on. Further, based on the fresh data, the HR manager must develop a sound pay scale for the employees.
Providing training and conducting performance appraisal for the staffs would also be helpful, as, it would enhance confidence of the staffs in providing effective services to the tourists that would increases customer satisfaction. Further, Yang (2010) commented that, the regular performance appraisal would be helpful in identifying the performance quality of the tasks based on which, appropriate reward should be offered to them. This suggestion can also be supported by the theory of Maslow’s hierarchy of needs, where employees reach the level of self-actualization when employees feel esteemed by their superior due to accomplishing a challenging task or the responsibility assigned to them (Nadiri and Tanova, 2010).
Peter Farnsworth has suggested managing the staffs through applying hard and soft HR practices. However, as the company is facing the issue of a very high level of staff turnover rate, hence, the soft HRM would be more preferable as compared to hard HRM. As per the soft HRM, Imperial must treat the employees as the most significant asset and a basis of competitive advantage. Hence, all the staffs need to be communicated regularly for identifying and fulfilling their needs effectively. This can be supported by the notion of Behavioral management theory that includes the human aspect of work. The theory supports understanding employee behavior at work including conflict, motivation, expectations, improved productivity and team dynamics (Heizer and Render, 2014). In the word of Guchait and Cho (2010), this theory considers staffs as important resources than machines. Resolving the issues of staff turnover would contribute to solve other related issues like customer satisfaction, poor staff attendance, poor team working, and inefficiency of management. All these issues together led to the increased staff turnover rate in Imperial hotel. Therefore, taking initiatives to cope with staff retention would solve the managerial issues the organization is facing currently.
In order to reduce staff turnover rate and increase staff retention, Imperial hotel must focus on increasing staff engagement, which notion can be supported by Maslow’s hierarchy of needs. As stated by Chand (2010), for many individuals, the fundamental need of a job is the salary that allows them to continue a lifestyle they are used to. Having a sense of economic independence is natural in almost all people.
Image 2: Maslow’s hierarchy of needs applied to staff engagement
(Source: Chaffey and White, 2010m p.69)
Next employees need a job security so that they do not have any fear of losing their jobs. Further, they need, belongingness and esteem from their workplace, which can be done by engaging employees in organizational decision-making process. Therefore, it is critical to understand for the managers of Imperial hotel that employees should feel like they are part of something greater and their contribution toward the organization is valued. Each employee possesses some ambition and hence, it is the responsibility of the organization is to connect that aspiration and facilitate growth of employees.
Another recommendation for Imperial hotel is to provide staff development training in order to increase their efficiency in terms of providing good quality of services. With changing business system and growing business, it becomes essential to provide training to the staffs after indentifying their specific needs. This not only enhances employee skill and capability but also increases customer satisfaction, as improves staff performance leads to better quality of services.
A regular performance appraisal system along with a reward system must be there within the Imperial hotel. Performance appraisal would help the firm to identify the individual contribution of each staff along with their achievements according to which, the firm needs to offer rewards. The manger of Imperial hotel should play the role of theory Y manager of McGregor, who assumes workers as trustworthy and capable of fulfilling responsibilities and have greater motivation level. On fulfilling the responsibilities and doing something beyond, the employees must be appraised and rewarded (Barrows et al. 2012).
Due to lack of managerial efficiency, Imperial hotel in London is facing some significant issues that have created significant threats for its competitiveness and profit margin. Turnover rate of employees in the hotel increased to 80 within just one year. The key reason behind this high rate if turnover is inappropriate behavior of the manager toward the employees, low payment scale as compared to other companies, no reward and career development opportunities and high travelling cost. Therefore, the newly appointed manager Peter Farnsworth provided some suggestions those are discussed through different theories related hospitality and staff management. After carrying out wide discussion and comparison, it is recommended to Imperial hotel to focus on increasing employee engagement, carrying out training and development programs, regular performance appraisal and reward system for increasing staff morale decreasing turnover rate. The recommendations fulfilled the aim of the study aptly. This would be helpful for the Imperial hotel in managing their issues by increasing employee retention and thus to solve other related issues.