Business management has always been a great challenge for many organizations and businesses. The companies’ productivity and success are determined by the kind of management and leadership style approaches. The paper seeks to analyze a business management case relating to a London based hotel called Imperial Hotel. The imperial hotel is a four-star international set of hotels that operate twenty-five hotels in the United Kingdom. The hotel offers many services such as conference facilities, boarding facilities, conferencing, leisure centers and restaurant facilities.
The hotel has been in operation for almost one hundred years and has been facing many challenges that are likely to bring about productivity crisis. The hotel receives many guests such as individual from international business community and tourist. The guests have a very high expectation from such a four-star hotel like the perfect service standards. Conversely, the hotel faces some problems that will possibly tarnish the image of the hotel. This paper seeks to discuss the second problematic issue the new general manager of the hotel, Peter Farnsworth has identified. The problem is (high staff turnover with a high percentage of staff leaving within a year). Employee turnover is the percentage of the employees who leave an organization and the positions taken by new workers. Turnover in any organization should be reduced by having employee retention which will have a positive impact on human resource management.
It is noted that the hotel employs individuals who desire for a short period. The high turnover has led to high operation cost to the company since the company uses the about thirty-five percent of their total revenue as labor costs. The hiring of new staff has an additional cost that arises due to the training of the new staff every time they join the organization. The recruitment of new staff, on the other hand, has reduced the service quality and this has impacted on the number of customers that have hotel receive throughout the year. Furthermore, it is noted that the employees quit joining the competing hotels since they need some excellent employee experience and satisfaction.
The high turnover is increased by the by the general fall in the staff morale and commitment their jobs. There is need to address the high turnover rate since it is likely to cause severe impacts to the organization by having additional costs that are associated with training and recruitment of employees. The current company manager has come out and gave suggestions to curb the problem of high turnover rate. Peter Farnsworth believes that below proposals would work, first is to retain staff in the leading supervision positions, secondly having benchmarks on competitor hotel pay scales, thirdly promoting talented staff and performance appraisal and also having hard and soft human resource practices that improve staff management.
According to the interview results obtained from the staff that leaves the hotel, they say that there is poor work culture and that is turnover (Chon & Yu, 2012, p. 33). The second is that the company offer poor pay in comparison to their competitors. The low pay does not sustain their living in the current London which is very expensive. Thirdly the hotel does not have proper training for their employees, and there is little promotion for the staff to supervisory jobs making them quit. Lastly, due to the kind of their services, other hotels have a higher competitive advantage, and they have provided better working conditions to their staff and offering of better pay (McDowell, Batnitzky & Dyer, 2014, p. 33).
According to (Sharpley & Forster, 2013, p. 17), high turnover levels makes an organization have low productivity and poor performance amongst the employees. When an organization hires new personnel, there is a possibility that they could be having a little experience which will impact on the productivity and organizational efficacy. A company must employ workers with many years of experience to have a better competitive advantage since they guarantee service quality. During the study, it is noted that the imperial hotel staff has poor morale and it impacts on the hotel’s performance. The service quality has reduced in the hotel, and thus the customers now prefer to shift to the competitor hotel to have better services.
High turnover rated is a concern to any organization since it increases the cost. An organization uses a lot of resources to deal with turnover because there are costs associated with the hiring of new staff and training them to meet the duties that they are expected to perform. There are adverse e effects on organization profitability because of the incurred cost due to the expensive recruitment process (McDowell, Batnitzky & Dyer, 2014, p. 27). Furthermore, many organizations confess that new employees usually demand higher pay than the former personnel. Organizations that have employee retention incur less cost than those that have higher turnover rates. Many companies that experience high turnover have always invested most of their time and resources in tackling the issue instead of marketing and business diversification which has a positive impact on performance.
Organizations experiencing high turnover have their staff having low levels of morale. The employees are affected when they see their colleague quitting their jobs, by the friend quitting their performance is also affected. The employees left behind may decide even to leave the company to get other employment opportunities. It is also challenging to have the promotion of staff since they may quit any time they want.
By not having retention, the employees do not get high levels of experience and knowledge to work for an organization. A company would get low qualified or inexperienced employees who cannot meet the standards that an origination goals (Nickson, 2013, p. 17). The human resource department also faces challenges in identifying talented staff who would work on the critical positions in an organization. By having retention, the head of human resource can identify staff who could work for the profitability of the company.
In management theory, human resource professionals have employed several of tools to measure the performance of any organization workforce (Nickson, 2013, p. 15). In our case, the Imperial hotel should take a holistic approach to spending the time to understand the impact that high turnover has impacted the hotels’ performance. First, many theories suggest that any organization should have a correct recruitment strategy. The hotels need to have the most suitable employees to available positions by ascertaining the right fit by having the best-recruiting plan (Boxall & Purcell, 2011, p. 33).
The hospitality experts have come out to say that most international hotels successfully attract the best and talented personnel. The human resource should give the employees a long-term career development which will make them have a good experience. By retaining these experienced workers, the best performance is reached. The hospitality experts also say that there is need to nurture employee talent by having fair competition and having a promotion to employees which boost loyalty and motivation among the staff. It is best to have retention of staff to have the maximum potential of the workforce.
Another strategy advocated by management theory is improving employee training and having development programs. By having career development programs, a company would have a customized training of its employees who would work according to a company’s goals (Boxall & Purcell, 2011, p. 33). It is costly to have staff training and is risky since an employee may resign. However, it is to the benefit of the company since they can retain employees whose skills have been cultivated according to the organizational needs. There is another advantage in offering sufficient training, the best and talented potential employees are to be provided extensive training to ensure that the best is obtained from the employee. Despite the cost of training programs, the hotel managers’ perspective is that it benefits in reducing staff turnover. The benefit of training programs usually outweighs the cost of training.
The new manager Peter Farnsworth should apply the equity theory on the personnel enumeration; this will reduce the high turnover rate. Business management professionals say that the equity theory improves the employee morale and productivity (Nickson, 2013, p. 17). When there is a balanced and fair enumeration of an employee, there is a positive impact on the production level. When the employee input is equal to the output that they give the company, they get motivated.
Any organization should ensure that the employee’s input is satisfactorily remunerated. The equity theory when used to the positive encourages workers to make committed contributions, headwork and flexibility to the duties they are assigned.so as to achieve the best performance, the employers should reward best-performing workers, and this will ensure the company retains the best employees.
The fourth is the theory that many business management consultants encourage is striving to meet employee’s needs. Research shows that the employees whose needs are not met tend to move to other organizations to find other opportunities (Broderick, 2012, p. 29). Many people as they work expect that their careers to grow. To improving careers, an organization should employ various team building exercises. By having the team building, the employees get to engage with other people of diverse knowledge and improving their careers. Also, the employers should empower their workers to make decisions. By involving the workers in the decision-making process, they feel part of the team and that their competencies and skills are appreciated.
Lastly, the other theory of reducing turnover rates is considering contract work. It is encouraged that if an organization has high turnover rates than the industry average, contractual work should be employed. Contract employment usually serves to ensure that the workers work efficiently to complete their obligations (Boxall & Purcell, 2011, p.19). In Imperial hotel, it would be wise for the managers to employ contract jobs where employees are to work for a set period that they agree together. A strategy related to contractual hiring is outsourcing hiring. If an organization has done all it takes to reduce the high turnover, but they still fail, then they can outsource to get assistance. The staffing agency can become the most cost-effective solution.
Human relation approach can be employed in the Imperial hotel. The experts argue out that managers can analyze organizational behavior by understanding how the staff interacts in the workplace. The human relations theory says that an organization can attain their objectives through the people (Broderick, 2012, p. 21). The manager in the hotel should have a clear understanding of the human behavior and how he should relate to employees. By having the excellent personal relations, there will be a suitable environment where higher production thrives. The relationships ensure that the people do not move to the competing businesses
The imperial hotel should employ the correct recruitment strategy that guarantees that there is long-term career development. The workers will tend to remain in the hotel since their careers are developed, and they achieve the experience they desire. Employee training in the hotel will ensure that the hotel has the personnel who have customized requirements in the hotel which will meet the customers’ demands (Boxall & Purcell, 2011, p.19).
By training the employees, it will make the organization strive to retain them and thus reducing the high turnover rates. The equity theory would make sure that the workers are satisfied with the pay since they will feel that they are treated equally. The equity theory also serves meeting the employee needs. By having collaborative teams in the imperial hotel would encourage teamwork. The teams would work in harmony, and the workers would have a right environment for working. When the workers have a suitable environment, they won’t move to other competing companies thus solving the problem of high turnover rates (Broderick, 2012, p. 24).
The most profound problem in the Imperial hotel is high turnover rate. The study conducted revealed that the high turnover is as a result of lack of growth opportunities, low worker morale, little promotion opportunities, low pay and even poor working culture. The manager should apply best managerial practices to ensure that the high turnover is reduced to negligible levels. By utilizing the managerial theories, the turnover levels will reduce since managerial theories ensure that there is a best workforce experience and satisfaction. Subsequently, the hotel would realize better returns and reduced operational costs.
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McDowell, L., Batnitzky, A. and Dyer, S., 2014. Division, segmentation, and interpellation: The embodied labors of migrant workers in a greater London hotel. Economic Geography, 83(1), pp.1-25.
Nickson, D., 2013. Human resource management for hospitality, tourism and events. Routledge.
Sharpley, R. and Forster, G., 2013. The implications of hotel employee attitudes for the development of quality tourism: the case of Cyprus. Tourism management, 24(6), pp.687-697.
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