Human Resource Management (MBA 509)

A case Analysis on Improving: Performance at the hotel Paris

(How we can use the hotel Paris case)

Submitted to

Dr. Ikramul Hasan

Email: kramul@iub.edu.bd
Independent University, Bangladesh,
School of Business, MBA Program

Prepared by

Sadia Afrin, Student Id: 1910708

Email: a6rin87@gmail.com

Independent University, Bangladesh,

School of Business, MBA Program

 Abstract
The Hotel Paris International’s initial corporate strategy was geographic expansion thereby capitalizing
more market reputation for good services but their reputation for good service has been deteriorating.
Therefore, top management along with HR Director Lisa Cruz reviewed their present strategy and
formulate a new competitive strategy which was “to use superior guest service to differentiate the Hotel
Paris properties, and to thereby increase length of stay and return rate of guests and thus boost
revenues and profitability.”

To support this new strategy, Lisa and her team reviewed the hotel’s activities to translate new strategic
option into strategic goal which was achieving a number of required organizational outcome i.e. fewer
complains, more written compliments etc. In next stage, Lisa and her team then decided some
competencies and behavior their employee need to exhibit to achieve the strategic goal which includes
“high quality front desk customer service”, “taking calls for reservation in a friendly manner”, “greeting
guests in the front door”, “processing guest’s room service meal efficiently” and finally motivated and
high-morale employees to provide all these service.

After that Lisa’s task was to identify HR policies and activities that will produce the required employees
competencies and behavior to achieve the strategic goal. In this endeavor, she suggested higher
management to develop and implement the training programs to develop highly capable, motivated and
highly morale workforce since she found that “number of hours training for new employees” & “number
of hours training for experience employees” , percentage of HR budget on training weren’t enough to
produce the required competencies and behavior. Even the number of hours of training session was
quite low when compared this HR metric with those of competitors through benchmarking. Therefore
lack of required hours of training result in poor performance (poor customer services), less motivated
employees as performance and training are related. Consequently it led to market reputation to decline.

Lisa then along with management outlined the strategy Map and formulated some hypothesis how HR
activities ( increased no of hours of training) will improve the hotel’s performance: increased no of hours
of training will develop motivate, high morale and empowered work force which will enable employees
to develop superior customer services competencies and to provide improved behavior i.e. “high quality
front desk customer service”, “taking calls for reservation in a friendly manner”, “greeting guests in the
front door”, “processing guest’s room service meal efficiently”. It will lead to increased customer
satisfaction and customer return, and as a result financial performance of the hotel will improve. The
strategy map also outlined the cause-and-effect links among HR activities. Thus, strategically relevant HR
policies and activities- increased no of hours of training for new and experience employees produced
the required workforce competences and behavior which enabled the Hotel Paris International’s to
achieve its organizational outcomes and success.

Key Words: Organizational Performance, Customer Service (service provided toward hotel
guest) ,Competencies and behavior of the employees., Customer satisfaction, Strategic goal,
Strategy Map

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Background:

In 1990 the Hotel Paris International was a single hotel in a Paris suburb and later they
expanded which comprised a chain of 9 hotels including two in France, one each in London and
Rome, and others in New York, Miami, Washington, Chicago and Los Angeles. Their initial
corporate strategy was geographic expansion through multicity alternative for their satisfied
guests and thereby capitalizing more market reputation for good services. But the difficulty that
they face in this case was their reputation for good service has been deteriorating. It became
more challenging when the elected French President Francois Hollande was not able to halt or
slow down the economic decline and therefore imposed a higher tax rates of 75% which caused
many contemplated to leave the country. Moreover, many tourist faced with similar economic
challenges elsewhere were increasing choosing short term rental apartment to stay for a
fraction of what a fine hotel stay might cost. As a result, top management along with HR
Director Lisa and others reviewed their present strategy and formulate a new competitive
strategy to achieve the desired organizational outcomes.

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Problems:
To identify the major reason causing declining market reputation and to formulate functional policies
and activities that will support the competitive strategy of the hotel Lisa reviewed the training process.
She compared Hotel Paris performance on various training metrics with that of high performance hotels.
There were lot of gaps in the existing training programs. Hence, it was evident that lack of inclusive
training program caused the poor performance of the employees as employees training and employees’
performance are correlated. Some of the problems in existing training process are as follows:

 The hotel did not have a formal, comprehensive job training program for the hotel employees.
 Hotel’ training team only spend fraction of training duration for employees which is much less
than the benchmark. It was found by Lisa that high performance hotels were providing 90 hours
of training for new employees annually and 70 hours for experience employees annually
whereas for Hotel Paris it was only 15 hours and 8 hours respectively
 Most of employees didn’t have clear understanding of the strategic goal of the hotel. As a
result they didn’t what competencies and behaviors are expected from them that will help the
hotel to achieve its strategic goal.
 The hotel’s HR budget and cost on per training program was also low. As a result it was not
possible to provide efficient training program according to job nature and capabilities of the
hotel stuffs.
 There was no comprehensive customer service training for the new hires would help new
employees acclimate to a new job, organizational culture and ensure they’re ready to
communicate with valuable customers of the hotel. Only an informal trainings have been
provided for minimum hour which did not serve the purpose.
 Job training was not a prioritize HR activity and practice for them. It was provides on irregular
basis and there was no formal system to check that whether employees can implement the
training in their performance.
 They did not have high-morale, motivated, patient, people-oriented employees. They didn’t
have any professional training on how to handle job stress, challenges and still provide superior
service to the hotel guests.

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  There is no integrated system that will allowed Lisa and top management to monitor and assess
employees’ performance, competencies and service-oriented behavior and identify the gap
and design training program accordingly.

Options and Actions:

The strategic goal of the Hotel Paris was to use superior guest service to expand geographically. Several
employee competencies and behaviors including employee morale, commitment, and the percent of
arriving guests receiving the hotel’s required greeting had significant effects on customer and
organizational outcomes such as guest satisfaction and frequency of guest returns. In turns, outcomes
like these contributed measurably to the Hotel Paris’s strategic goals, including profit margins, market
share, and scores on industry satisfaction surveys. Lisa and her team then worked on some options that
would help to achieve the required organizational outcome and to creating a training program that will
help to produce the required employee competencies and behaviors.

 To ensure fewer complain and lower dissatisfaction received from the customer.
 To confirm high satisfaction of customer and thereby more written compliments and positive
feedback received from them.
 To create customer loyalty and ensure higher return rate of the customer
 To encourage longer duration of staying of the customer through quality customer service.
 To ensure higher guest expenditure per visit of the guest.
 To deliver a friendly manner while taking a call for reservations.
 To greet all customers at the front door and receive them with a warm welcome.
 To provide superior front desk services.
 To process customer’s room service meals efficiently.
 To foster an empowered work force who are self-motivated with high morality.

All these options will help to ensure the returning of customer as well as create some new customers for
the hotel which will help to achieve the strategic goal of the Hotel Paris International

On the basis of the above mentioned options, the next task for Lisa and her team was to identified HR
policies and activities that will help to achieve the strategic goal. Since she found that the major gap was

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in training programs provided by the training team which if developed and would implement, it could
contribute greatly in proving performance and achieving desired result. Therefore, they had taken the

(Continued)

strategically action and policy based on the training program mostly along with some other initiative
which can be supportive in this case. Since employees training is one of the significant HR Metrics for
ensuring good performance, top Management of the Hotel Paris also approved Lisa and her team to go
ahead in this endeavor.

These strategically relevant HR policies and actions includes the following:

 Lisa and her team design a formal and comprehensive package of training program for all
employees of the hotel Paris International focusing on competitive strategy, their critical
employees’ behavior including the need to be customer oriented so that employees understood
would require in terms of offering high quality customer service, producing customer
satisfaction, thereby capitalizing on market reputation.
 They retained a training supplier to design a one day training and orientation program
comprised of lectures, video presentation for all new employees which cover the Hotel Paris’s
history, strategic goal, competencies required to provide customer oriented service,
communication skills and things like smiling, greeting, and positive language etc. which guides
new employees and prepare them for providing the high-quality customer service
 Conduct a need assessment to identify and establish priorities regarding training requirement
and capacity development of the employees. They provide customize training according to job
nature.
 They made training a regular priority and not just a one-time event. It’s crucial to put together a
regular training programmer so that the skills employees learn always remain fresh, and staff
members don’t forget certain aspects, and they can learn new skills as well.
 Develop training for Front desk attendants to provide personalized customer service- making
each customer feel as though there is no one else, at that moment, more important than him or
her and able to provide valuable information which is a huge asset that makes a big difference.
 They developed an integrated HRIS system that allowed HR team and the top Management on
ongoing basis to monitor and assess global performance on strategically required employees
competencies and behavior such as attendance, moral, commitment, service-oriented behavior.

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 They also provided just-in-time training solutions such as Performance Support Systems in which
HR team constantly monitor the employee’s activities to provide real-time guidance. It guide the
hotel stuff on what to say to the guest, what questions to ask, troubleshooting, and can also
include alerts for critical fields or wrongly entered information.
(Continued)
 Develop and implement training program on stress management, motivational session,
complain handling so that it develops employees’ capabilities and foster a motivated work force.

 With the help of and International training company, she planned a series of weeklong seminars
for Manager which would be held once in a six month at different hotels of different city which
will give Manager the opportunity to learn more about the new HR program and practices that
Lisa and her team introducing in order to supporting company’s strategic aim.

 Lisa and her team also translated all training module and programs in to language of the country
in which Hotel Paris did business so that for the employees working in the different city, it
became easy to understand.

 The team also trained employees on technological aspect how to use modern technologies, fast
adopting hotel management software to streamline the check-in and check-out process,
generate financial reports, provide information quickly on front desk or while talking for
reservations which saving time, relieving the hotel staff of the more tedious responsibilities and
improving the guest experience. 

 Evaluate effectiveness of the employees training program and obtaining feedback on the
training from employees, she and her team used metrics participations survey, pre and post-
testing etc.

 Most of the high performing hotel spent 8% of their total payrolls on training. Therefore as per
Lisa’s proposal, Management increases the HR budget on this metrics.

 They also increased no of hours of training in each training session for both new and
experienced employees.

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  Institute practices that improve disciplinary fairness and justice of the organization that improve
employees’ morality.

All the strategic actions mentioned above had been taken by Lisa and her team which led to great
success.

Conclusion:

Within a year Lisa and the top Management of the hotel were not surprised to see that the new training

program brought a radical change in employee’s competencies and behavior. Employees are receiving

good score on several employees’ capabilities and behavioral metrics ( speed in check in/out,

percentage of employees scoring high on Hotel Paris’s semiannual attitude surveys, customer

compliments receives for front desk service ) improved remarkably. In this way, an improvement in the

training program (no of hours, HR expenses on training, participation rate etc.) of the hotel lead to an

improvement in performance, motivation and morality of the employees which are associated with the

reduction in customer complaints. Furthermore, a reduction in customer complaints results in increased

guest return rate, customer loyalty which will lead to a rise in hotels revenue. Hotel Paris International

then received more compliments for their first-class customer service which helped them to expand

geographically and have a chain of nine successful Hotel in the western world. Thus, it would appear

that strategically relevant HR activities and practices produced the required workforce competences and

behavior which enabled the Hotel Paris International’s to have a big effect in their performance and to

achieve organizational outcomes.

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Questions & Answers:

Question 1. Draw a more simplifies and abbreviated strategy map for the Hotel Paris and summarize in
own word an example of the hierarchy of links among hotel’s HR precipices necessary work force
competencies and behaviors and required organizational outcomes.

Answer: Strategic Map of Hotel Paris:

High score in Increase in Increase in

4. Strategic and
industry’ service percentage of Profitability
Financial
satisfaction market share and
outcome
survey reputation

Various customer
3. Strategically Reduce in and organizational
Increase in
relevant number of Increase in new outcome metrics
customer
customer and complaints and customer includes: increase in
satisfaction and
organizational increase in return rate of
customer loyalty customer, longer
outcome written
index duration of staying
Metrics compliments
increase in guest
expenditure per
stay

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 Other Service-
2. Strategically Employees’
Increase in oriented behavioral
Reduce in Service
relevant number of self-
metrics includes:
Employee speed & accuracy of commitment and
employees’ motivated and
turnover info during check-in engagement
competencies highly morale & out, percentage Index
and behavioral employees of guest receiving
Metrics with greetings, call
answers in friendly
manner

Increase in training Develop other HR

Increase in HR
1. Strategic HR and development practices: Ethics
expenses for
(increase no of hour and Fair
Practice and employees’
of training, Treatment, Labor
activities capabilities
customize training, Relations,
Metrics building, training
evaluate effeteness Performance
and development
of training etc.) evaluation etc.

Question 2. List at least 15 HR metrics for the Hotel Paris could use to measure Its HR practice.
Answer: 15 HR Metrics for the Hotel Paris that they could use to measure HR practice are as follows:

NO. HR practice & activities Details of HR metrics

1. Recruiting Number of qualifies applicant per position

2. Selection Percentage hired based on a validated selection test

3. Number of position filled Percentage of job filled from within

4. Hours of training for new Number of hours of training for new employees
employees
5. Hours of training for Number of hours of experience for new employees
experience employees
6. Employees participation rate Percentage of workforce participated on training program.
on training
7. HR expenses Percentage of HR budget spent on outsource activities ( recruiting,
benefit, payroll)
8. Performance appraisal Percentage of employees receive a regular performance appraisal

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9. Incentive pay Percentage of workforce eligible for incentive pay

10. Performance feedback Percentage of workforce who receives performance feedback from
multiple source
11. Compensation Target percentile for total compensation.

12. Target bonus Percentage of target bonus for employees.

13. Work force working in cross- Percentage of workforce routinely working in a self-managed, cross-
functional or project team functional or project team

14. HR-to-employee ratio Number of employees per HR professional

15. Annual turnover Percentage of annual turnover rate

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