The Imperial Hotel in London is a valued four-star restaurant owned by the Four-star Marketing Start Hotels. Apart from the Imperial Hotel, the managing group controls other twenty-five hotels rated four stars. The main customers served by the premium hotel are international business individuals and tourists. With the hotel’s high definition, guests visiting the facility aspire to have a unique experience and improved standards of services. However, the Imperial Hotel has also experienced some strategic and management problems that could potentially ruin the brand image of the company in reference to its rank in London’s hospitality industry. This paper is a case study of the second problem i.e. high staff turnover with 80% of the staff leaving within a year. The rate of turnover in the industry is due to the existing condition of employment and low salary. The Imperial Hotel employs foreign individuals and London students who work in the industry for a specific duration of time.
The high turnover rate in the hotel was realized due to the high costs of operation of approximately 35% of the gross revenue in the company. The increased revenue expenditure is defined through the high costs incurred in training new workers; which has resulted in the reduction of the quality of services delivered to clients. The industry will lose good and recurrent guests due to poor quality of services offered by the employees. Moreover, the workers decide to quit their initial company and work for a competitor due to lower levels of job satisfaction. Transferring from one company to another may be influenced by decreased the commitment and morale among the workers hence leading to an increased rate of turnover (Cho and Lewis, 2011). When the Imperial Hotel fails to address the concern of high rates of turnover, then more additional costs of operation will be incurred in training and employing new workers. Peter Farnsworth, the new GM, believes that when some mitigating strategies like increasing the amount of salary, offering quality trainings and undertaking performance appraisals are used, they will lead to more job satisfaction. When employees are satisfied, they will be able to focus on their capabilities in the organization (Charan, 2014). Significantly, the aspect of identifying and rewarding the best workers encourages competition of workers to become supervisors hence leading to an overall increase of the management of the staff in HRM practices.
The rate of turnover in the hotel is the second most fundamental problems that the industry struggles to handle. The rate of turnover at the hotel is 80%, which makes more than eight hundred employees in the industry to leave in a year. According to an interview involving different workers, the status of the company’s culture makes the management to have a low perception for the work hence leading to more turnovers (Alessandri, Borgogni and Latham, 2016). At the present, the company has a culture of turnover, which makes the workers to refer to the uneconomic working hours as the cause for turnovers. Apart from that, the workers complained concerning the quality of trainings offered to them. This factor resulted into poor wages given to them with no consideration of promotions and opportunities to be supervisors over others. The low rate of payments will be unable to meet the demands of travelling to various chains in Central London; mostly considering the increased costs of travelling. Since other neighboring hotels in London offer their employees a good workplace environment and salary, the Imperial Hotel has a lower competitive advantage in the hospitality industry.
The increased rates of turnovers in a company are a significant concern based in its implications to the overall health of the organization. Moreover, high turnover rates result to the company’s increased necessity to invest more funds to sustain its production in the competitive world. The management of high rates of turnover is resource consuming since the company will be forced to hire new skilled personnel or train them, which means more spending of revenues. In that case, companies need to effectively deal with high turnover problems since they might have devastating effects on the company’s growth and profitability (Cohen, Blake and Goodman, 2016). The process of hiring, recruitment or selection of new employees could be expensive in most companies; since the human resource managers will have to include additional costs in training less competent workers. Moreover, the newly employed individuals might ask for a higher salary than what the existing or previous workers would. A company that experiences a lower rate of turnover might spend more revenues in its operation compared to the one that incurs higher rates of turnover. Whichever the case, organizations will have to employ a consultant to help solve the pending issue, which means more operational costs are spent in the process (Hvide and Kristiansen, 2007). To control the issue, the company will require more resources and time to deal with the matter instead of using this chance to diversify its strategic operations, advancing its performance and investing or implementing new marketing techniques.
It is fundamental for an organization to encourages and instill morale to its workers. When morale levels are low in a company, turnovers would be observed hence affecting the overall workplace condition and performance. In that case, a company with a high rate of turnover obviously has workers will low morale. Moreover, workers experience a lowered morale when there is constant withdrawal or transfer of individuals from the workforce to other companies. In addition to morale, low payment to workers might stimulate some of them to seek other employment opportunities. Even if a worker still perseveres in their current organization, they will automatically feel demoralized when others move to other companies (Kim, 2012). The high rate of turnover in the Imperial Hotel led to low production from workers with low levels of morale. Since the company had a high rate of turnover, it was evident that there were individuals with lower levels of job experience than the previous ones.
Due to this, the rate of production and efficiency of workers decreased in reference to the hotel’s initial level of success and competitive dimension. Poor experience and morale of workers are the major reasons why guests were served so poorly, hence affecting the overall brand image of the hotel. Unsatisfied customers were forced to look for other four-star hotels in London. This step made the company to decrease its competitive advantage in the hospitality industry. When workers feel bored or constrained in a certain workforce, they will seek for other places to fulfill their career objectives and personal desires. However, a company can effectively offer quality trainings to existing workers to enhance profitability and productivity (Kosteas, 2010). Using trainings as a measure to solve potential management issues in the workplace, workers can formulate a rounded competence to add value to the Imperial Hotel.
Therefore, the most appropriate managerial technique that the managers from the Imperial Hotel can employ is the use of human relations in the management process. This technique points out the need of organizational managers to analyzing organizational behavior (mode of conduct in an organization). On the contrary, the main hypothesis explaining the human relation theory is that a firm can only achieve its objectives through its people and with the people. This approach was presented by a scholar known as Elton Mayo in the 19th century, with the agitation of boosting business performance. This theory emphasizes that human beings are not economic-rational but have emotions, which alter their daily activities and offers the radical view of business and people operation (Ariely, 2009). Additionally, every firm is centered upon the mutual aid and rather not mere mechanical systems. Therefore, essential characteristics constituting the human approach process include:
Clear comprehension of human behavior by organizational managers
Every managerial staff should be in a position of being aware of the inter-personal relationship with respective employees
Lastly, improved human relations in the workplace results to higher production rates and increases motivation levels
Consequently, the employee equity theory is the most suitable model of the management theory presented by Peter Farnsworth, which targets at minimizing the turnover rates at the Imperial Hotel in London (Marcoulides, 2008). On the other hand, the theory of human equity is directly applicable to human relation who is targeted on improving organizational productivity and upholding employee motivation at the hotel. Since the theory is in compliance on the basis that it is essential in figuring out a reasonable sense of balance amid the employee output and the employee’s production rates. Thus, production levels signify various levels of skills, level of hard work and efficiency rates. On the other hand, employee output rates imply the monthly salaries or the profits that employee acquire from various production inputs in an organization.
Therefore, in an event when any employee feels that the output levels are less compared to the input levels, it results to depreciation in employee’s morale in any firm. Thus, it is essential for most organizations to make certain that employee’s inputs are highly considered in the any organization, which is achieved through sufficient pay and benefit (Brotherton, 2012). In order to boost organizational performance business employees should initiate an excellent reward scheme, which will boost organizational performance and not making employee seek alternative solutions in competitive firms. Hence, factors such as commitment, flexibility, skill, hard work, and effort are outlined to essential input that boosts employee equity. Moreover, employment equity theories also commend factors such as the use of financial incentives and job security expansion, which are aligned as employee outputs.
With this perking order of theoretical needs scholars such are Abraham Maslow exhibit rigid resemblance of an effective human relation technique that helps in minimizing employee turnover rates (Alshanbri et al., 2015). In addition, the theory points forward that every employee constitutes of essential needs that all employers should strive in satisfying in order to improve their motivation. Not being in a position of meeting every employees needs will result to each employee inquire about other employment opportunities in other firms. For instance, an essential basic need that employee require include career, growth, and development. Conversely, in an event where any employer is not in a position of meeting the stated need for career development and growth, It will result to the employee to find out other organizations with better rewarding levels (Maddux, 2004). Like the Imperial Hotel in London in our context, there are rare occasions where the employee is promoted to higher ranked position i.e. supervisory positions. This results to absconding of the initial hotel by employees with the aim of finding rival hotels with the aim of improving their careers in the rival hotels.
Based on this paper it is thus concluded that the Imperial Hotel in London should employ various human relation approaches, which will enable it to curb the problem of high turnover rates. With the presence of a high turnover rate, this implies that the probable organizational problem will be improper human resource. According to the human relation theory, there is an assertion that a firm will achieve its set objectives when there are proper human relations within the organizational staffs. Therefore, it is upon Peter Farnsworth to ascertain whether there is close linkage between the hotel management team and its employees. Furthermore, the human relation model declare that all managers should take in hand various concepts and ideas which suppress the living of the employees in the organization, besides that it will results to abandonment of the firm by the employees upon neglecting of the issues. Presently the Imperial Hotel in London encounters a high rate of turn over levels due to the unsatisfactory levels of employees due to low salaries and scarce rewarding systems. Moreover, there has been frequent account of deprived job satisfaction levels due to insufficient of prospective measures, which will enable them boost, their career levels (Ray, 2018). Therefore, with the new general manager Peter Farnsworth should institute various policies of the human relations in order to point out the problems presented by the employees.
Additionally the new Imperial Hotel manager should make sure that various employee equity theories are addressed which will solve the problem of employee high turnover rates. The equity theory of the employees further argues that employee input levels should be equivalent to the output levels. Consequently, it is vividly clear that the Imperial Hotel comprises of employees who are not fully satisfied with various pay packages provided by the hotel managerial system. Pitiable compensation of the hotel managerial systems is the most probable reason why there is increased turn over levels in the company (Sirota, Mischkind and Meltzer, 2005). According to the employees’ equity theory, there is an assumption that upon equalizing the input levels with the output levels in an organization will result to boosting workplace performance and additionally will increase employee motivation. For this reason, Peter Farnsworth should target at improving employee compensation levels in order to minimize turnover levels at the Imperial hotel. Besides, the manager should make sure that the hierarchy of need theory is instituted in order to minimize turnover rates at Imperial Hotel in London.
Conclusion
Conclusively, with a high turnover rate of about 80% it thus outlines a key issue that the Imperial Hotel in London encounters. Most common reasons that lead to increased turnover rate levels at the Hotel are inadequate opportunity of training and growth, reduced employee morale, and poor satisfaction of employees. Therefore, in order to ensure success and meeting of Imperial Hotel’s organizational goals and objectives, the new manager should institute these managerial theories explained in the above sections of the paper (Management Theories to Mitigate the Issue). Upon application of these managerial theories, turnover rates will be reduced because employee will acquire training, benefits and higher income levels to increase chances of increasing the business operations (??????????? and Mitrofanova, 2015). High turnover rate reduction will still relieve the hotel from some additional operation expenses hence increasing the income levels of the company.
References
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