High Staff Turnover At Park Hyatt Hotel In Sydney – Causes And Effects

Importance of Employee Selection in Hospitality Industry

Question:

Write an essay on  Park Hyatt Hotel, Sydney.

Park Hyatt Hotel, Sydney is one of the most famous hotels in Australia, located on Harbor side overlooking the Sydney Opera House. It is an 8 minutes’ walk from the Museum of Contemporary Art Australia (Sydney.park.hyatt.com 2016). The hotel is combined with an elegant restaurant with a relaxed eatery, a cocktail bar, spa, roof top pool and steam room. In spite of having such attractive arrangement, the hotel is facing issues to keep their productivity high because of recruitment and selection issue. Not only in Park Hyatt are most of the hotels in the country hit by staff turnover issue as according to (Bryson et al. 2013), hotels is Australia lose about 51% of their employees every year as found by a recent study conducted by Griffin University Queensland. A benchmarking study of turnover indicates that an average turnover rate should be around 15% per year; however, the data collected by Griffin University is three times higher (Riley 2014). This major issue directly comes from the human resource department that must be minimized in order to gain satisfactory productivity.

 It is very important to select right people for the right job in hospitality industry as it can have a great deal of impact on the overall capability of an organization and its capacity to achieve strategic goals and objectives. Especially in hospitality industry, personal knowledge and skills of the employees play a major role in developing an organization’s competitive advantage. In hotel industry, competitive advantage is achieved through customer services; therefore, this area requires the selection of high quality staff (Crawford 2013).

This is the area where Park Hyatt Australia has failed to respond appropriately, as it is hit by high staff turnover rate. As selection of staff is a very time consuming, costly and complex process, Park Hyatt is forced to invest the same to recruit new employees to replace the ones who have left the organization. The direct cost of staff turnover is also hampering Park Hyatt and the resultant gaps are preventing the organization to achieve the goals and objectives.

As a result of high turnover rate, Park Hyatt Australia is facing several internal issues in its organization.

High turnover rate is bothering Park Hyatt Australia as it losing an employee is forcing the organization to go through the recruitment, selection and hiring processes all over again. When the organization is getting a group of new employees, it has to train them again, which is again costing time and money (Chang and Madera 2012). On the other hand, a new employee cannot deliver the same sales or production results as the former ones; therefore, Park Hyatt has to wait for those employees becoming fully functional.

 High turnover rate has generated a sense of low morale in the company as organizational culture is being hampered. Organizational culture is the shared norms and value of a collection of workers who work together. It is getting tough for Park Hyatt authority to motivate its employees to share their vision and to execute at high levels as colleagues and co-workers are disappearing all around them. According to Bryson (2013), workplace relationship is the primary key to an employee’s job satisfaction. When associates and colleagues are leaving, remaining employees are forced to cycle through the procedure of getting to know new recruits.

High Turnover Rate and Its Impact on Park Hyatt Australia

As a result of high turnover rate, it can be said that the primary level of experience across Park Hyatt is lower than it otherwise would be. Because of high turnover rate, the company is forced to conduct recruitment processes repeatedly, as a result new employees with less knowledge and less experience is coming in the business. They are taking a great deal of time to understand the organization and its goals and objectives. Until then, their performance is not meeting the expectations of the organization and resulting as poor performance.

Managers of Park Hyatt are getting irritated with the constantly revolving door of workers. For example, a supervisor is putting so much effort in training a group of employees so that they can work to meet the organizational goals and objectives. However, those employees are leaving the organization within few days and joining any other rival company (Bryson 2013). As a result, the manager will have to train another group of employees who will be freshly recruited and his rival company will have the competitive advantage for the employees who are trained in Park Hyatt.

This one is considered as the worst effect of high turnover rate that requires immediate focus to be fixed. As Park Hyatt is investing too much money and other resources to correct high turnover rate, they are unknowingly taking their business from diversity, marketing to new customers and improving on performance.

Among several reasons of high turnover in the organization, four major reasons are mentioned here that are forcing the employees to resign.

Park Hyatt will have to understand that, does not matter how much someone loves working an organization, he will consider leaving the same if he is offered with a better offer. Hotels such as Crown Metropol Melbourne, Shangri-la Hotel Sydney and Sydney Harbor Marriott are offering a better package to its employees; therefore, Park Hyatt and other hotels experiencing high employee turnover rate (Crawford 2013). In addition to better “pay and benefit” compensations, some hotels are offering additional options such as flexible schedules, remote work rights, on-site fitness options and discounts on services or travel.

It is also found that the employees of Park Hyatt are not engaged with their job well enough. They are not good in seeking out challenging work; they are not good at resolving and finding solutions for complex problems, they are not interested in offering support to other colleagues and they are not interested in the organization’s unstructured training and development opportunities (Chang and Madera 2012). In spite of looking in these factors, the authority of Park Hyatt is only trying to promote their business by exhibiting their decoration and wide range of services they are providing. They are not realizing that adding number of services is not enough if the service providers are not interested in their job.

Most of the employees are leaving the job voluntarily due to their relationship with direct managers. According to Bolander and Sandberg (2013), if work relationship are positive and motivating, employees will accept average and sometimes low wages. Without that, it is obvious that employees will have a wandering eye.

Four Major Reasons for High Turnover at Park Hyatt

In order to understand the issue of employee turnover rate precisely, some case studies are provided below,

Case study 1: In Australia, the largest and number one Pizza chain is Pizza Point. Its competitive advantage lies in the quality of its products and services. However, recently a survey has shown that the customers of the organization are finding the quality of the foods in the menu inconsistent. Besides, they are also complaining that the service has also become unsatisfactory. The strategic human resource management team of the organization has stated that the only reason behind this issue their weak selecting and retention process. It is true as the organization only retains 20 percent of its employee’s pet restaurant. Rest of the employees is dismissed only after three months of work regardless of productivity.

Case study 2: ABC Security Agency is also dealing with the same problem where the issue is much more serious that Pizza Point. ABC security has more than 2,000 security personnel serving to provide superior services to a thousand clients. In the process, whenever a client complains about the incompetence and inefficiency of their security personnel, the organization immediately terminates that employee without even listening to him. As a result, the work force of the organization is going down repeatedly, which in turn bothers the customers more severely. Besides, when the organization is recruiting new hires, they deploying them without offering proper orientation and training; therefore, the quality of services are falling down drastically.

In the hospitality industry of Australia, the best practices of recruitment and selection are known as Merit System Principles. Successful hotels of Australia such as Crown Metropol Melbourne, Sydney Harbor Marriott, and Grand Hyatt Melbourne are experiencing comparatively low turnover rate because of this merit system (Dmitrieva et al. 2014). The process of merit system principles is mentioned below,

Within this system, selection and recruitments of qualified employees are done from all segments of the society where candidates who will serve at advanced positions will be selected based on merit.

Employees must be treated fairly and equally without considering their political affiliation, race, religion, sex, marital status and disability (Bolander and Sandberg 2013).

Equal payments must be provided for the employees who are assigned to perform same tasks without even seeing their experience and background.

 High standards of integrity, conduct and concern will be shown for the public interest.

Employees would be managed efficiently, effectively that helps, and organization to retain and separate employees based on their performances (Chang and Madera 2012).

Training systems and performance development sessions must be included in the workplace in order to educate and train employees to gain better organizational and individual performance. 

Human Resource Department will have to evaluate the skills and accomplishments of the current employees. HR manager will have to make a list of the employees who are not performing well and will have to motivate them to join training sessions that will improve their current skills.

Involuntary turnover takes place the authority of Park Hyatt terminates the services of an employee for several reasons; however, the main reason is layoffs (Bolander and Sandberg 2013). In order to prevent such terminations the organization can implement a proper employee assistance program.

Solutions to Reduce Staff Turnover at Park Hyatt

This program will help to figure out the employees who are experiencing performing problems for some reasons that are out of their control such as drug addiction, illness or financial distress. The primary employee assistance program will provide Park Hyatt and organization-funded referral service to external experts who will be responsible for developing a “rehabilitation” program to the referred individuals (Riley 2014). The referred employees will have abide the discipline process provided to them; however, the fail to abide those rules then they will be subjected to dismissal. Employee assistance program will work best if the program is clearly described to the employees by handbooks, managers and other supervisors are trained to figure out the signs of employees who are in distress and can understand the referral process, workers are trained in the processes of self-referral and the employee assistance program is evaluated yearly in terms of quality of the service, its effectiveness and overall cost.

Within this process, the employees are helped to improve their knowledge and skills, which will help them to realize that these are transportable to other contexts (Dmitrieva et al. 2014). Park Hyatt authority can use this process on a group of employees to help them to assess their current position, establish plans for action and evaluate their actions in supportive but challenging atmosphere.

The human resource department put a great effort in respect to fulfilling the vacancy with a most sincere as well as suitable employees. This effort consists of greater contribution of investment as well as physical participation. In this context the human resource management greatly focuses on reducing the voluntary turnover of the employees. There are mostly several crucial steps which will be highly ensure that the firm will be benefitted by a reduced rate of voluntary turnover amongst the employees. These steps are discussed below:

Park Hyatt restaurant must put emphasis on developing an impressive environment that will encourage the employees to be trustful as well as free to the other colleagues. This way the communication between the employees will be open and thereby the organization will benefit an enhanced information sharing capability. At the same time, the employees will be motivated to continue their work in the organizations it will generate a sense of belonging as well as homely ambiance. The employees need to be trusted with greater responsibilities so that they can relate with the success as well as various problems of the organization. On the same note, the employees will be able to feel superiority among the workplace and thus will attempt to stay in their designation. The continuous feedback along with recognition will generate an ample amount of motivation which will bind the employees with the organization. The continuous appreciation from the organization will encourage them to continue their job.

In the same context, Park Hyatt restaurant must put a greater investment in respect to enhancing the abilities as well as skills of the employees. The professional training session is most effective mean of developing the personal and professional skills of the employees. In addition to that, the innovative as well as state of the art technology will highly attract the employees. They will feel obligated to work in this kind of modern workplace in comparison with the other organization. The effective and healthy work life balance approach will also ensure that the employees will be intrigued enough to adhere with the work system of Park Hyatt restaurant. The organization must focus on the matter that the employees don’t get overly stressed from the work load. This has the critical tendency to turn down the employee motivation quite substantially.

In addition to that, Park Hyatt restaurant also must keep in mind that the employees will always be looking for ambitious opportunity in their career. Therefore, the organization must be focused for maintaining the market position with aggressive marketing approach. Moreover, the organization must make aware the employees that they have a effective chance to make thir career growth within the organization. In order to do that, Park Hyatt restaurant must keep promoting the in house employees those are efficient as well as experienced. Furthermore, the company must facilitate an impressive remuneration system to their employees so that the employees would not have any grievance regarding their pay structure. Attractive incentive system will efficiently enhance the chance of implementing this particular remuneration system.

Conclusion

At the end of the study, it is clear that Park Hyatt hotel of Australia is also facing issues with the turnover rate of the employees in the hospitality industry is increasing slowly but steadily. There are several reasons behind this issue; however, the problems in the recruitment and selection process are considered as the primary reason, which is causing the damage and influencing employee turnover rates. The higher authority of Park Hyatt will have to understand the situation, and they will have to bring a huge change in their human resource department. The changes will not only include new systems and tools that will cultivate better results while motivating and training employees, but will also bring in new human resource personnel to empower the department with more manpower and ideas. In the above study, some best practices of other hotels of Australia are provided by which they are able to recruit employees who are gaining enough motivation to stay with the organization; however, it is also important to adapt some other strategies to reduce the turnover rate of the organization. Therefore, a recommendation is also provided where some strategies are mentioned that the organization can adapt.

References

Bolander, P. and Sandberg, J., 2013. How employee selection decisions are made in practice. Organization Studies, 34(3), pp.285-311.

Bryson, J., James, S. and Keep, E., 2013. Recruitment and selection.Managing human resources. Human Resource Management in transition, pp.125-149.

Chang, W. and Madera, J.M., 2012. Using social network sites for selection purposes: An investigation of hospitality recruiters. Journal of Human Resources in Hospitality & Tourism, 11(3), pp.183-196.

Crawford, A., 2013. Hospitality operators’ understanding of service: a qualitative approach. International Journal of Contemporary Hospitality Management, 25(1), pp.65-81.

Dmitrieva, N.V., Zaitseva, N.A., Kulyamina, O.S., Larionova, A.A. and Surova, S.A., 2014. Scientific and Theoretical Aspects of the Staff Recruitment Organization within the Concept of” Talent Management”. Asian Social Science, 11(3), p.358.

Riley, M., 2014. Human resource management in the hospitality and tourism industry. Routledge. Abington.

Sydney.park.hyatt.com. 2016. Park Hyatt Sydney | Luxury Sydney Hotel in the Rocks. [online] Available at: https://sydney.park.hyatt.com/en/hotel/home.html [Accessed 15 Jun. 2016].