Challenges Faced by the HR Department in Hotel Paris - Essay Example

? Hotel Paris case Table of Contents Introduction 3 Problem ments 3 Challenges 3 Solutions 4 Conclusion 6 Reference 8 Introduction The case brings forth the challenges faced by the HR department in Hotel Paris in terms of their compensation and benefit structure for employees. There exists a gap between the actual strategic objectives of Hotel Paris and the alignment of compensation and benefit structures in accomplishing those objectives. The various problems in this context are studied and analysed in the study and suitable recommendations are provided for eliminating the gaps and attaining a greater association between compensation plans in the organization and strategic objectives of the company. It is also aimed at attaining greater satisfaction and contentment of employees such they are adequately motivated to perform up to the desired standards in the organization. Problem Statements Challenges Challenge 1 The present compensation structure in the company is highly unstructured, unplanned and unsophisticated. In this, the pay range for workers is too narrow and does not differentiate much between them at different positions, such as front desk clerks, security guards etc. “Like several other HR systems at the Hotel Paris, the compensation programs were unplanned and unsophisticated........................each job category”. Challenge 2 Maintaining a salary standard which is competitive in the market seems to be inadequate to attain the best contributions and performance of employees. Also the compensation structures are not enough to motivate them to perform to their best abilities. They remain frustrated and discontented and this leads to high employee turnovers and attritions. “For example, the firm’s policy is simply to pay its employees a competitive salary...............extraordinarily service oriented workforce”. Challenge 3 The organization also lacks a performance based pay structure. In the absence of such a compensation structure, employees are seen to be less accountable for their job activities and responsibilities. They do not have the incentive to perform a higher level or to improve and enhance their productivity and performance in the organization. In other words compensation structures are not properly channelized towards attaining employee behaviours towards accomplishing organizational goals (Snell & Bohlander, 2012, p.465). “The company has given little thought to tying general pay levels or individual employees' pay to the company's strategic goals”. Solutions Solution 1 Firstly a well defined job roles and responsibilities must be created for all positions in the organizations which include front line employees, securities, staffs, back-end workers, management executives etc. Compensation structures must be developed according to this structure and must be generated as per educational qualifications of employees, numbers of years of experience and position and designation in the organization. It is to be ensured that there is no overlap between the salary slabs for the different positions. This is important in order to differentiate between the positional roles of employees. The same salary from two different levels would necessarily de-motivate employees at the higher level of the hierarchy (Mathis & Jackson, 2011, p.153). Solution 2 Finally, setting a compensation standard at par with the industry standard would not be effective in retaining or attracting talents in the organization. There can be multiple organizations paying similar compensation and employees would be easily tempted towards them. Thus it is recommended that the compensation level must be a step higher than the industry standards in order to attract and retain talents from the industry. However, a fair proportion of the gross salary must be performance based. This would not only help to get potential candidates but also help to motivate them to perform to the best of their ability in the organization. Besides this, it would also serve the purpose of controlling employee attritions to a substantial extent (Ellig, 2002, p.4). Solution 3 A performance based compensation structure must be established. This means the organization could include an incentive system based on targets. Each employee would require to work according to the targets set by the management. Reaching over and above the target would yield them additional incentives apart from the base salaries. This would primarily help to incorporate a healthy and competitive environment in the organization where each one would feel motivated to perform to the best of their abilities so as to earn maximum possible salary from the organization. Besides monetary benefits, it is also recommended that the company includes rewards, recognition as prime aspects of recognising the contributions of employees in the organization. Rewards for good performance would surely help to maximise the performance and productivity of employees and take them up to a higher level. One of the key aspects of compensation structures is their alignment with long term goals and objectives of firms. This it is to be ensured that the compensation structures bring out the desired level and direction of performance of employees such that organizational goals and objectives are attained and accomplished. For example, in case the organization strives to incorporate a customer centric approach and seeks to enhance its customer base within a few years, compensation structures of front line staffs and customer care executives would be crucial. In this case, the salaries and incentives of the customer care executives and front line staffs would have to be tied to such aspects as increase in customer satisfaction; repeated purchases from the same customer; number of complaints from the customers, or increase in the number of customers in the organization etc. Thus, if the compensation structures of employees are aligned with the above aspects this would strategically yield the benefit of attaining an increased customer base for the company in the long run and generate a more customer focussed approach (Chingos, 2002, p.215). Conclusion The case reveals that in the absence of a properly framed compensation structure, Hotel Paris is not able to direct efforts of employees towards the accomplishment of goals and objectives. The company suffers from poor productivity and performance, discontentment and dissatisfaction among employees and high turnovers. Additionally the present compensation structure of the company is also not sufficient to attain long term objectives and goals of the organization. Thus it is recommended that such a structure is developed which not only maximises employee performances but also instils an environment which is motivating and encouraging. An incentive based pay structure is recommended in which employees would earn additional monetary benefits by reaching performance targets. Non monetary aspects such as rewards and perks are also recommended for appreciating potential performers. Well defined job roles and salary structures according to the individual merits, experience, qualification is called for such that there are no overlapping between compensation levels of two different positions as this can be de-motivating and frustrating for an employees. Reference Chingos, P. T. (2002). Paying for Performance: A Guide to Compensation Management. New York: John Wiley & Sons. Ellig, B. R. (2002). The Complete Guide to Executive Compensation. USA: McGraw-Hill Professional. Mathis, R. L. & Jackson, J. H. (2011). Human Resource Management: Essential Perspectives. USA: Cengage Learning Snell, S. A. & Bohlander, G. W. (2012). Managing Human Resources. USA: Cengage Learning. Read More