Human Resource Strategy For Quality Service: The Hilton Group Plc - Essay Example

Human Resource Strategy for Quality Service: The Hilton Group plc The Hilton group operates an international portfolio which is spread across 50 countries and 500 hotels, with more than 60,000 employees. Expansion in 1999 with Hilton Group plc purchasing Stakis plc in an exchange worth of 1.4 billion GBP. The integration of the two organizations each of its own history of operating practices, management and organizational culture triggered an extensive market research to understand the customer expectations of the Hilton brand. Headed by a main board and Chief Operating Officer, The Hilton group is divided into 4 global regions comprising of UK; Europe, Middle East and Africa ;Asia Pacific and US. In each region, area presidents and executive team run their operations. As new businesses are evolving around the world, resistance to change has become a primary factor for business failure. The success depends on the ability to foresee and capitalize on the change. The key organizational trends must be acknowledged by visionary leadership, diversity, flexibility globalization, customer focus, zero defects, network orientation and good technology. The quality of the Hilton brand is such that the customer service, managerial and operational excellence is higher than in most industries. The management at Hilton believes that training and development of its employees play a very vital role to stay ahead of the competition. Hilton group it totally decentralized; splitting into different regions and countries; cities and individual hotels. Management of people, materials and affairs become very difficult and affects the management of the company. The critical issues faced by Hilton because of the changes in the organizational structure are Labor Market Labor market and retention remain the areas of managerial concern especially in the UK, where booming economy and high profits in the hospitality industry could not save many international hotels from the market retention in what is called the tightest labor market since 1978 ( Benini and Sturken, 2000, Kennedy 1998).The reasons cited by the employees for high turnover in the hospitality industry is because of lack of career structure available, low remuneration and the working environment. High turnover Issue Employee turnover in the hospitality industry is a whopping 50% and 25% for management staff, enough to make employers lose tangible and intangible costs of employee turnover. Turnover has an immediate effect, particularly in the customer service dependent areas of the business where there is direct interaction with the customers. A vacant position means more work for the remaining employees without having to compromise on the quality of the work. The ageism issue is difficult to identify and eliminate and in hospitality industry the older recruits having considerable experience may have lower absentee rate (Nord and Durand, 1978;Lucas 1995).In Hilton the employees are treated as valuable assets and receive in-depth training to assume greater responsibility and where opinion is sought with operational changes, turnover rates are low. However, in some hotels in the UK has introduced customer host scheme, under which old recruits over 60 years old are recruited to help during the peak periods. Impact of new technology With the integration of all cultures and regions, the need for having new technology to facilitate on- line hotels will also have an impact on the staff and therefore training becomes a continuous need and requires greater skill. (Torrington D and Hall, 1991; Tyson and Witcher, 1994; Welch, 1994)Information and communication technology systems will integrate the power of internet, customer relationship management and allow variety of operation such as product selection, ordering, fulfillment, tracking, payment and reporting to be performed by a single tool. Trans Culture Management The eastern and the western employees cannot realize a mutual understanding towards politics, economy, culture, especially hotel culture and management. The cultural sensitiveness with the foreign managers will be poor. The other factor will also be the communication between the employees. Different understanding and misunderstanding to leader’s intentions and work targets will cause a decrease in the hotel’s operational efficiency. With different ages, castes, cultures, languages and genders the managers need to communicate clearly with employees and encourage good communication too. Initiatives issued by the CEO through the diversity council include formal supplier diversity mission statement and program implementation; diversity programs advertising campaigns; Franchise development diversity outreach programs; diversity training programs; mentoring programs; Hotel Management diversity performance measurement; Annual week cultural diversity festival; charitable giving programs They have to incorporate diversity principles in all aspects of business operations including employment, training and mentoring, purchasing, franchising and hotel ownership, advertising, marketing, community support and management performance measurements.60% of their workforce is a minority, 30% in a management position according to 2000 US Census Bureau the workforce in the United States. The strategies that Hilton HR adopted to support cultural integration are- HR Resource/Training Enhanced competitiveness through a workforce that reflects diversity of hotel guests appreciates uniqueness of each guest and values contribution of every team member. Hilton promotes candidates with diverse backgrounds, skills and abilities through Hilton Hotel Management Development program(HHMDP).They have also matched all the team members with appropriate mentors(upper management staff participating as mentors)It is obvious that the Hilton Group believes that the knowledge and training must be given at the earliest and begins with the recruitment. Hilton employees are introduced to ‘diversity works’ philosophy upon joining the company. The broad recruitment strategy suggested by Perlutter (1969) and by D’Annunzio-Green (1997) is to have different approaches for managing and staffing. Hilton’s recruitment is to combine the best of headquarters and the subsidiaries to develop consistent worldwide practices and develop a group of international managers from diverse countries. The recruitment would be done based on the competency rather than their nationality. In regard to the Hilton hotel group, it tries to involve more integration between the center and subsidiaries to ensure close co-operation between different parts of the world and implement both universal and local standards for evaluation and control. To overcome the Trans cultural conflicts and realize effective management with the Trans culture condition, Hilton had introduced a Trans-Cultural management program which aims in designing a feasible organizational structure and management mechanism in an environment of different cultures, achieving rational allocation of corporate resources and improving corporate comprehensive effect to the highest degree. Cultural tourism and ecotourism are also encouraged where local people are employed as guides thus providing more interaction with the local community. This not only creates employment for the local community but also offers greater quality opportunities for indigenous people. Purchasing and procurement of services The CEO of Hilton expressed a corporate vision of forging supplier relationships that reflect cultural diversity of the communities they serve. Hilton also created toll free phone lines for diversity suppliers to access information on the Hilton diversity supplier program. They also instituted a diversity performance goal to all owned and managed hotels to conduct a local market outreach for increasing participation of women and minority groups in purchasing activities. Marketing and Sales The Hilton’s Sales team has a strategic method that initiates targeting the multicultural market. They also introduced a sales unit mentoring plan to promote the development of diverse sales force. All the brands within the Hilton family of Hotels contribute to advertising and promoting various aspects of diversity initiatives. Hilton Group Diversity programs In addition to giving opportunities to potential employees, these diversity programs have also enhanced the competitiveness and strengthened the business value of the corporation. This is a part of the reason why their slogan is ‘diversity works’. The hotel has strict diversity programs to follow including stakeholders, employers, suppliers and even the advertisement company. The diversity training program is at all levels of hotels operations. In addition, there is also HHMDP which is a written set of performance goals established to measure diversity performance implemented for all corporate management staff. Hilton maintains 60% minority workforce, 50% of which are female. The Hilton Management development Program (HHMDP) selects women and minority employees and trains them for management position in an 18 week program. Development and performance evaluation When considered the global nature of the hotel industry, D’Annunzio- Green (1997) believes that there are 2 tiered approaches to international development. The fist approach is that the managers should be able to operate in different locations while developing sensitivity to local environment and culture. While the other important aspect is based on strategic level, where managers are required to think globally and view the organization in a wide global context. Hilton has introduced a large number of HRM strategies to focus on training, development of global managers who would be able to understand the different cultures and operate throughout the world. In 2005, Hilton formed the first multicultural advisory board and it proved that it has always shown a historic commitment to diversity. The encouragement of minorities to hold managerial positions, provide diverse ideas and knowledge necessary to run a successful hospitable business. They have gone beyond the minimal requirements to make sure their staff can provide innovation, creativity, improve local and global market share, give back socially and increase the profits. This is accomplished by the giving minorities who have the potential to make a huge difference. Hilton groups have displayed leadership through their diversity programs by acting as an agent for change. It has created an environment, which people from all around the globe can work cohesively despite the language and cultural barriers. Hilton has achieved and maintained a diverse workforce by having separate affirmative actions administered at each hotel and corporate office. 2. Hilton boosts the most efficient and effective sales, distribution and revenue management system in the industry. The Hilton name, reputation for management expertise and renowned investment in this sector of staff training is one of the elements to Hilton’s continued market leadership. Hilton’s organization reward strategy is not only an essential tool in terms of recognition, motivation and recruitment but also an opportunity to demonstrate the culture of the organization in a way that has a real impact on the employees. One of such initiative taken by HRM is the introduction of ‘Espirit’. Through this programme, it aims at making everyone feel valued within their working environment. Their objective is to maintain high standards in HRM and create a business culture where the employees can develop their careers. According to the UK HR vice president ‘Esprit should live in the hotels and line managers should determine recognition rather than been seen as Head office initiative’. The Human resource management (HRM) and Human Resource development (HRD) activities support activities such as selection, training and development, employee motivation and recognition, and performance management. The ideas of recognition, respect and reward are the key elements in the success of Espirit which also encompasses competitive training and development initiatives and a rewards programme that gives the employees benefits. A recent CIPD report indicates that the line managers involvement in coaching and guidance, communication and involvement has a positive effect on overall organizational performance (Hutchinson and Purcell, 2003).A key finding is that to gain line managers commitment to people management and leadership (Hutchinson and Purcell, 2003).Adopted by every sector of the business, it fosters the brand behavior and standards. Strategic HRM (Human Resource Management) is fundamental to the business in delivering the Hilton promise of Equilibrium and the strategy communicated throughout the organization is equilibrium. Absolutely core to the strategy is the contribution of the staff. In UK and Ireland the business plan has to be consistent with Hilton worldwide and so it is very important that the business plan is rooted in Equilibrium and Espirit, the HR strategy to deliver equilibrium. This program has delivered substantial improvements to guest satisfaction targets and brand delivery. The major elements of Espirit program includes Recruitment and induction programs Recognition of personal and collective achievement Intensive learning and development courses Enhanced working conditions and staff facilities Streamlined communication Adherence to clear code With a training program like the Espirit, Hilton attains better informed and motivated employees and this in turn leads to higher employee satisfaction, higher standards of guest service and higher revenues and profits .Espirit starts with quality recruitment and comprehensive training workshops. It is an innovative and unique human resource programme which allows employees to continuously evolve and develop skills across all the disciplines by way on ongoing monthly reviews, evaluation; customer feedback, training, rewards, certificates for improving their skills. It also means liveliness, adding value, improving self esteem and delivering quality services. To achieve the core an objective of Hilton, the balance scorecard (BSC) was introduced which is a technique for integrating strategic planning and to measure the performance. The Hilton awards include the ‘bright idea’ award,’ employee of the month/year’ award. Employees are also nominated to be a representative of Hilton Exchange committee where team members share ideas with the management to improve the hotel. At an executive level, bonuses are function of personal, divisional and company wide performance. However, to motivate rank and file staff, Hilton wisely chose incentives that accentuate those core competencies vital to the international hotel business. To encourage productivity and loyalty among the employees, Hilton introduced Star bonds and for every outstanding customer service, they receive some points to it for which they can redeem for goods purchased at Hilton. This initiative by the HRM has proved to be more motivating, cost- effective non cash incentive. Hilton also follows a careful succession planning which enable the company to grow strong employee base and create a thorough corporate identity. Most positions are filled within and this helps the company to maintain the contentment and also motivation of the employees. Hilton is also very open towards working flexible hours for employees to accommodate childcare. It is regarded as a way to retain the skills of the employees and to maintain their dedication. Hilton University provides Hilton people with the learning and development opportunity to develop their careers and realize their full potential. This puts their development of people to the heart of their business strategy. Online Hilton University marks another industry first. It hosts every aspect of continuous learning, knowledge, training and development within Hilton.8000 team members are registered over 1, 00,000 courses for employee development such as operational, finance, technical and general management courses. This helps the hotel by having employees enhance their competency and provide better quality service. In short, Equilibrium identifies Hilton quality and Espirit delivers it. Hilton has adopted a new strategic approach to ensure quality is achieved through Espirit programme which combines service offering and employee performance. The quality of service is based on 3 dimensions: customers, service deliverers and strategists. It also ensures that in the international arena the Hilton approach to quality service is adapted to national cultures also. Hilton has made significant achievements since 1999 in integrating hotel brands and continues to accomplish its strategic direction in the face of the turbulent economy. The leadership quality of Hilton also creates and mentors harmonious workplace relationships, ensuring there is no lack of trust and communication and timely feedback and appreciation and fair treatment to all its employees. Literary References Chunwei Li (2008), International Journal of Business and Management, A study of Trans- culture Management of International hotel in China; 3 (7 ); 146-149 Dr. Judie Gannon (2008); The enhancing case studies: International Learning experience Developing Intercultural skills for International Industries-Role of industry and educators; Research case study; Oxford Brookes University Gillian Maxwell and Gordon Lyle (2002); Strategic HRM and business performance in the Hilton Group; 14/5(2002) 251-252 Hilton Hospitality, Inc. (2002). The Hilton family, where diversity works. https://cvmas02.cvmsolutions.com/hilton/Hilton%20Family.pdf). Retrieved February 10, 2007, from http://hiltonworldwide1.hilton.com/en_US/ww/people/diversity.do;jsessionid=9C20947303C106661EAB92F98C022AA4.etc42 International Labor Organization (2001), Human Resource development, employment and globalization in the hotel, catering and tourism sector, Geneva International Labor office. Phillip Frhr. Von Bodman, Rudolfo Carlos, Robert Poprawski, Rachad Saab and Shaomei Wu (2003), Hilton Hotels Corporation- A case study ; Class room discussion. Cornell School of Hotel Administration. Sandra Watson and Gillian A. Maxwell (2005); HR Business partnership- Perceptive on developing HRM and HRD roles to Line managers; Research and theory symposium. Napier University and Glasgow Caledonian University Read More