The Imperial Hotel-London Case Study

The Imperial Hotel based in London is a four-star state of the art hotel. The facility is run and owned by the 4-star market-start chain of hotels with its headquarters in London, United Kingdom. The hotel is located in the West End of the Central Business District. Most of the clientele that frequent the hotel are international businessmen and tourists both local and foreign.

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The hotel comprises the following staff members:

• 450 staff (300 permanent employees & 150 part-time.)
• Six departmental head: Housekeeping, Food and Beverage, Front office and Reception, Human Resource and Training and guest services.
• Outsourced services (specialist cleaners, laundry services and management of the leisure facility.)

Ordinarily, the visitors of the 4-star hotel have a high expectations of such a facility because of the required high standards in a 4-star hotel. Nonetheless, the hotel has been having challenges with service delivery and management crisis. The above problems have a great potential to tarnish the reputable image of the top 4-star hotel in the heart of London. This report will discuss the causes, effects and challenges of poor guest satisfaction that has affected the facility very much.

In order to address the challenge, the management decided to change the General Manager of the facility. Peter Farnsworth has taken over the management of the hotel. With his vast experience in the hospitality industry, there are high expectations that the hotel will have a new positive look. Peter is taking over from the general manager who experienced a lot of management problems. The hotel went through the highest turnover of staffs that rose to 80%. This is the highest since the facility was started. It was graded bottom in the entire star chain of hotels on the parameters of guest satisfaction. At the moment, the rating is at 65% according to the internal benchmark grading style in regard to all the parameters that were assessed (compose, 2017).

The 80% staff turnover means that more than 800 employees leave the hotel annually. It has increased the operational cost because of the high cost of training new employees. Furthermore, new staff members provide a low-quality service to the guests. The hotel has lost most of the trusted customers because of poor service from the staffs. According to the interview conducted by some of the former staff members, the majority of the staff members leave their job to work for other hotels because of poor remuneration. Another factor for the high rate of staff turnover is lack of motivation to the workers resulting in a decreased morale and commitment to their respective duties. The long working hours and lack of growth are also some of the contributing factors (McQueen, 2016).The new CEO Peter Farnsworth, has already put some measures to solve the challenge. For instance, he has suggested increased salary and bonuses to the workers. There will be regular training and performance appraisals. All the staff members are encouraged to apply for supervisory positions as a way to promote internal growth. The hotel has come up with various incentive schemes to motivate workers to meet excellent standards. This will, in turn, improve productivity. On an overall view, the new manager and changes being implemented will see overall sales of the facility rise (David K. Hayes, 2016).

High Turnover Rate and Its Effects

The biggest challenge for Imperial Hotel leading to poor guest satisfaction is the high turnover rate. The new general manager wants to sort the issue with the urgency it deserves. As discussed above, the rate of turnover in the hotel is more than 80%. When translated into exact figures, it means more than 800 workers the hotel higher leave the company yearly. When contacted former staff members, the major reasons for leaving the company are because of the poor working conditions and the poor environment for working. A culture of staff turnover is already a culture in the facility. Secondly, the working hours for the hotel are unsociable, the majority of the staffs who are students and young people find this as a great challenge (Boella, 2017). Moreover, they cite poor pays, inadequate staff training and lack of refresher training. There is also little growth in the company killing the morale of the workers. Finally, poor pay has affected many workers in their social life. Most of the staffs are unable to meet the high cost of living more so the transport cost in Central London. The hotel lacks competent and skilled workers because competitor hotels offer better packages and better working conditions that motivate staffs (Boella, 2017).

Effects of Poor Guest Satisfaction

According to Maxwell and Watson, poor guest satisfaction in any particular organization is a cause of alarm because of the negative impact to revenue generation and the cost associated with the challenge. It is the main reason for high cost of running the business in any company. It is quite expensive for the company to manage the high turnover rate because of the high cost of recruitment and training new staffs. Moreover, there is a lot of time wasted during the changeover that negatively affects the growth of the company. According to Maxwell and Watson (2004), the management should handle the issue of high turnover rate as soon as possible because it will greatly affect the productivity of the company. Moreover, new employees are likely to ask for more pay compared to the people already working. Any company that experiences low staff turnover rates will not get the high operational costs when compared to companies that experience high turnover rate (Wood, 2001). In addition, the company may be forced to higher or outsource skilled consultants to fix the problem of high turnover. The company will require spending more time and resources to solve the problem instead of using the available resources to expand the business, diversify the business, making new investment and using the available resources to improve the performance of the business (Wood, 2016).

When a company is faced with a high turnover of staffs, the level of work commitment and morale among the employees is negatively affected. The effects have a big challenge towards the performance of the company because of the little commitment. When staffs see their colleagues leaving in large numbers, they tend to have a decreased morale and the urge to look for better opportunities becomes high. Moreover, the high turnover rate is a show of poor pay hence no single employee will be interested to stay in such an organization (Wood, 2013).

Another important factor to consider, high-level turnover causes an organization to have poor performance and low productivity among the workers. An organization that continuously has a workforce of new staffs always perform inefficiently because of little experience. Poor customer service is the biggest problem that can face hospitality industry because their business is all about service. Now, in the case of the Imperial Hotel in London, lack of motivation and decreased morale amongst staff members is the main reason that affects the performance of the hotel (Mullins, 2008). Poor service delivery can be associated with low morale and staffs who are not experienced in the job. It is the reason why the hotel is losing more guests because they now prefer to visit other 4-star hotels with good services.

According to (Laurie J. Mullins, 2013), the high level of turnover in a company frustrates the efforts of management in implementing progressive agendas. Managers and supervisors working in a company with high turnover rate waste a lot of time making recruitment, selection, and hiring new staffs. Instead of the management staffs spending the time to improve service delivery and performance of the company. Most of their time is spent training new staffs and making them adjust to the new environment. For instance, most managers will spend a lot of time to ensure that the new staffs are adequately trained before they are assigned duties unfortunately, most of the new staffs leave the company after a very short period probably less than a year (Alison Morrison, 2011).

Management Theories that Would Fix Poor Guest Satisfaction and High Turnover in Imperial Hotel

The most effective management theory that the Imperial Hotel adopt is the human relations approach to management. The theory argues that, all the managers should analyze and understand the organizational behavior. In other words, managers should learn how individuals interact at the place of work. The biggest assumption of the theory of human relations is that, any organization can only achieve the set goals and its objectives through the people (all the stakeholders) and by the people. The theory was developed by Sir. Elton Mayo during the early 1990s in order to improve the performance of the organizations (xxx). The above management theory argues that, the human resource should not be taken as economic-rational beings, but rather emotional. Moreover, all the organization's success is based on cooperation and not the mechanical systems put in place by the management. Basing on the theory, its main components for the human relations approach are:

• Managers ought to understand human behaviour.
• Managers should learn the inter-personal relations among all the employees in the organization
• When a company has good human relations among the employees at their place of work, the productivity of the company increases and there is higher motivation for job commitment.

In my opinion and basing on the above case, employee equity is the best form of a management theory that Peter Farnsworth should adopt to solve the challenge of employee turnover at the Imperial Hotel. Employee equity theory is based on good human relations that eventually lead to improved productivity and morale of the staffs. The theory argues that, it is important to establish a fair and transparent balance the employee output and employee's production ability (David K. Hayes, 2016). In this matter, Production level refers to specialized skills, commitment to work, hard work, and efficiency of the person. The output of the employee refers to the pay package and bonuses employees get from production input of their skills. When a staff feels that there is a great imbalance between the level of input and output especially when the situation favors the employer, they become demoralized in their workplace. In order to improve performance and motivate workers, employers should offer a good pay package that will make the staffs to be satisfied and not to look for greener pastures in competitor companies. The theory describes the effort, skills, hard work, commitment, and flexibility as the proper input among employees. On the other side, praise, financial incentives, and job security are considered as employee outputs.

The hierarchy of needs theory can also be a good theory to adopt. It was developed by Abraham Maslow and it serves as another good example of a human relations approach that can minimize employee turnover. The theory argues that employees have basic needs that their employer should strive their best to satisfy. Failure to do that, the employees will seek alternative options for their personal development and growth. The employees' may be forced to look for alternative options and opportunities even in rival companies. In our case, the Imperial Hotel in London offers very few opportunities for the staffs to grow in their career. This forces, most of the staffs to look leave the company and look for alternative options in competitor companies.

Summary

The Imperial Hotel in London adopts the human relations theory in the management of their business in order to solve the problem of poor guest satisfaction and high turnover. The challenge is caused by human...