Evaluating Performance Management in Hotels: A Case Study

The report discusses the working of hotels and identifies management issues that can be improved using various management tools. It highlights the importance of performance management practices in improving hotel operations, citing examples from books and journals such as 'Performance Management-Its about performing not just Appraising' by Chaddha (2005) and 'Managing Performance and Performance Management: Information Strategy and Service User Involvement' by Rea and Rea (2002). The report also touches on the concept of performance-related pay, citing sources such as Lewis (2014) and OECD (2005), as well as online resources like Classic Tools (2015) and Management Tools and Trends (2015).

Development and
Management
Performance

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Coursework 1: reward management report......................................................................................3
Individual performance related pay in business environment.....................................................3
Barriers in implementing individual performance related pay....................................................4
Overcoming barriers in Performance Related Pay.......................................................................5
Advantages of individual performance related pay in hotel sector..............................................6
Disadvantages of individual performance related pay in hotel sector.........................................6
Alternative reward strategies to complement or replace IPRP....................................................7
Most effective reward strategy.....................................................................................................8
Coursework 2: Appraisal management report.................................................................................8
Performance Management...........................................................................................................8
Appraisal as a Performance Management tTool..........................................................................9
Importance and effectiveness of Objective Setting, Strategic Alignment and Feedback............9
Improving organisationorganization’s performance on the basis of Pperformance management
tools and performance management plans.................................................................................10
Methods of managing poor performance by an employee.........................................................11
Improving hotel's management by using Management tools.....................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
2

INTRODUCTION
People are the most valuable assets of any organization. They must be carefully deployed
and managed to ensure optimum utilisation of resources. As per the given case, Cavendish Hall
Hotel is a 200 bedroom, four-star county house hotel located in rolling hills. The hotel has
introduced an individual performance related pay (IPRP) scheme but now it is facing various
ongoing performance problems. Ways to overcome these problems by adopting Performance
Management System have been depicted here. Performance Management System is a process
where managers and employees work together to ascertain the overall contribution of employees.
The study shows the need, advantage; disadvantage of IPRP and steps that Cavendish Hall Hotel
can take to improve the performance of its hotel. Along with that, ways in which organization
can overcome the hurdles related to reward and incentives have been assessed here. Various
performance management tools have also been discussed in this report.
COURSEWORK 1: REWARD MANAGEMENT REPORT
Individual performance related pay in business environment
It is a combination between financial rewards and company's performance. The main aim
of this scheme is to give rewards based on performance of each individual. It ensures the control
of managers over his employees. IPRP is suitable in the business environment of Cavendish Hall
Hotel because main objective of IPRP is to improve performance of all employees by:
 Specifying each employee the objectives and targets related to Cavendish Hall Hotel.
 Giving emphasis on performance oriented culture.
 Setting objectives and standards that need to be met by the employers.
 Giving rewards based on performance.
 Giving more emphasis on teamwork and individual performance.
 Motivating staff members.
If any manager of Cavendish Hall Hotel assures implication of these above rules
successfully, then it is an indication that he can use PRP advantageously. The incentives will not
only motivate everyone to work harder but will also make them aware about the business in
which Cavendish Hall Hotel is involved.
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Barriers in implementing individual performance related pay
There are various barriers in adopting performance-related pay. Whole performance is
measured on the basis of a single parameter instead of various measuring tools. This may result
in causing a hostile attitude of employees towards Cavendish Hall Hotel because there are
situations when there is low customer volume and at that time, manpower strives to achieve
attention of a single customer(Lewis, 2014). This may however please the customer but increases
resentment between employees. It also makes employees work at unsafe speed and does not take
into account all factors. Various issues that affect the performance of an employee negatively are
as follows: Compensation Package: The main aim of an employee at the time of joining an
organization is not only to satisfy their personal desires but to fulfil their financial needs.
Good financial status not only helps an employee to fulfil his basic needs but also enables
him to achieve various social ambitions (Rigby and Bilodeau, 2005). Due to an
unsatisfied pay package, it is possible that employees will feel distressed due to non
fulfilment of their expectations. Hence, they can be reluctant to do any additional or
challenging new task.
 Reward system: Reward is the best kind of motivation that a person can earn. In general
parlance, performance and incentives are linked with one another (OCED, 2005).
Rewards can be different depending up on the performance. Training and development: The main aim of providing training is to promote change for
the betterment of people. It upgrades the skills of a person which may result in providing
desired change which an organization wants to achieve (Razmerita, Kirchner and
Sudzina, 2009). Thus an organization should always boost its performance by removing
complex activities that do not add to the firm's growth and providing training to those
who require it. Balancing work life: All employees want balance between work life and personal life.
Stress arises when any person either keeps his personal obligations or professional
obligations pending (Tangen, 2005). Work-life balance is very much related to the
performance of an organization and individual. This balance results in job satisfaction,
positive thinking, etc.
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 Working environment: The environment in which employees function badly affects the
quality of work which they perform (Raza, 2014). If the environment is motivating and
cooperative, then employee automatically gets motivated to do good work and perform in
a better way. Most of the innovations and creativity begin with a creative work
environment. There are various internal political reforms, rigid organizational structures
and conservatism that can hamper an individual’s growth.
Overcoming barriers in Performance Related Pay
This approach is a core management strategy which challenges other organizations that
do not have pay policies related to the work done by their employees (Kagaari, Munene and
Ntayi, 2010). The most critical part for Cavendish Hall Hotel is that of deciding incentives for
hard working people and maintaining their payroll budgets. Various barriers in implementation
of PFP system that can be faced by Cavendish Hall Hotel are: Unwillingness of people to adopt PRP: There is a common notion formed in the minds
of people compelling them to think that if business has grown in so many years without
any PRP system then, it can do the same in long run as well. It is important for them to
know that all employees perform differently depending upon time, position, capability,
involvement and motivation (Kagaari, 2011). Human resource which has performed their
best and has raised their contribution in success of the company is required to be
rewarded by a token of appreciation. Organizations need to know that in case of
developing a standardized approach and setting objective for individuals will anyhow
increase the productivity and motivate people to stay and grow within organization. Challenges for managers: Strong and significant cultural changes are often challenges
for managers and employees as well. This system followed by organizations must be
transparent and accountable with differential rewarding patterns (Rea, and Rea, 2002).
This will help in ensuring trust and confidence in top level managers. Managers must also
adapt to the ever changing environment.
 Budget considerations: Implementing PRP will have significant effect on budgeting
techniques. Any increase in allocation of funds no matter whatever the purpose is, may
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hamper the overall budget of an organization (Rigby, 2005). Thus, the source of funding
in this case needs to be considered in advance before implementing PRP.
Advantages of individual performance related pay in hotel sector
There are many advantages of IPRP in hotel sector. Some of them are like:
 It ensures right pay to right people.
 It is a progress check which helps in weeding out the lazy workforce.
 It states the objectives that business has and ensures what is more important.
 It helps in retaining skilled and qualified people through distribution of incentives.
 It results in improving the team work as well as individual performance.
 It helps in focusing on areas where company requires attention.
 It also increases the efficiency of employees through better performance.
 It also provides a clear indication to all employees regarding the work criteria that they
are required to maintain. If employees stand up to that criterion then they are rewarded.
 Appraisals in between year increase employee’s ability to perform with consistency.
Disadvantages of individual performance related pay in hotel sector
Some of the disadvantages of IPRP are as follows:
 It may result in conflicts that may occur between employees on a personal level.
 Managers and supervisors are burdened with various other problems.
 Implementing this pay system may involve high cost.
 Regardless of the efforts a person may use, he will not be rewarded if there are no results.
 Control over workers is established by the way of rewards.
 Employees need to be highly committed towards work.
 In case of recession, it is possible that people who fly high in the organization are not
rewarded as per their capability which may encourage them to leave the firm.
 Employees need to accept this system in order to grow.
 By this system, appraisals are converted into pay. Many people may not like the idea as
they would prefer an appraisal in the form of job post.
 Managers may be biased. It gives them the role of judges. This approach may be too
subjective.
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 It is not possible to measure the level of performance always.
 Teamwork is replaced by individual performance. Thus, the concept of teamwork is often
hampered.
 Many times, PRP is used by the organizations where it is difficult to improve the
performance.
Alternative reward strategies to complement or replace IPRP
Reward is the largest expense that company has to incur. Correct reward strategy by
Cavendish Hall Hotel may help in attracting, retaining and motivating people (Tangen, 2005).
Reward can be in the form of increase in pay levels, incentives, cash bonuses, non-cash bonus
like recognition, mentoring others, etc. Other reward strategies that can be used by Cavendish
Hall Hotel are: Total reward approach: This framework is a strategic planning approach with the help of
which Cavendish Hall Hotel can measure what it is trying to achieve, what it's people
want, what all things can be implemented and what it can afford. It helps in retaining and
attracting right people at the right cost (Chaddha, 2005). As per this approach, if an
employee engages himself, he can earn even more than what he had expected. Competence Related Pay: This is given to an employee only when he/she has acquired
some critical skills or knowledge regardless of the job position that he holds. It also
depends upon the way in which an employee behaves in case of general attributes.
Example, multitasking ability (John and James, 2000). This will help Cavendish Hall
Hotel in assigning the value to each of its employee. Skill Based Pay: This is a compensation system under which an employee is rewarded
with an additional pay along with various formal certifications and courses that are
sponsored by company. This depends upon the skills, mastery and knowledge of
particular individual who is working in the firm (Sumlin, 2010). Skill refers to an
expertise in any field. Team Pay: This is a kind of approach used by certain organizations where the bonus of
each individual is related to the team with which he is working. This helps an individual
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in maintaining the teamwork and emphasizing on team work rather than personal growth
because team's progress will decide his bonus and incentives.
 Broad banding: This is applicable on only those individuals who are in extremely huge
salary bands (John and James, 2000). The increase in this situation is nearly 100% more
than as compared to the traditional or typical salary band.
Most effective reward strategy
The strategy used by Cavendish Hall Hotel is an appropriate one. It just needs to
implement it thoroughly and classically. Changes that it can undergo are like it can combine its
existing policy with the skill based pay and team pay. This will motivate the employees to work
harder and strive for betterment. This will not only ensure individual's appraisal but will also
motivate them to work in groups which will fulfil the aim of Cavendish Hall Hotel and will
resolve all the existing disputes as well (Purcell, Hutchinson. 2007). Customer satisfaction is the
top most priority in any hotel industry. If employees will be happy, they will work differently
which will finally increase the customer base and improve reputation. These strategies in
combination may work appropriately because skill based incentives and PRP will improve the
individual's performance and team pay will encourage them to help other weak employees as
well as to work in harmony(Classic Tools, 2015).
COURSEWORK 2: APPRAISAL MANAGEMENT REPORT
Performance Management
Performance Management is a definite process with the help of which employees and
managers work together in order to plan, review and monitor work objectives of an employee. It
also measures the overall contribution that an employee has towards the organization in which he
is working. Performance Management helps in keeping right people at the right place (Gary,
John and Sons, 2009). It is not an annual review system. It is based on continuous assessment in
which an employee is given with feedback and on-going sessions in order to ensure that they
would meet their objectives and required goals on time. The key fundamental goal of
performance management is promoting and improving effectiveness among employees. It
ensures that goals are continuously being met by an organization. Any deviation in actual and
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desired results is referred as a performance problem (John and James, 2000). On the other hand,
any effort made by a person to reduce the gap between actual and desired results is known as
performance improvement.
Appraisal as a Performance Management Tool
Performance appraisal is a tool where performance of an individual is documented in a
formal way and required feedback is given. Every business has goals and priorities which if
satisfied, benefits the organization. Similarly, employees of Cavendish Hall Hotel need to
understand that if goals of hotel are satisfied then, appraisals will be rewarded to them.
Cavendish Hall Hotel can use appraisals as an effective management tool for improving the
performance of hotel. It will help in assessing the job performance of Cavendish Hall Hotel's
employees which will further help in ascertaining the appraisals of each individual (Creelman,
2012). It can be done by the managers who are kept responsible for over viewing the work of
employees. This has various problems attached to it as well. This method can be bureaucratic
and can affect the actual performance of individual also. If performance appraisals are done
rightly by Cavendish Hall Hotel then it can help in facilitating meaningful communication which
will ensure that an individual's goals are in parity with that of business. This will motivate them
to work together in a better way. Cavendish Hall Hotel will have to assess the required training
and development needs. Hotel can also adopt a 360 degree review where all the managers, co-
workers and subordinates will review the performance of an individual. Cavendish Hall Hotel
can shift to an integrated mix and match system of appraisal tools in order to improve their
performance (Armstrong, 2005).
Importance and effectiveness of Objective Setting, Strategic Alignment and Feedback
Setting objectives and aligning them strategically so as to get the desired feedback is very
important in any kind of organization. Various management tools are used by the firm to
improve its efficiency. Setting objectives is a specific tool that generates a target for business and
its owners. Setting objectives by Cavendish Hall Hotel can help them in determining long term
goals, identifying needs of any specific department or division and determining expectations of
an individual employee. Importance of objective setting it that it maintains the focus on business
environment (Gary, John and Sons, 2009). These objectives can also be used to determine
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company's position in a long run. They define where the organization is and where it wants to
reach. Effect of setting objectives is that these goals can be used to create a competitive
advantage. Competitive advantage arises when a company has the capability to produce goods
and allocate them in a better way than what other competitors are doing. It helps in expanding
the business operations. Strategic alignment is a result of setting link between an organization's
resources and structure with the help of its business environment and strategies. Its importance is
that it emphasises on performance by aligning the contribution made by people in order to
minimize the waste (Morrison, Ghose, Dam and et.al., 2011). Thus, Cavendish Hall Hotel can
achieve strategic alignment by setting standards of care that must be followed by each employee
in course of employment. Thus, it will affect the growth and working of hotel in a positive way.
The main objective of Cavendish Hall Hotel in taking feedback is to know about the wrongs and
harms that are present in the business and trying to improve them with the help of suggestions
and rational thinking. Feedback ensures that the hotel keeps its customers happy and makes
regular changes in order to cope up with the dynamic environment. Feedback can be in the form
of reviews and rewards also (Purcell, Hutchinson. 2007).
Improving organization’s performance on the basis of performance management tools and
performance management plans
There are various tools of Performance Management which include Planning and
Budgeting, Key Performance Indicators, Balanced scorecard, Benchmarking, Business
Excellence model, Enterprise Risk Management, Six Sigma, Performance Dashboard, Customer
relationship management and performance appraisals (Sumlin, 2010). On the other hand,
performance management plan is an indicative tool which is designed in order to assist, monitor,
analyse, report and evaluate the progress in achieving the desired goals. Cavendish Hall Hotel
can improve its performance by following the basic tools and plans of performance management.
It can also follow a combination of these techniques in order to achieve an appropriate system for
the hotel. These actions will help in achieving the mission of hotel and standards that it has set to
attain. There are no fixed standards regarding the format of performance management tools and
plans. These standards represent the way in which Cavendish Hall Hotel can engage
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commitments from its employees in order to achieve the best possible outcomes (Gary, John and
Sons, 2009).
Methods of managing poor performance by an employee
Poor performance of any employee affects the working of entire organization. Thus, the
cause of issue is needed to be known by getting into the roots of problem. As a result, Cavendish
Hall Hotel needs to carry out the following steps in order to manage poor performance of
employees. These steps are like:
Diagnosing performance: It is important to diagnose the poor performance because it is
important for the hotel to know the main cause of problem before trying to fix it up (Morrison,
Ghose, Dam and et.al., 2011). This poor performance may be due to lack of motivation or
inability of the person also. Low ability may be a result of low aptitude, lack of improvement,
difficult tasks, strong efforts despite of poor performance, incorrect choice of job, etc. If the
problem is diagnosed wrongly then the whole process goes wrong and problem remains the
same. Thus, it is the key step in improving performance of an individual.
Enhancing the ability of a person: There are various problems that are associated with
the inability of a person. His abilities can be enhanced by using various methods like:
 Reassigning the person with some new tasks according to his capabilities, technical
knowledge and interpersonal skills. To ensure the success of this strategy, hotel must not
demote or de-motivate any person.
 Releasing the person simply means that the employee must be allowed to let go.
Cavendish Hall Hotel can use this strategy against those people who cannot be
reassigned, refitted and relocated (Purcell and Hutchinson, 2007). For this purpose, hotel
may also ignore the legal bonds and restrictions. It will promote company's and
individual's growth as well.
 Refitting him by finding different combinations of tasks and abilities. Retaining an employee by providing him additional training (Armstrong, 2005).
Motivation: Many times, the motivation given is not enough. Poor performance may be
due to low motivation also. It can be done by setting performance goals, providing assistance,
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and feedback. Ability combined with motivation can have a great impact on the successful
performance of an individual.
Creating a performance improvement plan: Finally, a plan is needed to be made in order
to cope up with the existing problems that an employee is facing (Tangen, 2005). It involves
asking various questions to employees relating to their dis-satisfaction, working environment,
motivational strategies, etc.
Conducting programmes: Cavendish Hall Hotel can also improve the poor performance
of its employees by conducting:
 Training seminars conducted by managers and other employees of hotel.
 Training seminars conducted by external learned people.
 Providing computer based trainings.
 Stimulating and conducting relevant exercises.
 Conducting development programmes and sessions.
 Providing education to employees through diploma courses.
 Holding seminars which may prove useful for the employees.
 Subsidised long term courses in college or university.
 Confronting the employees personally in a friendly way.
 Specifically telling them about the needs of hotel.
Example: Marriott International has employees and hotels all round the globe. It is
highly engaged in the satisfaction of its customers and employees. There was a case in Chicago
where due to the adoption of new methods by management, employees were not able to adapt to
it. Marriott started a new training programme for all its employees and hired some new floor
level staff as well. After this, when programme was completed, employees were able to easily
connect themselves with the new strategy and tools that were required by the hotel to be fulfilled.
Similarly, Cavendish Hall Hotel can also use some of these techniques which will help in
resolving the current employee’s issues that they are facing.
Improving hotel's management by using Management tools
Management tools ensure a competitive position of business and improves its
performance as well. Top management tools which have been analysed and affect the business of
an organization are strategic management, Customer Relationship Management, Employee
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engagement Surveys, Benchmarking, Balanced Scorecard, Core competency, Outsourcing,
Change Management Programs, Supply Chain Management, Mission statement and Vision
statement, Market Segmentation and Total Quality Management (Classic Tools, 2015). With the
help of these business tools, Cavendish Hall Hotel can implement new strategies along with its
existing ones to improve the efficiency of workers and to establish better working patterns.
However, in the last decade, with the change in dynamic environment and technological
advancement, management tools have evolved so invariably and dramatically that it is very
difficult for the hotel to choose the right management tool which will help in its progress. This
never ending confusion is due to the fight for perfection among hotel industry and never ending
increase in customer's demand. Cavendish hall Hotel must take a strategic attitude towards the
business management tools instead of adopting the latest tools (Management Tools and Trends,
2015). The most appropriate management tools which Cavendish Hall Hotel must adopt are
Customer Relationship Management, Employee engagement Surveys, Benchmarking and Core
competency. It can also adopt a mix of these four tools. Customer Relationship Management will
help in improving the relationship with customers and will ensure in giving a personal touch to
each of its customers. Employee engagement Surveys with each employee will increase the
employee’s participation and motivate them to work better and progressively. It will develop a
feeling of belongingness in the minds of each individual. Every employee will start knowing that
they are important for the hotel and their views matter in the progress of hotel. Benchmarking
will ensure lying down of certain standards that every employee will have to follow and
maintain. Core competency refers to skill or knowledge of a person in some specific field (Skill
Based Pay, 2015). Implementing this tool will motivate the employees to find the key functional
area in which they are good and work in it so as to achieve maximum positive results for the
hotel.
CONCLUSION
From the above study, the way in which an individual can achieve the performance
related rewards by linking performance and rewards has been discussed. Along with that, it is
clear in the report that how hotel can motivate individual and group activities which include
initiatives like giving rewards which affects the individual behaviour to a high extent. In addition
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to this, the reason because of which performance appraisal plans fail has been explained as well
as it has been assessed that employees can be motivated to perform better in order to earn
incentives. Objectives of performance management and various factors that affect the working of
hotel have been discussed in the report as well. Also, the way in which hotel can improve its
management issues with the help of management tools have been evaluated.
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