The Imperial Hotel Case Study

This case study focuses on the high staff turnover issue in The Imperial Hotel, London. It discusses the reasons behind the issue, such as poor work culture and lack of employee satisfaction. The report recommends adopting Elton Mayo's human relations theory and suggests strategies like taking employee feedback, formulating HR policies, and appreciating employees. The challenge lies in managing the abrupt change in work culture.

Running head: THE IMPERIAL HOTEL CASE STUDY
THE IMPERIAL HOTEL CASE STUDY
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Executive Summary
The purpose of this report is to come up with an effective strategy plan regarding the
high staff turnover issue in The Imperial Hotel, London. The report outlines that the main
reason for this is poor work culture and lack of employee satisfaction. The report summarizes
that Elton Mayor’s human relations theory must be applied to the case. Recommendations
include taking feedbacks from the employee regarding their complaints about the workplace,
formulating HR policies about good behaviour to employees and appreciating employees at
regular intervals. The report mentions that the challenge however lies in coping up with the
abrupt change in the work culture of the hotel’s operations.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Review of the issue................................................................................................................3
The planning...........................................................................................................................5
Implementation, recommendations and benefits....................................................................7
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................10

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Introduction
The hotel industry is one of the harshest industries in the world (Hsieh 2017). Any
hotel is never out of challenges, since the need for constant development according to the
changing market and environmental dynamics in the industry keep managers on their toes to
anticipate their next move to stay competitive. Such has been the case with The Imperial
Hotel. The Imperial Hotel is a luxury five star hotel in London, which provides its guests with
all sorts of facilities, starting from an exotic swimming pool to large conference rooms and en
suite facilities. However, recently the challenges regarding the sustainable development of
the hotel has been at stakes. The previous manager has retired from his job, putting Peter
Farnsworth as the new manager. He has recognized five particular problems regarding the
functioning and operations of the hotel. These problems are namely poor guest satisfaction,
poor staff turnover, poor work culture, inefficient use of IT systems and poor back office
operations. The hotel has also been going under renovation, which suggests that for the next
two years, at least 60 rooms will be unavailable at any point of time. This has further
pressurized the development of the hotel amidst the other rising problems within its
operations. This report will be focusing on the second problem, which is poor staff turnover,
and aim to apply management theories to come up with an effective solution to it. The
discussion in the report will be involving a three point plan, which is the review of the issue,
the solution and recommendation for the issue and the implementation and benefits of the
issue.
Discussion
Review of the issue
This particular issue which the hotel has been facing in the recent years is related to
staff turnover rates. Staff turnover rates refers to the percentage of staffs in an organization

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who end up getting replaced by new staffs. This rate for the company has been a whooping
80%. Therefore, this has cost the hotel immensely, eating up 35% of their sales revenue. This
is because with every staff that leaves, the company has to spend on training and supervision
costs and other costs on new recruitment processes. As 80% is a very high rate, the company
must come up with a plan to do something about the high staff turnover rate in order to make
sure that the sales revenue of the company can be retained in large chunks instead of
spending them largely on new recruitments, for the sustainable development of the hotel
amidst the renovation crisis. A few of the factors which Peter Farnsworth can look into,
pertain to the reasons which former staffs have given on their departure from the hotel’s
workforce.
Some of these issues involve the operational and management aspects of the hotel
directly. These include a poor work culture, which many employees have termed as
aggressive at times. Some have also complained about the work hours which do not provide
them with an acceptable work-life balance. Some have complained about lack of proper
training and poor pay levels, and little scope for promotion and bonuses. Some have also
pointed out environmental issues such as the high costs of living in London, the
transportation problems at night.
Peter Farnsworth must know that he would not be able to eliminate each of the
environmental problems, but the operational problems can be brought under his control, and
some of the environmental problems can be minimized. It is also important to note that since
this issue is replacing old staffs with new staffs, the hotel has been lacking efficiency and
experience in their work. This is because old employees have been leaving the company and
the hotel is having to rely on new employees to take up the position of managers, or promote
existing employees prematurely. If this continues, then according to De Winne et al. (2018),
the hotel would soon run out of sustainability and the future would be bleak for it.

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The main issue which this problem has outlined is that of an internal management
issue. Management has been poor, especially human resource management, which has made
employees unsatisfied with the current benefits and management of the hotel. The leadership
style of the management if the hotel has been highly performance oriented, which has
overlooked the welfare of the employees to a significant level. What the management of the
hotel requires at this stage of time is that of an employee oriented or relationship oriented
leadership style which would highly consider the human aspects of work as well as the
performance and objectives aspects. In such a case, as learned thus far from the problem, the
most beneficial strategy would be to implement an employee oriented management style as
per Dale-Olsen (2016), which would build the group cohesion of the workforce.
The planning
As discussed earlier, the current problem which the hotel has been facing is a big
threat to the sustainable development of the hotel, and therefore, the current manager must
come up with a new management strategy to combat that, amidst the sales crisis of the hotel.
The problem pertains to the unsatisfactory working conditions and benefits which the
company provides to its employees, and hence, the solution plan has to particularly focus on
the employee benefits and work culture of the hotel. The recommendation in the previous
section suggested that the management style of the organization must be changed from a
performance oriented leadership to a more employee oriented one. This suggests that the
management theory which the current manager must consider adopting is that of Elton
Mayo’s Human Relations Theory.
A review of the theory
Elton Mayo’s human relations theory is based on this psychology that better working
conditions and human relations in the workforce is essential as it boosts the productivity of

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the team and also makes sure that the employee retention rate shoots up as well (Trahair and
Zaleznik 2017). Elton Mayo in his theory states that psychological factors such as employee
value, personal attention, satisfaction, peace and cohesion, coupled with social factors like
employee relations, working conditions and proper treatment can motivate employees to
work harder and improve their loyalty towards the organization which they have been
working for (Fisher and Bendix 2017). This theory also states that human relations can make
employees satisfied with low pays as well as long as the social and working conditions in the
company (King 2016). This makes perfect sense relating to the case, since one of the major
issues for which employees have left the organization is because of low pay and incentives,
and also poor bonuses. According to Follet (2016), applying this theory would set the
platform for the employees to be satisfied with their work despite the low pay. This would be
highly beneficial for the hotel since it would also ensure that the company does not have to
spend on increasing wages and incentives for the employees as they already have to spend a
lot on the renovation process, which blocks sales revenue as 60 rooms will be unavailable for
the next two years.
The strategy
The strategy which the organization should consider adopting is strengthening
employee relations, and subsequently improve the work culture. First and foremost, it must
be enrolled within the hotel’s jurisdiction that employees must behave cordially with each
other, and rude behaviour should be strictly against the rules of the operations. This will be
done in an attempt to improve the aggressive work culture which many employees have
complained of before parting ways with the hotel.
Focus should also be on addressing the various problems which employees have been
facing specifically. To do this, they should be given an individual document in which they

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can reflect on their problems and dissatisfactions regarding working in the company. This
data should be recorded for analysis purpose, and the data with the highest frequency must be
addressed on the highest priority. According to Dočekalová and Kocmanovahis (2016) is to
make sure that employees have a majority of their issues working in the hotel resolved, and
have minimal work related problems or issues with the management of the organization.
However, it must be noted that the issue of underpay is overlooked by the employees, by
designing the questions in such a way that tends to make employees look into the other
aspects of their work lives.
Regular inspection into the work culture must also be done in order to make sure that
the intended plan is going accordingly. This can be achieved by means like taking regular
feedbacks from the employees. This would also make them feel valued and important to the
organization (Mahshi, Kralj and Arcodia 2018).
Another thing as Guiso et al. (2016) state, which could be done in order to serve the
purpose is appreciation. Appreciation does not necessarily have to be in the form of monetary
incentives. In fact, an honorary prize such as a memento prove to be more effective in
motivating employees and satisfying them in return for their service, than simple monetary
rewards (Giardina 2018). This would be beneficial for the company in terms saving funds and
increasing productivity and employee satisfaction at the same time.
Another strategy to adopt would be to restrict the recruitment of foreign nationals,
since they often prove to be a threat to the organization’s employee retention rates as laid out
by Hitotsuyanagi-Hansel, Froese and Pak (2016).
Implementation, recommendations and benefits
The planned strategy must find a proper implementation strategy as well so as to
make sure that the purpose of the plan is fulfilled. An email must be sent out to every

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employee about the organization’s new HR policies. Prior to that, the manager must have a
detailed meeting with the HR manager of the organization, to clarify each point about the
new policy of employee oriented management. The roles and responsibilities of the HR
manager must be made clear to him or her, so as to make sure that the plan is implemented
effectively.
Followed by that, the organization must look into designing questions for the
employees, who would respond about their difficulties in the workplace. The wisest way to
do this would be to ask the employees about the management and culture related problems in
the workplace. Thus, the issue of underpay will not be a part of the response.
Managers and team leaders should be regularly trained to behave well with their
employees, and that must be incorporated in to their job descriptions. Also, according to
Quian et al. (2016), organizations must look forward to hosting mini appraisals throughout
the year and appreciate employees who have given outstanding services to the organization.
Managers must also be told to appreciate their employees for their efforts instead of lashing
out at them, alongside explaining the benefits of this behaviour to the organization.
Benefits
 Higher employee satisfaction would lead to higher employee retention, reducing the
issue of high staff turnovers.
 Adopting the humanist aspect of leadership by only addressing the managerial and
operational issues, makes it sure that the hotel would not have to spend extra for the
satisfaction of the employees.
 35% of the sales revenue will be retained by the hotel, which will prove to be crucial
for the hotel amidst the renovation and revenue crisis.

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 Sustainable development as a result of high employee retention and work culture,
which would one day lead to highly efficient and experienced employees, and less
expenditure on new recruitment processes.
Challenges
 According to Healey, Bleda and Querbes (2017), many managers and team leaders
might not be able to abruptly change their aggressive ways of managing employees.
This might make them feel awkward all of a sudden, and might backfire the hotel if
they choose to leave the organization instead.
 Asking specifically about the operational and managerial aspects of work might make
the employees think that their core expectations are being deliberately overlooked.
 A sudden change in the work culture of such a big organization might bring about a
disruption in the work processes of the organization (Alvesson and Sveningsson
2015).
Conclusion
From the above discussion, it can be concluded that considering the problem of poor
employee retention by The Imperial Hotel, the best management theory to apply would be
Elton Mayo’s human relations theory. Under this, strategic measures like taking feedbacks
from the employee regarding their complaints about the workplace, formulating HR policies
about good behaviour to employees and appreciating employees at regular intervals should be
considered. Recommendations also include restricting recruitment of foreign nationals since
they pose a threat to employee retention. However, the challenge lies in coping up with the
abrupt change in work culture, making sure that it does not disrupt the work processes of the
operations.

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Bibliography
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Dale-Olsen, H., 2016. 2. Employee turnover. Research Handbook on Employee Turnover.
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De Winne, S., Marescaux, E., Sels, L., Van Beveren, I. and Vanormelingen, S., 2018. The
impact of employee turnover and turnover volatility on labor productivity: a flexible non-
linear approach. The International Journal of Human Resource Management, pp.1-31.
Dočekalová, M.P. and Kocmanova, A., 2016. Composite indicator for measuring corporate
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Follett, M.P., 2016. 7 Management thought and human relations. A History of Management
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Giardina, M., 2018. Can money buy happiness? Analysis within the labour market and
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