Hilton Hotel's Ethical Issues in Reward Management: A Detailed Report

This report analyzes the ethical challenges faced by Hilton Hotel in its reward management practices. It identifies issues such as subjective evaluation criteria leading to bias, conflicts with justice theories, and the impact of reward distribution on employee motivation. The report examines the application of Herzberg's two-factor theory and performance appraisal methods like Management by Objective (MBO) to address these ethical dilemmas. It highlights concerns like wage gaps and potential discrimination, offering recommendations for a more ethical approach, including fair treatment, equitable distribution of rewards, and adherence to ethical principles in all decision-making processes. The report emphasizes the importance of treating all employees fairly and avoiding discrimination, ultimately aiming to enhance employee satisfaction and maintain a positive brand image.

LEADING AND MANAGING
ETHICALLY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Identifying ethical problems faced by Hilton in the area of reward management.................1
Critically evaluating methods employed by hotel Hilton manager for dealing with ethical
issues or dilemma...................................................................................................................5
Recommendations to the firm for adopting more of ethical approach...................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

ILLUSTRATION INDEX
Illustration 1: Herzberg two factor theory.......................................................................................3

INTRODUCTION
Every firm should essentially comply with all kinds of ethical practices while managing
and leading its employees. This is because; lack of consideration of same will lead to cause the
direct impact upon the motivation level of workers. Presently, I am working in one the famous
hospitality firms in UK which is named as Hilton. It is an international hotel chain which was
found in the year 1919. The firm operates more than 540 hotels around the world (Hilton, 2016).
The present report will depict the ethical problem which manager of Hotel Hilton is facing in
relation to the reward management. In addition to this, the study will also showcase the current
approaches as well as policies which are used by the cited firm in order to deal with the ethical
problem associated with reward management. Finally, at the end several recommendations will
be suggested to the manager of hotel Hilton.
Identifying ethical problems faced by Hilton in the area of reward management
It is essential for the firm that it must take measures in terms of enhancing the motivation
of its workers in an effective way. Thus, for increasing the enthusiasm of hotel workers, policies
are used for giving reward which plays very important role. However, while distributing reward
to the employees, there are many ethical dilemmas or problems that arise in front of the manager
of cited firm. Hence, for the corporation, it is essential that Hilton must take significant action
towards the same. However, if not taken, then motivational level of hotel workers will be
impacted in a negative way (Kallio and Kallio, 2014). In accordance with the given context,
there are many ethical problems identified which manager of hotel Hilton faces in the task of
managing and distributing the reward to the respective employees.
In order to distribute rewards to the employees, management of hotel Hilton has to
choose some criteria. Method of evaluation which manager selects can be subjective or
objective. But, the way which manager uses give rise to the ethical issues. Here, a manager
completely ignores an ethical approach while using subjective criteria for distributing reward to
the employees. This is because, in the prejudiced criteria, manager does not consider the
performance or the contribution which is being given by the employees during the specific
period of time. However, in order to distribute reward to the worker hotel Hilton manager gives
importance to its own likes and dislikes. For example, if hotel manager has good relations with
the workers who do not perform well. Then, in the given condition, the respective manager will
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give more reward to the specific employee. This is done with an aim to maintain or continue an
effective relationship with him/her.
However, the given thing is completely argued by the Justice theory of ethics. This theory
states that there are three different types of components namely; procedural justice, distributive
justice and interpersonal justice (Justice theory of ethics, 2016). Here, the component of
distributive justice is concern with the distribution of reward. Thus, the given constituent depict
that the manager must give reward to its employees in accordance with the contribution and
performance which is being given by them. This is because, it is through this way only manager
of organization can maintain or enhance the satisfaction level of its workers. Thus, manager can
motivate its employees by delivering them the return of their best performance in an effective
way.
Hence, it can be stated that ethical issues are arises within hotel Hilton when manager
makes wrong selection of the criteria with respect to distribution of reward to the respective
employees. This is because, if here manager give high reward to the employee to whom he has
good relationship, at that time motivation of other employee will get impacted who does not
have fine terms with the manager (Leonard and Cardy, 2014). It is a serious issue because
manager’s likes and dislikes will lead to affect the motivation of other hotel workers and due to
this they will not being able to carry out their efforts in terms of giving their best performance to
the firm. Thus, because of this, the sales and profits of the hotel Hilton will be affected in a
negative way. Moreover, the given thing will also hamper the brand image of organization in the
eyes of both buyers and workers. Furthermore, such behavior of manager may also create
problems in the future recruitment and selection procedure of employees. This is because, firm
compliance with the given approach may arise difficulty for it with regard to attracting the large
number of workers towards the enterprises (Niven, 2011).
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In addition to this, with an aim to manage reward system for the employees, managers of
firm like hotel Hilton takes help of different theories of motivation. In this context, there are
varied theories of motivation which gives description about the factors which manager of cited
firm can use as a reward management. In this context, one of the famous motivation theories
which are generally being used by manager of many organizations during the process of giving
reward is of Herzberg two factor theories. The theory gives description about two different
factors namely; hygiene and motivational (Herzberg two factor theory, 2016). The factors
possess many means of distributing reward to the workers which leads to raise the motivation of
employees too. For example, it has been assessed by the manager of hotel Hilton that due to
constant negative feedback about their performance, employees who are working at the lower
level felt highly de-motivated and dissatisfied. The impact of same will be seen upon the
performance of employees (Nussbaum, 2013). Thus, in order to enhance the motivation of these
workers, manager of hotel Hilton has taken the help of Herzberg two factor theory. Thus, with
the use of this, manager of cited firm has taken decision that it will raise the motivation of these
employees by performing some increment in their basic wages or salary. Thus, the method which
manager has adopted gives rise to the ethical issue or dilemma (Seal, 2010).
This is because; business ethics state that the firm must consider each of its employees at
equal pace. Furthermore, workers should not be discriminated by its manager on any ground or
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Illustration 1: Herzberg two factor theory
(Source: Herzberg two factor theory, 2016)

in any circumstances. Thus, the method which manager of hotel Hilton is adopting is completely
wrong. This is because, in the act of enhancing the motivation of some employees, the
motivation of those workers who perform well and give their immense contribution to the job
which is being assigned to them get affected adversely. Hence, one of the most significant ethical
issues which are being faced by the hotel Hilton manager in the process of raising the motivation
of employees is to treat each and every employee in a fair and equitable manner (Witzel, 2004).
However, the employee's attrition rate within hotel will increase if cited corporation will
not take significant action towards the same. Moreover, due to this, trust of workers from the
company will also be lost. In addition to this, method which firm uses in order to give bonus or
reward to the employees tends to increase the huge wage gap among them. For example,
manager of hotel Hilton sets some benchmark for its employees with an aim to review their
performance for the particular period of time. It is set on the basis of criteria’s such as number of
negative feedback received by them and their behavior with respective to customers of firm etc.
Here, on the basis of given criteria, employees are given ratings as per 5 point scale (Zhang and
Fan, 2013). Here, percentage of bonus rises as per the given five point scale. For example,
employee’s salary will be increased by 5%, if they will get 2 points. In the similar way, 20%
salary of the employees will be increased if they will get 5 points.
For instance, on reviewing the performance of employees, manager of firm has given
different types of ratings to its worker. Here, some workers have received 5 points and some
have received 4.5 points. There is a very negligible difference that exists between the given two
points, yet the individuals who have received 4.5 points will not be considered as liable one with
regard to 20% increment in their salary. Thus, there is a huge wage gap prevail between the
given two employees. As a result of it, an ethical dilemma arises in front of manager of hotel
Hilton. This is because, in the given circumstances, it becomes difficult for the manager of
organization that whether it should follow ethical approach in the given situation or not (Aksakal
and Dağdeviren, 2014). However, if not followed, then the direct impact of the same will be seen
upon the motivational level of employees in an effectual way. Overall, it can be said that for the
firm it is essential that they must consider ethical aspects while making any kind of decision
about the enterprise.
Further, it is necessary for the manager that they must not discriminate its employees on
any ground such as gender, caste and religion. But, while giving rewards to the employees’,
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manager must adopt such practices which are considered as immoral and oppose the equality
legislation of the country. For instance, manager of hotel Hilton has decided to give promotion to
one of its female employee. However, during the process, it is assessed by the hotel Hilton
manager that the respective female employee is pregnant and may leave the company at any
point of time (Armstrong and Taylor, 2014). Thus, on considering the given condition manager
of cited firm has stopped the promotion of female employees and has taken the decision with
regard to encourage some other male employee in place of her. The activity which is being
carried out by manager is completely immoral.
Critically evaluating methods employed by hotel Hilton manager for dealing with ethical issues
or dilemma
The manager of hotel Hilton takes significant actions with an aim to deal with the ethical
problems or issues which arises within an enterprise. In this regard, from the above analysis, it is
assessed that cited firm faces ethical issues while distributing rewards to its respective workers.
Here, while giving reward, manager of cited firm will have to make the selection of specific
criteria (Rose, 2014). However, instead of presence of set criteria many times the performance of
hotel employees are influenced through manager biasness. This gives rise to ethical issues. With
an aim to resolve the given issue, manager of hotel Hilton uses the technique of performance
appraisal which is also called as Management by Objective (MBO). The given technique plays
very important role in the process of giving reward to the workers in a fair and equitable way.
Here, in this method, the performance as given by hotel employees is not influenced through
leader or manager’s own likes and dislikes.
The method consists of different steps and these are used with an aim to evaluate the
performance which is being carried out by the cited hotel employees in an effective way. The
detailed explanation regarding the assessed steps is depicted as below: Goal setting: The process begins with the setting of goal. The given target is jointly being
decided by both manager and employees of the organization. For example, manager of
hotel Hilton has the goal to enhance the satisfaction of its customers by giving them high
quality of services (Hussain and et.al., 2013). Performance standards: Here, on the basis of above mentioned goal, manager of cited
firm has developed different performance standards for the respective employees. With
regards to the hotel Hilton, there are number of performance standards identified. It
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consists of number of positive feedback received by the workers. Furthermore, another
performance standard would be the type of behavior which is carried out by the
employees while dealing with their respective guests (Carroll and Buchholtz, 2014).
 Comparison and Periodic review: Here, the manager of hotel Hilton compares the
performance of employees on the basis of set criteria and accordingly it will give reward
to the employees. For instance, here manager will offer or give high reward to the
employees who have fulfilled all the given set of criteria. Thus, the given method which
is being used by hotel Hilton will provide opportunity with regards to give reward to the
employees on the basis of their performance. Thus, through this way, the ethical issue of
judging the employee performance as per manager’s likes and dislikes is being resolved.
However, it has been critically evaluated that the performance evaluation method which
is used by manager of cited firm is effective but it takes lots of time and money of the enterprise
(Bratton and Gold, 2012).
In addition to this, the manager of hotel Hilton faces ethical dilemma when major wage
gap exists between two employees due to slight difference in the performance rating. This type
of condition puts manager into dilemma. In order to resolve the given issue, manager of hotel
Hilton has directed its efforts in terms of standardizing the reward management policy. It is
framed and formulated by them and the same thing will also need to be communicated by them
to their employees. Here, through this way cited firm can resolve the problem of ethical dilemma
which arises when there is a very slight difference assessed between the performance ratings of
two employees (Perkins, 2013). However, this slight difference develops major variation in the
salary of respective workers. In accordance with the given context, it can be said that
standardizing the reward policy of firm is being considered as an effective method, but it leads to
hamper the motivational level of those workers who are not doing well than the employees who
have achieved high score in the performance rating method. Thus, in order to maintain the
motivational level of these employees, manager of hotel Hilton takes help from different non
monetary sources. It consists of assigning of more roles and responsibilities to the workers and
giving letter of appreciation to them etc. These all given practices as being employed by the
manager of hotel Hilton plays very effective role in terms of increasing the motivation of those
workers who have achieved well but because of some complication their performance is not
being rewarded by the manager in an appropriate manner (Zheng and et.al., 2016).
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However, it has been critically evaluated that it is not necessary that non monetary form
of motivation will help in enhancing the motivation level of all workers who are feeling de-
motivated due to their rating. This is because, for some employee money matters a lot. Thus, for
the firm, it became very difficult with regard to enhance the motivation level of workers by
employing varied other means as well.
In addition to this, manager of hotel Hilton uses all the provisions of Equality act with an
aim to treat its respective employee in a fair manner. In addition to this, here firm will not
discriminate its workers upon any aspect (Noddings, 2013). Furthermore, while preparing the list
of employees who will be promote by the organization, manager of cited firm consider the
performance of employees instead of their personal issues or problems.
Recommendations to the firm for adopting more of ethical approach
There are number of recommendations suggested to the manager of hotel Hilton which
will enable it with regard to respond to the assessed problems in a more ethical way. In this
regard, it is suggested to the firm that with an aim to distribute reward to the employees in a fair
and equitable manner, it should use performance appraisal techniques such as 360 degree
method. It is a method in which the performance which is being given by the employees during
the specific period of time is being analyzed from 360 degree angles (Sparrow, 2013). Here, four
individuals tend to evaluate the performance of employees. It consists of supervisor,
subordinates, customers and employee itself. Thus, the given thing provides opportunity to the
manager in terms of giving an effective rating to the workers in an effectual way. In addition to
this, through this way, significant action towards the practice of likes and dislike of the workers
can also be taken into account (Justice Theory of ethics, 2016). Furthermore, it is by complying
with the given type of activity only; the motivation of workers at hotel Hilton can be enhanced.
This thing will help in developing the sales and profits of firm in an effectual manner. Thus,
through this way only, the cited company can resolve all its ethical issues and problems. Hence,
it can gain the benefits in the form of increased profits and sales.
Moreover, in order to promote fair rating, it is recommended to the hotel manager that it
should employ workers or managers from some other organizations. Here, through this way,
necessary control over the biasness as being done by the employer of firm can be carried out.
Hence, the manager can raise the probability of giving fair and equitable reward to the
employees.
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CONCLUSION
Articulating all the facts and figures from the above analysis, it can be depicted that while
doing different human resource operation and functions, there are many ethical dilemma and
problems being faced by the manager of corporation. Thus, for the firm it is very essential that it
must take timely action towards the same. This is because, if not taken then outcome of the firm
will get impacted in a negative way. Furthermore, the given thing will also cause the direct effect
upon the performance of employees. Due to this, it becomes difficult for the firm like hotel
Hilton to give their best performance to the customers. In addition to this, in order to behave
ethically, it is required by the manager of cited firm that it should prepare its organizational
policies on the basis of do's and do not ground.
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REFERENCES
Books and Journals
Aksakal, E. and Dağdeviren, M., 2014. Analyzing Reward Management Framework with Multi
Criteria Decision Making Methods. Procedia-Social and Behavioral Sciences. 147. pp.147-
152.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave
Macmillan.
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder
management. Cengage Learning.
Hussain, S. and et.al., 2013. Impact of Effective Training Program, Job Satisfaction and Reward
Management System on the Employee Motivation with mediating role of Employee
Commitment. Journal of Public Administration and Governance. 3(3). pp.278-293.
Kallio, K. M. and Kallio, T. J. 2014. Management-by-results and performance measurement in
universities–implications for work motivation. Studies in Higher Education. 39(4). pp.574-
589.
Leonard, B. and Cardy, R. 2014 . Performance Management: Concepts, Skills and Exercises.
Routledge.
Niven, P. R., 2011. Balanced scorecard: Step-by-step for government and nonprofit agencies.
John Wiley & Sons.
Noddings, N., 2013. Caring: A relational approach to ethics and moral education. Univ of
California Press.
Nussbaum, M. C., 2013. The therapy of desire: Theory and practice in Hellenistic ethics.
Princeton University Press.
Perkins, S., 2013. 7 Executive reward. Reward Management: A critical text. p.148.
Rose, M., 2014. Reward Management. Kogan Page Publishers.
Seal, W., 2010. Managerial discourse and the link between theory and practice: from ROI to
value-based management. Management Accounting Research. 21(2). pp. 95-109.
Sparrow, P. R., 2013. 11 International reward management. Reward management: a critical text,
p.233.
Witzel, M., 2004. Management: the basics. Psychology Press.
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