Imperial Hotel Case Study: HRM and Management Strategies Analysis

This case study examines the Imperial Hotel in London, a four-star establishment facing significant challenges due to high staff turnover. The analysis delves into the root causes of this issue, including low salaries, inadequate training, and limited opportunities for advancement, which contribute to a turnover rate of 80% within a year. The study evaluates the impact of this turnover on the hotel's operations, including increased costs related to recruitment and training, diminished service quality, and a decline in customer satisfaction. The paper applies management theories, particularly human relations and employee equity theories, to propose solutions. These solutions emphasize the importance of understanding employee needs, fostering a positive work environment, and implementing strategies such as performance appraisals and reward systems to improve employee satisfaction and retention. The conclusion emphasizes the need for the hotel to adopt human relation approaches to address the high turnover rate, improve staff morale, and ultimately enhance the hotel's performance and brand image.

Assessment Case Study 1
ASSESSMENT CASE STUDY – THE IMPERIAL HOTEL, LONDON
Student’s Name
Code + Course Name
Professor’s Name
University Name
City, State
November 4, 2018

Assessment Case Study 2
I. Introduction
The Imperial Hotel in London is a valued four-star restaurant owned by the Four-star
Marketing Start Hotels. Apart from the Imperial Hotel, the managing group controls other
twenty-five hotels rated four stars. The main customers served by the premium hotel are
international business individuals and tourists. With the hotel’s high definition, guests visiting
the facility aspire to have a unique experience and improved standards of services. However, the
Imperial Hotel has also experienced some strategic and management problems that could
potentially ruin the brand image of the company in reference to its rank in London’s hospitality
industry. This paper is a case study of the second problem i.e. high staff turnover with 80% of
the staff leaving within a year. The rate of turnover in the industry is due to the existing
condition of employment and low salary. The Imperial Hotel employs foreign individuals and
London students who work in the industry for a specific duration of time.
II. Analysis of the Individual Problem
The high turnover rate in the hotel was realized due to the high costs of operation of
approximately 35% of the gross revenue in the company. The increased revenue expenditure is
defined through the high costs incurred in training new workers; which has resulted in the
reduction of the quality of services delivered to clients. The industry will lose good and recurrent
guests due to poor quality of services offered by the employees. Moreover, the workers decide to
quit their initial company and work for a competitor due to lower levels of job satisfaction.
Transferring from one company to another may be influenced by decreased the commitment and
morale among the workers hence leading to an increased rate of turnover (Cho and Lewis, 2011).
When the Imperial Hotel fails to address the concern of high rates of turnover, then more
additional costs of operation will be incurred in training and employing new workers. Peter

Assessment Case Study 3
Farnsworth, the new GM, believes that when some mitigating strategies like increasing the
amount of salary, offering quality trainings and undertaking performance appraisals are used,
they will lead to more job satisfaction. When employees are satisfied, they will be able to focus
on their capabilities in the organization (Charan, 2014). Significantly, the aspect of identifying
and rewarding the best workers encourages competition of workers to become supervisors hence
leading to an overall increase of the management of the staff in HRM practices.
Evaluation of the Turnover Rate
The rate of turnover in the hotel is the second most fundamental problems that the
industry struggles to handle. The rate of turnover at the hotel is 80%, which makes more than
eight hundred employees in the industry to leave in a year. According to an interview involving
different workers, the status of the company's culture makes the management to have a low
perception for the work hence leading to more turnovers (Alessandri, Borgogni and Latham,
2016). At the present, the company has a culture of turnover, which makes the workers to refer to
the uneconomic working hours as the cause for turnovers. Apart from that, the workers
complained concerning the quality of trainings offered to them. This factor resulted into poor
wages given to them with no consideration of promotions and opportunities to be supervisors
over others. The low rate of payments will be unable to meet the demands of travelling to various
chains in Central London; mostly considering the increased costs of travelling. Since other
neighboring hotels in London offer their employees a good workplace environment and salary,
the Imperial Hotel has a lower competitive advantage in the hospitality industry.

Assessment Case Study 4
Effects
The increased rates of turnovers in a company are a significant concern based in its
implications to the overall health of the organization. Moreover, high turnover rates result to the
company's increased necessity to invest more funds to sustain its production in the competitive
world. The management of high rates of turnover is resource consuming since the company will
be forced to hire new skilled personnel or train them, which means more spending of revenues.
In that case, companies need to effectively deal with high turnover problems since they might
have devastating effects on the company's growth and profitability (Cohen, Blake and Goodman,
2016). The process of hiring, recruitment or selection of new employees could be expensive in
most companies; since the human resource managers will have to include additional costs in
training less competent workers. Moreover, the newly employed individuals might ask for a
higher salary than what the existing or previous workers would. A company that experiences a
lower rate of turnover might spend more revenues in its operation compared to the one that
incurs higher rates of turnover. Whichever the case, organizations will have to employ a
consultant to help solve the pending issue, which means more operational costs are spent in the
process (Hvide and Kristiansen, 2007). To control the issue, the company will require more
resources and time to deal with the matter instead of using this chance to diversify its strategic
operations, advancing its performance and investing or implementing new marketing techniques.
It is fundamental for an organization to encourages and instill morale to its workers.
When morale levels are low in a company, turnovers would be observed hence affecting the
overall workplace condition and performance. In that case, a company with a high rate of
turnover obviously has workers will low morale. Moreover, workers experience a lowered
morale when there is constant withdrawal or transfer of individuals from the workforce to other

Assessment Case Study 5
companies. In addition to morale, low payment to workers might stimulate some of them to seek
other employment opportunities. Even if a worker still perseveres in their current organization,
they will automatically feel demoralized when others move to other companies (Kim, 2012). The
high rate of turnover in the Imperial Hotel led to low production from workers with low levels of
morale. Since the company had a high rate of turnover, it was evident that there were individuals
with lower levels of job experience than the previous ones.
Due to this, the rate of production and efficiency of workers decreased in reference to the
hotel's initial level of success and competitive dimension. Poor experience and morale of workers
are the major reasons why guests were served so poorly, hence affecting the overall brand image
of the hotel. Unsatisfied customers were forced to look for other four-star hotels in London. This
step made the company to decrease its competitive advantage in the hospitality industry. When
workers feel bored or constrained in a certain workforce, they will seek for other places to fulfill
their career objectives and personal desires. However, a company can effectively offer quality
trainings to existing workers to enhance profitability and productivity (Kosteas, 2010). Using
trainings as a measure to solve potential management issues in the workplace, workers can
formulate a rounded competence to add value to the Imperial Hotel.
III. Management Theories to Mitigate the Issue
Therefore, the most appropriate managerial technique that the managers from the
Imperial Hotel can employ is the use of human relations in the management process. This
technique points out the need of organizational managers to analyzing organizational behavior
(mode of conduct in an organization). On the contrary, the main hypothesis explaining the
human relation theory is that a firm can only achieve its objectives through its people and with
the people. This approach was presented by a scholar known as Elton Mayo in the 19th century,

Assessment Case Study 6
with the agitation of boosting business performance. This theory emphasizes that human beings
are not economic-rational but have emotions, which alter their daily activities and offers the
radical view of business and people operation (Ariely, 2009). Additionally, every firm is
centered upon the mutual aid and rather not mere mechanical systems. Therefore, essential
characteristics constituting the human approach process include:
 Clear comprehension of human behavior by organizational managers
 Every managerial staff should be in a position of being aware of the inter-personal
relationship with respective employees
 Lastly, improved human relations in the workplace results to higher production rates and
increases motivation levels
Consequently, the employee equity theory is the most suitable model of the management
theory presented by Peter Farnsworth, which targets at minimizing the turnover rates at the
Imperial Hotel in London (Marcoulides, 2008). On the other hand, the theory of human equity is
directly applicable to human relation who is targeted on improving organizational productivity
and upholding employee motivation at the hotel. Since the theory is in compliance on the basis
that it is essential in figuring out a reasonable sense of balance amid the employee output and the
employee’s production rates. Thus, production levels signify various levels of skills, level of
hard work and efficiency rates. On the other hand, employee output rates imply the monthly
salaries or the profits that employee acquire from various production inputs in an organization.
Therefore, in an event when any employee feels that the output levels are less compared
to the input levels, it results to depreciation in employee’s morale in any firm. Thus, it is
essential for most organizations to make certain that employee’s inputs are highly considered in
the any organization, which is achieved through sufficient pay and benefit (Brotherton, 2012). In

Assessment Case Study 7
order to boost organizational performance business employees should initiate an excellent
reward scheme, which will boost organizational performance and not making employee seek
alternative solutions in competitive firms. Hence, factors such as commitment, flexibility, skill,
hard work, and effort are outlined to essential input that boosts employee equity. Moreover,
employment equity theories also commend factors such as the use of financial incentives and job
security expansion, which are aligned as employee outputs.
With this perking order of theoretical needs scholars such are Abraham Maslow exhibit
rigid resemblance of an effective human relation technique that helps in minimizing employee
turnover rates (Alshanbri et al., 2015). In addition, the theory points forward that every employee
constitutes of essential needs that all employers should strive in satisfying in order to improve
their motivation. Not being in a position of meeting every employees needs will result to each
employee inquire about other employment opportunities in other firms. For instance, an essential
basic need that employee require include career, growth, and development. Conversely, in an
event where any employer is not in a position of meeting the stated need for career development
and growth, It will result to the employee to find out other organizations with better rewarding
levels (Maddux, 2004). Like the Imperial Hotel in London in our context, there are rare
occasions where the employee is promoted to higher ranked position i.e. supervisory positions.
This results to absconding of the initial hotel by employees with the aim of finding rival hotels
with the aim of improving their careers in the rival hotels.
IV. Summary
Based on this paper it is thus concluded that the Imperial Hotel in London should employ
various human relation approaches, which will enable it to curb the problem of high turnover
rates. With the presence of a high turnover rate, this implies that the probable organizational

Assessment Case Study 8
problem will be improper human resource. According to the human relation theory, there is an
assertion that a firm will achieve its set objectives when there are proper human relations within
the organizational staffs. Therefore, it is upon Peter Farnsworth to ascertain whether there is
close linkage between the hotel management team and its employees. Furthermore, the human
relation model declare that all managers should take in hand various concepts and ideas which
suppress the living of the employees in the organization, besides that it will results to
abandonment of the firm by the employees upon neglecting of the issues. Presently the Imperial
Hotel in London encounters a high rate of turn over levels due to the unsatisfactory levels of
employees due to low salaries and scarce rewarding systems. Moreover, there has been frequent
account of deprived job satisfaction levels due to insufficient of prospective measures, which
will enable them boost, their career levels (Ray, 2018). Therefore, with the new general manager
Peter Farnsworth should institute various policies of the human relations in order to point out the
problems presented by the employees.
Additionally the new Imperial Hotel manager should make sure that various employee
equity theories are addressed which will solve the problem of employee high turnover rates. The
equity theory of the employees further argues that employee input levels should be equivalent to
the output levels. Consequently, it is vividly clear that the Imperial Hotel comprises of
employees who are not fully satisfied with various pay packages provided by the hotel
managerial system. Pitiable compensation of the hotel managerial systems is the most probable
reason why there is increased turn over levels in the company (Sirota, Mischkind and Meltzer,
2005). According to the employees’ equity theory, there is an assumption that upon equalizing
the input levels with the output levels in an organization will result to boosting workplace
performance and additionally will increase employee motivation. For this reason, Peter

Assessment Case Study 9
Farnsworth should target at improving employee compensation levels in order to minimize
turnover levels at the Imperial hotel. Besides, the manager should make sure that the hierarchy of
need theory is instituted in order to minimize turnover rates at Imperial Hotel in London.
V. Conclusion
Conclusively, with a high turnover rate of about 80% it thus outlines a key issue that the
Imperial Hotel in London encounters. Most common reasons that lead to increased turnover rate
levels at the Hotel are inadequate opportunity of training and growth, reduced employee morale,
and poor satisfaction of employees. Therefore, in order to ensure success and meeting of
Imperial Hotel’s organizational goals and objectives, the new manager should institute these
managerial theories explained in the above sections of the paper (Management Theories to
Mitigate the Issue). Upon application of these managerial theories, turnover rates will be reduced
because employee will acquire training, benefits and higher income levels to increase chances of
increasing the business operations (Митрофанова and Mitrofanova, 2015). High turnover rate
reduction will still relieve the hotel from some additional operation expenses hence increasing
the income levels of the company.

Assessment Case Study 10
VI. References
Alessandri, G., Borgogni, L. and Latham, G. (2016). A dynamic model of the longitudinal
relationship between job satisfaction and supervisor-rated job performance. Applied Psychology,
66(2), pp.207-232.
Alshanbri, N., Khalfan, M., Noor, M., Dutta, D., Zhang, K. and Maqsood, T. (2015). Employees’
turnover, knowledge management and human recourse management: A case of Nitaqat
Program. International Journal of Social Science and Humanity, 5(8), pp.701-706.
Ariely, D. (2009). The End of Rational Economics. [online] Harvard Business Review. Available
at: https://hbr.org/2009/07/the-end-of-rational-economics [Accessed 27 Nov. 2018].
Brotherton, P. (2012). More Employee Input and Accountability Yield More Effective Practices.
[online] Main. Available at: https://www.td.org/magazines/td-magazine/more-employee-input-
and-accountability-yield-more-effective-practices [Accessed 27 Nov. 2018].
Charan, R. (2014). It’s Time to Split HR. [online] Hbr.org. Available at:
https://hbr.org/2014/07/its-time-to-split-hr [Accessed 27 Nov. 2018].
Cho, Y. and Lewis, G. (2011). Turnover intention and turnover behavior. Review of Public
Personnel Administration, 32(1), pp.4-23.
Cohen, G., Blake, R. and Goodman, D. (2016). Does turnover intention matter? Evaluating the
usefulness of turnover intention rate as a predictor of actual turnover rate. Review of Public
Personnel Administration, 36(3), pp.240-263.
Hvide, H. and Kristiansen, E. (2007). Management of knowledge workers. London: Centre for
Economic Policy Research.

Assessment Case Study 11
Kim, N. (2012). Employee turnover intention among newcomers in travel industry. International
Journal of Tourism Research, 16(1), pp.56-64.
Kosteas, V. (2010). Job satisfaction and promotions. Industrial Relations: A Journal of Economy
and Society, 50(1), pp.174-194.
Maddux, R. (2004). Effective performance appraisals. New Delhi: Viva Books Private.
Marcoulides, G. (2008). Performance appraisal: Issues of validity. Performance Improvement
Quarterly, 2(2), pp.3-12.
Ray, L. (2018). What Are the Causes of Job Satisfaction in the Workplace?. [online]
Smallbusiness.chron.com. Available at: https://smallbusiness.chron.com/causes-job-satisfaction-
workplace-21851.html [Accessed 27 Nov. 2018].
Viveros, P., Crespo, A., Barberá, L. and Gonzalez, J. (2015). Graphical analysis for operation
management: A graphical method to support operation decision making. Quality and Reliability
Engineering International, 32(7), pp.2299-2311.
Митрофанова and Mitrofanova, A. (2015). Managing employee turnover. Management of the
Personnel and Intellectual Resources in Russia, 4(4), pp.47-51.

Assessment Case Study 12
VII. Appendices
Appendix 1: Week 4 seminar – Imperial Hotel Case Study Planning Sheet: The Imperial
Hotel Assignment - Formative Exercise
Student Name/No:
Group/Seminar Tutor:
Date of submission: November 4, 2018