Imperial Hotel Employee Turnover Report: A Case Study

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Introduction to Management
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Table of Contents
1.0 Introduction..........................................................................................................................3
2.0 Analysis of the Problem.......................................................................................................4
3.0 Conclusion............................................................................................................................8
4.0 Bibliography.........................................................................................................................9
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1.0 Introduction
The Imperial Hotel is one of the oldest hotels situated in London. It is owned by the Star
Hotels, which owns a chain of 4-star hotels in the UK and this hotel is one of them
(Imperialhotels.com, 2019). The hotel has been facing a high employee turnover rate, where
the 80 percent of the staff leave the hotel within the first year of employment. This is due to
many reasons, one of the major one’s being that most of the employees of this hotel are here
temporarily as they are generally students or foreign national from the European Union.
Another reason pointed out is that these employees receive very low wages, which is just
sufficient for being equal to average living wage rate.
The leaving employees have stated many reasons for leaving, some of which are – poor
perception of work culture, unsociable working hours, lack of training, poor remuneration
compared to other sectors, little opportunity for promotions and bonuses, high transportation
costs, and many more. Many talented employees have left the hotel to work in competing
hotels, who offer better pay and good working conditions. This high level of staff turnover
has put significant pressure on the staffing budget of the company. The training cost for the
induction process has been significantly increased due to this turnover. The employees have
also stated decreased job satisfaction and low commitment to the hotel. Due to turnover, the
employees have been pressurised to do more work.
This report will aim at mitigating the high turnover issue of Imperial Hotel with a three-point
plan that will be supported with relevant management theories.
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2.0 Analysis of the Problem
2.1 Discuss the problems of the hotel that are caused from a managerial and operational
perspective. Explain how they link to the other 4 problems.
The main issue of the problem is high turnover rate among employees of the hotel. The
employees of the hotel have already stated various key reasons for which they are leaving the
hotel and going to other competing hotels for employment. Some of these key reasons will be
explained in detail, which will help in pointing out the key management and operational
issues that are causing these reasons to surface.
Poor perception of work culture
The work culture of the organisation defines all their values and beliefs that the organisation
has maintained. These values define the personality of the company and the expectations that
employees of the company expect from the firm and themselves (Rahimi and Gunlu, 2016).
The work culture of the hotel has been seen in a negative perspective by the employees. The
work culture of the company has given a poor impression in the minds of the employees.
They believe that they are not valued enough by the company. The employees thus work less
productively and feel uninterested in working. This leads to lower employee satisfaction and
higher rate of absentees (problem 3 of Imperial Hotel).
The employees have complained that they are forced to work for longer hours than what is
stated in their contract, without pay. The main issue of the employees in this case is that they
are not paid enough for their effort. Competing hotels are giving lesser work hours and higher
pay compared to Imperial Hotels. Working for longer hours also makes the employees feel
more tired easily (Rahimi, 2017). This drops their productivity levels, causing them to work
ineffectively. Higher working hours and lesser also makes them frustrated, making them rude
to the customers, reducing their satisfaction (problem 1). The management of the hotel has
not yet taken any effective stances to the problem of overwork and less pay. The employees
also have lesser chances of getting promotions and bonuses because of the high rate of
turnover. This has created a situation where the management cannot effectively give
promotions and bonuses to employees, as they fear that the employees will soon leave the
hotel.
Lack of training
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Little or no training is given to the employees, which has resulted in the employees getting
more confused on how to do their job and what is expected of them. This causes the
employees to be scolded by the managers of the hotel for their poor performance and for the
various mistakes they might have made (Markova et al., 2016). This makes the employees
disoriented with the work culture of the hotel, leading to lesser satisfaction and poor team
working, especially among the front of house staff (problem 4). No training has also made
them more prone to making mistakes, which have decreased customer satisfaction (problem
1).
Ineffective Managers and Leaders
It can be said that the managers and the leaders are incapable of organising the employees as
evident from this problem of high turnover and other problems. The managers have made no
effort to train the employees so that they become better in handling their tasks. They also
cannot plan the tasks under a proper time slot, leading to the employees working for higher
than necessary hours. The managers have set up ineffective operating and control procedures
in place that have led to stock being pilfered from the kitchen and the hotel inventory
(problem 5). The leader has also implemented a negative work culture pattern as per his style
of leadership, leading to more issues arising along with managerial faults (Moutinho and
Vargas-Sanchez, 2018).
2.2 Suggest 3 recommendations for resolving the problem. It should also improve the
quality of service, staff morale, operational efficiency and productivity to make the hotel
financially stable. Explanations with management and operations theories should be
given.
In order to solve the high turnover problem of Imperial Hotel, three recommendations have
been provided with appropriate management theories. These theories are explained below.
1. Rational Goals and Scientific Management
By applying Frederick Taylor’s Rational Goals Model, the prosperity and productivity of
the employees can be increased if the method of conducting operations get systematised. This
will lead to prosperity of the employees and the employers. This model is also known as the
Scientific Management model. As per this theory, there are five principles which Imperial
Hotel can follow to mitigate the problem of high turnover. These principles are:
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 Determine the best approach: When it comes to handling the grievances and issues
of the customers, the manager should make a list of all the possible solutions to that
particular issue. After the manager has analysed these issues, he or she should choose
the best approach or solution to that problem. This will make task easier for the
employees and save time (Winiecki, 2015). The customers will also be more satisfied.
 Selecting the best employee: After the most suitable approach has been selected by
the manager, he or she chooses the most capable staff member to carry out all the
necessary tasks. This is helpful because guests of the hotel can have a multitude of
issues that require varied staff members to solve them. For example, if a customer has
problems with payment, then the staff member best suited to handle payments will be
selected for the task, which in this case will be the accountant. This ensures that the
tasks are completed swiftly and with finesse.
 Train and Develop Employees: It is important for Imperial Hotel to provide training
to the employees. This will be done to ensure that the staff members become more
capable to carry out their respective tasks. The employees can also be taught new
skills that will be helpful for working in the hotel. Developing these skills will allow
the employee to be capable to carry out a variety of tasks.
 Financial Incentives: The employee can be given financial incentives and bonuses
based on their performance. These incentives will satisfy the employees and will
make them more motivated to work harder so that they can avail these incentives.
 Managers will plan and organise work: In order to prevent issues from rising in the
first place, the managers need to carefully plan all the necessary activities that need to
be carried out during the day. The manager must be able to decide which staff
member is best suited to carry out an activity and thus allocate work to the employees
accordingly (Savino, 2016). Organising activities will help the hotel to be better
prepared to tackle any issues. This will keep employees happy by preventing
overtime, and also satisfy customers.
2. Reducing Bureaucracy
Bureaucracy is one of the key problems that Imperial Hotel is facing. The employees have
voiced complain regarding the work they are given by the managers. They are overworked,
and are not paid for their overtime. They have a poor perception of the work culture because
the managerial system is bureaucratic in nature. This can be overcome by following Max
Weber’s Bureaucracy Theory model has five principles, which are as follows:
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 Proper Regulations: The management should set up proper rules and regulations in
order to organise the workers and keep them in check. Setting up valid and reasonable
rules will allow the hotel to coordinate the tasks of the workers and help in
maintaining the activities of the management and the employees (Beetham, 2018).
 Impersonal Management: The employees of Imperial Hotels are unsatisfied with
their work because they work for long hours without much pay. They also feel less
valued by the organisation. It is to be noted that the turnover rate of the hotel is 80
percent because even though most employees leave the company after working for a
year, some employees do not, signifying that they are happy or are favoured over
others. Impersonal management ensures that all employees are treated equally, which
will increase their satisfaction (Weber, 2015). This will reduce the employee turnover
rate.
 Division of Labour: Division of work between the employees and the managers will
allow the necessary activities of the hotel to be completed swiftly in due time. These
tasks need to be divided as per the specialisation of the employees and the skills of the
manager. Proper division of labour will allow the employees of the hotel to work in
fixed timings.
 Hierarchical Authoritative Structure: Hierarchical structure in Imperial Hotel
should be maintained so that the chain of command and authority is not compromised.
This allows the tasks of the hotel to become clearer and easily distinguishable. The
employees also get to know who their respective managers are (Bennis, 2017).
3. Maintaining Good Human Relations
It is important for the managers and the leader of the company to maintain good relations
with the employees and the customer. They can do so by applying the Human Relations
Theory by Elton Mayo. According to this theory, maintaining good relations between the
employees and the customers with the management will make operations easier (Miner,
2015). The employees will be better able to address the grievances of the employees and the
customers. This is totally dependent on the style of the manager and the leader. Whether it is
autocratic or democratic, the hotel must choose the correct style to manage the employees
and the customers. This will make the employees more satisfied and productive, satisfy the
customers, and reduce turnover along with increasing the profitability of Imperial Hotels.
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3.0 Conclusion
The Imperial Hotel in London, UK has faced many problems which have led to the company
having an extremely high employee turnover rate of 80 percent. The customer satisfaction
rate of the customers is also 60 percent. This is pretty poor compared to other hotel owned by
Star Hotels, the owner of Imperial Hotel and their competing four-star hotels. The new
General Manager of the hotel, Peter Farnsworth needs a definitive solution to five problems
which the hotel is facing. This report has provided relevant theories and suggestions to
overcome the problem of high turnover rate.
The employees of the hotel were leaving within the first year of their employment, making
the management be concerned as a high turnover rate will tarnish the brand image in the eyes
of employees. This will lead to lesser number of personnel to come to the hotel to seek
employment. The employees have stated many reasons for their dissatisfaction, some of them
being low wages, long working hours, poor perception of work culture, lack of training, less
chances of promotion and incentives, and many other reasons. The main reasons for these are
the improper style of management and leadership in the hotel.
These issues can be successfully mitigated by rationalising the goals and tasks of the
employees and the managers by scientifically and strategically managing the employees. This
can be achieved using Frederick Taylor’s Rational Goals Model. Bureaucracy can be
reduced by implementing Max Weber’s Bureaucracy Theory. Good relations with the
employees and the customers can be maintained by following Human Relations Theory by
Elton Mayo (Zoller and Muldoon, 2019). Following these theories will lead to reduced
turnover, improving the quality of service, staff morale, operational efficiency and
productivity to make the hotel financially sustainable.
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4.0 Bibliography
Beetham, D., 2018. Max Weber and the theory of modern politics. John Wiley & Sons.
Bennis, W.G., 2017. Beyond bureaucracy. In American Bureaucracy (pp. 3-16). Routledge.
ImperialHotels.com, 2019. Imperial London Hotels - Great Value Central London Hotel
Rooms From £55 Per Night | Imperial Hotels. [online] Available at:
https://www.imperialhotels.co.uk/en/ [Accessed 4 Jul. 2019].
Markova, E., Anna, P., Williams, A.M. and Shaw, G., 2016. Migrant workers in small
London hotels: Employment, recruitment and distribution. European Urban and Regional
Studies, 23(3), pp.406-421.
Miner, J.B., 2015. From Elton Mayo’s Personality and Motivation Theory to Human-
Relations Training and an Approach to Employee Counseling. In Organizational Behavior
4 (pp. 144-146). Routledge.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Rahimi, R. and Gunlu, E., 2016. Implementing customer relationship management (CRM) in
hotel industry from organizational culture perspective: case of a chain hotel in the
UK. International Journal of Contemporary Hospitality Management, 28(1), pp.89-112.
Rahimi, R., 2017. Organizational culture and customer relationship management: a simple
linear regression analysis. Journal of Hospitality Marketing & Management, 26(4), pp.443-
449.
Savino, D.M., 2016. Frederick Winslow Taylor and His Lasting Legacy of Functional
Leadership Competence. Journal of Leadership, Accountability & Ethics, 13(1).
Weber, M., 2015. Bureaucracy. In Working in America (pp. 29-34). Routledge.
Winiecki, D.J., 2015. Comparing a few behavior engineering models. Performance
Improvement, 54(8), pp.6-14.
Zoller, Y.J. and Muldoon, J., 2019. Illuminating the principles of social exchange theory with
Hawthorne studies. Journal of Management History, 25(1), pp.47-66.
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