The Portman Hotel Company

Problem statement: Given the problems faced by management with Personal Valet (PV) system, should the management continue with the PV system or not. Try wording it more positively and without losing the USP of PV. External and Internal Analysis: PESTCL Political: All the large hotels in the San Francisco area were represented by unions. Typically eight or nine unions represented the different employee groups in a hotel. Unions would generally picket hotels that wouldnt align themselves with the union. The labour rates in U.S.A were much higher than their counterparts in Asia. As a result, having a high staff count at the base of the employee pyramid was not financially viable. Economical: I hope you the difference in the meaning of the term economic and economical Legal: The associates signed a contract that included a bill of rights. In case any rights were violated, the associate could seek redress in court. Not an external issue. They could have not done it. Mere contract of voluntary nature. Pay was commensurate to the work hours on that day. The daily wage structure did not guarantee work hours independent of occupancy, in the hospitality industry. Industry average base pay was $7.50 an hour across hotels

SWOT analysis

Strength:

Opportunities:

-Unique concept of personal valet system which is first of its kind in USA -Competent workforce that takes pride in the work they do. -Good customer-centric policies. & many more you have missed. Weakness:

-Higher occupancy as a possible result of a well executed PV strategy. First entry into the category etc. Missed some key ones.

Threat:

-Lack of experience in hospitality sector. Strange! Portman is a pioneer in hotels. May be in PV they are new. So is everyone else -Training imparted to PVs not up to the mark as compared to the demands of the job. -Work allocation is not appropriate for the kind of work that is expected. -Rates higher than that of comparable hotels.

- Presence of Unions that could influence the PVs in their outlook. -Change in occupancy levels due to seasonal variations. -Glut of luxury hotels in San Francisco. -Competitors coming up with similar business models.

Swot lacked focus on PV which is the problem under examination.

Factors that affect the problem: -Lack of Training (Word neutrally) -Socio-Cultural Drawbacks -Competition -Existing compensation and Benefits. -Recognition for work -Job satisfaction -Fluctuating Occupancy rates Merely highlighting does not make it critical, you should say so. Structure of the teams especially 5 star Decision Framework 1) Socio-Cultural Factors The personal valet system is an integral part of the Asian hospitality sector. However, its effectiveness in America is highly questionable. The power distance which defines the degree to which people accept hierarchical authority is very high in the Asian countries. People in the west are not used to this structure which makes them resist the idea of a personal valet. It is perhaps an idea whose time hasnt yet come. 2) Low Job satisfaction Lack of Job satisfaction among PVs is another major factor which has lead to the problem. The original description involved work that was related to helping the guests by carrying out tasks like ordering theatre tickets or suggesting a jogging route. However, most of the time was taken up in doing cleaning work leading to dissatisfaction. Equity Theory suggests that if an individual thinks there is an inequality between two social groups or individuals, the person is likely to be distressed because the ratio

between the input and the output are not equal. Other groups treated PVs like maids rather than a group crucial to the business strategy resulting in low job satisfaction. 3) Existing compensation and benefits Even though the PVs were receiving many benefits, their base pay was similar to that of a maid. The management expected them to earn more by serving the customers to the best and receiving tips. This was not apt on the part of the management as the customers were not liable to pay tips and hence the valets were earning very less as compared to what was expected .Besides the tips received were also not given to the deserving valet in many cases.

Options: 1) Continue with the existing system for some more time and see if it stabilises over time. 2) Continue with the existing system by making a few amendments to the HR strategies. Like, o Increase the hierarchical structure by introducing some middle level managers between the PVs and the top management. o Appoint a team leader in a team of five who allocates work to everyone in the team and who will be in charge of supervising the team. This would ensure that there is better allocation of work and each personal valet would know what he is exactly expected to do. Currently, the management seems a bit too confused about how work is to be allocated. o A proper reward and punishment policy can be enforced. 3) Exit from the current system (PV) of guest service and implement a revised strategy more suitable for the environment. Their business strategy of providing unparalleled service can still be achieved through other means. Options are well drawn out in relation to the problem Recommendation: Considering the critical highlighted factors, we would recommend that the PV system be abolished in favour of a comprehensive approach that is more suitable for the environment in which the hotel operates.

In future, if the environment were to become more conducive to the PV system, it can be revisited. I hope you have realized that PV system has increased the occupancy a 100%, is the USP, is the first entrant etc. It seems HR problems are so overwhelming that you are willing to give up the business differentiation for it. Would it be the way to create SCA?