Regency Grand Hotel Business Analysis

Introduction to the Regency Grand Hotel: Introduction to the Regency Grand Hotel

The Hotel is among the five star hotels in Bangkok, established by local investors. The ownership of the hotel was later transferred to the American Hotel Chain. John Becker a man with a good history in organizational management became the General Manager. Becker introduced an empowerment strategy as an aspect that would increase employee motivation and satisfaction. The practice reduced the bureaucratic governance that was embedded in the past management.

The employees were now able to get involved in decision making, creativity, and innovation. Interaction with top management was also encouraged. Becker’s policy however did not improve the performance of the organization, he spent a great deal of time solving employee problems, there was an increase in the number of complaints by customers and an increase in mistakes made by the employees. The performance of the organization therefore deteriorated. Symptoms & Causes of Deterioration of Performance:

Symptoms & Causes of Deterioration of Performance

Cultural factors Communication factors

Staff performance: personality and organizational fit

Job design and role ambiguity

Espoused and enacted values

Power hierarchy & decision making process

Stress, absenteeism, high staff turnover and job satisfaction

Major issues in the case: Major issues in the case

Organizational change inadequately managed.

The differences in the newly merged workforce with dissimilar profiles had not been addressed.

Following this, Becker did not employ a communication strategy that supported the dissimilarity between management and employees and their different cultures. The unclear decision making process and power hierarchy.

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Lack of proper analysis of the chances of success of the strategy of empowerment. Lack of proper coordination within the management team, when trying to implement the empowerment strategy. The Hotel also faced the challenge of social emotional conflicts among employees. Contingencies of power such as source of power were not clearly outlined.

These issues resulted in high levels of stress, absenteeism and turnover. Communication and Culture: Communication and Culture Prior to the take over, The Regency Grand was Thai owned and operated. While weighed down by the internal processes the census was one of understanding and fitted in within the cultural bounds. The American conglomerate conducted little research into the culture as reflected by Becker’s appointment and utilization of predetermined strategies ill-suited to an already successful business.

English is becoming the common business language in Thailand (Chakorn, 2006). Verbal and written communication differs greatly between the two cultures, amplifying the need for Active listening. Implementation of organizational change: Implementation of organizational change in times of change within an organization, it is essential for the management team to ensure that employees are actively involved in the process of change. Becker introduced his new policy to the directors of the organization.

He however, found himself all alone trying to implement the empowerment practice. Involving employees in the decision making initiatives is crucial. The purpose of this is to make them feel part of the organization (Lynn, 2008). The empowerment criteria employed by Becker enabled assimilation of employees in the decision making process. Their contributions were however, not profitable to the organization. Involve staff in change Involve staff in decision making Ensure staff feel included in organization More successful organizational change Organizational Culture and Change :

Organizational Culture and Change Organizational culture exists where a set of cognitions is widely shared by members of a social unit and comprised of fundamental assumptions, values, behavioral norms and expectations, and larger patterns of behavior (O’Reilly, Chatman & Caldwell, 1991). Employees at the Regent had an organizational affiliation to the Hotel, adding to the organizational culture. O’Reilly, Chatman and Caldwell (1991) indicate that individuals will choose roles, occupations and organizations based on congruency with their own values.

Organizations tend to recruit individuals who are likely to share their values. When Becker implemented changes in job roles and organizational structure, without maintaining a congruency in values, this may have lead to changes in the organizational culture. Person-culture fit will increase commitment, satisfaction and performance. To ensure this is implemented, it may be necessary to adjust aspects such as hire new staff with similar values, or help existing staff to see congruency between their values and those of the organization. Personality :

Personality “Cultures shape the expression of traits but not their levels” (Hofstede & McCrae, 2004, 74). Personality traits have been found to have a significant role in influencing job choices and work values (Berings, Dufruyt & Bouwen, 2004) Therefore, these traits should be taken into account, both when hiring employees and when designing and redesigning job roles. Big Five Personality Traits: Big Five Personality Traits Through research, five primary personality traits have been found to account for personality variations in society (Robbins, Bergman, Stagg & Coulter, 2006).

These traits are: extraversion, agreeableness, conscientiousness, emotional stability, and openness to experience. Teng (2008) indicates that Schneider and Bowen (1985) found that personality traits of service employees can predict service quality. By hiring employees with personality traits in mind during the selection process, organizations are better able to create a suitable job-personality fit, and therefore improve profitability. Personality Trait requirement comparison (Adapted from Robbins et al, 2006) : Personality Trait requirement comparison (Adapted from Robbins et al, 2006)

Personality Trait requirement comparison – cont. : Personality Trait requirement comparison – cont. Working effectively with personality traits: : Working effectively with personality traits: Although personality traits are intrinsic, it is possible to assist employees to display desirable behaviour in a range of circumstances through effective training techniques and skill building. Individual variations in preferences for different organizational cultures are associated with interpretable differences in personality characteristics (O’Reilly et al, 1991).

The redesign of roles, responsibilities and reward systems to encourage desirable outcomes will increase congruency between individuals’ self-perception and person-organizational-fit, thereby improving the high staff-turnover situation as well as job satisfaction. Unclear power hierarchy : Unclear power hierarchy Another major issue encountered at the Regency Grand Hotel which affected the organizational culture was the problem of unclear power hierarchies which lead to staff not understanding their role clearly in the decision making process.

Employees were given empowerment but this proved to be problematic as staffs were unable to discern between what constituted a major or minor problem. Staff found that in many cases when they did make a decision it was later overturned by supervisors. One part of the process of empowerment is impact. “Empowered employees view themselves as active participants in the organization; that is, their decisions and actions have an influence on the company’s success” (Mc Shane, 2008, p. 185). Becker introduced empowerment but this part of the process was distorted as the employees felt that their decisions were not valued and often overturned.

Additionally, Becker stated he would not tolerate the same mistake twice. Staff now found it easier to revert back to their old ways of passing all problems over to their supervisors. This was directly counteractive to the plan of “allocating more decision-making authority to front line employees” (McShane, 2008, p. 192). This further reduced the effect of empowerment. Job Design and Role Ambiguity: Job Design and Role Ambiguity Employees were uncertain of the types of issues that were to be considered “Minor” and “Major”. Without clarification, they continued to refer problems to management. Jobs that have ambiguous demands, jobs that have too many demands, and jobs that do not allow the employee to participate in work related decisions are likely to hinder attempts at successful performance, thereby frustrating higher order needs” (Beehr, Walsh & Taber, 1976, 42). This frustration results in reduced effort and motivation. They go further to state that “Effort toward quality is related to role ambiguity in that concern with the quality of one’s work is not maintained if it is unclear what constitutes task success”(Beehr et al, 1974, 46).

Supervisors were unsure and reversed employee decisions to refer them on to higher levels of management. Role Conflict: The front-line staff were expected to experiment and be creative in dealing with situations at work, but were only allowed to make a mistake once. This resulted in reduced learning capacity as employees began behaving defensively in order to avoid reprimands for errors. Reduced Job Satisfaction: Increase in customer complaints, increase in absenteeism and employee turnover.

Intra-organisational relationships suffered as trust was lost and fear reigned. Poor reviews due to declining levels of customer service. Role ambiguity: Role ambiguity Role ambiguity was another issue for the Hotel. “Role ambiguity can be defined as a lack of information needed to perform the role (Pearce, 1981; Cooper et al. , 2001). This issue can lead to many problems. “Employees who experience role ambiguity tend to perform at lower levels than employees who have a clear understanding of job requirements and what is expected of them.

Likewise, role ambiguity is reflected in employees’ uncertainty concerning appropriate actions in commonly occurring job situations. It explicitly results when employees are not clear concerning the amount of authority they have and when they do not know others’ job performance expectations” (Boles & Babin, 1996, as cited in Ussahawanitchakit, 2008). What is my role? What are my responsibilities? What are my functions? Who is my supervisor? What are the delineations of my role? Where is the information I need? Where is the information I need? Do I have the power/control to do this?

Role ambiguity: Role ambiguity According to role theory, role ambiguity will result in coping behaviors by the uncomfortable employees in organizations that may attempt to solve the problems by avoiding stress, or to use defense mechanisms for changing the real situation. Therefore, ambiguity will allow an employee to be dissatisfied with his role in the organization, change reality and reduce his performance (Rizzo et al. , 1970). It can be seen in the case of the Regency Grand Hotel that due to the lack of clarification of the role each employee played within the organization stress resulted.

This stress lead to an increase in staff moving toward the defensive tactic of pointing the finger at other employees therefore disowning any problems they may have encountered themselves. Recommendations for defining roles and reducing ambiguity: Recommendations for defining roles and reducing ambiguity The remedy for the situations that have evolved within the hotel is to clearly define each person’s role and make them aware of the importance their part plays in the overall operation of the hotel. Ensure employees are aware of their responsibilities.

Additionally to define what is a major and minor problem and make it clear to members of staff who has the power to make decisions at each level, would also be of great assistance. For example if a problem arises at the front counter with a customer which would incur a minimal cost to the organization this could be handled by reception staff with little impact on the supervisor and within a much faster time frame causing less inconvenience to already disgruntled customers. This could be achieved by removal of the ‘same mistake twice rule’ that Becker introduced.

In this way employees would truly feel empowered to make decisions that would have an impact on the organization thereby feeling that they were an important part in the hierarchy that exists in the hotel. Address Managerial / Supervisory level employees’ concerns at losing power. Reward them for encouragement and development of front-line team results. Job Satisfaction Aspect: Job Satisfaction Aspect Job satisfaction is essential for the work. Steven & Travaglione (2007) note that happy workers are generally more productive. The initial management run by the Thai investors provided attractive employment packages e. . high salaries and bonuses. The performance was however, not impressive. The empowerment practice introduced by Becker reduced the bureaucratic governance. Employees were now able to interact freely with the top management. Becker interacted with employee and solved their problems. Nevertheless, there was an increase in the number of complaints and mistakes made by employees. Job Satisfaction Recommendations: Job Satisfaction Recommendations An audit process should be implemented to ensure change in strategy is adopted effectively.

Open communication and feedback is required to ensure management is aware of the situations and any recurring issues that may require further investigation. Employees will respond well to feedback on their actions, this will assist with the learning process. Employ a risk manager, they do one on one coaching/counseling with employees to help with their concerns and be a impartial person to talk to when frustration arise and learn coping skills for the working at the hotel, this would have been great for when they did the changing of owners for a easy transition.

Recommendations: Recommendations As front-line employees have not had power to make decisions in challenging situations in the past, it may be necessary to implement training sessions to improve skills when dealing with these situations, for example, conflict resolution courses, customer service training. An audit process should be implemented to ensure change in strategy is adopted effectively. Reward employees for correct/suitable actions – note rewards may be as simple as verbal encouragement or “Employee of the Month” titles.

Open communication and feedback is required to ensure management is aware of the situations and any recurring issues that may require further investigation. Employees will respond well to feedback on their actions, this will assist with the learning process. Motivation: Motivation is a fundamental aspect of improving the quality of performance of the work force. The Regency Hotel management aimed at developing motivation among employees. However the employees were not motivated. Increased frustration, stress, job dissatisfaction and high turnover were some of the factors that demoralized employees. Encouraging innovativeness and reativity among employees is an essential component of a successful organisation. The free environment provided by the organisation was not effectively utilized by the employees. The performance of the organisation depreciated as a result. Motivated staff Improved performance of organisation Motivation Recommendations : Motivation Recommendations As mentioned earlier, reward employees for correct/ suitable actions – note rewards may be as simple as verbal encouragement or “Employee of the Month” titles. Team Building events, going on vacations with other employees to train up with other employees from the other hotels in the chain.

Whenever the emphasis is on positive feedback it is a good idea to provide feedback in both public and private settings. When employees are recognised and encouraged in public, it acts as a natural stimulant for others who are close enough to see or hear what’s taking place. Monthly training to empower and motivate the employees and sub management to have more skills and coping strategies in stressful/pressure situations. There is never an end to training, employees can also better themselves and that betters the organisation as a whole.

Stress management seminar’s, motivation seminar’s, new skills seminar’s as they say knowledge is power and the more knowledge their employees have will create more motivation and improvement in their work and the hotel efficiently. Team building : Team building Team building enhances the capacity for an organisation to perform tasks faster and effectively (Steven & Travaglione, 2007). Through empowerment employees were supposed to be more united. Employees were instead more divided and constantly in conflict. The empowerment policy was basically enacted for the purpose of improving the organisations performance.

Complaints from customers were frequent The deterioration in service provision captured media attention. Team Building Recommendations : Team Building Recommendations Communication Exercise: This type of team building exercise is exactly what it sounds like. Communications exercises are problem solving activities that are geared towards improving communication skills. The issues teams encounter in these exercises are solved by communicating effectively with each other.
• Goal: Create an activity which highlights the importance of good communication in team performance and/or potential problems with communication.

Problem Solving/Decision making exercises focus specifically on groups working together to solve difficult problems or make complex decisions. These exercises are some of the most common as they appear to have the most direct link to what employers want their teams to be able to do.
• Goal: Give team a problem in which the solution is not easily apparent or requires the team to come up with a creative solution Planning/Adaptability Exercise: These exercises focus on aspects of planning and being adaptable to change. These are important things for teams to be able to do when they are assigned complex tasks or decisions. Goal: Show the importance of planning before implementing a solution Trust Exercise: A trust exercise involves engaging team members in a way that will induce trust between them. They are sometimes difficult exercises to implement as there are varying degrees of trust between individuals and varying degrees of individual comfort trusting others in general.
• Goal: Create trust between team members Stress and case relationship : Stress and case relationship All of the factors identified in the Regency Grand Hotel case contribute to the high levels of stress, and resulting symptoms of stress: absenteeism and high turnover.

Research supports the findings above by citing that open upward and downward communication; supporting creative organisational cultures by encouraging new ideas and mistakes that naturally ensue; clear and constant feedback (Baptiste, 2009); structured job design and work organisation; and well managed organisational change (Redfern, Rees & Rowlands, 2008) are all elements that help reduce the levels of stress felt by employees within an organisation. According to Redfern et al. , (2008, p. 288) negative stress occurs ‘when the pressure placed upon an individual exceeds the perceived capacity of that individual to cope’.

They offer a definition of stress by describing it in the following way: ‘stress releases powerful neurochemicals and hormones that prepare us for action – to flight or flee” (Redfern et al, 2008, p. 288). Results from recent studies highlight some of the possible reactions of negative stress within organisational settings: ‘stress related problems among workers contribute to dysfunctional organisational consequences such as decreased organisational commitment, increased absenteeism, and high turnover’ (Chiu, Chien, Lin and Hsaio, 2005, p. 839).

These reactions have been strongly experienced as symptomatic of issues at the Hotel. Visual depiction of case stressors and results in staff : Visual depiction of case stressors and results in staff New management Organisational change Unclear decision making hierarchy Communication problems Espoused versus enacted values – issues with creative organisational culture Lack of feedback Cultural clash between management and employees Issues with job design Stressors Release of powerful neurochemicals and hormones Possible outcomes Reaction Fight Flight

Recommendations for introduction into the Regency Grand Hotel : Recommendations for introduction into the Regency Grand Hotel Physical activities such as exercises like jogging, aerobics, walking, and circuit classes can be implemented as lunchtime sessions which not only benefit employees by reducing stress levels and stress related illnesses but also work towards strengthening the social and team aspects of work. Research shows that the regular undertaking of such activities in an organisational setting has many positive effects on resilience to stress.

For example physical well being is improved, as is mental alertness, decision making abilities and job performance. Relaxation technique classes also introduced to the Hotel staff would, assist with coping with mental and physical manifestations of stress. Classes that teach employees deep breathing skills, meditation, and yoga echoes the benefits of exercise with additional advantages such as restoring energy and vitality (Treven and Protocan, 2005).

Recommendations for introduction into the Regency Grand Hotel : Recommendations for introduction into the Regency Grand Hotel Much research has been undertaken on how learning and development programs within the workplace can add to employees resilience to stress (Redfern et al. , 2008). Programs such as: Lifestyle programs which educate employees on the advantages of balanced diets and a regular exercise regime Time management kills within a job role to ensure that goals are met with minimal stress (Shuttleworth, 2004) Specific training for managers to ensure they have the skills to control their own stress levels as well as track those of their employees – this particular training will have the added advantage of buy in from the management perspective to develop an appropriate culture at the Regency Grand Hotel as well ensuring that the managers act as role models for their employees (Shuttleworth, 2004) In addition to the exercise, relaxation techniques and learning and development solutions, it is recommended that Employee Assistance Programs be introduced to the Hotel, this program offers employees a service whereby challenging situations can be discussed with counsellors and psychologists who can provide tools that will embed coping mechanisms (Trevern and Protocan, 2005).

Recommendations for introduction into the Regency Grand Hotel : Recommendations for introduction into the Regency Grand Hotel In addition to the exercise, relaxation techniques and learning and development solutions, it is recommended that Employee Assistance Programs be introduced to the Hotel, this program offers employees a service whereby challenging situations can be discussed with counsellors and psychologists who can provide tools that will embed coping mechanisms (Trevern and Protocan, 2005). Recommended stress reducing strategies Physical activities Relaxation techniques Learning and development solutions Employee assistance program Conclusion :

Conclusion The majority of problems experienced during the acquisition of the Regency Hotel may have been avoided or at least reduced dramatically through effective communication strategies, incorporating a comprehensive feedback loop to ensure understanding of changes and new requirements on an organisational level as well as individual level for all employees. Cultural, personal and organisational aspects should be taken into account; and changes to job design and job roles should be made clear to ensure successful adoption of the new system. At this stage, the Regency hotel is in a state of flux, with reduction in staff retention, profit and reputation. Effective change management strategies as outlined in this presentation should now be introduced to assist the employees to build a new Organisational Culture and incorporate the Empowerment strategy.