MGMT 210 Week 7 Discussion 2

MGMT 210 Week 7 Discussion 2 | Devry University

Week 7: Benefits

The Hotel Paris’s competitive strategy is “To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability.” HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy by eliciting the required employee behaviors and competencies.

Although the Hotel Paris’s benefits (in terms of things like holidays and healthcare) were comparable to those of other hotels, Lisa Cruz knew they weren’t good enough to support the high-quality service behaviors her company sought. Indeed, the fact that they were roughly comparable to those of similar firms didn’t seem to impress the Hotel Paris’s employees, at least 60% of whom consistently said they were deeply dissatisfied with the benefits they were getting. Lisa’s concern (with which the CFO concurred) was that dissatisfaction with benefits contributed to morale and commitment being below what they should be, and thus to inhibiting the Hotel Paris from achieving its strategic aims. Lisa therefore turned to the task of assessing and redesigning the company’s benefits plans.

As they reviewed the numbers relating to their benefits plan, Lisa Cruz and the CFO became increasingly concerned. They computed several benefits-related metrics for their firm, including benefits costs as a percentage of payroll, sick days per full-time equivalent employee per year, benefits cost and competitor’s benefits cost ratio, and workers’ compensation experience ratings. The results, as the CFO put it, offered a “good news–bad news” situation. On the good side, the ratios were generally similar to those of most competing hotels. The bad news was that the measures were strikingly below what they were when compared tothe results for high-performing service-oriented businesses. The CFO authorized Lisa to design and propose a new benefits plan.

Lisa knew there were several things she wanted to accomplish with this plan. She wanted a plan that contributed to improved employee morale and commitment. She also wanted the plan to include elements that made it easier for her employees to do their jobs, so that, as she put it, “they could come to work and give their full attention to giving our guests great service, without worrying about child care and other major family-oriented distractions.”

One of the metrics Lisa and her team specifically wanted to address was the relatively high absence rate at the Hotel Paris. Because so many of these jobs are front-line jobs—valets, limousine drivers, and front-desk clerks, for instance—it’s impossible to do without someone in the position if there is absence. As a result, poor attendance had a particularly serious effect on metrics such as overtime pay and temporary help costs. At the urging of her compensation consultant, Lisa decided to look into a system similar to Marriott’s BENETRADE. With this benefit program, employees can trade the value of some sick days for other benefits. As Lisa put it, “I’d rather see our employees using their sick day pay for things like additional healthcare benefits, if it means they’ll think twice before taking a sick day to run a personal errand” (Dessler, 2015, 452).

What is your opinion of the new Hotel Paris benefits plan?

Dessler, G. (2015). Human resource management (14th ed.). Boston: Pearson Learning Solutions.