Culture of Hyatt Hotel Corporation

The scope for the examination of behavior in organizations is very wide. There is a multiplicity of interrelated factors which influence the behavior and performance of people as members of a work organization. It is important to recognize the role of management as an integrating activity and as the cornerstone of organizational effectiveness. People and organizations need each other. The manager needs to understand the main influences on behavior in work organizations and the nature of the people – organization relationship. (Laurie J Mullins, 2007).

In this assignment I aim to analyse the working of Hyatt Hotel Corporation with reference to their cultural characteristics and how the company portrays itself. I also will analyse their emphasis on coaching their employees and the importance and effectiveness of the same. I will also discuss the tools Hyatt uses to motivate their employees and how it affects performance as well as the attrition rate of the company.

Introduction to the company

Hyatt Hotels and Resorts

Hyatt was founded by Jay Pritzker in 1957 when he purchased the Hyatt House motel adjacent to the Los Angeles International Airport. Over the following decade, Jay Pritzker and his brother Donald Pritzker, working together with other Pritzker family business interests, grew the company into a North American management and hotel ownership company, which became a public company in 1962. In 1968, Hyatt International was formed and subsequently became a separate public company. Hyatt Corporation and Hyatt International Corporation were taken private by the Pritzker family business interests in 1979 and 1982, respectively. On December 31, 2004, substantially all of the hospitality assets owned by Pritzker family business interests, including Hyatt Corporation and Hyatt International Corporation, were consolidated under a single entity, now named Hyatt Hotels Corporation. Hyatt manages, owns, franchises and develops 434 properties around the world as of March 31, 2010.

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The Company’s business is conducted by its employees and officers, under the direction of the President and Chief Executive Officer and the oversight of the Board of Directors to enhance the long-term value of the Company for its stockholders. The Board of Directors is elected by the stockholders to oversee management and to assure that the long-term interests of the stockholders are being served. The Board recognizes that the long-term interests of stockholders are advanced by taking into consideration, as appropriate, the concerns of other stakeholders, including associates, guests, property owners, suppliers, the public and members of the communities in which Hyatt Hotels Corporation operates.

Hyatt Hotels Mission, Goals, Values

Mission

We provide authentic hospitality.

We make a difference in the lives of those we ‘touch’ everyday — that is our definition of hospitality.  We do this in an environment that respects all people and all ideas.  We do it in an efficient way that leads to superior results.  

Goals

We aspire to be the preferred brand in each of the segments we serve…most preferred among our:  

Employees

Guests

Owners (both third party property owners as well as stockholders)

Values

Mutual Respect

Listen well

Verify

Acknowledge

Intellectual Honesty and Integrity

Tell and accept the truth

Honor your commitments

Humility

Let actions speak for themselves

Recognize the contributions of others

Fun

Don’t take yourself too seriously

Creativity and Innovation

Challenge conventional wisdom

Take action/risks

Evaluate

METHOD

As a corporate development trainee at the organization, I was involved in Human resources and Training departments of the hotel which gave me access to the policy manuals, Hyatt employee intranet and other resources. This has helped me gather the information mentioned below. Also, due to constant interaction with other employees of the organization from each department, I am able to analyze the mentioned data and discuss in detail, how the organization is faring and whether the strategy they have applied is beneficial to the performance of the company.

Culture

Hyatt, being a large organization maintains a basic culture although due to the size of the company and the number of employees globally, each division and hotel has developed a sub culture which defines the particular place. Hyatt believes that these sub cultures should be encouraged as long as they do not conflict with the company’s basic culture. In an organization with the diversity and global presence as Hyatt, one can see both, a strong overall culture as well as the growth of powerful sub-cultures that reflect the large culture but are also different in important ways. (Schein, 2003)

The word “culture” in Hyatt International Operations is used to refer to the personality of the organization and is formed by the combination of the following elements:

Shared values (What we think is important)

Beliefs (How we think things should be done)

Norms (The way we do things around here)

Role Models (The people who personify our corporate values)

Systems (Our written and unwritten ground rules)

The company has strong cultural characteristics and values that it abides by. These characteristics are based on the global presence of the company. They have six main cultural characteristics which are elaborated below. These elements determine the ways in which the organization and its people behave and solve business problems.

The six key characteristics that describe the Hyatt culture are highlighted as follows:

We are innovative. – Hyatt was the first hotel chain to start the atrium lobby concept in the world. They have always found alternate and smarter solutions to issues in the hospitality industry. They pride in the concept of being innovators of new trends in the industry.

We work through teams. – Hyatt encourages an environment in which employees are made to work in teams to enhance performance. This also helps in increased motivation and employee satisfaction due to constant feedback from the team.

We care for each other. – Hyatt ensures that the employees are empathetic towards each other’s needs. They portray a picture of a family when speaking with their employees to nurture a caring attitude.

We encourage personal growth. – Hyatt has numerous programs and training modules that allow fast track growth of employees. They have recognition programs for their employees and they ensure that the performance of each employee is tracked and monitored to keep employees motivated

We are multicultural. – Hyatt has a presence across the globe which makes it important for the company to adapt and change according to different cultures. They ensure that there is no discrimination in terms of colour, ethnicity, religion or race.

We are customer focused. – Hyatt ensures that they are focused towards the satisfaction of their external as well as internal customers. The policies of the organization keep the employees, guests as well as owner’s benefits in mind.

These six characteristics are encouraged and rewarded throughout all aspects of Hyatt’s operations. They are introduced to new employees through an updated History of Hyatt presentation during the hotel’s Orientation Program. These cultural characteristics are communicated to all the employees of the organization so that they can reward behaviors which demonstrate them; and, hire people who will thrive in them.

Preserving and communicating their culture in International Operations is critical to their continued growth and success. They can enhance the culture by rewarding the behaviors that support it, by recruiting new employees who can easily assimilate into their culture, and by demonstrating the characteristics in the day-to-day operations.

From a more tactical perspective -, Hyatt makes it a point to reward behaviors that exemplify their culture – such as teamwork, caring, and innovation. This can be done through recognition programs such as HYachiever Awards, HYstar Awards, and others. They also incorporate it into their hiring processes to ensure that they are hiring people who will fit into the culture – and who already share many of these characteristics.

In their culture of inclusion, employees feel accepted for the individuals they are, regardless of their background, style, ideas, or beliefs. Hyatt continues to receive recognition as one of America’s best companies for our diverse population. An illustration of this culture is given below:

For one week, every year, Hyatt comes together globally to ‘Celebrate Our People’ by recognizing and acknowledging the most important asset to the company, their associates. This is also the perfect time to understand the differences of associates and understand the vast cultures represented in the company by pairing and celebrating with a sister hotel in another country.

The culture of the organization if put in a model would be best described by Role Culture mentioned by Charles Handy in his book – Understanding organizations.

Role culture is successful in this organization as it is a very large company with many subsidiaries and units. All the hotels in the company are to be managed and operated according to one particular culture which makes it easy to have a flat, predictable system such as the Role culture. The hotel industry is based on predictions and planning which makes it a sensible decision to adapt to the role culture. Even though as mentioned by Mr. Handy, role cultures are slow when it comes to change, Hyatt manages change quite well as the communication, training and development is very efficiently handled.

Role cultures offer security and predictability to the individual. They offer a predictable rate of climb up the pillar. They offer the chance to acquire specialist expertise without risk. They tend to reward the satisfier, the person concerned with doing his job up to the standard. The role culture is frustrating for an individual who is power oriented, or wants control over his or her work; who is eagerly ambitious or more interested in results than method. (Charles Handy, 1993)

To overcome the predictability and non innovation that role culture brings about in the organization, Hyatt has a number of fast track development programs for employees that enable them to identify potential leaders and enroll them in these programs. The productivity of each employee is monitored carefully and regularly through performance development programs run by the individual department monitored by Human resources.

The most important conclusion is that culture is a multifaceted, multidimensional phenomenon which is not easily reduced to a few major dimensions. Culture reflects the effort put in by the group to cope and learn, and is the residue of this learning process. Culture provides meaning, predictability and stability in the present and is also the result of effective decisions from the group’s past. (Schein, 2003)

MOTIVATION

The hotel industry is a significant part of the tourism industry worldwide and its employees play a key role in delivering the service product to its customers. Excellent service provided by employees can create lasting positive experiences for customers. The individual motivational constructs of the hospitality employee play an important and perceivably a significant role in achieving high satisfaction among hotel customers.

The motivation of employees, whether professional, skilled or unskilled, is a major issue in all service organizations. For the hotel industry, employee motivation is a major issue. It is a challenge for the management of the hotel industry to motivate employees to work with energy and efficiency due to odd hours and high stress situations

One of the company’s responsibilities is related to ensuring employees’ workplace motivation. Human resource management’s function is to assist the company in keeping the employees satisfied with their jobs. If employees are not satisfied, they will not perform to expected norms. Workplace dissatisfaction and poor performance usually lead to high employee turnover in the hospitality industry, particularly in developed countries. According to a Hotel and Catering Training Company in the United Kingdom, turnover is the United Kingdom was estimated to have cost the hotel and catering industry 430 million pounds a year, and turnover was higher among men than women (Lucas, 1995).

It was also reported that in order to reduce labor turnover and retain productive employees, management has to improve working conditions and keep the employees properly motivated. Human resource managers need to understand the motivational processes and human needs in different cultures.

To understand employees’ needs, managers should understand key theories that help them learn the basic needs of people. Maslow’s theory is one of many theories that pointed out the basic sorts of needs. They are Physiological needs, Security needs, Belongingness needs, Esteem needs, and Self-actualization needs. The lower level needs must be satisfied before the next higher level. Another theory, Hertzberg’s is based on two distinct sets of factors: hygiene factors such as pay, organizations, policies, working environment and motivating factors such as recognition, promotion, achievement and the intrinsic nature of the work.

Hyatt has a number of various ways to keep their employees motivated. They follow the Herzberg’s motivational theory with an adaptation of Maslow’s hierarchy of needs.

Hyatt fulfills the Hygiene factors mentioned in the Hertzberg theory by providing the basic needs of efficient supervisory hierarchy, good working conditions, a transparent system of communication and interpersonal relations, a competitive salary along with benefits such a health insurance, provident fund and pension schemes. The company’s Human Resource policies and administrative policies are also in place to ensure satisfied employees.

Hyatt’s motivational factors in terms of the theory are also fulfilling. Their recognition programs are mentioned below in detail. In terms of the work itself, it is a challenging industry which involves a high amount of dedication and self motivation. The timings and high stress situations during peak seasons require on the spot decision making skills while being calm and composed for the client. The attrition rate in the industry is high due to these challenging factors. Hyatt tries to ensure that all their employees are motivated at all times although a weaker personality may not be able to handle the pressure which creates a situation where they do not last increasing the attrition rate of the industry itself.

Recognition Programs

the HYachievers, HYinnovators and HYstar Programs as well as the Service Awards are the minimum requirements that are implemented in every hotel. The Director of Human Resources is responsible for coordinating these programs and plays a pro-active role in supporting and developing new programs as appropriate for the hotel. All employee recognition programs are budgeted annually during the Business Plan process.

HYstar Award: “People making a difference”

The HYstar program has been developed to recognize the employees who continuously demonstrate Hyatt International Operations Cultural characteristics.

The objectives of the HYstar recognition program are to reinforce the company’s vision, mission and culture mentioned above. HYstar points are awarded individually to employees by various sources such as guest compliments, manager’s log, employee suggestions and exceptional performances.

As an employee earns points in the program, they are able to utilize their points to redeem gifts at any point in time. Some examples of the types of gifts a hotel may offer are:

Vouchers (i.e. food vouchers from a local grocery stores)

Phone cards

T-Shirts

Bags

Small gifts (Hyatt Logo gifts)

Additional laundry entitlement

Restaurant vouchers

Hotel merchandise

At the end of the calendar year, one HYstar of the Year will be awarded to the employee with the highest number of points over a one-year period.

The following are examples of awards that could be presented to HYstar of the Year:

Airline ticket to a vacation destination

Stay with full board at another Hyatt property

Extra paid vacation to enjoy the above

Some extra cash to enjoy shopping and vacation

Hyatt also incorporates Maslow’s Hierarchy of needs to keep their employees motivated. They ensure that the Physiological and Safety needs are taken care of by providing a competitive salary including a meal a day and House rent Allowances, they have strict policies to ensure job safety in terms of termination policies and work environment as per local rules and regulations for health and safety. In order to fulfill the social, esteem and self actualization needs of their employees, they conduct an annual survey which has been formulated by an organization known as ‘Gallup’. This survey asks twelve simple questions and can review the satisfaction levels of the employees and departments of the hotels. This allows the company to know the challenges they are facing in terms of employee satisfaction and build strategies to overcome them.

This survey is also used as a tool to evaluate individual hotels, and their departments in terms of levels of satisfaction which in turn affects the efficiency of the employees eventually affecting the performance of the company.

The summarized results of the last two years are mentioned below as an overview of the performance of the company.

In 2010, participation was strong and the 86% of Hyatt employees around the world filled the survey. The aim of conducting the survey is for the company to understand how to provide the best workplace in the hospitality industry.

1) Hyatt increased the population of employees who feel ‘engaged’ by 11% in comparison to 2008/2009.

2) Over 16,000 action plans were prepared and executed in 2009. The results show that those who worked together to develop a plan and then saw it through to meaningful change were rewarded with the significant improvement in their team’s engagement. Those who did not complete plans, or have meaningful discussions, saw their engagement levels remain flat or decline.

3) RECOGNITION and PROGRESS in the first half of 2010 showed the most overall improvement from 2008-2009. These were also the two items that most work groups selected in the action planning process.

In 2010, Hyatt found that engaged employees are 11 times more likely to know what Hyatt stands for and what makes it different from competitors. Engaged employees are also 12 times more likely to be proud of Hyatt’s products and services, and 10 times more likely to recommend Hyatt to friends and family.

Importance of the survey to Hyatt

There is a clear and strong relationship between positive business outcomes and a workforce that identifies with organizational goals and demonstrates a strong, emotional commitment. Building and sustaining a positive experience at work for employees is important. This kind of accomplishment does not happen overnight and, once achieved, can vanish quickly if the support of engagement is not made a part of everyday lives.

The feedback in 2010 will make it possible for Hyatt to focus on two or three areas in each department that will improve the work experience for the team members. Managers will be accountable for establishing meaningful action plans with the team to drive change. Information sessions are being scheduled to support action planning in individual departments and hotels with the goal of improving the employee experience at Hyatt. In addition, regular messages are posted on the employee portal that provides information on best practices that relate to creating preference in the workplace.

Coaching

The Hyatt Leadership Network (HLN) is an employee portal containing standardized training modules that have been developed for the employees. Each employee is enrolled in these modules according to their job description. The format of HLN is intended to provide resources that are easily accessible for learners and to support individual and business development needs.  

Hyatt Leadership Network learning content is organized within four schools. 

The School of General Studies provides the fundamentals of learning for all employees.  The resources available support Hyatt’s mission, goals, and values by providing resources that build on Hyatt’s culture.  

The School of Hospitality provides the operational standards of performance and includes the technical skills, service expectations, and systems knowledge required in daily hotel operations. 

The School of Management provides resources supporting management skills development for Hyatt employees that lead to superior results. 

The Leadership Institute provides formal and informal development opportunities designed for future leaders at Hyatt. 

  Hyatt believes that personal growth is an important aspect of an employee’s ‘Hyatt experience’; the Hyatt Leadership Network is important for the company by helping the employees meet their individual development goals. 

Apart from the above, each hotel has an individual training department that imparts regular training and development modules which are beneficial to the employees. The training managers are responsible for doing a training need analysis for the employees and enroll them in various programs for their development and growth.

Training is used to improve knowledge and skills, and to change attitudes, it acts like an important potential motivator. There are many benefits of training to the employee as well as the organization:

Employee confidence, motivation and commitment increases

It provides recognition, enhances responsibility which may lead to increased pay and promotion

It provides the employee with a sense of personal satisfaction and achievement which broadens opportunities for career progression

Helps to improve the quality and availability of the employees. (Mullins, 2007)

Below, is a table provided by Mullins in his book defining Training, and summarizing the training in an organization. This chart fits in with an organization like Hyatt due to its large size, skill requirements and situation handling needs in its employees.

There is also a strong mentoring system in place. Each new employee is mentored by an experienced employee. This helps the new employees learn and understand the processes as well as provides them with a confidante who helps them fit in to the organization and imbibe the culture.

Coaching is the process of helping employees improve performance and develop their capacity to perform well in the future. It is about changing behavior to make things better. Because the process of change is difficult and can provoke anxiety, people often resist it. The forces of inertia are strong, but effective coaching can surmount them. (Friedman, 2010)

Hyatt Hotels encourage coaching with the help of the mentoring system, and a concept known as Hyatt on skill training. This training module is undergone by supervisors and above. Graduating this module enables employees to conduct training sessions for tasks. Training may be conducted within the department / team. A trainer is entitled to train three other employees at a time. This enables personalized coaching for employees which makes it easier for them to understand and work on day to day tasks thus increasing the productivity. Monitoring of employees’ performance is also easier and more effective making them more confident in their jobs.

Summary and Conclusion

After the above report on Hyatt Hotels Corporation, one can derive many conclusions about the company. Hyatt is a very large organization with a presence around the world and has been awarded many times for being a great company to work for. Some of their most recent awards are mentioned below:

The Culture of Hyatt

Taking into consideration, Mr. Charles Handy’s models of culture, Hyatt follows the Role culture model. This model is getting increasingly popular with large organizations as it works by logic and rationality. The internal business processes are controlled by

A process and procedure for roles – fixed job descriptions, definition of authority

A process and procedure for communication – fixed channels and tools of communication

Rules for dispute settlements – a process of appeal and thorough investigation.

Hyatt portrays a strong corporate culture. Corporate culture may be defined as the sum total of the customs, traditions, values and meanings that make the company unique. Since the corporate culture is formulated by the senior management and founders of the organization, it is often termed as the “character of the organization”. (Montana P, 2008)