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A Strategic Review of the People Management Issues in Capital Hotels and Conference Centres (CHCC)

Info: 3757 words (15 pages) Essay
Published: 12th Nov 2021 in Human Resources

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INTRODUCTION

Capital Hotels & Conference Centres (CHCC) is a medium-sized international business that owns and operates 50 hotels and conference centres mainly in the UK and Western Europe. The company strategy has shifted to targeting only 4-star hotels lately in capital cities such as Toulouse, Bangalore, Bangkok, Bucharest and Shanghai and getting away from their 3-star venues and hotels going forward replacing the owners with a British General Manager.

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This report aims to analyse the factors that are likely to be contributing to the people management problem in CHCC. First, this report will discuss issues related to low business growth, then examine the challenges that this organisation has faced with the Graduate Development Program and finally move to identify the issues related to managers ' engagement, development and turnover. As a member of HBS hospitality & tourism consultancy services, a strategic review of the people management issues must be carried out for the apparent growth of the business analysing the CHCC acquisitions strategy and financial performance.

LOW GROWTH

As analysed from the Nampak business case study by Smedley (2011) A Lot of Bottle, where the business was cost-focused and traditional manufacturing without considering people's savings. The Managing Director of the company Nampak, Eric Collins says, “The mindset has traditionally been that labour is cheap- so you invest in machinery and processes, you don’t invest in people”. CHCC is also a cost-focused company where, the company views their staff as a cost instead of viewing them as an investment.

Another issue prevailing here in CHCC is that CEO (ex-chef) aimed to create hotels for good quality restaurant to attract local diners in addition to hotel and conference guests.  The hotels lack the operational excellence required by the hotel targets in order to deliver at par excellent guest experience.

The fierce competition and lack of quality in service leading to a slower growth rate in comparison with the similar hotels and conference businesses. As viewed in the case study by Karson and Murphy (2013) on attracting local guests to resort food and beverage operations: The case of the Orlando Resort and Spa. Restaurant owners needs to understand the foundations of marketing strategy in order to identify their most profitable consumer base and the strategies needed to capture their patronage. The National Restaurant Association (2007) defines marketing strategy as consisting “of the major decision you must make about the segment of a market, which one or ones you can profit by addressing, how to position your products and services in that market, and why that market should buy your products and services.”

CHCC have replaced the owners with the British General Manager and seconded a Head of F&B and other Heads of the department from the UK. As suggested by Chung (2011) Developing your global know-how. ‘Global experience is considered imperative for career success, especially in the sales and marketing function’ regarding the relocation of the staffs or executives. Because it causes failure to adapt to a different culture, lack of competency and lack of communication skills resulting in a slower organic growth in the company as managers are not satisfied with their jobs.

Due to the acquisition, the turnover or the organic growth rate of hotel was less (around 60 million pounds) as compared to the competitors which are making 61 to 63 million per year. (1% to 3% more). As the study suggested by Amorós and Dalmau (2012). The Impact of Mergers and Acquisitions on Brand value in the Hotel Sector during the economic crisis in Spain says that, Mergers and Acquisitions (M&As) was the solution for many businesses to deal with the crisis, viewed by businesses as an efficient and fast way to gain market share, expand into new markets and acquire new brand. But making an M&A does not warranty that the new firm will succeed in every objective. It’s hard to meet all the stakeholder challenges. All researchers and media reports claim that most mergers fail, approximately 70% of acquisitions fail to achieve their expected value. Consequently, mergers and acquisitions sometimes end up destroying rather than creating value to companies.

The location of the company also acts as a factor of low growth here, as it is based in Reading, Berkshire which is a small town in England surrounding the countryside ideally not good for a business hub as it is famous for its medieval period. As suggested by Klein (2004) Corporate Headquarters Site Selection, the headquarters location is an important part of the company's image and role for its shareholders and consumers as well and is a basic component of its market position and how its products are perceived by the customers.

THE GRADUATE DEVELOPMENT PROGRAMME

The problem here is with the Graduate Development Scheme set up by the Personnel Manager for recruiting the graduates, most of whom were only British. It was unsuitable and most of the graduates left within few months for better pay and benefits as company lacked management and training development centres for the graduates neither the managers have any selection nor recruitment skills. According to the HR director Stevens J Sainte-Rose (Coca-Cola, 2008) for external appointments “You always have to have a fresh perspective and fresh thinking”. The Monitoring, Validation and Assessment process is missing from CHCC managers here to understand the needs of the staff to have training objectives for better strategic planning for the company.

A survey from the Coca-Cola (2008) Caught by the Fizz, brand commitment showed that marketing staff thought that more time was spent purchasing the talent to fill the positions rather than cultivating the talent. There was a running pilot programme to assess the training and development and evaluate the advancement strategies that would check whether people identified as highflyers were ready for promotion.

CHCC has failed to adapt the functioning of The International Assignment Cycle (Harzing and Christensen,2004) which closely follows the Recruitment and Selection process involving internal and external consultants, followed by the Hiring and Preparation of workers, by providing them with training to adapt to the Expatriation in another country followed by the Repatriation, enabling them to return and adjust back in the company. 

The concern added here is that, the Head Housekeeper and Public Relations and Publicity Manager are women and as a female, they could have some issues such as job discrimination, irregular working hours or perhaps the level of skills required in the hospitality industry. As said by Weyer (2007) explaining about the persistence of the glass ceiling for women leaders Gender inequality remains in leadership positions, even with lower-level women's visibility 20 years later.

Also viewed from the case study by Menicucci et al. (2019) on Does gender matter for hotel performance? As gender diversity in the workplace is perceived both as a social and ethical imperative (Kelan, 2008; McCabe, Ingram, & Dato‐on, 2006). Given the evolution of women's participation in the global labour market, it is noteworthy that a growing number of women hold leadership positions previously controlled by men. Female employees often find it difficult to compete with their male counterparts due to various visible and invisible obstacles and barriers (e.g., marriage, motherhood, sexism and stereotyping). For instance, this issue is heightened when the functional aspects of hospitality management include long working hours and high levels of flexibility (Pinar, McCuddy, Birkan, & Kozak, 2011).

The issue here is that the Personnel Manager and Training Manager have been internally promoted from the F&B department and are now reporting to the Finance and Administration Manager. As the Finance and Administration Director's job description indicated by the Princeton-Blairstown Centre (PBC) is a 108-year-old, 501(c)(3) non-profit organization notes that its role is responsible for the organization's accounting, financial reporting, budgeting, tax compliance, investments, insurance, talent management and audit functions. The position ensures appropriate controls and procedures of the financial and accounting process are in place and is also responsible for managing the organization's operational, talent management and IT structures. That's why they are better suited to strategic decision-making and operations that improve the performance programming and capacity building of the organisation, therefore not really people oriented.

SATISFACTION, DEVELOPMENT and TURNOVER of MANAGERS

Middle managers moving on to better jobs as they have received very little management training or development despite the fact the company was holding an open course management programmes for the managers. According to Dr Cole (2016) CIPD report about Training Line Managers says, There is a terrible confluence of pressures on middle managers to ensure that workers provide a truly high-quality service to service users, meet the organization's needs in terms of results, performance details, be transparent to department heads, look at the team's care and confinement to protect them in that sense. Therefore, it is important to provide training and development programmes for additional experience, understanding, structured work and thinking for them to take away good institutional memory as they go on to find better jobs.

In order to take away the institutional memory when the managers or staff leave, as seen from the Coca-Cola (2008) Caught by the fizz case study, Managers deal with an unforeseen problem, counselling, training sessions, personality development and feedback, and 360-degree analysis. When participants leave the centre, detailed feedback is given from both a marketing manager and an SHL (Saville and Holdsworth Limited) an international company conducting personality, behavioural and skill testing providing individual solutions coaches that relate to their current development programmes.

One of the recruitment choices for middle managers was to second them to global hotels and bring them back to senior positions, but

25 per cent left early due to unhappiness

35 per cent fell short of GM's goals and

30 per cent left within one year because of the lack of cross-culture training programs, language barriers, culture differences, lack of communication skills, lack of competency and political instability provided to them by CHCC.

According to a report by Prokesch (2007) How GE teaches teams to lead change says that the reasons for the foster growth of the company have been:

  1. Team training through an opportunity for managers to reach consensus on the obstacles to progress.
  2. Participants are encouraged to understand both hard barriers (organisational structure, skills and resources) and soft barriers (how the leadership team members act and spend their time individually and collectively).
  3. Managing the present and building the future is everlasting leadership.
  4. Create a common language of transition.
  5. The programme was not an academic exercise; it was intended to establish an action plan for the company.

According to the research conducted by Deery and Jago (2015) on Revisiting Talent Management, work life balance and retention strategies says that, employees who left for another company did so because they were given career progress or because they were confronted by other hotels offering better terms of employment. While greater opportunities for training and development are very important to retain staff. Karatepe (2013b) says that work engagement as a motivator will help retain talented employees through training empowerment and rewards.

CONCLUSION

After analysing the case study, the factors responsible for the cause of the problems was mainly the lack of training and development programs by the company. The root cause was having this business run by a Britisher instead of hiring a local Manager from the target countries as they were expanding towards Asia in order to understand and get familiarised with the local culture, people and language.

CHCC lacked recruitment and selection training due to which many graduates left their jobs as they were not given any feedback, motivation, incentives or rewards for good performance along with better pay and benefits.

The aim of the CEO who was an ex-chef had no experience in CRM (customer relationship management), was not updated with new technology and advancement and lacked experience for the current role. His aim was to create a hotel for good quality restaurant and attract locals for the business but he seems to lack  skills , and  does not appear to be well equipped with the staff management recruitment and operational qualities in order to meet the hotel targets to deliver excellent guest experience.

The company can benefit immensely from a proper marketing team to handle internal and external promotions of the company. The company was not updated, and Head of the Departments was following the old-fashioned recruitment policies as they were not agile thinkers and lacked efficiency and effectiveness in delivering the services with their team.

They lacked staff satisfaction and retention due to which many graduates moved on for better jobs. As the success tagline stated by Chiemelie (2019) Bacardi Martini UK “Family and people focus culture”. CHCC needs to effectively develop a set of organisational values to communicate, direct and reward, and use appropriate training and recruitment to enhance the match between potential and current staff and the needs of a value-based organisation.

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