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The Regency Grand Hotel is one of the most prestigious and luxurious hotels in Bangkok, Thailand. Since its inception, it has earned a brand name in the industry owing to the exceptional salaries and benefits offered. The hotel staff and managers felt privileged being a member of the hotel, and perceived that they were being taken well care of under the leadership of the then General Manager.
The following case study illuminates the dilemma of the employees undergoing the management changeover following its acquisition by an international group.
In the earlier set-up, the employees were expected to follow the orders of their managers without questioning them. Initiatives to solve problems at personal level were discouraged and it led to lack of innovation and risk-averse behavior. Eventually, the hotel staff got accustomed to the style of management over the past fifteen years, and it made the work go smoothly with minimal number of conflicts.
However, the recent sale of the hotel to a new American group introduced an altogether new style of administration to the employees. The management style of the new GM was entirely opposite to what the staff was familiar to, and it caused problems bringing the hotel’s performance and reputation down the drain.
Problem symptoms and indications
The former style of management gave limited authority to the front line employees and did not permit them to take any action on the spot without referring to their superiors. On the contrary, the new General Manager (John Becker) encouraged them to perform beyond their routine duties to provide customized services and thus make them feel special. This is directly related to empowerment, which is a key aspect in the service industry especially the hotels (Hubrecht & Teare, 1993). Becker’s motive in employee empowerment was linked with his intention to achieve competitive advantage through upgrading the staff competencies. As stated by Wall, et.al (2002, p.147) employee empowerment results in motivation, inventiveness, implied knowledge, participation, and enthusiasm necessary to survive in today’s cutthroat competition.
Although, Becker saw empowerment as a means to enthuse employees and “delight the customers” (Barbee & Bott, 1991, p. 27) the hotel’s current managers expressed their disappointment. They were discontented with the idea of giving bottom line employees more authority and decision powers. The disparity in management approach is attributed to the cultural differences in these countries, for instance power distance, and uncertainty avoidance (Hofstede, 1980, p.45-55).
Thailand and USA fall in the extreme ends of the cultural continuum presented by Hofstede (1980). Efforts are generally focused towards equal distribution of power in USA, while only a few people are given authority in Thailand given the larger power distance in the latter. Also, there is strong uncertainty avoidance in Thailand, calling for more written rules & regulations, whereas uncertainty is easily accepted in USA and emphasis is laid on minimal formal rules (Hofstede, 1980, p.51).
Becker failed to recognize these cultural differences while implementing his theories into practice. Joining a new organization and country demands awareness about the various social and cultural issues involved before transforming the existing practices (Lane & Beamish, 1990, p.88). What worsened the situation further was his previous experience in places with poor performance and low employee morale. It is noticeable that his new assignment was doing sound business; therefore, his approach ought to be different in this case.
Becker spent a great deal of time with the employees in an effort to elucidate his expectations from them. The role theory (Bush and Busch, 1981; Teas et al., 1979) mentions that the frontline employees have a greater need for role precision to carry out their duties efficiently. Role clarity perceived by the customer-contact employees is not only advantageous for customer satisfaction, but is also associated with employee’s job satisfaction, organizational commitment, and performance (de Ruyter et al., 2001).
Yet, he did not succeed in putting a clear demarcation between complex and small issues. This kind of uncertainty was a continuous threat and led to higher anxiety and stress among the employees since strong uncertainty avoidance prevails in Thailand (McShane and Travaglione, 2007, p.47). The employees did not have a clear role perception due to role ambiguity. In this regard, Saks (1996, p.301-23) states that role perception is a result of role ambiguity, and with time this may result in stress specially when working under a new management.
In addition to that, the employees were not able to distinguish between a major and a minor problem because of the lack of training (assumption). They had never been assigned a decision-making role before, and unfortunately did not receive a proper guidance from their seniors in such difficult situations.
A further study into the Regency Grand Hotel shows that in quest of employee empowerment, power was transferred from the middle-line managers to the lower rank staff. Daft (1995) suggested that the recent trend of flatter organization structures have considerably altered the traditional role of supervisors. Consequently, the managers found their job meaningless and reversed employees’ decisions by terming them complex issues. They insisted that upper management’s approval is required to address such problems and thus, tried to regain their supremacy. The manager’s reactions are associated to their control needs, achievement needs, and recognition needs () that forced them to maintain their grip on routine decisions.
Furthermore, the employees did not receive any kind of support, feedback or appraisal for taking initiatives and going out of their way to enrich customers’ experience. As per Herzberg (1959) theory, motivation techniques such as superior’s support and a positive and timely feedback have enduring productive influence on the employee behavior and resulting performance.
In this context, experts have referred to the ABC’s of behavior modification theory (McShane and Travaglione, 2007, p. 85-86) which states that employee behavior can be modified by managing its antecedents (for example encouraging staff to take initiative) and its consequences (for instance approving their decisions and constructive feedback). The theory further states that people have a propensity to repeat behaviors and actions that are followed by pleasant consequences, and extinction occurs when no consequences follow at all. Since the managers did not provide any support to the employees engaged in the desired work behavior, their self-driven decision-making process disappeared.
The absence of motivation from the superiors eroded the employees’ self-confidence and they started to totally rely on their superiors to make decisions on their behalf. This is because of the high collectivism in Thailand (Hofstede, 1980, p. 45) where there is a strong need for consensus.
The overall problem with the Grand Regency Hotel is directly linked to the MARS model, which identifies four key factors that have a direct effect on employee behavior, viz. motivation, ability, role perception, and situational factors. The employee performance levels drop if any of these factors is absent from the organizational context (McShane and Travaglione, 2007, p. 36). It is apparent from the study that the employees were not motivated to continue the new task behaviors, and they lacked the ability to define the complexity of the decisions, which again led to ambiguous role perceptions.
Moreover, the dissatisfaction of the hotels’ staff affected their work behavior as evident by the increase in the number of turnovers and absenteeism. These are undoubtedly identifiable with the EVLN model of employee responses to dissatisfaction at work. It is found that exit is the most frequently used response of the four reactions in a notion that no better alternatives exist. (Withey & Cooper, 1989, p.533). As indicated by (Lau et al., 2003, p.77) role conflict and a low degree of job involvement leads to a higher absence rate. Low levels of supervisory support and immediate social control resulted in increased absenteeism. (Price, 1998, p.227-246).
The number of employees mistakes reported to upper management increased; this is because of the lack of training, feedback and motivation.
With passage of time, an organization wide culture emerged in the hotel where lower level employees throw their work over the wall to upper level employees indulging in counterproductive act (Lau, et al., 2003, p.75). As a result, the performance of the employees dragged the overall hotel performance down leading to an increase in the number of guest complaints.(Heskett, et al., in Koys, 2001, p.113) This was demonstrated in the heightened criticism in the newspaper and magazine reviews where the hotel was named as “one of the Asia’s nightmare hotels”.
The hotel General Manager and the employees experienced high levels of stress. Becker’s stress was clear from his statement “unless the hotel is on fire don’t let anyone disturb me”. He was annoyed by the increasing number of consultations from managers regarding minor issues, which otherwise were supposed to be sorted out by themselves. This reflects lack of training on the managers’ front as well. The role ambiguity was the main reason behind the employees stress as they misunderstood their roles. Role conflict and role ambiguity have been found to be the major causes of role stress (Boles & Babin in Siegall, 2000, p.427).
The ever-increasing stress levels experienced by the employees weakened all the good relationships that were existent under the older management. The employees were no longer united, and because of that, counterproductive behaviors surfaced in the form of backstabbing and employees not taking responsibility for their actions.
In brief, even though Becker introduced empowerment with kind intentions, his plan failed because of poor implementation. He acted too fast that the spontaneous empowerment in fact snatched power from everyone involved. He did not give sufficient time to the newly empowered to be trained or get mentally prepared for their new roles. The next blunder Becker made was of believing that the managers would readily pass on their powers to their subordinates the minute he declared empowerment program. In his zeal to initiate empowerment, he ignored all other factors to support his decision.
The recommendations for improving the performance of Regency Grand Hotel are presented for all the three hierarchal levels mentioned in the case study.
The current managers of the hotel backlashed on the new General Manager’s decision of giving more decision powers to the front line employees. Those dissatisfactions were the consequences of cultural differences (low power distance in America, while high power distance in Thailand). Obviously, dealing with cultural clashes is difficult since cultural patterns change very slowly (Hofstede, 1980, p.53). Therefore, Becker should consider these issues and address them beforehand. We would recommend higher degree of compatibility in his leadership style. In this situation, he should conduct meetings with the managers in order to clarify their doubts, and communicate the same down the hierarchal levels. It would be logical to check on their performance on regular intervals of time.
Next, he should try to lessen the power distance between the managers and the front office staff by means of social events and gatherings. It would definitely ease out the managers’ egos and identify the hidden potential of their subordinates. In the end, this would help them to act like mentors to facilitate change rather than being directive in their approach. As said by Quang & William (1998, p.361) influence of multicultural leadership on flexibility, empathy, understanding problem solving, and communication leads to a successful organizational change.
Moreover, emphasizing on trust, communication and mutual objectives should be taken into account. Becker should train the managers in their new roles as coaches to assist the employees in taking independent decisions. Goal sharing for improving customer service and hotel’s overall performance should be implemented to bring them together as a team.
In order to have a successful implementation of empowerment we must have strong self-determination, meaning, competence and impact. If any of those four dimensions is weak then it reflects directly on the empowerment process. (Forrester, 2000) Though Becker’s idea of empowerment was positive in itself, yet his plan proved disastrous. One way to make the process more effective is selective empowerment, which limits delegating power to employees who display the appropriate competencies. Invest in enhancing their knowledge and skills through formal training, mentoring, and self-learning because rightful application of power depends on one’s capabilities. Employees should be given a chance to demonstrate expertise by employing simulations, case studies, mentors, and supervised trials. They should be assigned low-risk decisions first, and progressively work up to challenging judgments since achievement at the safer levels would boost confidence through expectancy of success. The employee performance could be improved due to the self fulfilling prophecy of the managers. (McShane and Travaglione, 2007, p.80)
Becker should influence the managers’ perceptions that better results are obtained through empowerment than not. This may be done by following a sequential approach. First, focus on empowerment that does not steal complete authority from the mid level managers. Instead, enhance employees’ power by widening their knowledge set and providing them with more training and development opportunities. Second, begin the process from the top levels of management and trail down the changes to the subsequent lower ranks. This would allow the seniors exercise greater power and, going through a successful empowerment experience would raise their expectations from the change. Finally, concentrate on specific materialistic results, for instance initiating a performance appraisal and reward system based on the level of power demonstrated by a manager’s subordinate and reward more generously to team work as compared to individual performance. For successful implementation of empowerment, managers need to believe that they are in control of their outcomes.
The employees were confused in differentiating major and minor problems, which originated from their lack of role clarification. Role clarity implies the required information that is provided for employees in order to do their jobs efficiently (Kelly and Hise, 1980 cited in Mukherjee and Malhotra, 2006, p.446). In the given case study, it could be prevented by following the three key essentails of role clarity, i.e. feedback, participation and finally team support. The effectiveness of employees depends on their perception about wielded power by superiors. (Yukl, 1981).
Managers should focus on providing their employees with feedback, paying more attention to normative feedback as it positively affects the individuals’ performance by improving either perceived competence, competence valuation (Sansone 1989) performance pressure (Butler &. Nisan, 1986; Ryan, 1982) or a combination these factors. The effect of positive normative feedback on the performance would not be relevant unless employees were well trained in a way that their skills would match the tasks they were entailed to handle. This would enhance their perceived competence (Sansone 1988), which is handling customers minor problems without referring back to their supervisors.
The employees were uncomfortable in their newly assigned role and hesitated to accept the responsibilities. In addition, lack of motivation from the seniors wore down their confidence. Instead, the performances should be followed by adequate rewards to ensure staff that they are on the right track (Locke and Latham, 1990, p.241). Providing on the job training to employees should be one of the middle managers’ priorities, as it has been proven a good way to learn (Wood, 1994). Also, well-trained employees will be better prepared to face the organizational change (Lange, 2006) occurring at the Regency Grand Hotel, which will in return help them overcome the challenges involved with the process of empowerment.
Apart from General Manager and the managers, the front line employees should also share responsibilities for making the empowerment program successful. McShane & Tavaglione (2007, p.186-89) identifies four core necessities in employees’ behavior, namely competencies, self-monitoring and designing natural rewards. To participate in the empowerment process, employees should possess adequate capabilities to deal with the additional decision making roles.
Another suggestion for the employees proposes practicing self-leadership. Certainly, it was the managers’ duty to provide the employees with proper training and feedback, but we should not overlook the part of employees themselves. They should try to set goals for themselves to create self-direction and self-motivation required to execute the new tasks. Self-leadership incorporates five key elements that is personal goal setting, constructive thought pattern, designing natural rewards, self-monitoring, and self-reinforcement. Employees who indulge in all the above-mentioned practices would perform jobs better than the ones being supervised by others, and as Larkin asserts, high self-monitor generates more confident individuals to adapt to the empowerment approach.
In addition, “speaking up” of the employees should be regarded as an important solution (Premeaux & Bedeian, 2003, p.1537). They should express their point of views about work related issues, recommendations, or requirement of changes and alternative approaches. The problem rose in Grand Regency Hotel because employees were hesitant to speak out their positions due to the fear of punishment. McShane & Travaglione (2007) argue that the voice of employees should be established as a way to communicate dissatisfaction and to propose ideas to the manager to improve situations.
Finally, employees who possess self-awareness, as one of the four dimensions of emotional intelligence, would have better emotional responses. Higher level of working emotions and attitudes would help employees attain better performances and prevent the tensions among the hotel employees.
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