HR Practices Of Four Seasons

Introduction

Nowadays the range of luxury hotels all over the world is very big. There are different types of luxury hotels and all of them have their own policy, procedures and missions. Competition among these kinds of hotels is huge nowadays. The competition is based not on prices or percentage of discounts but it is based on values, exclusivity, atmosphere and quality of service. One of these competitors is world known, luxury brand Four Seasons Hotels and Resorts. However Four Seasons Hotels and Resorts managed to differentiate them from all other competitors in the Hotel Industry. In Four Seasons, management has a huge value of their employees, because they know that the power of service is in human resources. Human Recourse Management in Four Seasons Hotels and Resorts definitely plays very important role for providing success of the company and delivering premises to their employees and customers. The following research provides readers with full picture of Human Resource Management Policy of Four Seasons hotels and Resorts. Also additional recommendations and comments are given in order to clarify the policy and mission of Human Resource Management. The research includes five important questions about HRM. Answers for these questions can be used as tools to improve the human resource policy of Four Seasons Hotels and Resorts. As for readers the research will help them to understand the value and mission of Human Resource Management in Hospitality Industry.

Introduce the Company and its positions in the Hospitality Industry. Is it an employer of choice?

“Four Seasons Hotels and Resorts” Company was founded in 1960 by Isadore Sharp and positioned as luxury hotel chain. The first hotel was opened in 1961 in the downtown area of Toronto, Canada. Isadore Sharp started a new kind of luxury hotels by making it personalized, taking care of each customer and offering an excellent service for their guests. For funds Sharp involved his brother-in-law, Eddie Creed and his friend, Maurry Koffler. Each of them contributed to the project. From 1970 till 1976 there were opened several Four season Hotels and resorts in London, Ontario and Bahamas. In 1976 Four Seasons hotels and Resorts grew and decided to expand in North America. So in 1976 they entered the US market in San-Francisco. So in 1977, Isadore Sharp along with Creed and Korrler decided to convert Four Seasons Hotels and Resorts into private company. Four Seasons has created a new niche in luxurious segment of Hospitality Industry, thus provided themselves with a great opportunity to grow. In 1986 the company went public, by being presented on stock market, but in 2007 it became private company again. By 1991 the company had around 36 hotels all over the world and around 13 sales and corporate offices. However Four Seasons faced with some financial issues and was rescued by investor from Saudi Arabia, the Saudi Prince Al-Waleed. In 1994 he purchased 25 percent of Four Seasons’ stocks and invested around C$100 million. After investing by Saudi Prince, the Four Seasons continued their expiation and opened new properties in Singapore, Mexico City, Berlin and Prague. In mid-nineties, whole hotel industry faced a downturn. As a result Four Seasons Hotels and Resorts turned to managing style rather owning hotels because it was much more profitable in the long run. (Four Seasons Hotels Inc’s HR Practice., 2009). Nowadays Four Seasons Hotels and Resorts has 84 properties all over the world with exclusive service and very clear company’s culture. Nowadays Four Seasons Hotels and Resorts has several competitors in Hospitality Industry. They are Fairmont Hotels, Ritz-Carlton, St. Regis and Mandarin Oriental Hotel Group.

Positions of Four Seasons Hotels and Resorts are very strong now. Despite on financial problems they faced in 1994, Four Seasons managed to stabilize and continue growing in hospitality industry. Four Seasons continues to have more of its hotels designated as AAA Five Diamond properties than any other hotel company and it has the most Mobil Five Star awards in the industry. The company is also consistently highly ranked in readers’ surveys in publications such as Conde Nast Traveler, Travel + Leisure, Institutional Investor, Andrew Harper’s Hideaway Report and the Zagat Survey. (Hospitalitynet, 2010).

First of all, the writer would like to give the definition of term “Employer of choice”. “Any employer of any size in the public, private, or not-for-profit sector that attracts, optimize and holds top talent for long tenure, because the employees choose to be there”. (Herman and Gioia, 2002, p. xi). Personalized service is a unique feature of Four Seasons Hotels and Resorts. But in order to make the service unique for their guests, the company pays attention to their employees. Four seasons Management teams do value their staff and treat them as guests, also with uniqueness. As one of employees said: “You’re never threated like just and employee. You are a guest.” (Four Seasons Hotels Inc’s HR Practice., 2009). This is the one and the most important reason why Four Seasons Hotels and Resorts became an Employer of choice. The company is recognized by many popular magazines as an Employer of Choice. For example, since 1998 Four Seasons Hotels and Resorts are among 100 “The best Companies to Work for”, by Fortune Magazine. In 2009 Four Seasons Hotels and Resorts Company was awarded “The best Workplace” by Great Place to Work Institute Canada. Later in 2009 the Company was awarded “Lifetime Commitment Award” by National Society of Minorities in Hospitality (NSMH). In addition they were awarded “Inductee to Canada’s 10 Most Admired Corporate Cultures” Hall of Fame 2010. Also Four Seasons Hotels and Resorts pay a lot of attention to trainings and development programs, thus in 2010 the company was listed in “Training top 125” by Training Magazine. (FourSeason, 2010). As Four Seasons Hotels and Resorts in an international company and has many hotels all over the world, some of Four Seasons’ properties were also recognized by leading tourism and hospitality magazines. For example Four Seasons Hotels in the United Kingdom were “The Best place to Work in Hospitality” in 2008; Four Seasons Hotel Dublin received Business Award Status, based on the Hotel’s best practices in “Recruitment and Selection” and “Learning, Development and Progression”; in 2008 Four Seasons Hotel Prague was awarded as “Company of the Year 2008”. This award is given to the companies who supporting the employment of hearing-challenged individuals. (FourSeason, 2010). All these awards and recognitions are the main indicator of Four Seasons Hotels and Resorts culture and a result of well-organized corporate environment.

Explain its culture, its unique to the Company, how does this vary from its major competitors.

Four Seasons Hotels and resorts has their own and unique service culture. The culture is mainly based on “Golden Rule” by Four Seasons Hotels and Resorts. The philosophy of “Golden Rule” is very simple and clear. As the CEO of Four Seasons Hotels and Resorts, Isadore Shard defined it: “The Golden Rule – do unto others, as you would have them to do unto you” (Four Seasons Hotels Inc’s HR Practice., 2009). According to Mr. Sharp definition it is very important to treat everyone: guests, colleagues and partners as you would want them to treat you. Within Four Seasons Hotels and Resorts the “Golden Rule” applied to every person in the company and it does not matter whether you are manager or front line employee. What Four Seasons calls its unique service culture is based on a series of insights and beliefs about the person who provides the act of service, and the one who receives it. In writer’s opinion, the “Golden Rule” makes the uniqueness and creating a very positive atmosphere within all company and all properties around the world. The scheme below represents the forming of the culture. (Scheme 1)

Scheme 1

As readers can see from the Scheme 1 there are several steps leading to the organizational culture. The first step is “Philosophy of company’s founder.” As it was mentioned above Mr. sharp has his own philosophy of service and company’s culture which is based on making the service exclusive and personalized. By implementing his own view of the service into Four Seasons Hotels and Resorts Company’s structure, Isadore Sharp has created absolutely new type of culture not only for his personal need but also for whole the company. The next step is “Selection Criteria”, which is based on recruiting and selection of candidates. As we know from the case-study of Four Seasons Hotels Inc., each potential candidate for any position in four seasons Hotels and Resorts had to pass through five interviews and the final one was with the General Manager of the Hotel. In the example above readers can see that selection process in Four Seasons Hotels and Resorts is very difficult. It means that the company needs the best employees from the best. The selection process is very important for the company, because managers look for really professionalized persons or persons who have potential to learn and to be trained. The thing is that Four Seasons Hotels and Resorts based on personal service, that’s why they have such complicated selection process. The next steps of analyzing Four Seasons’ culture are “Top Management” and “Socialization”. Top Management plays very important role in forming company’s culture. As readers can see, in Four Seasons Hotels and Resorts Company, senior executives help to establish behavioral standards that can be adopted by the company. Socialization is a process which helps new employees to adopt into company’s culture and implement skills and advantages in practice, by making service in Four Seasons Hotels and Resorts personalized. In addition the Socialization step can be separated into several stages like Pre-arrival stage, Encounter stage and Metamorphosis stage. All these stages directly helps in the process of forming the culture of Four Seasons Hotels and Resorts.

In writer’s opinion, Four Seasons’ company culture is much differentiated form its main competitors. As an example, the company’s culture of Ritz-Carlton Hotels and Resorts is based on “Gold Standards” of the company. “Gold Standards” consist of six parts which includes the credo, the motto of the company, the three steps of service, service values, the 6th diamonds and the employee promises. (Gold Standards of Ritz-Carlton, 2010). As if follows, Four Seasons and Ritz-Carlton cultures are focused on making the service they provide more personalized, but in addition Four Seasons hotels and Resorts are focused on their employees. As a result, readers can make a conclusion that in Four Seasons Hotels and Resorts, the culture is as guests oriented as employees oriented. To prove this statement, the writer would like to present a phrase maintained in the case-study: “Loyalty to guests is important, but employees come first.” (Four Seasons Hotels Inc’s HR Practice., 2009). One of the most important Four Seasons Hotels and Resorts’ differences from major competitors is that the company is more employees oriented rather other companies in Hospitality industry. As a result it attracts more and more employees to join Four Seasons Hotels and Resorts.

How does HRM fit into the company’s vision, mission & values? Do these reflect a strategic purpose? How does HRM fit into the overall identity of the company, its managers and employees, make recommendations for any improvement and justify these.

Four Seasons Hotels and Resorts haves their own vision, mission and values which are behead on “Golden Rule”. From HRM point of view, it directly into company’s values, vision and mission. From the strategic nature of HRM in Four Seasons Hotels and Resorts, they deal with day-to-day issues, but it is also proactive in nature and integrated with other management functions. In addition HRM makes more clarified strategic view of human resource in Four Seasons Hotels and Resorts. From the recruitment point of view, human resource management makes sophisticated recruitment for all employees. In addition it has strong internal labour market for core employees. (Henderson, 2008). One of the most important values of Four Seasons hotels and Resorts is empowerment. HRM is responsible for delivering this feature to employees’ vision. Empowerment is management responsibility of sharing information, rewards, and power with employees so that they can take personal initiative and make decisions to solve problems and issues of the guests and improve service quality and performance of the company. It is based concept of giving employees the skills, resources, authority, opportunity, motivation, as well giving them responsibilities of their actions. (BusinessDictionary, 2010). In Four Seasons Hotels and Resorts management pay lots of attention to empowerment because it helps to increase the level of service and in addition it makes employees feeling more responsible and important for the company. That’s why in all Four Seasons’ properties employees can act and take decisions independently. It means that for human recourse management, employees’ satisfaction is very important as guests’ satisfaction. Based on this writer can definitely say that Human Resource Management make big contribution into company’s vision, value and mission. In Human Resource Management, trainings play also an important role in employees’ development and success. As for Four Seasons Hotels and Resorts, trainings are transformed into learning and development philosophy transcending job-related training programs. The advantage of trainings in Four Seasons is that all trainings are designed foal all levels of employees including non-management. In addition trainings are designed to develop leadership and personal skills. For example Four Seasons Hotels and Resorts has a special program designed for graduates of hotel schools. Applying to Manager In Training Programs (MIT) is meant that candidates has the attitude to be trained, accept “Golden Rule” and successfully implement it in their job. (Manager In Training Programms, 2010).

In order to improve HRM policy of Four Seasons Hotels and Resort the writer would suggest several steps to make it more balanced between guest oriented policy and employees oriented policy. Four Seasons are trying to balance these two subjects, but it seems that they are a bit confused about it. The solution of this issue is to provide more benefits for their employees. First of all it would increase the flow of qualified persons who have ability to be learnt. From the other hand it would motivate employees to increase their level of education, to apply for mote training programs in order to get career development in the future. The third advantage of increasing employees’ benefits is that this would change and directly review the policy of the Four Seasons Hotels and Resorts thus make it more employees oriented. But for the other hand the company should not forget about their main goals – personalized service for each customer. That is why Four Seasons Hotels and Resorts make their employees empowered. The HRM policy of the company is also based on forwarding employees to the right way, the way of “Golden Rule”. They don’t do anything special, but their work is not easy, because Human Resource Department is the first who faced with employees’ challenges and in addition they have to bring the ideas and values of “Golden Rules” into employees’ minds, in order to reach company’s goals which are based on exclusive and personalized service in all Four seasons Hotels and Resorts.

Does it have effective policies and procedures in HRM? Critically evaluate the ones you have identified.

As readers can see from examples above, Four Seasons Hotels and Resorts have very specific HRM policy. The thing is that in Four Seasons Hotels and Resorts Human Resource Management is based on standards, but they don’t have lots of rules. As they prefer personalized customer service they do empower their employees, so they can act in any situations. This allows employees to take actions and to feel free to respond all customers’ needs. As in all situations, there is a risk of making wrong decision. The employee will be responsible for this, but in all cases the company can lose their customer which will affect the company as a whole. As Human Resource policy in Four Seasons Hotels and resorts is more company’s philosophy orientated the employee turnover is just a half compared with the whole industry. Four Seasons created their own niche in the hospitality industry. Nowadays Four Seasons Hotels and resort has several main competitors. From HRM point of view, employees’ benefits are one of the most attractive parts for people who are interested in joining company. The term “employees’ benefits” is common for all industries. Employee benefits are all benefits and services, other from wages for time worked, that are provided to employees in whole or in part by their employers. (Definition of Employee benefits, 2010). Below, the researcher presented the table of benefits, which presents the whole picture of benefits policy of Four Seasons Hotels and Resorts and its main competitor Ritz-Carlton. The table will help readers to analyze and examine employee benefits of two main competitors in luxury mid-size hotel niche. In addition both competitors use management contracts model of managing properties. This is very good decision. The thing is that there are several recent examples that show that franchising method of managing properties doesn’t work in a proper way nowadays.

Development of employees’ commitment or loyalty directly depends on job conditions provided by employer. That is why providing basic benefits in necessary for big companied like Four Seasons Hotels and Resorts. But in order to attract more employees whey included more benefits in basic conditions. Definitely this action would influence the flow of employees and would increase motivation, which will positive effect the company.

Table 1

Benefits

Hotel Brands

Four Seasons Hotels and Resorts

Ritz-Carlton Hotels and Resorts

Career growth opportunities

Career growth/promotions opportunities

Unique deep culture

Discounts on spa treatments

Best-in Industry training

Childcare discounts

Luxury environment in magnificent locations world wide

Tuition reimbursement

Profit sharing / incentive bonus / competitive salaries

Income replacement programs (both short and long-term disability)

Complimentary stays at Four Seasons properties with discounted meals

Discounted accommodation in all Ritz-Carlton Hotels and Resorts

Paid holidays / vacation

Paid vacation, sick and holiday leave

Educational assistance

Health and wellness insurance programs

Dental and medical / disability / life insurance

Life/health/dental/vision insurance

Retirement benefits / pension

Retirement savings and profit sharing plans

Employee service awards

Healthcare and dependent care spending accounts

Annual employee party / social and sporting events

Service anniversary awards

Complimentary meals in dedicated employee restaurants

Complimentary or low cost meals in your Employee Dining Room

(Four Seasons Benefits, 2010), (Ritz-Carlton: Understand Benefits, 2010)

After careful comparison of both employees’ benefits, readers can define several differences, which directly influence the loyalty of employees. In order to make HRM policy more reliable, writer would suggest to enlarge number of benefits. In addition increasing different incentives for line-staff employees would also positive effect Human Resource policy of Four Seasons Hotels and Resorts.

If you were the VP of HRM how would you move the company forward in the next five years?

Four Seasons Hotels and Resorts is very developed luxury hotel chain.