This document discusses human resources best practices in the hotel industry. It examines five categories of best practices - leader development, training and knowledge building, employee empowerment, employee recognition, and cost management. It profiles 15 hotel companies that were identified as champions in human resources practices. For each champion, it provides a brief description of a notable human resources practice they have implemented, how they implemented the practice, and a contact person. It discusses in more detail the leadership development practices of four hotel companies that ensure future leaders develop essential skills through comprehensive training programs.

1. BestPracticesin
HumanResources
No hotel can have excellent operations without excellent employees—and that
by Cathy A. Enz and requires excellent human-resources practices.
Judy A. Siguaw
D esigning integrated human-
resources systems is one of
the most powerful ways to ensure
the creation of value for customers
this article we examine five catego-
ries of HR best practices, focusing
on the specific practices adopted by
champions selected from this study
and profitability for owners. In (see Exhibit 1). The five categories
today’s competitive environment, of best practices are:
high-performing organizations have (1) leader development,
learned how to deploy human- (2) training and knowledge
resources (HR) practices to enhance building,
competitive advantage. The most (3) employee empowerment,
successful firms create a bundle of (4) employee recognition, and
employee practices that are cus- (5) cost management.
tomer focused, are aligned with In addition, we present the prac-
each other, and reinforce the organ- tices of three champions who de-
ization’s strategic position. Innova- vised comprehensive practices that
tive hotel companies are developing incorporated many different types
their human-resources practices to of HR practices. We provide an
help build and sustain organizational overview of the human-resources
effectiveness. champions and their practices and
In a comprehensive study on best discuss the practices’ benefits and
practices in the lodging industry then conclude with the insights and
conducted by professors affiliated
with Cornell University’s hotel Cathy A. Enz, Ph.D., is the Lewis G.
school, a select group of companies Schaeneman,Jr.,ProfessorofInnovation
was identified as being notable for and Dynamic Management at the
their human-resources efforts.1 In Cornell University School of Hotel
Administration «cae4@cornell.edu»,
1
The full study is available in: Laurette Dubé, where Judy A. Siguaw, D.B.A.,
Cathy A. Enz, Leo M. Renaghan, and Judy A.
Siguaw, American Lodging Excellence: The Key to
isanassociateprofessorofmarketing
Best Practices in the U.S. Lodging Industry (Wash- «jas92@cornell.edu».
ington, DC: American Express and the American
Hotel Foundation, 1999). © 2000, Cornell University
48 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

2. L O D G I N G B E S T P R A C T I C E S
Exhibit 1
Overview of human-resources (HR) best-practice champions
HR champions Practice initiated, developed Measure of success
Accor North America Combination of numerous integrated HR Lower employee turnover, higher employee-satisfaction scores,
initiatives including work design, rewards, and “significantly” better performance; better career devel-
feedback, and group process. opment and increased responsibility; customers report
greater consistency and a higher level of service.
The Boulders Resort Created three-person housekeeping teams Retention and morale of room attendants improved; rooms
responsible for determining their own are readied faster; guests have fewer intrusions on their
work patterns. privacy.
Cendant Corporation Developed a comprehensive group of Executed franchise agreements for more than 50 hotels with
diversity initiatives. minority franchisees; contributed over $1 million to minority-
supportive organizations; received a B (highest grade
awarded to any hotel company) in the NAACP’s 1998
grading of minority progress in the hotel industry.
Choice Hotels Management training and development Has competent leaders in the pipeline and a reduction in em-
International program using a competency model. ployee attrition; expects to save money by relying less on
external hiring. Tighter brand standards and a stronger
emphasis on maintaining brand equity are directly attributed
to the building of critical competencies.
Coastal Hotel Group Created a buddy system of loaning employees Profits are up, turnover is down, and operations improved;
to acquired properties to help train new customers enjoy a better experience.
personnel.
Day Hospitality Group Mandates a sabbatical leave for GMs with five Used as a recruiting tool; anticipates reduced management
years’ tenure. turnover and enhanced morale (first sabbaticals occurred
in 1999).
Disney’s Polynesian Trains employees using a values-based three- Noted improved performance, morale, and teamwork; received
Resort module training program, entitled “Magic of fourth diamond 14 months ahead of plan; received WDW’s
Polynesia.” RAVE award and the 1998 Diversity Spirit award.
Four Seasons & Developed a designated-trainer program for Employees applaud the consistency of standards and access
Regent Hotels the front-line employees complemented by to informed and experienced trainers; seventy-five percent
and Resorts on-line training materials. of all promoted employees were designated trainers; in-
dependent rating systems have recognized the company
for its service standards; helps support rate leadership
and high RevPAR.
Hyatt Regency Created a community-based hospitality-training Provided the Scottsdale hospitality industry with qualified and
Scottsdale program for local high-school students. skilled workers; customers have better trained service
providers.
Inn at the Market Outsourced HR needs to a part-time Employees have access to a full range of HR services at mod-
professional. est cost; managers are informed and trained; provides
employees with a confidential and impartial representative
and additional guidance for self-improvement.
Marriott International Develops future leaders through a management- Established consistent framework for developing leaders;
development program. increased rigor of filling senior positions; customer should
experience improved service.
Minneapolis–St. Paul Line-level employees are empowered to make Dramatic improvement in guest-comment cards; increased
Hilton Airport guest-satisfaction decisions. occupancy and ADR on the executive level; cost savings in
training, advertising, and other expenses; boosted morale;
guests expect immediate solutions to problems.
Continued overleaf
February 2000 • 49

3. Exhibit 1
Overview of human-resources (HR) best-practice champions (concluded)
HR champions Practice initiated, developed Measure of success
Motel 6 Employees are groomed for general-manager Created an internal pool for management positions; reduced
positions. the costs of recruiting managers; reduced employee
turnover by 10 percent; boosted guest satisfaction by
50 percent.
Motel Properties, Inc. Employee-recognition program Increased employee retention; boosted revenues and
improved profits; improved customer satisfaction.
Ramada Franchise Employee selection, training, and satisfaction Increased retention and job satisfaction. Better-trained staff.
Systems, Inc. initiatives Franchisees are happy with the guest-survey results.
Ritz-Carlton Tysons Self-directed work teams Cut employee turnover in half from 1993 to 1994, falling
Corner to 25 percent in 1998; reduced payroll costs; reduced
manager-to-staff ratio (from 1:15 to 1:50); greatly
improved employee-satisfaction ratings.
Rodeway Inn Developed employee-satisfaction and -rewards Improved job performance and morale; became first
International– program. Rodeway to receive Choice Hotels President’s Award
Orlando for guest service.
Sheraton–Denver West Two sales managers share one job. Ability to keep strong management talent and tap the
energy and skill of two employees for the price of one.
Simpson House Inn Focused a training curriculum on diversity. Increased morale; became first B&B to achieve AAA five
diamonds.
Sonesta Hotels Created a wholly owned training subsidiary Turned HR from a cost center into a revenue center.
and unique training materials.
Tamar Inns Created a self-funded health-insurance plan Kept cost per covered employee below the national average
by developing a clinic and making alliances (saving over $37 million in ten years); provides enhanced
with local health providers. medical service and expanded coverage to employees;
reduced sick time and turnover.
Towneplace Suites Cross-trained employees. Employees have high job satisfaction; guest service improved.
by Marriott
White Lodging Conducts pre-shift meetings for all departments. Improved communication and employee retention; received
Services Radisson’s Presidential Award for four years running.
advice of the practice champions to tice and the name and address of a Leadership-development Practices
assist those who may want to adapt contact person. The goals of the management-
and improve a practice for the ben- The effort to improve perfor- development practices of Choice
efit of their own firms. mance usually requires organizations Hotels, Marriott International,
In the best-practices study the to change their model of managing Motel 6, and Day Hospitality are
largest number of champions was in people and, hence, to alter their to ensure that their future leaders
the area of human resources. This management systems and augment develop essential skills and compe-
finding is not surprising given the their leaders’ skills. To develop their tencies and, furthermore, that the
central role that employees play in best practices, the champions ex- pipeline of future leaders remains
successful hotel operations. The panded employee involvement and full. Two of these champions—
champions in human resources authority, boosted skill building and Choice Hotels and Marriott Inter-
identified by peer organizations and information sharing, and imple- national—developed comprehensive,
managers are listed in Exhibit 2, mented cost-containment strategies chain-wide leadership-development
with a brief description of the prac- and performance-based rewards. programs.
50 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

4. L O D G I N G B E S T P R A C T I C E S
Exhibit 2
Human-resources (HR) best-practices cases, descriptions, implementation, contact people
HR champion,
Title of case Description of case Method of implementation Contact person
Accor North America Created multiple practices, such as New practices involve the establish- Dale S. Wielgus,
Internal Customer empowerment, bonuses, 270- ment of a task force with one vice president of
Satisfaction degree feedback, and employee member typically being an out- human relations
roundtables to achieve high levels side consultant. Trials are con-
of motivation and retention. ducted for each practice before 914-725-5055
full implementation. Fax: 914-725-6147
The Boulders Creates self-directed, three-person First met with housekeeping supervi- Linda Heyman,
housekeeping teams. Each team sors and staff, followed by training. director of housekeeping
Self-directed
Housekeeping Teams divides and interchanges all room Two test teams were used for three 602-488-7369
duties, chooses its own work months. Modifications were made Fax: 602-488-6767
areas, assumes responsibility based on team feedback.
for quality, and self inspects.
Cendant Corporation Launched comprehensive diversity Convened a series of meetings with Donna Dozier Gordon,
Comprehensive initiative: (1) Franchise develop- leaders in the African-American (former) director of
Diversity Initiative ment among minorities, (2) Sup- community. Senior management diversity development
plier development, (3) Career developed the initiatives with a
development, (4) Philanthropic strong commitment to a new ap- 973-496-8543
giving, and (5) Target marketing. proach for conducting business. Fax: 973-496-7307
Choice Hotels Created an integrated executive- Identified business challenges and Robert Barner, VP of
International training and -development system competencies that would be criti- organizational develop-
In-house Executive using a competency model that cal. Conducted focus groups with ment and learning
Training and targets the core competencies director-level managers. Ranked
Development required for effective performance. competencies and obtained execu- 301-592-6278
tive feedback. Created a composite Fax: 301-592-6161
model and integrated the model
into the staffing and development
process.
Coastal Hotel Group Skilled employees are loaned to newly Corporate managers determine the Steven Brewster,
Employees on Loan for acquired properties to help with buddy-needs-training timetable of public-relations manager
Training with the Buddy training. The practice allows new acquired properties. The practice 312-654-2962; and
System hotels to benefit from well-trained took three to six months for imple-
workers, existing hotels to lower mentation. The HR director works Susan Evans, corporate
their payroll costs, and the skilled with general managers to identify human-relations director
buddy employees to broaden the best buddies. 312-988-9017
their experiences with different Fax: 312-988-9017
operations.
Day Hospitality Group A 90-day paid sabbatical leave is The president and his partner Frederick Cerrone,
Sabbatical Leave mandated for every general agreed to establish this practice president
Program for General manager with five years’ tenure. based on the president’s personal
Managers with experience. 770-446-1500
Experience Fax: 770-604-9682
Disney’s Polynesian A training program, “Magic of Key individuals, including an outside Clyde Min, general manager
Resort Polynesia,” was designed to consultant, developed three mod-
A Value-based Process facilitate employee understanding ules for training. These modules 407-824-1232
of Training and and commitment to the business have been integrated into an eight- Fax: 407-824-3174
Selection and values. hour orientation and training class
attended by all cast members in
their first 30 days.
Note: The case titles correspond to the cases written on each
champion in: Laurette Dubé, Cathy A. Enz, Leo M. Renaghan,
and Judy A. Siguaw, American Lodging Excellence: The Key to
Best Practices in the U.S. Lodging Industry (Washington, D.C.:
American Express and the American Hotel Foundation, 1999). Continued overleaf
February 2000 • 51

5. Choice’s change. Choice as- assignments. The Benchstrength to become a general manager and
sessed the core competencies needed Management System provides the is provided with opportunities for
by its future leaders and created an firm with a consistent approach to cross-training. Successful cross-
integrated executive-training and evaluating leadership potential and training qualifies employees as can-
-development system. In particular, ensures that the company focuses on didates for the manager-on-duty
when Choice shifted its business core capabilities that are key to fu- program. In this second phase of the
direction to become strictly a fran- ture success. program, employees use self-training
chisor, the company realized that its A day in the sun. In a depar- manuals to prepare for the MOD
future managers would need a set of ture from traditional leadership de- role. A general manager from an-
competencies different from those velopment, Day Hospitality Group other Motel 6 property then tests
required when the company also (which operates a group of hotels the employee, who becomes a certi-
operated a portfolio of hotels. To mostly under Marriott flags) devised fied MOD once he or she passes.
identify competencies critical to the unusual practice of requiring a Finally, those employees who have
achieving its goals Choice relied on sabbatical leave for general managers completed phases one and two can
the competency-models research of when they achieve five years of ten- be appointed to full-time general-
the Corporate Leadership Council ure in the company. The idea, says manager positions. Once this level is
(a non-profit group in Washington, Day Hospitality president Frederick achieved the new general manager
D.C.) and the Career Architect Cerrone, is to stress the importance receives a five week in-depth train-
Portfolio sort cards developed by of a balanced life and to demon- ing program in one of the regional
Lominger Limited. After ranking strate that there is “more to life than offices. By spring 1998 some 300
competencies and gaining the input just work.” Cerrone instituted the Motel 6 employees had moved up
of numerous executives via personal mandatory 90-day paid sabbatical the ranks to become GMs. Thus, this
interviews, Choice devised a com- leave after he took time off from his employee-to-manager development
posite model of competencies for own job for a trip to India. His ex- program has helped fill a need for
the four senior-most levels of the perience and reflection helped him qualified managers and serves as a
organization (senior vice president, return to his business with the idea practice that combines both em-
vice president, senior director, and for a sabbatical leave program that ployee training and a path toward
director). Then the company as- would permit managers to “unplug” leadership development.
sessed the competencies held by top and spend time with family. Cerrone
executives and compared those believes that the development of this Best Training and Knowledge-building
competencies to the ones needed program for the company’s relatively Practices
for the future. The next steps were young GMs will inspire them to Employee training and skill building
development planning, coaching, return to work refreshed and replen- have become increasingly critical
and career-path mapping. Choice ished with a new frame of mind and areas of HR management for firms
now uses its competency database their creative juices flowing. working to enhance service quality,
for annual readiness assessments, Turning on the lights. While reduce labor costs, and increase pro-
which are used in determining cur- all the leadership-development best- ductivity. Five best-practice champi-
rent leaders’ capabilities and forms practice champions designed systems ons—Coastal Hotel Group, Disney’s
the basis for selection, promotion, in anticipation of the needs for fu- Polynesian Resort, Four Seasons &
and succession planning. ture leaders, Motel 6’s approach Regent Hotels and Resorts, Hyatt
Marriott’s bench. Marriott comprises the development needs Regency Scottsdale, and Simpson
calls its system-wide leadership- of both employees and managers. House Inn—devised approaches to
development initiative the “Bench- Motel 6 created a three-step pro- training consistent with their spe-
strength Management System.” This gram that makes every employee cific circumstances and challenges.
set of tools and measures assists se- eligible for eventual consideration as Simpson House Inn, a bed and
nior managers in identifying poten- a general manager. The three phases breakfast located in Santa Barbara,
tial leaders and ensuring that those of the development program are California, devised the “Simpson
managers develop the skills and cross-training of employees, man- House University” as part of its
competencies needed to carry the ager-on-duty (MOD) responsibili- training curriculum. The general
company forward. Using targeted ties, and a general-manager assign- manager, Dixie Budke, developed
development plans, senior managers ment that includes training. In the training modules using a variety of
give critical positions to high- first phase every hotel employee is innovative activities that promote
potential managers as “stretch” made aware of his or her potential understanding, improve staff com-
52 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

6. L O D G I N G B E S T P R A C T I C E S
Exhibit 2
Human-resources (HR) best-practices cases, descriptions, implementation, contact people (continued)
HR champion,
Title of case Description of case Method of implementation Contact person
Four Seasons & Regent Created designated-trainer positions A task force of corporate and field John Young,
Hotels & Resorts within each department of the managers developed the on-line executive vice president
“Designated Trainer” hotel, aided by an on-line training training program. The training
Program for Front-line program in CD form. Materials are manager developed the content 416-449-1750
Employees used to make front-line employee and structure of the program with Fax: 416-441-4341
training as effective and consistent operating management in the
as possible. Seattle hotel. After the training
was fully evolved it was launched
throughout the company.
Hyatt Regency The hotel’s training manager designed The Hyatt formed a partnership with Denise Pruitt,
Scottsdale and conducts classes in hotel the City of Scottsdale, the local training manager
A Community-based management for junior- and school district, and academic
senior-level students at the local institutions. The Hyatt worked 480-991-3388
Hospitality Training
high school. closely with the school district to Fax: 480-483-5573
Program for High-
school Students develop the curriculum. The pro-
gram required six to seven months
to plan. The partners meet quar-
terly to discuss changes and
projections for the future.
Inn at the Market The inn retained a part-time The HR consultant was hired and then Joyce Woodward,
Outsource Human consultant to manage its began to work with the GM who general manager
Resources to Profes- HR activities. defined her job activities.
sional HR Consultant 206-443-3600
Fax: 206-728-1955
Marriott International This corporate-wide leadership- Marriott developed a system for identi- David Rodriguez,
development initiative uses various fying and developing leaders using senior vice president,
Leveraging Leadership assessment tools to ensure that external and internal research and staffing and development
Capacity and Building future leaders develop the requi- best practices. Senior manage-
Future Leaders site skills and competencies. ment evaluations are used to 301-380-8886
construct development plans and Fax: 301-380-4229
guide staffing.
Minneapolis–St. Paul Empowers line employees to make First implemented at the front desk, Patrick Simpson,
Hilton Airport any decision involving guest without trial or test period. The director of front-office
Line-employee satisfaction. practice was unconditionally operations
Empowerment adopted and has spread to all
of the guest-contact areas. (800) 637-7453
(612) 854-2100
Fax: (612) 854-8002
Motel 6 Created an employee-development The HR team obtained support from Joe Eulberg,
Training Employees for program that makes every em- the Motel 6 president and execu- senior vice president
General Management ployee eligible for consideration as tives first. Implementation was
a general manager. The practice gradual (over a five-year period) 972-702-6801
includes three different training and based on natural management Fax: 972-702-5996
programs: cross-training, manager attrition. Access to and expertise at
on duty, and general manager. the regional offices was a major
factor in implementation success
at the property level.
Motel Properties, Inc. Instituted a variety of recognition A management team developed the Janice Cook,
Employee Recognition programs for employees begin- recognition concept, which is director of human
Program ning from the time of the initial implemented and revised by resources
interview. the HR department.
912-635-4715
Fax: 912-635-3230
Continued overleaf
February 2000 • 53

7. munication and self-understanding, The rapid growth of Arizona costs, increased productivity, and
and enhance self-esteem. Budke also tourism and the accompanying improved employee retention.
developed all staff meetings and shortage of qualified hospitality em- While Coastal is no longer a small
other HR policies to enhance com- ployees caused the Hyatt Regency hotel group, it continues to use this
munication and reduce conflict. She Scottsdale to embark on a commu- practice, although its economic
explains the property’s philosophy as nity-outreach program. In coopera- benefit will most likely be greatest
follows: “Seamless, flawless, gracious tion with the Scottsdale School for small organizations.
service can be given only by people District, the city, and local colleges A different training issue—
who feel good about themselves and and universities, the Hyatt’s training consistency—drove the develop-
what they are doing, and who are manager developed and taught edu- ment of the designated-trainer
motivated intrinsically by their own cational programs at the local high position at Four Seasons & Regent.
competence and sense of personal school. Intended to develop stu- A period of rapid growth caused
mission.” dents’ interest in the industry, the inconsistent communication and
Kinaole. A similar philosophy program includes college-level training regarding service standards.
was the basis for the training pro- courses, field trips, and guest speak- To address this issue, the company
gram at Disney’s Polynesian Resort, ers from local hotels. The curricu- created designated-trainer positions
“Magic of Polynesia,” which was lum leads directly into the two-year within each hotel department. This
designed to facilitate employee un- degree program at Scottsdale Com- is a joint effort between the proper-
derstanding of and commitment to munity College or into the four- ties that invest in the designated
the business. The resort created year program at the School of Hotel trainers and the corporate HR de-
three training modules to assist em- and Restaurant Management at partment, which devised the on-
ployees in learning about Polynesia Northern Arizona University. One line training materials. The desig-
and to foster an alignment of per- challenge of this training initiative nated trainer, who holds a regular
sonal and resort values. The first was coordinating an alliance among job assignment, follows a carefully
module provides three hours of corporate, governmental, and educa- structured program of teaching and
instruction on the business of hospi- tional organizations. The results coaching with the help of an on-
tality and the cultural elements of have thus far been positive, and the line training program (OLTP). The
Polynesian hospitality and entertain- practice has provided the Scottsdale OLTP comprises more than 100
ment. Recognition and coaching are hospitality industry with qualified job-specific training manuals on
also used to help cast members (em- and skilled workers, many of whom CD. Regional training coordinators
ployees) become “perfect hosts” in have worked for Hyatt. helped implement the program
sharing aloha with the guests. Mod- Coastal Hotel Group and Four hotel by hotel, and local managers
ule two seeks to align employees’ Seasons & Regent Hotels and Re- and training employees customize
personal values with those of the sorts both use skilled employees to the materials to suit local job de-
resort. Cast members are asked train newcomers. Coastal devised a scriptions and operating structures.
questions that evoke personal reflec- buddy system for training employees
tion, such as, What are the key driv- in newly acquired properties. The Employee-empowerment Practices
ers in your life?; What do you think buddy system was developed when Enhancing customer service and
you are all about?; Who are you?; Coastal, being a small management motivating employees were the
and What are the things that are company, could not afford the cost driving forces behind the self-
important to you? The final module of a corporate training center. In- directed work teams at the Ritz-
focuses on delivering kinaole (flaw- stead, corporate managers determine Carlton Tysons Corner and the
less excellence in the highest de- the needs of an acquired property Boulders, the cross-training at
gree) product and service to the and provide employee trainers with Towneplace Suites by Marriott,
guest. In this portion of the training, the requisite knowledge and skills and the autonomous line-level de-
values and service standards are inte- from existing hotels. All parties ben- cision making at the Minneapolis–
grated. All cast members attend the efit from this practice because the St. Paul Hilton. Similarly, the pre-
three training modules within 30 employees at the receiving hotel shift meetings developed by White
days of their being hired. In addi- gain knowledge, the lending hotel Lodging Services were developed
tion, the values that guide the train- reduces payroll costs, and the trainer to share information and keep em-
ing are reinforced and integrated is given an opportunity for personal ployees fully aware of the overall
into the hotel’s reward, accountabil- growth. This simple and effective operation. Each of these five cham-
ity, and coaching programs. practice resulted in lower labor pions altered the way in which em-
54 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

8. L O D G I N G B E S T P R A C T I C E S
Exhibit 2
Human-resources (HR) best-practices cases, descriptions, implementation, contact people (concluded)
HR champion,
Title of case Description of case Method of Implementation Contact person
Ramada Franchise Developed an integrated and compre- After managers were trained, training Tim Pigsley, corporate
Systems, Inc. hensive set of employee initiatives segments were installed in local director of personal-
Employee Selection, called Personal Best Hospitality. hotels. Thirty days after training, best hospitality
Motivation, Training, Programs include prescreening for the employee-motivation compo-
and Satisfaction selection, training via interactive nent was put in place. After six- 973-496-1568
CDs, employee-loyalty program, month shake-down, the guest Fax: 973-496-0322
and monthly guest-satisfaction survey was put in place.
surveys.
Ritz-Carlton Tysons Shifted decision-making responsibility With employees’ participation, identi- Marie Minarich, director
Corner to hourly staff and eliminated fied tasks to transfer to staff mem- of human resources
Self-directed Work management positions. bers. Developed a trial at the front
Teams, Job Redesign, desk. Success of trial led to full 703-506-4300
and Employee adoption. Fax: 703-917-6509
Empowerment
Rodeway Inn Developed an employee-satisfaction A monthly budget of $100 to $150 Nick La Falce,
International–Orlando program that rewards excellent was established to provide general manager
Rewarding Employee performance. awards, pins, and inexpensive
Performance in an gifts to deserving employees. 407-996-4444
Economy Hotel Fax: 407-352-5806
Sheraton–Denver West Two people share one full-time Located talented staff and agreed William Walp, director of
Job Sharing Between sales-manager position. on an hourly pay rate. Conducted sales and marketing
Sales Managers a 90-day trial.
303-987-2000
Fax: 303-985-7545
Simpson House Inn Simpson House University is a training General manager developed training Dixie Adair Budke,
Hospitality Training curriculum that includes testing, modules. general manager
Curriculum with an communication, language-skill
Emphasis on building, and staff powwows. 805-963-7067
Respecting Diversity Fax: 805-564-4811
Sonesta Hotels Created a wholly owned training Former operations managers are used Jackie Sonnabend,
Creating A Profit- subsidiary called Training by for training. Training budget for executive vice
center Training Design. Also devised a service- Sonesta is placed in HR, not oper- president hotels
Operation training game. ating departments’ budgets, to
encourage training. 617-421-5400
Fax: 617-421-5402
Tamar Inns Operates its own self-funded Researched health-care options, Bob Cox, risk manager
Implementation of health-care program, including obtained agreements with hospi-
Self-funded Health operating a primary-care facility tals. Opened own medical office. 407-370-0776
Insurance and contracts with hospitals Negotiated prescription plans with Fax: 407-370-0931
and specialists. drugstore.
Towneplace Suites Built a lean staffing model on Benchmarked other Marriott facilities. Erica Alexander
by Marriott cross-training and efficient Devised a service-needs matrix.
Cross-trained Staffing training approaches. Cross-trained managers and then 301-380-3019
Model as Driver of new employees. Continues to Fax: 301-380-3802
Revenue revise and adjust training.
White Lodging Services Fifteen-minute pre-shift meetings Introduced concept and provided Mary Jo Dolasinski,
Pre-shift Meetings for for all line employees in all important printed materials to all director of training
All Departments departments. employees covering mission, steps and development
to service, and standards of opera-
tion. Celebrated the advent of the 219-769-3267, ext. 4347
new meetings with a big party. Fax: 219-756-2902
February 2000 • 55

9. ployees perform their jobs and work self-directed housekeeping teams to
with each other, with the results of improve the work environment and
improving guest service and boost- decrease the number of guest-room
ing employee retention. entries. As was the case at the Ritz-
After winning the Malcolm Carlton, managers at the Boulders
Employees’ sharing expertise Baldrige Award in 1992, the Ritz- wanted to enhance customer ser-
Carlton Company determined that vice and staff motivation. The re-
and training with each other greater employee empowerment sort empowered three-person, self-
would appeal to the staff and deliver directed housekeeping teams to
helps to increase the overall even more-outstanding customer assign all room duties in a given
service. To those ends, the Tysons block of rooms—in which they
Corner hotel’s executive committee would choose their own work areas,
skill level of employee teams decided to conduct an empower- evaluate room quality, and conduct
ment project, starting by changing room inspections. After a training
and spread responsibility its name to “guidance team” to set program for supervisors and team
the tone for what was to come. leaders, the team leaders created
for the total operation. After a detailed examination of cur- two trial teams of housekeepers
rent practices in each department, composed of the most enthusiastic
the guidance team identified a num- employees. The program was modi-
ber of management tasks for pos- fied considerably after a three-
sible transfer to hourly employees. month test period. At this writing,
These included setting work sched- the Boulders has four teams func-
ules, compiling payroll information, tioning with more being planned.
interviewing and selecting team The resort’s managers view this
members, and forecasting budgets. practice as being both more effi-
The hotel called this effort the cient than previous operations and
“Tysons Corner Project,” and devel- a better way to retain and motivate
oped a mission statement that all room attendants.
employees signed. Front-office em- Towneplace Suites by Marriott
ployees were the first to experiment has developed a model for staffing
with self-management by taking that empowers employees and also
over the tasks of the front-office supports the low cost structure that
manager for a year-long trial run. makes possible the brand’s core
As an incentive the hotel offered concept. To maintain its strategic
the employees half of the savings position as an affordable extended-
that accrued from eliminating the stay brand, Towneplace needs to
position—an amount that worked operate with low staffing costs. To
out to about $1.00 more per hour accomplish this goal the company
for each one. The project was suc- developed a model for staffing and
cessful, and the hotel eventually training that provides a high degree
rolled the practice out to the entire of accountability and responsibility
hotel in June 1995. Although man- for all employees. The typical
agement positions were eliminated, Towneplace hotel of 95 suites oper-
no one was fired, and new titles ates with a service team of just 10
were devised for the remaining ex- to 12 associates. Examining activi-
ecutives and the empowered hourly ties at Residence Inn and Court-
staff. Throughout the implementa- yard by Marriott, the brand’s man-
tion the managers made an effort to agers developed a matrix of some
consult employees and keep them 20 typical service encounters. That
fully informed. matrix became the basis for cross-
Late in 1998 managers at the training the chain’s general manag-
Boulders devised and implemented ers and employees. After hiring and
56 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

10. L O D G I N G B E S T P R A C T I C E S
training general managers (using because they felt their authority
careful screening that employs as- might be compromised, and em-
sessment tools), the company ployees were also cautious because
trained a regional leader, the new they feared being criticized for their
GM, and the new employees to- decisions. The practice was imple-
gether for three days. Finally, the mented, however, without a trial. Variable pay has emerged as
company empowered employees to Instead, the managers held a meet-
train each other in the skill areas for ing with the front-office staff and a way to reward employees
which they were highly rated. Em- assured them that they would not
ployees’ sharing expertise and train- be condemned for solving a prob- when performance leads to
ing with each other helps to in- lem right away. Critical to the suc-
crease the overall skill level of the cess of the practice was the en-
team and spread responsibility for dorsement of the general manager. organizational success.
the total operation. The cross- The hotel began seeing dramatic
training model is strengthened with improvements in guest-comment
various role-playing activities and cards within two months of imple-
sharing service stories in daily mentation. As Patrick Simpson, the
meetings. manager who championed the
White Lodging Services also uses practice, observed, “The confidence
meetings to share information and of the employee so empowered
build a strong community. The pre- radiates in his or her guest-contact
shift meetings for line employees in ability, which in turn gives the guest
all departments helped increase confidence that his or her stay will
productivity, according to Mary Jo be a rewarding experience.”
Dolasinski, the company’s director
of training and development. While Employee Recognition
some employees initially resisted Compensation is a powerful com-
this practice, the meetings have municator of organizational priori-
proven to be an effective mecha- ties and a key component of suc-
nism for improving communication, cessful performance improvements.
goal-setting, training, and employee While employees’ base pay usually
recognition.2 reflects local competitive labor mar-
Just do it. An interesting ap- kets, variable pay has emerged as a
proach to employee empowerment way to reward employees when
is that of the Minneapolis–St. Paul performance leads to organizational
Hilton, which allows its line em- success.3 The strategic use of vari-
ployees to do whatever is necessary able pay is still in its infancy in the
to satisfy guests. This practice was hospitality industry, and we found
developed originally for the front- only a few champions that offered
office employees, who were frus- any practices related to employee
trated by the delays in resolving compensation. One example is the
guest concerns that occur as a result Houstonian Hotel, our overall
of using the traditional chain of property-level champion in em-
command. Some supervisors were ployee satisfaction, which pays a
hesitant to embrace this practice standard rate to all employees but
offers quarterly bonuses to all em-
ployees based on the hotel’s suc-
2
For a discussion of the application of a bal-
anced management scorecard at White Lodging
Services, see Gregory A. Denton and Bruce
White, “Implementing a Balanced-scorecard 3
For more information on the strategic use of
Approach to Managing Hotel Operations: pay, the reader should consult: Jay R. Schuster
The Case of White Lodging Services,” on pages and Patricia K. Zingheim, The New Pay (New
94–107 of this issue of Cornell Quarterly. York: Jossey-Bass, 1996).
February 2000 • 57

11. professional was out of the question.
Exhibit 3 Instead, the property contracted
Self-funded health-insurance costs for Tamar Inns with a human-resources professional
who provides the inn’s 57 employ-
ees the expertise and counsel that
Number Tamar National Tamar total they require. For this consulting
of covered cost per cost per cumulative Savings
Year lives covered life covered life savings percentage
service, the hotel incurs a cost of
$1,000 per month.
1989 436 $ 936 $2,700 $ 769,104 65% Work sharing. At the Sheraton–
1990 435 1,720 3,040 574,200 43% Denver West two experienced sales
1991 524 2,223 3,425 629,848 35% managers share one full-time sales
1992 1,014 745 3,710 3,006,510 80% position, permitting the company to
1993 1,240 871 3,784 3,612,703 77% get the energy and expertise of two
1994 1,382 1,384 3,383 2,762,894 59% seasoned managers for the price of
1995 1,513 1,256 3,533 3,445,752 64% one. The hotel instituted this job-
1996 2,301 913 3,897 6,865,632 77% sharing arrangement to accommo-
1997 2,471 1,033 3,924 7,143,760 74% date one sales manager’s need to
1998 2,830 1,080 4,315 9,155,050 75% work part-time. This practice re-
sponds creatively to the employees’
Total 14,146 12,161 35,711 37,965,453 70% evolving work-and-family needs, is
cost effective, and produces a posi-
cess.4 Two champions, the Rodeway of the month and year), along with tive outcome for the customer.
Inn International Orlando and Mo- such other rewards as special gifts The arrangement works chiefly
tel Properties, Inc., have developed a and star award pins. While the mon- because the two part-time sales
variety of ways to reward and ac- etary cost of such recognition is managers are in continual contact.
knowledge line-level employees modest, the benefits in employee We believe that the advent of so-
beyond a base salary. satisfaction and retention are no- phisticated information-sharing
Faced with a low local unem- table. Perhaps the best indication is tools will make job-sharing arrange-
ployment rate and a shortage of job the motel’s 99-percent occupancy, ments like this even more viable in
applicants, Motel Properties devel- which can be sustained only with the future, because customer infor-
oped an employee-recognition the support of satisfied employees. mation can be carefully documented
program that provides rewards from and transmitted in a timely fashion.
the time of the initial interview Cost-management Practices On its own. Ten years ago the
throughout the employment con- Many of the practices we have dis- escalating costs of medical care in-
tract. The recognition program is cussed are motivated by efforts to spired Tamar Inns to implement a
sustained by continuous evaluation create competitive advantage self-funded health-insurance plan
and modification of the rewards and through differentiated service deliv- for employees at six of its properties
by integrating recognition with the ery made possible by better-trained in Orlando. After careful study, the
company’s operations and culture. and empowered employees. Another president, CFO, and risk manager
Another economy-segment pro- approach to establishing competitive decided that the key areas in which
gram designed to enhance employee advantage is through cost-efficient to achieve cost controls were pri-
morale, efficiency, performance, and human-resources practices. That is mary care, in-hospital care, and spe-
satisfaction was developed by the the tack taken by three best-practice cialist care. To handle primary care
Rodeway Inn in Orlando. This re- champions—Seattle’s Inn at the Tamar opened its own medical of-
ward program includes traditional Market, Sheraton–Denver West, and fice, staffed with a doctor, nurse
recognition practices (e.g., employee Tamar Inns. In an intriguing twist, practitioners, and medical assistants
a fourth champion, Sonesta Hotels, in an operation that had a 1999
4
For a discussion of this practice champion,
see: Laurette Dubé and Leo M. Renaghan, converted its human-resources budget of $550,000. The company
“Strategic Approaches to Lodging Excellence: training from a cost center into a also put in place dental, prescription,
A Look at the Industry’s Overall Best-practice revenue-producing department. and psychiatric counseling plans. To
Champions,” Cornell Hotel and Restaurant Admin-
istration Quarterly, Vol. 40, No. 6 (December For the small Inn at the Market, control in-patient costs Tamar ap-
1999), pp. 16–26. the cost of hiring a full-time HR proached Orlando hospitals with
58 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

12. L O D G I N G B E S T P R A C T I C E S
the following offer. Since most hos- pitality industry, and the training perform the following roles: mod-
pitals in the area were running an activity has become a revenue- erator, scribe, timekeeper, and con-
average occupancy of 65 percent, producing operation. science. Responsibility for a particu-
Tamar proposed “renting” the lar role is rotated among employees
rooms that no one else was using Comprehensive HR Initiatives from meeting to meeting.
by offering a capitated rate for in- At the beginning of this paper we Personal best. Ramada Fran-
patient care based on the average noted that one of the overriding chise Systems is another best-
35-percent unused beds. The offer goals of good HR practice is to practice champion that provides
also guaranteed payment on the assemble HR initiatives that an integrated set of HR activities,
tenth of every month for the complement each other and are which is praised by licensees as one
agreed-upon capitated rate—thus driven by strategic objectives. While of the best things ever to come from
giving the hospital a known cash many of our champions have fol- a franchisor. Ramada’s Personal Best
flow. Finally, to manage the costs of lowed this path, we feature three hospitality initiatives have the fol-
specialists, the company devised two here because of the broad scope of lowing four major components:
approaches. It worked out a flat rate their HR initiatives. They are Accor (1) a predictive prescreening test for
with four local dentists, with a guar- North America, Cendant, and selecting employees, (2) a training
anteed monthly minimum fee. For Ramada Franchise Systems. program that uses an interactive CD,
other special care, such as gynecol- Managing well. Accor’s (3) an employee-reward program,
ogy and pediatrics, Tamar made an founders believe that what leads to and (4) an independently adminis-
arrangement with its selected hospi- growth and profitability is managing tered monthly survey of guests’ sat-
tal to set up capitated specialists’ people well. Accor North America isfaction with employee service. The
rates. As illustrated in Exhibit 3, designed a group of HR initiatives, first component, selection, is facili-
Tamar’s cost per covered employee including empowerment, compen- tated by a pre-screening test called
has remained below the national sation, performance evaluation, and the Predictive Index. This selection
average, resulting in a ten-year cost group-process feedback, to comple- instrument, designed by Arizona-
savings of over $37 million. ment each other. The elements based Praendex, helps Ramada get
In the 1980s Sonesta Hotels be- worked as follows. The empower- the right people into the right jobs.
gan designing and delivering cus- ment program pushed decision The subsequent interactive CD-
tomized service-training classes for making down to line levels. General based training is available in both
hourly employees. The training managers’ bonuses were tied to suc- English and Spanish. The company
program eventually expanded to cess on three measures: employee supports formal education through a
include managers, supervisors, and satisfaction (30 percent), customer tuition-reimbursement program for
upper-level executives. The training satisfaction (30 percent), and profit- employees. The third component is
programs, customized to the specific ability (40 percent). Managers’ per- a loyalty program for employees in
needs of each hotel, are taught by formance appraisals used a 270- which points can be earned for
former operations managers who degree review process that included participating in training and per-
have credibility with the staff. As evaluations by peers, subordinates, forming special services. The points
part of its training program, for in- and superiors. The company also has earned can then be redeemed for
stance, Sonesta created a board an approach to new practices that gift certificates. Each month manag-
game, “Personal Service,” that pro- involves developing a task force, ers nominate an employee “star” of
vides an innovative and engaging typically with an outside consultant the month, who receives extra
platform for instruction on service. as a member, and implementing points and special recognition from
What makes this HR activity new practices in one or two pilot the president of the company. Three
unusual is that, after a decade of hotels. of the stars are picked for the
fine-tuning, Sonesta converted the Finally, the company established Ramada USA Today advertising
program into a wholly owned sub- employee roundtables so that all campaign. The final component of
sidiary, Training by Design, that employees can discuss issues. Those this program is a guest survey that
provides line, management, and feedback sessions are particularly provides feedback results monthly
executive training for Sonesta and productive because they consistently on employee guest service.
about 50 other companies. Cur- use a model that assigns the employ- Upgrades. Cendant’s com-
rently, 60 percent of Training by ees certain group-process roles. At prehensive diversity initiatives,
Design’s clients are outside the hos- each meeting designated individuals launched in 1997, illustrate the
February 2000 • 59

13. Exhibit 4 NAACP’s 1998 report card on mi-
Perceived practice outcomes nority progress in the hotel industry
brought the company’s grade from a
C- to a B, the highest grade for any
12
hotel company.
Success of the Practices
N u m b e r o f c h a m p i o n s
10 As we indicated above, all of the
best-practice champions reported
positive outcomes from the adop-
8 tion of their initiatives. A pattern of
results is evident, as illustrated in
Exhibit 4. As the exhibit suggests,
6 employees were the primary benefi-
ciaries of the HR practices.
Employee satisfaction and im-
4 proved morale were the most-
frequently cited outcomes of the
champions (mentioned by 52 per-
2
cent of the champions), followed by
the reduction of turnover (44 per-
0
cent), and increased productivity
cy sts n ice n e t r (35 percent). Employee opinion
ten tio tio nc ofi ve
is Co
sf ac erv ac ma Pr r no surveys at the Four Seasons before
ns
s sf r Tu
Co ati er ati rfo
er
s
sto
m es Pe and after the introduction of its
m Cu lo ye
sto mp designated-trainer program show
Cu E
higher levels of satisfaction and a
clear appreciation for the improved
way in which a firm can develop and mentoring, and (5) target mar- clarity of standards in the wake of
integrated HR activities around a keting to reach minority customers. the training program. Four Seasons
specific corporate goal. Motivated In the area of career development has also found that 75 percent of all
by the NAACP’s report card on and mentoring, the company line employees promoted to super-
minority progress in the hotel in- opened a reservation center in visory positions have successfully
dustry, Cendant’s senior managers Orangeburg, South Carolina, a city filled designated-trainer positions.
felt they should take proactive that is home to two historically The Ritz-Carlton Tysons Corner
steps to enhance opportunities for black colleges, creating opportuni- experienced a 22-percent drop in
African-Americans and other mi- ties to recruit minority students. In employee turnover after introducing
norities. Cendant started by conven- addition to hiring some 200 em- self-directed work teams, while
ing a series of meetings with key ployees from the schools, it also Motel 6 reported a 10-percent de-
opinion leaders in the African- established an ongoing mentoring crease in turnover after it established
American community. What program between the schools and its training program.
emerged were the following five the reservation center. Cendant Thirty-five percent of the cham-
key diversity initiatives: (1) franchise further developed a corporate-in- pions cited reduced costs as an out-
development among minorities via tern program in conjunction with come of their HR practices and 26
financial incentives, (2) supplier Inroads, an organization that places percent mentioned increased profits
development with minority vendors talented minority students in in- as a favorable result. Motel 6 reasons
using the assistance of the National ternships in Fortune-500 companies. that the $6,000 to $10,000 it typi-
Minority Supplier Development The company’s franchise-develop- cally spends in hiring a new man-
Council, (3) philanthropic giving ment efforts produced more than ager is saved through its policy of
(more than $1 million in 1998) to a 50 hotel franchise agreements with promotion from within. Increases in
variety of organizations that benefit minority entrepreneurs. As a first occupancy and ADR were cited
minorities, (4) career development measure of Cendant’s success, the as outcomes from the employee-
60 C R E LOTELANDRESTAURANTADMINISTRATIONQUARTERLY
O N LH

14. L O D G I N G B E S T P R A C T I C E S
empowerment activities in the changes in attitude or work culture Based on their own efforts, the
Minneapolis–St. Paul Hilton, and once their practices were put in best-practice champions also offer
the training program of the Simpson place. the following words of wisdom.
House Inn. Finally, a philosophy expressed First, start sooner and go slower.
Customers also experienced the by many champions involved a se- Several champions wished they had
value of these HR champions’ prac- quence of events that began with begun the practice sooner and had
tices, if sometimes indirectly. As the the design and implementation of been slower in the implementation
general manager of the Rodeway an HR practice. Practices typically process. For others, “sooner” meant
Inn International Orlando, Nicholas resulted in satisfied employees and getting staff involved earlier in the
La Falce, stated, “have a satisfied reduced employee turnover. These process. When developing self-
employee and you have a satisfied changes in employee morale and directed teams, for instance, the di-
guest.” Increased satisfaction and retention would then translate into rector of housekeeping at the Boul-
overall service quality were often improved customer service. Satisfied ders wished she had implemented
cited as important customer benefits customers would become loyal and her efforts at a slower pace with
from the best practices. Disney’s increased profits would be the ulti- more realistic goals to help reduce
Polynesian Resort, for example, mate outcome. David Rodriguez, the resistance initially experienced
noted that its success is reinforced senior vice president of staffing and from room attendants.
by guests’ letters and comments. development for Marriott Interna- Second, managers emphasized
The benefit to the customer of the tional, was one of many champions the importance of communication.
Scottsdale Hyatt’s community-based who observed that profitability and “Communicate like crazy” was sug-
student training was invisible, be- loyal relationships with customers gested by Choice Hotels’s expert for
cause it helped keep up service are the results of the customer’s organization development. Many of
standards, according to the Hyatt’s experiencing improved service. our champions noted the power and
manager who developed and taught The front-office manager of the impact of sharing information with
the course. Minneapolis–St. Paul Hilton, Patrick superiors, peers, and subordinates.
Efficiency, consistency, career Simpson, echoed this sentiment by Often under-appreciated is the im-
enhancement, fulfilling individuals’ observing, “The confidence of the portance of listening to those whom
potential, and customer retention employee so empowered radiates in you wish to change and adjusting
were also listed as outcomes of his or her guest-contact ability, programs based on their feedback.
implementing these HR practices. which in turn gives the guest confi- By using pilot tests and trials based
One indicator of efficiency is the dence that his or her stay will be a on feedback, many of our champi-
significantly reduced manager-to- rewarding experience.” ons were able to modify their prac-
employee ratio that resulted from tices. In the case of Accor, the pro-
the Ritz-Carlton’s empowerment Insights cess for communication was a best
efforts. The managerial staff went For those managers who are consid- practice in and of itself.
from one for every 15 employees ering implementing similar prac- Finally, managers should remem-
to one for every 50 employees. tices, the single most consistently ber that their projects are not likely
Curiously, many of the champi- offered insight was to obtain the to be simple, quick, or easy. Good
ons noted that the positive out- commitment of senior managers HR practice is long-term and re-
comes were not directly measured, and critical decision makers. Indi- quires on-going adjustments and
and few had established pre-practice viduals in large companies, such as tenacity. While frequently labeled as
baseline measures of either customer Accor, Cendant, Choice, Marriott, programs, the champions realized
or employee outcomes. For ex- and Ritz-Carlton, stressed the need that their initiatives were often new
ample, Coastal Hotel Group’s buddy for senior-level support. Much of approaches to doing business and
system for employee training is not the success at Choice Hotels and sometimes radical departures from
directly tracked, but its managers Ritz-Carlton, for instance, was the how the work was done and how
believe that it has contributed to result of initial sponsorship and en- people were treated previously.
increased profits, decreased em- couragement by top executives. Through hard work, good research,
ployee turnover, and overall im- Marriott’s contacts offer the advice careful measurement, pilot testing,
proved operations. Many of our that the most important thing you top management buy-in, and con-
champions spoke of the unseen, can do is get senior managers in- tinuous feedback, successful imple-
unmeasured, and yet strongly felt volved and working together. mentation is possible. CQ
February 2000 • 61