The Portman Hotel Company

Problem statement:

Given the problems faced by management with Personal Valet (PV) system, should the

management continue with the PV system or not.

Try wording it more positively and without losing the USP of PV.

External and Internal Analysis:

PESTCL

Political:

All the large hotels in the San Francisco area were represented by unions. Typically

eight or nine unions represented the different employee groups in a hotel. Unions

would generally picket hotels that wouldn’t align themselves with the union.

The labour rates in U.S.A were much higher than their counterparts in Asia. As a

result, having a high staff count at the base of the employee pyramid was not

financially viable.

Economical: I hope you the difference in the meaning of the term economic and

economical

Pay was commensurate to the work hours on that day. The daily wage structure did

not guarantee work hours independent of occupancy, in the hospitality industry.

Industry average base pay was $7.50 an hour across hotels

Legal:

The associates signed a contract that included a bill of rights. In case any rights were

violated, the associate could seek redress in court.

Not an external issue. They could have not done it. Mere contract of voluntary nature.

SWOT analysis

Strength:

-Unique concept of personal valet system

which is first of its kind in USA

-Competent workforce that takes pride in the

work they do.

-Good customer-centric policies.

& many more you have missed.

Opportunities:

-Higher occupancy as a possible result of a

well executed PV strategy.

First entry into the category etc. Missed some

key ones.

Weakness:

-Lack of experience in hospitality sector.

Strange! Portman is a pioneer in hotels. May

be in PV they are new. So is everyone else

-Training imparted to PVs not up to the mark

as compared to the demands of the job.

-Work allocation is not appropriate for the

kind of work that is expected.

-Rates higher than that of comparable hotels.

Threat:

- Presence of Unions that could influence the

PVs in their outlook.

-Change in occupancy levels due to seasonal

variations.

-Glut of luxury hotels in San Francisco.

-Competitors coming up with similar

business models.

Swot lacked focus on PV which is the problem under examination.

Factors that affect the problem:

-Lack of Training (Word neutrally)

-Socio-Cultural Drawbacks

-Competition

-Existing compensation and Benefits.

-Recognition for work

-Job satisfaction

-Fluctuating Occupancy rates

Merely highlighting does not make it critical, you should say so. Structure of the teams

especially 5 star

Decision Framework

1) Socio-Cultural Factors – The personal valet system is an integral part of the Asian

hospitality sector. However, its effectiveness in America is highly questionable. The

power distance which defines the degree to which people accept hierarchical authority

is very high in the Asian countries. People in the west are not used to this structure

which makes them resist the idea of a personal valet. It is perhaps an idea whose time

hasn’t yet come.

2) Low Job satisfaction –Lack of Job satisfaction among PV’s is another major factor

which has lead to the problem. The original description involved work that was

related to helping the guests by carrying out tasks like ordering theatre tickets or

suggesting a jogging route. However, most of the time was taken up in doing cleaning

work leading to dissatisfaction.

Equity Theory suggests that if an individual thinks there is an inequality between two

social groups or individuals, the person is likely to be distressed because the ratio

between the input and the output are not equal. Other groups treated PV’s like maids

rather than a group crucial to the business strategy resulting in low job satisfaction.

3) Existing compensation and benefits – Even though the PVs were receiving many

benefits, their base pay was similar to that of a maid. The management expected them

to earn more by serving the customers to the best and receiving tips. This was not apt

on the part of the management as the customers were not liable to pay tips and hence

the valets were earning very less as compared to what was expected .Besides the tips

received were also not given to the deserving valet in many cases.

Options:

1) Continue with the existing system for some more time and see if it stabilises over

time.

2) Continue with the existing system by making a few amendments to the HR strategies.

Like,

o Increase the hierarchical structure by introducing some middle level managers

between the PVs and the top management.

o Appoint a team leader in a team of five who allocates work to everyone in the

team and who will be in charge of supervising the team. This would ensure

that there is better allocation of work and each personal valet would know

what he is exactly expected to do. Currently, the management seems a bit too

confused about how work is to be allocated.

o A proper reward and punishment policy can be enforced.

3) Exit from the current system (PV) of guest service and implement a revised strategy

more suitable for the environment. Their business strategy of providing unparalleled

service can still be achieved through other means.

Options are well drawn out in relation to the problem

Recommendation:

Considering the critical highlighted factors, we would recommend that the PV system be

abolished in favour of a comprehensive approach that is more suitable for the environment in

which the hotel operates.

In future, if the environment were to become more conducive to the PV system, it can be

revisited.

I hope you have realized that PV system has increased the occupancy a 100%, is the USP, is

the first entrant etc. It seems HR problems are so overwhelming that you are willing to give

up the business differentiation for it. Would it be the way to create SCA?