Case Study of Taj Hotel Group

By:Akhilesh Singh Rawat

Harish KumarPushpendra Kumar Singh

Shubha N. BhambhaniPG-PPM , MDI GRGAON

Issue at handKrishna Kumar is facing a dilemma that Mr.

Bhowmick who is COO of Luxury Hotel Division has plan to appoint a General Manager who has been handpicked by him in contrast to CDC recommendation. Experience with the processes that no one took

seriouslyCDC has spent considerable time and discussion

in selecting the candidateBhowmick may help the person whom he chooses

but not the person selected by the systemGood Judgment vs number based performance

History and OriginsTaj Mahal Bombay ( the Taj) was built by Jamshetji Tata

in 1903Indian Hotels Compnay(IHC) was sole share holderUnder Ajit Kerkar who led during 1970 to 1997 , saw

rapid growth & at one point Taj group owned more then 80 properties within Indian and overseas

Kerkar was charismatic leader running organization on personal relationship

Success for employees was determined by the proximity to Kerkar - Resentment among executive who were not in Kerkar’s coterie

Salaries were 15-20% below the marketLack of Corporate Governance - Questions were raised

for not meeting ethical standards by Taj Group and finally Kerkar forced to resign

Krishna Kumar, who was head of Tata Tea was made MD of IHC

New Initiatives in TajVision of Taj “ a hotel with service philosophy of

Indian World and the technological underpinning of the western word”

Voluntarily Early retirement package was given to 256 executives and 1697 staff members out of 15000

Salaries were raised to be inline with marketSome of the properties were sold and shut downManagement Structure based on Product Area was

formed and resulted in to three divisions viz. Luxury Hotel , Business Hotel , other division ( Leisure hotel , International Hotel and Air catering)

New Initiatives in Taj - Contd

Taj People Philosophy – Performance Management Process linked to long term company goals Through Balanced Scorecard

Performance Appraisal System ( 75% on Objective Results , 25% on Judgmental Review) for fair evaluation

Key Result Area ( KRA) comprising Goals and Objectives were laid out at the beginning of each year and progress was tracked and monitored

Potential Development Centre (PDC) – established to evaluate the fast track professionals

Employee Satisfaction tracking System

New Initiatives in Taj - Contd

Taj Focused training interventionsFocus on creating system and standard

for operations and Service QualityBalance of Labor management relations 360 degree feedback system Carrier Development Committee – formed

to value the contributions of performers , discuss high level openings and how to groom senior mangers for those jobs

Challenges Transparency at Great Cost – Comparison of Fast

Tracked Professional and Non Fast Tracked ProfessionalDilemma for achieving the international norms for staff

to guest ratio Growth of a non IT conversant workforce Competition from Global Luxury Hotel Chains – World

class Service and standards of excellenceNeed to have a Balance among the Ability to change and

value of relationship & local Knowledge – Labour Management Relationship

Hotels with service philosophy of Indian World with technological underpinnings of the western world – Glass ceilings for Indian Managers

Developing Managers - Past

Tata Administrative Service Taj’s own Management Training Program Rising through by excelling as staff workers

through sheer hard work Under tutelage of Seniors(Kerkar) - Managers

were mentored/developed and assigned to PropertiesService Quality compromised Lack of Structured systems - 3600 feedbackEmployee Satisfaction Tracking System

Developing Managers – Current & Future

Career Development CommitteeSystem based Approach not a substitute for mentoring

Performance Management Process linked to long term company goals Through Balanced Scorecard

Performance Appraisal System ( 75% on Objective Results , 25% on Judgmental Review) for fair evaluation

Key Result Area ( KRA) comprising Goals and Objectives were laid out at the beginning of each year and progress was tracked and monitored

Potential Development Centre (PDC) – established to evaluate the fast track professionals

The way forwardKrishna Kumar need not to reverse the decision

of CDC on account of following : - Taj Group is concerned with promoting within

company and personally making efforts to educate and better their current staff has positive outlook.

The promotion in Taj Group are being governed by how well the employee is completing that KRA instead of personal relationship between employee and management

Employees are aware of the CDC and they know that the performance is continuously being monitored by central management.

Thanks

Balanced Scorecard The balanced scorecard

is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

360 degree feedback system 360-degree feedback, also

known as multi-rater feedback, multi source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate work circle. Most often, 360-degree feedback will include direct feedback from an employee's subordinates, peers (colleagues), and supervisor(s), as well as a self-evaluation. It can also include, in some cases, feedback from external sources, such as customers and suppliers or other interested stakeholders.