CASE ANALYSIS

THE PORTMAN HOTEL COMPANY

PROBLEM STATEMENT
In what ways Portman higher management could reformulate their HR strategy and thereby
leverage its human resource towards fulfillment of the organizational objective of providing a
personalized experience in the American luxury hotel industry.

PESTC ANALYSIS OF THE INDUSTRY:

Political: Not Applicable
Economic:
Portman aimed at bringing Asian standards of hospitality in the U.S. which was
labor intensive and involved high labor costs. The Personal Valet approach
involved the labor cost which was three times as compared to Asia. Hence
Portman Hotel Company would require more capital to hire labor.
Because of cheap labor, Asian hotels could afford three employees for every guest
whereas America could manage only a 1:1 ratio. Hence Portman had to stay near
this ratio to be cost effective.
Social:
The target consumers comprised of the luxury segment which needed customized
service.
Customers were not accustomed to the culture of paying tips, when same was
asked for.
Portman Hotel wanted to ensure a comfortable, convenient and personalized
experience to its American customers.
Labor unions were not allowed to grow by the Portman management.
Employees were made to sign contract, which gave the employee due rights.

Technological: NA
Cultural:
The American culture revolves around the philosophy of self service and hence
customer visit to hotels do not involve expectations on grounds of personal
communication, service and extraordinary treatment.
Whereas Asian culture is such which involves personal and customized treatment
by the employees to give the guests a pleasant and memorable experience of their
stay in the hotel. The Personal Valet would take care of all the needs and requests
of the guests and ensure that they are taken care of well.
Hence introducing the Asian culture of hospitality into America and
implementing was a challenge for Portman.
 SWOT Analysis:
INTERNAL STRENGTHS
- Ability to foresee the future and introduce
the concept of a niche and luxurious
service, which involved getting the Asian
standards of hospitality to the U.S.
- Recognized the importance of Intangible
psychic needs of the guests and hence
wanted to satisfy that through a memorable
experience through servancy.
- Realized the importance of Employee
satisfaction and hence focused on personal
as well as professional growth of the
employee.
INTERNAL WEAKNESSES
- Inability to keep the employees motivated
and committed to work.
- Weak training skills and inability to focus
on the employees needs and keep it satisfied
all throughout.
- Absence of a proper HR structure and
suitable rewards and efficiency check
systems.
- Inability to be able to meet its long term
strategy due to the gap between external
alignment and Internal Alignment.
- Inability to successfully implement and
ensure that the objectives and goals of each
level of the hierarchy are achieved. The
vision and mission of the company were
successfully trickled down to the lower
levels but no effort was taken to ensure that
proper systems were introduced to help
achieve these.

EXTERNAL OPPORTUNITIES EXTERNAL THREATS

- Being the first hotel to come up with
Personal Valets system and hence reap the
benefits of being the first mover in the
industry.
- To become the provider of a world class
luxury experience to its guests by
successfully implementing its strategy with
a proper HR structure as its backbone.
- Fear of the continuing increase in attrition
rate due to the inability to keep the
employees contented to stay where they are.
- Fear of unacceptability of by the Americans
of the new way of service and culture due to
improper implementation of its goals and
processes.

IMPORTANT QUESTIONS TO BE ADDRESSED:

1. Portmans market position and Market Competitiveness:
Portman is currently the first to come up with the Personal Valets system, though there
are two hotels that have recently come up that are trying to introduce the Asian style of
service in the US market. Hence the market is less competitive and if Portman
successfully introduces a proper structure and process, it can reap the benefits of being
the first mover in the market.
2. Portmans strategy to compete successfully in the chosen market:
This involves introduction of the niche- a revolution in guests service, which involved
giving the guests an experience by professional, cheerful an immediate response to every
request.
3. Attitudes, behaviors and skills expected from its employees to execute its strategy:
This includes people who have the ability to do almost everything perfectly with
positivity, focus, values and attention to detail. Employees who are friendly and are
intrinsically motivated to perform and go the extra mile to keep their guests happy are
needed in the organization.
4. Portmans practices with respect to:
(1) Recruitment: Recruit people that are friendly and voluntarily ready to take initiatives
and enjoy the work that they do. The hired Selection Research Inc.(SRI), to look for
the people with the characteristics they were looking for.
(2) Selection: They followed an extremely selective process. Select those who exhibited
immense pleasure in serving guests and who did the work not just as a mere job but
who felt like they were working for their own organization. Those selected were
made to stay at the job for at least one year.
(3) Compensation: The associates were made to expect as much as $200 a week as tip.
Also, there were other extras like liberal reimbursements to outside courses, access to
cafeteria, parties, $200 for the associate of the month and $1000 per week in the hotel
for the associate of the year.
(4) Training: Employees were given a 2 week training course wherein they were taught
cleaning rooms and other skills needed on the job as well as to judge the guests and
categorize them into lovers or rejecters.
(5) Career Development and Career Paths: Employees at Portman were taught all the
jobs necessary to take care of the guests from cleaning the bathrooms to mixing a
drink. Hence this made them multi-tasking and made their work more interesting and
less monotonous. But the employees were expected to be happy with their position
and didnt have much scope to climb up the ladder. The PVs had to be contented
with their position.
(6) Feedback and Performance Appraisal: Not much attention was paid to this aspect
hence Portman lacked in knowing the concerns of the ones who were in direct contact
with their guests- the Valets. Also due to lack of a proper system of performance
evaluation and appraisal, few valets didnt perform their jobs and others ended up
making up for it which increased discontent amongst them.
CRITICAL FACTORS:
Lack of a proper HR structure
External Alignment and Internal Alignment
Increasing attrition rate and disinterested employees
Increasing costs of hiring and maintaining the Human Resource
Achievement of its strategy to compete successfully in the market by taking care of the
above mentioned critical factors

PROBLEM ANALYSIS:
1) Lack of Proper HR structure:
What is lacking in Portman is the presence of a proper HR structure and policies. As far
as recruitment is concerned, Portman does recruit and select the employees they feel
suitable as per their expectations and also have an associate contract that needs to be
signed by every employee which clearly defines their work boundaries and expectations
that the organization has from them.
But what is missing is the proper demarcation of work responsibilities and defining jobs.
Also since there is no proper performance evaluation, appraisal and feedback system in
place, PVs tend to take their responsibilities and their job more casually due to which
some of them end up working to make up for the others.

Hence implementation of these 2 systems is necessary to firstly, be able to evaluate

performance of every PV so as be able to evaluate their efficiency and secondly, to make
the employees feel a part of the organization by encouraging them to share their
concerns, issues and give feedback on important issues.

2) External Alignment and Internal Alignment:

What was also lacking in Portman was the gap in aligning the external as well as the
internal resources and objectives. The internal alignment meant a committed and
motivated workforce who enjoyed providing their guests with customized and a world
class luxury experience, and aligning this with the companys strategy and objective. .
This required support of a proper HR structure and process in place.
The external alignment meant aligning your services as per the expectations of your
customers and satisfying their needs and requests accordingly. Since Portman was
introducing a new way of servicing customers, what was required is fulfilling and
performing those services efficiently to give a pleasant experience to the guests.
 External Environment: Changing external Environment,
Managerial challenges
Managerial
inter pretati on of
desirable
be havior

Inte rnal Environment: Aligning

employee behavior to what is considered
desirable as organizations act through
employees
Aligning
empl oyee attitude
to desirable
be havior

Managing Dynamics of
individual behavior:
Perception, Personality,
Motivation and Learning

Also what needs to be aimed is achieving Organizational Citizenship Behavior (OCB)

and Job Dedication out of the employees. The employees need to be satisfied themselves
to be able to satisfy their guests.

3) Increasing attrition rate and disinterested employees: Portman was experiencing a

gradual increase in the number of their dissatisfied employees and their motivation levels
were declining drastically. The PVs felt that they were treated like more of maids rather
than a group crucial to the business strategy.

This could be related to the Pygmalion Effect which wasnt present in this case:
 Also, Kelleys Attribution Model can also be applied in this case where specific
information can be used to make specific social attributions for the behavior and
outcomes of others:
(1) Consistency: Here what could be observed is whether an employee at Portman
behaves in the same fashion over time. The PVs who are not working efficiently,
their behavior could be examined to establish if his behavior is consistent or not.
(2) Distinctiveness: Here it could be observed if the employees behave the same in
different situations. It could be possible that the current work structure and
environment at Portman could be such that makes the employee behave in a particular
way. By improving situations, the employee could probably work better and
efficiently and thats what needs to be observed.
(3) Consensus: Here it could be observed whether the other employees other than the
target employee are also behaving the same way in a particular scenario.

Application of this model would make it easier for the superiors to divide the causes of
such behavior into three classes: person, stimulus or situation, which would have an
important influence in processes such as reward distribution, performance appraisal or
selection.

Applying the concepts of Pay Dispersion and Equity, wherein minimum wages are paid
to all but extra pay to those who are working efficiently could keep the employees
motivated.

Maslows need hierarchy model can also be applied here wherein the PVs when
recruited are made to feel like an important part of the organization and hence they expect
their self actualization needs to be satisfied. But since they end up spending more time in
cleaning bathrooms than serving and catering to the requests of their guests, they end up
dissatisfied and this causes discontent and reduction in their motivation and dedication
levels. Hence satisfaction of this need in the triangle is also necessary to expect OCB
from the employees.

4) Increasing costs of hiring and maintaining the Human Resource:

Portman is experiencing increased costs of maintaining their human resource, which is of
utmost concern to them now as they are approaching full occupancy and need to hire
more resource to be able to meet his demand, in a cost effective way.
 The employees are currently paid a minimum wage irrespective of occupancy and
keeping the employees in the organization even when there is low occupancy is what is
costing Portman a huge sum.
Also keeping employees temporarily at the times of full occupancy is not a feasible
solution as the commitment and dedication that is expected out of them will not be
present as the employees wont feel a part of the organization. Hence a trade off needs to
be achieved between these 2 ends.

5) Achievement of its strategy to compete successfully in the market by taking care of

the above mentioned critical factors:
The above mentioned factors that have been discussed need to be taken care of with a
view to be able to implement the strategy and objective of Portman of bringing in Asian
culture in the American market successfully. Hence all these need to be aligned to
achieve this goal.

ALTERNATIVE SOLUTIONS:
Recruit workers as per requirement: This alternative involves keeping employees
during the busy months of the hotel and laying them off in the rest of the months when
they are not needed. This would reduce costs considerably as the costs of keeping the
employees are reduced.
But the major drawback with this alternative is that if this solution is implemented, the
employees would not display dedication and OCB, because in order to do that they need
to feel a part of the organization and that is not achieved in this case. A similar conflict
was experienced in Portman when floaters were employed to fill up the gaps of required
workers during high demand. The permanent PVs were not able to relate to them and
understand their way of working.
Hence this alternative was not a very feasible one.

Introduction of a performance evaluation and feedback system:

The current structure of Portman includes an HR team, and this could be utilized to
introduce a performance evaluation system, wherein all the PVs are asked to sign a
register after they perform every task wherein they need to fill in the details of the work
done, the room in which it was done and the time. The register would be maintained by
the Team Captain of the group and he would be accountable for the quality of service of
the team.
This would make it easier for the management to evaluate the performance of the
employees and identify the inefficient as well as the efficient ones. The associate contract
gives a right to the employees to know regularly about their performance and
introduction of this system would facilitate providing proper feedback to the employees.
 Also an employee feedback system needs to be introduced wherein the employees are
asked to fill a feedback form on a regular basis where they are asked to share their views
on the level of support services received in order to provide exceptional services to their
guests and also encourage them to provide any suggestions to improve anything they feel
lacks in the organization.

Principle of Equity (equity with differential wages): This principle of motivation states
that employees are ensured not just equal wages to all but also equality on the basis of
performance and that an employee is paid as much as the other is for doing the same
work with equal dedication and commitment.
Hence the PVs could be paid minimum wages and based on their efficiency could be
paid extra. Also a system of Job Rotation could be implemented wherein the current
system of work hours on the basis of seniority could be modified in a way that an
employee that works for 40 hours this week and another employee who works for 16
hours could then work vice versa for the next week. This would ensure that employees
are made to work for equal hours on an aggregate basis but are fluctuating throughout the
year. Wages could be paid accordingly.

RECOMMENDED SOLUTION:
The recommended solution would be as follows:

Menes proposal of having Team Captain (TC) within every group could be
implemented but their roles and job description would be slightly modified than
the one mentioned by Mene, wherein every TC would be accountable for the
performance of every PV in his group and he would be handling the job register
wherein he ensures that every PV works as per the work assigned to him in the
stipulated time and notes it in the register.
Also the TC would keep rotating within the team on a regular basis (for eg.
weekly, fortnightly, monthly etc.) so that every member in the team gets a chance
to become TC which would not only motivate them in a way but make them feel
as if theyre being promoted and given a chance to lead and be accountable for
the performance of the people under them.
Rotation of employee work hours wherein during periods of low occupancy the
employees are made to work for reduced work hours rather than laying them off
 and similarly during busy schedules, allot them higher work hours. This would
ensure that the workers are maintained in the organization all throughout the year
and this would encourage OCB and Job satisfaction and Commitment as well as
dedication towards work. Wages could be paid according to the work hours and a
minimum wage rate would be fixed which would be paid irrespective of
occupancy.
Implementation of Performance evaluation and appraisal, and a Feedback system,
wherein via the job register and feedback by the Supervisors, the performance of
each PV is evaluated both as a PV as well as a TC. Regular feedbacks are given
to them and efforts are taken to find out the reasons if any, for any inefficiency
found. Also, feedback from employees towards the current support services
would make the organization serve the guest s better by providing the employees
with the proper services and facilities needed to support this function.
This up-down as well as down-up mechanism would ensure control as well as
belongingness and accountability in the organization.

The Organization structure would be modified as follows:

SUPERVISOR

TC TC TC

PV PV PV PV PV PV PV PV

PV PV PV PV
Hence there would be 5 such supervisors who would have 3 TCs each under them which would
keep rotating, and under each TC would be the 4 other members of the group as the TC would be
one member amongst the team of 5. The supervisors would then report to the higher levels of the
structure with each level in the hierarchy accountable for the performance of their subordinates.