STRATEGIC HUMAN RESOURCE MANAGEMENT CASE ANALYSIS.

MOHIT KOTWAL, PGDM(E) BATCH, ROLL NO. 024

CLUB-MED(B)

Club Mediterranee was the ninth-largest hotel company in the world in 1986.Jacky Amzallag, director of Human
Resources for Club Med’s American zone. It was founded by a group of friends in 1950 as a non-profit sports
association. By 1985 Club Mediterranee S.A., a publicly owned company traded on the Paris Stock Exchange, had
more than 100 resort villages throughout the world and hosted more than 800,000 vacationers.
In 1972 Club Med, Inc., was formed as a U.S. subsidiary of Club Mediterranee. The subsidiary sold the company’s
vacation packages and operated its resorts in North America, the Caribbean, South America, Asia,
and the South Pacific. What was referred to in Club Med as the “American zone” comprised the 17 villages.

Misunderstandings frequently arose between European GOs and American GMs—and between European and
North American GOs as well. After examining the problem in depth, management decided, in the early 1980s,
to dramatically increase the percentage of North American GOs, resulting in major recruiting drives in large U.S.
and Canadian cities. Some Club Med managers, however, voiced concern over continuing problems rooted in
ethnic differences. Because the number of GOs recruited from Europe was much larger than that from North
America, and the turnover rate for European GOs was roughly half that for American GOs.
Current Problems
1 High turnover of American GOs.
2 Complex village assignment task due to turnover
3 Rotation of six months not taken well by some employees
4 Recruitment problems – Discrimination laws in US hamper quick screening of resumes
5 Friction between the European and American GOs
6 Newly promoted American Chiefs of Service assigned to foreign locations
HRM practices :Benefits
1 Buffer hires recruited to act as mid-season replacements for GOs who quit or get fired in the middle of a season
2 On the job training gives a hands on experience
3 Discussion with Chiefs of Service on the team composition
HRM practices :Drawbacks
1 Buffer hires get their joining 4-6 months after they are recruited.
2 People don’t know what they would be doing for before they reach the assigned village.
Rotation:
Advantages Disadvantages
1 Break the routine Disadvantages –
2 Motivator for the young GOs - travel the world 1 Building a team is difficult due to constant
3 Employees get accustomed to different cultures changes
4 Learn to adapt 2 Logistics costs involved
3 Employee satisfaction drops during

Options
Jacky had several ideas about how to improve the system. First, some village chiefs fired two or three times as
many GOs as other chiefs. “Why should that be?” he queried. “If they had to live with the aggravation it
caused, perhaps they would try to work with their new GOs instead of executing them right away. Why not have
chiefs more involved in the recruiting process, maybe taking time off from their villages conduct interviews after
visiting cities.
Alternatively, Jacky’s ideas on how to better manage the recruiting process was to recruit and assign GOs to
villages throughout the year.