Daphne Jones has recently been appointed as personnel manager of the Cavendish Hall Hotel, a 200 bedroom, four-star county house hotel located in rolling hills a few miles south of a major northern industrial conurbation. The hotel provides a wide range of conference and banqueting facilities and is a popular wedding location. It employs a range of full time, part time and temporary seasonal staff across 5 departments: Events and Banqueting, Rooming and Reception, Housekeeping, Food and Beverages, HR and Administration.
As part of a new performance management system the hotel introduced an individual performance related pay scheme three years ago and the hotel manager would like Daphne to review the effectiveness of the scheme. Each member of staff receives a one per cent salary increase irrespective of performance to take account of the increased cost of living. Each line manager then scores each member of staff in their team based on their individual performance over the pay year. There are four options:
Staff scored as ‘excellent’ receive a four per cent pay rise (three per cent plus the one per cent cost of living increase), those marked as ‘good’ receive three per cent and those as ‘satisfactory’ two per cent. People who are marked as ‘unsatisfactory’ simply receive the one per cent cost of living increase.
Despite the scheme the hotel manager has discussed ongoing performance problems with Daphne. The hotel has received some poor reviews from guests concerning levels of customer service and room cleanliness on Trip Advisor UK:
“The staff try hard but lack the professionalism of a 4/5 hotel to compete. I will stay in the hotel over the road next time as much better value for money in my opinion.”
“Yesterday I forgot my key. After running miles to the reception, they gave me another key which still didn’t work. No fresh orange juice at breakfast.”
“Booked four nights for a very special occasion but checked out after two truly disappointing days. Service was not friendly or prompt. Our room had a flickering bathroom light that was never replaced.”
“I was surprised that standards have slipped so much. Staff are no longer friendly and ’on the ball’. I couldn't relax in my room as I was repeatedly interrupted by staff checking the room. Indifferent service in the bar, very slow checkout caused by only one member of staff being available to serve many customers. When an extra member of staff did appear to help with checkout and I mentioned the long delay she commented that she was busy on the phone.”
Perhaps unsurprisingly given these reviews, the hotel is also suffering from declining room occupancy rates which is now attracting negative attention from head office.
As a starting point to her investigations, Daphne has reviewed staff opinions of the reward strategy based on the results from the latest employee engagement survey and has noted some apparent problems:
Prepare a management report to provide Daphne with a critical evaluation of individual performance related pay (IPRP) and why the current scheme may be having a limited impact on performance at the Cavendish Hall Hotel. Provide recommendations on alternative reward strategies they could consider.
Submission guide are provided. Please refer to the attachment.
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