East Bay is a coastal resort area which has struggled to attract visitors in recent years. Fifty years ago the area was a popular holiday destination which was also able to attract large numbers of day trippers on summer weekends and bank holidays from the nearby large city. Now fewer and fewer come each year. Things may soon improve thanks to East Bay council's success in attracting grants to build a new purpose-built, state-of-the art conference centre with its planned 3000 seat auditorium, but this announcement has come too late for Jack King and his hotel group, East Bay Nights Ltd. After years of declining sales and decreasing profits in all three of his hotels in the area, Jack has had to admit defeat and has put his company into receivership.
You work as a management consultant for a company in the leisure industry that operates visitor attractions around the world. Your company is looking to expand and has cash available to buy East Bay Nights Ltd from the receiver. The aim would be to invest substantial sums in upgrading the three hotels that make up the group, closing each in turn for a programme of refurbishment and re-opening them before the new conference centre opens in two years' time.
You are asked by your managers to meet with the receiver's representatives and to visit each of the hotels to talk to their general managers. Your brief is to establish what HR practices are currently in use in the hotels with a view to recommending what, in your view, needs to change if the proposed acquisition goes ahead. You spend a week in East Bay during which time you establish the following:
- The three hotels are run by different general managers who have each reported separately to Jack King. There are separate management teams and quite widely differing management systems and management styles in operation across the three hotels, as well as very different approaches to the management of employees. Staff only work in one hotel, although some have moved jobs from one to another over the years.
- Each hotel employs around 30 permanent staff, many of whom work on a part-time basis. These teams are supplemented during the summer and at other busy holiday times by temporary staff recruited on a ‘casual’ basis.
- Jack King has been managing the hotels on a very tight budget for the past five years spending no money at all on training or staff development, paying most of his staff at a fixed hourly rate which is around the local minimum level, with no other incentive, bonus or benefits schemes in place.
- Any vacancies are only advertised in the local newspaper, and much recruitment is done by ‘word of mouth’. It is not always easy to fill vacancies and the quality and number of applications are often very low.
- Workers are not encouraged to speak up about any problems they are experiencing and there are high levels of dissatisfaction amongst employees. Staff turnover levels among permanent staff are running at around 50%, but would be far higher if seasonal workers and temporary staff were included in the analysis. There are some long-serving employees in each hotel, but the average length of service of current permanent staff is less than two years.
- Most of the current staff, including all three general managers, got their jobs by knocking on Jack's door and asking directly if any vacancies were available. They did not have to compete with any others for the job, being appointed if Jack decided that they would fit in after a brief interview with him. None received any specific management training or development.
- No formal induction programmes are run in the hotels. Staff learn their roles on the job from colleagues and their line managers, and are usually ‘thrown in at the deep end’ to sink or swim in their new roles with little preparation.
- There is no formal appraisal or performance management in place with employees receiving only ‘ad hoc’ feedback, and usually only when something has gone wrong or there have been customer complaints.
- Regular ‘sackings’ have occurred which have followed no formal process. East Bay Nights Ltd has been named as the respondent in 25 separate labour tribunal cases over the past two years for non-payment of wages on dismissal. The company does not have a good reputation locally as an employer.
Write a briefing paper (report) for your manager which meets the following objectives:
- Makes recommendations for what you consider to be the most important changes that would need to be made to the HR policies and operating practicesat the three East Bay Nights hotels were your organisation to take the company over.
- Justifies each of these changes with a good business case, and with reference to appropriate research and literature. This means presenting a strong and persuasive rationale
- Makes reference to both the internal and theexternalcontext of the company, including the way in which legislation should be taken into account in its future people management policy and practice.