HRM-Mountain Lodge Case Study

8/12/2019 HRM-Mountain Lodge Case Study

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The Mountain

LodgeMGX9850

Neha Sardana (25411292)10/25/2013


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The predominance of small firms is one of the defining characteristics of the hotel

industry and their success and survival is linked directly to the operational practices (Asree, Zain

& Razalli, 2010).

The Mountain Lodge is a seasonal ski resort located in the snowfields of Victoria with

about 120 staff members. It falls under the category of SME (Small & Medium enterprise),

which by definition, have less than 250 employees. SME's are characterized as having a small

share in the market and personalized management by its owners (Kramar & Syed, 2012). Hudson

brothers, the owners of the successful and reputed Luxe Boutique Hotel (located in the city),

expanded their operations by buying this established ski resort. The case further talks about the

ownership, functioning and issues at the Mountain Lodge Resort.

UNDERLYING ISSUES:

After careful analysis of the case, non-existence of a link between the Strategic

Management and the Human Resource aspects can be drawn. Strategic Management is pattern

or plan that integrates an organization's major goals, policies and action sequences into a

cohesive whole(Quinn, 1980). Human Resource Management refers to the policies, practices

and systems that influence employeesbehavior, attitudes and performance (De Cieri & Kramar,

2008). There were clearly no policies or practices that pre-existed or had been formulated after

the change in ownership. The lack of research by the Hudson brothers before expanded their

operations, by buying the Mountain Lodge, left the 'mission' and 'vision' of the business diluted.

The framework (Appendix 1) clearly outlines the necessity to integrate the strategies formulated

for a business with the Human Resources for implementation of the same. This lack of research


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and the non-existing HRD within the business demonstrated the non- involvement of the owners

and therefore inculcated the feeling of isolation and insecurity within the employees.

The case points out Hudson brothers' awareness of the differences in the existing business

(Luxe Hotel) and the acquired business (Mountain Lodge). Despite the awareness, Sam and Ted

did not do much to apprehend the differences in the models, structures, culture and functioning

of the two businesses. They did not understand that the culture within their two businesses was

extremely different and incomparable. Organizational culture can influence how people set their

personal and professional goals, perform tasks and administer resources to achieve them.

Further, it affects the way in which people consciously and sub-consciously think, make

decisions and ultimately the way in which they perceive, feel and act (Schein, 1990 as cited by

Mushtaq, Fayyaz & Tanveer, 2013). According to Denison (1990, as cited by Mushtaq, Fayyaz

& Tanveer, 2013) performance of an organization is related to the degree to which culture values

are strongly held or widely and commonly shared. The employees felt disconnected from the

owners and did not appreciate the constant comparisons with the city hotel staff and eventually

the profits were down by about 15% on the last season.

Not perceiving the apparent differences and duplicating the functioning methodology at

the city hotel in the ski resort resulted in Hudson brothers adopting a wrong Management Model.

"A management model is the choices made by a companys top executives regarding how they

define objectives, motivate effort, coordinate activities and allocate resources; in other words,

how they define the work of management. A management model involves choices at the most

fundamental level about how the company will be run. Those choices then shape the specific

practices and behaviors in the company. Because these principles are invisible and rarely made

explicit, there is unawareness of the management models businesses use"(Birkinshaw &


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Goddard, 2009). The brothers 'assumed' that the resort manager would be committed based on

the commitment capabilities of their city hotel staff. Also, the problems at the Lodge were often

compared to the issues at the city hotel and not much was done to understand/handle them

differently. The Hudson brothers did not analyze the key differences and weighed the actions (at

the Lodge) against the standards at the city hotel, such as, the age-bracket of the casual staff, the

seasonal functioning and the difference in the structure, which led to an increase in the number

of issues arising at the lodge.

IMMEDIATE ISSUES:

The most immediate problem that surfaced within the Lodge was the inefficient Human

Resource Planning. HRP determines employees needs, supply of personnel, rationally predicts

the companys future manpower needs, and avoids cost errors. It is about matching the number

and skills of employees to business needs in the longer and/or shorter term. It enables managers

to answer two basic questions. First, how many employees? Second, what sort of employees?

HR planning, also, determines the suitable techniques of selecting, recruiting, and developing

employees knowledge and skills so that the organization can improve its effectiveness (Saad,

2013). As there was no HRP, an internal labor market (ILP) had not been well established,

leading to over-reliance on the managerial staff. Since the hospitality sector is labor-intensive, it

should be of utmost importance to have a steady supply/immediate availability of staff. It has

been argued that hotel managers lack a strategic focus for the management of staff and,

therefore, have not used their ILMs well (Jago & Deery 2004 as cited in Saad, 2013).

Simms et al. (1988) have suggested that a weak or unstable ILM correlates with a disjuncture

between employee expectations of promotional opportunity, job satisfaction and working hours,


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and the actuality of these work components (as cited in Saad, 2013). A weak ILM has also been

linked to employees experiencing lower levels of job satisfaction and organizational

commitment, resulting in a dissatisfied workforce with greater intention to leave (Jago & Deery

2004 as cited in Saad, 2013). An improper Human Resource Planning and the absence of an

Internal Labor Market left the owners with no immediate replacement for the two people

responsible for ensuring smooth functioning of and within the Lodge (Paul & Jan) and the

Lodge's operations crippled, burdening the owners' with additional responsibilities.

Lack of HRP and ILP directly impacted the business in terms of the issue of Employee

Turnover. Research suggests that the hospitality industry has created and reinforced a turnover

culture. Employees generally enter with the belief that there is limited career development and

promotional opportunities (Iverson & Deery,1997). This has both direct costs (e.g. recruitment,

hiring and training) and indirect costs (e.g. overtime, reduced customer satisfaction) (Pearlman &

Schaffer, 2013). Turnover culture is said to have an impact on the organization in a negative way

by acting as a counterculture to the organization's main objectives (Cooke & Rousseau, 1988 as

cited in Pearlman & Schaffer, 2013). Turnover culture at the Mountain Lodge is evident in the

abrupt exit of Paul (resident manager) and Jan (head chef) and return of only 40% casual staff

from a year before.

Incorrect Recruitment and Selection Techniques posed another threat to the smooth

operation of the lodge. In the hotel industry, there is little evidence of systematic selection

practice to identify the quality service characteristics and he process is acknowledged to be

informal and basic, particularly for the non-managerial staff (Kelliher & Johnson, 1987;

Waryszak & Bauer, 1993 as cited in Lockyer, 2004). The same technique was implemented in

the Mountain Lodge, where the new recruits were in their early twenties and had cold-called the


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brothers in search of work just before the ski season. Despite the Hudson brothers' seriousness

about the quality experience they were trying to provide, there was no systematic attempt to

assess the selection of the staff.

As seen in the case, there were questions and issues about Sam and Ted's Leadership

capabilities. Weak involvement, large dependence on managerial employees and inability to

understand the differences in the hotel and the lodge has been highlighted. Leadership is a

dynamic process based on influence relationship between a leader and a follower, which

recognize and accept him as a leader (Ispas, 2010 as cited in Andreia, 2012), which in turn,

affects individual performance (Appendix 2). Church (1995) confirms that leadership style of

managers at the workplace directly affects quality of services and organizational performance (as

cited in Andreia, 2012). But the Hudson brothers were staunch, old, conservative, and "stuffy"

which widened the gap between them and the young casual staff and reduced the productivity

and increased isolation.

ISSUES:

There were numerous HR flaws in the functioning of the resort. There were no Quality

Standards or Code of Conduct policies. Hogan et al.s (1984) construct of "service orientation"

identifies several personality characteristics useful for service work, such as courtesy,

consideration, tact, perceptiveness, responsibility and good communication skills (as cited in

Lockyer, 2004). The casual workers would party in the small hours and turn up at work in poor

physical conditions which eventually led to fall in profits and rise in customer complaints.


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There was also a mismatch in the required skills and the skills of the hired casual

workers. There were concerns about the lack of appropriate skills amongst the restaurant staff.

But the staff hired was young, casual, irresponsible and lacked commitment. A proper

recruitment process had not been defined (cold-calling was used), there was no formal job

description and the employee expectations were not aligned with that of the business.

The absence of Employee Engagement and Retention policies increased the responsibility

(of motivating the new casual employees) on the permanent staff in the Lodge. This required

them to put in extra without being incentivized and little or no support from the leaders.

Organizations that truly engage and inspire their employees produce world class levels of

innovation, productivity and enhanced performance (Ncube & Jerie, 2012). Konrad (2006)

suggests that disengaged employees often force or hurry through interactions with the customers,

provide inadequate or incomplete service, complain in front of the customers, and fail to put

forth anything but the minimal effort (as cited in Ncube & Jerie, 2012), which were seen through

the customer complaints that were largely staff related.

HR APPROACHES:

The framework (Appendix 1) illustrates the integration of the Strategic formulation and

the Strategic Implementation. A business' mission, goals and opportunities are formulated and

implemented. Since HR practices can be used to achieve HR capability outcomes (such as skills,

ability, knowledge) and HR actions (behavior, results)(Kramer, Bartram & DeCieri, 2011),

formation of a Human Resource Department for the Lodge is of utmost importance. Lucas

(1995) and Maher & Strafford (2000) remark that HRM issues are important even if an

organization employs only a handful of people. Jameson (2000), Barrows (2000) and Conrade et


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al. (1994) state that issues of human resource development in the hotel sector have been

neglected, especially in small businesses (as cited in Nolan, 2002). The hotel industry is a labor-

intensive service industry, depending on the social and technical skills, ingenuity and hard work,

commitment and attitude of its employees and hence it is imperative for the industry to develop

effective HRM practices. The HR functions would ensure that the organization has the proper

number of employees with the levels and types of skills required and develop a 'control' system

that ensures the employees act in a way that promotes the achievement of the goals specified in

the strategic plan (Kramer, Bartram & DeCieri, 2011). The HR person would also deal with the

staffing problem at the Lodge.

Hotels are only as good as their staff, which can make or break a company's ability to

render services (Collins, 2007). Krackhardt and Porter (1986) found that employees were more

likely to leave if they saw their peers quitting. Paul and Jan's departure had carved a pathway for

the others to follow. Turnover is known to be high in the hospitality industry. The Causal Model

of employee intent to leave (Appendix 3) illustrates organizational factors that have an impact on

the employee's intention to stay. Many employees enter the industry with the expectation of

working for a minimum amount of time in one organization, which directly calls for retention

measures. Offering job-security via long-term contracts and permanency via performance-

appraisals can promote the perception of long-term commitment (Iverson & Deere, 1997).

Integrating training and development procedures could enhance sense of belonging, along

with developing career paths within the Lodge which would directly impact job fulfillment and

satisfaction and reduce turnover, which would encourage staff members, especially the

permanent staff (like Paul and Jan) to have a long-term commitment. The development of an

internal labor market would provide a constant supply of trained and qualified workers, which, in


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turn, would lead to higher retention. Organizations can also create a culture that gives individuals

permission and support for task performance (DiPietro & Condly, 2007).

The pre-entry variable of negative affectivity in the Causal Model (Appendix 1) has been

noted to have a direct impact on an employees' willingness to quit. Employees with high

negative affectivity experience low task-engagement are less inclined to control their work

environment; communication with peers and management is negligible and are therefore more

likely to leave (Iverson & Deere, 1997). This seemed to be a major issue at the Mountain Lodge,

highlighted by the fact that the staff turned up at work in poor physical conditions and only 40%

staff returned for the new season. Since "hospitality has been identified consistently ad an

industry with poor employment practices"(Rowley & Purcel, 2001 as cited in Collins, 2007),

there is an immediate need for appropriate recruitment and selection techniques, which may

include a formal referral system, more rigorous interviewing procedures (and not cold-calling),

personality tests and realistic job previews teamed with an appropriate job design (Lockyer &

Scholarios, 2004). This would ensure a match between the required and the hired skills and

therefore increase job satisfaction and lower turnover.

Researches (Hoan, Curphy & Hogan, 2002 as cited in DiPietro & Condly, 2007) show

that motivation and managerial support accounts for half of all performance results. Sam and Ted

need to alter their leadership style. Nstase M. (2006)pointed out that when a manager uses a

participative leadership style, the employees become more involved, more responsible and their

organizational commitment grows (as cited in Andreia, 2012). The key to being a leader lies in

the firm's ability to manage change (Olsen, West & Tse, 1998 as cited by Chanthoth & Olsen,

2002). To ensure smooth functioning, Sam and Ted would have to understand the change in the

functioning of their two businesses, be proactive, reduce reliance on the managerial staff, get


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involved, and exercise control. This would improve their relationship with the young employees

at the resort, and may have an impact productivity and retention.

CONCLUSION:

The case has highlighted some major HR issues, such as no human resource planning,

mismatch between strategic formulation and implementation, faulty recruitment and selection

techniques, wrong leadership style, employee turnover and duplication of organizational culture

based on a different business.

By including the strategic management components and human resource components in

the business, Sam and Ted can target and eliminate most of the highlighted issues. Formulating a

strong HRD, restructuring the recruitment and selection along with providing training and

development and by modifying the leadership style, the functioning at Mountain Lodge can be

given a new direction. There may be costs involved in bringing along most of these changes but

nonetheless, have lasting benefits.


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APPENDIX 1


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APPENDIX 2

LeadershipStyle

JobSatisfaction

OrganizatinalCommitment

Employee'sIndividual

performance

Source: Andreia, 2012

Leadership and Employees' Individual Performance

Framework


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APPENDIX 3

Causal Model of employee intent to leave

Source: Iverson & Deery, 1997


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Documents

HRM-Mountain Lodge Case Study