High Turnover - Accor Australia - Case Study Example

High Turnover: Case of Accor Australia Name Institution High Turnover: Case of Accor Australia Company Profile Accor is a multinational company with a history dating back to 1967. It was first founded in Lille, France as a corporate operating in the hospitality industry. This company has long being guided by its philosophy of exceeding the expectations of the stakeholders. It has a general driving force of ensuring that the parties it interacts with are left happy and satisfied by the terms of the company. By this it aims that once a relationship is established it will be maintained and be made stronger over time. The company hence offers services in a manner to delight its guests, stakeholders and employees. In delivery of services and interaction with various stakeholders the company and its staff are guided by a set of company core values. These are: trust, responsibility, innovation, professionalism and transparency (ACCOR, 2008). Accor set its foot in Australia in 1991. The first hotel was located in Sydney but has since expanded to other Cities and towns. Today the Company operates approximately one hundred and twenty one hotels across the soil of Australia, with the most famous probably being the Darling Harbour Hotels. Accor in Australia is divided into two lines of business: hotels and services. The hotels unit which is the major line of business includes a range of business categories like luxurious hotels, budget hotels, voyage, business centers and resorts. The services wing comprise of internet services, vouchers and smart cards. This company targets a range of customer groups both locally and internationally. Primarily the services are designed to match requirements of individual customers and corporate organizations. Under the first category the company serves both local and foreign tourists and the same case applies to the second category. Basically, in the later case Accor facilitates conferences, trade shows and other meetings (ACCOR, 2008). The problem of Labour Turnover One of the most stringent challenges that have hindered the smooth development pattern of Accor is high rate of labour turnover. The situation hit highest levels in 2007 when 76% of workers were leaving employment within twelve months. The trend has constantly been going down by 5% per annum ever since. However, the last couple of years the company has struggled to maintain its work force for a considerable long duration. This has not augured well for the company and hence the desire to analyze the situation in this paper. The focus in this regard will be to establish the primary causes of the problem. Once they are clearly identified and defined possible solutions will be proposed based on the professional approach of the subject. The recommendation so proposed will articulate best practices to improve relationship between managers and staff and this is a prerequisite to creating a constant service delivery. Finally, an implementation strategy for the solutions will be devised and presented. Factors Contributing to Labour Turnover Any factor that triggers job dissatisfaction contributes in one way or the other to labour turnover. In fact, labour turnover has never been brought about by one reason, but rather a number of factors. These factors work together making an employee feel that there could be greener pastures elsewhere. The things that cause job dissatisfaction will be the primary focus in addressing this problem. Strategies that improve employee morale should be the foundation of solutions to the problem (Murphy & Cleveland, 1995). The relationships that subsist between the workers and their heads define how much the working environment will support standard management practices and consequently promote employee retention. For the case of Accor certain factors were responsible for the shocking levels of staff loss. First is the lackluster supervision that staff members were accorded by their managers. A worker was not allowed enough freedom to execute his/her duties and there was general feeling that the company does not value the services of junior employees. Extensive coercion and undefined reporting responsibilities made it particularly difficult for the workers (ACCOR, 2008). The extended spells the workers had to serve as casuals played also played a central role to the high levels of labour loss. Workers felt dissatisfied with this state of affairs and hence the drive for better career opportunities (ACCOR, 2008). Impatience took its toil and workers felt that the development process of their careers was being stagnated by continued association with Accor. The major presumption is that much of assignment in working in the company as casuals would entail catering or service at the customer contact point. When employees find their assignments less challenging and probably feel that they are skilled enough to take up more technical tasks they become dissatisfied (Kreitner & Kinicki, 2007). This migration was attributable to desire to seek for better positions and particularly permanent jobs. As such it was evident that the employees felt that their current employers were not doing enough to assure them better opportunities at least in the immediate future (O’Connel & Kung, 2007). If this assertion was guided by information they had gathered from the employer, then the corporate culture and human resource policy are two issues to be treated at suspect in Accor Company. Majority of the casuals were dissatisfied with the level of remuneration at the company. They felt that their contribution to the organization was equivalent to those of the permanent workers but the differences in their packages were unexplainable. This argument motivated them towards seeking greener pastures in new industries. Possible solutions to the Problem In the grand scheme of things, having a satisfied work force is the primary consideration to fixing the problem of turnover. Achieving this goal entails creating a sound human resource management system. This should ensure that employees enjoy their work, have a well understanding of their assignment, they have a strong affiliation to the organization they work for, reasonable, fair and equitable remuneration, opportunities for career development and reasonable policy on work life balance. In the light of factors that contribute to high turnover in Accor Company a number of strategies need to be implemented to offer solutions to the mentioned problems. These strategies include: One is to create a supportive environment. Having this in place will ensure that employees enjoy executing their duties regardless of the time of the day they are called upon to work. Night shift workers, for example, should be accorded extra facilitation like transport to and from work or be accommodated within the company rooms (Lynch, 1991). The labour rate for hours worked at night and holidays should be considerably higher than those of normal time. An improved industrial relations environment would go a long way in ensuring that workers are at ease with their employer and appreciate their assignments. Another strategy should involve effective supervision. The approach created within the organization for supervising workers should be made as professional as possible. The leaders should treat their subordinate as trained, qualified and valuable co-members of staff. Dictatorial methods of giving instructions to the staff should not be tolerated at all costs (Campion, 1991). Considerations for change in hierarchical structures should be made to facilitate sound relations between workers and authorities. A sound organizational structure ensures that duties and responsibilities follow a prescribed system. For instance, no one employee should be positioned such that he/she has two or more bosses. An organizational structure should be redesigned such that one worker receives orders from one supervisor and he/she answerable to one specific manager (Rankin, 2006). The organizational culture should be designed so as to support partnership between staff and management. There should be clear and open lines of communication between the managers and subordinates. To effect this, managers should spend more time in their internal management roles as opposed to their external duties (Rankin, 2006). A complete rearrangement of the employees should be considered to ensure that the positions held by workers are those that best fit their training and capabilities. The company should ensure that all top positions are held by retention oriented managers as this ought to be the tone of the company. The work organization should ensure that there is a proper stream relation amongst members of staff. The work alignment should not lead to internal competition as this would lead to sub-optimization on the side of the company and dissatisfaction on the side of employees. Unnecessary competition should be avoided at all costs as it leaves a bad taste to some workers since they perceive that the contributions of their colleagues are more valuable than theirs. In practical terms the duties of different workers should facilitate one another (Campion, 1991). Implementation of Solutions The suggested solutions require proper brainstorming to convert them into a comprehensive step by step strategy. For the case herein; the implementation process is divided into five stages. Each stage has a lead manager who should spearhead the implementation. Also, each function has a defined period of time and the whole process is designed to last one and a half years. Function Responsibility Time Frame Crafting Strategy Top Management 3 Months Preliminary Testing Select Team 2 months Communication Departmental heads 1 Month Implementation Human Resource Manager Implementation Team Functional managers Operational Managers 12 Months Monitor & Review Performance Measurement Manager Regularly The implementation process should be allowed enough time and to ensure that all parties become properly assimilated into it. The top management should refrain from endorsing an autocratic style of people management. This can be avoided through extensive involvement of all staff members before deciding on the way to go. The process should be accorded due attention as it involves a complete overhaul of the current organizational culture and its replacement with an improved one. The process should take the following steps: Stage 1 – The top management brainstorms on the suggested solutions combining them into a single document organizational strategy. The strategy involves creating a completely new work environment that promotes employee participation and particularly addresses the needs of junior workers. Primarily the management designs the new organizational structure by eliminating some positions and creating new ones. The plan spells out individual and departmental responsibilities and time frame for each function. Stage 2 – A select team is established comprising of representatives from various departments to work out on finer details of the grand strategy. The team should come up with a number of pilot plans that can be adopted. For example they can draft a number of organizational structures with a view to selecting the best from the many. They should also design the job description or each position including the limits of authority. Step 3 – The whole plan is communicated to all workers, allowing them to air their input and concerns through the select team. For example, a number of organizational charts can be distributed to workers and be requested to select the one they most prefer. Communication helps to minimize resistance. Step 4 – Implementation takes course. This follows inclusion of workers’ views into the strategy and final approval by the top management. Managers start taking their new duties; others leave their assignments while new arrivals are oriented in light of the new system. All staff members start being designated by their new titles and start earning as per their new job descriptions. Step 5 – This is usually a continuous process that should fall under an independent function to promote openness. The monitoring evaluates the progress and milestones that the company makes over time and suggests corrective actions in case of deviations from strategy. Review should focus on getting the perceptions of all parties and an independent evaluation of whether all workers are complying with the new procedures. Conclusion Employee retention is an objective that should be given priority attention not only by personnel managers but also by the entire management of any organization. This is primarily so given the costs that are associated with losing vital employees and hiring new ones. Quantitatively, the cost of losing workers can be computed on the basis of lost production volumes and associated profits. Other measurable costs include funds committed to recruitment process; costs of new employee induction and orientation and costs incurred to train them how to handle their duties and responsibilities. That one aside, there are other associated costs though they may not be quantifiable; they are incurred all the same. Such include company strategies, secret formula and other information based attributes. When employees shift to a competing firm they share vital internal information that the rival organization can use to outdo its competitor in the market (O’Connel & Kung, 2007). It is upon these considerations that the rationale of employee retention is exemplified. Every effort should be made to ensure that the number of workers leaving employment over a period of time is kept as low as possible. Comparatively the costs of maintaining a sound and competitive human resource framework are far much less compared to costs of losing employees and hiring others. References ACCOR. (2008, 0115). Accor.com group. Retrieved 0115 2008, from Accor.com group: http//www.accor.com/gb/group/en_bref/accor_en_bref.asp Boulard, G. (2000). Sales and Catering Training helps cut Employee Turnover: Sales and Catering Training Hotel & Motel Management, 215, (16)92. Glance, N.S., Hogg, T., & Huberman, B.A. (1997). Training and Turnover in the Evolution of Organizations. Organization Science, 8, 84-96. Hatfield, E., Walster, G. W., & Berscheid, E. (1978). Equity: Theory and research. Boston: Allyn & Bacon. Kreitner, R., and Kinicki, A. (2007). Organizational Behavior (8th ed.). Burr Ridge, ILL: McGraw-Hill/Irwin. Lynch, L. (1991). The Impact of Private Sector Training on Race and Gender Wage Differentials and the Career Patterns of Young Workers. Final Report submitted to the U.S. Department of Labor, Bureau of Labor Statistics. Murphy, K. R., & Cleveland, J. N. (1995). Understanding performance appraisal: Social, organizational, and goal-based perspectives. Thousand Oaks, CA: Sage. O’Connel, M. & Kung, M. (2007). The Cost of Employee Turnover, Industrial Management, 49, 14-19. Campion, M.A. (1991) Meaning and Measurement in Turnover: Comparison of Alternative Measures and Recommendations for Research. Journal of Applied Psychology, 76, 199-212. Rankin, N. (2006). Benchmarking labour turnover. IRS Employment Review, 842, 42-48. Read More