TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE

THE HOTEL PARIS CASE

We present a Translating Strategy into HR Policies and Practices Case: The Hotel Paris Case in the
end-of-chapter material of each chapter (starting with this chapter). This continuing case
demonstrates how the Hotel Paris s HR director uses the concepts and techniques from each
chapter to create a human resource management system that helps the Hotel Paris achieve its
strategic goals. As we explained in this chapter, the basic HR strategy process is as follows:
Management formulates a strategic plan. This plan in turn implies certain required organizational
outcomes, such as improved customer service. Those required outcomes in turn imply certain
workforce requirements. Human resource management then formulates HR strategies (policies
and practices) to produce the desired workforce skills, competencies, and behaviors. Finally, the
human resource manager chooses measures to gauge the extent to which its new policies and
practices are producing the required employee skills and behaviors. The Hotel Paris s human
resource manager might for example use the following sequence of steps:

Step 1: Define the Business Strategy. We saw first that translating strategy into human resource
policies and activities starts by defining the company’s strategic plans and goals.

Step 2: Outline a Strategy Map. As we also saw, a strategy map summarizes the chain of major
interrelated activities that contribute to a company’s success in achieving its strategic goals.

Step 3: Identify the Strategically Required Organizational Outcomes. Every company must
produce strategically relevant outcomes if it is to achieve its strategic goals. For the Portman
Hotel in Shanghai, in this chapter's introduction, the main outcome of management
sought excellent customer service, to help their hotel stand out from the rest.

Step 4: Identify the Required Workforce Competencies and Behaviors. Here, ask, What
competencies and behaviors must our employees exhibit if our company is to produce
strategically relevant organizational outcomes, and thereby achieve its strategic goals?

Step 5: Identify the Required HR System Policies and Activities. Once the human resource
manager knows the required employee competencies and behaviors, he or she can turn to
formulating the HR activities and policies that will help to produce them.
Here it is important to be specific. It is not enough to say that we need new training
programs or disciplinary processes. Instead, the manager must now ask, Exactly what sorts of
new training programs do we need to produce the sorts of employee competencies and
behaviors that we seek? cleaning fluid before washing items like these. As a result, these fine
white blouses were being washed in cleaning fluid that had residue from other, earlier washes.
Jennifer now wonders whether these employee meetings should be expanded to give the
employees an even bigger role in managing the Carter store’s quality. We cant be everywhere
watching everything all the time, she said to her father. Yes, but these people only earn about $8
to $15 per hour. Will they really want to act like mini-managers? he replied.

Step 6: Choose HR Scorecard Measures. We saw that many managers quantify and computerize
this chain of strategic goals, employee competencies, and required HR practices. The HR
Scorecard process helps them to do so. Recall that the HR Scorecard is a process for assigning
financial and nonfinancial goals or metrics to the HR-related chain of activities required for
achieving the company’s strategic aims and for monitoring results. The task here is to choose the
appropriate metrics. For example, if we decide to improve the disciplinary system, how precisely
will we measure improvement? Perhaps we would use the metric, number of grievances.

The Hotel Paris International

Let us demonstrate how this process works by considering our fictitious company, the Hotel Paris
International (Hotel Paris). Starting as a single hotel in a Paris suburb in 1990, the Hotel Paris now
comprises a chain of nine hotels, with two in France, one each in London and Rome, and others
in New York, Miami, Washington, Chicago, and Los Angeles. As a corporate strategy, the Hotel
Paris s management and owners want to continue to expand geographically. They believe doing
so will let them capitalize on their reputation for good service by providing multi-city alternatives
for their satisfied guests. The problem is that their reputation for good service has been
deteriorating. If they cannot improve service it would be unwise for them to expand, since their
guests might prefer other hotels after trying the Hotel Paris.

The Strategy

Top management, with input from the human resource manager and other managers, and with
the board of directors’ approval, chooses a new competitive strategy and formulates new
strategic goals. They decide: The Hotel Paris International will use superior guest services to
differentiate the Hotel Paris properties, thereby increasing the length of stays and the return rate
of guests, and thus boosting revenues and profitability. All Hotel Paris managers including the
director of HR services must now formulate strategies that support this competitive strategy.

The Strategy Map

Based on discussions with other managers, the HR director, Lisa Cruz outlines a strategy map.
This should help her visualize the HR activities that are crucial to helping the hotel achieve its
strategic goals. For example, producing satisfied guests requires attending to all those activities
where there is an opportunity to affect the guest’s experiences. For the Hotel Paris, activities
include getting the guest from the airport and checked in, cleaning the guest’s room, and picking
up baggage, and getting the guest checked out. The Strategically Required Organizational
Outcomes The Hotel Paris s basic strategy is to use superior guest services to expand
geographically. Each step in the hotel’s strategy map provides opportunities for improving
The Strategically Required Organizational Outcomes

The Hotel Paris s basic strategy is to use superior guest services to expand geographically. Each
step in the hotel’s strategy map provides opportunities for improving guest service. For example,
Lisa and her management colleagues must take steps that produce fewer customer complaints
and more written compliments, more frequent guest returns longer stays, and higher guest
expenditures per visit.

The Strategically Relevant Workforce Competencies and Behaviors

Therefore, the question facing Lisa is this: What are the competencies and behaviors that our
hotel’s employees will have to exhibit if we are to produce the required organizational outcomes
such as fewer customer complaints, more compliments, and more frequent guest returns?
Thinking through the types of activities that occur at each step in the hotel’s value chain helps
Lisa answer that question. For example, the hotel’s required employee competencies and
behaviors would include high-quality front-desk customer service, taking calls for reservations in
a friendly manner, greeting guests at the front door, and processing guests’ room service meals
efficiently. All require motivated, high-morale employees.

The Strategically Relevant HR System Policies and Activities

The HR manager’s task now is to identify the human resource policies and activities that will
enable the hotel to produce these crucial workforce competencies and behaviors. As one
example, high-quality front-desk customer service is one such required behavior. From this, Lisa
identifies human resource activities to produce such front-desk customer service efforts. For
example, she decides to institute practices to improve disciplinary fairness and justice in the
company, and to improve employee morale. She assumes that enhanced fairness will produce
higher morale and that higher morale will produce improved front-desk service.

The HR Scorecard

Finally, Lisa may (or may not) decide to computerize all these cause-and-effect links among the
HR activities, the workforce behaviors, and the organizational outcomes, using scorecard
software to present results on digital dashboards. With a computerized scorecard software
package, Lisa need not limit herself to assessing the effects of A handful of employee behaviors
(such as the percentage of calls answered on time). Instead, she could include metrics covering
dozens of activities, from recruitment and selection through training, appraisal, compensation,
and labor relations. Her HR Scorecard model could also include the effects of all these activities
on a variety of workforce competencies and behaviors, and thus on organizational outcomes and
on the company’s performance. In this way, her HR scorecard would become a comprehensive
model representing the value-adding effects of the full range of Hotel Paris human resource
activities.
How We Will Use the Hotel Paris Case in This Book

Table 3-2 presents some of the metrics that Lisa could use to measure human resource activities
(by chapter). For example, she could endeavor to improve workforce competencies and
behaviors by instituting (as per Chapter 5, Recruiting) improved recruitment processes, and
measure the latter in terms of the number of qualified applicants per position

Similarly, she may recommend to management that they change the firm’s pay policies (see
Chapter 11, Pay Plans) so that the target percentile for total compensation is in the top 25%.
She could then show that doing so improves employee morale, employee service behavior,
customer satisfaction, and the hotel chain’s performance. In practice, all the HR activities we
discuss in this book influence employee competencies and behaviors, and, thereby,
organizational outcomes and performance.
Questions

1. Draw a simple strategy map for the Hotel Paris. Specifically, summarize in your own words an
example of the hierarchy of links among the hotel’s HR practices, necessary workforce
competencies, and behaviors, and required organizational outcomes.

2. Using Table 3-1 (page 92), list at least five metrics the Hotel Paris could use to measure its HR
practices.