Stage 1 – Managing a budget

1. Analyze Previous Data and Statistics

Past Statistics:
 Labour costs: $795,000 (wages plus uniforms, training, and ancillary items).
 Room occupancy: 80%.
 Revenue from room sales: $7,008,000.
 Average room sale: $200 per room.
Current Requirements:
 Executive Housekeeper salary: $85,000 per annum.
 Room Attendants' rate: $30 per hour.
 Room Attendants' hours: 38-hour week.
 Number of Room Attendants: 10.
 Rooms serviced per shift: 10.
Future Projections:
 Expected room occupancy: 95%.
 Standard rack rates increase: 10%.
 Wages growth: 2%.
Draft Room Attendant Roster for One Week:
 Calculate weekly hours: 10 Room Attendants * 38 hours = 380 hours per week.
 Consider increasing efficiency to 13 rooms per shift.
2. Consult with Colleagues and Relevant Others
Identify Colleagues and Personnel:
 Executive Housekeeper: Provides oversight and approval.
 HR Department: Provides wage growth data and staffing guidelines.
 Sales and Marketing Team: Provides room occupancy and rate projections.
  Current Room Attendants: Provide insights into current working conditions and
potential efficiency improvements.
Meet with Colleagues:
 Discuss budget situation and proposed budget.
 Present personal perspective on the need for budget adjustments.
Encourage Contributions:
 Gather opinions and ideas regarding income, costs, and budget allocations.
 Record comments for later reference.
3. Allocate Funds According to Agreed Priorities
Use of Software:
 Prepare a 13-week budget using estimated costs and room sales projections.
 Factor in colleagues' valid contributions, expected changes in trade levels, and projected
cost increases.
Make Budget Notes:
 Document decisions made about fund allocation and final figure calculations.
 Save hard and soft copies of budgets and notes.
4. Use Weekly Figures to Assess Performance
Identify Variances:
 Determine positive or negative variances.
 Calculate variance by dollar amount and percentage.
Provide Written Analysis:
 Analyze the actual performance of the business based on budget evaluation.
 Identify possible reasons for variances and suggest improvements.
5. Liaise with Colleagues
On Analysis of Budgets:
 Discuss budget performance and seek input on ways to reduce costs or improve
outcomes.
 Record colleagues’ input for later reference.
6. Revise Draft Budgets
Propose Roster Variations and Staffing Alterations:
 Suggest two roster variations to improve the budget:
 Increase efficiency by servicing 13 rooms per shift.
 Adjust working hours to match peak occupancy times.
Propose Staffing Alterations:
 Reduce the number of Room Attendants if efficiency improvements are achieved.
 Implement a part-time or flexible staffing model during off-peak periods.
Changes to Housekeeping SOPs:
 Implement more efficient cleaning procedures.
 Introduce cross-training for staff to handle multiple roles.
Factor in Upcoming Expenses:
 Include known additional expenses and commitments in the budgets and notes.
 Update budgets based on weekly figures, ensuring management and operational
imperatives are provided for.
 Include clear action suggestions in budget notes.
7. Communicate Revised Weekly Budgets
Explain Suggestions for Action:
 Highlight benefits and disadvantages of different budgeting approaches.
 Consider potential impacts on customer service and colleagues’ employment and
working conditions.
Deliverables
1. Labour Budget for the Housekeeping Department:
 Detailed Labour Budget:
 Based on the information provided and the projections for the next three
months.
 Includes calculations for increased occupancy and wage growth.
Labour Budget for Housekeeping Department (3 Months)
Item: Amount
 Room Attendants' Cost: $148,200
 Executive Housekeeper: $21,250
 Additional Costs: $29,300
 Total: $198,750
Notes:
 Increased room occupancy to 95%
 Standard rack rates increased by 10%
 Wage growth projected at 2%
2. Detailed Budget Notes:
 Notes documenting the decisions made, rationale, and any input or comments from
colleagues.
Budget Notes
1. Decision to increase efficiency to 13 rooms per shift based on industry standards.
2. Projected increase in room occupancy due to marketing campaign.
3. Factored in a 2% wage growth over the 3-month period.
4. Comments from colleagues:
 Executive Housekeeper: Emphasized the importance of maintaining service
quality.
 HR Department: Provided data on wage growth and staffing guidelines.
 Room Attendants: Provided insights into current working conditions.
3. Weekly Performance Analysis:
 Analysis of weekly figures, identifying variances, and providing written evaluations.
Weekly Performance Analysis
Week: Budgeted Cost: Actual Cost: Variance ($): Variance (%): Comments
 1: $15,000: $14,500: -$500: -3.33%: Reduced overtime due to efficiency
 2: $15,000: $15,200: +$200: +1.33%: Slight increase in training costs
4. Revised Budget Proposals:
  Proposals for roster variations, staffing changes, and SOP adjustments to improve
budget outcomes.
Revised Budget Proposals
 Roster Variations:
1. Increase efficiency by servicing 13 rooms per shift.
2. Adjust working hours to match peak occupancy times.
 Staffing Alterations:
1. Reduce the number of Room Attendants if efficiency improvements are
achieved.
2. Implement a part-time or flexible staffing model during off-peak periods.
 Changes to Housekeeping SOPs:
1. Implement more efficient cleaning procedures.
2. Introduce cross-training for staff to handle multiple roles.