Mr. Cobb

Human Resources, Recruitment & Training

Talent Management Practices with Impact

By Adam Cobb, Regional Manager, Halogen Software

In the hotel industry, the quality of your staff and the services they provide directly affects your bottom line. As your frontline brand ambassadors, your employees' performance is what drives your organization’s true competitive advantage. To succeed, you need to attract, develop and retain competent, enthusiastic and accountable employees, and keep them engaged and motivated.

For Hotel Executives, a robust and well-managed talent management strategy delivers a proven and practical way to create a culture of high performance, ongoing development and an organization-wide commitment to high quality service. This article examines the value of talent management to the hotel industry, and focuses on three key talent management practices that have a major impact on the bottom line – goal setting, pay for performance and coaching.

Talent Management Defined

Talent management refers to the overall process of attracting, developing, managing and retaining workers. It includes a wide variety of functions including recruiting, learning and training, compensation, employee performance management and succession planning. Talent management is based on the idea that employees are an organization’s most valuable asset. This is particularly true in the hotel industry where ongoing success is driven by the quality of customer service delivered to guests. Employees have a direct impact on customers’ willingness to become repeat customers or to recommend the hotel to others.

Historically within the hotel industry, employee turnover rates have been extremely high with some estimates putting turnover as high as 50%. The American Hotel and Lodging Association has estimated that the turnover cost per employee is a minimum of $4100 per employee, and the American Management Association pegs this number at 30% of an employee’s annual salary. Part of this high turnover can be attributed to a lack of training and development opportunities which can lead to employee dissatisfaction and attrition.

In the highly competitive hotel industry, establishing a talent management strategy with a focus on creating a culture based on performance can help drive employee satisfaction, reduce employee turnover costs and assure high customer service levels.

Making Talent Management Work

While the idea of talent management has increased in popularity, a large number of hotels are not addressing talent management requirements on a proactive basis and others are using a piecemeal approach that results in major gaps in performance information. For talent management programs to have a measurable impact on the bottom line, these programs need to be clear, consistent and offer employees and managers ongoing value.

A best practices-based approach to talent management places employee performance at the core of all talent management functions. This approach enables the organization to ensure that all talent management decisions are based on actual data derived from the performance management process; it also makes it easier for the organization to make strategic business decisions based on actual employee and organizational needs. Putting a talent management program in place requires careful planning and understanding of how all of the elements work together to drive results. An increasing number of hotels are implementing web-based solutions that streamline the administration of key talent management functions so that HR, managers and employees can focus on higher value activities such as employee coaching and goal setting.

For example, Pechanga Resort and Casino, based in Temecula, California relies on an online talent management system to support employee appraisals and pay for performance programs for its more than 5000 employees. All of the organization’s team members - from housekeeping to food and beverage to dealers in the casino - are included in talent management programs. Since implementing the system more than two years ago, Pechanga has experienced real business results with lower turnover and better alignment. Every single employee has a clear picture of what is expected of them, which helps to ensure they are delivering customers the best service in the industry.

Pechanga offers a powerful example of several practices that have a proven impact for hotel operators when it comes to talent management: goal management, pay for performance and employee coaching.

Creating Engagement with Goal Management

Today's best practice method for achieving goal alignment is the organization-centric method. With this method you start at the top, setting the organization's highest level goals, then if needed, set high level goals for divisions in the organization. But from there, every employee, regardless of their level or function in the organization, is asked to set personal goals that in some way contribute to the achievement of the organization's high level goals. Now everyone knows exactly how they are contributing to the organization's goals and are engaged and accountable for the organization's success.

Managers are the lynchpin in ensuring your organization is able to effectively roll out and maintain goal management as they are the frontline with employees across all departments. To help managers and employees make the most of goal management:

• Give managers and employees (since they should participate in writing their own goals) annual training on how to write effective goals. It's not an easy skill to master, and we easily forget how to do it well.
  
• Provide a sample of an effectively written goal on your appraisal form. This will help jog everyone's memory.
  
• Set up your appraisal form to include fields for a description, milestones, measures of success, due dates, etc. so none of these elements are forgotten.
  
• Regularly communicate the progress and status for high level organizational goals.
  
• Schedule quarterly reviews where managers and employees can review the status of goals and make any changes necessary to keep them SMART (specific, measurable, achievable, relevant, time-bound).

Recognizing Employees with Pay for Performance

Pay for performance programs offer a powerful tool for hotel organizations to motivate and reward employees for high levels of performance. Making pay for performance meaningful requires support from managers to help keep the program fair and effective in encouraging high performance:

• Managers need training on multiple levels to ensure they understand the nuances and complexities of compensation. Training should be offered on the following:
  ~ How pay affects motivation and engagement
  ~ How to effectively communicate about compensation and adjustments to keep employees motivated and engaged
  ~ The basic elements of compensation and how to use them: pay scales, job codes, compare ratios, bonuses, stock options, variable pay, etc.
  ~ How and why you should consider compensation when conducting performance appraisals
  ~ What your compensation management process is, and your managers role in the process
  
• Data is a critical part of the compensation decision-making process, and managers need to have a solid understanding of your organization’s approach to compensation, the size of their compensation budget, the pay scales for various positions, if they have high potential employees, and each employee’s performance and compensation history. Most importantly, managers need each employee’s performance rating for the year which is based on the performance appraisal results.
• Compensation adjustments aren't something that should be rushed. That means making sure performance appraisals are completed on time (a clear, straightforward process with effective forms and support tools can help), training is completed, and managers have the data they need to make decisions – all in sufficient time to allow thoughtful consideration.
• Managers need to know how employees in the organization feel about their compensation. Do they have confidence in the current process? Do they feel fairly rewarded and recognized? How do they perceive communication around compensation? Understanding their employees' perspectives and attitudes can help managers improve their compensation management skills and make sure employees are effectively rewarded for their performance.

Employee Coaching for Success

For talent management programs to be successful, it is important that both the organization on the whole, and your managers, understand that conversations about performance are not a once-a-year event. Managers need to clearly understand that working with employees on performance is an ongoing process that plays a critical role in employee satisfaction and organizational success. To drive employee coaching in your organization and support managers in this role, the following is recommended:

• Clearly communicate expectations to all new and current managers around what is expected of them as a manager, and define the role that coaching plays in your organization.
• Provide training and ongoing development opportunities for managers to gain skills and an understanding of the various aspects of coaching and overall talent management.
• Ensure managers have adequate time to focus on employee coaching and can invest time in having conversations about performance.
• Offer tools to ensure managers are able to realistically execute administrative tasks related to coaching and employee performance management. Automating these tasks can streamline the process further and provide a centralized place to access and administer appraisals, record notes and conversations throughout the year, and house all employee related information including past appraisals and development plans.

In the highly competitive hotel industry, a well-executed talent management strategy has the power to reduce employee turnover and dramatically improve employee engagement and customer service levels. The end result is a more agile, competitive organization where employees have a clear understanding of what is expected of them, are recognized for their accomplishments and receive ongoing coaching, training and development.

As regional manager at Halogen Software, and a certified Human Capital Strategist, Adam Cobb has worked directly with hundreds of human resources professionals to plan and implement integrated talent management systems in support of their organizations’ strategic plans. With more than a decade of software solutions experience, Mr. Cobb applies his expertise in performance management, succession planning, pay for performance and performance based learning solutions to help Halogen’s clients build solid business cases for investing in automated talent management systems. Mr. Cobb can be contacted at 613-270-1011 x 4110 or acobb@halogensoftware.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.