HUMAN RESOURCE MANAGEMENT

CASE SUBMISSION

IMPROVING HOTEL STARLAC'S HUMAN RESOURCES

AND TALENT MANAGEMENT SYSTEM

SUBMITTED BY- GROUP 12

LIOKCHILA JAMIR - MS19A024
LOIS MARY JOSE - MS19A025
NEHA GEORGE - MS19A034
SAHAS CHOWDARY - MS19A040
PRIYANKA AZAD - MS19A070

SUBMITTED TO
DR.T.J. KAMALANABHAN

APRIL 2020
1. How would you characterize Hotel Starlac's current organizational
structure and culture in terms of their strengths and weaknesses?

Organizational structure refers to the norms, rules, policies formed by the company to
achieve its objectives. Organizational Culture includes the value, behavior and attitudes of
the employees. Both of these are equally important for the success of the organization.

Organizational structure and culture of Hotel Starlac appeared to be inclusive for employees
and managers but eventually had benefited only a few members of the management who
indirectly controlled the structure and organizational culture.

Strengths Weaknesses

Organizational Structure is directly The process of survey for employee

supervised by Carla , who is the HR satisfaction is absent hence database for
director as well as heir of Hotel Starlac employers to measure and understand
their employees' attitude, feedback,
motivation, and satisfaction is
unavailable

Active employee engagement in decision Standard Operating Procedures(SOPs)

making for daily administration and are not maintained which makes it difficult
operations of the hotel . for employees to follow structured
operational norms

Weekly informal evaluation and Department heads and supervisors are

assessment to continuously implement highly tenured and appear to take undue
customer related and integrated solutions. advantage of their positional power.

The employee reward system is highly No definite job descriptions for employees
motivating. working below managerial positions. Also
no measurement system and
Taylorization of tasks.
 Strengths Weaknesses

Matching policy for compensation of No organizational onboarding and

employees i.e. pay scale is at par with induction programme for new joiners,
competitors. unorganized on job training.

Relaxed and informal Work environment. Carla, the HR director and owner of the
hotel was unapproachable for employees
below managerial position.

2. What are the strengths and weaknesses of Hotel Starlac's current hiring
practices, including their orientation practices? To what extent should we
take Isabelle's description as being accurate? If further investigation is
needed, how would you conduct it? How can hiring practices at Hotel
Starlac be reassessed?

1) Although the measures taken for a candidate to get shortlisted for an interview is
structured, the interview rounds appear to be without proper evaluation system. Even after
having hired employees with past work experience in Ritz Carlton and Carlson Rezidor, Hotel
Starlac’s still lacks popular hiring practices and assessments.

Employee orientation programme is unstructured, on job training practice is absent, new

joiners are not introduced about the company and its goals and objectives.

Strengths Weakness

Employees have series of evaluations and Evaluation system for interview round is
tests before appearing for the interview round not structured, interview round by HR was
which includes graphology and background not part of the hiring system
verification.
 Employees with past work experiences in Ritz Popular hiring practices are not followed,
Carlton and Carlson Rezidor are hired at skill set assessment is not part of the hiring
Starlac. structure.

Strengths Weaknesses

The orientation programme is well structured , The orientation programme is not

also the Champions of Starlac are said to part implemented in spite of a good structure,
of on job training program. there is no documented SOP for the
orientation.

2) Isabelle’s experience depicted a negative feedback, since she had raised her expectations
after getting shortlisted for the interview with Starlac, but as soon as she joined she
experienced working in a different role than the one she had interviewed for. Hence it can be
considered accurate because of the below mentioned reasons: -

● The working environment of Hotel Starlac’s was considered to be very relaxed and
informal for the service industry.
● The Hotel’s Managerial structure lacked the Taylorization of tasks, with division of
labour, time-and-motion measurements, job prescription, and centralized standard
procedure.
● Department heads were highly tenured and had positional power due to their
experience, also there wasn’t any hierarchical structure for managerial ranks.
● There was a high staff turnover rate for employees working at bar/restaurant positions.
● Also hiring practices and assessments were not standardized.

3)

● Further investigation can be done by approaching other employees who have left the
organization, with a standard questionnaire or a feedback survey.
● Exit interviews can be conducted for employing leaving the organization to help
reduce future turnover, improve company culture and attract top candidates.
● Conducting a structured interview with a departing employee will help the organization
understand why the employees are leaving and what can the organization do to
improve their retention rate and company culture.
 ● Exit interviews are a great method for gaining valuable, actionable insights which will
help an organization attract and retain top talent.

4) Hiring assessments can be improved by introducing proper hiring practices and interview
evaluation methods. It is said that the organizations with the more effective hiring systems
rank higher in financial performance, productivity, quality, customer satisfaction, employee
satisfaction and retention.

Below methods can be adopted as part of hiring practices: -

● Job interviews in which candidates are asked to describe specific examples of their

skills.

● Automated resume screening and search.

● Assessments that predict whether candidates are motivated by the factors associated

with a particular job or a company's values and ways of doing things.

● Simulations that gauge specific job-related abilities and skills.

● Introduce employee referral system.

● Measurement using the human metric system.

● Standardized procedure guide for Evaluator with parameters for assessment.

3. Perform an assessment of Hotel Starlac's current management of

working conditions and social dynamics, including leadership aspects.
What measures can be implemented to identify and address employee
dissatisfaction?

1) The HR director cum owner at Hotel Starlac tried to implement managerial

practices that she reads in newspapers and magazines, she is committed to introducing
similar workplace practices that honor her employees' responsibilities on the job: -

● Employee involvement in developing effective methods for administrative function

and daily operational activities. Carla as an owner involved her employees in every
decision made. In weekly, informal meetings, any employee can voice their opinion
 on marketing strategies and also take part in decisions such as whether to partner
with online travel agents (OTAs).
● Even if this process invited a third eye perspective to address business decisions and
improve employee efficiency rate there is a high risk of distinction between the
management level and employee level becoming blurred and communication
complexity also suggestions may be desire based instead of need based.
● Rewards based on monthly meetings could lead to employee favoritism as only
employees participating voluntary were rewarded hence rewards were not
performance based.
● Employee satisfaction survey were not documented; feedbacks were totally based on
self-evaluation which was very subjective and had probability of biased decisions
● All department heads have seniority tenure of 20 years on average while employees
working at front desk, bar and restaurants belonged to millennial age group with
seniority of average of 3 years. This showed a huge generational gap between the
department heads and employees below managerial level.
● There was a high turnover rate and due to no organizational structure employees'
work responsibilities were not defined and due to which employees had risk of
managing more responsibilities without getting compensated for the same.
● Department heads and managers used their positional power to assign
responsibilities to subordinate employees
● No structured orientation programme.
● Train the trainer programs were not much effective. No on job training provided to the
employees
● Hotels were receiving fewer job applications due to its high turnover rate and negative
feedback by employees who have left the organization.
● CRM system was utilized at its minimum capacity and negative reviews about hotel
staffs were expressed
● Senior employees had their influence on the owners, and hence management
operated at their comfort zone which made the organizational, work culture and social
dynamics functioned not in favor of subordinate employees but few belonging to
management

2) A business is only as good as its people. With staff retention, productivity and
engagement now ranking as the most topical concerns for modern-day business,
identifying ways to improve and build job satisfaction for employees must be on the
company agenda in order to ensure continued success. Below are few methods to
address employee dissatisfaction: -
 ● Assess the situation thoroughly.
If the issue stems from something within your company, gather as much information
as you can before deciding how to act. Offering assistance, whether through a formal
employee assistance program or other means, will build their loyalty to your company.

● Look Inward
Reasons for dissatisfaction at the workplace could be manifold, so take a good look
at the company policies and practices. If the subordinate employees are unhappy
about their work, provide them career mapping and internal job posting opportunities.

● Take Feedback
It is crucial for an organization to have ears to the ground when it comes to analyzing
employees’ level of happiness Company surveys and team management activities
are a great way to explore satisfaction levels within the workplace.

● Communicate
In order to understand the organization’s direction and where employees can add
value, communicate well. Build a culture that enables flexibility and autonomy for
individuals while stimulating and developing talent.

● Structured Orientation and training programme

New employees should have a short but intense training session to learn the details
involved in performing their jobs, in compliance with the SOPs.

● Train the trainer and reverse training programme.

Senior employees can give on job training to subordinates and subordinate
employees can train the senior employees with latest tool and management systems,
thus building the generational gap.

4. What are the strengths and weaknesses of Hotel Starlac's current performance
management and appraisal practices? How can its performance management system
be improved?

Performance management is an ongoing process of communication between a supervisor

and an employee that occurs throughout the year, in support of accomplishing the strategic
objectives of the organization.
The current performance management system of Starlac is unstructured and lacks a proper
feedback mechanism, it is implemented by Carla who holds weekly meetings and has a talk
with each staff member that constitutes an informal evaluation based upon a mix of
feedback and self-assessment.

Strengths

● There is a personal and close relation with the employee and the Carla which can
lead to better employee satisfaction and organizational efficiency.
● Employees can freely express their opinions for improvement of the organization.
● This process helps employees understand what is expected of them and the allows
Carla to clarify expectations and discuss issues with their employees.

Weakness

● The Current process of performance appraisal is very unstructured and hence it can
lead to employee dissatisfaction if they feel the process was unfair.
● The Current Performance appraisals is very time consuming and cannot be handle by
Carla once Starlac expands.
● Human assessment are subject to natural biases that result in rater errors. The entire
process can be a waste of time if not done appropriately

Suggestions for Improvement

Starlac can implement a more structured form of Performance Appraisal such as the 360-
degree performance appraisal which provides a holistic approach towards the performance
of employees. Development plan based on the 360-degree performance appraisal system,
effectively improves the overall performance of employees and productivity of the
organization. Usually under the 360-degree appraisal system the feedback is collected from
peers, subordinates, customers, managers and the team members of the employee. The
feedback is collected using on job surveys based on the performance of employees. This
would be beneficial:

● In order to get an enhanced review about performance and prospective of the future
leader.
● To broaden the insight of manpower development and its needs.
● In order to collect feedback from all the employees in a structured way and to ensure
organizational justice.
5. What are the strengths and weaknesses of Hotel Starlac's current reward
practices? To what extent does the monetary and nonmonetary rewarding system
contribute to retaining the top performers? To what extent does it lead to
dysfunctional turnover? How should it be improved?

The current reward practices in Hotel Starlac is managed by Carla, she maintains daily,
personal contact with the “Starlacians,” and makes sure they have all the necessary
resources to achieve their daily duties and. Carla also holds monthly meetings with a
number of employees randomly picked from different departments during which she
discusses interdepartmental problems and seeks ideas to continuously implement customer-
related and integrated solutions. Employee participation is rewarded with lump-sum
bonuses, travel or entertainment vouchers and discounts, membership in a sport club,
bottles of wine, or flowers and a variety of perks Carla believes any Starlacian will value.

Strengths

● It promotes healthy competition among the Starlac employees.

● It helps clearly defined goals and enables employees to abide by them.
● It helps to increase employee retention. Incentive programs give employees a sense
of control over their incomes. When they work harder and smarter, they see better
results.

Weakness

 It can lead to demotivation of employees who did not receive incentives.

 If Starlacians see the incentives as unfair it can lead to resentment, and undermine
teamwork. Incentives can also motivate employees to undermine each other’s efforts
rather than work as a group to achieve company goals.
 Short term benefits and incentives can also shift the employees focus from the long
term goal.

At Hotel Starlac, the matching policy regarding compensation i.e., their pay scale is on par
with that of the competition, but bonuses and incentives as well as benefits and perks offered
to employees make their direct and indirect monetary compensation package more attractive
than those of its local competitors. As a result, Starlacians are satisfied with their
compensation and benefits. Most department heads and supervisors have been working for
the hotel for over 30 years, having been promoted from within the organization after they had
 held entry-level positions. This shows that the reward system plays an important role in
retaining top performers.

Dysfunctional turnover is the voluntary separation among high and average performers and
functional turnover is the voluntary separation of low performers.
In Starlac for employees at operational levels, the average seniority is 20 years, ranging from
15 to 25 years. Only 10 employees have been working for less than three years. These
employees mainly serve in front office and bar/restaurant positions and staff turnover rate
has steadily increased over the years, mostly in the front office and the bar/restaurant
service. This shows that the high and average performers are satisfied with the reward
structure and the dysfunctional turnover is low. However functional turnover is high.

Suggestions for improvement

Starlac should develop a new reward management system which is more formalized,
standardized and impersonal. To improve the performance and productivity, strong labor
divisions and control procedures can be adopted. The reward management should be
improved to incorporate employees who serve in the front office, restaurant and bar where
the employee turnover is high, short term goals and incentives for meeting them can help
raise employee morale and satisfaction.

6.Both from the owners' and the employees' perspectives, what would be the pros
and cons of the changes that would (1) be implemented by Whitestone under a
management contract, and (2) occur if Hotel Starlac moves into a niche market by
becoming a medical and social institution?

Whitestone Undertaking Management Contract

Pros Cons

Owners Whitestone is an organization with The Owners, especially Carla is very

Perspective more than 15yrs experience in attached to the institution and they
repositioning and restructuring believe that even though the
hotels and implementing changes management contract with
that would enhance staff Whitestone would maximize hotel
performance and increase return profit, it will not do anything to
on investment, Hence by giving advance their original dream to
the contract to them the owners benefit the society.
can retire as they had planned It will also impact the relation they
 without worrying about the have with their loyal employee and
Profitability, Employee satisfaction put them at risk.
and succession in Hotel Starlac

Employees Under Whitestone's new Whitestone would conduct a detailed

Perspective management contract, personnel and systematic manpower planning
administration at Hotel Starlac to identify personnel needs and
would be more formalized, ensure that the labor supply could be
centralized and impersonal. This modified according to forecast
would lead to more efficient occupancy rates and many
management, more transparency employees could lose their jobs in the
and fairness, which will in turn restructuring. It could also put the
lead to increased employee loyal employees of Hotel Starlac at
morale and satisfaction. risk or after retirement of the owners.

Hotel Starlac moving into a niche market by becoming a medical and social institution

Pros Cons

Owners Perspective According to Swiss studies It would be very hard to let

the present location of Hotel go of the Hotel since the
Starlac lacks medical and owners are very attached to
social institutions to take it and it would be hard for
care of elderly people. By them to put their employees
transforming the current especially the one who have
facilities and adding the new grown with them over the
lodging and dining capacity, years at risk.
Carla and Steffen could tap
into an entirely different
market and also fulfill their
mission of benefiting the
society.

Employees Perspective Few employees such as the Most of the employees will
ones whose skills can be lose their jobs when the
used in the management of hotel is transformed to a
the hospital, maintenance hospital.
staff etc. could retain their
jobs.
7. What decision should Carla and Steffen make about Hotel Starlac—transform it into
a medical and social establishment to enter a niche market? Run it under a
management contract and keep it? Make it profitable within three years before selling
it?

The best decision Carla and Steffen could take is to run Hotel Starlac under the
management contract of Whitestone and keep the ownership. From the above pro and con
analysis, it can be established that running the Hotel under management contract is more
beneficial for both the owners and employees. Whitestone being an investment and advisory
firm that includes private equity fund, strategic awareness, and operational backing with
more than 15 years’ experience in repositioning and restructuring hotels by implementing
changes it would be suitable for enhancing staff performance, increasing return on
investment and improving the revenue of Hotel Starlac as a whole.

If Hotel Starlac would have to be transformed into a medical and social establishment even
though it will help the owners fulfill their mission of benefiting the society, It would be very
hard for them to let go of the Hotel and it would be difficult for them to put their employees
especially the one who have grown with them over the years at risk. Moreover most of the
employees will lose their jobs, post the transformation.

Another option would be to make the Hotel profitable within 3 years and sell it. Even though
this is one of the most popular ways to raise the value of the asset in the income
capitalization approach, it does not align with the mission of Hotel Starlac which values its
employees and believes in benefiting the society more than themselves.

Hence it would be best to run Hotel Starlac under the management contract of Whitestone.

8. What kind of data on Hotel Starlac's external environment would you

need to collect and analyze to make a more accurate diagnostic and
formulate more reliable recommendations?

The following information from the external environment can be collected and analyzed to
make more reliable recommendations:

Monitor competitors
Hotel Starlac must start observing the competitors on the job market who are in a competition
with the organization. So they should try to explore the sustainable sources of the job
candidates. By monitoring the competitors, the hotel can keep its position in the long run.
Candidates as source of competitor information

To be well informed about their competitors, the recruiter can ask job candidates about
competitors in the industry. Candidates are the ones with a fresh experience on the job
search and they remember which advertisements or benefits appealed to them. Asking these
questions in a structured way would be an easy way to get resourceful information.

Competitors’ Talent Acquisition Strategy

By using Big Data analysis, the management at Hotel Starlac can learn more about
competitors such as online sourcing strategies, how effective their campaign efforts are
compared to ours, their marketing efforts to the same candidates and other critical insights.
Rather than being complacent in their current processes, it is essential for them to analyze
the external environment in this way in order to make decisions that are informed and not
simply a lucky/blind guess.

Using Porter’s 5 Forces Analysis:

1) Threat of New Entrants

New entrants in the 5-star hotel industry will bring innovation, new methods, technologies
and thereby put pressure on Hotel Starlac through lower pricing, reduction of costs and
offering new value propositions to both employees and customers. The management
therefore needs to manage all these challenges to ensure that they build an effective barrier
to safeguard its competitive edge.

To continue increasing revenue, they should keep a tab on such changes in their
environment.

2) Bargaining Power of Suppliers

Suppliers are the source of the hotel’s raw materials. In order to stay ahead, the
management should invent strategies of creating strong ties with them and also stable profit
to not lose them. In case of losing certain sources, Hotel Starlac should consider having a
number of suppliers as an option and also check their bargain power while paying enough to
enable the control over the suppliers.

3) Bargaining Power of Customers

As service becomes more uniformed, customers become more demanding as they find many
options to choose from. Hotel Starlac should identify the customers’ needs and break any
informality of service in order to retain customers. Not doing this will put pressure on the
hotel’s profitability in the long run.
Using this force, they can help determine information to:

 build a large customer base

 rapidly innovate products
 reduce losing existing customers to competitors

4) Threats of Substitutes
Hotel Starlac has an underground parking area, a franchised spa, gym, banquet hall, seminar
facility and is currently developing a casual dining restaurant and an additional 50 hotel
rooms. These are the services offered by the hotel. With the rise in competitors and their
similar services, there stands a threat of substitute for needs. This threat of product or
service is high if competitors offer value propositions that are unique from the offerings of
Hotel Starlac.

They can explore more information through the following fronts:

 How they can be service oriented rather than just product oriented?
 How can they understand the core need of customer?
 How can they increase the switching cost for customers?

5) Threats of Existing Rivals

In the competitive hotel industry, the rivalry among existing players will drive down prices and
decrease the overall profitability of the industry. By studying the external environment
pertaining to existing competitors, Hotel Starlac can delve and derive useful information to:

 build a sustainable differentiation

 build scale to compete better
 collaborate with competitors to increase market size.

9. What kind of data regarding Hotel Starlac's internal environment would

you need to collect and analyze to make a more accurate diagnostic and
formulate more reliable recommendations?

To make more reliable recommendations from the internal environment, they should pose
questions on the following current practices:

Internal environment: Is the working environment suitable for employees in all levels? Hotel
Starlac has noticed a pattern of retaining old employees but an increased turnover from the
newer employees. Does this mean there are issues of seniors’ superiority which are
unpleasant to the employees working under them?

Growth:

They should check whether the employees get an equal environment of growth. There might
be a possibility of little to no growth opportunities for the new joiners as compared to older
employees who have already reached the top positions.

Training and support:

They should check if the management is emphasizing on the importance of training

employees- both new and experienced.

Recognition:

Are the employees given due recognition that is timely, informal or formal? They should
reconsider their effort in this area and recognize that appreciation is a fundamental human
need.

In addition, the management should impose the following: -

Employee Survey

Carla and Steffen must have a clear understanding of the employees who make up their
workforce. Conducting employee surveys is an excellent vehicle for gaining that insight.
For example, in the case of employees like Isabelle, a carefully designed and conducted
employee survey can reveal a great deal of information about employee perceptions that
management can use to gain insight, improve the workplace and make decisions. Their
responsiveness to the employee feedback leads to higher retention rates, lower
absenteeism, improved productivity, better customer service and higher employee morale.
This act of the hotel conducting a survey can send a positive message to employees that
their opinions are valued.
If the managers are not fully committed and ready to really listen to and act on the
employees’ grievances, then conducting a survey can give a voice to the employees to be
heard by the senior management.
Employee surveys will clear the dilemma of whether to continue with their current system
(whether their current practices are redundant) or turn to a partner or buyer.

Hiring practices:

Hotel Starlac’s hiring process seems to be left unchecked and leans more towards an
outdated process. They should consider very seriously what Isabelle experienced. Irrelevant
interview questions, unprofessionalism, oversharing untimely information, big promises and
no action, poor orientation and poor treatment of employees are all (unchecked) red flags. If
they want the hotel to continue with success, they should bank on the new employees and
therefore whom they bring into their company should be done through a thoroughly studied
and trusted employee hiring process. Carla and Steffen should realize that the hiring process
does not begin with an interview and end with the job offer. It rather involves planning and
considering the job prior to an interview, recruiting and interviewing wisely to bring in the right
person, and providing new workers with an orientation that enables them to get off to a
strong start with the company. Is their company following this sincerely? If not, what should
be done? These are the right questions to ask to get the fruitful information.

Analysis of financial data

When it comes to the question of selling or keeping the hotel, they should consider their
financial standing. As stated in the case, they are considering the income capitalization
approach. To consider this and other alternatives, the management of Hotel Starlac should
be prepared with a thorough knowledge of their financial competency. They should check
their revenue management, budgeting, forecasting, pricing, asset management, cost control,
past years’ data and others to help make the necessary decision.
10. Discuss the advantages and disadvantages of adopting the
Whitestone approach to bottom-line labor. What moral issues confront
employers who want to implement such an approach? What would be the
likely reaction of hotel and restaurant employees' unions if Hotel Starlac
implements the Whitestone approach?

Advantages of Whitestone approach:

1) Simplify work relations

Line employees will have tasks that will be well distributed which will cut down
miscommunication, over communication and inequality of labor. There will be specifics given
as to who should do which work and how it should be done.

2) Work gets done fast

With the implementation of task distribution and communication, work will get done faster
which will result in greater productivity and profit, and thereby reduce costs.

3) Improved employee management

A pay-for-performance HR system will emphasize the connection between the employee’s

work and the hotel’s bottom line. These individual incentives hold each individual
accountable and thus increases their level of responsibility. This allows them to track and
measure each employee’s contribution.

4) Smooth flow of information

Whitestone will introduce procedures and disciplinary codes of conduct and the flow of this
information will follow a top-bottom approach. This makes the employees, HODs, supervisors
accountable and answerable to a senior.

5) Standard & simplified overall management

Whitestone’s approach will provide stronger labor division, regulations, control procedures,
clear & specific job specifications, avoid overstaffing, structured hiring process, impactful
orientation and a strategic balanced scorecard system.
Disadvantages of Whitestone approach:

1) Loss of control

Farming work out to an external agency will result in Carla and Steffen’s loss of control on
how tasks are being monitored and performed.

2) Risk of hidden costs

Even though the bottom-line approach is generally considered to reduce costs and increase
profit, there still lies chances of underlying costs. The owners should be very careful to read
the lengthy terms carefully to escape unexpected costs.

3) Huge shift for present employees

With Whitestone bringing in a big wave of change, it might be unwelcome and unfavorable to
employees who have been accustomed to their decade old practices. There lies the risk of
inadaptability, turnover, reduced performance, etc.

4) Shift in time frames

Even though it initially feels like they are after a common goal, Whitestone and Hotel Starlac
management may march out into two different ways in the future. There will therefore be a
difference and difficulty in synchronizing schedules, setting goals, priorities, etc.

5) Reduced owner-employee communication

While Whitestone’s approach can help to personalize the employee experience through data
and other systems, they will never be fully capable of supplanting the emotionally charged,
face-to-face encouragement that was practiced by Carla and Steffen.

The moral issue faced by the employers is that they may feel they are deviating from their
original mission and vision for their company. This is a major disadvantage as they may be
denying their employees face-to-face communication & feedback, personal growth &
motivation, development opportunities, and others. The customers can also feel the effect of
this implementation via poor employee services, reduced satisfaction. In our case, Carla
feels that the Whitestone approach is too centered on profit while the company wants to
contribute to society, so she sees this as a direct barrier to her point of focus. In such ways,
outsourcing strategies will hamper the morale of owners by reducing their original values and
general contribution to well-being of employees and society.

If Hotel Starlac implements the Whitestone approach, the following are the potential reactions
of their employees:
1) The employees (especially the senior ones) would find themselves incompatible with
the new system. Being used to constant communication with the owners, employee
involvement, less centralized structure, the Whitestone approach brings in practices
that are foreign to them.
2) Such changes will increase employee turnover. The inability to cope with the new
system will leave employees searching for jobs in other companies.
3) The shift to profit maximization may change how the employees had perceived Hotel
Starlac and they may lose the good faith they had.
4) On the other hand, for employees (especially newly joinees) who were previously
dissatisfied with the management of Hotel Starlac may be appreciative of the
Whitestone approach. They may be encouraged by the increased visibility, open
platform, centralized structure, incentives, etc. Their goals are more likely to align with
the profit maximization approach of Whitestone.

________________________________________________________________________________
SUMMARY: -

In the context of a war for talent, hospitality business leaders are competing to attract,
develop, and retain high performers. The challenge is crucial in the tourism and hospitality
sectors; whose competitive advantage relies on its workforce. Their human resource
management (HRM) systems should contribute to increasing individual and organizational
performance. Yet, HRM practices exhibit big discrepancies between small family-owned
independent establishments and large corporate groups and chains owned by shareholders.
In particular, the ongoing purchase of independent hotels by finance-based companies like
private equity or pension funds sets the scene for HRM challenges at both individual and
organizational levels.

Hotel Starlac is an independent and small 5-star hotel located in Geneva, Switzerland. Due
to fierce competition and an ongoing decline in the hotel's revenue and gross operating profit,
the current owners are faced with three potential options, which will entail very different
management models and practices: (1) reposition their hotel as more of a niche business; (2)
sign a management contract with an investment and advisory firm called Whitestone; or (3)
eventually sell the hotel to Whitestone. A proper diagnostic of Hotel Starlac's strategic talent
management practices might help the owners make the right decision.

After analyzing the pros and cons of all three management models it is advisable for the
owners to go for management contract which will improve staff performances at all
hierarchical level and solve the current management problem and will also help Steffen and
Carla retain their ownership.

From the standpoint of employees who are overly attached to how Hotel Starlac functions, it
might result in unpleasant results such as inability to cope with the new system, tendency to
quit and loss of faith in the management. However, if we want the hotel’s revenue and
popularity to grow, and with regard to the future and the many possible threats from
competitors, and with the entry of new age employees, the Whitestone approach does
appear to be more logical and preferable if they are to keep the hotel up and running.

__________________________________________________________________________