HR Scorecard 7 step process – An illustration

In this article we are giving an illustration by considering a fictitious company ‘The Hotel Paris International’ to show how this seven step process works. 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, 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 actually prefer other hotels after trying the Hotel Paris.

The strategy: Top management with input from the HR 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, and to thereby increase the length of stays and the return rate of guests, and thus boost revenues and profitability. All Hotel Paris managers including the director of HR services must now formulate strategies that support this competitive strategy.

The value chain: based on discussions with other managers, the HR director, LC outlines the company’s value chain. This should help her to identify those HR activities that are crucial in helping the hotel achieve its strategic goals. In a service business, the “product” is satisfied guests. Producing satisfied guests requires attending to all those activities along the Hotel Paris’s value chain where the company has an opportunity to affect the guests’ experiences. For the Hotel Paris, there are inbound logistics activities such as getting the guest from the airport and checked in. There are operations activities such as cleaning the guest’s room. There are outbound logistics activities such as picking up baggage and getting the person checked out and to his or her plane. There are marketing and sales activities aimed at attracting guests to the Hotel. There are service activities that provide post-stay services, such as travel awards to guests for multiple stays. And are various support activities, such as purchasing, information systems, and HR.

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 value chain provides opportunities for improving guest service. For HR director LC, reviewing the hotel’s value chain activities makes it clear that achieving the hotels strategic aims means achieving a number of required organizational outcomes. For examples, LC and her management colleagues must take steps that produce fewer customer complaints and more written compliments, more frequent guest returns and longer stays, and higher guest expenditures per visit.

The Strategically Relevant Workforce Competencies and Behaviors: The question facing LC is: What are the competencies and behaviors that our hotel’s employees will have to exhibit, if we are to produce required organizational outcomes such as fewer customer complaints, more compliments, and more frequent guest returns? Thinking through the sorts of activities that occur at each step in the hotel’s value chain helps LC 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 guest 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 and specify the HR policies and activities that will enable the hotel to produce the crucial workforce competencies and behaviors. As one example, “high quality front desk customer service” is one such required behavior. From this, the HR director identifies HR activities to produce such front desk customer service efforts. For example, she decides to institute practices to improve the disciplinary fairness and justice in the company, with the aim of improving employee morale. Her assumption is that enhanced fairness will produce higher morale and that higher morale will produce improved front desk service. —

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