Human Resources Management in Hyatt

Assessment Human Resources Management Case study: Hyatt Hotels

Karim REMILI 10320430 Grégory GIBERT 10320439 Anne-Sophie BOUGÈRE 10320443 Gauthier DUCHÂTEL 10320437 Number of words: 4385

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Table of contents INTRODUCTION

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PRESENTATION OF HUMAN RESOURCES MANAGEMENT

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HISTORICAL DEVELOPMENT MODELS WHICH IMPACTED HRM WELFARE TRADITION SCIENTIFIC MANAGEMENT THE BEHAVIOURAL SCIENCE CONTRIBUTIONS AND INFLUENCES OF THESE MODELS OVER HRM DEFINITION OF HRM STRATEGY IN HRM CULTURE IN HRM PRACTICE IN HRM RELEVANT OF HR TODAY

5 6 6 6 8 8 9 10 12 13 16

PRESENTATION OF THE MAIN MODELS OF HRM

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SOFT HRM CRITICISM OF SOFT HRM HARD HRM CRITICISM OF HARD HRM BEST FIT CRITICISMS OF BEST FIT BEST PRACTICE CRITICISM OF BEST PRACTICE

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CASE STUDY: SOFT HRM AND BEST PRACTICE IN HYATT

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‘HIGH PERFORMANCE WORK SYSTEM’ (HPWS) MOTIVATION Analyse COACHING Analyse ‘RESOURCE BASED VIEW’ (RBV) Analyse CULTURE Analyse PFEFFER’S 7 KEYS Analyse GENERAL ANALYSE

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CASE STUDY: HARD HRM AND BEST FIT IN HYATT

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UNITARIST “FLEXIBILITY” Analyse BUSINESS STRATEGY Analyse MILES AND SNOW Analyse GENERAL ANALYSE

47 47 49 51 53 54 54

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CONCLUSION

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APPENDICES

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APPENDIX 1: THE MODEL OF SCHULER AND JACKSON (1987) APPENDIX 2: PFEFFER’S 7 KEYS ABOUT HRM PRACTICES APPENDIX 3: KARIM’S REWARDS FROM HR DEPARTMENT DURING HIS INTERNSHIP IN A HYATT HOTEL APPENDIX 4: HYATT’S VRIN FRAMEWORK APPENDIX 5: INTERVIEW OF AUDREY KLOTZ, HUMAN RESOURCES OFFICER IN A HYATT HOTEL APPENDIX 6: PFEFFER’S 7 KEYS IN APPLICATION WITH HYATT APPENDIX 7: PORTER’S 5 FORCES IN APPLICATION WITH HYATT APPENDIX 8: HYATT’S TOWS MATRIX

58 59 60 62 65 68 70 72

REFERENCES

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PLANNING

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CONTRIBUTIONS

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Introduction Human resources management (HRM) is an aspect of organisational management that is concerned with the management of an organisation’s workforce.

The extent to which an organisation’s workforce is managed effectively represents a critical element in improving and sustaining organisational performance. The purpose of this assessment is to analyse and evaluate the relationship between strategy, culture and HRM in Hyatt and to reveal what type of key initiatives the HRM function can take in Hyatt in order to support the achievement of organisational objectives.

To provide with precision the answers to these questions, in a first part we are going to make a presentation of HRM and more precisely about its history, the different models which have contributed directly or indirectly to its creation and the contributions and influences of these models over HRM as we know today. Also, we are going to define with precision HRM and its link with the strategy, culture and practice and see how it is relevant for us today.

Then, in a second part we are going to present the main models which composed HRM and analyse to what extent these models are relevant today for Hyatt. Also, we are going to study the impact of the economic environment on these practices as in times of crisis for instance.

For this assessment, we used all the information that we studied in courses, news sources like different books of HRM that we chose in the library but also the answers of the interview that we made to Audrey Klotz, a Human Resource Officer from a Hyatt Hotel (the full interview is in the appendices).

Sincerely, Karim, GrĂŠgory, Anne-Sophie and Gauthier.

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Presentation of Human Resources Management Historical development The first time that we spoke about HRM was by Beer in the Harvard Business School in 1984. It was use to know how to manage in different ways. It created culture change in business because now work was determined and regulated.

Beer introduced the word ‘strategic’ speaking about HRM in 1984 when he considered that people were strategic resources.

Indeed, managers must see employees as strategic resources and not just as a cost because they represent competitive advantages.

According to Beer, if you use this model and if you use the culture of paternalistic (which means that the employer acknowledges and considers the employees’ rights and feelings): you will have a competitive advantage.

It is the first level of competitively to succeed: people have to be managed strategically thanks to this model.

The origins of HRM come from through the changes did by the industrial revolution, mainly the growth of the factory system.

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Two important developments in the late 19th and early 20th century critically impacted the development and evolution of HRM: Welfare Tradition and Scientific Management.

Models which impacted HRM Welfare Tradition

In the Welfare Tradition, the managers have to care about the collective and the group needs of the employees: it is a paternalistic representation.

Scientific Management The Scientific Management is a classical and a mechanistic approach: it is about rules, structure and regulation. Employees are considered as a part of the machinery so they are expendable as the machines.

Here we are not interested in collective problems: it is an unitarist vision whereas in the Welfare Tradition the vision is pluralist.

There is one direction, one source of loyalty and the power is centralised in the hand of the managers: it is called prerogative.

The Scientific Management is characterised by Taylor who gave 4 principles in 1911 called ‘Taylor’s principles of Scientific Management’ and which are the followings:

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One best way In the organisation there is one best way to work and employees have to follow this way.

Piece-rate system Employees are going to be paid for their productivity and they are not going to be paid if they fail in their quota.

Functional foremanship Supervisors have more power than employees and they do not have to be mixed with them. Indeed, the best way to use employees is to control them.

Scientific selection of personnel The selection of personnel is mainly done by job interviews.

The Scientific Management is considered as an economic-rational model: employees are seen as cost.

For Taylor, employees only care about extrinsic rewards whereas intrinsic rewards exist like better condition of work or vacations.

Finally, concerning the Scientific Management, Henri Fayol gave us 14 principles in 1916. He wright the commandments of the management and we still use these.

With the Welfare Tradition and the Scientific Management, they wanted to create a universalistic approach.

However, can we apply these principles nowadays and if yes, should we continue to use them?

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The answer is that these principles stay in operation today.

Indeed, all of these ideas exist at the same time. It is just about how do managers want to manage people: it is only about choices.

The Behavioural Science The research of people like Elton Mayo in the 1930s and 1940s indicated that the way people felt about their jobs influenced how they did their work.

For the first time, it was acknowedged that perfomance could be affected by concepts such as motivation, job satisfaction, group dynamics and leadership style.

Contributions and influences of these models over HRM First, for the Welfare Tradition, evidence of the progress made for workers and the utilisation of the paternalistic vision can be seen in the employment legislation regarding equality, dismissal, young workers, minimum pay, health and safety.

Today’s HR managers must keep up to date with these legal developments to ensure that their organisation meets its obligations to employees.

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Then, for the Scientific Management, HRM today still benefits from some of the tools developed during this time mainly about the scientific part.

This include job analysis, methods of selection and methods of training.

Finally, for the Behavioural Science, people are different in terms of what they expect from their jobs and how committed, satisfied and motivated they are, and may need to be treated differently. This requires a more flexible approach from managers.

The knowledge gained from research in these and other areas.

Those involved in managing people have now to consider how individual differences among employees affect the management style required.

Definition of HRM HRM can be divided in different keys areas:

Strategy

Culture

Practice

Each of these three areas constitutes the HRM and we are going to study them.

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Strategy in HRM A key characteristic of organisations that adopt the HR style of management is that a strategy for human resources is included in the overall corporate strategy. This means that plans for recruiting, developing and motivating employees are viewed as an important part of the long-term planning of the organisation.

HRM involves the development of long term plans and strategies with regard to these and other aspects of managing people. The HRM approach is proactive as it tries to anticipate problems and situations before they happen.

There should be a synergy between the 3 levels of strategy i.e. the senior HR manager should be involved in the 3 levels:

Business Corporate

Functional

How business strategy fits with HRM?

The differentiation through facilitation is the strategic fit.

How can this strategy be sustaining?

All is about the discipline associated with HRM culture: the managers have to keep improving and training their employees.

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There are two different types of strategic decisions:

Upstream strategic decisions Downstream strategic decisions

Concerning the upstream strategic decisions:

It is about higher view, senior managers. They have to anticipate where they are going to be in 2020 for instance. The strategy starts at the top of the business and this can affect all the organisation.

Then, concerning the downstream strategic decisions:

It is about the organisation of the structure and about HR policy choices: it is reactive.

HR should be a first order strategic decision, be reactive and HR managers at the table with the General Manager to decide.

HRM now take a tactical role: they should be at the upstream level.

Every HR models argues for that.

Finally, there is also the model of Storey in 1992 which allow us to see the link of HR especially with the strategy. He considered the HR function into 4 categories which are:

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Advisors They provide support to the line management like consultants.

Regulators They are involved with industrial relation, policies and procedures.

They make rules, develop policies and procedures.

Handmaidens They are subservient to managers and they operate in clerical role.

Change-markers They are involved with strategic development. They are specialised in strategy.

We can say that with the business strategy we find the best fit and with the HR strategy we maintain this.

Culture in HRM An organisation’s culture also influences how HRM works in the organisation.

Organisational culture refers to the accepted way of doing things within a place of work.

If the culture traditionally encouraged compliance with procedures and discouraged initiative, it is difficult to make a sudden change to a culture of commitment and participation.

An organisation’s culture develops gradually over time and can be hard to change quickly.

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For this reason, new organisations can more easily adopt the characteristics of the HRM style than older ones.

Practice in HRM Schuler and Jackson (1987) used the three keys basis of competitive advantage of Porter (1985) which are:

Cost leadership, differentiation through quality/service and focus on niche markets. We are going to see these keys in the second part of this assessment.

From these keys, they built their model of ‘Strategic Human Resource Management’ (SHRM) where they defined the appropriate HR practices and policies to fit the generic strategies of cost reduction, quality enhancement and innovation:

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Company mission and values

Desired competitive strategy

HR outcomes Employee behaviour aligned with company goals

Cost leadership, differentiation or focus

Supportive HR practices

Required employee behaviours

Choices in staffing, appraisal, remuneration, training, etc.

Extent of predictability in behaviour, degree of teamwork, etc.

They argued that business performance will improve when HR practices mutually reinforce the organization’s choice of competitive strategy.

In Schuler and Jackson’s model, the organisation’s mission and values are expressed through their desired competitive strategy.

This in turn leads to a set of required employee behaviours, which would be reinforced by an appropriate set of HR practices.

The outcome of this would be desired employee behavior that is aligned with the corporate goals, thus demonstrating the achievement of vertical integration.

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Using a competency-based approach to managing people is an example of how keys HR activities can be integrated. By clearly identifying the competencies (KSA: the skills, knowledge and personal attributes) necessary to attain high level of performance, a competency framework can be established and applied to other aspects of HR management, such as:

Planning To form part of the job anaysis

Selection To aid the choice of selection methods and to formulate relevant interview questions

Appraisal To evaluate employees' perfomance

Training and development To focus on specific competencies

Reward management To decide how much employees should be paid

HRM is identified as being unitarist approach. This is the assumption that workers and managers have the same goals within the organisation.

It implies that there is no conflict of interest between workers and managers. If this is the situation, there should be a high level of trust between workers and managers and this eliminates the need for union protection.

Individual bargaining is encouraged, meaning that each worker negotiates their own contract.

HR managers believe that this style of management will lead to more than just compliance. The aim is to increase commitment so that workers feel a sense of loyalty and responsibility to the organisation.

For this to happen, good employment relations are necessary.

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Relevant of HR today Thanks to its culture, practice and strategic part, HR allowed us to have different models today which characterize companies. These models which are Soft/Hard HRM and Best Fit/Practice are going to be analyse in relation with Hyatt in the case study.

However, some environment factors like the financial crisis impacted the process of these models and sometimes the human resources managers have to take some decisions which are against the nature of the models that they use.

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Presentation of the main models of HRM Soft HRM Soft HRM appeared in 1984 and it could be summarised by the following concept: the mutuality-shared interests that means concretely “I invest in you and you work hard for me”.

Indeed, the notion of ‘High Performance Work System’ (HPWS) appears which implies that employees are managed strategically by coaching or motivating by intrinsic/extrinsic rewards for instance.

It is a paternalistic HR approach where the employer acknowledges and considers the employees’ rights and feelings.

It is all about perfomance management and the goal it to help them to achieve their professional and strategic objectives for the company.

Indeed, the level of investment that the company puts into people is to achieve its strategy.

Thanks to these investments, employees are more connected to the business so there is a psychological engagement. The notion of 'Resource Based View' (RBV) appears: RBV is mainly based in strategy and economics and it concerns intellectual capabilities.

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Behind these concepts, there are some questions for the managers: “How well the business is performing and how much I will invest in the RBV? Too much or too little?”

“How much I am going to receive from this investment and when?”

Indeed, the results appear in general 6 months or more after these type of investments so the managers have to think about the long term and not the short term.

The resources can be physical, technological or human so three different elements are put together.

There is the idea of knowledge stocks which is the source of competitive advantage.

A company which uses soft HRM has to identify how much and how are the capabilities into its organisation and at the end, the company has to speak only about team, knowledge stocks and how it invests in that.

Criticism of Soft HRM

The danger of soft HRM is that when all the employee benefits are added up, the cost of the workforce leaves a business at a competitive disadvantage.

Furthermore, soft HRM could be considered sometimes too idealist because there are some aspects of this model which are difficult to put in practice in the real life.

Hard HRM It is called Hard HRM or strategic HRM in 1986 by Fombrun.

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Fombrun said about the Soft HRM that this model does not work in practice because it is too utopic for him.

The bottom line of financial success: how to run a business. It is the combo of strategic principles + financial objectives.

In this model the main preoccupation is to answer to this question: “How the business will survive?”. Here we do not talk about the employees and the collective needs as Soft HRM

Hard HRM is unitarist also as the Soft HRM but with a difference because it uses the unitarist “flexibility” which is numerical, financial and functional:

Numerical means manage by numbers: "How many employees do I need? I see you as a cost”.

Financial means managing by cost: “How much I will invest on 60 people? I am reducing the size of the workforce”.

Functional means “What type of skill do I need for my workforce?”. Utilisation of KSA.

Hard HRM is also autocratic in contrary to Soft HRM which is paternalistic:

Leader centralizes power and decision-making in himself. He gives orders, assigns tasks and duties without consulting the employees. The leader takes full authority and assumes full responsibility.

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Criticism of Hard HRM Such an approach pays relatively little attention to the needs of employees so:

A business adopting a genuinely 'Hard' approach might expect to suffer from higher absenteeism and staff turnover and less successful recruitment.

Best Fit Which characterises this model is that business strategy and HR strategy should be the same. Schuler and Jackson built a model which links business strategy, HR strategy and behaviour which is the following:

Business strategy Cost leadership Differentiation Cost focus

HR strategy

Behaviour

Utilisation Facilitation Accumulation

Predicable Creative Combination

This model is detailed with precision in the appendices (Appendix 1).

As we have indicated in the Hard HRM part, Fombrun is a real opponent to Soft HRM. He does not believe in Soft HRM in the reality so he suggested a strategy model:

Mission and strategy

Formal structure HRM

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For Fombrun, HRM should come at the end.

The most important things for him are the mission and strategy: the company must survive.

For Miles and Snow, the environment dictates the strategy and the strategy dictates the HR policy:

Environment

Strategy

HR policy

For them the environment dictates how we are going to create model.

However, what is the impact of the environment on business strategy?

The environment has a big impact on the business strategy because for instance in times of crisis, we are more going to use the cost leadership strategy than the differentiation strategy in the model of Porter, Schuler and Jackson.

However, there are different reactions and different types of people in front of the impact of the environment:

Defenders They maintain the same business strategy.

Prospectors They are looking for some new horizons, some new markets: it is entrepreneurial.

Analysers They analyse other markets for instance as which market is saturated, which company is doing well: it is about coordination.

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Criticisms of Best fit

In the Best fit model the strategy has to be connected with the HR but it is not always connected because HR is not in some company connected with strategy. This model is not always true in practice.

Furthermore, focus on fit with strategy is only one possible contingency and sometimes some companies do what they want.

Best Practice It is a soft approach and the opposite of the Best Fit.

Indeed, in this model the objective is to find the best way to manage people and HR should not be connected with strategy. Best Practice rejects that Best Fit model and here the culture is more important.

Pfeffer gave us 7 keys about HRM practices which are the followings: Full job security Business information sharing with employees

Reduction of status differentials

Employee training

Target selection

Workplace teams and decentralisation

High pay contingent on organisational perfomance

This model is detailed with precision in the appendices (Appendix 2).

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How realistic is this model mainly in times of crisis?

All of these 7 keys should be seen complementary each other and even in times of crisis as we are going to see in the case study with Hyatt, the company should still using one of this key.

Criticism of Best practice

The problem in this model is the absence of strategy and other keys functional areas.

Also, there is no consideration of impact of low-involvement work systems.

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Case study: Soft HRM and Best Practice in Hyatt ‘High Performance Work System’ (HPWS) Motivation The hotel industry is a significant part of the tourism industry worldwide and its employees play a key role in delivering the service product to its customers.

Excellent service provided by employees can create lasting positive experiences for customers.

The individual motivational constructs of the hospitality employee play an important and perceivably a significant role in achieving high satisfaction among hotel customers. The motivation of employees, whether professional, skilled or unskilled, is a major issue in all service organizations.

For the hotel industry, employee motivation is a major issue. It is a challenge for the management of the hotel industry to motivate employees to work with energy and efficiency due to odd hours and high stress situations.

One of the company's responsibilities is related to ensuring employees' workplace motivation.

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HRM's function is to assist the company in keeping the employees satisfied with their jobs. If employees are not satisfied, they will not be effective at work.

Workplace dissatisfaction and poor performance usually lead to high employee turnover in the hospitality industry, particularly in developed countries:

According to a Hotel and Catering Training Company in the United Kingdom, turnover is the United Kingdom was estimated to have cost the hotel and catering industry 430 million pounds a year, and turnover was higher among men than women (Lucas, 1995).

It was also reported that in order to reduce labor turnover and retain productive employees, management has to improve working conditions and keep the employees properly motivated. Human resource managers need to understand the motivational processes and human needs in different cultures.

In Hyatt Hotels, the low turnover could be illustrated and explained by the fact that members of the Hyatt family are united by shared values, a common mission and a common goal.

The associates at their properties are led by an experienced group of general managers.

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For example, the General Managers at their full service owned and managed hotels have an average tenure of more than 22 years at Hyatt. Senior operating management has an average of over 30 years of experience in the industry.

Regional management teams located around the world support their hotel general managers by providing corporate resources, mentorship and coaching, owner support and other assistance necessary to help them achieve their goals.

Their experienced executive management team sets overall policies for their company, supports their regional teams and their associates around the world, provides strategic direction and leads their global growth initiatives.

This low turnover objective in Hyatt Hotels could also be explained in the following part and more precisely in the promotion part of Hertzberg’s theory where Hyatt projects the career of the employees in the future.

To understand employees' needs, managers should understand key theories that help them learn the basic needs of people.

Maslow's theory is one of many theories that pointed out the basic sorts of needs. They are physiological needs, security needs, belongingness needs, esteem needs, and self-actualization needs. The lower level needs must be satisfied before the next higher level.

Another theory, Hertzberg's is based on two distinct sets of factors: hygiene factors such as pay, organizations, policies, working environment and motivating factors such as recognition, promotion, achievement and the intrinsic nature of the work.

Hyatt has a number of various ways to keep their employees motivated. They follow the Herzberg's motivational theory with an adaptation of Maslow's hierarchy of needs:

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

Hyatt achieves the hygiene factors mentioned in the Hertzberg’s theory by:

Providing the basic needs of efficient supervisory hierarchy, good working conditions, a transparent system of communication and interpersonal relations, a competitive salary along with benefits such a health insurance, provident fund and pension schemes.

The company's Human Resource policies and administrative policies are also in place to ensure satisfied employees. 

Hyatt's motivational factors in terms of the theory are also fulfilling. In terms of the work itself:

It is a challenging industry which involves a high amount of dedication and self-motivation.

The timings and high stress situations during peak seasons require on the spot decision making skills while being calm and composed for the client.

The attrition rate in the industry is high due to these challenging factors.

Hyatt tries to ensure that all their employees are motivated at all times although a weaker personality may not be able to handle the pressure which creates a situation where they do not last increasing the attrition rate of the industry itself.

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The promotion in Hyatt Hotels could be illustrated by this example for the Human Resources Department:

Source: Hyatt Job Opportunity Website

With these type of illustrations, the objective of Hyatt is to project the future of its employees to motivate them and to show them that a hard work could bring them in higher position as Director of Human Resources for this example.

Finally, preserving and communicating their culture in International Operations is critical to their continued growth and success.

They can enhance the culture by rewarding the behaviors that support it, by recruiting new employees who can easily assimilate into their culture, and by demonstrating the characteristics in the day-to-day operations.

From a more tactical perspective, Hyatt makes it a point to reward behaviors that exemplify their culture, such as teamwork, caring, and innovation. This can be done through recognition programs such as HYachiever Awards, HYstar Awards, and others.

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Regularly, Human Resources organize activities of charity for instance and if an employee participates to one of these activities, he is personally thanks by the Human Resources Department by a paper.

To illustrate this part, we can take the example from Karim’s internship in a Hyatt Hotel (Andaz London Liverpool Street Hotel) where he participated in two different activities: one was to give a lunch to people with a critical financial situation and the other one was to collect food to send to the Nepal after the natural disaster.

After his participation to these activities, he received rewards from the Human Resources Department (Appendix 3).

These type of intrinsic rewards made him personally doubly happy because he fell very useful by helping these people and by the fact that his actions have been thanked by Hyatt.

The hotel has also organized other rewards which also scored him like the organization of some buffets with a speech from the General Manager to congratulate employees of their good job.

Analyse The motivation of employees mainly for hotel industry is one of most important issue.

Indeed, as we saw excellent service provided by employees can create lasting positive experiences for customers and in contrary workplace dissatisfaction and poor performance can lead to high employee turnover which has a high cost for the hotels.

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Hyatt has understood this issue and it is the reason why they put all their efforts to reduce this turnover and increase the motivation of the employees.

Indeed, they have an experienced group of General Managers (an average tenure of more than 22 years) which is very important because the General Manager represents the hotel. There are a high number of General Managers who change every 5 years of companies for instance which means that they are not satisfied by the benefits of their previous company.

The high experience from these General Managers of Hyatt show us that Hyatt and more precisely that Human Resources Managers achieve perfectly their mission to reduce the turnover and also to motivate the staff.

Indeed, it could be considered as a real motivation and a reassurance for others employees even the interns to see these workers with a high experience, mainly the senior operating management with an average of 30 years of experience in the industry, into the same company.

Then, the utilisation of different keys theories by Hyatt Managers to understand employees’ needs as the Maslow’s theory or the Hertzberg’s theory show us again a real desire to give motivation to their employees and to keep them into the company the longest time possible. Into the promotion part of the Hertzberg’s theory and more precisely in the motivational factors, the projection of career with the scheme for a basic employee from Intern to Director in the different department of the hotel is a source of motivation and a brilliant idea from the Human Resources Managers of Hyatt.

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Indeed, employees know that with a hard work they will be able to have access to the highest position in Hyatt Hotels.

Finally, Hyatt had perfectly understood that the motivation from the employees could be increased by rewards. Different programs exist to reward the employees (also the customers) which are intrinsic and extrinsic.

With the Karim's example of the intrinsic rewards from his internship in a Hyatt Hotel in London, he can say that these type of rewards are a real source of motivation.

Coaching The Hyatt Leadership Network (HLN) is an employee portal containing standardized training modules that have been developed for the employees. Each employee is enrolled in these modules according to their job description. The format of HLN is intended to provide resources that are easily accessible for learners and to support individual and business development needs. The Hyatt Leadership Network learning content is organized within four schools:

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The School of General Studies Provides the fundamentals of learning for all employees. The resources available support Hyatt's mission, goals, and values by providing resources that build on Hyatt's culture.

The School of Hospitality Provides the operational standards of performance and includes the technical skills, service expectations, and systems knowledge required in daily hotel operations.

The School of Management Provides resources supporting management skills development for Hyatt employees that lead to superior results.

The Leadership Institute Provides formal and informal development opportunities designed for future leaders at Hyatt. The institute helps the employees meet their individual development goals.

Apart from the above, each hotel has an individual training department that imparts regular training and development modules which are beneficial to the employees. There is also a strong mentoring system in place:

Each new employee is mentored by an experienced employee.

This helps the new employees learn and understand the processes as well as provides them with a confidant who helps them fit in to the organization and imbibe the culture.

Hyatt Hotels encourage coaching with the help of the mentoring system, and a concept known as Hyatt on skill training. This training module is undergone by supervisors and above.

Analyse The Hyatt Leadership Network and more precisely its four schools provide a real training for Hyatt’s employees which is benefit at different level. The training 32

managers are responsible for doing a training need analysis for the employees and enroll them in various programs for their development and growth.

Thanks to the training, Hyatt Hotels can improve knowledge and skills of their employees and can change attitudes; it acts like an important potential motivator.

There are many benefits of training to the employee as well as the organization: employee confidence, motivation and commitment increases. Indeed, training provides:

Recognition and enhances responsibility which may lead to increased pay and promotion.

The employee with a sense of personal satisfaction and achievement which broadens opportunities for career progression.

Help to improve the quality and availability of the employees.

(Mullins, 2007)

Then, about the coaching providing by Hyatt:

It is the process of helping employees, improving performance and developing their capacity to perform well in the future.

It is about changing behavior to make things better. Because the process of change is difficult and can provoke anxiety, people often resist it.

The forces of inertia are strong, but effective coaching can surmount them. (Friedman, 2010)

Finally, the fact that Hyatt Hotels encourage coaching with the help of the mentoring system enables personalized coaching for employees which makes it easier for them to understand and work on day-to-day tasks thus increasing the productivity.

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Monitoring of employees' performance is also easier and more effective making them more confident in their jobs.

‘Resource Based View’ (RBV) We are going to analyse the RBV of Hyatt by its VRIN:

Applying Barney's (1991) VRIN framework can determine if a resource is a source of sustainable competitive advantage. To serve as a basis for sustainable competitive advantage, resources must be valuable, rare, inimitable and non-substitutable.

We detailed with all the precisions the VRNI of Hyatt in appendices (Appendix 4) but we decided to summarise its VRNI above:

Value of strategic capabilities The international recognition by being a world class brand The strong capital base and disciplined financial approach The deep culture and experienced management teams

Rarity Strong customer image The staff is multi-skilling and multicultural Hyatt consistenty receives top rankings, awards and accolades for its services High experience of the managers and high innovation in the company

Inimitability Hyatt's human resources are difficult to imitate Knowledge and skill of the staff member The fast services provided by Hyatt

Non-substituability Generally, the hotel industry is not threatened by substitute products except in times of crisis.

Even if video-conferencing can alter demand for accommodation, majority of companies prefer 'real meeting

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Analyse By analysing Hyatt’s VRIN, we can say that Hyatt’s resources are a source of sustainable competitive advantage.

The strategic capabilities by the world brand class, the strong capital, the financial discipline and the deep culture are a source of greater value in terms of relative costs and benefits, than similar resources in competing firms.

The multi-skilling and multiculture, the different awards received for the services or the high innovation of Hyatt are a source of competitive advantage which make the rareness of Hyatt in term of resources.

The inimitable is not only present in the services provided

by Hyatt, but mainly in the human resources and the staff members by their knowledge and skill which is one of the most important point for the hotel industry.

The non-sustainable character of the hotel sector in general except in times of crisis allows to Hyatt a better competitive advantage thanks to its resources.

Culture Hyatt, being a large organization maintains a basic culture although due to the size of the company and the number of employees globally, each division and hotel has developed a sub culture that defines the particular place. Hyatt believes that these sub cultures should be encouraged as long as they do not conflict with the company's basic culture.

The word "culture" in Hyatt International Operations is used to refer to the personality of the organization and is formed by the combination of the following elements:

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Shared values What we think is important

Systems

Beliefs

Our written and unwritten ground rules

How we think things should be done

Role Models

Norms

The people who personify our corporate values

The way we do things around here

The company has strong cultural characteristics and values that it abides by.

These characteristics are based on the global presence of the company. They have six main cultural characteristics that are elaborated below. The six key characteristics that describe the Hyatt culture are highlighted as follows:

Innovative

Being costumer focused

Working through team

Being multicultural

Carrying of each other

Encouraging personal growth

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Here is the detail of all these characteristics:

Innovative Hyatt was the first hotel chain to start the atrium lobby concept in the world.

They have always found alternate and smarter solutions to issues in the hospitality industry. They pride in the concept of being innovators of new trends in the industry.

Working through team Hyatt encourages an environment in which employees are made to work in teams to enhance performance.

Carrying of each other Hyatt ensures that the employees are empathetic towards each other's needs.

They portray a picture of a family when speaking with their employees to nurture a caring attitude.

Encouraging personal growth Hyatt has numerous programs and training modules that allow fast track growth of employees. They have recognition programs for their employees and they ensure that the performance of each employee is tracked and monitored to keep employees motivated.

Being multicultural Hyatt has a presence across the globe that makes it important for the company to adapt and change according to different cultures. They ensure that there is no discrimination in terms of color, ethnicity, religion or race.

Being costumer focused Hyatt ensures that they are focused towards the satisfaction of their external as well as internal customers. The policies of the organization keep the employees, guests as well as owner's benefits in mind.

These six characteristics are encouraged and rewarded throughout all aspects of Hyatt's operations. They are introduced to new employees through an updated History of Hyatt presentation during the hotel's Orientation Program.

In their culture of inclusion, employees feel accepted for the individuals they are, regardless of their background, style, ideas, or beliefs.

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Hyatt continues to receive recognition as one of America's best companies for their diverse population. An illustration of this culture is given below.

For one week, every year, Hyatt comes together globally to 'Celebrate Our People' by recognizing and acknowledging the most important asset to the company: their associates.

This is also the perfect time to understand the differences of associates and understand the vast cultures represented in the company by pairing and celebrating with a sister hotel in another country.

The culture of the organization if put in a model would be best described by Role Culture mentioned by Charles Handy in his book: understanding organizations.

To overcome the predictability and non-innovation that role culture brings about in the organization, Hyatt has a number of fast track development programs for employees that enable them to identify potential leaders and enroll them in these programs.

The productivity of each employee is monitored carefully and regularly through performance development programs run by the individual department monitored by Human resources.

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Analyse In an organization with the diversity and global presence as Hyatt, one can see both:

A strong overall culture as well as the growth of powerful sub-cultures that reflect the large culture but are also different in important ways. (Schein, 2003)

The culture of Hyatt is clearly determined by the six main cultural characteristics that we saw and they bring to Hyatt competitive advantages. Indeed, the ‘Innovative’ characteristic for instance allows Hyatt to distinguish itself from other luxury hotels by bringing news ideas in the hospitality sector and the ‘Working through team’ characteristic helps in the same time to increase motivation and employee satisfaction due to constant feedback from the team.

The ‘Carrying of each other’ characteristic shows clearly that employees are not considered like machines which could be substituted but as important resources.

Also ‘Encouraging personal growth’, ‘Being multicultural’ and ‘Being costumer focused’ characteristics show us that the paternalistic HR approach where the employer acknowledges and considers the employees’ rights and feelings is totality respected by Hyatt.

These cultural characteristics are communicated to all the employees of the organization so that they can reward behaviors which demonstrate them; and, hire people who will thrive in them.

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Then, thanks to its culture, Hyatt receives recognition as one of America’s best companies for their diverse population.

This illustrates the hard work of culture put in place by the company by giving a high motivation to its employees as we saw previously and also in the same time by reducing the turnover for Hyatt which allows them to do not loose money.

The Andaz London Liverpool Street Hotel where Karim did his internship also received the award of ‘One of the best places to work in UK’.

This allows Hyatt to reinforce the idea that they use the right culture and make employees proud of their company and by the same time hiring news workers thanks to this prestigious award.

Finally, role culture is successful in this organization as it is a very large company with many subsidiaries and units.

All the hotels in the company are to be managed and operated according to one particular culture which makes it easy to have a flat, predictable system such as the Role Culture.

The hotel industry is based on predictions and planning which makes it a sensible decision to adapt to the role culture.

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Even though as mentioned by Mr. Handy, role cultures are slow when it comes to change, Hyatt manages change quite well as the communication, training and development is very efficiently handled.

Role cultures offer security and predictability to the individual. They offer a predictable rate of climb up the pillar. They offer the chance to acquire specialist expertise without risk. They tend to reward the satisfier, the person concerned with doing his job up to the standard.

The role culture is frustrating for an individual who is power oriented, or wants control over his or her work; who is eagerly ambitious or more interested in results than method.

(Charles Handy, 1993)

The most important conclusion is that culture is a multifaceted, multidimensional phenomenon which is not easily reduced to a few major dimensions.

Culture reflects the effort put in by the group to cope and learn, and is the residue of this learning process. Culture provides meaning, predictability and stability in the present and is also the result of effective decisions from the group's past. (Schein, 2003)

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Pfeffer’s 7 keys To illustrate how this model is relevant today for Hyatt we added some information from the interview (Appendix 5) that we did with a Human Resources Officer, Audrey Klotz, from a Hyatt Hotel (Andaz London Liverpool Street Hotel).

The 7 keys of HRM practices in relation with Hyatt have been detailed with precision in appendices (Appendix 6), but here is a summary of these practices:

Full job security

It is a key thing for Hyatt because employees will feel more comfortable and will perform better if they know that their employment is secured.

Job security provides high staff retention and low turnover in the company.

Employees can project in the future with the company as we saw previously with the example of HRM career.

Target selection Hyatt selects its employees mainly on their personality because they can teach the skills but not the personality.

It is very important that employees feel comfortable and are themselves.

Workplace teams and decentralisation

In Hyatt Hotels, the relation between team members and team leaders is based on a trust relationship.

They empower their team members and therefore team leaders.

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High pay contingent on organisational performance

Salaries in Hyatt are increased every year of a minimum of 3%.

They are competitive and aligned with their competitors.

Employee training

Hyatt proposes a lot of training and coaching as we saw in the previously part, mainly with the Hyatt Leadership Network (HLN) and their mentoring system.

“Training is also very important for Hyatt as a company as we want to make sure that we develop our staff, and it is always a good way to retain”. (Audrey Klotz, HR officer)

Reduction of status differentials

Hyatt Hotels do not reduce the benefits of their employees, but they tend to increase them and try to find new ideas every year.

Business information sharing with employees

Twice a year a General Staff meeting is organised and the General Manager shares the “numbers” with all the staff.

Hyatt put is present on the social media which allows to the employees to see general information about the hotel.

Hyatt also shares information by e-mail and when important decisions are taken, some managers can send a common e-mail to all the employees of Hyatt in the world.

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Finally, even in time of recession all these practices are respected by Hyatt according to Audrey Klotz.

Analyse Best Practice model assumes that there is one best way to carry out HR functions and that this way can be applied to all organisations. Well-known example of Best Practice model is that of Pfeffer.

In this part, we wanted to know how this model is relevant today for Hyatt by analysing the different components of Best Practice outlines by Pfeffer and we can say that these practices are respected by Hyatt.

Indeed, about the job security, it is considered as a key thing for Hyatt. Thereby, they provide a job security illustrated by the high staff retention and the low turn over.

The example of the restaurant 1901 is a perfect illustration of the job security in Hyatt:

Even if a department has to close, Hyatt is not going to abandon its employees without solutions. And this is the main definition of the job security by Pfeffer.

Employees surely can be fired if they do not perform, but they should not be put on the street quickly because of economic downturns or strategic errors by senior management over which they have no control.

Hyatt also concentrates its recruitment mainly on the personality of the candidates and it is the right process because then employees feel comfortable and are themselves.

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Companies should screen for cultural fit and attitude, among other things, rather than just for skills that new employees can easily acquire through training.

Hyatt has succeeded to build a trust relationship between team members and team leaders in the workplace.

About the high pay contingent on organisational performance, Hyatt understands that high pay can produce economic success, as illustrated by the story of Pathmark.

About the high pay contingent on organisational performance, Hyatt understands that high pay can produce economic success, as illustrated by the story of Pathmark.

This large grocery store chain in the Eastern United States had three months to turn the company around or go bust. The new boss increased the salaries of his store managers by 40 percent to 50 percent, enabling them to concentrate on improving performance rather than complaining about their pay.

Thereby, Hyatt increases the salary of its employees every year of a minimum of 3% and the salary is competitive and aligned with its competitors as says Audrey Klotz which demonstrates that Hyatt does effort for its employees.

Successful companies that emphasize training do so almost as a matter of faith. It is very important for Hyatt as we saw with their different trainings and coaching to develop their staff.

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Then, about the reduction of status differentials, Hyatt do no reduce the benefits of their employees, it is the contrary. The most important for the company is to find new ideas every year.

About the share of information, the chief executive of Whole Foods Market has said that a high-trust organization "can't have secrets". It is the same for Hyatt with all the meetings organized by the General Manager where he shares the “numbers” with all the staff.

The company use also the e-mail to communicate important information to all the employees and is open to new ideas and feedbacks for its employees that shows us ‘Innovative’ characteristic of the culture of Hyatt, to find news ideas every year to improve its services.

Finally, the fact that even in time of recession, all these practices are respected by Hyatt shows us that even in difficult moments, Hyatt does not let its employees but in contrary Hyatt prefers to find solutions to maintain its key practices which characterises the company.

General analyse One of the criticisms of the Soft HRM was that it is too idealist because some aspects were considered difficult to put in practice in the real life.

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We saw during the case study that the theories of Soft HRM and Best Practice like the motivation, the coaching, the notion of ‘Resource Based View’ and Pfeffer’s practices are put in place by Hyatt in the real life.

Even if these practices have a cost, the goal is to help employees to achieve their professional and strategic objectives for Hyatt. Thank to Soft HRM and Best Practice, employees are more connected to the business by a psychological engagement which is a source of competitive advantage for Hyatt.

Case study: Hard HRM and Best Fit in Hyatt Unitarist “flexibility” Which characterises Hard HRM is the use of the unitarist “flexibility” which is numerical, financial and functional.

Analyse With what we studied previously in this case study, we can say that Hard HRM is not present in the practices of Hyatt in contrary of Soft HRM.

Indeed, the main preoccupation for Hyatt it is the well-being of its employees.

Hyatt puts a lot of effort on motivating and coaching its employees and also making them feel comfortable at their workplace as says Audrey Klotz because Hyatt knows that excellent service provided by employees can create lasting positive experiences for customers.

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Otherwise for the Hard HRM, the main preoccupation is not the well-being of the employees and the collective needs but that the business survives which has nothing to do with the practices of Hyatt.

Then, the unitarist “flexibility” which characterises Hard HRM is used by Hyatt but not exactly in the same way for the numerical and financial part. Indeed:

About the numerical part, of course the Human Resources Department wants to know how many employees do they need for their services but the difference is that they do not see the employee as a cost but as a person with a strong personality and as a competitive advantage for the hotel.

About the financial part it is the same, Hyatt's Managers have to know how much they are going to invest on the employees but it is not to reduce the size of the workforce as implies the hard HRM. In contrary, it is to be sure that employees will feel comfortable and themselves in the company.

Finally, the fact that Hard HRM is autocratic in contrary to paternalistic as Soft HRM shows us a new time that Hard HRM is not integrated into the culture of Hyatt.

Indeed, as we saw with Pfeffer’s practices, there is a trust relationship between team members and team leaders.

Managers do not take the full authority and are not here just to give orders. Furthermore, by its “innovative” character, Hyatt hears the news ideas proposed by the employees which is incompatible with hard HRM where the managers assign tasks and duties without consulting the employees.

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Business strategy In the model which links business strategy, HR strategy and behaviour, we can clearly say as confirmed Audrey Klotz that Hyatt adopts as business strategy the differentiation, as HR strategy the facilitation and that the behaviour is creative.

Firstly, about the business strategy, Hyatt proposes different categories of hotel which are the following: Andaz, Hyatt Regency, Hyatt Place, Hyatt House, Hyatt Zilara and Hyatt Ziva, Hyatt, Park Hyatt, Grand Hyatt, Hyatt centric and finally Hyatt Residence Club.

Each hotel has its own personality by proposing different services and the aim by creating all of these categories of hotel was to attract a maximum of customer who are different between themselves by their tastes, their needs, their budget, their expectations, etc.

Due to the different categories of hotel proposed by Hyatt, we can divide customers into two categories:

Luxury customer These types of consumers prefer a better experience with respect to their itinerary or stay: they are more attracted

by Grand Hyatt, Andaz or Park Hyatt for instance.

Budget customer These types of consumers prefer an optimum experience at a small budget: they are more attracted by Hyatt, Hyatt House or Hyatt Residence Club for instance.

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Therefor, we can clearly say that Hyatt brand is based on the differentiation strategy because of its different categories of hotel which allows the company to attract different categories of customers.

Furthermore, Hyatt serves large business destinations, large-scale meetings and conventions.

The business hotels include state-ofthe-art technology, sophisticated business and leisure facilities, banquet and conference facilities of world-class standard, and specialized programs.

So we can even say that the strategy is based on focus differentiation because customers demand top quality and are able to pay a big premium.

The company prefers to use its differentiation about its competitive advantage and to have a broad target about its competitive scope that confirm its differentiation strategy.

Secondly, the way that employees are treated as resources values and not just cost as we saw previously shows that the HR strategy is the facilitation.

Indeed, the motivation, coaching and rewards provided by Hyatt to the employees are Soft HRM's practices.

Finally, about the behaviour, we saw previously that the “innovative� characteristic is in the culture of Hyatt so the behaviour is clearly creative.

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Finding new ideas to improve the services mainly by hearing the employees is a key for Hyatt to differentiate itself from its competitors.

Analyse As demonstrated previously, the business strategy used by Hyatt is the differentiation.

However, does Hyatt have to continue to use this business strategy?

If we analyse the Porter’s five forces in relation with Hyatt (Appendix 7), we can see that the threat of entrance is that a lot of foreign companies are coming in the UK in the tourism and hospitality sector and entrepreneurs are innovating their services in the tourism and hospitality sector.

So by analysing this threat we can say that Hyatt has to keep using the differentiation strategy if the company wants to succeed in the hospitality sector because of the menace of foreign companies and because of the innovations of the entrepreneurs who are already in UK.

About the threat of substitutes, we can see that in general the hotel industry is not threatened by substitute products except that in times of crisis as domestic travel might replace international of overseas travel and certain destinations replace more expensive ones on cost grounds. Furthermore, AirBnB for instance is becoming a threat for the hotel industry but more for the economic hotel industry not for the luxury part. There are some indirect substitutes like video-conferencing for business which now alter demands of accommodation because they do not need now to travel of the entertainment industry because now some family prefer to spend their money in some Amusement Park for instance instead of travelling.

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So the threat of substitutes does not have a real impact for Hyatt is it more the threat of entrance which push Hyatt to keep innovating and to distinguish oneself.

Then, when we analyse the TOWS matrix (Appendix 8), we can see in the SO strategic options (Strengths combine with Opportunities) that by using its prestige as been a world class brand, Hyatt could increase its customer satisfaction which is already higher than its concurrent.

Furthermore, as a global platform by operating in keys markets including major business centers and leisure destinations but also higher growth markets, Hyatt has the opportunity to touch more customers and at the same time to increase their satisfaction.

Therefor, this need of differentiation from Hyatt to be in different locations not only in business centers but also in higher growth markets like Russia or India for instance by using in the same time its prestige as a world brand class bring and will bring to Hyatt a lot of success.

This is the reason that they have to keep their differentiation strategy because by the same time the relations with travel advisors will increase and more and more hotels from Hyatt will receive awards.

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Finally, the fact that the market is limited due to tough competition from international and domestic players show us one more time that Hyatt as to keep using its differentiation strategy to succeed in the hospitality industry.

Miles and Snow For them, the environment dictates the strategy and the strategy dictates the HR policy.

Environment

Strategy

HR policy

During the interview to Audrey Klotz, we asked her if in time of recession Hyatt still using the differentiation business strategy or if they use the other ones like the cost leadership or the cost focus.

The answer was that even in time of recession, Hyatt still using the differentiation business strategy.

Indeed, we can see that with the example that gave Audrey Klotz about the restaurant 1901 of Andaz that even in time of recession, when a Department has to close the Human Resources Department finds solutions for the employees to stay into the company by giving them other posts.

So we can say that the reaction of Hyatt could be considered as defenders: they maintain the same business strategy even if the environment as to change.

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Analyse The example of Audrey showed us that environment does not have a big impact on the strategy and then on the HR policy with Hyatt.

We can say that the environment does not dictate to Hyatt the model of the strategy whereas it could be the case in other companies.

General analyse The main criticism of Hard HRM is that this approach does not pay attention to the needs of the employees and the consequences of this approach are higher absenteeism, staff turn over and less successful recruitment in the company.

All of these characteristics of Hard HRM show us that Hyatt does not use this approach to manage its hotels as the turnover is very low in Hyatt mainly thanks to the motivation, coaching and rewards provided to the employees.

Furthermore, the recruitment in Hyatt is a real success and attracts a lot of people as the company is considered as one of the best place to work.

Finally, as we know Fombrun does not believe in Soft HRM in the reality.

According to his model, mission and strategy are the most important things and are in upstream where as the HRM systems should be at the end.

However, in Hyatt the HR Manager is involved in the strategy, together with the Leadership Committee as says Audrey Klotz.

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So the presence of the HR Manager in the strategy confirms that the objective of Hyatt is not just to know how to survive financially but mainly how to manage the employees effectively because they know that they are a competitive advantage for the company.

Conclusion As conclusion for this assessment, we resumed the model of Pfeffer about the 7 keys of HRM practices which could be considered as essential for any company and we decided to add some recommendations for Hyatt to have a more performant model.

Full job security

In order to increase the job security for the employees, Hyatt has to hire sparingly.

It will keep the Hyatt's labour force smaller and more productive than those of its competitors.

The threat of being replaced from employees will disappear and the productivity will be enhanced.

Target selection

Hyatt has to have a larger applicant pool from which select to improve the quality of its selection.

More choices will provide to Hyatt's Human Resources Department more chances to find the perfect candidats who will fit with the Hyatt culture.

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Hyatt needs to continue to give a high importance to the personality of its candidats and to their willingness rather than their academic perfomance to recruit them.

Selected candidats will provide an excellent service as they would have been selected because they share the values of Hyatt.

Workplace teams and decentralisation

All the employees have to continue to feel accountable and responsible for the operation and success for Hyatt, not just a few people in senior management positions.

This will increase sense of responsability, stimulate more initiative and effort on the part of everyone involved.

It will also permit to the employees to pool their ideas to come up with better and more creative solutions to problems.

High pay contingent on organisational performance

Hyatt has to continue to increase its high pay contingent for its employees every year to be competitive against its concurents.

Hyatt should also encourage share ownership.

Employees will improve their perfomances instead of complaing about their pay.

When employees are owners, they act and think like owners.

Employee training

Hyatt has a large choice of trainings for its employees and these trainings have a cost for the company. For this reason, Hyatt should select the most motivated employees for its trainings.

Selected employees will have the willingness and motivation to perfom during the required tasks of these trainings.

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Hyatt has to increase its return on its training. Indeed, the investment put on these trainings will provide to the company a return in a few years.

These returns will motivate Hyatt to create and to bring more and more trainings which is benefic for its employees.

Reduction of status differentials

Hyatt has to continue to use common space like cafetaria where managers eat with employees or uniforms for all the employees for instance.

Hyatt has to reduce the difference in compensation between senior management and other employees.

It will provide the reduction of organisation's degree of wage inequality, particularaly across levels.

Business information sharing with employees

Informations about salaries should be share with the rest of the employees as do a lot of important companies (for instance, every Whole Foods store has a book that lists the previous year's salary and bonus of all 6,500 employees). (Fisherman, 1996)

It will show that there is not inequality between two employees who have the same position in the company for instance and there will be a higher trust in the organisation from the employees.

Even motivated and trained people cannot contribute to enhancing organizational performance if they don’t have information on important dimensions of performance and training on how to use and interpret that information. (Dessler, 1999)

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Appendices Appendix 1: The model of Schuler and Jackson (1987) Business strategy Cost leadership It is the upstream activity and the objective here is to limited the cost so looking for the cheaper way.

The company can use term contract, tight managerial control and low investment.

Differentiation It is about high quality of services in the upstream activity.

Cost focus It is a combination of these two models.

HR strategy Utilisation It is a downstream activity. The upstream affects the downstream and it is a hard model.

Facilitation High commitment for the downstream activity. It is about rewards, etc. People are treated as resources values as in Soft model.

Accumulation Like RBV, in some places I invest in some others ones I do not.

Behaviour Predicable People are used as resources.

Creative This corresponds perfectly with the differentiation business strategy.

Combination Indeed, cost focus uses the combination of two business strategies.

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Appendix 2: Pfeffer’s 7 keys about HRM practices (1998) 

Full job security: employees surely can be fired if they do not perform, but they should not be put on the street quickly because of economic downturns or strategic errors by senior management over which they have no control. An example he frequently cites is Southwest Airlines, which sees job security as a vital tool for building employee partnership and argues that short-term layoffs would "put our best assets, our people, in the arms of the competition".



Target selection: companies should screen for cultural fit and attitude, among other things, rather than just for skills that new employees can easily acquire through training.



Workplace teams and decentralisation: Mr. Pfeffer is particularly keen on the way teams can substitute peer-based control of work for hierarchical control, thereby allowing for the elimination of management layers.



High pay contingent on organisational performance: high pay can produce economic success, as illustrated by the story of Pathmark. This large grocery store chain in the Eastern United States had three months to turn the company around or go bust. The new boss increased the salaries of his store managers by 40 percent to 50 percent, enabling them to concentrate on improving performance rather than complaining about their pay.



Reduction of status differentials: this includes dress, language, office arrangements, parking and wage differentials.



Employee training: the author notes that this activity "begs for some sort of return-on-investment calculations" but concludes that such analyses are difficult, if not impossible, to carry out. Successful companies that emphasize training do so almost as a matter of faith.



Business information sharing with employees: the chief executive of Whole Foods Market has said that a high-trust organization "can't have secrets". His company actually shares salary information with every employee who is interested.

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Appendix 3: Karim’s rewards from HR Department during his internship in a Hyatt Hotel

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Appendix 4: Hyatt’s VRIN framework Value of strategic capabilities: 

World class brands



Global platform with compelling growth potential



Diverse exposure to hotel management, franchising ownership and development platform



Strong capital base and disciplined financial approach



Deep culture and experienced management teams

Rarity: 

Hyatt has created a strong customer image. The hotel provides high services no matter which country or location. This enables the customers to trust in the brand of the hotel as they only expect the best services. The customers’ needs are the priority of the company and the staff members are flexible meaning been multi-skilling and multi-cultural which allow the hotel to serve the customers and reach customers satisfaction. Furthermore, Hyatt consistently receives top rankings, awards and accolades for service and guest experience from independent publications and surveys. Their brand recognition and strength is key to their ability to drive preference for their brands among their associates, guests and owners.



An important aspect of their compelling growth potential is their strong brand presence in higher growth markets such as India, China, Russia, the Middle East and Brazil. The combination of their existing presence and brands, experienced development team, established third-party relationships and significant access to capital provides them with a strong foundation for future growth and long-term value.



The members of the Hyatt family are united by shared values, a common mission and a common goal. The associates at their properties are led by an experienced group of general managers. For example, the general managers at their full service owned and managed hotels have an average tenure of more than 22 years at Hyatt. Regional management teams located around the world support their hotel general managers by providing corporate resources,

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mentorship and coaching, owner support and other assistance necessary to help them achieve their goals. Senior operating management has an average of over 30 years of experience in the industry. Their experienced executive management team sets overall policies for their company, supports their regional teams and their associates around the world, provides strategic direction and leads their global growth initiatives. 

Their owned full service hotels are located primarily in key markets, including major business centers and leisure destinations with strong growth potential, such as Chicago, London, New York, Paris, San Francisco, Seoul and Zurich.



Successful innovation has been a hallmark of Hyatt since its founding. Their dedicated innovation function, with representation at the highest level of their organization, ensures they continuously probe deeper and uncover new opportunities for enhancing the guest experience in each of their brands. For example, in 2012, this team led extensive research and testing in multiple hotels and brands around the world to explore enhancements to their functional design, guest experience, meetings, Hyatt Gold Passport and more. In addition, they have been successful in the introduction of new service models to the industry. They launched their Hyatt Place brand in 2006 and their Andaz brand in 2007, each of which features a unique internally developed service model that eliminates a number of de-personalized aspects of the hotel experience. In 2011, they launched Hyatt House, a revitalized extended stay concept that was designed based on insights gained from guests who frequently utilize extended stay hotels. They also have a long track record of creative approaches to food and beverage at their hotels throughout the world, which have led to highly profitable venues that create demand for their hotel properties, particularly in Asian markets. In 2012, they introduced Food Thoughtfully Sourced, Carefully Served, an industry-leading, global effort and new philosophy to provide healthy, sustainable and responsible food and beverage options for guests and associates. To further demonstrate our dedication to Food Thoughtfully Sourced, Carefully Served, they joined forces with Partnership for a Healthier America, and have committed to continuously enhancing the nutritional profile of food menus at full-service managed Hyatt properties across the U.S. and Canada over the next 10 years.

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Inimitability: 

Hyatt’s human resources are difficult to imitate. Other firms might find ways to do the same routines and procedures but the competitors cannot imitate the human capital that Hyatt poses. The knowledge and skill that the staff members have gained though learning experiences and facing different people of different cultures has given them the key capabilities for the firm. Hyatt was able to motivate their staff members and provide special training for them to become competent in their jobs. The idea of getting the staff members to be able to multi skill was done so that they could work under pressure, work as a team to get the job done, and clean the guest rooms while the customers are at breakfast.

Fast services also create value for the firm’s image and in return, this is difficult for the competitors to imitate.

Non-substitutability: 

Generally, the hotel industry in all major cities is not threatened by substitute products except that in time of recession domestic travel might replace international of overseas travel and certain destinations replace more expensive ones on cost grounds.



It is true that changes in technology alter demand for accommodation as for instance with the video-conferencing sometimes the business man does not need to travel. But the majority of the companies prefer to organize a meeting ‘in real’ mainly for important decisions and the majority of the Hyatt Hotels have meeting spaces which can be booking.



The different categories of hotels proposed by Hyatt allow to satisfy a large choice of customers (from budget customer to luxury customer) which distant the threat of news concepts like AirBnB.

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Appendix 5: Interview of Audrey Klotz, Human Resources Officer in a Hyatt Hotel Good morning Audrey, we are studying Best Practice and Best Fit models in Human Resources Management and we would like to know to what extent does Hyatt is familiar with these models.

First, Best Practice model assumes that there is one best way to carry out HR functions and that this way can be applied to all organisations. Well-known example of Best Practice model is that of Pfeffer. We would like to know how this model is relevant today for Hyatt with the followings components of Best Practice outlines by Pfeffer about:

Full job security “Employment security is a key thing for Hyatt. We do believe to our employees will feel more comfortable and will perform better if they know that their employment is secured (of course we can dismiss employees in case of gross misconduct). We will soon close our restaurant 1901 and trying to find a solution for the people who would like to still work with us. (Interview, empathy chats and transfer to other departments). “

Target selection “For Andaz it is extremely important to have the right person who has the right personality. We always say that we can teach the skills but not the personality.

We do not want our employees to play a role when they work at the hotel, it very important that they feel comfortable and are themselves.”

Employee training “Training is also very important for Hyatt as a company as we want to make sure that we develop our staff, and it is always a good way to retain.”

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Business information sharing with employees “We consider that salary information is sensitive matter, therefore we do not share that we the rest of the staff. Twice a year a General Staff meeting is organised and the General manager shares the “numbers” with all the staff (revenue, etc.) we use BOB, Facebook and emails to share other information. We are open to new ideas and feedback. We can be contacted on all these channels.”

Workplace teams and decentralisation “We empower our team members and therefore team leaders or assistant managers. The manager can then rely on his team and knows that everything will be taken care of. This is a trust relationship.”

High compensation contingent on performance “We generally increase salaries every year of a minimum of 3%. We are competitive and aligned with our competitors. “

Reduction of status differentials/harmonisation “We do not reduce the benefits of our employees, we tend to increase them and try to find new ideas every year!”

Then, in time of recession, does Hyatt change these components or are they globally maintained?

“These components are globally maintained.”

Finally, about the best fit model and strategy, who are involved at the upstream development and is the HR manager involved into this strategy?

“The HR Manager is involved in the strategy with the Leadership Committee.”

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What type of business strategy does Hyatt use between cost leadership, differentiation, cost focus and could you give us an example to illustrate your answer?

“Hyatt uses the differentiation as business strategy which could be justified by the following elements: Hyatt has a lot of categories of hotel like Park Hyatt, Grand Hyatt, Andaz, Hyatt Place, etc. which allows to have two categories of customers luxury and budget, different destinations and a high service and cares about its employees.”

Thank you very much, Karim, Grégory, Anne-Sophie and Gauthier.

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Appendix 6: Pfeffer’s 7 keys in application with Hyatt 

Full job security: it is an important characteristic for Hyatt because with a low job security, employees could not project in the future so they could not produce a hard work in the company. As says Audrey Klotz, employment security is a key thing for Hyatt and they believe that their employees will feel more comfortable and will perform better if they know that their employment is secured. The strong job security provided by Hyatt could be illustrated by the high staff retention and the lowturn over that we saw in previously parts but also by this example giving by Audrey Klotz: soon they are going to close one of their restaurant called ‘1901’ and they try to find a solution for the people who would like to still work with them by interview, empathy chats and transfer to other departments.



Target selection: Hyatt selects its employees mainly on their personality. “For Hyatt, it is extremely important to have the right person who has the right personality” as says Audrey Klotz. They always say that they can teach the skills but not the personality. They do not want their employees to play a role when they work at the hotel and it is very important that they feel comfortable and are themselves.



Workplace teams and decentralisation: Pfeffer is particularly keen on the way teams can substitute peer-based control of work for hierarchical control, thereby allowing for the elimination of management layers. In Hyatt Hotels, the relation between team members and team leaders is based on a trust relationship.

Indeed, they empower their team members and therefore team leaders or assistant managers. The manager can then rely on his team and knows that everything will be taken care of.



High pay contingent on organisational performance: salaries in Hyatt are increased every year of a minimum of 3%. “We are competitive and aligned with our competitors” as noted Audrey Klotz.



Employee training: Hyatt proposes a lot of training and coaching as we saw in the previously part, mainly with the Hyatt Leadership Network (HLN) and their mentoring system. As says Audrey Klotz, “Training is also very important for

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Hyatt as a company as we want to make sure that we develop our staff, and it is always a good way to retain”. 

Reduction of status differentials: Hyatt does not reduce the benefits of its employees, but they tend to increase them and try to find new ideas every year.



Business information sharing with employees: Salary information for instance are not easily share with the staff. As says Audrey Klotz, Hyatt considers that salary information is sensitive matter, therefore they do not share that we the rest of the staff. However, twice a year a General Staff meeting is organised and the General Manager shares the “numbers” with all the staff (revenue, etc.). Concerning the rest of the information, Hyatt put is present on the social media like Facebook and they have recently put a system called ‘BOB’ in different places of the hotel (like a big iPad) which allows to the employees to see general information about the hotel. Hyatt also shares information by e-mail and when important decisions are taken, some managers can send a common e-mail to all the employees of Hyatt in the world. Finally, Hyatt is open to new ideas and feedbacks for its employees.

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Appendix 7: Porter’s 5 forces in application with Hyatt

The threat of entry and barriers to entry: 

A lot of foreign companies are intending to scale up their operations by offering their services in UK in the tourism and hospitality sector.



Entrepreneurs are coming up with innovative services in the tourism and hospitality sector given the amount of scope for growth in the future.

Threat of substitutes: 

Generally, the hotel industry in all major cities is not threatened by substitute products except that in times of recession domestic travel might replace international of overseas travel and certain destinations replace more expensive ones on cost grounds.



We can consider changes in technology which alter demand for accommodation as for instance with the video-conferencing sometimes the business man does not need to travel.



The entertainment industry can be categorized as indirect substitutes because it is something which people tend to spend their money on: for example, a weekend get-away to Theme park or Amusement park could be considered a

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substitute to travelling to a nearby hill station of a famous venue on the weekend. 

AirBnB

The bargaining power of buyers: 

Hyatt is a luxury chain hotel but there are different categories of hotel in Hyatt, so customers can be generally divided into two categories: -

Luxury customer: These types of consumers prefer a better experience with respect to their itinerary or stay: for instance with Grand Hyatt hotels. They don’t mind spending the extra bucks to get the best possible experience.

-

Budget customer: These types of consumers prefer an optimum experience at a small budget: for instance with classics Hyatt hotels.



Within the hotels industry, where switching costs are than negligible and competing on prince alone is no longer a key to success, brand recognition and innovation helps to attract first-time customers and also repeat business. Due to a high reliance on sophisticated technology and systems and the growing importance of mobile communication channels, some suppliers may exert strong supplier power.

The bargaining of the suppliers: 

Property Owners, developers, real estate companies, companies providing services related to interior design, marketing, basic staff in hotel.



Staff costs are significant as success in the hotel industry is strongly influenced by the quality of the service provided. So staff costs have to be high for Hyatt hotels because they provide a luxury service.

Rivalry between competitors: 

The top competitors: -

Hilton group: Hilton, Conrad Hotels and Resorts, Doubletree, etc.

-

Marriott group: Marriott, The Ritz-Carlton, Renaissance Hotels, etc.

-

Starwood group: Sheraton, Le Meridien, Westin, St. Regis, etc.

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Appendix 8: Hyatt’s TOWS matrix

Strengths (S) – Opportunities (O): 

Hyatt has to use its prestige which is been a world class brand to increase its customer satisfaction which is higher than its concurrent like Marriott or Hilton by proposing different services and facilities (as they did when they built two news categories of hotel which are Hyatt Zilara and Hyatt Ziva).



Furthermore, as global platform Hyatt operates in key markets including major business centers and leisure destinations but also in higher growth markets which give them the opportunity to touch more customers and at the same time to increase their satisfaction.



Thanks to these two strengths, the relations with travels advisors which is already excellent, will increase by the arrival of news customers from different countries and Hyatt is going to have more and more awards from Trip Advisor like Certificate of Excellence for instance which will attract more customers because when a customer see that is is more likely to choice this hotel.



The deep culture and experienced management teams of Hyatt encourage the staff retention so employees provide an excellent service because they are

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proud to work for this company which can create lasting positive experiences for customers. 

Finally, thanks to all its strengths, Hyatt will be able to pass in front of one of its mainly concurrent which is Hilton because Hilton has greatly reduced its sales force, so it is the moment for Hyatt to expand its force to “eliminate” Hilton from its rivalry, and by the same time, increase the power in its comparative structure analyse.

Strengths (S) – Threats (T): 

Hyatt has to use its world class brand and its global platform to use more the technology for its services which can bring them more customers because as we saw in the macro environment, some of its rival like Marriott are in front Hyatt about the technology and their customers can for instance already pay with Apple Pay. These type of details can appear anodyne but customers want the facility to book their services so they are not going to choice one hotel instead of an other just because it is more easy to book services.



Finally, Hyatt has to use its experienced management teams to try to find better discounts to increase its customer satisfaction. Indeed, its mains concurrent have already the same type of loyalty program as has Hyatt and furthermore they propose better discounts for the new potential customers like “Look No Further” from Marriott which guarantee you the best rate and if it is not the case you can have 25% off on the price of your room and which had special rates for beds and breakfasts during 2013 and 2014 or Hilton which allow costumers to have points for free flights thanks to its partnership with airlines companies.



Experienced management teams of Hyatt could be also use to exploit more opportunities thanks to the technology as we saw before.

Weaknesses (W) – Opportunities (O): 

Even if there is a limited market share due to tough competition from international and domestic players, Hyatt can use its customer satisfaction which is higher than its concurrent to overcome that. The customer satisfaction will do the difference between the hotels and its excellent relation with travel advisors as we saw like Trip Advisor is very important. Indeed, the majority of

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potentials customers now before to choice an hotel they prefer to read the comments about the hotel on Trip Advisor for instance because customers can directly share their impressions. 

Furthermore, some of its rival like Hilton for instance have greatly reduced their sales force so it is a good opportunity for high because the market is going to be less limited.



Finally, about the last weakness of Hyatt which consist to have less locations world-wide compare to its key concurrent like Marriott or Hilton, thanks to the globalisation and the new categories of hotels proposed by Hyatt, this weakness should be overcoming quickly. Furthermore, Hyatt operates in higher growth markets like Russia, Brazil, India or the Middle East which is going to give them the opportunity to extend their locations.

Weaknesses (W) – Threats (T): 

By creating new types of category of hotels and by proposing new services and facilities as we saw with Hyatt Ziva and Hyatt Zilara, Hyatt will be able to overcome this limited market because they are going to propose something new for its actual and potential customers.



Furthermore, this expansion could be accompanied by some progress in technology, like already did Marriott with Apple Pay, which will allow to the potential customers of these news countries to book services easier and by the same time increasing the customer satisfaction.



Finally, by proposing new locations thanks to its new categories of hotel, it could be the right moment for Hyatt to innovate about its discounts system and proposing more discounts for its potentials customers which will allow it to have more opportunities to have news customers.

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competitive-forces (Accessed: 15 January 2016).

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Planning DATE 15/10

23/10

05/11

11/11

18/11

26/11

08/12

WORK DONE

OBJECTIFS FOR THE NEXT MEETING First meeting to determine the Starting the research of choice of our company: we information about Hyatt’s decided to choose Hyatt strategy, culture and HRM. Hotels.

We shared together the Collecting information information that we found about HRM in Hyatt mainly during the week and we what key initiatives HRM picked up the mains function can take. information.

We summarised information Collecting information for that we collected. We decided the introduction mainly on to start the introduction by the book “Human finding information about Resources Management in HRM and mainly its Ireland” that we study in development. course and also for the mains models of HRM (Soft/Hard HRM and Best Fit/Practice).

We summarised all the Continuing to collect information for the information about the introduction and we started mains models of HRM. the presentation of the mains models of HRM. We summarised the Collecting information information about the mains about the different aspects models and we started to find of the mains models for information about all these Hyatt practices. models for Hyatt Hotels.

We summarised all these Continuing the analyse information for the different between the theory of these parts of the mains models and models and the practices of we started to analyse the Hyatt. difference between the theory of these models and the practices of Hyatt.

We finished the analyse and Finishing the conclusion by we started to find some ideas adding recommendations for the conclusion. We to improve this model for decided to resume Pfeffer’s Hyatt. model about the 7 keys and to add some recommendations for Hyatt to have a more performant model.

PRESENT All

All

All

All

All

All

All

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13/12

We put in common all the Starting the design of the recommendations and we assessment, the table of built the conclusion. contents and doing the appendices.

All

16/12

We chose the design and we Reading the assessment finished the appendices. during the holidays to avoid potential mistakes.

We corrected the mistakes Upload the assessment. that we found during the holidays and we built the references.

All

13/01

All

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Contributions During all the development of this assessment, we believe that the workload was shared equally among each group members however we recognize that Karim was the most involved given the fact that he already did an internship in the company and he wants to work into this company in the future.

When we met us for the first meeting to choose our company, we decided to take Hyatt for different reasons: the hotel industry is a growing sector, in the majority of the courses in the Dublin Business School we speak about the different aspects of this sector so the information collected helped us for this assessment, because the role of the Human Resources Department in Hyatt Hotels is essential maybe more than into other companies and finally as Karim did an internship in Hyatt Hotels, it was very interesting to collect his experience and his feeling mainly about the practices of this company although the employees to have a plus value for the assessment.

In the first meetings, we all collected information about Hyatt’s strategy, culture, HRM and about the development of HRM. We summarised information and we built the introduction.

In the following meetings, Grégory, Anne-Sophie and Gauthier built the presentation of the main models and Karim used these main models to put them in relation with Hyatt in order to built the case study with his precious information from his internship and the analyse between the theory and the practices. Grégory, Anne-Sophie and Gauthier also added capital information for these parts which allow us to have at the end a performant main body.

Finally, in the last meetings, we all found that it would be a good idea to resume the Pfeffer’s model about the 7 keys as conclusion for the assessment and to add some recommendations to give a more performant model for Hyatt. No one was unwilling to contribute their fair share. We believe everyone finished their parts well and in time.

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