Reference no: EM131061900 , Length: word count:2500

InterContinental Hotel Brisbane case study

InterContinental Hotels Group PLC informally IHG is a British multinational hotels company headquartered in Denham, UK. IHG has over 710,000 rooms and 4,800 hotels across nearly 100 countries. Its brands include Candlewood Suites, Crowne Plaza, Even, Holiday Inn, Holiday Inn Express, Hotel Indigo, Hualuxe, InterContinental and Staybridge Suites. Of the 4,602 hotels, 3,934 operate under franchise agreements, 658 are managed by the company but separately owned, and 10 are directly owned. The InterContinental Brisbane (a fictional hotel), a four star deluxe hotel in the heart of Brisbane, is owned by IHG Hotels and was opened early in 2010 with 1019 bedrooms in total. Since opening the hotel until 2012 it operated very successfully with high occupancy, but was closed after the Brisbane flood for repairs for 6 months, and more recently has been experiencing significant fluctuations in demand.

In the hotel, the housekeeping department personnel, room attendants, are responsible for cleaning the rooms and associated public facilities areas, the offices, the recreation facilities, and all public restrooms. The housekeeping department operates an in-house towel and sheet laundry, as well as a uniform room, which is responsible for washing uniforms and guest laundry in-house. The daily activities of cleaning hundreds of rooms, dozens of meeting rooms and offices as well as all the public washroom facilities is a highly repetitive task; arguably like an assembly line type process. The housekeeping management team has to balance productivity and quality to ensure that the department operates efficiently and effectively and to the satisfaction of the guests, while ensuring employee satisfaction and motivation of the biggest department in a hotel at the same time. Housekeeping is costly and can represent up to 10% of a hotel's operational costs - it's the department whose payroll makes up the largest single line item in any hotel. Productivity of room attendants is important and defined by number of rooms cleaned per person in a defined period of time. Quality is also important and is measured to ensure that hotel and cleanliness standards are met to ensure that customer expectations are met or exceeded. Therefore most hotels implement systems of performance measurement and management tools.

In 2010, the newly appointed Head Housekeeper introduced formal standard operating procedures and non-financial performance measures. First, to get transparency and a basis for workload assignments a credit system for different room categories (King, Deluxe King and 3 types of suites) was introduced. Due to the size and the setup of rooms and number of beds, some rooms take longer to clean than others. There is also significant variation in time taken to clean rooms depending upon the state of the room or whether they are ‘checkout' (customer checking out) or ‘occupied' (just make the bed and refill toiletries) rooms, but this is not acknowledged in the credit system. The credit system is used to automatically assign workload to the room attendants each morning and to attempt to distribute the work fairly. The credit system ensures that productivity can be calculated and monitored. Second, lateness, absenteeism and sickness are recorded per employment type and this is reported monthly. The figure, percentage of shifts that were not started on time or had to be covered, is tracked over the year to identify trends. The credit for a King room is 20 minutes and a Suite is 25 minutes. Typically, full-time room attendants have a KPI target of cleaning 22 rooms in an 8 hour shift. To ensure quality of housekeeping operations, a spot checklist per room category is used for checking room attendants' performance against 4 KPIs (e.g. bathroom cleanliness). Housekeeping related scores and customer feedback are reported in regular team meetings (which directly employed room attendants are paid for and agency workers are not). Steps are taken to performance manage directly employed attendants and agency workers who do not achieve desired KPIs.

When the hotel opened in 2010, all the room attendants were directly employed on a permanent full-time basis (38 hours per week). The hotel only recruited women and preferred older women with minimal caring commitments. The result was a female room attendant workforce with an average age of 45 (now around 50). More recently, because demand has become more unpredictable, the hotel has started using labour hire agency workers. These agency workers are recent migrants to Australia from Asian countries aged in their twenties, who are largely working on restricted visas on a casual basis (frequently international students). The current employment mix is 50% directly employed and 50% labour hire. This shift in the employment status has been achieved by natural attrition; as directly employed workers leave they are replaced by agency workers. Directly employed workers are aware of this shift in employment status.

All workers spend longer than the allotted time to clean rooms, but the effects of this are experienced differently depending on employment status. Agency workers are paid according to a ‘credit' (piecework) system where they are paid per room (20 minutes for King and 25 minutes for Suites) based on a proportion of the minimum award rate. Agency workers spend considerable unpaid time waiting for guests to vacate rooms and moving around the hotel to get to their next room. This means that agency workers waste potential working time which lowers their average hourly pay rate to below minimum award rates. Most agency workers do not make time to take meal breaks because this is time that they could be cleaning and being paid. Because they are paid per room cleaned, agency employees clean rooms at a fast pace. Agency workers generally work part-time hours and their working hours and pay rates fluctuate based on hotel occupancy. Since they are employed by an agency they may work across different hotels, not just the InterContinental.

On the other hand, directly employed attendants are paid an hourly rate, based on minimum award rates, regardless of how many rooms they clean (although they are expected to achieve KPIs). They are not as rushed for time as agency workers and take regular scheduled breaks throughout the day and can ‘fiddle' time by taking a long time to walk between rooms. Directly employed workers are also rostered to work in the laundry or uniform room, so they get a break from non-stop room cleaning. Working in the laundry is a preferred job because it is not as physically demanding as room cleaning and there is a lot of non-work time associated with waiting for machine cycles to finish. While management try to rotate workers through the laundry, some directly employed workers seem to be rostered there more frequently than others. The directly employed room attendants are happy with their jobs and with the hotel's management. None of the employees are union members. There is no evidence to suggest that the agency workers are union members either.

Housekeeping in a hotel is a very physically demanding job that includes many, varied tasks. A housekeeper carries out the following tasks: making beds, tidying rooms, cleaning and polishing toilets, taps, sinks, bathtubs and mirrors, washing floors, removing stains and vacuuming. The most common work-related injuries among attendants are manual handling injuries and injuries relating to work pressure/over-exertion and equipment used on the job. The main causes of manual handling injuries are the tasks involved in the attendants' job, particularly when these tasks are performed repeatedly throughout the day, over successive days, and over years. The severity and long-term duration of injuries among attendants is an issue of concern to the hotel's managers given increasing Workcover premium costs (only applies to directly employed workers). The stature of agency workers (small, mainly female workers) and the age profile of directly-employed room attendants are acknowledged to be injury risk factors. Two elements of attendants' workloads contribute to injury risk: increased workloads (room quotas, and a greater proportions of checkout rooms within quotas); and attendants rushing tasks to complete their daily quota. However, rushing was primarily a cause of injury for agency workers paid piece rates and therefore not a financial cost for the hotel, but it may be viewed as an ethical concern.

To more efficiently deal with fluctuating demand and housekeeping demands, the hotel decided to introduce a software package called Optii Keeper to manage occupancy and room attendant workloads. The software recognises that a lightly used room occupied by a conference guest might take 15 minutes to clean on a refresh day, whereas a room that's been lived in and dined in by a family with two children, over three days, might take an hour to clean on a check out day. Same room type, but it's a different burden. Optii Keeper estimates cleaning times by examining occupancy in the room, guest type and use-pattern. It then reliably predicts, manages and optimizes housekeeping schedules in real-time using an automated system, with personal digital assistants (PDAs) for housekeeping staff. Optii Keeper dynamically automates workflow schedules, shows cleaning progress in real-time, streamlines communication with room attendants and provides a performance management system which highlights areas for continuous improvement. For room attendants, an electronic housekeeping schedule is provided on their PDA at the start of each day, and this is updated in real time as it changes (when customers check out), so it eliminates waiting time. The PDA also means that management can physically locate any room attendant at any time.

After the introduction of Optii Keeper, the performance of directly employed room attendants has gone up significantly and this has allowed housekeeping management to focus strategically on performance shortfalls. The software distributes the workload in a fairer way with less favouritism, (every directly employed worker is rotated through the laundry and uniform room) and this has had a positive impact on team performance of directly employed workers. Room attendants are able to see that each worker has to ‘pull their weight' and there is no favouritism towards certain team members. The system has, however, resulted in significant work intensification for directly employed room attendants as there is no ‘waiting time' or large distances to travel, since the software allocates the closest vacant room. The system also allocates rooms that are predicted to be long cleans (large family Suites with long occupancy) to directly employed workers. The target of 22 rooms per day has been removed as a KPI; instead there are task-based performance targets, based on room and guest type and occupancy.

For agency workers, the software has eliminated the need for unpaid time waiting for customers to vacate rooms, so they can earn more on their piece rates than previously. Piece rates have not been changed, regardless of time estimates in the Optii Keeper system, so agency workers still perform unpaid labour if a King room takes more than 20 minutes to clean, but agency workers are given priority in the software for the lightly occupied rooms that are quicker to clean so they are earning more for their time worked. They are happy with their higher pay. Agency workers still have highly variable working hours though - 2 hours one day and 6 hours the next - due to fluctuations in occupancy and this affects their earnings. All agency workers would prefer to be directly employed by the hotel and have consistent working hours.

After the implementation of the software, starting times, number of shifts started on time and the amount of minutes of working time lost became the focus of attention of the housekeeping management team as well as of the hotel management. The availability of the data "forced" the housekeeping management to look into the matter. The software enabled the management team to follow up with individuals to discuss poor performance and "return to work interviews" were introduced after room attendant's absences. These changes educated the housekeeping team, and made them understand that it is important to show up for work on time as otherwise the behaviour of one person has an impact on the workload of others. Furthermore, the management team got tougher and started to send room attendants, directly employed and agency workers, home if they showed up late (directly employed workers are docked a day's pay, and agency workers are unable to get any pay for the day). Since the PDA allows management to see where room attendants are in real time, management implemented very regular spot checks (sometimes several times a day). Management display the names and scores of room attendants in a league table, and introduced rewards (free meals and accommodation) for top performers. The hotel management are very pleased with the performance improvement after the introduction of Optii Keeper and think that the cost of the PDAs and the software was a worthwhile investment.

QUESTIONS: Each case question is a separate essay worth 25%, due in different weeks - you only complete ONE question.

• Employee or Contractor -

The Head Housekeeper was employed as an independent cleaning contractor five years ago; was given an Intercontinental uniform and required equipment including a computer and appropriate software, was primarily unsupervised during her work, was dismissed recently following several room complaints. She believes she has been unfairly dismissed and wants to take an action. The company maintains that she is not an employee, but an independent contractor and is therefore ineligible to make a claim. You are to discuss the general context of the legal tests used to determine if a worker is an employee or an independent contractor; the economic dependence test and the multi-factor test. By exploring their use, their elements and characteristics, and any issues related to the test(s) that might be problematic you will provide a context for their application to the case study material. In your conclusion show clearly your determination as to whether she is a contractor or and an employee and therefore whether she is entitled to take action against the firm. You can use precedent cases.

• CONTROL -

The PDA, and the surveillance capability associated with it, gives management total control over the housekeeping workforce. Discuss

• TIME AND WORK -

The Optii Keeper software has removed any chance of directly employed workers ‘making' or ‘fiddling' their working time. Discuss

• EEO and Diversity -

The Hotel has an employment policy to hire Indigenous workers through their special indigenous unit. Recently complaints have been received by the hotel from other workers that the use of this special employment unit amounts to Racial Discrimination. This unit provides special measures and services through a room available only to Indigenous employees. Discuss

• REPRESENTATION and VOICE -

The hotel's existing directly employed room attendants have little voice within their workplace and their concerns continue to grow regarding the outsourcing of their jobs to agency workers; the potential for a reduction in penalty rates; the increasing surveillance of PDA. Discuss their options.

• HEALTH AND SAFETY -

The hotel is proud of its WHS record. In the employees lunch room there is a large board that indicates incident occurrence and outcomes and promotes the minimisation of WHS risk. However Agency workers are not included on the Health and Safety Committee and directly employed room attendants are concerned with additional and unnecessary risks being taken by Agency workers. Discuss the options for management and workers

The research stage-

Step 1- Read the case and identify your topic.

Step 2 - Identify information in the case that might be relevant.

Step 3- Identify key search words, concept or topics and synonyms for those terms.

Tips:

-Terms may be truncated e.g. manag*
-Structure your search using Boolean operators (and, or ,not), e.g. hotel* and work NOT (design and construction)

Step 4- Search QUT library website and final appropriate peer reviewed literature. Read and take notes, or highlight print or digital copies. As you read ask yourself, what are the key arguments in this article?

Step 5- Once you're across the argument in the literature, and aware of the research evidence, start to structure an essay draft
Ask yourself:

-What is your argument going to be?
-What theory are you going to use to help structure your argument?
-Do you have evidence for AND against a position?
-Have you considered the employer's perspective AND the employee's perspective?
-Employment is affected by institutions (law, unions, employer associations and societal standards). Have you considered relevant institutional factors?

Step 6- Check structure requirements for a case-based essay (introduction, body text and conclusion).

Step 7- Insert your material into the sections.

2500 words.

14 refereces.