Revitalizing Workforce Engagement: A Strategic Approach for Fresia Hotel, Sydney

Question

How can Fresia Hotel in Sydney overcome challenges related to high turnover, low employee motivation, and limited career progression to enhance its overall workforce engagement and operational efficiency?

Answer

Executive Summary

The report addresses the issues of Fresia Hotel in Sydney Australia. Fresia operates its 5-star hotel chain in multiple locations around the world. The Sydney hotel started facing issues with high turnover and lack of employee motivation post its management stance of reducing additional staff resulting in increased work load on employees as a result of 4.6% award increase to staffby hotel association.The report suggests appropriate solutions to the 3 major issues identified in the hotel.

Introduction

This consultancy report involves suggesting economically viable and practical solutions to the fundamental issues that Fresia hotel currently faces. The issues include lack of proper rewards and remuneration, high turnover rates and lack of progression resulting in a volatile and demotivated employee base. To solve these issues the management needs to take prompt action to retain skilled employees and provide motivation to the existing staff which would ultimately help in reducing the number of customer complaints and increase number oof booking thus profiting the business. Recommendations to the issues involve introducing structure of performance-based appraisals, bonuses, training opportunities for employees and establishing system of promoting skilled employees to higher management levels as well as internal recruitment systems. These recommendations are designed to address the issues of high turnover rate, high costs of recruitment, low employee morale and loyalty and diminished image of the brand as an employer.

Issue Identification and recommendation

Issue 1

The first issue is associated with the hotels lack of proper remuneration structure. In response to the improved employee entitlements (4.6% increase) to staff the management increased the work load of staffs by recuing the staff numbers and withdrawing any additional pay schemes like overtime pay, shift allowances, lack of additional staffs and long working hours without breaks overtime pay. This resulted in an unhappy employee base which delivers less than quality services to the customers.

The management of the hotel must develop a culture of valuing staffs and establish a formal structure of rewards and remuneration. Employees should be given yearly appraisals and bonuses based on performance which could vary between 2%-5%. Establishing performance-based bonus and rewards scheme would not only encourage employees to perform better at work but would also ensure that organisational budget is not hugely affected as instead of paying a flat rate pay raise to all, the amount would vary depending on the performance of employees (Naisa and Gnanasekaran 2020). As per Herzberg’s two factor theory, rewards and remunerations are vital motivational factor that influence the hygiene factors such as job satisfaction resulting in a appropriately motivated employee base (Thant and Chang 2021). Proper rewards and remuneration structure would help in reducing the attrition rates of the employees. The payment structures of entry level jobs at hotel should be revised where the basic pay could be risen by 2% with provision for shift allowances and yearly performance bonuses. While this would transiently increase the operational costs, cost associated with recruitment and training could be reduced due to lowered employee turnover rates.

The recommended strategy would benefit the employees but would also impact the local governments with increased taxes paid by employees due to revised pay. The reduced turnover rates would improve business performance which would directly impact the hotel board of directors. The employees would be impacted the most with revised payment resulting in a skilled and motivated employee base (Curzi et al. 2019).

Issue 2

The second issue involves lack of retention. The hotel does not provide basic employee benefits also lacks decent salary structure. The staffs are underpaid and overworked resulting in an extremely unhappened and undervalued employee base. This has resulted in employees leaving the organisation and high turnover rates. As a result, the operational costs have increased and costs of recruitment and training have creased. The hotel has lost its old staffs due employees switching jobs.

The organisational management is recommended to take strategic steps to reduce turnover rates of employees. Organisation in order to retain skilled and loyal employee base should start with revising payment structure and introduce provisions of performance-based appraisal and bonus schemes. To increase motivation the organisational management should focus on increasing the job satisfaction of the employees by providing them opportunities of growth (Wang and Wang 2020). This can be done by providing upskilling trainings. Instead of using organisational financial resources in recruiting new employees who needs to be trained also, management should use the finance to retain the old staff by introducing medical benefits, overtime payment, yearly bonuses. These will ensure job satisfaction among the employees as well as better performance levels (Masri and Abubakr 2019). A cost benefit analysis of the suggested actions can be done which will show that benefits outperform the costs considering that costs associated to recruiting new employees are much more.

The suggested action would impact the stakeholders such as management, employees, customers and society. The management will face lesser complaints relating to unskilled employee base. The employees would receive financial benefits befitting their job roles and efforts. The customers would receive better services from the employee end and business will benefit and would pay higher taxes that helps in uplifting local community and society.

Issue 3

The third problem that the organisation is currently facing is lack of opportunity for progression for employees. According to the employees there is no scope for promotion in the organisation thus their career does not progress according to their skills and professional experience. Professional experience in the service sector especially in the leisure industry so highly valued as a seasoned employees have more knowledge on handling difficult situations. The organisation lacking this aspect is in loosing valuable employees to its competitors. Also, instead of promoting skilled and experience employees to higher management roles, recruiting new employees incurs higher costs.

The management of Freesia Hotels are recommended to establish a culture and system of promotion in the organisation through internal recruitment. In this system, the organisation may publish notice for vacancies to the existing employee base where employees can apply to job roles suitable as per their skills and experience. Based on performance and experience skilled employees can also be promoted to better positions (Haryono et al. 2020). First this will allow the organisation to fill higher positions with only 10-20% pay raise where recruiting from outside would require a minimum of 30% pay raise to the last drawn package. Secondly, this will ensure loyal employees who as well versed in the organisation’s culture and environment are given higher management positions.

This system would benefit both management and employees. The management would receive more loyal, knowledgeable, skilled and dependable employees in leadership and managerial positions. The employees would receive opportunity to advance their career while serving in the same comfortable work environment which will also be motivating to them (Aburumman et al. 2020). The organisation would reduce costs of recruitment in higher management positions through this process. Their reputation as an employer would improve attracting more skilled employee base.

Conclusion

The report recommended strategic solutions to the 3 fundamental issues that Freesia Hotels are facing. These issues were lack of proper remuneration structure, high turnover rate of employee’s lack of opportunity of career progression. These issues have given rise to various associated problems such as low employee morale, lack of employee engagement, low motivation, high costs of recruitment and diminished brand image as an employer leading to not being able to attract best employee base for the organisation.

By applying the strategic solutions of establishing structure of performance-based appraisals, bonuses, training opportunities for employees and establishing system of promoting skilled employees to higher management levels as well as internal recruitment systems the organisation will be able to address each of these issues appropriately and regain its former glory and reputation in the Australia leisure industry. However, in order to actualise the management first needs to change its attitudes towards the employees and accept them as valuable assets to the organisation.