Strategic Human Resource Management at the Shangri-La Group

Strategic Human Resource Management at the Shangri-La Group

• Introduction

This report entails a critical analysis of strategic Human Resource Management at The Shangri-La Group of luxurious five star hotels and resorts. Shangri-La Group of hotels and resorts is an award winning chain of hotels that originated in Asia. Most of the hotels affiliated to Shangri-La are based in Asia with other multinational chains spanning across Europe, America and Europe. These groups of hotels currently boasts of running more than 60 lavishly furnished hotels operating in the competitive hospitality industry. Among the services offered at the hotels is accommodation, catering services, wellness concept and spas. It also runs recreational clubs at the Hong Kong based Aberdeen Marina Club and Xili Golf and Country Club at Shenzhen in China. The hotels logo is represented by a letter ‘S’ while its organizational culture is borrowed from the Asian hospitality industry.  The chains of hotels mission is geared towards serving individuals who are proud of their achievements but are humble enough to show humility to other people. as a result this report applies the contingency model of HR management strategies, control based and resource based models while at the same time incorporating personnel, generalist, outsourced, centers of excellence as types of HR strategies.[1]

• Brief Company Background of The Shangri-La Group

Shangri-La runs most of the prestigious hotels around the globe with the main hotel being in the Asian Pacific. There is no doubt that the main Shangri-La hotel at Hong Kong has been the leading luxury hotel in the Shangri-La Group because of its seasoned management which has translated to continued success. In addition, the ownership structure of the hotels and resorts has been applauded for exhibiting excellence which has translated into efficiency and profitability.[2] Research into the human resource management structure of the Shangri-La Hotels and Resorts illustrates that the firms’ consistency starting from the upper management to lower management has been facilitated by their selection of employees based on academic merit.

As a result the leadership team at Shangri-La is made up of the best brains and talents in the Asian hospitality industry. Statistics presented by the Human Resource Department indicates that most of Shangri-La employees have a working experience of more than twenty years. At the organizational level, most of the hotel and resorts employees are moved up the ranks through promotions. In the event that an employee is noted with leadership talents, they are selected, trained and upraised into the management team. This means that the promoted employees have internalized the Shangri-La Hotels organizational cultures. The other characteristic reality about the human resource team at these chains of hotels is that its employees are from different nationalities.

The hotels emphasis on diversity has enabled it to employ people with multinational understanding of foreign cultures and this has attributed towards continued success. Most of Shangri-La’s corporate officers have a wide knowledge of international markets. Apparently this understanding of international perspectives has been resourceful when handling management and operational issues.[3] In order to reach out to a larger market group, the Shangri-La Group of Hotels and Resorts has continuously made attempts to widen their scope of operations through a rapid worldwide expansion plan. With this plan, there arises the need to analyze human resource management strategies that have been put in place for The Shangri-La Hotel: The Shard which is located at the London Bridge in the United Kingdom while other chains of hotels affiliated to Shangri-La Group can be found in Asia, Europe, Middle East and North America.

• Critical discussion of the importance of strategic HRM for The Shangri-La Group at its new proposed London location.

Setting up a new branch could be the trickiest part of the human resource management for Shangri-La Group of Hotels. This is basically because human resource management is a critical process that deals with the identification of the needs of human resource and designs strategies in order to help them attain the organizational goals. By default, human resource represents the backbone of the hospitality industry because the industry is service oriented. In the case of The Shard at London Bridge, HRM will serve the purpose of linking human resource and strategic plans of the larger organization.  With this objective in mind, there arises the need for extensive recruitment by the HR department in order to fill up the new premises with not only qualified but also efficient employees who understand the organizational culture. In addition, there is much pressure on the HR managers to identify and recruit qualified employees who will enable The Shard branch of hotel to satisfy the goals and objectives set by the parent organization – The Shangri-La Group.

Other importance of HRM as exhibited at the Shard appreciates that HRM plays the pertinent role of ensuring that the organization attains legal requirements stipulated in labor laws, it contributes towards organizational performance by matching corporate strategies such as performance and human capital management. The purpose of achieving a successful corporate fit between strategies and structure is further facilitated by the HR manager who also strives to improve the performance of the organization by attracting the right kind of employees, appraising them through training and ensuring that they are properly compensated. The manager moreover aligns HR to all the other organizational functions to achieve efficiency in the use of organizational resources. By appreciating the importance and purpose of HRM at the Shangri-La Group, the organization will be able to perform well by attaining consistency in its value proposition while maximizing on its value chain.

Because of the imminent pressure to perform like its predecessors, the new hotel will need to plan on the creation of employer brand, absence management schemes, retention, flexibility, talent management, employee selection and recruitment strategies. For the sake of attaining best practices at the proposed London location, the HRM team will further have to write down strategies describing what the new branch needs to achieve in a given time-frame, the number of employees required in each phrase of development and growth and lastly the HRM team needs to identify the type of human resource that the new hotel will require.[4] All this strategies will be helpful in helping The Shard at London Bridge to not only pursue its own goals but also those of The Shangri-La Group of Hotels and Resorts. For the achievement of best results by the HR department, there arises the need to embrace the competence based management strategies which supports a tactful assimilation plans as stipulated by the human resource manager and those made by the parent organization. By so doing, the importance of HRM is further exemplified when it assesses the suitability of its employees in relation to key competencies presented by The Shangri-La Group.

Among the competencies are vision and mission statements, goals and objectives which determine the direction in which the management team should control the organization into. It is after plans have been made that targets can be broken down and issued to each and every employee for ease of achievement. Furthermore, planning is essential in identifying employment gaps which can be handled through hiring of new employees to solve staffing problems. Apparently other issues relating to employee motivation could trigger review of remunerations of salaries and rewards.[5] In the event that the HRM notices laxity, absenteeism of reduced motivation among employees then measures aimed at career development and learning should be incorporated into the long term plans of The Shard Hotel. In order to keep abreast with the organizational culture of The Shangri-La Group of Hotels and Resorts, The Shard at London Bridge will need to identify employees with leadership abilities and train them in succession management.

The Shard Hotel will also benefit from efforts made by the Human Resource Management in monitoring the employees from time to time after which their performances will be evaluated with regard to productivity and customer satisfaction. Other parameter could be assessment of absenteeism, lateness and general laxity at the place of work. The results derived from the evaluation process will be vital in steering the new hotel into the desired direction through filling in of the competence gaps identified.

• Critical evaluation of a range of human resource strategies currently used by the Shangri-La Group

The human resource strategies employed at The Shangri-La Group entails a top down systems of management where by authority is passed down from the top management to the subordinates. This has made the prestigious group of hotels to be identified with formality and hierarchical leadership structure. Furthermore this HR strategy has been influential in propagating the control based management rather than the commitment based. Whereas the former emphasizes on control of employees by the managers, the latter is liberal as it appreciates the independence of the employees as well as their creativity in providing solutions to organizational problems. The control based and the commitment based models replicate Gregory McGregor’s theory X and Y respectively where The Shangri-La has been associated with control based management as well as the application of theory X.[6] Theory X emphasizes that all employees are lazy and thus they have to be pushed for them to perform which then reflects the control based model applied at the Shangri-La.

With this knowledge, it is rife that the management structure of an organization is of essence to the human resource management team in the sense that their strategies need to be passed at a departmental level after which they are assessed and evaluated by the board of governors at the main headquarters in Singapore. Such a strategy was put in place to ensure that all the decisions put by the affiliate groups are in line with the overall vision, mission, goals and objectives of The Shangri-La Groups of Hotels and Resorts. Among the current strategies recommended by the headquarter branch involves selection of employees on merit. In addition to this strategy the organization does not encourage unionization of its employees despite being a basic requirement among key employers most of the countries where it operates.

This strategy has been attributed to the inconveniences that could be caused by mass actions called by labor unions during peak seasons.[7] The hotels and resorts might lose out on their reputation which has taken them considerably long to build. Despite putting in place such strategies, the firm is quick in handling employee grievances so as to reduce any hindrances to achieving ultimate customer satisfaction. Owing to this strategy that is implemented at the parent Shangri-La hotel, it is mandatory that all the affiliates’ employees shun labor unions despite the collective bargains that employees enjoy from the unions. According to reports made by the labor union in the United Kingdoms, there are laws excepting companies from unionizing their employees. But the applicability of such laws is pegged on the achievement of certain requirements that are set by the government. Among the requirements include attainment of ISO certification, payment of wages beyond a certain minimum limit and the need for security measures in case employees feel oppressed by the management policies. The Shangri-La Group has been on the forefront in achieving these strategies in order to avoid tainting its reputation arising from striking employees or demotivated human resource.

The third strategy is the management appraisal process which intends to nurture in-house talents identified among the employees. In order to maintain the Shangri-La Group companies culture, there has been a strategy of training and appraising employees who merit into the management positions. This strategy is motivated by the need for employees to fill appreciated. Employees are happier when their talents are noted and rewarded accordingly.[8] Also, promotion of employees into management position encourages other employees to work harder so as to get promoted into leadership positions. On the side of the Shangri-La Group, the company has continuously benefited from proficient staff promotions. This is because the employees are first trained and later nurtured into admirable positions. The fact that the employees promoted have been loyal to work for the company for more than ten years has the implication that they would have internalized the company’s culture of continued excellence.

All in all The Shangri-La Group lacks defined plans for transforming their organizational culture and strategies. The continued inheritance of the same culture time and again has deterrent their attainment of maximum profitability and maximization of stakeholder’s value since the organization has bound itself to traditional management structure and strategies. Despite employing talented top managers and staff, Shangri-La lacks a definite strategy for transforming its structure to march up modern organizations. This has limited this group of hotels from being on the fast lane in embracing technological advancement. For instance the 2008 Global Recession drove the Shangri-La Group into cutting down on employees was rather more selfish and demotivating on the side of the employees. Even though the strategy was applauded by the management as a cost saving strategy, the employees were demotivated because of fear of the unknown. In order to avoid such unpleasant scenarios in the near future it is recommended that the Shangri-La Group of Hotels and Resorts looks into matters relating to restructuring of the organizational structure followed by transformation of their organizations strategies.

• Recommendations for developing upon human resource strategies currently used by the Shangri-La Group for their new London location

In order to develop human resource strategies used The Shangri-La Group the Shard located at the London Bridge, the management of the new hotel will need to look into the factor of employee motivation. This factor is seconded by the contingency theory of management which stipulates the need for adequately compensating employees[9] (Seyranian 2010). The contingency theory contains multiple behavioral theories and the bottom-line for the application of the theories is that there is no best way to manage employees. This demands that leaders should embrace considerate decision making, which further reflects the Fred Fiedler’s definition regarding contingency model. The main problem likely to face the implementation of change is the supported by the critical argument that institutionalizing change in affiliate companies is a hard endeavor. This is because psychologists identified change as the most daring part of the management process.[10]

Generally, change is among the most discussed topics at the work places. Seemingly, employers at The Shard Hotel in London are even more afraid of change than their newly hired employees. The change model stipulated by Kubler Ross comes in handy in shaping the perceived attitude and possible resistance to change. The five stages beginning with denial, anger, bargaining, depression and finally acceptance.[11] The employees have to be prepared psychologically so as to comfortably pass through these stages with the least resistance. Because of the anticipated resistance likely to emanate from the recommended structural changes, employees at the new location in London have to be coerced into understand that change is unavoidable and given the need to increase profitability and efficiency, then there arises need for structural and strategic changes[12]. The human resource manager could also work consistently on convincing the employees into accepting the new organizational strategies.[13]

Basically the HRM department at The Shard Hotel at London Bridge is charged with the noble responsibility of managing employees. With reference to the Shangri-La Group organizational strategies, it is evident that the change structure is likely to be lacking in several aspects. The most lacking components of change could be a failing communication network fueled by the bureaucratic system of management and the sudden introduction of a new organizational culture which is a complete overhaul of the traditional work culture.[14] Even though the new hotel might have profit maximization or cost cutting strategies, the employees might be made to feel misplaced. Employees who are not in unison with the change strategies or the change process could be made to strain at the expense of their own benefit.

Again, the layoff of workers in the two designated offices to pave way for automation could be de-motivating to the other employees who will be made to have the feeling that the organization is getting selfish and chasing its own interests at the expense of fending for its employees.[15] Furthermore, employees might lose confidence in the job security at The Shard Hotel and thus underperform. This will be problematic for the management and more so for the human resource manager who will be required by the parent company to explain the pertinent reasons behind the reduced efficiency and underperformance.[16] Therefore it is further recommended that before the HRM manager goes ahead with the proposed structural changes at The Shard Hotel, they should inform the board of directors at The Shangri-La Group so that in the event that the change process takes longer than desired, it will be easier to explain.

• Critical evaluation of the formulation and implementation of human resource strategies used by the Shangri-La Group

In evaluating the process of formulating and implementing human resource strategies at the Shangri-La Group, it is recommended that the following stages are followed especially for large and fully fledge organizations such as the Shangri-La Group. This analysis therefore entails the stage of analyzing the short term plans set by board of directors at the company. The plans are critical in determining the day to day operations of the firm. For the plans to be easily accommodated by the employees, they need to be communicated through the HRM manager.[17] This means that the HR manager will be required to seek opinions from the employees regarding the short terms plans for the organization after which the feedback will be passed on to the board of directors for alterations, changes and further review.

According to historical analysis of the HR strategies formulation process at Shangri-La Group, two stages of strategy formation have been vital. The process has in the past been supported by a well-established human resource information management system which is an established database that fosters good governance in addition to accountability. The elaborate information management system put in place by the management has also been fundamental in making revisions and updating employee skills and competencies after successful completion of each training program.[18] Moreover, two implementation stages have been widely used at the Shangri-La Group. The HRM manager has in the past identified infrastructural and system requirements to support both partial and full implementation of human resource information management systems to reflect real time competence profiles for each employee working for the group.[19] The interoperability of the system has been lauded for the increased efficiency especially during promotions when an employee is urgently required to fill up a vacant position in another branch.  The implementation process has in the past been successful because of good communication networks between employees and the human resource managers. The second phrase of implementing the strategic plan at Shangri-La organization has been facilitated by absorption of new employees at low profile jobs after which they are inculcated into the organizational culture. Consistent appraisal and training then improves these start up employees until they are better skilled, knowledgeable and competent. In the end, the employees become adapted to the working environment and are better equipped to match the evolving needs of the 60 chains of Shangri-La Group of Hotels and Resorts.

• Critical analysis of the impact of contemporary issues affecting strategic human resource management at the Shangri-La Group, and how such issues should be overcome at their new London location

Owing to the need for informed consent from the Board Of Directors at the Shard Hotel in London, the human resource manager will be given a go ahead. Likewise, apart from the non-structural changes, there could emerge the need for complete structural change for the whole chains of hotels and resorts in order to march with emerging trends in the hospitality industry.[20] It would be advisable that Shangri-La Group makes use of the two most pertinent human resource management theories in order to create opportunities. The theory of employee training and development and that of strategic human resource management would be applicable. The employee training and motivation theory is supported by the fact that motivated employees are more productive. The Shangri-La Group thus encouraged employing this theory which will ensure that in addition to the earlier suggested structural strategy on employee layoff, the organization will have a more empowered staff.

The second theory on organizational culture development illustrates the need for the Shangri-La Group to better its corporate culture. Currently, the organization has a good culture which has promoted good interpersonal relationships at the work place. The Shard Hotel needs to study the present organizational culture so as to establish its strengths and weaknesses. The culture at Shangri-La has been successful in promoting positive relationships among the employees.

• Conclusion

This report entails a critical analysis of strategic Human Resource Management at The Shangri-La Group of luxurious five star hotels and resorts. Shangri-La runs most of the prestigious hotels around the globe with the main hotel being in the Asian Pacific. There is no doubt that the main Shangri-La hotel at Hong Kong has been the leading luxury hotel in the Shangri-La Group because of its seasoned management which has translated into continued success. In addition, the ownership structure of the hotels and resorts has been applauded for exhibiting excellence which has translated into efficiency and profitability. The implementation process for the new strategic HRM changes at The Shard Hotel could be facilitated by the use of a Human Resource Information Management system which then would facilitate the application of the two theories relating to employee training, development and strategic human resource management. This paper therefore uses HRM models to emphasize on the need for corporate change, restructuring or general strategic implementation. Among the models used include the contingency model, McGregor theory, Kubler Ross Change model, control based and the commitment based models.

 

Bibliography

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Cynthia, Postan. 2007. The Cambridge Economic History of Europe: Trade and industry in the middle Ages. Cambridge: Cambridge press

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Merkle, Jaden. 2010. Management and Ideology. Management Journal: University of California Press. United States

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[1] Seyranian, Viviane. 2010. Contingency theories of leadership. Encyclopedia of Group Processes and Intergroup Relations. John M Press.

 

[2] Martin, Ronan. 2012. Transforming the HR function through outsourced shared services: insights from the public sector. HR Management Journal, Retrieved, Oct 2012. p 41

[3] Merkle, Jaden. 2010. Management and Ideology. Management Journal: University of California Press. United States

[4] Berk, Laura. 2008. Exploring lifespan development. Boston: Ally and Bacon.

[5] David, Gluttons. 2011. Human resource management and performance: a review and research agenda. Harvard Business School Journal. p 2

[6] Woodward, James. 2010. Industrial organization: Theory and practice. New York: Oxford University Press.

[7] Woodward, James. 2010. Industrial organization: Theory and practice. New York: Oxford University Press.

[8] Cynthia, Postan. 2007. The Cambridge Economic History of Europe: Trade and industry in the middle Ages. Cambridge: Cambridge press. p 21

 

[9] Seyranian, Viviane. 2010. Contingency theories of leadership. Encyclopedia of Group Processes and Intergroup relations. John M Press.

[10] Scire, Peter. 2007. Applying grief stages to organizational change. Harvard: Harvard University.

[11] Bugg, Lyssa. 2013. Dr Kubler Ross – Stages of Grief. Houston: New Haven Press.

[12] Conaty, Ben & Ram, Cate.  2011. The Talent Masters: Why Smart Leaders Put People before Numbers. Crown Publishing Group: Arizona p. 11

[13] Conaty, Ben & Ram, Cate.  2011

[14] Conaty, Ben & Ram, Cate.  2011

[15] Lutans, Fyah. 2011. Organizational Behavior. Tata: McGraw Hill

[16] McKenzie, Otego. 2010. Organizational Culture: An Investigation into the link between Organizational Culture, Human Resource Management, High Commitment Management and Firm Performance, Otego Management Graduate Review, Vol. 8.

[17] Lutans, Fyah. 2011.

[18] Ramaswam, O’Brien. 2013. The International Human Resource Management. Rutledge: Amazon Press. p 41

[19] Hans, Phillip. 2011. Employability, empowerment and employers, between debunking and appreciating action: nine cases from the ICT sector. Chartered Institute of Personnel and Development. p 31

[20] Morgan, Gose. 2007. Images of organizations. Thousand Oaks: Sage.

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