REDESIGNING EMPLOYEE INVOLVEMENT IN A SMALL FAMILY-RUN BUSINESS TONY DUNDON
Peninsula Lodge is a small boutique hotel close to the Great Barrier Reef in Queensland; a short distance from a national rainforest and within easy reach of beautiful beaches. It is a three-star hotel with 85 rooms, a restaurant, bistro and banqueting and conferencing facilities. Peninsula Lodge currently employs 70 employees (full time and part time), comprising three senior managers, 16 function supervisors (such as housekeeping, catering, weddings, bistro, etc.) and operational staff. Employees are not represented by a trade union. The hotel is family-owned, and two years ago a decision was made to add a leisure centre and market the hotel as a boutique wedding venue, offering a complete package and service to the wedding market. The addition of the leisure centre was described by a family owner as ‘traumatic’.

It was built at the same time as a new HR plan was rolled out, which sought to engage and involve staff. However, when the family owner attempted to introduce a new system to ‘professionalise’ supervisors and inject a new culture of customer service among employees, many quit, including long-service supervisors who were resistant of the changes. Further, a rebranded large hotel chain in the area intensified competition, resulting in growing economic pressure for Peninsula Lodge to compete in a wedding and leisure market dominated by large corporate hotels. After observing other boutique hotels internationally, the senior management team decided to compete by offering a unique and differentiated service rather than on price alone.

This involved the design and introduction of a new employee participation and engagement plan. Four ‘core’ elements to the engagement strategy were implemented. First, new communication channels were introduced that gave employees information about training possibilities in leisure, tourism and hotel activities. Employees were made aware and encouraged to apply for competency and workrelated qualifications. Second, staff briefings were introduced so all employees were informed about work schedules, any changing shift patterns and particular special events coming up in the hotel or in the local vicinity. Third, new standard operating procedures were introduced, and a weekly log of faults, guest comments and employee ideas were fed back up the management chain. Finally, important information was attached to individual pay slips. Additional systems were developed around each of the four core participation elements. One of the most significant was functional area meetings and briefings which were used as a two-way communication channel. These were held every week and because staff worked different shift patterns, minutes of the meeting were posted on bulletin boards. Employees who were not in attendance at a meeting had to sign to say they had received and read the minutes.

Senior management also introduced a system of ‘self-directed’ teamworking across seven key areas: customer service, human development, maintenance, cost control, quality, technology and the environment. Employees from all functional areas could select to be part of a team responsible for one of the key seven areas, with management ensuring all areas were represented by staff. The team would then meet to discuss ideas and improvement. Prizes would be awarded on a monthly basis for the best ideas from staff. Half-day workshops were introduced on a bi-monthly basis so ideas of one group could be reported and proposed to the senior management team. Examples of employee ideas implemented included new gluten-free restaurant and bistro menus; new environmentally friendly technologies to help clean rooms; an information card issued to staff on weekly basis that provided up-to-date information for guests on local excursions or events. The owners and senior managers of Peninsula Lodge feel they started to promote a new culture of participation and engagement that was absent among staff previously. Business has picked up and, anecdotally, it appears new business has emerged from word-of-mouth recommendations. However, take-up of new training schemes by employees has been minimal. Furthermore, while there have been plenty of new ideas from staff, few have been implemented by senior managers. For employees, there has been a long tradition of informal dialogue and communication and some staff feel the new strategy is too structured for a small family-run hotel.
Questions
1 Why do you think some employees feel negative about the move to more formal types of employee participation initiatives at Peninsula Lodge?
2 How would you describe employee participation at Peninsula Lodge in terms of the framework explained in the chapter (e.g. depth, level, scope, form)?
3 Do you think the size of the Peninsula Lodge is an important factor in the nature of employee participation?
4 From reading the Peninsula Lodge case, why is it difficult to establish a relationship between employee participation and organisational performance?