ORGANISATIONAL BEHAVIOUR A CASE STUDY OF HILTON HOTELS

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1 ORGANISATIONAL BEHAVIOUR A CASE STUDY OF HILTON HOTELS 1. Introduction An inevitable part of every organization or company, Organisational behavior is how the organizational structure works with its workforce and carries out marketing and functioning in general. Every company or organization is a team work and every team is made up of team members or employees. Organisational behavior, as Mullins (2007) defines it, is the study of behavior of people within an organization. Further, he has argued that organizational behavior is important to view the theoretical and practical matters of the organization. As a people s business, organizational behavior has a significant role in the hospitality industry. Being the fifth largest industry employing people in UK, hospitality industry has much to consider with regard to organizational structure and behavior and deal with human resources way more than any other industry. Understanding Organisational behavior involves five components (Singh, 2012): The environment Individual processes Interpersonal and group processes Organisational processes Change processes In this paper, we will examine the case of Hilton Worldwide, one of the largest chains in hospitality industry. 2. Case Description Begun from a small hotel in Texas in 1919, Conrad N. Hilton s hotel has flared out into Hilton Worldwide in the past 95 years over 91 countries with 10 brands and 4,000 hotels (Hilton Worldwide, 2012). The company s mission is to be the leader in hospitality industry and the worldwide network is operated by efficient teamwork and dedication. However, as an industry with much competition in the present scenario of globalization, increased travel and internationalization in every field, the development is not without uncertainties and nuances. The key problems in every hotel and hospitality industry are also faced by this eminent group. Kuslovan (2003) termed them as hallo effect and horn error. The hallo effect refers to the situation in which an employee performs well in pre-employment test

2 giving high expectations to the employer and thus, if he underperforms once, it is not interrogated for. On the contrary, horn error happens when right from the beginning, the employee is surrounded by negative hallo effect. There have been reports of Hilton employee strikes in Chicago and it has been emphasized by them that it s about overwork and low pay. A report by Scott Martin (2010) points out some reasons for the employee strike that happened in Hilton Chicago: Lack of contract since August Lack of replacement of resigning workers leading to overwork and covering up by remaining workforce. Reduced benefits, wage-cuts and layoffs to achieve greater productivity. Other issues the workers experience are (Mullins, 2008): Long and unpredictable shifts Long working hours Mental and emotional needs Increased manual work Cultural differences, Hilton being a worldwide industry and involves a blend of culture and people from all over the globe. Issues in workforce indicate poor leadership and management, inadequate teamwork and improper division of labour. While these problems exist, the manager at Hilton Kensington claims that they aid the workers through stress management by team work and building trust and confidence. But this goes only so far with commonplace employees and is not alike everywhere. 3. Literature Review Hospitality industry is one that has been defined by many experts and from many angles. While it is emphasized that hospitality industry includes hotels, restaurants and other setups that provide food and shelter or one of them to travelers or simply, people away from home (Barrows et al., 2009), Hayes and Ninemeier (2009) argue that it is a people business. In any case, organisational behavior, becomes essential in the fortune of hotel businesses. According to Robinson and Judge (2009), competitive development takes place in hospitality industry only if the employees are given ardent and candid leadership and management.

3 The key skills expected from employees in hospitality employees are (Mullins, 2011): Well-developed communication skills. Well-trained behavior towards guests, customers and fellow-employees. Team working skills. There are many approaches in organizational behavior in the hospitality industry. In the classical approach, the formal structure, technical needs and general needs of the organization are concentrated on (Mullins, 2005). However, Brooks (2009) points out some drawbacks of the classical approach. He argues that in classical approach the social and team work matters of the organization are ignored. The ideas of team work, team behavior and processes are neglected. The major limitation of classical approach is the negligence of the human elements and their role in dynamics of organizational performance. With the right resources and factors, production was improved in Taylor s classical approach, but t is said to be successful only in simple industries, not in modern organizations (Knights and Willmott, 2007). In short, classical approach is based on the idea that production comes before people. Such an attitude is not beneficial since it can lead to dissatisfaction and loss of workforce and productivity. This is, hence, an unsuitable approach in an industry like hospitality industry, which has give-and-take relationship with people and workforce. The organizational behavior approach was brought on to resolve the issues that classical approach created (Singh, 2010). Organisational approach emphasizes on the fact that all people have attitudes, desires and requirements and this includes the employees, too. Knights and Willmott (2007) further opines that proper communication between managers and employees are essential and that organizational behavior is often results of job satisfaction and related factors. People have certain expectations when they decide to join an organization to work. These include, for example, safe working conditions, good HR practices, rewards and promotions, progress in career, respect and consideration. At the same time, the organization also harbours certain expectations from the individuals they employ. These include: adherence to values of the organization, hard work to meet goals of the organization, obeying rules and regulations in the organization, respect to co-workers and management authorities, loyalty and confidentiality. The approach of Hilton management in organizational behavior is to create awareness of Hilton values and train the employees accordingly. According to Mullins (2007), Hilton hotels have employed diversity principles. This includes employment, mentoring, training and performance models, support.

4 Philips and Gully (2011) stated that organizational behavior can help hotel industry in forming fresh attitudes and values and result in better performance and competence. However, hospitality industry is still viewed as a low industry in many instances compared to other fields. The workers in the industry are mostly minority groups and hospitality industry faces much difficulty in employing highly skilled and educated employees. The salaries are also on the lower end within the industry despite its scope and global appeal. This shows a lack of motivation among the hospitality industry workers and possible employees. Motivation, thus, becomes an inevitable part in the success of hospitality industry and a significant movement in the organizational behavior approach. Motivation, in simple words, is why people do what they do. Motivation is a driving force that propels us to achieve something and realize our needs and expectations. Mitchell (1982, as cited in Mullins, 2013) said, Motivation is the degree to which an individual wants and chooses to engage in certain specified behaviours. As such, motivation is often a subjective and personal matter and not necessarily clear-cut, known factors. Motivation is a multi-factorial idea. It is affected by the situation of the person, the environment, culture, society, socialisation, other people s interference and actions, future prospects etc. Motivation maybe extrinsic or intrinsic. Extrinsic motivation covers the needs that are material like work conditions, safety and promotions. While, intrinsic motivation is more about the psychological needs, desire for achievements, appreciation and the likes. Various theories of motivation and needs of workers exist. Some of the most important theories or concepts of motivation are: Rational-Economic Needs concept of motivation It is not a trivial fact that in organisations and companies, the best and most successful motivation to workers is money. This is F. W. Taylor s Rational-economic needs concept of motivation (Mullins, 2004). According to Taylor, the employees want higher wages and they would work less only due to exhaustion. Money is the ultimate and best motivator according to this author. Maslow s Heirarchy of Needs Needs have a heirarchical order, according to Maslow. And as lower needs are achieved, newer and higher needs start to appear. Maslow emphasized that only when the present existing need is fulfilled, a higher need is thought of. In his heirarchical pyramid, the most basic needs are the physiological needs, safety needs and social needs, which are followed up by esteem needs and self-actualization (Egan, 2007, Mullins, 2013). This theory can be applied to organizational behavior and business management in the same order. Physiological needs are met in

5 workplace by providing adequate recess times and enough wages to cover the basic needs. A working place with security and stability takes care of the safety needs. The social needs can be met by promoting team works and group dynamics. Meanwhile, to meet the esteem expectations, employees need to feel respected and valued. They can be given important assignments, made to involve in more projects and also be appreciated for their achievements and meeting targets. The last point of self-actualisation, which is the uppermost, is one that calls for more involvement from employees and it can take a good amount of trust from the managers to assign new models of projects that require more creative, innovative works. The limitation of this concept is that the heirarchical pyramid is variable in different cultures according to their priorities and hence, not a strict one. Alderfer s Modified Need Heirarchy Model Also known as the ERG theory, Clayton Alderfer modified Maslow s hierarchy of needs theory into a shorter one (Rao et al., 2009). The reduced hierarchy model comprises of three levels of needs: Existence, Relatedness and Growth needs. The existence needs covers the physiological and safety needs in Maslow s hierarchy. The relatedness needs corresponds to the social needs like love, meaningful relationships and sense of belonging. The growth needs are about a person s potential and ability and this includes the aspects of esteem and self-actualisation. Herzberg s Two Factor theory This is otherwise called the Motivation-Hygiene theory. According to Frederick Herzberg, factors at workplace that satisfied or dissatisfied a worker affected motivation. Naturally, the satisfiers were the motivators and the dissatisfying factors were termed hygiene factors (Schermerhorn Jr., 2010). Some important motivating factors as per this classification included: achievements, personal growth, recognition etc. Meanwhile, the maintenance or hygiene factors were expected from working conditions, status of salary, relationships with the managers and colleagues etc. As Herzberg puts it, a worker s full potential should be utilized in business. If not, this can lead to a motivation issue. Workers should be employed with higher responsibilities when higher level of abilities are displayed. Unless the job concerned is capable of utilizing the employee s abilities, a lower skilled employee should be considered. This is generally seen in companies all over the world, where a worker is rejected due to overqualification, which in fact is the firm s uncertainty regarding the concerned job s power to fully use the employee s potential. McClelland s Three-Needs Theory As per David McClelland s studies, there are three kinds of motivational needs: Achievement, Power and Affiliation. Achievement deals with the need to succeed or excel in what they do.

6 The characteristics of high achievers are that they choose tasks that are moderately challenging only and accept personal responsibility for their work. Inorder to confirm their success, they seek feedbacks, too (Borkowski, 2009) Borkowski (2009) further describes that power is one s need to have an impact on other people and influence them. Power maybe positive or negative. Affiliation deals with the need for strong interpersonal relationship as it is the need of an individual to receive approval from others. According to McClelland (1985, as cited in Brokowski, 2009), a combination of all three needs exist in most people but the dominant need shapes the person s working and management behaviours. As per his studies, individuals with higher need for power are attracted to leadership while those with higher achievement needs make better leaders. But they can be pretty demanding on their employees which can disrupt normal organizational behavior. Those with dominant affiliation needs are great candidates for team work and works involving more interpersonal relationships. This theory is helpful in determining the area of expertise and ability of a worker. The four theories described above were the content theories. There are also some process theories of motivation like Adam s equity theory, Vroom s expectancy theory, Goal-setting theory and Reinforcement theory (Kadali, 2010). Besides motivation, there are other factors that influence organizational behavior such as leadership concepts and managerial approaches. Motivation of employees is a field that comes under proper leadership and management and is the most important factor in retaining employees. 4. Analysis Having gone through the major elements of organizational behavior, the importance of organizational behavior, team work, motivation and appropriate management in hospitality industry has been understood. This gives insight on the situation at Hilton hotels and their tactics with employees can be discussed to analyse organizational behavior in hospitality industry. Organisational behavior is a crucial aspect in hospitality industry, it being an industry that deals with a huge portion of human resources and skills. It s an industry that runs on human relationships and team work. To achieve success in this industry, it becomes necessary that the human resource is managed properly and the issues be dealt promptly and efficiently. Many issues arise from improper or lack of motivation within the firm. Motivation is a complicated

7 matter in hospitality industry, according to researchers, as it is a very competitive field and success is about how and how much work force is retained. The greatest challenge is to provide apt motivation and retention of workers. Hilton Worldwide (2010) claims that they implement motivation tactics among employees for good performance and the tactics include excellent training, travel offers, elevator programs (development programs), medical insurances and scholarships. Besides these, they also carry out recognition events that reward the best employee of the month or the year, special provisions for best workers, like vouchers and lunches every month. It is important to assess the organizational behavior of a firm to understand the current scenario and to issue amendments. Assessment can be done to evaluate each employee and team work. To monitor the organizational behavior in the company, various methods can be used, like surveys and group interviews and other data collection methods (Perkins et al., 2013). At Hilton, they claim to address this issue by methods like document review, monthly and weekly meetings and interviews. Document reviews are done through employee handbooks, newsletters and other performance appraisal systems, according to the HR manager at Hilton Kensington. Further, it is said that in hospitality sector, success belongs to those who form powerful corporate and social cultures of responsibilities through efficient communication with workers. At Hilton, the HR Manager Ms. Jones claims that, they carry out quarterly surveys of employee satisfaction and effectiveness of training sessions. Qualitative research in organization can help to create more relevant and specific theories (Endter, 2010) and models of organizational behavior and these qualitative assessment methods aid the same. However, the issue of diversity is quite vast in Hilton hotels, being a large industry with worldwide settings. Diversity as such was not focused upon as ethnicity and cultures blended with the very nature of hospitality industry having a worldwide scope. But the issues that have been not so well figured with regard to this are (Equality and Diversity Professional, 2008): Age: The majority of the employees were found to be young upon close inspection. This came as a part of attracting a transient workforce, while not concentrating on diversity. These workers aimed to work for a shorter period and leave in search of a real job. This took space that would have fared better if older employees with better skills and experiences were employed. Flexibility of working hours: Temporary or part time contracts were not preferred but this actually affected those willing to work efficiently with a more liberal appointment.

8 Lack of job opportunities for unemployed, homeless and older people: The disadvantaged groups were not offered any opportunities to be interviewed or appointed as they would not be able to commit fulltime to work. Currently Hilton has made it a point to work with them. Gender issues: The fraction of females and males working in the lower teams are mostly equal. But as the level of employment goes up, there is a decline of female managers and the ratio is biased towards males. Manager positions are mostly in male hands and this has a gender bias issue up and running. 5. Recommendations Efficient organizational behavior strategies can be carried out in the hospitality industry only with perfect cooperation between employers and employees. The staff in the company are the assets of the industry and its development. The more efficient and skilled they are, the more successful the company s future is. But it is quite difficult to maintain the right amount of justice and motivation in order to squeeze out the best from the employees, the industry being a large organization with various levels of management and team work. Some recommendations to act on the major issues are as follows: Adequate consideration of employee problems, both organizational and personal, and support from the organization in making them secure. Encouraging good communication and workplace ethics as well as following the same. Encouraging team works and meetings, support groups etc. Sufficient motivation and training from management with regard to work, according to suitable concepts and models studied. Looking into the issues of diversity, like employing older people, unemployed and disadvantaged groups and encouraging female managers. Reasonable wages and flexible working hours. Appointing new workers when employees leave instead of adding workload on remaining workers. 6. Conclusion This assignment was intended to study organizational behavior based on a firm of our choice and this has focused on the organizational behavior issues at Hilton Worldwide and briefly on hospitality industry.

9 The focus was on the issues in workforce and the common problems employees are facing in the industry. Further, the analysis emphasizes on the importance of motivation in hospitality industry with reference to relevant literatures and various theories and concepts of motivation have been applied, apart from describing qualitative assessment methods. The importance of leadership, communication and proper management has also been mentioned. With insight of specific issues employees of Hilton Worldwide and hospitality industry in general have experienced, some recommendations have been made to aid the organizational behavioural issues and its assessment in the industry. REFERENCES Barrows C. W., Powers (2009). Introduction to Management in the Hospitality Industry, New Jersey: John Wiley and Sons Inc. Brooks, I. (2009). Organisational behaviour: Individuals, groups and organisation, 4th edition; Harlow: Pearson Education Limited. Egan, J. (2007). Marketing Communications. Thomson. Published in ISBN: Endter, C (2010) Managing People in International Hospitality &Tourism Industries: Germany: Grin Verlag Equality and Diversity Professional (2008). Article [Online]. Issue: October Available at (Accessed on 22 April, 2014.) Hayes D. K., Niemeyer J. (2009). Human resources management in the hospitality industry, New Jersey: John Wiley and Sons Kadali, M. (2010) Theories of Motivation. Powerpoint presentation [Online]. Available at Published on July 14, Accessed on 24 April, 2014.) Knights, D., Willmott, H. (2007), Introducing Organizational Behaviour and Management. Thomson. Year ISBN: Mullins, L. J. (2013). Management & Organisational Behaviour, Ninth Edition. Prentice Hall Financial Times / Pearson

10 Perkins, S., Arvinen-Muondo, R. (2013). Organizational Behaviour: People, Process, Work and Human Resource Management. Kogan Page Publishers, ISBN: Rao, V.S.P., Hari Krishna, V. (2009). Management: Text and Cases. Excel Books India. ISBN: Schermerhorn Jr., J.R. (2010). Management. Eleventh Edition. John Wiley & Sons. Published in ISBN: Singh, K. (2009). Organizational Behaviour: Text and Cases. Pearson Education India. Published in ISBN: Steel, P and Konig, C, J (2006). Integrating Theories of Motivation. In The Academy of Management Review, Vol. 31, No. 4, pp