Introduction
St. Regis Resort is a popular chain of hotels run by Starwood Hotels. It has opened resorts in different countries, including England, Dubai, China, and Mexico among many others around the globe. Recently, its Mexican subsidiary started to experience various problems. The revenues have reduced by 35% over the past three years due to the effects of global recession and the unstable Mexican economic. Apart from the economic difficulties, the company is also troubled by the increased incidence of drug cartel-related violence levels. The rise in violence has not only scared away the prospective clients, but it has also made the employees more disengaged. This paper, based on the case study, considers the most appropriate change strategy that can be implemented in order to turn change the situation for the better. It will also delineate the various steps the corporation can take to change the organizational culture, to enhance employee engagement and satisfaction, and to ensure that the performance management corresponds to the desired level. The analysis indicates that the empirical-rational strategy is the most appropriate change management strategy for St. Regis Resort, as it bypasses the barriers that hinder the changes by encouraging voluntary adoption of the proposed changes.
Change Strategy
Organizational change is a complex phenomenon, and as such, is hard to achieve. In most cases, different people and offices in an organization have different views in regard to the proposed changes. There are essentially four change management strategies that St. Regis Resort can employ to implement its proposed changes. The first one is the normative re-educative strategy. Through this strategy, an organization redefines the values and norms of the employees in order to achieve the organizational change (Nichols, 2010). While it is an effective strategy, it can not be implemented overnight — the effective implementation requires years of cultivation. The second change strategy that could be used is the power-coercive strategy. Through this strategy, an organization uses its authority to enforce the proposed changes (Nichols, 2010). It means that the employees do as they are told. The downside of this strategy is that it tends to exacerbate change resistance and sabotaging of the proposed changes (Ciampa & Stalk, 2008). The third approach is the environmental adaptive strategy. This strategy requires an organization to transfer its employees to another department or organization that suits them, or change the organization in a way that would suit the employee. Clearly, these two options are currently not valid.
The last change strategy option is the empirical-rational strategy. It is the most appropriate one, given the challenges that St. Regis Resort is facing. Employing this strategy, the company should properly introduce the proposed changes and the incentives it offers while adopting the changes (Nichols, 2010). The empirical-rational strategy, in essence, rewards obedience. For instance, the company may offer additional benefits to the employees that are more engaged and productive in their day-to-day operations. Also, it may offer an additional compensation to the employees that receive the most tips and other forms of gratuities that demonstrate that the clients were pleased with the services they received at the resort. If the incentives are properly designed and communicated to the employees, most of them would accept the proposed changes, because their positive effects would be presented to them in the form of the incentives (Ciampa & Stalk, 2008). Additionally, it considerably reduces change resistance and sabotaging of the proposed changes, since it encourages the employees to adopt to the proposed changes out of their own volition.
Steps to Changing the Culture
St. Regis Resort’s recent employee survey indicates that the employees are disengaged and not as committed to the organization as they used to be. To change the prevailing malignant organizational culture, the organization should follow the steps delineated below. The 3-stage process will entail defining the culture, aligning the various components, and managing the creation of the new culture.
The first major step to changing the organizational culture is to define the concept of it. The management should first evaluate the current culture and its effects on the performance quality. The existing culture, for instance, is toxic, since it has reduced the employees’ morale. They do not feel safe anymore, and this has decreased their satisfaction and their level of engagement. Probably, they do not feel it is worth working at the resort anymore, given the inherent risks. After evaluating the current culture and performance, the management should then clarify their initial vision (Winn, 2014). The main objective of this step is to set the goals toward which the consequent processes will be aligned to. The organization should then clarify the values and expected behaviors from the onset. This way, all the employees will be aware of what is acceptable and what is not. For instance, St. Regis Resort employees are currently apathetic and detached, which has caused the company’s revenues to plummet. The management can explicitly state that it expects all employees to be actively engaged in the optimization of the positive experiences of the clientele.
The second major step involves aligning the processes and efforts with the desired organizational culture. At this stage, the management should clarify the strategic priorities of the organization (Krishnaveni & Monica, 2016). This may include the optimization of the market share, profitability, or creation of a specific desirable perception, among many other strategic priorities. After clarifying the objectives, the management should then engage the change management team to identify the specific goals and the way they are going to be measured. The importance of tracking the key performance measures can not be understated (Krishnaveni & Monica, 2016). If the organization is to note the direction of progress, then it has to identify and track its indicators. This may include profitability, the number of clients it hosts, the number of employees willing to work, the employee engagement, and satisfaction index among others.
The last major step involves managing the new organizational culture. The first major tactic here is to design a management system that would uphold the new culture. Crucially, this stage involves removing the barriers of the organizational change (Briscoe, Schuler, & Tarique, 2012). For the new culture to be adopted, the barriers that seek to maintain the status quo need to be eradicated. The barriers may be removed through a host of interventions, including rewarding obedience through recognition and material incentives (Winn, 2014). At a superficial level, they may be reduced through coaching and even enforcing the proposed changes. Another tactic would be to manage the communication habits and routes. Instituting transparent, genuine, and consistent communication is paramount to the quest for performance improvement. Throughout the whole process, the management should build the factor of motivation. Critically, it should have a functional feedback mechanism that enables the sharing and celebration of the progress that is being made in a transparent manner (Mathis et al., 2016). If the organization follows these three key steps, it should be able to change the existent culture that has proved to be injurious to the organization.
Engaging the Employees
As is evident from the case study, St. Regis Resort employees are becoming increasingly disengaged. They are not being involved in activities, neither are they enthusiastic about their work and workplace. The disengaged employees are indifferent and practically sleepwalking during their workday, without giving due regard to their level of performance or the effect their performance is having on the organization. Employee disengagement is a common problem in most business organizations. A study conducted by Gallup in the U.S. concluded that usually only about 33% of employees are engaged in the organization’s activities in any given year (Kumar & Pansari, 2016). The number is bound to be even lower in troubled economies, such as Mexican’s. The findings have remained consistent since the turn of the millennium, and they are not set to change anytime soon, unless an organization actively designs and implements strategies that enhance employee engagement.
The first strategy to enhance the employee engagement is to constantly communicate. Communication is the basis of any healthy relationship, both formal and informal. The managers should have regular communication with their subordinates. Research studies indicate that an employee who has regular communication with their managers, whether face to face or through digital platforms, is 75% likelier to become engaged in their work as compared with those who do not have regular communication with their bosses (Krishnaveni & Monica, 2016). The level of employee engagement, in fact, is also increased for the employees who have daily meetings or conversations with their immediate superiors. Furthermore, some studies have established that the managers who use the combination of face-to-face and electronic communication model have the most engaged employees (Matthis, Dorien, & De Jong, 2013). The ongoing transactions are especially helpful if they take place outside the formal setting — for instance, in the cafeteria, in a parking lot, or in a gym area, among others.
The managers at St. Regis can greatly enhance the level of employee engagement through holding regular personal conversations with their employees. The objective of it is to share their hopes and to allay the fears they might have, especially in the face of the increased drug-related violence (Kumar & Pansari, 2016). The managers should further make concerted efforts to know their employees beyond their workplace setting. As the Bible advises, a good leader is not selfish, but rather full of humility in regard to the others, as they are more important than themselves (Philippians 2:3 Revised Standard Version). Hence, the managers at the resort should make the employees feel safe enough to voice their concerns, to propose improvements, and to feel comfortable while talking about any subject, work-related or not. Employees who feel that their managers are interested and invested in them as people and not merely as employees are more engaged than those who do not feel valued as human beings (Krishnaveni & Monica, 2016). The more they feel the management cares about them, the more they will reciprocate by caring for their organization, hence increasing engagement and subsequent satisfaction.
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The second major strategy to enhance the employee engagement is through basing the performance management on clear goals. One of the primary reasons why employees become disengaged and frustrated with their work is that they do not have a clear definition of their goals or the evaluation criteria used to assess their performance (Matthijs, Dorien, & De Jong, 2013). The clarity of expectations is, in fact, a basic need for employees, and it is incredibly critical for employee engagement and performance. The more people feel conflicted about their duties, roles, and responsibilities, the more disengaged they become (Briscoe, Schuler, & Tarique, 2012). Also, they gradually become disconnected, because they are not even sure of what the future holds for them. The annual reviews become meaningless. In general, the employees whose managers have a clear understanding of the performance management activities tend to be more engaged than the employees whose managers are yet to figure it out — or who are struggling with the same tasks (Winn, 2014). St. Regis Resort managers should, therefore, clearly define the goals of the organization in Mexico and the parameters that will be used to assess the extent of their achievement.
The last major employee engagement strategy is to focus on the employees’ strength rather than on their weaknesses. Research studies have established that the improvement of the employees’ performance is more effective when the employers praise their strong points, as opposed to fixating on their weaknesses (Kumar & Pansari, 2016). The employees who have managers that focus on their strengths have a 50% chance of being engaged than those who have managers that are focused on their weaknesses (Mathis et al., 2016). The St. Regis Resort managers should, therefore, focus on the positive aspects that the employees are bringing to the company. The more the employees feel noticed and appreciated, the more engaged they will be, and this will have an impact on the company’s overall performance in regard to sales and profitability.
Performance Management
For St. Regis Resort to change its fortunes and its damaged perception, it has to maintain some consistency in the performance management. It should ensure that the performance management levels remain at the desired point. The first strategy is to focus on the performance management — the organization should design a conceptually sound business framework that would provide clear links between the business processes and comprehensive metrics (Cappelli & Tavis, 2016). An excellent business framework should integrate the business strategies, management processes, their key performance indicators, and even a reflective process that enables the continuous assessment and improvement. Crucially, the emphasis should be made on the results. The performance management efforts should always be geared toward assessing the employees’ achievement of the organizational goals and bottom-line (Cappelli & Tavis, 2016). Close attention should be paid to the organizational objectives, mission, and vision in order to ensure that the employee performance outcome is in line with the desires of the organization.
Additionally, to ensure that the performance management remains at the desired level, the firm must develop a culture of accountability. All the personnel involved, from the frontline employees who are getting assessed to the managers who are assessing them, should be held accountable for their prescribed roles and responsibilities. Everyone should have clearly-defined roles and goals. Only then the employees at the various management levels could be considered responsible for the failure of their efforts.
Crucially, for the company to achieve consistency in its performance management, it should aptly define the evaluation criteria. The employees must be informed, in no uncertain terms, what constitutes a good performance and what does not (Cappelli & Tavis, 2016). They must also be informed of what an acceptable level of performance is and which things can not be tolerated. The implication of defining the evaluation criteria is that the management will have consistent metrics against which the performance can be evaluated in regard to the organizational vision, mission, goals, plans, and budgets.
Lastly, to maintain the consistency of the performance management at a good level, the management should further diversify the performance management tasks. Centralizing the tasks on a single person or a group of people makes the process susceptible to overt and covert bias (Katzenbach, Steffen, & Kromley, 2012). To ensure objectivity in the performance management, the organization should diversify the functions to include second level managers and even peer group reviews, involved in reviewing the quality and consistency of feedback and comments by the evaluating managers. These alternatives provide an outsider’s view on assessment and help to eliminate bias. They ensure that the performance ratings are well calibrated, thus upholding to the consistency and high levels of performance management processes.
According to all mentioned facts, it is evident that the St. Regis Resort subsidiary in Mexico is facing a lot of challenges. All of them are, however, solvable, if the organization employs the correct organizational development strategies. With regards to change management, St. Regis Resort management should apply the empirical-rational approach. Its tactics streamline the transition and adoption of the proposed changes by encouraging voluntary acceptance of the changes. The steps to organizational culture change should involve defining the existent culture, aligning new organizational objectives with old ones, and then managing it in order to promote adaptation. To enhance the levels of employee engagement, the management should conduct clear communication processes, base the performance management on clearly defined goals, and focus on the employees’ strengths over weaknesses. Finally, to ensure that the performance management level is sustained at an acceptable level, the organization should focus on the results, develop a culture of accountability, define the evaluation criteria, and implement the use of the peer review groups.
