Read the following Case Study and answer the THREE (3) questions at the end.
THE ROYAL THAI HOTEL
The Royal Thai Hotel is a 5-star hotel in Bangkok, Thailand. The hotel was established 15 years ago by a local consortium of investors and has been operated by a Thai General Manager throughout this time. The hotel is one of Bangkok's most prestigious hotels, and its 700 employees enjoyed the prestige of being associated with this hotel. The hotel provided good welfare benefits, above-market-rate salary and job security. In addition, a good year-end bonus amounting to 4 months' salary was rewarded to employees regardless of the hotel's overall performance during the year.
Recently the Royal Thai was sold to a large American hotel chain that was very keen to expand its operations into Thailand with the purchase of a prestige hotel. When the acquisition was announced, the General Manager decided to take an early retirement when the hotel changed ownership. The American hotel chain kept all of the existing Royal Thai employees, although a few were transferred to other positions. Brett Williamson, an American with 10 years of management experience with the hotel chain was appointed as the new General Manager of the Royal Thai. Williamson was selected as the new General Manager because of his previous success in integrating newly acquired hotels in the United States. In most of the previous acquisitions, Williamson took over operations with a poor profitability and low morale.
Williamson is a strong believer in -empowerment-. He expects employees to go beyond guidelines and standards to consider guest needs on a case-by-case basis. That is, employees must be guest-oriented at all times to provide excellent customer service. From his U.S. experience, Williamson has found that empowerment increases employee motivation, performance and job satisfaction, all of which contribute to the hotel's profitability and customer service ratings. Soon after becoming the General Manager of the Royal Thai, Williamson introduced the practice of empowerment to replicate the successes that he had achieved back home.
The Royal Thai Hotel has always been very profitable, and its employees have always worked according to the management's instructions. Their responsibility has been to ensure that the instructions from their managers are carried out diligently and conscientiously. Under the previous management, innovation and creativity were discouraged. Indeed, employees were punished for their mistakes and discouraged from trying out new ideas that had not been approved by management. As a result, employees were afraid to be innovative and to take risks
Williamson met with the Royal Thai Managers and Department Heads to explain that empowerment would be introduced in the hotel. He told them that the employees must be empowered with decision-making authority so that they could use their initiative, creativity and judgment to satisfy guest needs and handle problems effectively and efficiently. However he stressed that the more complex issues and decisions were to be referred to superiors who were to coach and assist rather than provide direct orders. Furthermore Williamson stressed that mistakes were allowed but that making the same mistakes more than twice would not be tolerated. He advised his Managers and Department Heads not to discuss with him minor issues or problems and not to consult with him about minor decisions. Nevertheless he told them that they were to discuss important, major issues and decisions with him. He concluded the meeting by asking for feedback. Several Managers and Department Heads told him they liked the idea and would support it, while others simply nodded their heads. Williamson was pleased with the response and was eager to have his plan implemented.
In the past the Royal Thai had emphasized administrative control, resulting in many bureaucratic procedures throughout the organisation. For example, the front-counter employees needed to seek approval from their Manager before they could upgrade guests to another category of room. The front-counter Manager would then have to write and submit a report to the General Manager justifying the upgrade. Soon after his meeting with the Managers, Williamson reduced the number of bureaucratic rules at the hotel and allocated more decision-making authority to frontline employees. This action upset those who previously had decision-making power over these issues. As a result, several of these managers left the hotel.
Williamson also began spending a large portion of his time observing and interacting with the employees at the front desk, lobby, restaurants and various departments. This direct interaction with Williamson helped many employees to understand what he wanted and expected of them. However the employees had much difficulty in trying to distinguish between a major and a minor issue or decision. More often than not, supervisors would reverse employee decisions by stating that they were major issues requiring management approval.
Employees who displayed initiative and made good decisions in satisfying guest needs rarely received any positive feedback from their supervisors. Eventually most of these employees lost confidence in making decisions and reverted back to relying on their superiors for all decision-making.
Not long after the implementation of the practice of empowerment, Williamson realized that his subordinates were consulting him more frequently than at first. Most of them came to him with minor issues and consulted with him about minor decisions. He had to spend most of his time attending to his subordinates. Soon he began to feel highly frustrated and exhausted and very often he would tell his secretary that -unless the hotel is on fire, don't let anyone disturb me'
Williamson thought that the practice of empowerment would benefit the overall performance of the hotel. However, contrary to his expectation, the business and overall performance of the hotel began to deteriorate. There were an increasing number of guest complaints. In the past the hotel had a minimal number of guest complaints. Now there were a significant number of formal written complaints every month. Many other guests voiced their dissatisfaction to hotel employees. The number of mistakes made by employees was on the increase. Williamson was very upset when he realized that two of the local newspapers and an overseas paper had published negative feedback on the hotel in terms of service standards. He was most distressed when an international travel magazine voted the hotel -one of Asia's nightmare hotels'
The stress levels of the employees were continuously mounting since the introduction of the practice of empowerment. Absenteeism due to illness was increasing at an alarming rate. In addition, the employee turnover rate reached an all-time high. The good working relationships that were established under the old management had been severely strained. The employees were no longer united and supportive of each other. They were quick to -point the finger- at or to -backstab- one another when mistakes were made and when problems occurred.
Identify all of the symptoms in the case that indicate that there are significant problems in this workplace.