Marriott Corporate
Introduction
Marriott corporate is the leading company in the global hotel and lodging industry. It has its humble beginnings in a root beer franchise formed by J. Willard and Alice Marriott in 1927. The franchise slowly opened inns and acquired hotels over the years to form the Marriott Corporation. Some of the acquired hotels include the Ritz-Carlton Hotel and Renaissance Hotel. The owners established Marriott International as a derivative of the corporation, whose role was to manage and franchise hotels. Its headquarters is in Bethesda, USA. The corporation boasts 18 global brands sold in more than 72 countries. In addition, it owns more than 3900 properties and employs almost 200, 000 associates worldwide (Marriot International, 2014a). Some of its achievements include being ranked fourth among best employers in 2009 by Times. Its success stems from strong brand recognition, continuous innovation, effective human resource management practices and an efficient business model.
Business Strategy
The business strategy of Marriott International is its focus on management and franchising. Ownership and leasing policies take a limited portion of its overall strategy. By 2013, the company owned 675, 000 rooms: 55% franchised, 42% long-term management agreements, 2% owned or leased and 1% unconsolidated joint ventures (Marriot International, 2014b). The model also encompasses product segmentation consisting of residential real estate and up-scale amenities such as meeting rooms and athletic facilities (Rasheed, 2012).
Its corporate strategy includes policies that promote company culture, diversity and leadership. Past leadership studies show a positive correlation between top management effort and profitability (Bowman & Helfat, 2001). Marriott’s history of effective leadership can be traced back to JW Marriot, who counselled individual employees on their private problems in his first hotel.
Compensation and benefits policies
Marriott international has one of the best human resource management practices in the industry. This strength shows in its repeated inclusion in Forbes’s best companies to work for list. Its compensation package includes both monetary and non-monetary components, and consists of three categories: pay and benefits, recognition and growth opportunities (Marriot International, 2014c).
Pay and benefits of the company vary with location and job responsibilities. Locational factors that influence pay and benefits include employment laws and the scale of business operations. Marriott international offers competitive basic pay, mostly determined by the level of compensation prevailing in the hotel industry. Associates also enjoy benefits packages such as discounts on hotel room reservations, food and beverages and gift shops.
Recognition is an effort meant to reward employees for exceptional customer service. Marriott Company recognizes efforts such as excellent guest service, leadership, employee referral efforts, dedication to local communities and tenure of service at five-year intervals. For example, associates who have attained 25 years of service in the company receive free weekends at any Marriott hotel globally.
Growth opportunities at Marriott international include new global branches, evolving careers, internal promotions, health and wellness programs, ongoing training and professional development and multidisciplinary learning.
Compensation benchmarks
Compensation benchmarks are standards against which pay practices are measured. They can be internal, external or generic (Carpinetti & Meto, 2002 as cited in Akinusi). Internal benchmarking involves comparison between predetermined departmental targets and actual performance. Marriott uses internal benchmarking to determine compensation bonuses (Patna, 2011). Firstly, it uses broad measures such as the number of employee referrals or the number of positive customer feedback per employee. Secondly, it tracks employee competency levels over time to determine their fit for promotion. Thirdly, it conducts regular internal appraisal of workforce demographics. A recent appraisal showed that majority of associates were older: 43% were 45 years and above and 18% were 55 years and above (Finkelstein, Roher & Owusu, 2013). In addition, they mainly did physically demanding jobs in the hotels. Hence, Marriott Company reconfigured its job description to include fewer demanding tasks per shift and cross-trained the workers to enable them do multiple tasks of varying physical strength. Its pay-for-performance compensation tools include bonuses and rewards for high number or referrals.
External benchmarking involves comparing company performance against competitors in the same industry. In addition, employees normally compare compensation with their perceived sense of fairness regarding the effort they put in their work: pay equity theory. Thus, when they perceive a disparity between pay and perceived effort, their motivation level drops. Consequently, companies try to obtain data on the level of compensation paid by their competitors to employees of the same level. However, they encounter difficulties in obtaining data on competitors since they zealously protect their information. Thus, companies usually obtain data from third party consultants who normally assess a group of companies in a given industry such as Forbes, Fortunes and Institutional Shareholder Services Incorporation (ISS). For instance, Marriott incorporation measures its performance against competitors through rankings such as Forbes’s top fifty companies.
Generic benchmarking involves comparisons with best practices of other companies regardless of the industry. For instance, Marriott Company was among the World’s Best Multinational Workplaces ranking done by Great Place to Work annual study.
Recent studies indicate that hotel companies find it difficult to identify their correct peers for the purposes of compensation benchmarking (Chasan, 2012). They mostly include their competitors of similar size and talent needs. Furthermore, boards of directors may only select companies with high pay schedules as a ploy to give themselves high compensation. As a result, investors resort to independent bodies such as the ISS to determine whether compensation paid by companies truly reflect market conditions.
Recommendation
Compensation is one of the key determinants of employee retention rates. It varies with several factors such as skills, capabilities, company growth and government regulations regarding pay. Thus, Marriott International should incorporate a comprehensive compensation policy that appeals to employees’ career and personal values. It can do this by adopting strategies such as pay for performance, integrated pay program, pay competitiveness, variable pay and measurable recognition policy (Zingheim, Schuster & Dertien, 2009).
Firstly, pay for performance are standards that associate pay with the performance of employees. The human resource department can identify methods of quantifying measures such as output, skills and value-added effort (Zingheim, Schuster & Dertien, 2009). Output can include the number of referrals per employee or the number of guests each employee serves per day. Skills metrics can include the number of trainings an employee attends each year. Value-added effort can include the frequency on unique input an employee incorporates in the job. Such measures will enable the HR department in quantifying employee contributions and, thus, award compensation equitably. In addition, pay should be flexible in nature, in order to reflect changes in working conditions.
Secondly, the HR department should develop an integrated compensation program that combines pay and career growth. Employees not only want higher wages, but also desired opportunities for growth. An integrated program should include rapid promotion ladders and challenging and exciting tasks. Promotion opportunities can result from new branches that the company opens in different parts of the world. Hence, high performers can be given the opportunity to select the countries that they desire to work in as new branch managers. The basic pay should accompany promotions and reflect current market conditions.
Thirdly, the HR department can incorporate a system of variable pay. This policy involves short-term and long-term variations in the amount of bonus pay. Short-term variations can result from unexpected favorable market conditions that cause a rapid surge in company profits. When these conditions happen, the department can award higher bonuses through mechanisms such as vouchers. Long-term variations can result from more stable factors such as professional progression or employee tenure awards. These strategies will motivate employees to achieve exceptional results. Variable pay can take the form of stock options for employees or profit sharing. Profit sharing worked well for Great Little Box Company. The company adopted a plan that involved sharing 15% of annual profits equally among all employees and managers (Heymann & Barrera, 2010).
Fourthly, the human resource department can initiate a recognition policy that rewards unique efforts that save on cost. The rationale for this policy is that the company’s success depends on the quality of work of employees. Efforts that qualify for recognition should include breakthroughs, inventions, new clients and significant savings on costs. In addition, employees also want to feel accepted and valued. Thus, high-performing employees can get invitations to attend company balls with their families and get commended before other stakeholders in attendance (Tiwari, 2012).
Fifthly, Marriot international should incorporate a comprehensive safety policy. The policy should clearly outline emergency measures regarding disease epidemics such as Ebola by working with both local and international health organizations. Such measures include proper medical screening of customers before they initiate their hotel visits. In addition, the hotel should incorporate standard health procedures such as adopting the use of boiling water and bleaching detergents to clean bed linens and towels (Bachelor, 2014). Such measures will alleviate fears of employees regarding the handling of recycled hotel linens. In addition, the human resource department can offer bonus pay packages to employees working in areas affected with epidemics in order to compensate them for an additional job risk.
Finally, the company should align compensation packages to the personal values of employees, in addition to organizational goals. Employees are motivated by factors such as increased job responsibility, high job goals and perceived fairness in pay. The expectancy theory of motivation emphasizes the need for increasing pay for greater work effort (Value Based Management.net, 2014). Thus, Marriot should incorporate hourly bonuses and piecework compensation plans that vary with the number of customers served by an employee per hour. Furthermore, it should configure its employee referral reward program to emphasize on magnitude. For instance, it can increase the number of points awarded to employees per successful referral for motivation purposes. The company can also increase the number of days that an employee benefits from free stays in its global hotels from a 3-day weekend to a full week.
Conclusion
In conclusion, Marriott international remains a global leader in the hotel industry. Its competitive advantage spans several areas such as corporate diversity, workplace ethics, corporate social responsibility, brand innovation and business model. However, external factors such as disease epidemics and terrorism threaten its profitability. The company’s compensation policies are also competitive, attracting a diverse and competent pool of employees. With these strengths in place, the success of Marriott international can only soar to greater heights.
References
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