Tom Richman

Mississippi Motivators

 

This arrangement is one way MMI holds human-resources spending in check and ensures that human-resources programs are directed at actual operational needs. It's less important during budget meetings that Morgan and Hart agree on every point and more important that they keep challenging each other. What Hart and Morgan, and the other executives, can settle on Sunday afternoon as a reasonable human-resources budget is probably as good a measure of the program's effectiveness as any accounting device might yield.

It is not all done by feel, though. There are measures by which MMI can tell if it is doing something right, even if those measures don't always relate directly to a specific program or identifiable cost.

Guest comment cards, for example, say something about the quality of service rendered by MMI employees. Currently, compared with all Holiday Inns as a group, MMI properties get 25% fewer guest complaints.

Productivity, which MMI measures differently from most of its competitors, responds to many factors -- for example, the quality of management, selectivity in hiring -- but training and motivation are certainly among them. MMI expresses productivity as hours per room cleaned, or per restaurant or lounge customer served, or per room rented. By computing them this way, instead of as a percentage of revenue, MMI makes the numbers meaningful to employees at all levels -- general managers as well as lounge waitresses.

Such measures as gross operating profit and occupancy rates tell a company something about how well or how poorly it is performing in a market environment. They say very little, however, about why the company is performing well or poorly. If the problem is that room prices are depressed, MMI executives know that they won't solve it by eliminating training or employee-motivation programs. Especially not if they have good reasons to believe that those programs actually help keep costs down.

When the final 1987 budget was put together, Hart's request for additional human-resources spending remained largely intact. Jones and his crew believe that to cut it would be a false economy. And a dangerous one. Their experience suggests that spending wisely on human resources is a way to shave costs, not raise them. They can look at, among other things, productivity figures to see the effects of human-resources spending.

In 1981, its first full year under MMI management, the Parkway Holiday Inn in Tallahassee, Fla., required 1.069 hours of total labor -- such as maids, desk clerks, and porters -- for each occupied room. In 1982, after a year of MMI management, productivity improved to 0.713 hours per room. After two years, it improved again to 0.702 hours per room. That's a 34% labor reduction in just two years, one of the reasons Jones can claim to be among the lowest-cost Holiday Inn franchisees.

Or, management can look at employee turnover rates. MMI's is slightly less than 100% a year, which sounds terrible, except that in the industry, 200% and 300% turnover rates are not unusual. By keeping an employee, MMI knows that it saves hiring and training costs.

It also saves other costs that are difficult, perhaps, to quantify precisely, but are just as real. A new employee's productivity is never as high, MaKinster points out."Two-thirds of the cuts, falls, and slips occur with new employees," says Jones, "so the way to reduce accidents, and claims, is to have fewer new employees." The new employee takes a heavy toll on guest satisfaction, says MaKinster. "For instance," says Jones, "it's hard to get new front-desk employees to understand their authority on refunds or check cashing. So they refuse to do anything for the guest. They won't refund the 50? someone lost in the Coke machine. But over time, people begin to feel comfortable with their jobs, and that builds goodwill with guests."

"It's great to go out and market a hotel, to get those people here," says Stull, general manager of the Radisson in Jackson, "but if we can't get them to come back, it's a very expensive way to get a onetime guest."

MMI could, if someone there wanted to, compute the time required to recover the $165 it cost to send Debra Jones from Jacksonville to the housekeeper seminar in Orlando. "They told us," she says, "about how much the soap costs. If a guest used one, I used to just throw it away. But now if they're staying over, I leave a new bar, but I don't open it. Most of them will use the old one." Let's see. Jones cleans about 16 rooms a day, times two bars of soap, times six days a week. . . .

But how should Claude Collins compute the return on the dollars he spent training and motivating Carol Terrell on the Jacksonville front desk? "If a rude customer comes in," she says, "I just give 'em a smile that knocks 'em over so they feel bad about being rude. . . . It works."

The dollar value of the young lady's smile? That's hard to say. But it has value. "I can't compute the return on $190,000 invested in training," says controller Brady. "I wish I could, but . . . if we thought our hotels were poorly run, why would we go on doing this?"

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