Draw a more simplified and abbreviated strategy map for the Hotel Paris. Specifically, summarize in your own words an example of the hierarchy of links among the hotel’s HR practices, necessary workforce competencies and behaviors, and required organizational outcomes. (Dressler 83)
The Strategy Map
Next, Lisa, working with the hotel’s chief financial officer (CFO), outlines a strategy map for the hotel. This outlines the cause-and-effect links among the HR activities, the workforce behaviors, and the organizational outcomes (the figure on this book’s inside back cover shows the overall map; you’ll find detailed maps for each HR function in each chapter’s related MyManagementLabs page ).
This map and its linkages reflect certain assumptions on Lisa’s part. For example, based on experience and discussions with the firm’s other managers, she formulates the following hypothesis about how HR affects hotel performance: Improved grievance procedures cause improved morale, which leads to improved front-desk service, which leads to increased guest returns, which leads to improved financial performance. The HR director then chooses metrics to measure each of these factors. For example, she decides to measure “improved disciplinary procedures” in terms of how many grievances employees submit each month. She measures “improved morale” in terms of “scores on our hotel’s semiannual attitude survey,” and measures “high-quality front-desk customer service” in terms of “customer complaints per month.”
She moves on to quantifying the cause-and-effect links among these measures. For example: “Can we show top management that there is a measurable, sequential link between improved disciplinary procedures, high morale, improved front-desk service, number of guest return visits, and hotel financial performance (revenues and profits)?” If she can show such links, she has a persuasive case that shows HR’s measurable contribution to the hotel’s bottom-line financial performance.
In practice, the HR manager may well just rely on a largely subjective but logical argument to make the case for such cause-and-effect linkages. But ideally, she will use statistical methods such as correlation analysis to determine if measurable links exist, and (if so) what their magnitudes are. In this way, she might find, for instance, that a 10% improvement in grievance rates is associated with an almost 20% improvement in morale. Similarly, a 20% improvement in morale is associated with a 30% reduction in customer front-desk complaints. Furthermore, a 30% reduction in complaints is associated with a 20% increase in guest return visits, and a 20% increase in return rate is associated with a 6% rise in hotel revenues. It would appear that a relatively small HR effort in reducing grievances might have a big effect on this hotel’s bottom-line performance!
Several things complicate this measurement process. For example, it’s risky to draw cause–effect conclusions from correlation measures like these (do fewer grievances lead to higher morale, or vice versa?). Furthermore, it’s rare that a single factor (such as grievance rates) will have such effects alone, so we may want to measure the effects of several HR policies and activities on morale simultaneously.
As explained in this chapter, computerization could enable Lisa to build a more comprehensive HR scorecard process, one that might handle links among dozens of cause-and-effect metrics. (Several vendors supply such “scorecarding” software.) If not, then she will rely more on the logic and common sense underlying the strategy map to make her case.