Charles Heckscher. HBS cases are developed.

9-489-104 R E V . A U G U S T 9 , 1 9 8 9 ______________________________________________________________________________________________________________ Philip Holland prepared this case under the supervision of Professor Charles Heckscher. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 1989 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. C H A R L E S H E C K S C H E R The Portman Hotel Company It was November 1988, and Patrick Mene, vice president and managing director of The Portman Hotel, was re-evaluating the “5-Star team plan.” He, Joe Villa, director of human resources, and Spencer Scott, director of guest room services, had implemented the plan in December 1987, with the understanding that they would reassess it later. The 5-Star team plan had reorganized one group of employees, the personal valets (PVs). The PVs both cleaned the rooms and were like butlers for the guests. Under the plan, the PVs had been organized into teams of 5, with one team per floor. Mene had agreed to the plan because the PVs had complained about how disorganized they were when the hotel opened in October 1987. Now the PVs’ morale was down. Many of them were not performing or had poor attendance. The guests were starting to see mistakes. And all of this was aggravated by the hotel’s occupancy, which had just jumped from about half full to nearly 100% full in the last two months. Mene wondered too if he should rethink his original human resources strategy, which he believed was so important to The Portman’s success. The Portman’s goal had been to achieve a new level of service among American luxury hotels. And to do this, he believed, required a high level of employee commitment and responsibility. But maintaining commitment was turning out to be harder than he had expected. The Hotel John C. Portman, Jr., architect and developer, had been a world-famous designer of luxury hotels for 20 years. The Portman Hotel, however, was to be the first to bear his name and the first that he and his firm would not only design and develop but also manage. The hotel was relatively small—348 rooms and 21 floors. (The rooms were on floors 5 through 21, though the fifth floor had only 10 rooms and the 21st had only 2.) Its rooms were elegant, done in quiet shades of green or pink, with natural wood furniture. The look had been described as “contemporary with Asian accents.” The bathrooms were chrome and Portuguese Breccia marble, complete with a separate shower and tub, telephone and mini-television set. At a time when industry analysts were predicting a glut of luxury hotel rooms in San Francisco, Portman proceeded undaunted. He saw his hotel as a first, as carving a niche in the luxury market This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.489-104 The Portman Hotel Company 2 and ultimately setting new standards. The niche?—a revolution in guest service, a style of service Portman and his associates had become so impressed with during their stays in Hong Kong’s finest hotels. Portman wanted to bring that type of service to an American luxury hotel. Everything from organization to recruitment to rewards to architecture was to be done to achieve one end: “To bring Asian standards of hospitality to the U.S.” Based on this goal Mene had written the operating plans for the hotel. From the beginning, the challenge, he said, had been to build a company providing high quality at affordable rates, and to do this quickly and against strong competition. The guests must be provided not just great service but an experience. The hotel aimed to “overwhelm guests by the professional, cheerful and immediate response to every request.” There were to be “no rules” for guests: Portman employees were to give each guest a “memorable experience through servancy,” by satisfying the guest’s “intangible psychic needs.” For the guest, the Portman had to be a Home Away From Home and an Office Away From the Office. (See Exhibit 1 for a Portman advertisement.) The group of employees most central to the Asian philosophy of service were the personal valets (PVs). PVs were like butlers: they were expected to provide comprehensive personal services for the guests. No other American hotel had anything similar: the PVs were to be a key competitive difference for the hotel. Competitors The Portman competed with San Francisco’s finest luxury hotels. Rates (or “tariffs”) for single rooms at each hotel generally ranged from $140 to roughly $250 a night. In addition, two new luxury hotels had recently opened: the Mandarin and Nikko. These two, like the Portman, were trying to bring the Asian-style service to the U.S. market. The Portman’s rates were slightly higher than the others’: single rooms cost from $185 to $320. The budgeted goal for the average tariff was $220, which, over the course of the year, the Portman achieved. In general, all of the hotels offered similar features to guests—24-hour food service, elegant rooms and dining—but not personal valets or the concept of “no rules” for guests. Most of the competitors thought that the personal valet approach would be impossible in America. It was a labor-intensive strategy, and labor costs were three times greater in America than in Asia. Thus, typical Asian hotels could afford about three employees for every guest, whereas the normal ratio for American hotels was 1:1. The Portman needed to stay near that ratio to keep its costs competitive. Human Resource Management: Policy and Practice The key to the business strategy was providing unparalleled service. How could that be achieved? The employee handbook had the company’s answer: We know that if we want customers treated better we should treat each other better. We want to make the Portman the most fulfilling, fun work experience that anyone on the staff has ever had. We want to be the best employer in San Francisco, to show our trust and pride in each person on our staff, and to work in ways that help each person to grow, both personally and professionally. Michael Kay, president of The Portman Hotels—and Mene’s boss—put the philosophy very strongly: “We’d better have the same level of seriousness and commitment to meeting employee This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.The Portman Hotel Company 489-104 3 needs as we do to meeting guest needs. People are really our product—people who love you by nature.” Associate Contract Every Portman employee was called an “associate” and, as an associate, signed a contract. The associate contract spelled out how the hotel would practice its human resource strategy. It covered both the associates’ rights and responsibilities, making clear that the contract was binding, so that if any associate’s rights had been violated, the associate could seek redress in court. The contract included a “bill of rights.” Of the eleven listed, a few examples were, “The right to quarterly [written] performance reviews and an explanation of them; The right to know what is expected of him; The right to speak his mind in a professional manner; The right to be considered for any job in the Hotel once he successfully completes the training period.” Other
rights, not in the bill of rights but listed elsewhere in the contract, had to do with terms setting the duration of employment, levels of pay and training, grievance procedure, the role of seniority, and policies pertaining to layoffs, terminations, discipline and general rules of conduct. For example, in discipline cases not serious enough to warrant immediate termination, associates had a right to three written warnings for similar offenses before being fired. Warnings were void after three months; and after the second warning the associate would be placed on thirty-day probation, during which the department head and a human resources representative had to write up a plan to help the associate improve. The three would then meet weekly to review the associate’s progress. These policies were protected by an elaborate grievance procedure which could go to outside arbitration as a final step. As human resources director Joe Villa summed up: “Between the contract and the associate’s handbook and the orientation we give them, they know their rights.” Organization The organization of the hotel sought to maximize service while minimizing management overhead. Mene tried to cut out areas not essential to top service, particularly in middle management, such as the usual manager of food and beverage. Kay, the company president, saw this as “extending the bottom portion of the organization triangle”; it meant putting more employees in front of the guests, rather than in management. The director of room services, Spencer Scott, had had over 60 personal valets reporting to him directly when the hotel first opened (though he later added a level of supervision). Kay added that they could also avoid the usual costs that come with status: for example, all Portman employees shared the same dining hall. Without a deep hierarchy and with guest service so important, Mene hoped that employees would be content not to be promoted up the ladder, but to grow in their jobs, staying in them for a long time. Joe Villa, the director of human resources, called this management’s “real challenge.” Everything had to be coordinated to fit this strategy. We have to reward people for staying where they are,” he said. Achieving high quality and cost-effective service also demanded a certain philosophy of job design. Whereas jobs in most other hotels were “narrow,” Portman jobs would have to be “broad.” There would be no separate maids, no special category of workers to clean halls or to iron guest clothes. Associates would have more responsibilities, would have to be able to cover for one another, and would have to be willing to perform tasks outside their official responsibilities, particularly if those tasks had to do with a guest’s request. This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.489-104 The Portman Hotel Company 4 The key service groups, besides the personal valets, were entry court attendants, doormen, lobby porters, reception, room service, restaurant, and concierges. Upon arriving at the hotel (perhaps in one of the hotel’s green Rolls Royce limousines) guests would be greeted by an entry court attendant. A porter took their bags up to their rooms. The doorman, meanwhile, brought the guest to the third floor for check-in. The receptionist or the personal valet then escorted the guest to the room, where the valet prepared a welcoming tea and showed the guest the room. (See Exhibit 2 for the hotel’s organization chart.) Unions All of the large San Francisco hotels had unions representing their employees. Typically 8 or 9 unions represented the different employee groups in a hotel. Both Mene and Kay argued that having a number of separate unions rigidly delimiting jobs would undermine their strategy of broadly defining jobs and promoting inclusiveness. They believed that moving people around to avoid hiring extras was crucial to the business. It not only helped to ensure 40 hours a week for the associates but also helped minimize overtime expenses. The associates’ handbook stated: In the Portman Hotel, associates have rights. In fact, our associates have a written contract guaranteeing those rights, and it’s fully enforceable in a court of law. Nobody had to bring in a union to get it. When the Portman opened, the unions began attempts to organize the associates. Mene had told the four unions involved that he would be willing to bargain with them, but only if one union was to represent all employees. The unions did not agree to bargain jointly, and Mene did not agree to bargain with multiple unions. Shortly after, the hotel’s 9 engineers did vote to join a local union. The rest, including the PVs, seemed to prefer to stay unrepresented. Some unions picketed the hotel, and organizing it remained a major objective of the local labor movement. Recruiting “If you want friendly employees,” said Mene, “you have to hire friendly people—training and motivation won’t achieve those standards for you.” Good recruiting was crucial to the Portman’s strategy: the caliber of service depended directly on the caliber of people. The PV had to have “initiative,” with “a need to be nice to you.” Thus, said Kay, the hotel was looking for “talent,” not experience. As Villa defined it, talent was “the ability to do something almost perfectly,” as “positivity, focus, values and attention to detail.” Because he believed recruiting was so important, Mene hired Selection Research Inc. (SRI), a recruitment and development consulting firm. SRI’s approach to selection was to systematically study successful performers in a wide range of jobs and industries, looking for key success characteristics. Based on the characteristics it had discovered for the “hospitality” industry, SRI had designed questions to discern which applicants had those characteristics. The questions—the focus of an hour-long interview of each applicant—probed for the applicant’s “life theme,” or, the “consistent, recurring pattern of thought, feeling and behavior.” The desired themes for Portman hires included “Assertiveness,” “Pride,” “Responsibility,” “Positivity,” and “Gestalt”: (“Associates who are high on the Gestalt theme strive for structure and completeness in their lives. Neatness and cleanliness are natural manifestations of this theme. This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.The Portman Hotel Company 489-104 5 The hotel interviewed more than 9,000 applicants for its original 350 positions. Mene wanted the most talented people he could find, and he wanted them to know that they had been part of an extremely selective process. Those chosen were asked to make a commitment to stay in the job for at least one year. The Personal Valets Though all Portman associates were responsible for providing exceptional service, perhaps most important in this respect were the PVs: theirs was the largest group, making up about 85 of the 400 total; they had the most contact with guests; and no other American luxury hotel had them. The PVs reported through five supervisors to the director of guest room services. The director was responsible for preparing his staff for the guests’ arrivals, overseeing and approving the PVs’ schedules, handling the payroll, reacting to associates’ and guests’ problems, and ordering supplies. The PVs ranged from 19 to 50 years old, though over 80% were under 35. The majority of them saw the job as a way to support their true interests in life, which included becoming painters, writers, entrepreneurs, among other professions. Another significant group saw this position as a ground-floor entry into an exciting new concept in the hotel business. About 20% had some college education, and another 15% had been to trade school. The PV’s job was to greet guests at registration, show them to their rooms, explain how service at
the Portman worked and be on call (as a group) 24 hours for the length of the guests’ stay. What the PVs could do for a guest was essentially open. They might press a guest’s shirt before a morning meeting; buy a book for a guest; find a good jogging route; get the concierge to order theater tickets; prepare drinks from the room’s minibar; or draw the bath. As the associates’ handbook said, “As long as a guest’s request is moral and legal, we want you to do everything in your power to fulfill that request.” The PV was trained to anticipate a guest’s needs and personality, and judge whether the guest wanted to be “best friends” or have a formal, “Yes, sir” relationship. Aside from these butler-like tasks, the PVs also had to clean the rooms, perform minor maintenance, restock the rooms’ minibars, paint, clean the hallway, and move out the room service tray. The typical American luxury hotel was organized very differently. The maids cleaned the rooms, someone else stocked the bar, a “houseman” vacuumed and dusted the hallways, someone else put the shampoo in the bathroom—in short, it was organized by specialty. At the Portman, the PV did all these. As Mene put it, the PV had to be able to “clean toilets and still serve royalty.” The base pay of the valets was about the same as a maid’s in comparable hotels: about $7.50 an hour. It was expected, however, that they would add to this pay with lucrative tips as a result of the unusual level of service they provided. Spencer Scott, the director of room services, led them to expect as much as $200 a week in tips. Mene saw them as “independent capitalists,” with compensation heavily dependent on their performance for the guests. At full manning, which was 70 full-time equivalent or about 90 PVs, the monthly total budget for PV salaries and benefits was about $91,000. The total monthly budget for the hotel was $1.1 million. Mene pointed out that being a PV had other advantages over being a maid in another hotel. Each PV was responsible for 5 rooms, whereas the typical maid covered 16. All associates had the benefits of the associate contract, including long-term disability and retirement benefits. And there were unusual extras: liberal reimbursements for outside courses, access to an excellent cafeteria, parties, This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.489-104 The Portman Hotel Company 6 luncheons, $200 for the associate of the month, and $1,000 and a week in the hotel for the associate of the year. Each PV in the initial group received a two-week training course. Part was on cleaning rooms; part was on other skills needed in their job, such as mixing drinks; and part was on how to judge a guest’s personality so as to know what kind of service to provide. They learned to tell “lovers” —those who feel they deserve a high level of personal service—from “rejecters”—those who prefer independence and anonymity, and who feel uncomfortable with the idea of a servant. Problems in the First Months of Operations The first months of operations at the Portman were tumultuous as everybody struggled with how to implement the new service philosophy. According to one group of PVs: The supervisors were spread too thin and we had to make our decisions in chaos. We kept trying to find somebody. After our first interview with Scott, we no longer saw him. Everything turned out to be very decentralized. There was too much conflict and only chaos above. In the first month, turnover among the PVs was 16%. Some were fired, but many left because of problems which continued to trouble those who remained. First, the level of tips was far below expectations: instead of $200 per week, the average was closer to $40. This was due partly to low occupancy in the early months, but also in part to the fact that the American traveler just did not yet understand the personal valet system—neither how to use, nor how to tip, the PV. “We have to re-educate the public,” said one valet. In an effort at re-education, the hotel briefly tried leaving a letter in each guest’s room explaining the role of the valets and suggesting an appropriate tip; but this made guests uncomfortable and was soon discontinued. There were also concerns about the content of the job. When the original PVs were hired, they had been told that about 50% of their job would be cleaning and about 50% would be serving the guests. In practice cleaning took 80% of their time. Many had a hard time accepting this. Sometimes the cleaning made it harder to serve the guests, such as when the guests buzzed while the PV was cleaning a bathroom. Then the PV would have to rush “sweaty and smelly,” to answer the buzzer. There were frequent tensions with other groups of workers in the hotel. PVs complained that porters often were slow to respond to their requests to carry guest bags to and from the room; guests ended up having to wait. The PVs originally thought that they would do tasks like ordering theater tickets for the guests, but the concierges had “usurped” this. One complained: The hotel is disorganized. There’s no central character. Entry court, room service, the receptionist—it’s all departmentalized. Working with other groups is a problem. In general, they felt, other groups treated them like maids rather than as a group crucial to the business strategy. Finally, the PVs didn’t like their assignments. Scott, their boss, had started by assigning them to different rooms and different floors each day, according to shifts in occupancy. But constantly moving around made cleaning even more difficult. Different rooms were organized differently, as were the supply rooms on each floor. Working with different people every day was also difficult. The PVs often had to cover for one another, particularly when a guest buzzed, and thus needed to understand and trust one another’s work habits. They also thought that constant reassignments hurt tips, making This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.The Portman Hotel Company 489-104 7 it easier for some people to steal the tips, and because they couldn’t build long-term relationships with guests. Finding a Solution: the 5-Star Team Plan It became clear to Scott and Mene that the PVs wanted a plan for how they could deal with the chaos and solve the tip problem. Scott sat down with the supervisors, and together they came up with ideas. The supervisors then discussed the ideas informally with some of the PVs. As Scott put it, “We were trying to be solicitous of their needs. We would ask, What are your needs?”‘ The final product was the 5-Star team plan. Mene and Scott then held a meeting with all the PVs and supervisors, in which the PVs broke up into groups to discuss the plan. The meeting was very emotional, as valets vented their frustrations with the problems of the preceding months. Mene and Scott held several more meetings, during which the PVs suggested changes, finally giving their blessing to go ahead with the plan. In the last meeting, which was calm and organized, they drafted themselves into 15 teams of 5, based on seniority. Using a random drawing, they assigned each team to a floor. The plan, which went into effect in December 1987, worked as follows. On the day shift, two PVs would cover the floor, unless more than 14 rooms were occupied; then Scott would add a third PV. On the evening shift, only one PV would cover a floor, regardless of occupancy. On the night shift, 5 PVs would cover all the floors. Of the 5 team members, the first 3 (by seniority) were guaranteed 40 hours of work a week, regardless of occupancy, to be worked on set days. The fourth PV got 32 guaranteed hours, working the shifts not covered by the first 3. The fifth PV got 16 guaranteed hours, usually on night relief. The fourth and fifth PVs would
get more hours as the hotel reached full occupancy. This was a significant departure from tradition: other hotels did not guarantee hours independent of occupancy. In return, the hotel got a commitment to a higher level of productivity—up to 7 rooms per PV, when occupancy was high, rather than the original 5. The 5-Star Team Plan in Operation To the PVs, the 5-Star plan was an improvement at first. Now they knew ahead of time what days they had to work, and they got two consecutive days off. They liked the guaranteed hours. Some teams, particularly those on the upper floors, where occupancy was high enough to warrant using a full team, were able to coordinate their work and improve their cleaning and service. They got to know each other’s work habits and to “think like one person.” The night PV, for example, learned where the day PVs “would put Mrs. Jones’s dry cleaning.” Having fixed teams also made it possible to pool the tips, which made being paid to cover for someone else more fair. But despite the improvements, a number of significant problems remained. “Floaters” To staff the hotel with stable teams of 5 PVs per floor required a relatively full occupancy; but the Portman’s occupancy was still low. Thus, Scott had let the number of PVs drop from 75 in January 1988 to 59 in August 1988. (See Exhibit 3.) As mentioned, the hotel needed about 90 PVs for full This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.489-104 The Portman Hotel Company 8 occupancy. The low occupancy did not justify full manning, so he had to move away from using stable teams and instead resort to using “floaters.” Floaters were PVs who worked on different floors every day, depending on where they were needed. Using them brought back or worsened the problems the 5-Star system was supposed to solve. It became more difficult to pool tips, because floaters were not part of a team. The permanent PVs and the floaters could not get to know each other’s work habits. The floaters could not build long-term relationships with guests; they had to learn new rooms and supply offices every day. Many permanent PVs did not trust the floaters and thought the floaters were stealing their tips. One supervisor summed up the impact as follows: With floaters, we lost team loyalty. The floaters generally care less. They also have a harder time, they can’t find things, and they forget what floor they’re on. This all leads to wasted time and lowered responsiveness to guests. Discipline The team system was intended to help valets overcome the problems of coordination which had plagued them at the start. But many PVs complained of a continuing lack of organization. From the first, they and their supervisors had put much of the blame on Scott. Typical comments from the supervisors were: We haven’t had enough supplies, because of poor planning by Scott. He was too busy, threatened and defensive; he listened but he wouldn’t act. And he wanted to do everything. . . . He couldn’t delegate: you had to take it from him. He didn’t know what was where, how to fold, stock a cart—lots of stupid little questions came up that he couldn’t answer. Said Scott of the PVs: They have an unquenchable need to do additional things and pursue new needs. They want to do everything. They have a short attention span: they look for quick promotions and new experiences. They come to me one by one with requests and questions and expect me to answer by the next day. I see about 10 to 15 PVs a day. And when we have meetings, we get 70 different opinions—very strong opinions. They’re very proud and opinionated. Part of the problem was lack of supervision. In the original organization, the PVs were supposed to report directly to Scott. But right away he had realized he needed help, so he made three of the PVs supervisors. Three turned out to be not enough, however, and soon after, he promoted two more. The supervisor’s job was to check the rooms for readiness. On the day shift, for example, 2 supervisors would check 8 floors each. The supervisors also had to assist the PVs and conduct quarterly performance reviews. Despite these new positions, supervisors and PVs continued to complain of a lack of discipline and accountability. One PV said: Our main problem is the work ethic of others. Slouches disrupt the hotel’s workings. We need guidelines of discipline. Management is good, though perhaps too understanding. People get away with stuff. I have to cover for people a lot. We’re expected to confront each other. There’s no system to work out the problems. Scott did not believe it was part of the hotel’s philosophy to “discipline” poor performers. They would not “write people up”—that is, use the formal system—unless absolutely necessary. Instead, as This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.The Portman Hotel Company 489-104 9 Scott put it, they would appeal to an associate’s “sense of pride and fairness.” They considered their associates to be of the highest potential and thus could retrain rather than reprimand them. They reminded poor performers of the hotel’s mission and their original pledge to serve the guests. Scott tried to persuade them that good performance had many rewards, such as good tips. After complaining a number of times during the year, the PVs came to the conclusion that Mene and Villa also didn’t want to push Scott or the poor performers. One supervisor guessed: “I think it’s because management fears the union. They fear that if they discipline, they’ll get a union. San Francisco has strong unions.” It was important to Mene that his managers not “give up on people.” He wanted his managers to want their people to be successful, and he said that “it’s our fault if they’re not.” This view, he said, was unique: other hotels gave their employees 30 days to prove themselves and fired them if they failed. But the PVs and the supervisors were increasingly critical of the 5-Star system. They felt that between the floaters and the “slouches,” the teams were failing to solve the organizational problems which they were designed to deal with. The more meticulous workers complained that they were forced to pick up the slack for their colleagues, that they sometimes had to clean up to 10 rooms a shift, instead of 7. And, they argued, the commitment to quality was beginning to suffer: Management means well, but people take advantage. So I begin not to bother for most things. I just end up being the bad guy, so why bother? What Next? Mene looked back on all they had accomplished in the first year. They had provided a “breakthrough product, starting from zero.” The hotel was not yet profitable, but Mene felt they could do it. His people, he said, were very productive, perhaps by 20% more than he had originally expected. And the guests? “The lovers really love us; they get the experience.” For this group, the PVs and the philosophy of “no rules for guests” had successfully differentiated the Portman from its competitors; the essence of why the hotel had created the PV position, Mene believed, was working. But many issues still faced him. He was concerned about an increase in guests’ complaints. “We get more errors because we’re freewheeling, and I take lumps on the detail,” he said. “We must master the detail, even though the lovers are more important.” A supervisor commented: We need a new system, because we may be digging ourselves a hole. We have laundry problems daily. There’s no training because we’re so busy. The minibars aren’t stocked. Are we causing irreparable damage? He was also concerned about costs: the slowly increasing levels of hierarchy threatened to raise the level of overhead. He wondered what to do about turnover, which had run about 50% among the PVs in the first year. Although this was only half the normal tur
nover rate for hotel maids, it seemed too high for the quality position he was trying to develop. On the one hand, the PVs were frustrated and angry; on the other hand, Mene knew that they still took great pride in themselves and in the hotel, and still were deeply committed to the hotel’s mission. Finally, he needed to make a final decision on the 5-Star system. One proposal was to create a new position of “team captain” within each team. The captain would still clean and serve the guests, but would also be accountable for quality on that floor. The captains would report to the supervisors and be paid about $1.10 an hour more than the other PVs. This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.489-104 The Portman Hotel Company 10 It might work, but it meant higher costs and one more level in the hierarchy, which was against the original philosophy. In August and September 1988, occupancy suddenly shot up; by November it was 100%. (Over the year occupancy had averaged about 44%, as against the targeted break-even occupancy of 65%. For other hotels in the industry, August through November, and May through June were typically the busiest months, with expected occupancies of over 90%. December and July were the slowest months, with expected occupancies of about 40%.) Scott had to begin hiring again, this time at a much faster rate than ever before. With the systems already strained, it was time to set a clear direction for the future. This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.The Portman Hotel Company 489-104 11 Exhibit 1 An Advertisement for the Portman This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.489-104 The Portman Hotel Company 12 Exhibit 2 The Portman—San Francisco Organizational Chart This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.The Portman Hotel Company 489-104 13 Exhibit 3 Number of Personal Valets at Month-End, January-October 1988 This document is authorized for use only by sara alsuwaidi ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.

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