Employee Incentive Plan for the Away from Home Hotel, South Beach

Mary Smith

Employee Incentive Plan for the Away from Home Hotel, South Beach

November 1, 2018

BA 2196 Section 1 – Professor Jones

EXECUTIVE SUMMARY

Away from Home Hotel, South Beach (AFHSB) has issues surrounding the performance of our front desk talent. Employee happiness has declined, leaving untouched profit potential in the front office since the hotel opened one year ago. I recommend implementing an incentive program for all front desk employees that will assist in increasing sales and hotel occupancy, while also motivating our staff and boosting employee morale. Making this investment in our front desk staff and employing this system will lead to increased productivity, sales, and online customer experience scores. If we do not implement a system to regain employee morale, we risk a reduction in motivation, increased turnover, and untapped profit potential.

NOTE: You will NOT submit an executive summary with your written proposal. You will write an executive summary as a separate assignment, after you’ve received graded feedback on your proposal.

PROBLEM: REDUCED EMPLOYEE PERFORMANCE AND MORALE

Although management provides verbal appreciation and recognition to the staff, we continue to experience employee discontent. After AFHSB’s strong opening one year ago, employee morale and performance has steadily declined based on anonymous staff surveys. In the last six months, we started to experience employee turnover, which increased our employee training costs. Additionally, our online customer experience scores (reviews on TripAdvisor, Hotels.com, etc.) fell below that of our local competitors (see exhibit 1), which affected our occupancy rates. Specifically, the front desk staff voiced the most discontent. They feel underappreciated because we do not offer any kind of commission or recognition.

PROPOSAL: IMPLEMENT EMPLOYEE INCENTIVE PROGRAM

We should implement an employee incentive program for the front desk staff. A reward system to motivate our employees will increase performance and hotel revenue while showing our employees how much we value their hard work.

My solution for the growing issues at the front desk is to develop an incentive program that provides direct benefits to our employees who successfully up-sell and provide great customer service. I conducted an anonymous survey at our last monthly staff meeting to assess what incentives our employees are interested in receiving. According to the survey, the most desired incentives are cash/gift cards, paid days off, and free hotel stays at other Away from Home hotels. Our passionate, customer-oriented staff is our strongest asset. Thus, to provide positive reinforcement and continue to strengthen our team, rewards should be based on a point system or the amount of revenue gained from up-sells, as explained below.

For every up-sell an employee makes, they will receive a commission of ten percent of the total amount made from the upgrade after the revenue is actualized. We will ask employees to complete a form confirming the upgrade, have it signed by the guest, and submit it to management at the end of their shift to receive this compensation.

For every positive name mention employees receive, either face-to-face to management or through verified online reviews, they will receive one point. The point system will operate over a six-month period. Employees must redeem their points before the period is over as points will not roll over into the next six months if not used. I suggest the following point redemption scale:

· 10 points: $20 pre-paid visa gift card

· 25 points: Paid half day off of work

· 50 points: Free two-night stay at another Away from Home location

The employee who earns the highest dollar amount in up-sells will be recognized monthly and the employee that earns the most points will be recognized at the end of the six-month period. The front desk management will post updated rankings of points weekly in the back office as motivation and to keep our staff up to date on the program. The front office manager will also set monthly goals for total revenue through up-sells and total customer service points for the staff to work towards. Finally, the front desk management will track sales goal results and changes in online customer satisfaction surveys to assess the success of the employee recognition.

IMPLEMENTATION PLAN

With the holiday season approaching, we should move quickly so we can take advantage of a heavy travel season. We will provide training during the November staff meeting so that our staff knows how to properly execute an up-sell and to fully prepare our staff for the program. I propose the following timeline (see exhibit 2):

· Create upsell forms and point tracker chart by November 9, 2018.

· Announce the incentive program to staff on November 12, 2018.

· Hold employee training workshops on November 13 & 14, 2018.

· Begin incentive program on November 15, 2018.

· Evaluate early results on January 15, 2019 and compare to last year’s holiday season.

· First six-month period will end on May 15, 2019.

· Evaluate results by May 20, 2019.

BUDGET (see exhibit 3)

The initial cost of $630 includes:

· Three-Hour Training Sessions for 12 employees at $10 per hour – $360

· 1,000 copies of a new upgrade form – $270

Depending on the success of the program, we also need to budget for rewards. Although costs are associated with the rewards, they are awarded when employees meet milestones that will create more revenue. If all 12 front desk employees all earn each reward, the total cost is $4,320. This cost includes:

· $20 gift cards – if all 12 front desk employees earn these, the total cost will be $240

· Paid half days are $40 each (4 hours at $10 per hour) – if all 12 employees earn this, the total cost will be $480

· Free two-night stay (approximately $150 per night) at another Away from Home Hotel – if all employees earn this, the total cost will be $3,600.

BENEFITS OF THE PROPOSAL

This employee recognition program will strengthen employee morale while motivating front desk employees to take on sales related targets and increase customer satisfaction. The minimal cost of implementing this program will be significantly offset by the improvements in employee happiness and increased hotel revenues.

Increased Employee Morale

Initially, the training workshops we will run will increase employee morale by offering them support to succeed from AWHSB. The incentive program is geared to motivate front desk employees to achieve company goals by recognizing individuals who display notable customer service, leadership and high sales capacity. Friendly competition combined with measurable success among front desk employees can increase morale that will contribute to higher customer experience scores online.

Increased Revenues

This incentive program to recognize AWHSB employees’ accomplishments could also reap financial rewards for the company. By incentivizing front desk performance, we can earn higher revenue when employees up-sell our hotel rooms and services to guests upon check-in. Higher customer experience scores can help AWHSB capture more of the market share of nearby hotels.

If we do not take action, we risk higher employee turnover rates, which will lead to high costs for training new employees. Consequently, this program will provide preventative maintenance to ensure that our employees are motivated and happy.

CONCLUSION AND RECOMMENDATIONS

Modern South Beach Hotel should implement the front desk staff incentive program to recognize those employees who go above their normal work responsibly through providing excellent customer service and increasing the sales and occupancy of the hotel through up-selling. This program will resolve our current issues with declining employee morale and untapped profit potential at the front desk. The total cost for this 6-month incentive program is up to $4,950.

Putting this program into effect will increase the overall happiness and morale of our employees by rewarding them for their hard work and showing appreciation. With your approval, I will introduce this incentive program to our staff at the November staff meeting and provide the required training to be ready to begin this program on November 15, 2018. As a result, Away from Home Hotel, South Beach, will maintain quality leaders, diminish turnover rates, increase revenue, and bolster the morale of our team.

REFERENCES

Average Front Desk Clerk Hourly Pay. (2018, September 9). Retrieved from https://www.payscale.com/research/US/Job=Front_Desk_Clerk/Hourly_Rate

Copies and Documents. (n.d.). Retrieved from https://www.staples.com/sbd/content/copyandprint/copiesanddocuments.html

Customer Experience Scores for Boutique Hotels in Miami. (n.d.). Retrieved from http://www.bookings.com

Customer Experience Scores for Boutique Hotels in Miami. (n.d.). Retrieved from http://www.expedia.com

Customer Experience Scores for Boutique Hotels in Miami. (n.d.). Retrieved from http://www.hotels.com

Customer Experience Scores for Boutique Hotels in Miami. (n.d.). Retrieved from http://www.travelocity.com

Customer Experience Scores for Boutique Hotels in Miami. (n.d.). Retrieved from http://www.tripadvisor.com

APPENDIX

EXHIBIT 1 – CUSTOMER EXPERIENCE SCORES

EXHIBIT 2 – TIMELINE

EXHIBIT 3 – BUDGET

DescriptionQuantityCostTotal
Three-hour training session12$30$360
Upgrade forms1,000$0.27$270
$20 gift cardsup to 12$20$240
Paid half daysup to 12$40$480
Free 2-night hotel stayup to 12$300$3,600
Total Cost$4,950

By Nov. 9: Create upsell forms and point tracker chart

Nov. 12: Announce program to staff

Nov. 13 & 14: Employee Training Workshops

Nov. 15: Begin program

Jan. 15: Evaluate early results

May 15: End first six month run of the program

By May 20: Evaluate results

Customer Experience ScoresTripAdvisor Away from Home Hotel South Beach Slumber Hotel Sleep Tight Hotel Hotel Florida South Beach Inn & Suites 7.2 8.2 7.6 8.6 9.0 Hotels.com Away from Home Hotel South Beach Slumber Hotel Sleep Tight Hotel Hotel Florida South Beach Inn & Suites 7.3 8.1 7.7 8.6 8.8 Bookings.com Away from Home Hotel South Beach Slumber Hotel Sleep Tight Hotel Hotel Florida South Beach Inn & Suites 7.6 8.3 7.7 8.5 9.1 Expedia Away from Home Hotel South Beach Slumber Hotel Sleep Tight Hotel Hotel Florida South Beach Inn & Suites 7.2 8.1 7.5 8.7 8.9 Travelocity Away from Home Hotel South Beach Slumber Hotel Sleep Tight Hotel Hotel Florida South Beach Inn & Suites 7.5 8.2 7.6 8.5 9.0