Abstract:

The case examines Marriott International's (Marriott) various innovative HR practices, which
earned it the reputation of being 'the best place to work' in the hospitality industry. It describes
Marriott's 'Spirit to Serve' culture and the company's HR philosophy which guided its various HR
initiatives. The case gives an overview of the best practices employed by the company in the
recruitment, selection, training and development of employees. It also details the employee
retention strategies and grievance redressal system at Marriott. Finally, the case reviews the
benefits reaped by the company because of its employee friendly HR practices

Issues:

» Understand the role of an organizational philosophy and culture in the development of human resource policies in a
multinational organization

» Get insights into the HR best practices of a large global service organization

» Understand the role of employee development programs for retaining employees and improving organizational
productivity

» Appreciate the benefits that accrue to an organization through the use of employee-friendly policies

Background Note

In 1927, J. William Marriott (JW Marriott) set-up a nine-seat root beer 7 shop in Washington. After some time, William
started serving hot food along with the root beer and named the shop as 'The Hot Shoppe.' In 1929, Hot Shoppe was
officially incorporated as Hot Shoppes Inc and in 1937, Hot Shoppe, ventured into airline catering at Washington
airport, serving the Eastern, American and Capital airlines.

Over the next three decades, Hot Shoppes diversified into other businesses including food services management 8 by
starting a cafeteria at the US Treasury Building in Washington DC and the Highway Division. In 1966, the company
ventured overseas, acquiring an airline catering kitchen in Caracas, Venezuela. In November 1967, its name was
changed to the Marriott Corporation (Marriott).

In 1982, Marriott acquired Host International, a leading hospitality services provider in the US,
becoming the largest operator of airport terminal food, beverage and merchandise facilities in the
US. In the 1980s, Marriott acquired several companies including the American Resorts
Corporation (vacation business, 1984), Gladieux Corporation (food service company, 1985),
Service Systems (contact food service company, 1985), Howard Johnson Company (hotels &
inns, 1985) and Residency Inn Company9 (1987). With the acquisition of the Saga Corporation, a
diversified food service management company in 1986, Marriott became the largest food service
management company in the US.

Marriott also diversified into the moderate price segment of hotels under the brand name 'Courtyard' (1983). In
1987, Marriott entered the field of economy lodging by launching the first Fairfield Inn in Atlanta, Georgia. That year,
Marriott also launched its worldwide reservation centre (WRC) 10 at Omaha, Nebraska. This centre became the largest
one-point reservation operation in the US hotel industry...
The Marriott Way

Marriott's history of taking care of its employees dated back to its early days, when its founder,
JW Marriott, counselled the company's employees individually on their personal problems at his
first hotel. He valued their presence, kept them posted about the latest happenings in Marriott
and gave them excellent training. JW Marriott always ensured that employees who joined the
company felt themselves a part of the Marriott family. He made managers responsible for the
satisfaction of their subordinates. 

JW Marriott was always conscious of the fact that in the hospitality industry, providing the best
service to customers was paramount...

The HR Practices

Apart from providing a competitive pay package, Marriott strived to give its employees a good work life. The
company gave equal importance to non-monetary factors such as work-life balance, good leadership, better growth
opportunities, a friendly work environment and training.

Employees stayed longer with Marriott as they were happy with these non-monetary factors and thought them more
important.

Marriott's culture and guiding principles had a significant influence on the company's HR practices including
manpower planning, recruitment and selection; training and development, employee retention and welfare initiatives
and grievance redress.

Manpower Planning, Recruitment and Selection

Marriott attached a lot of importance to manpower planning. It started right from entry level and went through to
higher positions. Every unit of Marriott (division or department) prepared its expansion plans over the next couple of
years, and, in the process, decided on the number of entry level and managerial employees required for the
expansion.

Details on the number of new units planned in the given time frame (two to five years), a rough picture of the likely
organization structure, the time required to develop employees who could take managerial positions, current
availability of employees within Marriott and the necessity to recruit externally - all these were determined during the
planning process...

Training and Development

Once the right candidates were recruited, it was important to get them accustomed to the
company's unique work environment. Training and development played a key role here. These
programs varied between frontline employees and managerial personnel. Over time, training
programs evolved from classroom- based teaching to interactive multimedia training. Fresh
recruits went through an eight-hour initial training session, during which they were given an
overview of Marriott and their individual roles.

A unique feature was that senior hotel employees served lunch at the first session. During the three- month training
period which followed, a mentor, addressed as 'buddy' was allotted to each recruit. The mentor guided the trainee.
All trainees attended refresher sessions after the first and second months. On the final day of training, recruits
enjoyed a sumptuous feast at a Marriott hotel...

Employee Retention and Welfare Initiatives

Retaining employees in the hospitality industry was vital as the cost of recruiting and training
new employees was very high. Marriott operated in an industry where every day counted and
weekends and holidays generated more business than weekdays.

Customer service had to be provided on a 24/7/365 basis. The implication was that employees
had to go through a hectic work schedule; an average work week lasted more than 50 hours.
With the increasing work load due to rising customers in the late-1990s, several key managers at
Marriott left.

They wanted to devote more time to their personal lives and their jobs at Marriott were not helping the cause.

Facing this challenge, Marriott launched a new program called Management Flexibility in February 2000 on a pilot
basis at three of its hotels.

The aim was to assist Marriott's managers in balancing their professional and personal lives, without negatively
affecting customer service or the company's financials...

Grievance Redressal System

By the mid-1990s, Marriott had a comprehensive complaint resolution system in place, known as the Guarantee of
Fair Treatment (GFT), to ensure that employee grievances were addressed.

Under GFT, complaints passed through successive stages in Marriott's hierarchy, starting with the immediate
superior, depending on whether or not the said employee was happy with the redress response given at each stage.

However, given the decentralized nature of Marriott's operations, and with managers handling several tasks,
resolution of complaints through GFT did not quite produce the desired results.

It, therefore, decided to try new methods of complaint resolution while continuing with GFT. These methods included
mediation, a toll-free hotline and peer-review...

The Benefits Reaped

Marriott's efforts over the decades to develop an employee-friendly work place earned it widespread recognition in
the hospitality industry. The awards it received for 'the best place to work' were testimony. (Refer Exhibit IV for
awards received by Marriott). The company reaped benefits like higher employee satisfaction and less turnover.
Employee satisfaction could be gauged from the 2003 Associate Opinion Survey, in which 90% of employees
surveyed expressed great pride in working for Marriott...