Indian Institute of Management, Indore

PGP-1, 2014-2016

Leisure co: Customer service, employee involvement and the Flexible Firm

(As a part of course Human Resource Management, PGP 2014-2016)

Submitted on January 26th, 2014

Prepared by:
Group 1, Section E
2014PGP250
IPM2011010
2014PGP036
IPM2011043
2014PGP085
2013PGP050
2014PGP449

Patel Rajnishkumar Vinodkumar

Amandeep
Aniket Nangia
Krishnakant Patidar
Bishwarup Pakrasi
Ankit Parihar
Dhananjay Sharma

Under the Guidance of

Dr. Amitabh Kodwani
Indian Institute of Management, Indore

Problem statement
The human resource problem at the Leisure Co is how to deliver high quality service to its
customers through a highly casualized workforce. The seasonal character of the Theme park
market and the traditional characteristics of service and leisure employment forces us to look
into the problem of long term investment in training and employee involvement when the
turnover rate is high.

Flexible firm model: (Atkinson, 1984)

The model divides the workforce into an indispensable core and a disposable periphery.
The peripheral employees at Leisure Co do the routine tasks as well are charged of the
responsibility of creating a fun, happy atmosphere for the customers visiting the theme park.
The dilemma of HRM at Leisure Co is that how should it value and invest in the human
resource which is core to it business competitiveness as opposed to treating the workers as
disposable commodities which can be bought and sold at the lowest possible rates on the
labor market.

Fig 1: Flexible firm model

Case Questions:
1. Which elements of the Leisure Co case conform to the model of the Flexible
firm?
Functional flexibility- enables employees to be redeployed between, through
multitasking and team working, in response to changes in production methods
and product demand.
Leisure Co being a theme park faced the problem of large overheads like
expensive machinery and also a near full capacity demand for 4 months and

then very low demand for subsequent months. Due to economic downturn
people were spending less at theme parks and there stay was shorter.
The flexible workforce which consisted of usually students was trained to
entertain and help customers. They were dressed up in themed outfits and
were also trained in technical tasks of running the rides. The core or
permanent employees of the company lead these students with experience and
trained the seasonal staff
New workers had to be recruited constantly and rapidly to satisfy the wide
variety of jobs at the theme park.
Financial Flexibility- it attempts to link the pay to local market conditions,
business performance or individual efforts.
The peripheral employees, in this case students and married women and nonmanagement employees who maintained the park during the off season were
paid low and were very insecure about their job. Leisure Co tried to implement
short terms incentive schemes to reward them for loyalty and merit. E.g.
employee report and employee share scheme.
The reason for this could be attributed to unemployment, no trade union or a
formal industry structure.
Numerical Flexibility- Allowed the head count to be increased and decreased
based on the demand for labour. The use of part time employees was increased
so that they could be hired and fired more easily.
In order to maintain the high standards of customer care and to retain more
employees a no of experimental schemes were implemented like personal
briefings, suggestions scheme and customer care induction programme.
Distancing or subcontracting- Replacing the employee contract with a short
term commercial contract which can be terminated easily.
Case does not suggest the use of this policy by Leisure Company towards its
employees.
2. Design an alternative approach to employee management for Leisure Co which
is more consistent with HRM principles yet economically feasible.
HRM regard the work for as a long term investment, suggesting stability, commitment
and a substantial investment in training.
An alternative approach to employee management for Leisure Company is described
below: Leisure needs to adopt a credo that contains 3 parts: employee training,
unrivalled customer service and spectacular profitability.
To be successful they need to hire people not on the basis of talent by on the
basis of a good positive attitude. Positive attitude helps in the sole purpose of
the company that is to entertain children and adults.
During the induction program at Leisure potential candidates should be shown
the importance of positive attitude and the companys vision.
The people hired by the company should be given the best in house training
and allow them a small period of lets say 90 days to determine whether they

are best for the job at hand or should be shifted to a place they like better. The
chance to identify the area which their talents are the most use helps the
employees to build trust and loyalty.
For the visitors of the theme park to return again and again Leisure should
empower the employees to go above and beyond the visitors expectations.
This should include allowing the employees to issue monetary compensation
without management intervention when necessary.
A continual recognition and reward system for all the members within the
company. It should be the responsibility of the company to make sure that the
employees maintain a positive attitude even in the face of low wages, long
hours and disgruntled visitors. Rewards on a daily basis for exceeding visitors
expectation would also reduce the attrition rate for Leisure.
By implementing a feedback system from the employees and also taking care
that those creative ideas are tested and implemented could also raise the
morale of the employees.
3. What would the problems be in applying the Leisure Co style of employment
management to a car factory and a social office?

The Leisure Co style of management consisted of the four types of flexibility i.e. functional,
financial, numerical and subcontracting. The following problems can occur in applying the
same style to a car factory:

A car factory requires a more stable workforce unlike the Leisure Co which employed
transient workforce.
A substantial investment in training is required for the workforce of a car factory. In
the manufacturing sector the customer satisfaction is achieved through a high quality
product which an employee can only produce after intensive training.
They need to be better looked after with good and effective incentive schemes as a
transient workforce can lead to a financial burden on a car factory.
The functional flexibility i.e. the redeployment of employees from one function or
task to another will lead to a drastic fall in productivity as in a car factory efficiency is
increased through repeatability of jobs.
There were no trade union in Leisure Co which made the numerical flexibility i.e.
sudden increase or decrease in number of employees possible but in the case of a car
factory usually there is a presence of a trade union which opposes such drastic
changes.
A car factory requires an employment throughout the year as compared to seasonal
employment of Leisure Co

The following problems have been listed which may occur in implementing Leisure Co style
of management in a social work office:

As the motivational level of the employees of a social office is way higher than that of
the Leisure Co, the incentive schemes may be considered redundant in a social work
office.
As the nature of work is mostly voluntary, remunerations to the workers doesnt
depend upon the local labour market and hence financial flexibility may not be
required for a social office.
Investment in employee commitment is required as the same workforce can work
across various social projects throughout the year whereas the workforce of Leisure
Co is seasonal.