Case description Hampton Inn

Hampton Inn, a hotel chain recently introduced a 100% Satisfaction Guarantee policy to help it gain a distinctive advantage in a highly competitive industry where customers have little allegiance to any particular hotel. When guests walk away from a hotel dissatisfied, chances are they will relate their unhappy experience to friends or business associates who might spread the story even further. Thus are hotel reputations lost. Hampton Inn decided to take advantage of this informal communication network with its new policy. The company believes that guests who go away impressed with the way Hampton Inn handled a problem will spread the word and generate additional business for the chain.

The guarantee is simple: Guests who are not completely satisfied with every aspect of their stay are not expected to pay. The guarantee allows every Hampton Inn employee to do whatever it takes to satisfy the guests including giving them their money back. Rhonda Thompson, one of Hampton Inns employees, describes the 100% Satisfaction Guarantee policy in terms of its supporting HR strategies:

While working as a guest services representative at a Hampton Inn hotel, I overheard a guest at our complementary breakfast complaining quite loudly that his favourite cereal was not available. Rather than dismiss the person as just another disgruntled guest, I looked at the situation and saw an opportunity to make this guest happy. I gave him his money back not for the continental breakfast but for the cost of one nights stay at our hotel. And I did it on the spot, without checking with my supervisor or the general manager of the hotel, and without making the guest fill out a long complaint form.

Some people might be surprised to hear this story or they might not believe it could happen. After all, how could a front desk employee give a guest his money back without getting permission from the boss? And why would the hotel support this action for something as simple like a bowl of cereal?

But when the 100% Satisfaction Guarantee was introduced, my job was like most other jobs in the hotel industry. My responsibilities were outlined in my job description and I was evaluated on how well I fulfilled those duties. There wasnt much room to express my own ideas, and I wasnt expected to come up with any. Most people I worked with liked it that way because they know what their jobs entailed and what to expect. When the 100% Satisfaction Guarantee policy was first announced, many employees felt this program would have little effect on their jobs. But when we learned that every employee would go through a three day training program, we knew that the guarantee was something special. It became more and more apparent that the new Hampton Inn guarantee would affect all our jobs and we would have to change the way we thought about performing our routine duties. The company scheduled a series of training sessions at every hotel, involving videos, classroom style teaching, open discussions and role playing. Through this training, we learned what to do if a guest asked to invoke the guarantee. We also learned how to identify situations when we, as employees, should invoke the guarantee for guests before they even complain. This training reinforced the message that employees at every level should use this responsibility to make sure guests are satisfied.

Many employees, including myself, were skeptical at first. Although we were proud of our hotels and the service that we offered, we thought that guests might take advantage of the guarantee as a way to get something for free. But the training emphasized that, although any reason given by a guest is a valid reason to invoke the guarantee, most guests would not take advantage of us. Hampton Inn basically threw out its old job descriptions. Of course a housekeeper's duties still included cleaning and preparing guest rooms. But the housekeepers real job is to satisfy customers and this is typically accomplished by cleaning the room to perfection. For example, if a housekeeper sees a guest having trouble with a lock on her room door, the housekeeper has the authority to stop what she is doing and takes whatever action is necessary to correct the situation. While the goal of the 100% Satisfaction Guarantee is to give every guest a satisfying stay, the program has made the employees jobs more satisfying as well. When Hampton Inn tells employees that they can do whatever it takes to make a guest happy without needing approval from a manager theyre telling employees that they trust them to do their jobs. Most employees have never worked for a company that will unconditionally back them up for refunding a guests money, no matter how small the problem was to begin with.

This type of trust motivates employees to do a better job, and makes them try harder to deliver excellent customer service. Employees know that they dont have to wait for their once-a-year review to find out if they are doing a good job; they find out every day from guests staying at the hotel.

Discussion Questions

1. This semester we have discussed many challenges that face business and HRM related to change. Discuss two specific HRM challenges present in this case. Name each specific challenge and provide your rationale for these choices based on facts seen in the description of the case.

Change Management

2. Kotter notes, in the introductory chapter in Leading Change, that one error made in bringing successful change to an organization is permitting obstacles to block the new vision. Discuss one such obstacle seen in this case and refer to a specific HRM program (function) initiative Hampton Inn used to remove this blockage.

3. Using Kotters discussion of management v. leadership and the in class and online material from the course related to this topic use one example from this case to discuss how leadership made a difference in Hampton Inns change efforts. Your example should show the contrasting perspectives from the comparison table seen in Figure 2-3 (Chapter 2) of the course text.

4. Referring to the HR Competencies model (studied in HRM 1200 and reviewed in this course), comment on what specific HR competencies are used in this case to make the change needed.