REWARD POWER IN A HOUSEKEEPING OPERATION

Karin Christensen was a successful executive housekeeper in a downtown hotel in Cleveland, Ohio.

One of the reasons for her commendable achievements as a leader was the system of rewards that

she had approved by the general manager and put in place to compensate employee performance.

She had established a bonus scale that was tied to a point system in which workers received extra

money for good performancefor example, arriving to work on time, lack of absenteeism, going

the extra step to service guests, suggesting ways to improve operations, and higher-than-average

productivity. Employees worked very hard to obtain points that translated into extra cash over

their minimum wages at the end of the pay period. Karin had demonstrated to her superiors that

the bonus system in place was well worth the high productivity achieved, the better-than-average

employee retention, and the achievement of superior customer service. In fact, the profit

percentage of her department was the highest of all the company's properties. Considered to be a

star, Karin was asked to manage the housekeeping department of a larger hotel that the

company was opening in Phoenix, Arizona. Karin accepted and was transferred with a

substantial raise in salary.

A new manager was quickly hired to replace Karin. Although relatively new in the

industry, Ryan Samuel held a degree from a hotel and restaurant management program and

was proud of having finished his academic work with a 3.8 GPA in his major. On taking over the

management of the department, Ryan was surprised to find in place the bonus/compensation

system initiated by Karin. He remembered from his college courses that rewards could be used

with employees in some occasions but that this type of management power was likely to erode if

workers expected to be rewarded for any extra effort put in their jobs. He decided to get rid of

the system and replace it with a more equitable way of rewarding performance.

Knowing that it would be difficult to take away a recompense system that had been in

place for a long period of time, Ryan decided to increase employee wages across the board

before eliminating the bonus/performance method. His goal was to motivate employees to put

extra effort in their work by paying them a better wage.

Three months into the implementation of his plan, Ryan realized that his system had

failed; productivity was down, absenteeism was up, and customer satisfaction had deteriorated to

dangerous levels. Ryan was flabbergasted, wondering what had gone wrong in the process.

1. How was reward power was used by the two managers in this case study?

2. In your opinion, who was a better administrator, Karin Rivkin or Ryan ?

3. Explain what you would have done if you had replaced Kristin as a manager.

4. Determine what Ryan should do after finding out that his changes had not worked as

expected.