Having worked across several countries allowed me to receive exposure to the best business practices in the industry from international leaders in hospitality such as Marriott International and Relais&Chateaux. I could witness a difference between independently operated hotels and restaurants in Kazakhstan and their international counterparts. One of the most striking practices I witnessed was having a strict hierarchy in place in the hospitality industry. The two-Michelin star restaurant that I worked for in France had:
- Director of the restaurant - responsible for the financial part of the department plus participates in developing a menu and making critical decisions in the way service is delivered
- Assistant director - assists the director and may take some responsibilities from him
- Head waiter - responsible for the entire team/shift
- Sommelier - wine expert
- Captains - the first person guests see and from whom they order dishes
- Assistant captains - help captains take orders from guests
- Regular waiters(commis de salle) - deliver dishes and assist guests
- Bussers - pick up plates and clean tables once guests leave
- Runners - delivers dishes to the floor from the kitchen but not to the guests
Working as an entry-level intern I was initially assigned the lowest position - runner. After a few months, I managed to climb a bit to the level of assistant captain. In the beginning, I was burdened by such a cumbersome and strict hierarchy. The restaurants that I have previously worked in did not have such a strict hierarchy and division. It was not seen as a viable and necessary complication for me. However, over time I realized that it has its own benefits and drawbacks like any other organizational structure.
It all comes down to organizational structuring, the way companies organize their human capital and direct their resources in the most possibly effective way. At the moment, the hierarchical organization structure is the most dominant among government entities and big companies including big hotels with over 250 rooms. There are certainly alternative ways of organizational structures among prominent companies such as Morning Star which uses the flat organizational structure that’s based on workers’ autonomy. However, in this article, we will only cover the traditional hierarchical structure since it’s the most relevant to the hospitality industry.
Now moving into the hotel industry, one of the hotels I worked in had the following hierarchy in the Front Office department:
- Front Office manager - MOD(aka Manager On Duty) in the morning shift
- Two assistant Front Office managers - MODs when the FO manager is in the emergency meeting or absent. Variously assist FO manager
- One Night Audit Manager - MOD at night shift
- Two front desk managers - typically MODs in the evening shifts
- Seven supervisors - people that are responsible for small teams within different areas such as phone calls, front desk or VIP lounge.
- Around 15 regular guest service representatives(GSR) - people working at the desk or answering phones - entry-level positions
My colleague from St. Regis explained the situation in the housekeeping:
- Director of housekeeping
- Housekeeping manager
- Assistant Manager
- Housekeeping coordinators - assigning which person does which room at what time.
- Housekeeping supervisors - responsible for the entire floor, each supervisor has from 3 to 10 subordinates depending on how busy is the day.
- Housekeeping attendant - housekeepers
- Houseman - removes the trash and linens, delivers room requests, refills the fridge, bell boy for the housekeeping
As can be observed, there are complex hierarchies in place in each department of big luxurious properties. Furthermore, they have different power relationships and dynamics. The primary reason companies rely on hierarchies is the communication overhead. It can be costly to inform and discuss with everybody about daily business decisions that may affect the company. Thus, by having several directors and managers you can inform them and they in turn will inform their departments.
Since the industrial revolution, the distribution of labour was found as the most effective method of mass-producing products within the shortest time period with consistent quality, the hospitality industry was no exception. Furthermore, to make workers more accountable there are supervisors who are responsible for their individual units. Usually, supervisors are more experienced associates that have higher proficiency in solving complex problems with an ability to train newly-hired employees. They have broader responsibilities and have higher retention rates in general.
The additional benefit of having more supervisors and managers within the department is that the department will have more flexibility by being less dependent on one individual manager. For example, when the head of the department is planning to leave the company there will be a plethora of potential successors. Moreover, the more people try out managerial positions the higher the human capital of the company in case there is a need to gather a task force to be sent to another location, the management can easily organize potential candidates from within and etc.
If done properly, setting up clear responsibilities and expectations within the hierarchical framework can increase employee engagement within the company. For instance, supervisors may develop a sense of responsibility and encourage other employees to start upholding higher standards of quality service. The research about the navy recruits who monitor radar shows that the human focus span is not longer than 30 minutes maximum and after that, the accuracy and engagement are observed to be dropping substantially. Thus we can deduce that changing the nature of tasks done by employees every hour or so will increase employee engagement and in turn affect guest satisfaction. One of the ways to do that is by having supervisors distribute different tasks throughout the shift. For example, one employee may take care of online check-ins at the Front desk while the other one is responsible for allocating all the guests with allergies to feathers to a feather-free room, of course, these responsibilities have to be mixed up with basic front desk duties.
Potentially the company will have lower rates of inter-team arguments when a clear division of responsibilities is set up. For instance, the Sales Director may not overrun the financial decisions approved by the head of finance since there is a clear difference in the jurisdictions. People working as concierges may share some responsibilities with front desk agents, however, at the end of the day, they are responsible for different things. There should still be some flexibility that allows managers and employees to negotiate different responsibilities.
One more benefit is the increased employee retention rate. As there are more people who grind their way up within the department to become managers and supervisors, the likelihood of quitting the job is significantly lower. This can be attributed to psychological commitment and consistency that results in the feeling of achievement. Once people are committed to the department by receiving a promotion they are less likely to leave the company compared to entry-level workers.
Despite mentioning all the advantages hierarchical structure brings into the hospitality industry, it definitely has its drawbacks that must be taken into consideration and if not managed right may cost business competitive advantage. Among the disadvantages of strict hierarchy, there are many: strife of innovation and strict standardisation, lack of flexibility when bringing change to the organization, and little autonomy on the side of the entry-level employees in the decision-making process.
The most glaring of issues is that fresh ideas coming from the bottom of the organisation can get stuck on the way up. The bureaucratic structure ensures that sometimes truly amazing ideas may have to get through too many people before being approved by the management. That way innovation is only limited to the teams at the top of the food chain. However, if the right leader was chosen, there will be an open-door policy that does not fall on deaf ears.
Even when the new ideas are implemented on the top level of the organisation they may not get all the way down to the bottom ranks. This leads to another issue: the lack of flexibility. Sometimes the management needs to thoroughly ensure that the entirety of the organisation moves either to the new system or the new procedure. For example, Marriott still struggles to move from the old central reservation system Marsha, which was invented in the 80s, to the newer systems that may be more convenient with additional features that cater to contemporary market and needs. This is due to the fact that all layers of a company use that system.
The hierarchical structure also does not favour independent decision-making in the junior management and entry-level employees such as servers, front desk agents and others. However, that has been consistently offset in Marriott by providing an opportunity for the entry-level employees to solve any guest issues within the reasonable money bracket of between 100$ to 1000$ depending on the brand. This philosophy allowed Ritz-Carlton, Marriot’s franchise, to hold leading positions in terms of guest satisfaction and employee engagement as well as the most luxurious hotel brand by allowing its employees to spend up to 1000$ for guest satisfaction.
Some of the aforementioned downsides can be avoided if the organization sets up solid communication channels as well as structures itself in the most efficient way possible across all levels of employees within the organization as was shown by the example of leading international hotel chains that create an environment to attract and retain top talent.
Another interesting occurrence that can be observed is the clanning within the department. For example, morning shift people may relate less to the night shift while evening shift may be having an impression that they bear the main burden of the department. Housekeepers who are responsible for their floors tend to be defensive and territorial of their ‘domains’. Service and kitchen teams may have different expectations while fulfilling guest orders and etc. We as human beings have a natural tendency to form groups and cliques. Moreover, over time people coming from the same group tend to develop common values and traits, in psychology, it’s called convergence. The opposite of convergence is divergence, which is when people from one group tend to become less like other groups. For example, people working at the front desk during the day tend to develop traits that facilitate a positive customer service experience while Night Audit teams tend to be more detail-oriented and analytical. It becomes even more obvious when looking at different departments within the hotels such as Sales and Finance.
Executive teams, on the other hand, tend to be of diverse backgrounds to cover for each other’s blind spots, in economics, it’s called comparative advantage. Comparative advantage entails that each individual should focus on their strengths and rely on others for everything else. Furthermore, executive teams tend to be less hierarchical than their lower counterparts. When the executive team is being formed, companies look for diversity in terms of skills and experience. That’s why in many hotels General Manager(aka GM) and Assistant GM may have different completely different sets of skills and experience. For example, the hotel may have a GM who has an administrative background while Assistant GM may have more operational experience, that way, they compensate for their weaknesses and amplify their strengths.
As a final example I will illustrate a typical layout of the executive team within a standard hotel:
- Hotel General Manager(aka GM)
- Assistant GM
- Front Office Manager
- Revenue Director
- Sales Director
- Events Director
- Financial/Accounting Director
- F&B director
- Housekeeping manager
As can be seen, there are as many managers and directors as there are departments. Sometimes to make executive teams smaller, additional positions like Rooms Division Director can be created that way Rooms Division Director has a rapport with FO and Housekeeping managers. Each hotel is unique catering to its own segment within a lodging market, therefore hierarchical structure can be changed as needed.
There are several benefits behind hierarchical organizational structure:
- The clear line of command ensures the decisions are made by the most qualified people
- Essentially having several supervisors and managers allows for consistent delivery of quality service that is not dependent on one person
- Increases the retention rate
- Makes managers more accountable to each other
- It allows for cross-checking where different managers and supervisors catch each other’s errors
- Increases employee retention rate by promoting more people in general to supervisory positions
- Supervisors relieve the burden on managers
- Low communication overhead
- Allows more experienced employees to deal with more complicated work or customer care cases
There are certain drawbacks that come with that structure:
- Strict control and sometimes little autonomy on the side of the entry-level employees
- If not set up properly, the managerial decisions can be running uncheck and result in power abuse.
- Slow change that is brought by innovation
- Ideas can get stuck when going from the bottom up
In conclusion, we can summarise that the most important question we should ask when structuring our organisation is what goals do we want to fulfil? What is the purpose behind the hierarchy? Otherwise making positions and creating entire divisions without the end goal in mind is pointless.
Special regards to Jack Kuo Chang who assisted me by sharing information from his hotel.