Motivation Systems for Hospitality Organizations: A Case Study of Motel

Generally speaking, the hospitality industry competes on a global basis by providing food and beverages services as well as accommodations for tourists and travelers. For instance, according to Lucas, “The term hospitality industry serves as an overarching label for businesses whose primary purpose is to offer food, beverage and accommodation for sale on a commercial basis” (2003:3). By contrast, hospitality services are associated activities that take place within the hospitality industry which are provided within different segments of the marketplace. Such hospitality activities are primarily involved with providing food and beverage services for a wide range of institutional operations including educational facilities such as colleges and universities, passenger airline carriers, healthcare and long-term care facilities as well as penitentiaries and jails (Lucas 2003). For the purposes of this study, the focus will be on the hospitality industry and hotels in general and on Motel 6 in particular.

1.2

Rationale of the Study. Because the hospitality industry is an integral part of the travel and tourism industry, an economic environment that adversely affects the latter will also have an adverse impact on the former. The ongoing global economic downturn has created the need for companies competing in the hospitality industry to develop a competitive advantage to remain viable, and motivated employees represent one such competitive advantage. For example, Umashanker and Kulkarni emphasize that, “It is a universally known and well-documented fact that when we talk of customer satisfaction it takes effective and motivated service (encounter) personnel at the delivery end to make the difference” (2002:31).

In fact, a highly motivated workforce is an absolute essential for organizations competing in the hospitality industry for without this factor firmly in place, nothing else that the organization does will make any difference in the long run. In this regard, Umashanker and Kulkarni add that, “All the product design, operation planning and other associated efforts will come to a nothing if the delivery end personnel fail. Earning profits through delivering customer satisfaction is one of the philosophical underpinnings of service businesses” (2002:31). Therefore, identifying opportunities for organizations competing in the hospitality industry to achieve a competitive advantage through a more motivated workforce represents a timely and important enterprise, and these factors are described further below.

1.3

Aims and Objectives. The aim of this study was to identify motivation system that could be used by companies competing in the hospitality industry to achieve a competitive advantage. In support of this overarching aim, the study was guided by three objectives as follows:

1.3.1

To deliver a comprehensive review of the literature concerning employee motivation in general and employee motivation in the hospitality industry in particular;

1.3.2

To provide a case study of a hospitality organization to identify what best practices are available for employee motivation that could be used by similarly situated companies competing in the hospitality industry; and,

1.3.3

Based on a synthesis of the literature review and case study findings, to provide a series of recommendations for motivating employees in hospitality organizations.

2.0

Literature Review

2.1

Definitions and Concepts.

2.1.1

An Employer’s Perspective. Hospitality organizations are currently faced with some fierce competition, and some companies might have few resources available to devote to elaborate employee motivation schemes (Brody, Lane & Steed 2004). According to Brody and his associates, “Full-service hotels are in fierce competition with suite and economy hotels for business travelers” (2004:324). From the employer’s perspective, employees represent one of the best resources available for developing and sustaining a competitive advantage in such a highly competitive environment. For instance, Chen, Niu, Wang, Yang and Tsaur emphasize that, “An important avenue for customer value creation is the interaction between customer contact employees and customers” (2009:40). One of the leading economy hotel chains that has taken this advice to heart is Motel 6, which forms the basis for the case study developed and discussed further below.

2.1.2

An Employee’s Perspective. The workforce of the 21st century has a number of different expectations from those that existed just a few decades ago. During the mid-20th century, for example, people could reasonably expect to join a company at the entry level, work hard and be rewarded with a series of promotions and raises until retirement. In other words, there was an unspoken but widely recognized social contract that meant if people were loyal and dedicated to a company, the company would return the favor by providing lifetime assurances of employment and retirement benefits when they had successfully completed the required amount of time on the job. By sharp contrast, Spillane emphasizes that today, “People are less and less sure about what ‘work’ really means. Their expectations of work, especially getting it and enjoying it, are now matters of both deep anxiety and mundane reality” (2001:16). Besides a shift in the aforementioned social contract, Spillane suggests that there are some other important reasons for this change in how people view their jobs. According to Spillane, “There are high unemployment rates in industrialized societies. For many people in modern society, work is no longer something that happens in a fixed place during a fixed unit of time, producing a fixed output and reward” (2001:17).

This means that many people will probably have more than one job during their professional careers, and likely many more than that, but there is a high price to be paid for such job mobility for both employees and employers. For employees, changing jobs means starting all over again in establishing credibility and trust with a new employer, and this usually takes a lot of time. In addition, even if people are highly proficient in their professions, every organization is different and “learning the ropes” at new places of employment can also require a great deal of time and can be a stressful process. For employers, the high costs of recruiting and training new employees are well established, making job mobility a challenging aspect of developing motivational tools in any workplace. The high costs of high turnover rates among employees include, but are certainly not restricted to, the costs of recruitment, new employee training and orientation, as well as a period of job orientation in which new employees are typically not as efficient as more experienced employees (Mccaughey & Bruning 2005).

In this regard, Spillane reports that there are two key aspects of job satisfaction that generally apply to any workplace setting:

1. Experienced Meaningfulness. The individual must perceive his or her work as worthwhile or important by some system of values he or she accepts; and,

2. Knowledge of Results. The worker must be able to determine, on some regular basis, whether or not the outcomes of his or her work are satisfactory (2001:17).

In order to develop motivational initiatives that can have a significant effect on this two key aspects of job satisfaction, employees must have their jobs expanded along the following five dimensions:

1. Skill Variety. The degree to which a job requires the worker to perform activities that challenge his or her skills and abilities.

2. Task Identity. The degree to which the job requires completing a whole and identifiable piece of work — doing a job from beginning to end with a visible outcome.

3. Task Significance. The degree to which a job has a substantial and perceivable impact on the lives of other people, whether in the immediate organization or the world at large.

4. Autonomy. The degree to which the job gives the worker freedom, independence and discretion in scheduling work and determining how he or she will carry it out.

5. Feedback. The degree to which a worker, in carrying out the work activities required by the job, gets information about the effectiveness of his or her efforts (Spillane 2001:17).

This level of job expansion, though, can be a challenging enterprise even under the best of circumstances, but the process is especially difficult during periods of high job mobility and economic downturn when people may not stay at a job long enough (or be allowed to stay at a job long enough) for their jobs to do anything but evaporate from underneath them during periods of economic downturn.

2.1.3

Social Behaviour. Because customer satisfaction is of primary importance in the hospitality industry, the manner in which hospital industry employees behave on the job can have a make-or-break effect on a company. In this regard, Liu and Chen emphasize that, “Within service organizations, frontline employees and supervisors are regarded as the show windows of the company’s customer orientation. They are the direct participants in the implementation of this marketing concept, because the ‘personal component of services is often the primary determinant of customer overall satisfaction” (2006:478).

2.2

Review of Existing Industry Research Articles.

2.2.1

Industry Context. In any industry, there are some general approaches that can be used for employee motivation including the following.

1. Positive reinforcement/high expectations;

2. Effective discipline and punishment;

3. Treating people fairly;

4. Satisfying employees needs;

5. Setting work related goals;

6. Restructuring jobs; and,

7. Base rewards on job performance (Employee Motivation: Theory and Practice 2010).

The rewards that relate to job performance typically include pay and benefits. According to Chonko and Roberts, “Of all the many properties that characterize work in formal organizations, pay is one of the most important. Pay has been found to influence significant organizational behavior variables, including turnover” (1996:154). As noted above, though, a number of other motivational factors can be used depending on the wants and needs of the employees that are involved. For example, according to Neff (2002), truly effective employee motivation and satisfaction programs require organizations to use more than just pay and benefits because different people view personal success in the workplace in vastly different ways. In this regard, Neff emphasizes that, “Successful companies know that motivated, satisfied employees increase customer satisfaction and profit margins. Because of the link between employee satisfaction and customer satisfaction, companies have implemented an array of strategies to help increase employees’ internal motivation” (2002:386).Therefore, within the foregoing broad approaches, there exists a wide range of motivational tools and techniques that can be used to good effect depending on economic and industry context, and these issues are discussed further below.

2.2.2

Economic Context. Even the most efficiently operated hospitality organization will feel the effects of an economic downturn, and the ongoing global economic crisis has affected the travel and tourism industry, and by extension, the hospitality industry as well (Grist 2009). Consequently, hospitality organizations that have weathered this economic storm and even prospered deserve a closer look by companies seeking to identify ways they can do the same, and Motel 6 represents just such an enterprise as discussed further below.

2.3

Research Company Background. Motel 6 (hereinafter alternatively “the company”) was established in 1962 in Santa Barbara, California and has grown to include more than one thousand hotels with more than 105,000 rooms (Motel 6 Corporate Profile 2010). The company maintains corporate offices in Carrollton, Texas as well as Columbus, Ohio (Career Opportunities 2010). The corporate profile for the company also notes that, “Part of the Accor family, Motel 6 is the largest owned and operated hotel chain in North America. Accor is the largest hotel operator in the world with nearly 4,100 hotels in 90 countries” (Motel 6 Corporate Profile 2010:2).

According to the company’s promotional literature maintained under “Career Opportunities,” Motel 6 emphasizes that this corporation “realizes that having the right people is very important in producing our product — well managed properties with satisfied customers. Therefore, our goal is to provide an environment that attracts, develops and retains talented self-starters who want to be part of a leading organization in budget lodging” (2010:1). Interestingly, although the Motel 6 hotel chain originally did not offer franchises for investors, the corporation has always provided its hundreds of Motel 6 properties in the United States with a centralized risk management plan as a cost saving measure (Johnson & Oshins 1999). Beginning in 1996, though, the company initiated its franchise program and there are currently more than 380 franchised locations scattered across the country with more being planned every day (About Motel 6, 2010), with 34 franchises being opened in the first half of 2010 alone (Accor North America Opens 34 Franchise Locations 2010).

Although the accommodations at Motel 6 have improved significantly since Kay observed, “Motel 6 units are not good hotels” (1995:134), the organization continues to charge far less than many of its competitors, thereby making them “good hotels for $30 per night,” and the organization remains “a highly effective organization” (Kay 1995:134). Given that Motel 6 not only survived this early perception of their accommodations as well as the economic downturn that has created widespread concern throughout the hospitality industry, they must be doing something right. In this regard, Kay (1995) suggests that while Motel 6’s upper-end competitors try to achieve a competitive advantage based on their reputation for the superior quality of their accommodations and service, Motel 6 has sought to achieve a “value for money” reputation that has served the company well over the years. In fact, many luxury hotel chains are highly reluctant to establish their facilities anywhere near Motel 6 locations because of the message that the Motel 6 brand communicates: “This is an area suited to budget motels” (Merrill & Smith 2007:1849).

Clearly, Motel 6 has carved out a very large niche for itself in the economy hotel segment of the hospitality industry, but attracting and retaining high quality, qualified employees when there is such a focus on economy represents a significant challenge. Therefore, Motel 6 places a high value on ensuring job satisfaction among the employees it does recruit. While the need for job expansion remains an essential part of job satisfaction in any organization, so too is the need for providing employees at all levels with respect and recognition for superior performance. This element of job satisfaction is also emphasized by Motel 6 which adds in its promotional literature, “We strive to maintain a culture that treats employees with respect and appreciation for their contributions. The company is also committed to long-standing values including: customer service, teamwork, diversity, recognition, communications, ethical behavior and opportunity for growth and development (Careers 2010:2).

When resources for employee motivation initiatives are scarce as is the case with Motel 6 and its emphasis on cost efficiency, Royle and Towers (2006) emphasize that strong leadership is needed at all levels within the organization, but with a specific focus on providing employees with respect, dignity and the types of rewards they will view as being commensurate with their efforts as well as a workplace environment that fosters mutual respect, a process that requires “individualized employee relations” (2002:67). This observation means that different motivational programs might be used in the more than 1,000 different hotels maintained in the United States alone by Motel 6, and these motivational programs would all require careful consideration of the potentially powerful cross-cultural effects that might exist in different regions of the country.

Furthermore, the hundreds of entrepreneurial franchisees that have invested their own resources in a Motel 6, or perhaps more than one motel, will have a vested interest in ensuring that their employees are highly motivated to deliver the type of service that brings customers back and provides the word-of-mouth testimonials that are the lifeblood of any industry. This means that there is a potential for more than a large number of different motivational approaches to be used within the corporate motel chain as well as within the franchisees, but there is an overriding emphasis throughout the Motel 6 organization on providing a workplace that provides their employees with the respect and opportunities for growth that are the most essential elements of any motivational initiative.

Despite the number of different motivational approaches that may be in place at any given Motel 6 facility, the company offers a standardized benefit package for all of its employees, including one of the best benefit package available in the hotel industry today as shown in Table 1 below.

Table 1

Recapitulation of Motel 6 Employee Benefit Packages

Employee Category

List of Benefits

All Motel 6 Employees

* Medical Plan

* Vision Plan

* Dental Plan

* Company Paid Life and AD&D Insurance

* Supplemental Life & AD&D Insurance

* 401(k)

* Vacation (Consistent with the Motel 6 policy)

* Credit Union

* Accor Card (After one year of service employees are eligible to receive 50% off room rates)

Additional Benefits for General Managers Only

* Business Travel Accident Insurance

* Short-Term Disability

* Long-Term Disability

* Performance Bonuses

* Housing (One bedroom apartment provided with all utilities paid except personal long distance telephone charges)

Additional Benefits for Area Managers Only

* Business Travel Accident Insurance

* Short-Term Disability

* Long-Term Disability

* Performance Bonuses

* Company Car (from the approved company list). This also includes regular maintenance and upkeep of the company car.

Source: Career Opportunities 2010

As can be seen from the list in Table 1 above, all employees at Motel 6 have an incentive to remain on the job for at least a year by virtue of the Accor Card that provides them with a 50% discount on Motel 6 room rates across the country and in overseas facilities as well, and general and area managers have a powerful incentive to motivate their employees because of the performance bonuses that are available for top performers in the organization.

3.0

Methodology.

This study used a mixed methodology consisting of a review of the relevant literature together with a case study of Motel 6. This mixed methodology is highly consistent with a number of researchers who cite the benefits of using a case study approach to learn more about a given topic in-depth (Wood & Ellis 2003; Gratton & Jones 2003). For instance, according to Neuman, the case study approach is “research in which one studies a few people or cases in great detail” (2003:530). Likewise, Zikmund reports that the case study method is “an exploratory research technique that intensively investigates one or a few situations similar to the researcher’s problem situation” (2000:722). One of the main advantages of using a case study for this study was that motivational factors in the hospitality industry could be examined closely and a focus on a given corporation, in this case Motel 6, could be developed, an approach that is also consistent with the guidance provided by Leedy (1997) and Yin (2003).

4.0

Conclusions and Recommendations

4.1

Conclusions. Taken together, the research was consistent in showing that people who work in the hospitality industry are no different from those in any other industry. All people appear to want and need recognition for the work they do and to receive rewards that are commensurate with their efforts. In addition, everyone wants the opportunity to earn more money and for many people, this means moving up the corporate ladder and assuming the additional responsibilities that go hand-in-hand with earning regular raises and bonuses. In this regard, Motel 6 was shown to have a comprehensive benefit package program in place for all of its employees, with incentives available to encourage new hires to remain on the job for at least a year to qualify for an Accor Card that entitles them to half off any of the chain’s 4,100 facilities around the world.

While there was no specific pay schedules available for Motel 6 that could be compared with similarly situated budget hotel chains, it is reasonable to conclude that the pay offered by the organization is competitive based on the region in which they operate given the company’s spectacular growth rate in recent years, a process that would likely not have been possible without a workforce that was motivated to deliver the type of customer service that is essential to success in the hospitality industry.

4.2

Recommendations. Based on the review of the literature and the case study of Motel 6, the following recommendations are provided:

1. Organizations competing in the hospitality industry should periodically review their current motivational initiatives to ensure they are achieving the desired goals and outcomes;

2. Because pay and benefits represent only a part of an overall motivational program, managers should identify what employees want and need and seek to reduce that gap in cost-effective ways;

3. Organizations competing in the hospitality industry should review the best practices that are in place at Motel 6 and other successful corporations to determine if any of the motivational approaches in place at these companies can benefit them as well; and,

4. Establish metrics by which the effectiveness of any motivational program can be measured to identify additional opportunities for refinement and improvement.

References

About Motel 6. (2010). Motel 6. [online] available: http://www.motel6.com/about/.

“Accor North America Opens 34 Franchise Locations.” 2010 Motel 6. [online] available: http://www.motel6.com/about/press_room/release.aspx?Document=428.

Brody, R.G., Lane, S. & Steed, E. 2004 “The Development of an Accounting Performance Measure to Minimize Inter-departmental Conflicts in the Hospitality Industry.” International Journal of Management 21(3): 324-325.

“Career Opportunities.” 2010 Motel 6. [online] available: http://www.motel6.com/about/careers / default.aspx.

Chen, L-C, Niu, H-J, Wang, Y-D, Yan, C. & Tsaur, S-H. 2009 “Does Job Standardization Increase Organizational Citizenship Behavior?” Public Personnel Management 38(3): 39-40.

Chonko, L.B. & Roberts, J.A. 1996 “Pay satisfaction and sales force turnover: The impact of different facets of pay on pay satisfaction and its implications for sales force management.” Journal of Managerial Issues, 8(2), 154-155.

“Employee Motivation: Theory and Practice.” 2010 Accel Consultants. [online] available: http://www.accel-team.com/motivation/>.

Feagin, J.R., Orum, A.M., & Sjoberg, G. 1991 A Case for the Case Study. Chapel Hill, NC: University of North Carolina Press.

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Grist, J. 2009, March 7 “Economic downturn evident in CBDs.” The Northern Star 5.

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Merrill, T.W. & Smith, H.E. 2007 “The Morality of Property.” William and Mary Law Review

48(5): 1849:1850.

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