Critical Thinking

Background:

Shalimar Hotels is a chain of 4 star hotels in Rawalpindi, Lahore and Peshawar. This Pakistani, family owned business and is the leader in terms of market share. Shalimar Hotels are appreciated by customers for their affordable room rates, excellent food, good location in the centre of the city. The hotel lobbies are always packed Pakistani politicians, businessmen, army officers and their families.

Shalimar Hotels are owned by Chaudhary fmily of Jehlum. Thee family has expanded and most key positions in the organizations are held by the Chaudhary second generation. The first management has been replaced by their children who are graduates. However none of these graduates have a degree or formal education in Business Administration or hotel management.

In 2001, Shalimar Hotels signed a joined venture agreement with a leading American hotel chain. The American company acquired 49% of the company’s equity and is providing know how, its brand name and marketing support. The American partner has instituted an elaborate in-house training program for enhancing the competencies and skills of hotel staff.

During the past three years, Shalimar Hotels has seen a dramatic increase in employee turnover that has risen 23% in 2008. Employee relations in the company are tense and in September 2009, there was a labor strike and a shut down of Shalimar hotels chain for two weeks.

There is no HR department in the company. In the board meeting held on March 31, 2010 the American partner expressed serious concern at the rising employee turnover, deteriorating organizational climate and dwindling profits of the company. An urgent employee survey by an HR consultant was conducted. The consultant presented the following problems in HR.

Major problems of HR:

RECRUITMENT:

i. External influence and undue recommendations: the main problem in recruitment process of Shalimar Hotels is that nearly 45% of hiring in the company has been done on recommendations. Recommendations can be a source of recruiting quality employees but 45% of the hiring on recommendations is an unfair practice. Government influence should also not affect hiring process. This process should be transparent.

ii. Absence of formal recruitment process: There is a formal recruitment process which should be followed by each and every organization. The aim of recruitment is to attract qualified job candidates; the recruitment process is a sales activity. The new appointments must be aware of company’s mission, vision statement and history.

iii. No job description and job specification: one of the main problems in the recruitment process of Shalimar Hotels is that job descriptions and job specifications are not made for employees. Job description and job specification are the products of job analysis and if the