How PESTEL Objectives can Conflict With Corporate Objectives – Taj Group Hotel

Introduction

The case study presented concerns the numerous changes that took place in the Taj group Hotel in 1990’s. In 1990’s, revolutionary transformations took place at the Taj Group Hotel, which gave the company a completely new image while under the leadership of Ajit Kerkar and Krishna Kumar. Under Kumar’s leadership, new novel practices that had major influences on employees were introduced. The company’s owned properties were streamlined, its management was restructured, and new strategies were implemented to enable Taj Group Company to compete favorably with other companies both locally and internationally. These changes brought about some variations in management of Taj Group Hotel during the tenure of the two leaders. In summary, the case study provides a classic scenario of how PESTEL objectives can conflict with corporate objectives.

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Evaluating Performance Management Systems in Taj

Strengths-Kerkar’s management system

One of the major strengths of Kerkar’s system is its ability to breed great loyalty among the company’s employees. This gives members of staff the opportunity to be part of the company’s vision, which eventually motivates them to work hard in order to help the company realize its objectives (Beardwell and Claydon, 2010; & Forrester and Tashchian, 2006, p. 461). Again, Kerkar’s system has brought about greater financial and physical growth to Taj Group Hotel as compared to the company’s status before his tenure. This has been advantageous in the sense that, it has enabled the company to make better improvements than those made before his tenure. The third strength of Kerkar’s system is the fact that it creates a culture with a ‘family orientation.’ This culture ensures that there is a close relationship between the company’s leader and the workers (Yagil and Medler-Liraz, 2013, p. 482).

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Most importantly, Kerkar’s performance management system lays much emphasis on developing internal talent pool and grooming is done through on-the-job-training. Talent development is one of the most important aspects of human resource management (Yukl 2012). Through talent development, Kerkar assists Taj Group Hotel to achieve sustained success through a strategic and integrated approach that incorporates improvement of employee performance and development of individual capabilities (Wilton 2013).

Weaknesses: Kerkar’s management system

Kerkar runs the Taj Group Hotel on the basis of personal relationships which prevents him from creating boundary between personal life and the company. This prevents him from formulating strategies that can help the company move forward (Forrester and Tashchian, 2006, p. 459). Even though Kerkar’s performance management system has resulted into aggressive expansions in the company, the system lacks service quality mainly due to the absence of a formal process of employee evaluation and tracking. Lack of a formal process of employee evaluation and tracking prevents KerKar from identifying employees’ strengths and weaknesses thereby making it difficult to suggest methods for improvement (Bach 2000, p. 268).

Kerkar’s performance management system lacks structured systems and standards which prevents him from identifying the best method of motivating employees. He therefore ends up using wrong motivation strategies to encourage his employees. Using wrong motivation strategies may not inspire workers in the long run which may interfere with their performance (Kaifi and Noori, 2011, p. 82) as observed during Kerkar’s reign. For instance, KerKar feels that meeting employees once a year and congratulating them for the good job done throughout the year is enough to encourage then to continue working for the company. Again, Kerkar’s system puts employees’ salaries at arrange of between 15 and 20 percent lower than market average. This does not motivate employees as expected.

Strengths: Kumar’s management system

Kumar’s performance management system comprises of employee development and performance appraisal. This system assists employees to improve their skills and to identify their areas of weaknesses for future improvements (Bach 2000, p. 268). According to Becker, Huselid and Ulrich (2006), a good performance management system needs to involve employee development and performance appraisal. Kumar understands the importance of having highly skilled and well-performing employees in an organization. For this reason, he has decided to launch an extensive reform that will ensure that corporate governance is realized at the Taj Hotel Group (Newton and Findlay, 1996, p. 56)

Kumar also employs the 360-degree feedback that enables him to maximize transparency among employees (Hazucha, Hezlett and Schneider, 1993, p. 332). With the 360-degree feedback in place, managers at the Taj Group Hotel are ready to provide feedback and have discussion with the company’s employees (Yukl 2012; & Knights and Wilmott, 2007). The system also enables leaders and employees of the company to remain transparent and to be morally responsible about their actions. This prevents workers from engaging in unethical behaviors, thereby ensuring that the Taj Group Hotel meets the ethical standards of the Tata Companies (Karl 1997, p. 100; & Brewster, Sparrow and Vernon, 2011).

Additionally, Kumar has introduced a new performance management system that has been able to unify the Taj Group Hotel with other Tata Companies. The system has created structured systems and standards that are applicable to all branches of the company, thereby enabling them to act as a unit (Yukl 2012). Kumar’s structured performance management system also assists him to create a more balanced promotion system for better employee motivation (Kaifi and Noori, 2011, p. 82). This system has also enabled Kumar to transfer successful managers to other locations where they can achieve maximum benefits from their skills and capabilities (Bach 2000, p. 268).

Weaknesses; Kumar’s management system

The new systems introduced by Kumar do not capture all aspects that are required for a person to be considered a successful manager. Additionally, Kumar’s performance management system has seen some excelling members of staff being promoted to manager positions. However, Kumar does not consider the fact that the business has now become very complex and too technologically demanding to be managed by merely excelling employees (Poon 2013, p. 400).

Other weaknesses of Kumar’s management system include; its ignorance about the traditional framework culture, it does not promote loyalty among employees, and the fact that the new system is not focused on a physiological contract plan to motivate experienced senior employees to the changes. These weaknesses greatly interfere with employee motivation in the company which impacts negatively on performance (Becker and Gerhart, 1996, p. 800).

Rationale for Bhowmick’s request

As far as Bhowmick is concerned, the person who has been selected to feel the position of the general manager at the Taj Kumarakom is not the right candidate for the job. I think Kumar should consider the several complaints that have been raised by senior executives concerning the new recruitment and selection process since this one of the best ways used to involve employees in the decision-making process (Kaifi and Noori, 2011, p. 90). After making these considerations, Kumar should accept Bhowmick’s request but he must first approach the Career Development Committee and inform the members about the request. Kumar should let the committee members know that senior executives are not comfortable with the method that the committee uses to fill vacant managerial positions.

Rationale for accepting Bhowmick’s request

The rationale behind Bhowmick’s request is the idea that, well experienced members of an organization enhance performance and appointing managers to senior positions based on experience highly motivates employees (Brady 1987, p. 440). This position has been arrived at following a comprehensive analysis of the steps that needs to be followed in performance management process. Performance management is a process that occurs in a cycle. The process begins by performance planning where employees’ expectations are viewed, including the plans they expect to achieve when still working with the company (Clegg, Kornberger and Pitis, 2008). Looking at employees’ expectations and levels of experience is very important because it provides an insight into how the workers will get the job done (Kaplan and Norton, 1992, p. 72; & Kaplan and Norton, 1996, p. 76).

This explains why it is important to allow senior managers to reconcile their expectations with that of the company when filling vacant managerial positions at Taj Group Hotel (Lucas, Lupton and Mathieson, 2006). Consequently, this will assist the senior managers to achieve important results when given the new positions (Wright and McMahan, 2011, p. 99). Since the current system used by the company does not give employees room to link their job expectations with that of the company, the star employees may not respond positively to it (Atkinson and Shaw, 2006; & Becker and Gerhart, 1996). Since a position has been taken that Kumar should accept Bhowmick’s request, it is unnecessary to give rationale for declining the request.

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Motivating A and B players

Every employee in an organization will feel encouraged to keep working for a particular company if he or she receives fair treatment from the managers or from senior executives (Guest, 2011, p. 8). The Career Development Committee at Taj Group Hotel is interested in retaining both ‘A’ and solid ‘B’ players. The committee uses promotion into new positions as the main method of motivating both types of employees (Wilton 2013). Suppose the committee gives only solid ‘B’ players the opportunity to grow, the star employees will feel demoralized and they will leave the company for its competitors. Similarly, if the committee gives only the star employees the opportunity to grow, solid ‘B’ players will also think of moving to the company’s competitors Delong and Vijayaraghavan, 2003, p. 102). The company should try and motivate both ‘A’ and ‘B’ players. In order to motivate both star and solid “B” players and keep everyone on Board, the Taj Group Hotel should include other methods of motivating employees, such as pay increases and additional benefits, into its system (Kerr and Slocum, 1987, p. 102). This will assist the company to retain both star and solid ‘B’ employees, bearing in mind that it is not possible to make all employees fill all new positions in the organization (Brady 1987, p. 438).

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In order to motivate ‘B’ players, the Taj Group Hotel must provide comprehensive coaching in order influence their average performance. This is because ‘B’ players are fond of rejecting responsibilities and will require close attention of their supervisor in order to accomplish tasks. In addition, the company must formulate programs and policies that will enhance employee performance and productivity (Delong and Vijayaraghavan, 2003. For example, the company should assign tasks to every ‘B’ player and stress that the assigned tasks must be completed before the end of the day. This way, the ‘B’ players will develop the spirit of completing tasks on a daily basis.

            The best way to motivate ‘A’ players is by establishing a strong relationship with them in order to increase their participation in organization’s activities. ‘A’ players should also be allowed to give their opinions concerning the best strategies that should be implemented to assist the company realize its objectives. This creates motivation for ‘A’ players because it makes the workers feel connected to the company (Lucas, Lupton, and Mathieson, 2006).

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