Homework Help is Here – Start Your Trial Now!
Business
Operations Management
How large would you estimate the implied costs of fluctuations and other personnel-related issues

How large would you estimate the implied costs of fluctuations and other personnel-related issues

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question

How large would you estimate the implied costs of fluctuations and other personnel-related issues?

This case was researched by David Bollier and written by Laura Pochop, under the supervision of Kathleen A. Meyer, executive director of The Business Enterprise Trust. case centre The Business Enterprise Trust DONNA KLEIN AND MARRIOTT INTERNATIONAL (A) Oher and ne morning in early 1993, Donna Klein struggled to contain 9-996-057 As Director of Marriott International's Work-Life Program, Klein had. instituted a number of child-care resource and referral programs that were producing admirable results - she thought. Klein was in charge of a small group within Marriott's Human Resources department that served as consultants in helping Marriott managers best serve the needs of its Associates (employees). Klein had always viewed Marriott as an "employer of choice" in regards to benefits and respect for line workers. But the report that the Human Resources department had recently commissioned revealed a much less optimistic picture. The dependent care resource and referral program that Klein had established was all but ignored by Marriott's hourly workers, who made up more than three- quarters of the company's 180,000 person payroll. Usage data revealed that fewer than .5 percent of hourly employees used the service. These lower-wage Associates, who earned an average of $7.00 an hour, rarely could afford the child care programs that Human Resources recommended. Instead, they relied on friends, family members and older siblings to take care of their small children, and missed work when their patchwork system failed. Klein's reports also revealed that the lower-wage workers were depending on Marriott property managers for assistance with even more serious and distracting personal issues: domestic abuse, lawsuits, immigration, homelessness, family finances and more. Some property managers reported spending upwards of 50 percent of their time on their efforts to serve as "makeshift social workers" for their hourly Copyright © 1997 by The Business Enterprise Trust. The Business Enterprise Trust is a national non-profit organization that honors exemplary acts of courage, integrity and social vision in business. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic, mechanical, recording, or otherwise - without the permission of The Business Enterprise Trust. Please call (415) 321-5100 or write The Business Enterprise Trust, 204 Junipero Serra Blvd., Stanford, CA 94305. Harvard Business School Publishing is the exclusive distributor of this publication. To order copies or to request permission to photocopy, please call (800) 545-7685 or write Harvard Business School Publishing, Customer Service Dept., 60 Harvard Way, Boston, MA 02163. Distributed by The Case Centre www.thecasecentre.org All rights reserved North America t+1781 2395884 e infosa@thecasecentre.org Rest of the world t+44 (0)1234 750903 e info@thecasecentre.org Donna Klein and Marriott International (A) employees. Klein recognized immediately that this was a very costly and inefficient solution for the managers and the lower-wage Associates. She also knew that the problems caused by these workers' personal issues, such as turnover, absenteeism, worker disputes and tardiness, threatened the high standards of service that were Marriott's competitive advantage in the ultimate of service industries. Klein knew that she and her group must devise a solution that would assist hourly workers. What's more, she needed to "sell" the solution to the property managers who ultimately would have to pay for any new employee benefit programs. Marriott International Begun by J.W. Marriott in 1927 as a chain of root beer stands, Marriott International had grown to an enormous service-industry conglomerate (Exhibit 1: Marriott's 1993 income statement). By the early 1990s, the corporation operated three separate chains of hotels aimed at upscale business travelers, mid-range tourists and budget minded travelers. In 1994, Marriott operated nearly 4,000 properties in all 50 United States and in 23 foreign countries. It also owned Host International, the largest airport concession operator, as well as fast food chains, school cafeteria contractors and a national hotel management company. Workers in the Service Industry Service industries such as hospitality, restaurant and retail depended on large numbers of primarily unskilled workers. Hotels, particularly, relied on huge numbers of housekeepers, food service personnel, customer service representatives and maintenance workers who were generally paid near the minimum wage and provided with only rudimentary benefits. Turnover in these jobs was high, and employers often complained about the lack of work skills these entry-level employees brought to the job market. Many of the workers in this wage class were recent immigrants who brought to the job their difficulties with the language and customs of the United States. Marriott supervisors often were called upon to help workers navigate the 2 9-996-057 complicated social service system set up to assist immigrants. Other workers, while native-born, had limited formal education and struggled to provide themselves and family members with stable housing and basic needs. Many were single parents. Nearly all felt the necessity to seek employment at the highest possible wage they could attain, so they would often leave a job with no notice if a higher paying opportunity presented itself. The Consequences of Low-Wage Employment As Donna Klein investigated the situation further, the stories of Marriott Associates she interviewed convinced her to become their advocate: "I was so amazed at the stories they were telling me, stories that should have been intuitively obvious. Single mothers were coming to work and leaving their children home alone because they had no choice. A lot of sibling care issues... eight year olds caring for four year olds. Just heartbreaking stuff. These were good people who wanted to work, who wanted to perform, but, because of life circumstances, had difficulty doing it. They were making a tradeoff between taking care of their children and being loyal to the job. I was really moved by the stories I heard. [I talked to al single mother who... was so committed to her job, she took two bus rides and a subway trip to leave her daughter with a relative on Monday mornings. But because of her evening work hours, she could not pick up her baby at night and bring her home via mass transit, so she picked her daughter up Friday evenings. You hear so many people talk about [lower- wage workers] being lazy, and not caring. It's just not true."
Transcribed Image Text:This case was researched by David Bollier and written by Laura Pochop, under the supervision of Kathleen A. Meyer, executive director of The Business Enterprise Trust. case centre The Business Enterprise Trust DONNA KLEIN AND MARRIOTT INTERNATIONAL (A) Oher and ne morning in early 1993, Donna Klein struggled to contain 9-996-057 As Director of Marriott International's Work-Life Program, Klein had. instituted a number of child-care resource and referral programs that were producing admirable results - she thought. Klein was in charge of a small group within Marriott's Human Resources department that served as consultants in helping Marriott managers best serve the needs of its Associates (employees). Klein had always viewed Marriott as an "employer of choice" in regards to benefits and respect for line workers. But the report that the Human Resources department had recently commissioned revealed a much less optimistic picture. The dependent care resource and referral program that Klein had established was all but ignored by Marriott's hourly workers, who made up more than three- quarters of the company's 180,000 person payroll. Usage data revealed that fewer than .5 percent of hourly employees used the service. These lower-wage Associates, who earned an average of $7.00 an hour, rarely could afford the child care programs that Human Resources recommended. Instead, they relied on friends, family members and older siblings to take care of their small children, and missed work when their patchwork system failed. Klein's reports also revealed that the lower-wage workers were depending on Marriott property managers for assistance with even more serious and distracting personal issues: domestic abuse, lawsuits, immigration, homelessness, family finances and more. Some property managers reported spending upwards of 50 percent of their time on their efforts to serve as "makeshift social workers" for their hourly Copyright © 1997 by The Business Enterprise Trust. The Business Enterprise Trust is a national non-profit organization that honors exemplary acts of courage, integrity and social vision in business. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic, mechanical, recording, or otherwise - without the permission of The Business Enterprise Trust. Please call (415) 321-5100 or write The Business Enterprise Trust, 204 Junipero Serra Blvd., Stanford, CA 94305. Harvard Business School Publishing is the exclusive distributor of this publication. To order copies or to request permission to photocopy, please call (800) 545-7685 or write Harvard Business School Publishing, Customer Service Dept., 60 Harvard Way, Boston, MA 02163. Distributed by The Case Centre www.thecasecentre.org All rights reserved North America t+1781 2395884 e infosa@thecasecentre.org Rest of the world t+44 (0)1234 750903 e info@thecasecentre.org Donna Klein and Marriott International (A) employees. Klein recognized immediately that this was a very costly and inefficient solution for the managers and the lower-wage Associates. She also knew that the problems caused by these workers' personal issues, such as turnover, absenteeism, worker disputes and tardiness, threatened the high standards of service that were Marriott's competitive advantage in the ultimate of service industries. Klein knew that she and her group must devise a solution that would assist hourly workers. What's more, she needed to "sell" the solution to the property managers who ultimately would have to pay for any new employee benefit programs. Marriott International Begun by J.W. Marriott in 1927 as a chain of root beer stands, Marriott International had grown to an enormous service-industry conglomerate (Exhibit 1: Marriott's 1993 income statement). By the early 1990s, the corporation operated three separate chains of hotels aimed at upscale business travelers, mid-range tourists and budget minded travelers. In 1994, Marriott operated nearly 4,000 properties in all 50 United States and in 23 foreign countries. It also owned Host International, the largest airport concession operator, as well as fast food chains, school cafeteria contractors and a national hotel management company. Workers in the Service Industry Service industries such as hospitality, restaurant and retail depended on large numbers of primarily unskilled workers. Hotels, particularly, relied on huge numbers of housekeepers, food service personnel, customer service representatives and maintenance workers who were generally paid near the minimum wage and provided with only rudimentary benefits. Turnover in these jobs was high, and employers often complained about the lack of work skills these entry-level employees brought to the job market. Many of the workers in this wage class were recent immigrants who brought to the job their difficulties with the language and customs of the United States. Marriott supervisors often were called upon to help workers navigate the 2 9-996-057 complicated social service system set up to assist immigrants. Other workers, while native-born, had limited formal education and struggled to provide themselves and family members with stable housing and basic needs. Many were single parents. Nearly all felt the necessity to seek employment at the highest possible wage they could attain, so they would often leave a job with no notice if a higher paying opportunity presented itself. The Consequences of Low-Wage Employment As Donna Klein investigated the situation further, the stories of Marriott Associates she interviewed convinced her to become their advocate: "I was so amazed at the stories they were telling me, stories that should have been intuitively obvious. Single mothers were coming to work and leaving their children home alone because they had no choice. A lot of sibling care issues... eight year olds caring for four year olds. Just heartbreaking stuff. These were good people who wanted to work, who wanted to perform, but, because of life circumstances, had difficulty doing it. They were making a tradeoff between taking care of their children and being loyal to the job. I was really moved by the stories I heard. [I talked to al single mother who... was so committed to her job, she took two bus rides and a subway trip to leave her daughter with a relative on Monday mornings. But because of her evening work hours, she could not pick up her baby at night and bring her home via mass transit, so she picked her daughter up Friday evenings. You hear so many people talk about [lower- wage workers] being lazy, and not caring. It's just not true."
Donna Klein and Marriott International (A) Searching for a Solution Mulling over the report on her desk, Donna Klein reflected that its contents, combined with the anecdotal information she had gathered from talking to Marriott's hourly employees and property managers, meant that the dependent care referral program Marriott had established, while well received by professional employees, was all but meaningless to the majority of its workforce. "The data...explained to me why lower- wage workers weren't using [the resource and referral service]. They had many more issues that were more fundamental to their daily life... whether or not they could pay their utility bills, whether or not they were being evicted from their home or apartment, why they were being evicted, whether or not they were able to pay for groceries and handle their mother's funeral... countless daily kinds of challenges... The understanding of the importance of, for instance, quality child care, was not on the screen. It became very clear that in order to really support our working families we needed to be very holistic about our response. So our response and solution needed to be very comprehensive and it needed to address the whole person or the whole family. We also recognized that based on the education level, the language difficulties, and the hours of work of the hourly population, that we needed to have something that was extremely user- friendly, extremely easy to understand and something confidential." Klein insisted that she and her department find a solution. But how could one company tackle the enormous problems of lower-income workers? What could Marriott do to serve the highly individualized needs of thousands of employees who worked at thousands of widespread properties? And in the end, how would she 3 9-996-057 convince senior management, and eventually property managers, that this was a problem worth investing in? Donna Klein and Marriott International (A) CONSOLIDATED STATEMENT OF INCOME Marriott International, Inc. and Subsidiaries Fiscal years ended December 31, 1993, January 1, 1993 and January 3, 1992 Sales Lodging Rooms Food and beverage Other Contract Services Operating Costs and Expenses Lodging Departmental direct costs Rooms Food and beverage Other operating expenses, including remittances to hotel owners Contract Services Operating Profit Lodging Contract Services Operating profit before corporate expenses and interest Corporate expenses, including restructuring charges of $5 million in 1992 Interest expense Interest income Income before Income Taxes and Cumulative Effect of a Change in Accounting Principle Provision for income taxes Income before Cumulative Effect of a Change in Accounting Principle Cumulative effect of a change in accounting for income taxes Net Income Earnings Per Share: Income before cumulative effect of a change in accounting for income taxes Cumulative effect of a change in accounting for income taxes Net income See notes to consolidated financial statements. 4 1993 $2,491 1,063 566 4,120 3,310 7,430 584 814 2,472 3,870 3,204 7,074 250 106 356 (63) (27) 9 275 116 159 (33) $ 126 $ 1.26 1992 (in millions, except per share amounts) (.26) $1.00 $2,315 1,023 479 3,817 3,154 6,971 546 782 2,253 3,581 3,064 6,645 236 90 326 (67) (25) 3 237 103 134 9-996-057 Exhibit 1 $ 134 1991 $2,208 1,017 449 3,674 3,033 6,707 509 772 2,160 3,441 2,944 6,385 233 89 322 (72) (24) 4 230 97 133 $ 133
Transcribed Image Text:Donna Klein and Marriott International (A) Searching for a Solution Mulling over the report on her desk, Donna Klein reflected that its contents, combined with the anecdotal information she had gathered from talking to Marriott's hourly employees and property managers, meant that the dependent care referral program Marriott had established, while well received by professional employees, was all but meaningless to the majority of its workforce. "The data...explained to me why lower- wage workers weren't using [the resource and referral service]. They had many more issues that were more fundamental to their daily life... whether or not they could pay their utility bills, whether or not they were being evicted from their home or apartment, why they were being evicted, whether or not they were able to pay for groceries and handle their mother's funeral... countless daily kinds of challenges... The understanding of the importance of, for instance, quality child care, was not on the screen. It became very clear that in order to really support our working families we needed to be very holistic about our response. So our response and solution needed to be very comprehensive and it needed to address the whole person or the whole family. We also recognized that based on the education level, the language difficulties, and the hours of work of the hourly population, that we needed to have something that was extremely user- friendly, extremely easy to understand and something confidential." Klein insisted that she and her department find a solution. But how could one company tackle the enormous problems of lower-income workers? What could Marriott do to serve the highly individualized needs of thousands of employees who worked at thousands of widespread properties? And in the end, how would she 3 9-996-057 convince senior management, and eventually property managers, that this was a problem worth investing in? Donna Klein and Marriott International (A) CONSOLIDATED STATEMENT OF INCOME Marriott International, Inc. and Subsidiaries Fiscal years ended December 31, 1993, January 1, 1993 and January 3, 1992 Sales Lodging Rooms Food and beverage Other Contract Services Operating Costs and Expenses Lodging Departmental direct costs Rooms Food and beverage Other operating expenses, including remittances to hotel owners Contract Services Operating Profit Lodging Contract Services Operating profit before corporate expenses and interest Corporate expenses, including restructuring charges of $5 million in 1992 Interest expense Interest income Income before Income Taxes and Cumulative Effect of a Change in Accounting Principle Provision for income taxes Income before Cumulative Effect of a Change in Accounting Principle Cumulative effect of a change in accounting for income taxes Net Income Earnings Per Share: Income before cumulative effect of a change in accounting for income taxes Cumulative effect of a change in accounting for income taxes Net income See notes to consolidated financial statements. 4 1993 $2,491 1,063 566 4,120 3,310 7,430 584 814 2,472 3,870 3,204 7,074 250 106 356 (63) (27) 9 275 116 159 (33) $ 126 $ 1.26 1992 (in millions, except per share amounts) (.26) $1.00 $2,315 1,023 479 3,817 3,154 6,971 546 782 2,253 3,581 3,064 6,645 236 90 326 (67) (25) 3 237 103 134 9-996-057 Exhibit 1 $ 134 1991 $2,208 1,017 449 3,674 3,033 6,707 509 772 2,160 3,441 2,944 6,385 233 89 322 (72) (24) 4 230 97 133 $ 133
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS