The management of Hyatt Hotels wins this week’s award for “stupid management tricks!” Their prize: three free nights at one of their Boston hotels being served by a “highly motivated” group of employees.
In an article titled, “Hyatts Face Protests After Layoffs in Boston Area,” (Sept. 25, 2009) The New York Times reported, “Hyatt Hotels is facing a wave of anger and protests as a result of its decision to lay off 98 members of its housekeeping staff at three Boston area hotels and replace them with lower paid workers.”
The actions taken by of the Hyatt management are a perfect blueprint for commiting multiple acts of stupidity in a single situation. The Hyatt managers demonstrated the multi-tasking ability to be dishonest and deceptive in communication with employees; how be disingenuous in their actions with those employees to be laid off, at the same time angering those employees who remain and creating negative public relations for the entire company. This is a classic example of a company trying to solve a problem by doing all the wrong things.
The Hyatt management in Boston, like many companies in these times, was faced with mounting pressures to reduce costs in response to reduced business. It would be dereliction of their responsibilities if they failed to act, but that is not the problem. The problem is how they approached the problem.
First, management took the classic “lazy manager’s” solution to the problem and decided to outsource the hotel’s housekeeping activities. The idea being that it would be cheaper to contract with an outside company to bring in individuals who were being paid at barely subsistence levels and without any benefits. (I won’t even go into the potential quality of service and relationship problems with other Hyatt employees this action may cause.)
Once it was decided to outsource housekeeping chores management acerbated the situation by not communicating that decision to employees. In fact, apparently they lied to them about their activities. As the Times reported, “… management had told the housekeepers to train the Staffing Solutions (outsourcing) workers because those workers might fill in for them when they were on vacation or out sick.” Not that that was enough, but several days before the layoffs, management told the housekeepers to empty their lockers because the lockers were going to be cleaned. Shame!
But there’s more. The Times article cited one employee who had been with Hyatt in Boston for 22 years who said that when management told the workers they were going to be laid off late on August 21, they were told that was their last day.
Maybe to assuage some of their feelings of guilt (if they had any) the company extended benefits for 90 days and set up a task force to help them in other ways. Wow! When more than 150 hotel workers and their supporters protested the actions in front of the Park Hyatt in Chicago, the company had them arrested (photo by ProgressIllinois.com). Nice way to build company employee morale.
Hyatt Hotels is certainly not the only company seeking to reduce expenses that has made matters worse by making stupid management decisions, but they assuredly have become the self-appointed model for now.
The management of companies such as Hyatt Hotels and others who take this approach to cost cutting, generally exhibit the following characteristics:
- They show by their actions that they don’t trust their employees.
- They take actions that appear to be the easiest, i.e. outsourcing
- They start at the bottom with the most vulnerable as opposed to the top where the really big expenses reside.
- They fail to communicate and involve their employees in seeking a solution.
- They even lie to employees.
- Worst of all they care only about themselves and little for their employees.
Unfortunately, for too many, this seems to be the accepted way to manage.
And the Moral of the Story …
Certainly the management of companies have a responsibility to control expenses and react to a changing business environment. Often, these are difficult challenges, but they are made worse when management is lazy and attempts to take short-cuts to the solution, rather than working to involve everyone impacted and seeking a long-term solutions.
Unfortunately, many managements take the Hyatt approach that create the reaction of one Hyatt employee who said, “The kick us out on our last day of work. The way they treat us was like animals.”