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7HR001 Managing Human Resources Case Study

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Student Number 1232696 Email [email protected]

Assignment Details

Module nameManaging Human

ResourcesModule Code 7HR011

For the attention of Dr. Paschal Anosike

Due date 27thDecember 2013

Assignment title Case study Analysis Taj Hotel Group

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Case synopsis

This case study examines the Taj Hotel group under the leaderships of two charismatic leaders,

Ajit Kerkar and Krishna Kumar, of different eras and describes the extensive changes made to its

Performance anagement !ystem "P!#$ Kerkar has led the Taj group from %&'( to %&&' and

during his tenure the hotel group was thriving financially) however issues were raised due to the

inability of Taj group to uphold ethical standards of Tata conglomerate$ As a result Kerkar was

replaced by Kumar in %&&', primarily to address the corporate governance issues$ He

implemented a P! at Taj in order to evaluate and award increments to staff members* fairly$

+ith the rapid advancement in technology and emerging competition with the entrance of top

international hotel chains in to the ndian hotel industry, there were major shifts on how Taj

operates) including replacing the management structure and improving the service -uality to

match with international standards$ The entire case study is cemented on the .howmick*s re-uest

to re/consider the decision taken by Kumar to select a candidate for the 0eneral anager

position at the Taj Kumarakom based on the test results of 1areer 2evelopment 1ommittee

"121#, thus placing Kumar in a dilemma whether to respect the decision of 121 or to ignore the

re-uest of .howmick, who has groomed leaders throughout his tenure at Taj$

Theoretical Analysis

Human 3esource anagement "H3# procedures have a direct impact on the productivity and

financial performance of any organi4ation "Huselid, %&&5#$ However, as a result of revolution of

information technology, rapidly changing business environment and increasing complexity of

operations, organi4ations are experiencing significant changes on how human resources are

managed thus H3 is currently perceived as a strategic partner in attaining organi4ational goals

"6awler and ohrman, 7((8#$ 9volution from traditional personnel management functions to a

!trategic Human 3esources anagement "!H3# system was evident during last few decades

and simultaneously, number of H3 roles has also signified new dimensions in managing

people) including viewing employees as sources of competitive advantage ".ecker and Huselid,

7((:)+right et al$, 7((%#$ To create and execute strategic alignment in order to build long/term

success, !trategic Performance anagement !ystems "!P!# are adopted by most organi4ations

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";lrichet al$, 7((%#$ n !P!, the top management and other managers set specific objectives

for each division and individuals, considering the overall effectiveness and efficiency of

organi4ational functions and both -ualitative and -uantitative mechanisms are used to measure

performance of employees$ orton, %&&:#$ Taj case study

provides the background to identify major issues and challenges faced by organi4ations during a

shift from a traditional H3 system towards a strategic P!$

!"aluation o# PMS at TA$ Hotel group under %er&ar and %umar'

Kerkar had the ability to identify leaders and mentor them effectively$ As recalled by a senior

executive, ?Kerkar had a nose for ferreting out who would be a good leader, and he could

effectively groom them@ "Taj 1ase study, p$7#$ This could be a reason for Taj group thriving

financially during the tenure of Kerkar$ Kerkar was a charismatic leader and his charisma was a

great source of motivation to all employees and his vision was behind the growth of Taj$ 1onger

and Kanungo "%& has suggested that inspiration, a sub/factor of charismatic leadership, help

in motivating employees$ The intrinsic faith and mutual trust placed on Kerkar by Taj employees

was the main factor for high employee retention even though salaries were less compared with

market$ The major drawback of Kerkar*s system was the unavailability of a structured, well

executed P!$ The discernable, informal P! was based primarily on subjective criteria and

decisions taken were perceived bias$ The rigid environment also led to create fiefdoms within Taj

group$ There was no clear strategy for setting objectives for organi4ation as well as forindividuals and this could reduce the morale and productivity of employees$ !ince promotions

and rewards were based on personal affiliations, there were no systematic carrier progression

pathways to individuals thus leading to de/motivation of employees$ Bne of the advantages of

the Kerkar*s system is that it did not promote employee ranking through appraisals$ uduli

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"7(%%# described that in collectivist cultures, such as ndian culture, individual ratings and

increments are less concerned and performance based pay is discouraged$

;pon replacing Kerkar, Kumar initiated the ?Taj People Philosophy@ which included a formal

P! and a mechanism termed balanced scorecard, to evaluate the employees fairly$ The new

P! helped Taj to align individual objectives to long/term organi4ational goals$ +illiams "7((7#

suggested that this could create strong relationships between the organi4ation and employees

since employees can observe how their contribution is impacted on success of the company$

Kumar ensure that clear goals and objectives are set in the form of Key 3esults Areas "K3As#

for individuals at the beginning of each year so that everyone is clear about what tasks they are

expected to execute and how those tasks are re-uired to be performed$ According to .eardwell et

al."7((C#, employees who precisely know what is expected, will perform better than individuals

who are unaware of their objectives$ ;nlike the old system where promotions were based on

personal relationships, under new P!, progress of employees was measured against K3As and

promotions and increments were awarded according to results of performance/appraisal system$

2eutsch "%&'5# suggested that individuals who perform and contribute more to the company

should receive a higher percentage of rewards than individuals performing less$ As recalled by

one executive ?t was a big change to have people asking, where are you on your K3A*s, not

how close are you to Krishna KumarD@ "Taj 1ase study, p$8#$ This suggests that employees who

were outside the coterie of Kerkar were looking for a fair system for evaluation$ Kumar

established the 121 and Potential Assessment 1enters "PA1#, which helped in creating career

progression pathways where individuals, whom were identified as high performers, were sent for

evaluation and trained them outside the area of work, so that they would be fit for general

managerial positions in future$ However, the competition created through PA1s resulted in

demorali4ation of individuals whom were not selected, yet they were considered as great

performers$

Reasoning )ehind implementing ne* system

There were several reasons for Kumar to launch a formal P!$ Eirst reason was to address

issues with regards to not meeting ethical standards of TATA group$ The new P! helped to

build the transparency in monitoring, measuring and rating of employee performances and to

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build the ethical platform for promotions and increments while annihilating personal relationship

based rewarding in order to uphold the corporate governance standards demanded by the TATA

group$ Pressure exerted on TAF group due to external forces such as entrance of global

competitors and technologically demanding operations could also be considered as a critical

factor for Kumar to launch a formal P!$ He rotated even senior managers to learn ?new ways

of doing business@ thus to improve the -uality of the service delivered and to break up fiefdoms$

%rishna %umar,s stance on -ho*mic&,s re.uest

According to my point of view, Kumar should grant .howmick*s re-uest and reconsider his

choice for selecting the candidate for the 0eneral anager position due to several reasons$

.howmick is considered as a legend within the Taj group and has a pedigree of identifying and

grooming leaders for senior managerial positions$ He has developed managers throughout his

career at different properties of Taj group$ .howmick believed that new systems implemented by

Kumar did not capture all aspects being a good manager, for instance, personality and

resourcefulness and he further argued that ?great managers do not always follow procedures@

"Taj 1ase study, p$:#$ This suggests that .howmick did not trust the 121 or the system in

selecting right candidates for right positions and therefore he could argue that his candidate is a

better choice than the individual selected by 121$ .rady "%&'# proposed that managers are

re-uired to make rational decisions which are not guided by rules and systems$ Kumar knew that

not respecting the work autonomy and judgment of .howmick could result in de/motivation of

one of the highest ranked subordinates of the company$ Kumar also knew the fact that .howmick

will be responsible for training and mentoring the chosen candidate) as such .howmick might

help the person nominated by him to become successful or choose not to help the person

designated by the 121$ 1onsidering all above factors Kumar should reconsider his decision and

select the candidate nominated by .howmick$

However, there could be few implications as well in granting .howmick*s re-uest$ f the

selection made by the 121 is not respected by Kumar, any future decisions made by 121 would

not be taken seriously by employees, thus could lead to downfall of the system$ There could also

be a hidden agenda behind .howmick*s nominating his candidate over the decision made by

121 thus leading not to select the right person for the job$

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A or Star Players and ne* system

!tar players always had a special attention from the Taj management even during the Kerkar*s

informal system and under the new system) the 121 has helped in grooming ?A@ players for

?A@ positions$ Huselid et al$ "7((5# argued that ?A@ positions in organi4ations have a direct

impact on organi4ational strategic management and add value by increasing revenue or reducing

costs and as such organi4ation must systematically identify ?A@ players to fill ?A@ positions$

121 helps Taj group in identifying ?high/level openings@ or the ?A@ positions and then

identifying suitable candidates through various evaluations$ 0roysberg et al. "7((C# explained

that ?A@ players are intelligent, dynamic, charismatic and could predict changes while adapting

-uickly$ However, there could be risks associated with ?A@ players$ They do not stay with an

organi4ation for a longer period regardless of paying big salaries and group performance could

also get affected "0roysberg et al., 7((C#$ Therefore 121 must carefully manage its strategies to

prevent de/motivation of star performers of Taj in order to prevent them from moving to

competitors$

- or Solid Players and ne* system

Brgani4ations generally disregard the importance and value of ?.@ performers and this could

pose a risk to the long/term success of the organi4ation "2elong and Gijayaraghavan, 7((8#$

2elong and Gijayaraghavan "7((8# further argued that . players play the role of ?truth tellers@ in

an organi4ation and helps in stabili4ing the system in the presence of ?A@ players$ Harnessing

and developing talents of !olid ?.@ players are important to an organi4ation since their

contribution is vital in building competitive advantage$ ;nder the Kerkar*s system, solid players

of Taj group only had a limited opportunity to develop their careers since promotions were based

on personal affiliations$ .ut with the establishment of 121 and PA1, provides clear career

progression pathways to solid players while coaching them to recogni4e their true talents thusgiving opportunity to perform well$ Bne of the main objectives of the 121 was to value the

importance and shaping the careers of solid performers$ The formal P! and its tools such as

.alanced !corecard, ensure feedback is provided to solid performers thus enabling them develop

and improve so that they could be groomed for future managerial positions$

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The 121 must ensure that opportunities are provided, not just for !tar performers, but also for

solid performers in order for them to grow and develop so that there will be a balance in the

system$

Conclusion

The Taj case study provides a platform to understand how organi4ational functions are

interrelated to H3 functions and how strategically executed P! could align individual

objectives to organi4ational goals$ t also discussed about the importance of setting objective and

goals up/front so that employees would understand what is re-uired to be done to achieve

objectives$ .alanced scorecard used as a performance appraisal tool in the P! at Taj helped to

evaluate employees fairly$ t could also helped in communicating and aligning organi4ational

goals and strategies at every level of the organi4ation and enabling real/time learning

mechanisms with regards to providing feedback "Kaplan and >orton, %&&:#$ Eair evaluation

system helped Kumar to build an ethical leadership at Taj and to maintain ethical standards of

TATA group$

Taj case study gave me an insight of challenges and issues faced by real life organi4ations and

various H3 tools used by organi4ations to manage such issues and gain advantage over a

competitive market$ personally found that this case study is interesting and challenging andhope that it would be helpful for me in future when dealing with strategic H3 issues$

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Re#erences

.eardwell, $, Holden, 6$ and 1laydon, T$ "7((C) Human Resource Management: A

Contemporary Approach$ Cth ed$ ET Prentice Hall, 6ondon$

.ecker, .$ 9$ and Huselid, $ A$ "7((:# !trategic Human 3esources anagement where do we

go from hereD$Journal of Management, (":#, pp$ &/&75$

.rady, E$ >$ "%&'# 3ules for making exceptions to rules$Academy of Management

Review, 1"8#, pp$ C8:/CCC$

1onger, F$ A$ and Kanungo, 3$ >$ "%& Charismatic leadership in organizations$ !age

publications 1alifornia, ;!A$

2elong, T$ F$ and Gijayaraghavan, G$ "7((8# 6etIs hear it for . players$ Harvard usiness

review, 31":#$ pp$ &:/%(7

2eutsch, $ "%&'5# 9-uity, 9-uality and >eed +hat 2etermines +hich Galue +ill be ;sed as

the .asis of 2istributive FusticeD$Journal of !ocial "ssues, (1, pp$ %8'/C&

0roysberg, .$, >anda, A$ and >ohria, >$ "7((C# The risky business of hiring stars$Harvard

#usiness Review, 3"5#, pp$ &7/%(%$

Huselid, $A$ "%&&5# The impact of human resource management practices on turnover,

productivity, and corporate financial performance$ Academy of Management Journal, (3"8#,

pp$ :85/:'7$

Huselid, $ A$, .eatty, 3$ +$ and .ecker, .$ 9$ "7((5# JA Players* or JA Positions*D$Harvard

#usiness Review, 3("%7#, pp$ %%(/%%'$

Kaplan, 3$ !$ and >orton, 2$ P$ "%&&7# .alanced !corecard / easures that 2rive Performance$

Harvard #usiness Review$70"%#, pp$ '%/'&$

Kaplan, 3$ !$ and >orton, 2$ P$ "%&&:# ;sing the .alanced !corecard as a !trategic anagement

!ystem$Harvard usiness review, 7+"%#, pp$ '5/5$

6awler, 9$ 9$ and ohrman, !$ A$ "7((8# H3 as a strategic partner what does it take to make it

happenD$Human Resource %lanning, 2"8#, pp$ %5/7&$

uduli, A$ "7(%%# Performance .ased 3eward and >ational 1ulture An 9mpirical 9vidence

from ndian 1ulture$ !ynergy, 45pp$%/%8

;lrich, 2$, .ecker, .$ and Huselid, $ "7((%# &he HR scorecard: 'in(ing people$ strategy$ and

performance$ .oston Harvard .usiness !chool$

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+illiams, 3$ "7((7# Managing employee performance: design and implementation in

organizations$ Thomson 6earning, 6ondon

+right, P$ $, 2unford, .$ .$ and !nell, !$ A$ "7((%# Human resources and the resource based

view of the firm$Journal of management, 7":#, pp$'(%/'7%$

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