Ideas and Information | Hospitality Resources International

The liabilities associated with failing to properly follow federal and state labor, compensation, and discrimination laws can be significant and are not something any small business should take lightly.  This is particularly so for hospitality operations that are labor-intensive and often standalone, independent entities with few economies of scale and limited resources.

Often such operations have no dedicated Human Resource manager, instead assigning these important responsibilities to the controller or administrative staff as additional duties.  While not questioning the competency or conscientiousness of these employees, such an approach to HR administration makes it all the more critical that all aspects of the organization’s HR function are spelled out in detail and all managers have a thorough understanding of related issues and best practices.  This is certainly not an area to fly by the seat of one’s pants and hope for the best; doing so is too much like playing Russian roulette – sooner or later the results will be catastrophic!

Recognizing the potential consequences of a slap-dash approach to HR management, there are essential best practices that should be at the heart of every enterprise’s HR function.  Here’s my list of top ten:

1.  Written Human Resources Standards, Policies, and Procedures (SPPs).  As we say in The Quest for Remarkable Service:

“While hospitality operations should avoid becoming overly bureaucratic, there are clearly areas where the repercussions of not following set policies and procedures present a significant risk.  Two of these are Human Resources and Accounting.  In the former, there are federal and state laws that dictate how employment and personnel matters must be handled and, if not scrupulously followed, they can create significant legal and liability exposure for the organization.”

Written Personnel Standards, Policies, and Procedures also cover a wide area of enterprise work rules and promote better organization and efficiency, while reducing costs due to error and rework.

2.  Detailed Hiring Policies and Procedures.  Advertising for vacant positions, screening and interviewing applicants, as well as properly and consistently in-processing new hires requires well-established policies and procedures and managers who are properly trained to follow all hiring requirements.  This will only happen if hiring practices are spelled out in detail and followed consistently

3.  Standardized Personnel Files.  Those operations with paper personnel filing systems must design standardized personnel files, as well as the standards, policies, and procedures that ensure the consistent and correct gathering, storing, and protecting of all pertinent employee information related to hiring, compensating, assigning, evaluating, promoting, counseling, disciplining, and terminating employees.  This is not an area for a catch-as-catch-can approach to recordkeeping.

4.  Formal Onboarding Process.  Recognizing that first impressions are powerful determinants in establishing any person’s attitudes about, and commitment to, a new job, it is imperative that the enterprise make an effort to welcome and impress the new hire.  But the consequences of not providing a warm, welcoming, and informative onboarding process go far beyond first impressions.  Given that there is much basic information for employees to know, a formal onboarding process will ensure that new hires receive a formal orientation for both the enterprise as a whole and their individual department, as well as initial training in organizational values, culture of service, position skills, safety, and security.

5.  Detailed Performance Expectations and Review Process.  All employees deserve to know what is expected of them in their jobs and the criteria by which their performance will be evaluated.  This is especially true for management positions as their work has a significant bearing on the success or failure of the organization.  But unless expectations and performance criteria are spelled out in a formal and consistent way, much is left to chance or individual initiative.

6.  Written Counseling and Disciplinary Procedures.  Many grievances and formal complaints of wrongful termination and discrimination stem from a failure of managers to formally and properly document counseling or disciplinary sessions.  Having a clearly defined disciplinary process and standards for applying disciplinary procedures will go a long way to eliminate such complaints.  Employee Development and Disciplinary Guides provide an excellent framework for hospitality managers.

7.  Departmental Staffing Guides.  Each department head, by creating a staffing guide of core and seasonal positions, determines optimal year-round staffing.  These core positions, then, are “protected” from seasonal adjustments in all but extreme situations.  Once Departmental Staffing Guides are established, no new hires should be made for core positions without an existing vacancy or the express approval of the general manager.

8.  Benchmarked Personnel Actions.  Most managers recognize the importance of benchmarking payroll information on a pay period basis as a means of better understanding and controlling their pay cost.  But it’s also important to benchmark major personnel actions by department and for the enterprise as a whole.  Such benchmarking can highlight excessive departmental turnover or disciplinary actions that may be a sign of poor leadership, faulty screening and hiring, or lack of departmental training or communication.  Spotting these troublesome signs early can prevent larger problems from arising.

9.  Standardized Discharge Procedures.  Discharging an employee for performance or cause is fraught with liability issues.  Having well defined procedures is an important step in avoiding wrongful termination or discrimination charges.  See Discharging without Repercussions for more information.

10.  Ongoing HR Training for Managers and Supervisors.  Given the breadth and depth of HR requirements and best practices, it is essential that all managers and supervisor have a thorough understanding of these in all their detail.  This can only happen through consistent, ongoing HR training.  Human Resources on the Go is an excellent example of such training.

Bottom Line:  There is much to be concerned about in HR management.  Without formal HR Standards, Policies, and Procedures and the ongoing effort to educate and train enterprise leaders in HR issues and best practices, there will be ongoing personnel issues in the operation.  Sooner or later, these will result in a significant and costly problem for the enterprise.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Significant drivers are creating a potential HR Perfect Storm for Private Clubs – The Recession, Rising Unemployment, Growing Regulation, Increasing Litigation and Downsizing.

So how can clubs develop a strategy to streamline payroll and HR processes, protect themselves and avoid costly mistakes.  Clubs generally fall into two basic camps when it comes to their payroll and human resource strategy:  in-house or outsource.  In-house means club staff are generally directly responsible for the process and outsource is defined as contractual service with a 3rdparty to perform all or part of a particular HR process.  As a sub-category of outsource, some clubs utilize a Professional Employer Organization (PEO) but we generally recommend against this strategy.

The vast majority of clubs opt for an “outsourced” strategy to relieve administrative burden, gain expertise and prevent liability.  Given the trend towards Club Controller’s taking on increasing HR related responsibilities, this approach is likely to accelerate.

Develop a Strategy.  Within the category of “outsource payroll”, there are a variety of sub-strategies clubs employ.  The beauty of outsourcing is each club has the flexibility to customize its level of services based on existing resources, expertise, payroll & HR complexity… and budget.   At the heart of any club’s outsourcing strategy, the goal is saving time and reducing expenses.

Key Drivers.  All strategy considerations should be evaluated against the positive or negative effect on these key drivers:

• Administrative Burden – This really comes down to taking a close look at resources – time, people and money; determining if the club is getting the best return on investment of each.  Additionally, what are the opportunity costs and associated risks?
• Compliance and Risk Exposure – The question here is:  Do I understand the rules of the game and are there processes in place to make sure I stay up to date and on top of the rules?   Is the club at risk and how much risk is the club willing to tolerate?
• Employee Relations – How is the morale of the club’s employees and what effect is this having on productivity and profitability?  Are time and attendance policies fair and are they fairly and equitably enforced?  Are they enforced at all?
• Asset Protection – Related to risk, this is quantifying and documenting the high risk points related to payroll and human resources.  One of the most common types of litigation a club may face is employee related.  Is there a way to protect the assets of the club from frivolous HR related lawsuits?
• Cost Considerations – Is there pressure on the club to reduce expenses?  Labor is typically the biggest expense making it the most likely candidate for significant savings.  Can you do this without a negative effect on service?

Action Plan.  To get started in developing a high performance plan for your club, schedule a full payroll, HR and compliance audit.  While I recommend hiring a professional HR Consultant to perform an external audit, some clubs may opt to conduct an internal audit for budgetary reasons.  To provide an idea of what is involved, you can download a Sample HR Assessment Form here (courtesy of Crawford Consulting Group).

Once the audit is complete, you can evaluate your clubs strengths, weaknesses, opportunities and threats (SWOT) to determine the best processes to outsource.  Again, the overall goal is to save time, reduce expenses and prevent risk.  Every club is different and there is no perfect combination of outsourced services, but below is a list of the most commonly outsources processes.

HR Perfect Storm for Clubs White Paper.  If you would like to dig a little deeper into the current HR environment clubs are facing today, the most important issues and how to develop a winning HR strategy, check back here for our upcoming white paper.  If you would like to receive an advance copy, email us at info@clubpayroll.com with HR White Paper in the subject line.

Tom Howard, President, ClubPay

Tom has worked in the private club industry for over 20 years working in various positions within private country clubs including food and beverage manager, general manager and director of operations. For ten years, Tom has helped over 600 clubs “get the most out of technology” in his role as Vice President of Technology Training Associates (TTA), the largest provider of the Jonas Software in the country.

This weekly blog comments on and discusses the club industry and its challenges. From time to time, we will feature guest bloggers — those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking club managers throughout the country and around the world.

Club Resources International – Management Resources for Clubs!