Introduction
We have been asked to assist the CEO of a small, newly opened hotel with 50 to 100 rooms in creating a compensation plan. The hotel caters to an elite clientele and is opulent. Hotels in Los Angeles, Miami, Manhattan, Chicago, and Houston will open in five months. The company has recruited us to develop an attractive benefits and compensation plan for the four most crucial roles the establishment will need as the launch dates of these hotels draw near.
General manager, front office administrator, sales and marketing supervisor, and executive chef are among these positions. The duties and obligations for each position, as well as the necessary qualifications and pay, are listed in the following job postings. The remuneration for employees under this plan, which includes incentives and rewards and is developed at an acceptable level, is in the top 10 to 25 percentiles.
Methodology
To finish the project, extensive research was done to gather data on wages and benefits for jobs of a similar nature in the hotel sector. A variety of online resources were used to gather pertinent information. The gathered data was examined to establish industry standards and calculate typical remuneration rates. Regional and city-specific cost of living measurements were considered to further modify each site’s reimbursement. The proposed pay packages were created, ensuring they were in the top 25% of sector salary levels, using the survey findings and location-specific changes.
Job Descriptions
General Manager
A general manager is a senior-level executive monitoring a company’s achievements and procedures. They are the primary decision-makers and guarantee that the hotel runs smoothly and successfully; only one will be required per hotel. The GM oversees all hotel divisions, including the front desk, housekeeping, meals, drinks, and upkeep. As a result, they create and implement methods to accomplish the hotel’s monetary and operational objectives (Korenková et al., 2019). The GM also ensures that all visitors are satisfied and addresses problems or concerns.
Qualifications and Skills
- The equivalent of a bachelor’s degree in hospitality administration or a comparable subject.
- Prior employment in hotel management or a comparable position.
- Outstanding managerial and decision-making abilities.
- Knowledge of money and the capacity to evaluate financial statements.
Front Office Manager
In a hotel or similar facility, the front office manager is in charge of supervising the day-to-day activities of the main office division. They oversee a group of front desk staff and ensure that guests have an incredible day. In addition to managing the front desk workers, the front office manager is also responsible for training and advising them (Wolniak, 2020). Additionally, they guarantee smooth check-in and check-out procedures and manage appointments and inquiries from visitors.
Qualifications and Skills
- A bachelor’s degree in hotel management or a closely related discipline is preferred.
- Prior employment in front desk or guest services.
- Exceptional multitasking and organizing skills.
- Familiarity with reservation platforms and hotel administration software.
Executive Chef
The hotel’s culinary activities, including menu development, meal preparation, and kitchen administration, are under the control of the executive chef. They oversee a group of kitchen employees and guarantee the availability of high-quality food and beverages, and only one will be required per hotel. The duties of the executive chef include conceiving and producing dishes that complement the theme and target audience of the hotel (Wolniak, 2020). Additionally, they recruit, educate, and manage the sous chefs, line cooks, and cleaners who work in the kitchen.
Qualifications and Skills
- Qualification is equal to a culinary degree.
- Substantial culinary arts background, including previous employment as an executive chef or sous cook.
- Thorough familiarity with the various cuisines, cooking methods, and food trends.
Sales and Marketing Manager
To promote company expansion and accomplish organizational goals, the advertising and marketing officer is responsible for creating and implementing marketing and sales approaches. This position entails leading a group of sales and marketing experts, controlling the sales procedure, and implementing marketing strategies to increase brand recognition and client acquisition. They are responsible for creating and executing advertising and promotional initiatives to meet revenue goals (Wolniak, 2020). As a result, they develop connections with businesses, tour operators, and online travel booking sites.
Qualifications and Skills
- Bachelor’s degree in commerce, marketing, or a similar subject.
- Prior professional experience in sales and advertising positions, ideally in the hospitality sector.
- Strong understanding of marketplace evaluation, revenue administration, and sales strategies.
Results of the Compensation Survey
A compensation survey was carried out to understand the various compensation packages offered across the sector. The purpose of the survey was to collect data regarding the salaries and perks offered within the hospitality business, specifically within the boutique hotel sector. The data used in the study came from trustworthy sources that are accessible via the Internet. These online sources included business reports, compensation records, and employment websites. The study covered various roles in boutique hotels, such as those in management, at the front desk, in maintenance, and in the restaurant and bar departments.
As per the survey findings, the boutique hotel industry salaries are highly variable and dependent on job title, years of experience, geographic area, and hotel size. The poll concentrated on hotels in large urban regions, such as the addresses of our prospective properties in Manhattan, Chicago, Miami, Houston, and Los Angeles. This was done to ensure that the results were accurate and relevant.
The findings enumerated that the salary ranges for executive positions in small-scale hotels are competitive, directly reflecting these facilities’ premium nature. The results showed that the yearly wage range for general managers ranged from $80,000 to $150,000 on average, with the exact amount being determined by the location and size of the hotel (O*NET Resource Center, 2023). In most companies, the annual salary range for assistant general managers was between $50,000 and $90,000 (O*NET Resource Center, 2023). These numbers aligned with the top 25 percentile compensation packages offered by companies in this sector.
The pay of those at the front desk varied according to their experience level and the responsibility they were given. It was discovered that entry-level professions, such as front desk agents, had a median hourly rate that fluctuated between $12 to $18 (O*NET Resource Center, 2023). Nevertheless, more seasoned or senior roles, such as front desk administrators or hotel guest service supervisors, could receive hourly wages ranging from $15 to $25 (O*NET Resource Center, 2023). This is because such roles need a greater level of responsibility and expertise.
The front desk employees typically received health coverage, paid time off, and worker discounts. The housekeeping staff, essential for keeping the hotel clean and comfortable, generally received hourly earnings ranging between $10 and $16 (O*NET Resource Center, 2023). Housekeeping supervisors and executive housekeepers, for example, got an hourly rate that ranged from $14 to $20 (O*NET Resource Center, 2023). Other supervisory responsibilities, such as those involving housekeeping, paid much more. Housekeeping staff members frequently have access to employee wellness programs, retirement plans, and health insurance as part of their employee perks package.
There was a significant variety in the compensation offered for food and beverage jobs at boutique hotels. The hourly salary for entry-level occupations, such as waiting tables or working behind the bar, was usually between $10 and $15 (O*NET Resource Center, 2023). However, occupations that required a higher level of competence and obligation, such as restaurant proprietors or executive chefs, attracted higher hourly earnings that ranged from $18 to $30 (O*NET Resource Center, 2023). Meal reductions, rewards determined by effectiveness, and possibilities for professional progression were frequently included among the additional benefits provided to employees working in the food and refreshment industry.
The compensation study considered the benefits that boutique hotels supply in addition to salaries. Most hotels provide their employees with perks such as medical coverage, retirement savings accounts, paid time off, staff discounts on hotel amenities, and career advancement opportunities. The findings showed that the range of perks and the scope of those advantages differed from one hotel to the next, with some facilities providing more all-encompassing packages to entice and keep high-caliber employees.
Consequently, the advantages often provided to employees in the luxury hotel business were investigated as part of the survey alongside the salaries offered. The main components of a worker’s compensation bundle are medical insurance, a pension plan, paid time off, staff reductions, and performance-based incentives. According to the survey findings, providing competitive advantages to recruit and keep top employees is essential. The specific perks varied from one hotel brand to another. Nonetheless, the most common ones included substantial paid time off regulations, retirement savings arrangements with company contributions pairing, full medical coverage, and appealing staff savings on accommodation and offerings.
Because the CEO strongly emphasizes the provision of incentive potential based on the profitability of each location, the survey investigated the industry’s practices regarding performance-based bonuses. It was discovered that luxury hotel chains frequently offer bonuses connected to the level of financial success experienced by the hotel, department, or individual. A fixed proportion of the employee’s base salary or a profit-sharing arrangement can be the basis for these bonuses. The survey showed how important it is to link staff incentives with the economic goals of the firm to develop a culture of collaboration and drive success.
Calculations of Recommended Compensations
It is necessary to take into account several criteria to arrive at an accurate calculation of the suggested reimbursements for the workers of the boutique hotel chain. These elements include the industry averages, modifications for the cost of living, and the objective of placing the remuneration plans in the top 25% of the industry. An in-depth description of how these computations were performed is provided as follows:
Industry Averages
It is vital to discover the industry averages for the various positions in the hotel sector to provide a foundation for the remuneration arrangements. This was accomplished by carrying out a thorough payment survey using materials accessible over the Internet. The survey collected information on salary ranges, benefit packages, and bonus mechanisms for comparable roles in the hotel business. Each position’s average compensation was determined by examining the data obtained and compiling it. The survey’s findings regarding compensation indicated the standard salary levels provided for each employee’s role. These medians contribute to awareness of industry practices and act as a benchmark for proposed reimbursements.
Adjustments for Locations
Because the boutique hotel chain intends to launch in five different cities (Manhattan, Chicago, Miami, Houston, and Los Angeles), it is necessary to make adjustments to consider the cost of living in each city. Each municipality’s cost of living in relation to the national average was evaluated by utilizing either expenditure of living averages or statistics obtained from reliable sources, such as the United States Bureau of Labor Statistics. The living expenses in each area must be considered when determining whether the compensation packages should be increased or decreased. For instance, cities with higher living rates may need to pay higher incomes to attract and keep talented people.
To adjust for the regional cost of living in each city, it is crucial to use city-specific cost of living indices. To change the payment following the market, adjust it by multiplying the average income for every slot by the living expense indicator. For instance, Tellez (2022) enumerated that the cost-of-living factor in Manhattan is 150. If the median wage for the role of GM is $80,000, then the revised compensation would be $80,000 multiplied by 1.5, which would equal $120,000. Consequently, the cost-of-living multiplier in Chicago is 130, and a GM’s aggregate wage is $75,000 (Tellez, 2022). As such, the new remuneration would be $85,000×1.3 to give $97,500.
In Miami, a GM earns an average of $75,000 in wages. Miami’s cost-of-living multiplier is 175, so the modified salary for the role would be $75,000×1.75 to give $131,250. A GM in Houston earns a median income of $65,000, while the city’s cost-of-living index is 98. Therefore, the revised compensation package would be $55,000×0.98 to give $61,750. Finally, Los Angeles has an expense of living parameter of 115, while a GM earns an aggregate of $70,000. Thus, the modified salary would be $70,000×1.15 to give $80,500.
Top 25% of Industry Compensation Packages
The CEO instructed that the company’s compensation packages should be positioned in the top 25% of the marketplace. As an initial basis for meeting this directive, the mean wages calculated from the remuneration assessment might be employed. Analyzing sector research or questionnaires that offer details on the top quartile of remuneration packages in the hospitality sector assisted in establishing a standard for the industry. The following are the computations of the recommended compensations for the job roles discussed in the essay.
General Manager
The O*NET Resource Center was utilized to determine the appropriate remuneration levels for general managers. The salaries of general managers in the Manhattan metropolitan area varied from $55,060 to $141,970 in 2019, with a median salary of $80,000 (O*NET Resource Center, 2023). The maximum range was decided upon since it is known that the hotel leadership wishes to pay their staff at a level in the top 25 percentile. Glassdoor and a conversation with a general manager of an area hotel were helpful tools when calculating pay increases, perks, and other types of benefits for executives. As a result of rewards being tied to sales performance and the hotel’s size, which ranges from 50 to 100 rooms, bonus amounts ranged from $2,000 to $20,000.
Front Office Manager
The O*NET Resource Center was utilized to collect salary data for front-office executives in the metropolitan area of Chicago. To ensure that the remuneration was among the top 25 percent of industry bundles, a close range ranging from $55,060 to $141,970 was selected, which was determined based on the obtainable data (O*NET Resource Center, 2023). The bonus values were established by considering the performance-based aspect of awards and the insights from Glassdoor, which resulted in a range of anywhere from $2,000 to $20,000 (O*NET Resource Center, 2023). The raises, bonuses, and other incentives were determined by averaging the amounts businesses in each state typically provide for workers.
Executive Chef
In a manner analogous to that which was applied for determining appropriate remuneration for the prior occupations, salary data obtained from the O*NET Resource Center was used here. The metropolitan area of Manhattan had a wage range for executive chefs that went from $53,770 to $122,300, with a typical compensation of $77,040 (O*NET Resource Center, 2023). The highest possible range of $122,300 was decided upon so the business could meet the target of being in the top 25%. The bonus amounts ranged from $2,000 to $20,000 due to considerations brought up during a chat with the general manager and data obtained from the Glassdoor website.
Sales and Marketing Manager
Salary information for advertising and marketing directors was obtained from the O*NET Resource Center and considered using the same process. A wide range of salaries was available for this employment in the metropolitan area of Manhattan, ranging from $54,890 to $156,390, with an average wage of $86,840 (O*NET Resource Center, 2023). The top 25% remuneration goal was met by selecting the largest possible range, which came to a total of $156,390. The size of the bonus was established based on data from Glassdoor, taking into account the sales-driven character of the position, which resulted in a range that went from $2,000 to $20,000.
Conclusion
In conclusion, the goal of this project was to create a proposal for payment plans for the upcoming hires of the start-up boutique hotel chain that would open in five cities across the nation. The objective was to create pay plans that were above average, cost-of-living-adjusted, and ranked in the top 25 percent of industry compensation packages. The project team used resources found online to conduct a comprehensive remuneration survey. The study covered pay and perks while considering the various responsibilities within the hotel company. The survey’s findings gave us essential information about industry norms and trends in pay. The poll results created job descriptions for four favored roles within the hotel network.
References
Korenková, V., Závadský, J., & Lis, M. (2019). Linking a performance management system and competencies: Qualitative research. Engineering Management in Production and Services, 11(1), 51-67. Web.
O*NET Resource Center. (2023). Onetcenter. Web.
Tellez, A. (2022). These global cities have the highest cost of living. Forbes. Web.
Wolniak, R. (2020). Main functions of operation management. Production Engineering Archives, 26(1), 11-14. Web.