Carter, and it has been in place for about 5 years.

This program takes

Application Case the form of employee meetings. Jack holds employee meetings
periodically, but particularly when there is a serious problem in a
Tesla's Strategy store—such as poor-quality work or machine breakdowns. When
Written and copyrighted by Gary Dessler, PhD. problems like these arise, instead of trying to diagnose them himself or
By 2017 Tesla Motors briefly had a market value higher than the much- with Jennifer, he contacts all the employees in that store and meets with
larger General Motors. Tesla's strategic plan, formulated in 2006 by them when the store closes. Hourly employees get extra pay for these
company founder Elon Musk, was to start by offering a high- meetings. The meetings have been useful in helping Jack to identify and
performance energy-efficient electric roadster "without compromises” rectify several problems. For example, in one store all the fine white
and then expand to offer less-expensive family cars, while eventually blouses were coming out looking dingy. It turned out
enabling battery recharging with solar power devices.83 By May 2017, Tesla appointed a new HR head, Gaby Toledano, with
the title Chief People Officer. In announcing the appointment, Tesla
By early 2017, it was clear that Tesla was not soon going to achieve
noted that she would help Tesla address its labor and harassment
its goal of producing 5,000 Model 3 family sedans per week, and the
disputes. Ms. Toledano acknowledged that some disputes between
company also faced numerous human resource management-related
workers weren't reaching the HR office fast enough, but she said she's
challenges.84
working on the problem. Furthermore, Tesla employees receive
For example, hundreds of workers stopped building Tesla's battery
antidiscrimination and antiharassment training.
factory near Reno, Nevada, claiming that outside contract workers were
lowering their pay. Workers at Tesla's car plant complained of high Questions
employee accident rates. Musk reportedly said that Tesla wasn't
3-13. Was Tesla's human resource strategy consistent with its overall
skimping on safety to make more profit, but rather to survive and
strategy to produce "uncompromising" high-performance cars?
continue to offer employment.
3-14. Given what Kia UK accomplished, should Tesla implement such
Tesla also laid off about 700 workers at its California manufac-
an engagement program? Why?
turing facility. Many union activists asked why, having to ramp up
production of the new Tesla Model 3, the company would dismiss so
3-15. What would you do now if you were Tesla's Chief People
many employees. Some felt it wasn't because of poor performance Officer?
reviews, but because Tesla wanted to fire employees who wanted a 3-16. Based on the case, provide examples for Tesla of at least four
union. Elon Musk defends dismissing the 700 workers. Basically, he said strategically required organizational outcomes, and four
(1) most companies have performance reviews and use them to screen required workforce competencies and behaviors.
out employees, and (2) because it wants the highest-quality cars, Tesla 3-17. Provide a brief illustrative outline of a strategy map for Tesla.
needs to have higher performance standards than its competitors. As
Musk says, if a little company wants to compete with a giant one, the
little one must have a lot more skill, or it will get pummeled.
Some of Tesla's HR procedures are also somewhat unusual. For
exam- ple, Tesla requires that new employees sign confidentiality
agreements prohibiting them from discussing Tesla's business strategy that the cleaner/spotter had been ignoring the company rule that
and working conditions. The United Auto Workers filed unfair labor required cleaning ("boiling down") the perchloroethylene cleaning fluid
practice charges against Tesla, claiming that such agreements violate before washing items like these. As a result, these fine white blouses
employees' rights. were being washed in cleaning fluid that had residue from other, earlier
Tesla does use some sophisticated HR tools to improve its HR washes.
processes. For example, they used talent analytics to determine if Jennifer now wonders whether these employee meetings should be
employee referral programs improve their recruitment and retention expanded to give the employees an even bigger role in managing the
processes and distributed an employee engagement survey. Carter stores' quality. "We can't be everywhere watching everything all
the time," she said to her father. "Yes, but these people only earn about
$8 to $15 per hour. Will they really want to act like mini- managers?" he
replied.
Continuing Case
Questions
Carter Cleaning Company 3-18. Would you recommend that the Carters expand their quality
Written and copyrighted by Gary by Dessler, PhD. program? If so, specifically what form should it take?
3-19. Assume the Carters want to institute a high-performance work
The High-Performance Work System system as a test program in one of their stores. Write a one-
As a person who keeps up with the business press, Jennifer Carter is page outline summarizing important HR practices you think
familiar with the benefits of programs such as total quality management
they should focus on.
and high-performance work systems.
Jack, her father, actually installed a total quality program of sorts at
Translating Strategy into HR Policies and Practices Case* ,§
* The accompanying strategy map for this chapter is in MyLab Management; the overall map on the inside back cover of this text outlines the relationships
involved.

Improving Performance at the Hotel Paris

The Hotel Paris International
Starting as a single hotel in a Paris suburb in 1995, the Hotel Paris is now a chain of nine hotels, with two in France, one each in
London and Rome, and others in New York, Miami, Washington, Chicago, and Los Angeles. As a corporate strategy, the Hotel Paris's
management and owners want to continue to expand geographically. They believe doing so will let them capitalize on their
reputation for good service, by providing multicity alternatives for their satisfied guests. The problem is, their reputation for good
service has been deterio- rating. If they cannot improve service, it would be unwise for them to expand, since their guests might
prefer other hotels after trying the Hotel Paris.
Several things are complicating their problem. Tourists increasingly stay at short-term rental apartments (often through sites
such as airbnb .com) for a fraction of what fine hotels cost. In 2018 Airbnb agreed to more stringently comply with the limits on the
lengths of rentals in the heart of Paris, but not elsewhere. Marriott recently acquired the Starwood hotels chain (including many
brands such as Ritz-Carlton) and will present increased competition. And the election as French president of Emmanuel Macron in
2017 prompted widespread opti- mism among many in France regarding the country’s growth prospects, but also the possibility of
some labor strife, at least in the short run.

The Strategy
Top management, with input from the HR and other managers, and with the board of directors' approval, chooses a new
competitive strategy and formulates new strategic goals. It decides: "The Hotel Paris International will use superior guest services to
differentiate the Hotel Paris properties, and to thereby increase the length of stays and the return rate of guests, and thus boost
revenues and profitability.” All Hotel Paris managers—including the director of HR services—must now formulate strategies that
support this competitive strategy.

The Strategically Required Organizational Outcomes The Hotel Paris's basic strategy is to use superior guest
services to expand geographically. For HR director Lisa Cruz, reviewing the hotel's activities makes it clear that achieving the hotel's
strategic aims means achieving a number of required organizational outcomes. For example, Lisa and her management colleagues
must take steps that produce fewer customer complaints and more written compliments, more frequent guest returns and longer
stays, and higher guest expenditures per visit.

The Strategically Relevant Workforce Competencies and Behaviors

The question facing Lisa, then, is this: What competencies and behaviors must our hotel's employees exhibit, if we are to produce
required organizational outcomes such as fewer customer complaints, more compliments, and more frequent guest returns?
Thinking through this question helps Lisa come up with an answer. For example, the hotel's required employee competencies and
behaviors would include, "high-quality front- desk customer service,” "taking calls for reservations in a friendly manner,” "greeting
guests at the front door,” and "processing guests' room service meals efficiently.” All require motivated, high-morale employees.

The Strategically Relevant HR Policies and Activities

The HR manager's task now is to identify and specify the HR poli- cies and activities that will enable the hotel to produce these
crucial workforce competencies and behaviors. For example, "high-quality front-desk customer service” is one such required
behavior. From this, the HR director identifies HR activities to produce such front-desk customer service efforts. For example, she
decides to institutepractices to improve the disciplinary fairness and justice in the company, with the aim of improving employee
morale. Her assumption is that enhanced fairness will produce higher morale and that higher morale will produce improved front-
desk service.

The Strategy Map

Next, Lisa, working with the hotel's chief financial officer (CFO), out- lines a strategy map for the hotel. This outlines the cause-and-
effect links among the HR activities, the workforce behaviors, and the organizational outcomes (the figure on this book's inside back
cover shows the overall map; you'll find detailed maps for each HR function in each chapter's related MyLab Management page).
This map and its linkages reflect certain assumptions on Lisa's part. For example, based on experience and discussions with the
firm's other managers, she formulates the following hypothesis about how HR affects hotel performance: Improved grievance
procedures cause improved morale, which leads to improved front-desk service, which leads to increased guest returns, which leads
to improved financial performance. The HR director then chooses metrics to measure each of these factors. For example, she decides
to measure "improved disciplinary procedures” in terms of how many grievances employees submit each month. She measures
"improved morale” in terms of "scores on our hotel's semi- annual attitude survey,” and measures "high-quality front-desk customer
service” in terms of "customer complaints per month.”
 She moves on to quantifying the cause-and-effect links among these measures. For example: "Can we show top management
that there is a measurable, sequential link between improved disciplinary procedures, high morale, improved front-desk service,
number of guest return visits, and hotel financial performance (revenues and profits)?” If she can show such links, she has a
persuasive case that shows HR's measurable contribution to the hotel's bottom-line financial performance.
In practice, the HR manager may well just rely on a largely subjec- tive but logical argument to make the case for such cause-
and-effect linkages. But ideally, she will use statistical methods such as correlation analysis to determine if measurable links exist,
and (if so) what their magnitudes are. In this way, she might find, for instance, that a 10% improvement in grievance rates is
associated with an almost 20% improvement in morale. Similarly, a 20% improvement in morale is associated with a 30% reduction
in customer front-desk complaints. Furthermore, a 30% reduction in complaints is associated with a 20% increase in guest return
visits, and a 20% increase in return rate is associated with a 6% rise in hotel revenues. It would appear that a relatively small HR effort
in reducing grievances might have a big effect on this hotel's bottom-line performance!
Several things complicate this measurement process. For example, it's risky to draw cause-effect conclusions from correlation
measures like these (do fewer grievances lead to higher morale, or vice versa?). Furthermore, it's rare that a single factor (such as
grievance rates) will have such effects alone, so we may want to measure the effects of several HR policies and activities on morale
simultaneously.
As explained in this chapter, computerization could enable Lisa to build a more comprehensive HR scorecard process, one that
might han- dle links among dozens of cause-and-effect metrics. (Several vendors supply such scorecard software.) If not, then she
will rely more on the logic and common sense underlying the strategy map to make her case.

How We Will Use the Hotel Paris Case

A Hotel Paris case in each chapter will show how Lisa, the Hotel Paris's HR director, uses that chapter's concepts and techniques to:
(1) create HR policies and practices that help the Hotel Paris, (2) produce the employee competencies and behaviors the company
needs, and (3) to produce the customer service the Hotel Paris requires to achieve its strategic goals.
For example, she will endeavor to improve workforce competencies and behaviors by instituting improved recruitment
(processes Chapter 5), and measure improved recruitment in terms of "number of qualified applicants per position.” Similarly, she
will recommend to management that they change the company's pay policies, so that the "target percentile for total compensation
is in the top 25%.” She could argue, based on competitors' experience, that doing so will translate into improved customer service
behavior, more satisfied customers, and improved hotel performance. In practice, all the human resource management functions we
discuss in this book influence employee competencies and behaviors, and thereby organizational performance.
You will find the strategy map for each Dessler Human Resource Management chapter's topic in the chapter's MyLab
Management; the summary map on the inside back cover of this book outlines the overall relationships involved for the Hotel Paris.
Questions
3-20. Draw a more simplified and abbreviated strategy map for the Hotel Paris. Specifically, summarize in your own words an
example of the hierarchy of links among the hotel's HR practices, necessary workforce competencies and behaviors, and
required organizational outcomes.
3-21. Using Table 3-1 and Figure 3-9, list at least 15 metrics the Hotel Paris could use to measure its HR practice