Hotel Online  Special Report


 Negotiating Issues Between Hoteliers and Unions –
It’s About the Money
By Joseph M. Gravish (July 2006)

“He who loves the Workman and his work does what
he can to preserve and improve it.” (John Adams) 

As someone with a type “A+” personality I blew my cool over a recent survey for the Maritz Research Hospitality Group that suggests better pay and benefits might not be the biggest negotiating issues between hoteliers and unions. The survey contends that caring management is the real key to labor-management harmony.

Though I find the conclusions interesting, I have yet to find someone who will volunteer – without pay – to work at my hotel simply because management cares. I have yet to read about a union negotiating position suggesting that pay and benefits are not priority issues. Just ask union and hotel management negotiators in New York City, for example, who last month agreed to a new six-year contract providing annual wage increases, maintaining employer-funded health benefits, and allowing more time off days – an agreement praised by lodging industry leaders.

The inference – that a caring management philosophy is a substitute for “an honest day’s pay for an honest day’s work” - is simply not supported by the real facts. While I would agree intuitively that caring is important in building a trusting employer-employee relationship it’s too late to get religion when staring at a union negotiator across the table and the labor contract expires in 30- to 60-days, or less. Labor negotiations are, and will always be, primarily about compensation (pay and benefits). Even as far away as New Zealand there’s a union-sponsored “Supersize My Pay” campaign on behalf of McDonald’s employees to raise the minimum wage to $12 an hour by 2008, though the government already intends to do so. To quote Leo Rosten “Money can’t buy happiness. But neither can poverty.” 

What more could industry executives have done in the days and years leading up to a potential work stoppage now? Could they have cared more by adding a few additional maids because the time required for cleaning guest rooms has increased (more pillows, triple sheeting, turn-down service, etc.)? (Yet some managers still mandate 30-minutes per room!) Cared enough to be embarrassed to allow six jobs essential to hotel operations to be perennially listed among this state’s 25 lowest paying positions? Cared enough to do something more than continuing to pay employees at or below federal poverty level wages? Cared enough to provide more than the barest of employee and family health benefits, if any at all?

Cared enough to make better decisions on the basis of what the customer would expect in terms of quality and service, or what would be in the best interests of their business partners (read “employees”), not on how many nickels and dimes might be saved? Cared enough to budget for and mandate annual wage increases to offset yearly Consumer Price Index increases? Cared enough not to cavalierly dismiss an exorbitantly high, costly, morale-busting turnover rate as “business as usual”? Cared enough that franchisors deliberately place employee care standards upfront - in Section 2, not Section 20 – of their brand standards manual? Cared enough, as an industry, not to find itself with any other option but to rely on (possibly illegal) immigrants to fill jobs Americans supposedly won’t take?

How can we define “caring”? It begins first with respect, in the form of an appreciative compensation program designed to allow employees (read “business partners”) to create and maintain a reasonable quality of life for themselves and their families. One need only look at The Container Store which espouses a “1=3” hiring philosophy (hire only the best – never settle for less), and pays lower level associates (those that meet, greet and treat the customer) 50-100 percent more than other typical retailers. Other examples include Trader Joe’s, Southwest Airlines and some fast-food chains that provide health benefits even for part-time employees.

Interestingly, these companies are not only “employers of choice” but profitable as well. I know hotel managers who would simply dismiss this as an impossibility. But in fairness, some hotel chains do get it. Choice and Marriott hotels were honored again as industry visionaries with the “Workplace Excellence” seal of approval by the Alliance for Workplace Excellence. Their business strategy provides for work environments that emphasize revenue and profitability through empowerment and support programs focused on their most important assets. 

Let me list just a few reasons (gleaned from a variety of industry print media and Internet web-zines) national hotel associations and management companies will have a hard time defending their “we can’t afford it” position during near-term labor negotiations:

  • Headline: “Optimism Reigns At Meet the Money” (“… despite some miniscule risks, such as rising gas prices, the lodging sector is humming along nicely with no end of the cycle clearly in sight.”)
  • Headline: “Conference Centers Thrive in 2005” (“[(In 2005] Conference Center managers…turn the 13.7% increase in revenue into a 39.2% increase in profits.”)
  • Headline: “U.S. Hotel Industry Had Its Best Year EVER: Profits Rose to $22.6 Billion in 2005”
  • Headline: “Firm [CINTAS] Owes Workers and State $1.4 Million for Breaking Hayward Living-Wage Law”
  • Headline: “Workers Sue NY Restaurant for Withheld Tips and Unpaid Wages…”
  • Headline: “Governors OK Minimum Wage Increases”
Viewed through the eyes of the public the picture appears to be rosy for management. But take off the rose colored glasses -  it’s not so good for employees.

A letter to the editor of a local newspaper puts it all into perspective. It addresses the signing of baseball pitcher Roger Clemens to a contract long after the season started.

Clemens, a sure bet to join baseball’s Hall of Fame, pitched his first major league game on June 22 - 73 games into the season. The letter begins: “…let’s assume that Roger Clemens, who will earn $12 million this season, makes 12 starts for the Houston Astros. That’s a million dollars per game. Let’s further say he throws 100 pitches, reasonable, at least for younger pitchers… That means that he earns $10,000 a pitch. That’s almost equal to the annual salary of a minimum-wage worker. Think of it, Clemens will make in 1.5 seconds, windup and pitch, what a waiter, fast food clerk or hotel maid earns in more than 2,000 hours.”

It’s time for a reality check among national industry associations and their leaders, management firms and hotel executives – and it really is about the money.

Mr. Gravish is a human resources professional with over 25 years leadership experience at numerous organizational levels and among diverse environments, nationally and internationally. He is an advocate of building business success through, and by, people.

Joseph M. Gravish

Also See: Hotel Companies Need to Be on the List – the Right List; Employees Can Make it Happen / Joseph M. Gravish / May 2006
What Are Hotel Employees Worth? / April 2006
Hotel Labor Union Negotiations - a Perspective / Joseph M. Gravish / April 2006

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