Creating a Hospitality Bonus Structure That Gears Your Hotel Business Towards Success

Hospitality structure
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For every aspect of the hotel and tourism industries, a business is only able to become successful based on the quality and commitment of its employee teams. Yet thanks to an ever-competitive workforce market and ongoing labor shortages, earning and maintaining the loyalty of productive employees has become a significant challenge for hotels around the globe.

A hard truth that the hospitality industry has to come to terms with, is the fact that many of today’s workers expect more than a mere paycheck in order to gain their commitment. They now frequently expect further incentives that recognize and reward them for their efforts, and that are now commonplace within other industries. 

To remain competitive in attracting and retaining employees, hoteliers must address how they can create work environments that are seen as mutually beneficial by their staff, and that encourage them to deliver a level of service able to exceed guest expectations. To achieve this, they must begin taking a close look at the employee incentive structures they have in place. 

What are Hospitality Incentives?

Simply stated, an incentive for hospitality-based employees is anything that attracts them towards a particular job role and that encourages them to remain within that position. An incentive also can serve to motivate employees towards performing tasks more productively and with closer attention to ensuring high-quality results.  

Incentives can come in many shapes and sizes and can be tailored to individual business needs, budgets or particular employee expectations. Some may be financial in nature, such as offering monetary compensation. Others may involve providing benefits such as dental or health plans that provide employees and their family members with affordable access to care services. 

Others still can be tied to providing employees with indirect compensation, such as a reward system where staff can earn points towards recognition and/or an award for their efforts.  Ultimately, deciding which incentives to adopt will require hospitality professionals to perform an in-depth review of what their own employees value most. 

Read on to learn more about some of the more common employee incentives the industry has adopted and that are proving highly effective in maximizing both staff loyalty and productivity.

Defining and Structuring a Hospitality Bonus Program  

Begin With a Competitive Benefits Compensation Package

With 60 percent of workers stating that benefits are very important to job satisfaction, any hospitality business seeking to gain an edge in attracting and retaining staff should never overlook the importance of providing an ample benefits compensation package.

With medical expenses often representing exorbitant costs, ensuring that staff or potential employees have access to affordable healthcare can many times be viewed as the most important benefit of a particular job role. Hoteliers should therefore at minimum provide their employees with basic healthcare coverage options. 

To minimize the risk of otherwise content staff from looking for other jobs with better benefits, hospitality professionals should also consider providing workers with additional benefit options that can further boost an employer’s competitive standing. These can include providing staff with dental and vision care options, as well as retirement or life insurance plans. 

Taking Employee Compensation to New Heights

Businesses are always trying to find ways of boosting employee productivity in order to increase overall business efficiency, lower costs and ultimately deliver a better customer experience. Offering some sort of compensation based on performance not only serves as an attractive job role enticement, but also motivates staff to meet and exceed business goals.

For example, many organizations currently offer sales incentive plans that reward employees based on the number of successful sales that they are able to earn. These plans can be tied to specific sales numbers, providing businesses with an improved likelihood of meeting performance targets while offering staff opportunities to track their own progress. 

Depending on employee interests/priorities and hotel budgets, compensation provided for an incentive plan doesn’t necessarily need to be monetary. For example, points earned by employees could go towards receiving a free night hotel stay or meal at a property’s restaurant, or they can go towards providing employees with additional vacation time.  

Incentive Plans Aren’t Just for Sales

The advantage of an employee incentive plan is that it can be custom-tailored to increase performance and productivity for a wide range of operational areas beyond simply increasing sales. For example, hotels adopting a new upselling solution could provide employees with points for learning how to master the new system’s features. 

With hotels still suffering from worker shortages, managers can make better use of their existing labor pool by promoting cross-utilization among employee teams using an incentive plan. A housekeeper may, for example, be willing to learn how to manage front desk services if an incentive exists. A restaurant host may be open to learning how to become a server.

Combining cross-utilization with an effective incentive rewards program provides benefits for hoteliers and their employees alike. It first increases the likelihood of team members desiring to learn a new skill or role, as they can readily recognize the practical value to themselves by doing so. 

At the same time, hotel managers can steer employees to which skills/roles are needing to be filled by providing incentive points for those specific fields. This significantly means that hoteliers can simultaneously increase employee productivity and loyalty, while also sidestepping worker shortage issues and addressing the unique needs of their business.   

The Value of Employee Recognition & Appreciation

In today’s workforce market climate, simply saying thanks and showing employees that you appreciate their efforts can go a long way. Today’s employees want to know that their hard work is valued by a business and that their ongoing commitment contributes towards organizational success. 

Hoteliers should make it a point to thank each employee at the end of their shift because without them, nothing gets done and the guest experience ultimately suffers. Recognizing and appreciating employees also fosters a more positive work environment that breeds loyalty, attention to detail and a sense of community with their managers and peers. 

Recognition/appreciation doesn’t necessarily have to be just from managers, but can also come from guests and an employee’s colleagues. Hoteliers should implement a nomination process where both guests and fellow team members can submit recommendations on who should be recognized for a job well done.  

Not all employee recognition should be tied to a specific individual and should instead be geared towards appreciating the overall efforts of a team. This promotes effective team-building and collaboration, which only leads to further increased productivity, loyalty and service quality. 

Examples of demonstrating team-wide appreciation can include hosting employee-only ‘thank you’ parties, or allowing employees to leave a little early once completing their final shift for the week.     

Things to Keep in Mind When Implementing a Hotel Bonus Program

As can be seen from just the few examples provided, hoteliers have a wide range of options at their disposal when it comes to implementing a bonus/incentive program for staff. Yet some options may make more sense for one business versus another, so hoteliers need to approach compensation management with an eye towards their own operational and employee needs.

Hotel managers should perform a detailed analysis of what incentives their own employees value most, as well as which ones can be supported without upending budgets. Perhaps a hotel’s employees are more inclined to receive incentives such as a free night’s stay versus a slight bump in their take-home salary. 

If aiming to provide team members with some sort of financial compensation, hoteliers need to identify what the average bonus percentage should be. This will ensure that employees know what they can uniformly expect by performing a certain task or behavior. It will also allow hoteliers to adopt financial incentives without incurring a significant loss of revenue. 

Common Pitfalls to Avoid When Implementing a Hotel Bonus Program

Like many things within hospitality, there are several risks that can come with adopting a hotel bonus program if implemented with little thought and planning. Left unresolved, such issues can create an opposite effect where productivity, employee loyalty and service quality ultimately decrease. 

The first issue that hoteliers must avoid is setting unrealistic expectations for their teams. Being able to earn compensation and/or recognition does little good if it is effectively impossible for an employee to reach preset goals. Managers should therefore take a close look at what each position/role can effectively accomplish during a shift and set targets accordingly. 

The next issue hoteliers need to be on the lookout for is the potential for cheating. Racking up points that go towards earning compensation can mean that some staff members may be tempted to cut corners if it means gaining better rewards. To sidestep this risk, managers should implement a bonus program where employee performance is verifiable and monitored.   

Lastly, a bonus program should be equitable and accessible to all employees on the same terms. This importantly prevents potential accusations of favoritism, which can poison an otherwise positive workplace culture and lead to a drop in productivity/loyalty from employees who feel that they are being treated unfairly compared to other peers.   

Real-life Examples of Hotel Employee Incentive Programs

Go Hilton Employee Travel Program

The spread of employee incentive programs throughout the hospitality industry is one notable indication of their value for business operations. At Hilton Hotels, employees can, for example, benefit from the Go Hilton Travel program to receive room rate discounts for themselves as well as for eligible family members and friends. 

Employees are able to book up to seven consecutive nights with enviable rates that can be as low as $40 for Hampton, Hilton Garden Inn, Homewood Suites and Tru by Hilton branded properties. For more upper-scale locations such as Curio, Canopy and Hilton Grand Vacation properties, employees still gain a $60 per night rate discount advantage.

For front line workers who can often struggle just trying to pay bills, the Go Hilton Travel program serves as a powerful staff loyalty incentive that opens Hilton employees up to new experience opportunities that may otherwise be out of reach financially. 

Incentivizing Marriott Employees to Boost Loyalty Program Sign-ups

At Marriott International, the hotel brand was able to achieve its goal of boosting guest loyalty program sign-ups by incentivizing employees to increase sign-up numbers. Company leadership notably determined that a lack of knowledge about the program among employees was the leading cause behind lackluster performance.

To reverse course and achieve its sign-up goal targets, Marriott International devised a competition where properties from the same region could compete to see which obtained the highest number of loyalty program sign-ups. 

With first-place prizes such as expense-paid trips, Marriott was able to provide its employees with a high-value incentive to learn as much as they possibly could about the brand’s loyalty program, as well as take direct ownership over sign-up results. Teams could even benchmark their performance against other properties to see if they needed to make improvements.  

The end result: Placing staff members into teams and providing each team with rewards such as free trips when coming in at first place, Marriott was able to exceed its loyalty program sign-up goals by 10 percent. This impressive outcome is just one more example demonstrating how the presence of employee incentives don’t just benefit individual workers, but also provide a substantial return on investment for an organization as a whole.  

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Graduated from Standford University, Arielle has over 5 years of experience in the Hospitality industry. She holds an MBA in business administration from the IDC Herzliya, Israel. She currently works as Account Manager at UpStay, building and maintaining strong, long-lasting customer relationships. She is deeply passionate about helping hoteliers unlock significant new revenue streams from unsold premium inventory.


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