REWARD POWER IN A HOUSEKEEPING OPERATION
Karin Christensen was a successful executive housekeeper in a downtown hotel in Cleveland, Ohio.
One of the reasons for her commendable achievements as a leader was the system of rewards that she had approved by the general manager and put in place to compensate employee performance.
She had established a bonus scale that was tied to a point system in which workers received extra money for good performance—for example, arriving to work on time, lack of absenteeism, going the extra step to service guests, suggesting ways to improve operations, and higher-than-average productivity. Employees worked very hard to obtain points that translated into extra cash over their minimum wages at the end of the pay period. Karin had demonstrated to her superiors that the bonus system in place was well worth the high productivity achieved, the better-than-average employee retention, and the achievement of superior customer service. In fact, the profit percentage of her department was the highest of all the company’s properties. Considered to be a star, Karin was asked to manage the housekeeping department of a larger hotel that the company was opening in Phoenix, Arizona. Karin accepted and was transferred with a substantial raise in salary.
A new manager was quickly hired to replace Karin. Although relatively new in the industry, Ryan Samuel held a degree from a hotel and restaurant management program and was proud of having finished his academic work with a 3.8 GPA in his major. On taking over the management of the department, Ryan was surprised to find in place the bonus/compensation system initiated by Karin. He remembered from his college courses that rewards could be used with employees in some occasions but that this type of management power was likely to erode if workers expected to be rewarded for any extra effort put in their jobs. He decided to get rid of the system and replace it with a more equitable way of rewarding performance.
Knowing that it would be difficult to take away a recompense system that had been in place for a long period of time, Ryan decided to increase employee wages across the board before eliminating the bonus/performance method. His goal was to motivate employees to put extra effort in their work by paying them a better wage.
Three months into the implementation of his plan, Ryan realized that his system had failed; productivity was down, absenteeism was up, and customer satisfaction had deteriorated to dangerous levels. Ryan was flabbergasted, wondering what had gone wrong in the process.

1. In your opinion, who was a better administrator, Karin or Ryan and explain how their method worked better?
2. Explain what you would have done if you had replaced Karin as a manager.