Equitably Paying Hospitality Workers Through a Merit-Based System Can Increase Hotel Profits

The secret to success in the highly competitive world that hospitality workers command, goes beyond luxurious amenities and stellar service—it often lies within the satisfaction of the workforce. As waves of hotel strikes continue to spread, hotel management must implement strategic benefits for their employees, such as pay increases and creating opportunities to showcase individual performance. 

But it doesn’t stop at wages; rewarding the exceptional job performance of hospitality workers and their skills can encourage further education and training, which should be integral components of the compensation mix. By adopting this nuanced approach to pay, management can not only maintain a competitive edge but also foster a more committed and driven workforce. The impact of equitably paying hospitality workers reverberates through the entire organization in ways that benefit everyone.

Larry Yu, Ph.D. and Professor of Hospitality Management at The George Washington University said this boost in employee morale can be driven by a healthy reward system. Happy workers create happy guests, which is ultimately the foundation for customer retention, he added. Yu stated that employees are the impetus for hotels ranking in big bucks.

Yu’s Thoughts on Equitably Paying Hospitality Workers

“Equitably compensated employees are more satisfied and motivated employees. Retail management needs to consider pay increase strategically to improve employee satisfaction or retention in the tight labor market. Managers need to be knowledgeable of the market movement of wages and pay employees competitive wages and benefits. In addition, hotel management should offer merit-based reward for outstanding job performance and skill-based benefit for employees to gain new skills through education and training.

“Hotel management can increase employee pay strategically while maintaining competitive edge. Equitably compensated employees are more satisfied and motivated employees who demonstrate stronger in-role and extra-role performances, which increase guest satisfaction and loyalty, resulting in higher sales and profits for the hotel.”