Do You Run HR Like Hotel Le Bleu? Let’s Hope Not…

Hurricane Irene came sashaying up to the east coast of the US last week and made quite an entrance.

A lot of damage, a lot of power outages, and a lot of stress.   New York and New Jersey took drastic measures and ordered evacuations and emergency measures that may have seemed out of whack – but hey, if I were Mayor or Governor – I know I would rather be safe than sorry (can you say Katrina?)

But I digress – my point in this post is to highlight a hotel – which – in the spirit of truth in reporting – is denying all of what I’m about to say…

The Hotel Le Bleu supposedly raised its normal $250 a night room rate to $999 on Saturday, August 27th right before Hurricane Irene made landfall.

Some would say (like Gordon Gekko, or anyone on the top floor of Morgan Stanley) –

“Hey this is America.  Capitalism rules.  Supply/Demand.  Get over it.”

Moral Capitalism

Or… you could practice something I heard on the radio – “moral capitalism.”  That sounds so much better to me.  You don’t raise your prices just because supply and demand allows you too.  You don’t raise your prices because your competitors do.  In fact, moral capitalism would seem to me to require you to lower your prices.  Require you to suffer a little bit to help those who are suffering a lot.

But like it or not – there are always companies that take advantage of tragedy and disaster to line their own pockets.  I’m not a big believer in that personally, but it does happen.  Freedom isn’t free, so we get the good and the bad.

Do You Practice “Moral HR?”

But when I heard that story about the Hotel Le Bleu (remember – they are denying it), I thought of the tragedy of our economy and the toll it’s taken on employment and employees.  Layoffs, cutbacks, reduction in 401K matches, reduction in benefits, and increases in costs to employees for services and benefits.

So here’s the question for you HR folks – and a question you should ask your own company decision makers…

If you made changes to your employee/employer contract during this tragedy – when do you bring them back?  Or… do you?

Will you operate like the Hotel Le Bleu (allegedly) did and keep those cuts in place as the economy improves?  Why wouldn’t’ you?  It’ll increase your bottom line and if everyone else kinda tows the line on this, you remain at parity.  Is there any real reason to go back to “pre-2008” benefits?

You got the employees on the ropes.  They’re happy to have a job.  They can’t really go anywhere since the economy isn’t growing (assuming the individual companies will rebound, but overall the economy doesn’t grow enough for wholesale hiring – which is what I’m hearing from my sources close to Obama).

You have a right and an obligation to the shareholders (stakeholders, whatev) to drive profits.  Bringing back those bennies would be a violation of your fiduciary responsibility right?

Or…

You could practice moral HR – give more to the employees rather than less.  Lower the cost of healthcare (hey you cut some employees already right… you got some cash sitting around, no?)  Add some benefits – heck – the employees are probably suffering individually more than the company is as a whole – right?

How could the company take on a bit more of your employee’s pain now in order to garner more of their engagement later?  Should you?

That’s my question in all of this.  Is there such a thing as Moral HR and should there be?

I don’t know.

One last question… How many of you thought of the song “Come On Eileen” by Dexy’s Midnight Runners when we started hearing stories of Hurricane Irene?  I’m thinking a ton… and for you all – special video walkout music below (subscribers may have to click through to see video.)  Now where did I store those denim overalls?


FOT Background Check

Paul Hebert
Paul Hebert is the Senior Director of Solutions Architecture at Creative Group Inc and a writer, speaker and consultant. Paul focuses on influencing behaviors and driving business results through employees, channel partners and consumers. Over the course of his career, Paul has worked closely with clients to design influence, marketing, motivation, incentive, loyalty, recognition and reward programs to increase effectiveness and reduce costs. Paul is a recognized authority on incentives and performance motivation. Want to know what’s going to motivate your people to perform at their best and impact the bottom line? Want to know whether your service award program really means anything at all? Curious what psychological principles drive sales behavior? Paul’s your guy… unless you fervently bow down to Maslow. Check out his personal blog at "What Is Paul Thinking?" when you're tired of his FOT rants.

7 Comments

  1. Chris says:

    A company that goes under because it mis-manages its money doesn’t do its employees any good. So if your short-term generous at the expense of long-term viability, you’re actually doing your employees a disservice.
    It is HR’s responsibility, in companies “sitting on piles of cash” (as the media like to portray them), to demonstrate that an increase in pay/benefits to existing employees produces a greater return than other options for that money (including the option of not spending it in the current quarter). This requires both a short and long term focus. It also requires a lot of skill on the part of HR, because you have to recast payroll as an investment whose return you seek to maximize against the headwinds of Finance/Accounting treating payroll as an expense to be minimized.
    It’s not about being moral. It’s about staying in business.

  2. kolz says:

    I have a feeling that this ‘moral capitalism’ is socialism in milder term. Besides, even IF the hotel raised up the price, I highly doubt the revenue did passed down the chain (employees who have to work during this period).

  3. Assuming that moral capitalism is just a milder term for socialism, given the context of the issue, there’s nothing about it that should be vilified. Sometimes it’s not even an issue of capitalism but of business ethics. Raising room prices to more than double of your regular rate during a calamity does nothing for your consumers.

  4. Xyzzy says:

    Why, exactly, are Americans so scared of socialism? Is the thought that government exists to serve the people rather than business really so frightening?
    I can assure you that if a hotel behaved in that manner in my country (Australia), they could look forward to a long and sustained boycott. More likely, as in the case of recent disasters in Queensland, you’d see them offering rooms at a heavy discount, or in some cases, completely free of charge.

  5. IncentIntel says:

    Sorry I couldn’t get to the comments yesterday. Thanks for weighing in.
    @Chris – the key in my mind is there is a difference between maximizing and optimizing your financials. Too many companies focus on maximizing – which means something/someone has to lose in order for the company to win. Maximizing connotes a “single” right answer. If there is just ONE nickel left on the ground – you haven’t maximized. Optimization has a nuance of judgment – and that’s what I’m referring to. In this case – just because you have the right to raise prices – doesn’t make it the right thing to do. I think you misread my post to say that HR should ignore the financial equation. I’m not. I’m saying there are a variety of ways to allocate expenses/resources – not all of them maximize return – but they may optimize across a wider variety of variables.
    @kolz – It’s not socialism. It’s just smart business. I give now to get later. I’m all for profit – but I’m also all for smart, long-term, intelligent ways of getting it. The “moral” part I’m referring to is making the decision to walk away from the obscene short-term win for the more desirable long-term win.
    @MicroSourcing – Not really sure what you’re saying there… unless we’re in agreement ethics=morality – then you’re brilliant.
    @Xyzzy – (if that is your real name) – This isn’t a discussion of government – it’s a discussion about applying the same thought process we would use if our neighbors needed help during a short period of time. I’ll leave the political discourse to another blogger and another blog.
    But to your point in the second paragraph of your comment – If I ran the hotel – would do the same as you indicated. I’d lower my prices and then ask each hotel guest to help my business by tweeting, facebooking, recommending us in the future and give them some discount for their next stay as well.
    Thanks all for reading and commenting. Cheers.

  6. Dev Dugal says:

    OFFICIAL HOTEL RESPONSE.
    THANK YOU FOR YOUR PASSIONATE COMMENTS AND NOTES.
    LET US BE CLEAR THAT WE DID NOT PRICE GOUGE, NOR HAD ANY INTENTION TO DO SO. OUR HOTEL NEVER POSTED A $999 RATE ON OUR WEBSITE OR QUOTED ANY PERSON ON THE PHONE OF SUCH RATE. THIS WAS STRICTLY AN EXPEDIA (AND AFFILIATES) PUBLISHED RATE. WE ARE GOING THROUGH PROPER CHANNELS TO INVESTIGATE WHAT CA– USED OUR HOTEL UNNECESSARY SCRUTINY WITH OUR LOYAL GUESTS AND MOST IMPORTANTLY, THE COMMUNITY WE LOVE TO BE PART OF. THE HIGHEST RATE ANY GUEST PAID THAT WEEKEND AT OUR SOLD-OUT HOTEL WAS $269/NIGHT.
    WE HAVE TAKEN THE PROACTIVE ACTION TO REACH OUT TO ATTORNEY GENERAL OFFICE OURSELVES AND THE BROOKLYN BOROUGH PRESIDENT’S OFFICE TO CLEAR UP THE CONFUSION. WE HAVE ALSO SPOKEN TO OREN, THE PUBLISHER OF THE ORIGINAL ARTICLE, AND HE IS CLEAR ON THE MISUNDERSTANDING TOO AND HAS PRINTED A FOLLOW UP PIECE. DAILY NEWS PUBLISHED A FOLLOW UP ON PAGE 6 THE FOLLOWING DAY AND SO DID THE OTHER OUTLETS.
    WE HOPE TO CLARIFY FOR OUR LOYAL GUESTS, PRESENT AND FUTURE. WE STRIVE TO BE THE BEST COMMUNITY PARTNERS IN PARK SLOPE AND THE GREATER BROOKLYN AREA.

  7. IncentIntel says:

    Thanks Dev Dugal – got it. You can stop yelling at me now.

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