By applying the 4 key components of transformational leadership, hospitality leaders can enhance employee satisfaction, drive team performance, and elevate the guest experience.

The hospitality industry thrives on exceptional service and memorable guest experiences. To meet the evolving expectations of today’s guests, leaders must inspire their teams to embrace innovation, deliver personalized service, and stay motivated in dynamic environments. Transformational leadership is an ideal management style for fostering this type of growth and excellence. It is based on four key components, also known as the four “I”s:

Intellectual stimulation
Individualized consideration
Inspirational motivation
Idealized influence

By applying these principles, hospitality leaders can enhance employee satisfaction, drive team performance, and elevate the guest experience. Here’s a closer look at what each of these “I”s means for transformational leadership in hospitality.

The 4 key components of transformational leadership in hospitality

1. Intellectual stimulation: encouraging innovation and creativity

In hospitality, where delivering unique and personalized guest experiences is vital, intellectual stimulation plays a critical role. Transformational leaders encourage their teams to think creatively and come up with innovative solutions to enhance service and operations. Whether it’s finding new ways to improve guest satisfaction, streamline check-in processes, or personalize amenities, intellectual stimulation empowers employees to contribute to the organization’s success.

A hotel manager might involve their staff in decision-making when implementing new guest services, such as introducing tech-driven solutions like virtual concierge systems. By soliciting ideas from all levels of the team, leaders foster an environment that values creativity, resulting in services that set the property apart from competitors.

2. Individualized consideration: valuing each and every team member

The hospitality industry is built on people, both employees and guests. Transformational leaders understand the importance of building strong relationships with their team members by providing individualized support and recognizing each person’s unique strengths and needs. This component involves giving employees the attention they need to develop their skills and excel in their roles, while also acknowledging their achievements and contributions.

By focusing on individualized consideration, a hospitality leader creates a supportive environment where team members feel valued. If a restaurant’s chef is recognized for their creative contributions to the menu, this acknowledgement not only motivates them but also fosters a sense of ownership over their work. Leaders who make the effort to provide personalized feedback and support see higher employee satisfaction and retention rates, which translates to better guest interactions and service.

3. Inspirational motivation: setting a vision and uniting the team

Transformational leaders in hospitality must communicate a compelling vision that unites their team and motivates them to strive for excellence. This vision often revolves around the guest experience and creating moments that leave lasting impressions on guests. Inspirational motivation involves more than just setting goals; it’s about helping employees understand how their work contributes to the bigger picture and inspiring them to take pride in their roles.

A spa manager, for example, might share the goal of achieving a high guest satisfaction rating with the entire team. By clearly outlining the steps needed to reach this goal, whether through personalized guest interactions or attention to detail in services, the leader motivates employees to work toward a shared vision. This sense of purpose energizes the team, leading to improved performance and an elevated guest experience.

4. Idealized influence: leading by example

In hospitality, leadership is not only about managing operations but also about inspiring trust and respect among employees. Transformational leaders serve as role models for their teams by demonstrating the behaviors and attitudes they expect from others. This concept, known as idealized influence, is about leading with integrity, accountability, and enthusiasm.

Leaders who embody the principles of idealized influence inspire their teams to follow their example. A manager who consistently goes above and beyond to ensure guest satisfaction sets a standard for the rest of the team to emulate. By demonstrating excellent communication skills, problem-solving abilities, and a guest-first attitude, leaders can inspire their staff to deliver the same level of service.

The power to have significant impact

Transformational leadership has the power to significantly impact the hospitality industry by fostering innovation, empowering employees, and driving exceptional guest experiences. Through intellectual stimulation, individualized consideration, inspirational motivation, and idealized influence, hospitality leaders can create a positive and dynamic work environment where both employees and guests thrive. By applying these principles, leaders improve team performance and build stronger, more memorable guest relationships, setting their business apart in an increasingly competitive market.

Spa Executive is published by Book4Time, the leader in guest management, revenue and mobile solutions for the most exclusive spas, hotels, and resorts around the globe. Learn more at book4time.com.

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Sometimes we’re going to come across an employee who brings less value and even costs your business in revenue. Watch out for these employees who cost you money.

We talk a lot in hospitality, spa, and wellness about the importance of team members and our employees being our greatest assets. In the spa, our people are everything. They bring our customers joy and create transformational experiences. They breathe life into treatments, therapies, and rooms. Without them, our spas would be nothing but empty rooms and enticing menus. Our people bring value.

Unfortunately, sometimes we’re going to come across an employee who brings less value and even costs your business in revenue, some of it measurable, some of it less quantifiable. There are a few types of employees who cost you, including the disengaged employee, the underperformer, and the troublemaker.

Let’s take a look at these three spa employees who cost you money, why, and what you can do about it. 

The disengaged employee

A disengaged employee is someone who doesn’t enjoy their work, does the bare minimum, and is unlikely to recommend your company’s products and services, or your company as a place to work. They’re not your evangelists and may even be your detractors — while you are paying them.

Research by Gallup shows that productivity among highly engaged teams is 14% higher than that of teams with the lowest engagement, and that disengaged employees cost their company the equivalent of 18% of their annual salary. Gallup and the Queen’s School of Business also found that disengaged workers logged 37% higher absenteeism, 49% more accidents and 60% more errors than engaged employees.  

Disengaged employees won’t go above and beyond to create a memorable or transformational guest experience, they don’t inspire guest confidence and they can affect the mood and performance of other employees.

Research by People Metrics has also found that highly profitable companies have 50% more engaged employees versus unprofitable companies; and teams with high levels of engagement sell over 20% more than teams with low engagement. 

Disengaged employees are more likely to leave or job hop, and the cost of employee turnover is high. One study found it to be, on average, around 40% of an employee’s salary, broken down as follows:

Cost of lost business due to disruption
Unused vacation payout
New employee recruitment and training costs
Cost of new employee errors

A subset of the disengaged employee is the job hopper. This person may already be looking for their next job as soon as they start with you. Avoid this by looking at tenure in past positions and, if these are short and many, ask questions.

Manage your employee engagement by being engaged yourself. Check in with your team and identify and address issues early, before they become a bigger problem.

The underperformer

You want every team member to have a great work ethic and to go above and beyond, but reality is that this doesn’t always happen. Underperforming may be a by-product of disengagement or it may be the result of insufficient training, anxiety, or something else.

One report found that underperforming staff can cost a business up to 400% of the employee’s annual salary. That would mean that an underperforming employee making $50,000 a year can cost a company $200,000. That’s a dramatic estimate, but the cost of an underperforming employee is still big. Team members who don’t meet sales or performance goals need to be coached or redirected.

Spa performance also means making guests happy, keeping things clean, sanitized, and orderly, and being informed and prepared to treat guests before they arrive. It means knowing customer preferences, meeting and exceeding needs, problem solving, and finding creative ways to delight customers.

If team members are not making guests happy that will negatively impact your bottom line. Dissatisfied customers won’t necessarily complain. They just won’t come back. And they can leave negative reviews which will deter new customers. Ninety-three percent of consumers say that online reviews influenced their purchase decisions and less than half of consumers would consider using a business with fewer than four stars.

The underperformer should be offered training, coaching, and encouragement before more drastic options are considered.

The troublemaker

Do you have an employee who likes to start trouble by gossiping, antagonizing others, or being difficult in some other way, resulting in an uncomfortable or unhappy work environment and conflict? What does this person cost you?

Workplace conflict can lead to a toxic environment, employee attrition, absences, and more. An analysis published in May, 2021, estimates that workplace conflict costs UK employers £28.5 billion every year, or just over £1,000 (US$1382.77) for every employee. So, for a business that employs 30 people, that’s £30,000 or (US$41453.10).

The report estimates that 9.7 million UK employees experienced conflict in 2018/2019 and lists the following as the biggest annual costs to employers:

£11.9 billion from resignations
£10.5 billion from disciplinary dismissals
£2.2 billion from sickness absences

Not mentioned is the potential revenue loss from the impact of conflict and a negatively charged environment on guest experience. The atmosphere in your spa matters. If a guest senses conflict, frustration, or anger in the air, this will impact their satisfaction, which in turn impacts operations and revenue.

The troublemaker should be handled with compassion, understanding, open communication, and a firm hand. Sometimes people have no idea of the impact they have on others. Always offer the opportunity to change before taking further steps.

What to do about employees who cost you money

Finally, some stats on the cost of a bad hire:

• According to The U.S. Department of Labor, the cost of a bad hire can reach up to 30% of the employee’s first-year earnings.
• Based on a second-level manager earning $62k/yr a year who is terminated after 2.5 years, The Undercover Recruiter estimates that a bad hire can cost $840,000 in expenses. 
• CareerBuilder reports that companies lose an average of $14,900 per bad hire.

In an ideal world we would all avoid making a bad hire, but in the real world it happens. Experts like to go on about the cost of a bad hire, but this is never measured against the cost of not hiring anyone at all, which isn’t usually an option.

If you’re dealing with one of these employees, lean on the resources available to you. Use your software management system’s reporting to learn where gaps are and also to find out where your employee excels. Perhaps a therapist who lags on retail sales more than makes up for it by being a customer favourite who is often requested.

Be patient and offer coaching and training. Try to turn the situation around with support. Look at your management style and ask yourself if you are partly responsible for the situation — be honest in your answer. Ask yourself what you can change.

Weigh the cost of trying to fix the situation against the cost of hiring and training someone new. You might have to let a person go, but this should be a last resort. 

Lastly, view these resources on managing spa employees:

Keep your employees from quitting your spa

How managers can reduce employee stress in spa & hospitality

Your guide to the ultimate spa employee experience

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