LEMON TREE HOTELS: OPENING DOORS FOR EVERYONE case study solutions
1. Identify the problem; the key decision maker; Lemon Tree’s main customers, competition, and stakeholders; and its current business life cycle stage. How has the PwD initiative grown over the years? Is it viable for Lemon Tree to pursue the objective of having ODI employees represent 45 per cent of all employees? Why or why not?
2. What factors are crucial to the success of Lemon Tree’s initiative? What factors might be stumbling blocks?
3. Devise a human resource management strategy or framework to help Lemon Tree achieve its target
Questions
1. Identify the problem; the key decision maker; Lemon Tree’s main customers, competition, and stakeholders; and its current business life cycle stage. How has the PwD initiative grown over the years? Is it viable for Lemon Tree to pursue the objective of having ODI employees represent 45 per cent of all employees? Why or why not?
2. What factors are crucial to the success of Lemon Tree’s initiative? What factors might be stumbling blocks?
3. Devise a human resource management strategy or framework to help Lemon Tree achieve its target.
1. Identify the problem; the key decision maker; Lemon Tree’s main customers, competition, and stakeholders; and its current business life cycle stage. How has the PwD initiative grown over the years? Is it viable for Lemon Tree to pursue the objective of having ODI employees represent 45 per cent of all employees? Why or why not?
The major problem related to sustainability initiative of Lemon Tree to increase percentage of ODIs consisting majorly of PWDs from 23 % in 2017 to 45 % by 2025 includes absence of an adequate and smooth channel of employment exchange system to connect with PWDs and training partners who can work together to train various disability types and mapping of jobs for unique roles to be offered to different disability types. Lack of educational qualification among ODIs was also a concern. It was difficult to find PWDs with higher qualification. Providing equal opportunities to PWDs to hire for front end jobs rather than only for back end jobs, lack of safe public transportation, necessary infrastructure for PWDs, protective and highly possessive attitude of family towards their disabled member and lack of support from family due to disability biasness are other major impediments in accomplishment of sustainability initiative of the company.
KeyDecision Maker of Sustainability Initiative of Lemon Tree
This initiative has been started in the year 2007, when company has completed its three years of business operations, and it for the first time hired two speech and hearing impaired in Gurgaon and the number increased to 25 within two years of time frame. In initial years of this initiative till 2012-13, R. Hari (HR head) and Nikhil Sharma (Operations Head) had been assigned responsibility of inclusion of PWDs in the organisation. Later on in the same year, Aradhna Lal, (Vice President – Brand, Communications & Sustainability Initiatives) took charge of this initiative as sustainability head of Lemon tree and succeeded in inclusion of more than one sixth proportion of total work force of Lemon tree consisting of PWDs as of 2019-20.1 She is still sustainability head of the company and key decision maker in successfully implementing this initiative in the organisation. She has been assigned responsibility to head this sustainability initiative and recruit, train and sensitize other workforce to work with PWDs
Founder of company Patanjali Keswani with his prominent experience and knowledge in hospitality industry found an opportunity in mid chain hotel segments and set up hotels to serve middle class people having increased disposable income and value conscious business travellers. Company is also now targeting upper scale segment customers and focusing on leisure travellers2.
Major competitors of Lemon Tree
Lemon Tree hotel faces major competition in mid segment from Ista,Vivanta, Westin, Sarovar Premier, Ginger, Concept Hospitality & Roll Mafia.3 In the upper segment hotel chains, major competitors include Leela, Taj Group, Oberoi and ITC group of hotels.4
Major Stakeholders of Sustainability Initiative
Since this initiative has influence on all departments of the organisation, head of each department and people in hierarchy of such departments are key stakeholders of this sustainability department. Chief managing director of the company has a vision of creating socially inclusive workforce in the organisation to remain profitable in the business, has been also a major stakeholder in this initiative. Employing PWDs require brining necessary changes in SOPs, provide training and monitoring performance, mapping of jobs for different roles to be offered to them and create sensitized environment at work place. Government organisations and NGOs who are dealing with and engaged in providing training to PWDs are other important stakeholders of this initiative along with family to which these PWDs belong as their support is much required to prepare and encourage PWDs to perform their job at work place. Employees and senior officials of Finance, marketing, Operation and HR department are directly impacted by this initiative as they have to bring necessary changes in SOPs and develop different set of job profiles in different departments to cater the needs of PWDs to make them part of this inclusion process. Customers and government are also stakeholders of this initiative as it is the customers who will be getting services from them and government has set regulations of 3 % of workforce of an organisation to include PWDs for PSUs.
Growth of PWDs initiative over the years and current business life cycle of this initiative
This initiative has been started in the year 2007 where for the first time company had hired two speech and hearing impaired individuals for its Gurgaon site and within a year out of 680 employees, 21 consisted of PWDs in the overall workforce of the company. There was no look back since inception of this initiative.The company has set the objective of bringing ODIs in the mainstream of its workforce and kept on expanding inclusion of different types of PWDs and people who are deprived in some way or other in the inclusion process to provide them similar opportunities so that they can realize their full potentials and can live with dignity and integrity in the society. The company has a target of including 45 % ODIs in total workforce of Lemon Tree by the year 2025.
Till 2012-13, percentage of ODIs employees in the organisation was merely 6 % which has taken an upturn after Aradhna Lal has been assigned the responsibility as Sustainability head to move this initiative to its final goal, and reached to 13 % by 2015-16. In the year 2019-20, total numbers of employees are around 5000 and more than 1000 ODIs are working in Lemon tree making a percentage of 20 % of total work force of the organisation.5 The Company has been continuously working on fulfillment of its sustainability goal of including 45 % of ODIs in total workforce by the year 2025.
The company’s inclusion process is currently hiring more than 20 types6 of ODIs ranging from physical disability to intellectual disability to economic and social weak people and further extending its reach to fulfill its sustainability goal. The company has been collaborating with different NGOs and Government skill development agencies such as Skill council for persons with disability and National skill development Corporation to prepare and develop training modules for ODIs for various front end and back end jobs to bring them to mainstream and take over charge on front end functions as well7.
Over a span of 13 years since inception of this initiative company has been getting positive feedback, support and appreciation from customers and employees at work place enjoy working in such environment as they get sense of pride and happiness. Attrition rate of the company is much low as compared to industry standard. Company has been growing tremendously in terms of growth in revenue and profit as compared to its competitors and
Viabilityof pursuing objectives of ODIs representing 45 % of total workforce
Rather than a charity or social responsibility, this initiative is an integral part of Lemon Tree business model and provides a competitive advantage in several terms such as increased productivity (PWDs cleaning three to five more rooms daily on an average than non PWDs), lower attrition rate (26 % as compared to 60 % industry standards)8, enhanced morale and engagement of employees and more loyal and satisfied customers. However cost of recruiting and training ODIs are very high and every employee has to go through sensitization training program so they can work with PWDs effectively and efficiently. But most of these costs are borne by NGOs or government organisations8.
Started with a single hotel of 49 rooms in Gurgaon, it currently owns 81 hotels with bed capacity of approximately 8050 rooms in 49 cities with a target to increase it to 108 hotels with room capacity of 10700 in 68 cities by 2021 (source: company website), the company has positioned itself as one of the best hotels in the industry upon whom investors and shareholders can keep their trust and mobilise their funds in this company.
Amid of various benefits of this initiative in terms of increased customer loyalty, productivity and profitability, Such practices have not been common in the industry as it demands continuous focus and huge efforts from management team to implement such initiative in the organisation and expand it in a way Lemon Tree has done so far. In Long run, other hotels can become part of this initiative as currently Lemon Tree is offering knowledge sharing to different hotel chains such as Radisson, Country Inns and Suites and The Oberoi who are willing to adopt such inclusion policy9.
Keeping a goal of 45 % of ODIs in total workforce seems to be less practical in hospitality industry as PWDs possess their own limitations in terms of performing tasks for which they have been trained only. In case of emergency situations, they will not be able to manage situations and mishappennings can take place causing customer dissatisfaction and other losses to the company. However, PWDs can be trained to tackle emergency situations and other employees can assist and support them in such situations to avoid any contingencies and losses. Thus, this objective is viable to pursue for the welfare of the society and organisation as a whole subject to certain limitations of PWDs for which they can be trained, made aware of such situations in advance and be given adequate supervision and assistance.
Factors crucial to success or that might be stumbling blocks of Lemon Tree’s initiative can be explained using seven pillar inclusion model as stated by Aradhna Lal10-
1. Vision of inclusion of initiative in the organisation must come from top management. Patanjali Keswani, founder of LTH (Lemon Tree Hotel) has a vision of developing a socially inclusive organisation and this initiative is part of that vision. He wanted to give an opportunity to socially deprived individuals to live in society with respect and dignity. Continuous support from top management will help to achieve success in attaining goals of such initiative.
2. Adequate cascading of initiative should be facilitated through departmental heads among employees so that it can be easily sustained in the work environment and focus should be made towards inclusion of initiative at each level in the organisation ranging from back end jobs to front end jobs.
3. Necessary changes in terms of infrastructure, job profiles and SOPs to fit the requirement of PWDs in a particular job is must for success of this initiative. Adequate resources should be dedicated for successful implementation of this initiative at work place. For instance people with down syndromes cannot be deployed in nigh shifts. Installation of a gadget on the table in restaurants of Lemon tree in which lights up whenever an order is placed.
4. All employees other than PWDs should be given sensitization training to easily mix and work with them to attain goal of this initiative of inclusion of 45 % ODIs in total work force of the organisation. Employees must learn skills to communicate with PWDs in such a way where disability becomes immaterial. In Lemon tree Hotel, all employees need to learn sign language before boarding in their job position and develop a sense of empathy and sensitization towards PWDs.
5. Job mapping to fit different disability types and job profiles vis a vis each department is must and should be undertaken with utmost patience, ground work and framing of adequate training programs to inculcate necessary skills to perform the job with effectiveness and efficiency.
6. Collaboration with NGOs and government organisations engaged in rendering trainings to different PWDs to work together to develop different skill based training programs for different job profiles and different disability types are utmost important for success of this initiative.
7. Scaling up this initiative to include various job roles and various disability types, continuous effort to develop skill based training programs that suits to different disability types will create successful implementation of this initiative in the organisation and achieving goal of 45 % ODIs in total work force.
Some of other major factors that can contribute to success or create stumbling block for of this initiative includes-
Sourcing and hiring skilled PWDs are very difficult and complex process, which requires complete focus, design of jobs and training programs to suit different PWDs and sensitization of people working with them. Job creations for intellectual disability such as slow learners, people with autism or Down syndrome have limitations in terms of functioning intellectually and adapting behaviours necessary to perform the job. Due to lack of adequate infrastructure and supporting environment in education institutes, most of PWDs are school or college drop outs. Family support, transportation facilities and other infrastructures in the society must be addressed to create more and career & job opportunities for them in order to achieve goal of this initiative.
Customer support and appreciation for inculcating this initiative in hiring process helps to build strong rapport with them and strong positioning of the company in hotel industry. Excellent feedback from customers in terms of services offered increases customer loyalty and potential of the company to increase its revenue and thus profitability for its shareholders.11
Employees feel a sense of happiness and pride working with PWDs. It boosts up their morale, increases job satisfaction and performance at work place.11 Many times operational efficiency of PWDs are found higher than normal employees as in case of hearing impaired employees cleaning 3 to 4 more rooms extra as compared to normal employee on an average. An autistic person has ability to see such patterns which is difficult to be seen or noticed by normal people, which helps them to analyse complex process and data more efficiently than normal individuals.
Low attrition rate in the company (26 % as compared to 60 % in the industry) due to adoption of such initiative in hiring process saves cost of hiring and training for the company. However, company has witnessed increase in attrition rate of more skilled PWDs especially from finance, HR and sales department for a slight increase in salary (merely Rs. 1000). In order to make this initiative successful, it is important for Lemon Tree to continuously plan and devise career growth opportunities for PWDs to keep them happy and allow them to grow in their career along with learning new skills through different training programs.
Inclusion and integration of PWDs in diverse job roles at work place give them a sense of dignity, happiness, pride, representation in the company and make them self reliant. They tend to be more motivated than other employees at work place. Lifetime skills through specific training designed and developed for different disabilities, work environment diversity and inclusion of PWDs as representation of company and society as a whole, career progression through design and development of skill based jobs and focusing on strengthening and developing inter personal, managerial and leadership skills, employee delightment that is keeping them happy, taking care of them, offering opportunity to align with other employees and enhancing their experience consistently and flexi policies in terms of their likings and non likings at work places to adjust work environment and SOPs so that they can fit in that working culture easily; are crucial in successful implementation of this initiative.12
Survey on employee engagement on regular basis whether this initiative should be continued or stopped should be conducted for successful implementation of this initiative. Results of such survey done in past in the organisation concludes that employees wanted to continue this initiative as it increase their emotional quotient and reduce stress at work place. They feel pride, happiness, and increased morale and confidence working with PWDs.12
Cost and expenditure on training of PWDs, change in infrastructure and SOPs and losses due to contingencies that can arise in emergency situations where PWDs may fail to respond instantaneously are factors that can create stumbling blocks in successful accomplishment of this initiative at Lemon Tree Hotel.
3. Devise a human resource management strategy and framework to help Lemon Tree achieve its target.
Triple Bottom Line strategy of sustainability coined by John Elkington in 199713 can help and facilitate Lemon Tree Hotel to achieve its sustainability initiative goal of including 45 % ODIs in its total work force. This strategy works on model of 3 Ps – Planet, Profit and People13.
It refers to amount of natural resources an organisation consumes and its relative impact on environment. The less an organisation consumes natural resources and impacts environment, more will be the success of such business organisation in the society. Company has implemented sound policies in terms of reducing harmful and negative impact of its business operations on environment. Company has implemented water harvesting system through which it recycles and reuses same water in all of its hotels thus conserving water and achieving water efficiency. It has installed Solar panels to save and conserve electric energy and attaining electricity efficiency and saving cost on electricity and thus reducing cost of operations and increasing return on investment of shareholders. It makes use of CNG in place of LPG in their hotels to reduce carbon emission and safeguard environment. Green building materials are being used for construction of hotels and hotels are built in accordance with universal concept design to render easy and comfortable access for people who are differently abled. The company also follows Leadership in Energy and Design (LEED) Gold Standards while constructing buildings for its hotels. Trees and shrubs are planted all around hotel premises to improve quality of air and fosters greener environment for the society. In mid and long run, company is focusing on use of wind power and agro power to generate electricity, use of recycled water for AC cooling tower, heat pump for attaining energy efficiency, solar PV system for entire lighting in its estates and replacement of normal lights and installation of LED lights and use of geothermal energy for conservation of energy (source: Company website). Such strategies will help company to reduce its negative impact on environment thus fostering a sustainable growth of the company towards accomplishment of goal of its initiative.
It refers to responsibility of a company towards society in which it operates. Lemon Tree offers equal employment opportunities to PWDs as the company has a vision of sustainable and responsible growth which has been earmarked in their HR and operations policies. It has set goal of mainstreaming ODIs to an extent of 45 % by 2025 in its entire workforce. The company works in close connection with different NGOs and Skill development agencies who together trains PWDs to work across different areas of hotels from housekeeping to Food and Beverage service to Kitchen stewarding. Company works on career development programs where equal opportunities are provided to PWDs to excel in their career and live a life of pride, success and happiness. The company has won multiple national and international awards in its social inclusiveness program embedded in their work culture and ethos. The company currently employs more than 1000 ODIs in its total work force and is highest PWDs employer in hotel industry. It is hiring currently more than 20 different types of PWDs and developing different training programs, mapping different jobs to let them fit in the organisation (source: company website).
It refers to earnings generated by company for its investors and shareholders. Company by successful implementation of various energy conservation policies and building hotels as per world standard, it has been successful in reducing its energy and staffing ratio to nearly half of industry standard. Most of Cost and expenditure incurred in training of PWDs has been borne by government run NGOs and organisations and hence it has little impact on profitability of the company. The company has generated a CAGR of 16 % as compared to industry standard of approximately 10 %, indicating that company has been successful in generating better return for its investors while attaining goal of its sustainability development.14
1. Lemon Tree sustainability program retrieved from https://www.lemontreehotels.com /about-us.aspx.
2. Lemon Tree Goes Upscale with Aurika retrieved from http://bwhotelier.businessworld.in/ article /Lemon-Tree-Goes-Upscale-with-Aurika/10-01-2020-181877/.
3. MBA Skool team (2020). Lemon Tree Hotels SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP retrieved from https://www.mbaskool .com /brandguide/ tourism -and-hospitality/4282-lemon-tree-hotels.html.
4. Lemon Tree competitors, revenue and profits retrieved from https://www.owler.com/ company/lemontreehotels.
5. Building an Inclusive Organization, The Lemon Tree Hotel Way! Retrieved from https://amazingworkplaces.co.in/building-an-inclusive-organization-the-lemon-tree-hotels-way/.
6. Lemon Tree Hotels – An Inspiring Example Of Workplace Inclusiveness (2019) retrieved from https://blog.staah.com/success-stories/lemon-tree-hotels-a-inspiring-example-of-workplace-inclusiveness
7. Prajjala Saha (2017). Why it makes business sense to hire people with disabilities retrieved from https://www.hrkatha.com/features/why-it-makes-business-sense-to-hire-people-with-disabilities/.
8. Kazmin, A. (2018) “Lemon Tree Hotels Hires ‘Opportunity-Deprived People as a Key Part of its Workforce”, Financial Times, March 15, [online], https://www.ft.com/content/ 4257b9bc-e4e0-11e7-a685-5634466a6915
9. Three Ways To Sustain Diversity and Inclusion at Your Workplace (2020) retrieved from https://www.ungender.in/sustainable-workplace-diversity/.
10. Seven Pillar inclusion Model for inclusion of sustainability initiative (2019) retrieved from https://amazingworkplaces.co.in/building-an-inclusive-organization-the-lemon-tree-hotels-way/.
11. Anushree Sharma (2018) Inclusive hiring boosts customer as well as employee experience retrieved from https://www.peoplematters.in/article/diversity/inclusive-hiring-boosts-customer-as-well-as-employee-experience-18287
12. How do you manage and improve engagement levels in a scenario where the people you employ display a high level of emotional quotient, more than anything else. Building an Inclusive Organization, The Lemon Tree Hotel Way retrieved from https://amazingworkplaces.co.in/building-an-inclusive-organization-the-lemon-tree-hotels-way/
13. John Elkington (2018). 25 Years Ago I Coined the Phrase “Triple Bottom Line.” Here’s Why It’s Time to Rethink It. Retrieved from https://hbr.org/2018/06/25-years-ago-i-coined-the-phrase-triple-bottom-line-heres-why-im-giving-up-on-it.
14. Lemon Tree Hotels Limited Annual Report 2019-20 retrieved from https://www.lemon treehotels.com/factsheet/Policies/Lemon_Tree_Hotels_Limited_Annual_Report_2019_20.pdf