Inputs of Performance
Business Strategy
John C. Portman Jr. opened the Portman Hotel in October 1987 with the intention to
bring personal service, as seen in the hotels of Hong Kong, to the American people. The hotel
itself was 348 rooms and 21 floors. The business strategy was to be a home away from home and
an office away from the office. Portman Hotel was competing against other luxury hotels in the
San Francisco area and needed to provide an edge over their competitors if they wanted to be
successful. In fact, two competing hotels with Asian-style service recently opened nearby the
Portman. Although the Portman Hotel was priced slightly higher than its competitors, they
believed that Personal Valets, or PVs, were the competitive edge that distinguishes them from
their competitors.
Business Model
The Portman Hotel based its business model on providing guests an experience, not just a
service. They did this through organizational changes, different recruitment strategies, and
employee incentives. The hotel would operate with “no rules” for guests. Personal Valets would
be an all encompassing job; they would be the personal butlers of the guests, but also be
responsible for cleaning and restocking the rooms once the guests checked out. Patrick Mene, the
vice president and managing director of the Portman Hotel, knew that the success of the hotel
and competitive edge would reside on the success of the PVs providing unparalleled service.
HR System and Practice
The expected unparalleled service was detailed in the employee handbook developed by
Michael Kay, the President of Portman Hotels, and Patrick Mene. Kay’s philosophy was “we’d
better have the same level of seriousness and commitment to meeting employee needs as we do
to meeting guest needs. People are really our product – people who love you by nature.” All
employees of the Portman Hotel were called “associates” and were required to sign a contract
which explained how the hotel would practice its HR strategy. In this contract, associates rights
and responsibilities were clearly defined and insured associates’ rights were not infringed. The
contract included an employee “Bill of Rights” that detailed the legally enforceable rights and
terms of the employment. Joe Villa, the human resources director, stated “between the contract
and the associate’s handbook and the orientation we give them, they know their rights.”
The organizational structure was targeted to maximize service, while minimizing
management. The goal was to put more employees in front of guests, instead of typical office-
style managerial positions. They cut specialized positions, such as food and beverage manager,
which enabled them to keep positions more broad and cover more tasks rather than narrow and
focused on few tasks. This enabled the hotel to remain fairly horizontal. Mene envisioned
associates would grow into their jobs instead of climbing the corporate ladder. In a sense, Mene
demonstrated job sharing within the employees. Mene and Kay were open to the idea of a union,
but only if all associates would be represented by one union. After negotiations, not everyone
