Contribution Factor was created to assist companies manage revenue flowthrough. Based on common sense.
3 Premises
-People make 95% of their contributions to a position their first 3 years on the job.
People make 95% of their contributions to a position their first 3 years on the job.
People are the enthusiastic early years on a job. That’s when they have the most ideas, suggestions, and input. They don’t quit caring after 3 years. They start to run out of ideas for that particular position. Their contribution to your profits slow.
Solution: Reassign people after three years. Restart 3 year process.
It can be easy as exchanging two people with similar jobs. Or moving people to new situations. Examples: Switch Restaurant Manager from one restaurant to another. Switching markets for Sales Manager. Move someone from Housekeeping to Banquets.
Alternate solution: Re-engineer positions.
Easy to do in age of AI. Look at Restaurant Manager Role. How should it be changed to be more effective?Plan Your Attrition
Successful hotels/companies identify promotable employees…within first few weeks. At all levels.
What positions can employee be ready for within months. First year. Within 3 years. Supervisors/Managers need ascension plans for every position. That’s not HR’s job. Managers: Showcase talents on your team. Want promotion? Prepare internal employee to step up.
Ascension plans enable anticipatory recruiting.
We continually hear of hotels with 100%+ turnover in hourly positions. 40%+ in management. Why?
No hotel or company should tolerate those percentages. Positions with sky high turnover? Re-create the jobs. Department most often cited? Housekeeping. Make sure Executive Housekeeper is good motivator. Knows how to energize people. Make sure there is promotional path out of Housekeeping. Both for hourly, supervisory and management.
One of our clients rotates hourly employees through different department every 3 months. Wonderful way to identify hidden talents. Turnover rate? 22% for hourly associates. (Note: this hotel has developed clear standards on traits needed for each position. Profit margins reflect intentional hiring.)
What are ideal hiring ratios?
Ideal ratio of outside management hires to internal promotions/transfers? 20%
Reverse of that. 80% of management employees should be promotable. Not happening? Redesign positions. AI gives us wonderful opportunity.
Another highly hotel with low turnover percentages? Involves select hourly associates in monthly departmental performance reviews. Enables hotel to identify areas that are slipping. Or when operational issues have changed.Management Turnover Above 35%? Expect profit improvements to drop or be short.
Identify profit expectations from each employee on team. As part of annual budgeting process.
Four benefits:
Identifies projected profits, based on length time each employee in their position.
Shows areas for departmental revenue improvements.
Historically where turnover is likely to occur. Opportunity to be proactive. Anticipate.
Employees to be groomed for additional responsibilities.
Where can technology and/or AI make a difference?How can each position be streamlined?
(Should be in Standards of Performance.)Which tasks can be done better by someone else or better use of tech/AI.
(Could parts of this position be done better in other Departments?)How should tech/AI be adding to operational efficiency today?
(What are 3 ways to increase revenues today?)Who at hotel is responsible for evaluating alternative tech/AI?
(Is that person aware of your Departmental opportunities?)
Benefits of Contribution Factor?
Anticipatory management. Based on expected contribution from each employee. Your planned attrition tied to standards of performance. Reduction in turnover rates.
Leaders can be at any level in the organization. Their key: Anticipate daily.
Enjoy learning how Contribution Factor can make you better leader? Join us today.
Tom Ferree is the founder of Ferree & Associates and SecureEmploy, organizations focused on helping companies find exceptional talent and helping professionals advance their careers. Since founding Ferree & Associates in 1977, Tom has worked extensively with hospitality companies, executives, and rising leaders across the industry. Through SecureEmploy, he shares practical career strategies, leadership insights, and real-world advice to help professionals grow their careers and help organizations build stronger teams.
