Heading: Risk Management
This paper presents a discussion about Risk management in a work place environment. It focuses on the risk management issues affecting the employees of an organization. The program uses specific reference through a case study of the Heartbreak Hotel. Human resource issues and complains present risk indicators to the Hotel, which dominates the discussion. It compares the situations in the case study to the risk management standards that
The major area of discretion in this paper is about the risks surrounding the work environment. This study does risk management analysis by making use of the risk indicators such as the patterns of leave attendance, the incidents of sicknesses and injuries, employee satisfaction index and the salary payment. By using the Heartbreak Hotel, this paper does practical rating of impact and probability of the risks. It then provides contingency plan appropriate for the risk management and scenario analysis results.
Answer to Question 1
Risks Identified and their probabilities and Impacts
The conditions of work at the Heartbreak Hotel indicate that there are dangers associated with the welfare of the employees. The impacts of the risks can be rated in measurable scales of probability and the effect attached to the life welfare and production levels of employees. The risks have been identified as follows:
• Heavy lifting and strains
• Workplace safety comes last
• Ignoring problems, silencing victims
• Too scared to claim
• Health risks of stress
In assigning the measures for impact and probability, we set a scale of 1 to 5 where 1 in the probability scale means the incident is less likely to occur and 5 means the incident is most likely going to occur. In the impact scale, 1 means if the incident occurs, the impact will be extremely negligible and 5 means the impact will be great when the incident occurs. The high impact represents either loss of life or high amounts of financial losses.
We can then assign ratings to the risks that have been identified as:
Risk Probability Impact
Heavy lifting and strains 3 2
Workload 4 5
Workplace safety comes last 4 5
Ignoring problems, silencing victims 3 4
Too scared to claim 4 4
Health risks of stress 5 5
The risks manifest in various ways as seen in the complaints and opinions of the employees. They constantly complain about their welfare matters including poor payment scales, negligence towards their safety and health, social lives and their personal development.
The load of work that the employees handle is massive (Raleigh 2003). They cannot easily cope with the situation considering the impact it has on their health. They operate at the risk of injuries. All round them, there are possibilities of collapsing. There is not enough time to rest. Worse still, Miller (2010) observes that the employees generate a lot of revenue to the Hotel, but what they get in return is a mockery scale of remuneration. The hotel operates at a risk of losing its reputation by exploiting employees. It can also cause legal issues where employees fall sick or gets injured, or even dies while at work, thus attracting mandatory work man’s compensation.
Heavy lifting and strains
The length of time in which the employees work exerts a lot of pressure on them. They constantly have to lift loads, which imparts a lot of straining impact in their lives. The welfare of these employees is at stake. They hold heavy equipment such as trolleys and buckets and spend a lot of energy, leaving them fatigued. At the end of the working exercise, employees suffer from back aches, headaches and painful limbs. Room attendants constantly have to bend while doing the floor mopping and washing curtains and carpets. The impact of this can be so serious and can cost the organization a lot of its resources (Reese 2009).
Workplace safety comes last
The employees work every day under risky situations. The hotel doesn’t recognize the importance of considering their safety as vital. The company assigns the least priority to the issue of workplace safety. There is a high risk of sicknesses, injuries and sickness. The hotel is ironical in its practices by neglecting the safety of the employees at work place, yet the employees are their vital resource without which they cannot generates the massive revenues. Cases have emerged where the managers compel some employees to use faulty equipment that jeopardizes their lives. Others make numerous runs through the stare cases because of the pressure of work. It places their lives at risks of falling and also fatigue.
Ignoring problems, silencing victims
The hotel management deliberately refuses to listen to the sentiments of the employees. The employees therefore do not have any avenue to express themselves. The confidence of employees goes down. This is a critical risk because the employees suffer silently, hence portraying an image of suffering employees. This according to the argument of Gilles (2005) is a reputational risk to the hotel because the outside world does a detailed analysis of the behaviours of the hotel. It can easily make the hotel loose potential corporate clients, and eventually lose business to the respected companies. Hotel room attendants have reported cases of bullying by their bosses. Instead of offering supportive hands to the employees, their bosses blame them for whatever happens against their welfare (Sheehan 2005). It is evident that even sick offs are not easy to acquire because an employee does the application at the risk of losing their jobs.
Too scared to claim
The leadership of the hotel discriminates against certain employees, harasses and scares them to the point of intimidation. They also threaten them with dire consequences of joining workers’ unions. Those who discuss any issue with the workers’ unions or indicate the willingness to joint them, receive threats and victimization. They suffer silently under discrimination and unnecessary brutality. They even let go what legally belongs to them such as salary payment arrears. Without affiliation to the workers union, employees are very weak and voiceless. The victimization at times comes from sycophant employees who want to win favour from the management by proving that they are loyal to the administration. Employees who do not get satisfaction from their working conditions have the capacity to lower the performance of the hotel through their attitude. The hotel management and ownership are oblivious of the fact that when they do not motivate the employees, they are simply nurturing negative attitudes and discourage the employees from being responsible. This is detrimental to the financial yield of the hotels.
Health risks of stress
As the employees fail to get enough time to rest, they risk their health. The fact that they fall sick and are scared to share their sufferings even worsen the situations. The employees have great chances of suffering from stress and poor health conditions (Tranter 2004). Of course it means the employees should have leave days, but this is not enough. There must be breaks at certain intervals between work sessions (Malley 2002). There has to be a first aid kit fully equipped with the necessary health requirements to reduce the risk of threats to health. Apart from first aid, there has to be a means of receiving proper treatment whenever one falls sick or receives injuries. Ultimately, inherent health safety is necessary to reduce the risks of stress and poor health.
How management of risks can be complex
The issue of risk management can be very complicated especially where the company does not intend to comply with the safety rules and welfare of the employees. It also becomes difficult when the management does not want to acknowledge the reality that risks are inevitable in every organization. The only way to simplify risk management process is by applying preventive measures because corrective measures can be very expensive to apply.
Answer to Question2
Importance of Human side of Risk Management
Human aspect of risk management is very essential in the sense that the issue of human resource has a legal attachment including industrial actions. The legality that surrounds the binding contracts leads to serious consequences in the events of breaches. Secondly, human aspect of risk management has an attachment to the reputation and the goodwill of the organization (Rushmore 2010). The performance of the hotel for example entirely depends on the efforts of employees at work. If the management of human resources is faulty, it will reflect on the overall performance of the company in contrast to the core objective and strategic plan. Failure to maintain a proper standard of human aspect of risk management leads to the emergence of various incidents in other areas, because human beings then become potential perpetrators of incidents such as theft, fights, riots and wanton destruction of resources.
Answer to Question3
The risk associated to marketing avenues is the loss of reputation. While social media is a vital advertisement tool, it has another side of it which is very dangerous to the existence of a company. Clients and consumers are usually swift in sharing their sentiments on the social media because of the freedom of expression that it offers, and the level of confidentiality. This is a risk for a company like the Heartbreak hotel because its employees can easily share the information on the social media and give the hotel a negative branding.
Whenever a company breaches the service level agreement that it signed with its employees, it then begins to operate at a legal risk. This can be so costly because the employees have to be paid for the defamation, mistreatment, harassment and assault, workman compensation and career development issues. The company therefore has to observe the terms of contracts and avoid disobeying them. One way to eradicate financial risks is by prevention, especially by acting professionally towards the welfare of the employees.
If a company employs staff without adequate knowledge, it requires holding several Training sessions to equip the employees with proper product and service knowledge. Operating with ignorant employees places a company at a risk of poor performance, lack of professionalism and destruction of the company image. Training the employees can be as costly considering that it as to be an indefinitely continuous process. As the company diversifies, it opens new needs for training.
Answer to Question 4.
Scenario planning is very essential in predicting and mitigating the emergence of risks. It enables a company to make decisions on the change drivers by making relevant assumptions. It thus consolidates the change drivers into a realistic feasible framework. A company produces several scenarios for test, and then narrows down to a few scenarios relevant to the acquisition of the most appropriate contingency plan. The leadership of the company prepares a documentation of the scenarios and test results, which leads them into identifying the emerging issues that require contingency and mitigation plans. The documentation of the scenario is generic and hence applicable to the subsequent incidents and other risk management related issues.
Recommendation and Implementation
There is need for prevention of the possibility of occurrence of the risks in the Hotel. Since the risks are related to the employees, the impacts are definitely huge and can contribute to the downfall of the entire enterprise. The hotel needs to recognize the rights of every employee to receive what is rightfully theirs. The next very vital action is to observe the terms of reference and avoid breaching and intimidation. The Heartbeat Hotel has to realise that a company without reputation risks extinction from the market. While it is not possible to eliminate all risks facing an organization, it is true that a company can effectively minimize the exposure to the risks (Anderson& Xie 2009). There is a certain amount of risk within which a company can comfortably exist. The cost of prevention is usually less than the cost of correcting already spoilt situations. The aim of the Hotel should be to minimize cost by avoiding preventable avenues of spending.
In the Heartbreak Hotel, the most possible high impact risks are related to the human resource welfare. This in turn relates closely to reputation and strategic factors of the Hotel. It exposes the Hotel to legal challenges that may be so costly and detrimental to its future image and position in the market (Davis & Jarvis 2007). Considering the presence of social network, the hotel exposes itself to the greatest risk of losing its image that it has spent many years to build.
Probability: The likelihood that the risk incident will occur.
Impact: The amount of loss that is expected out of the incident in the event that it occurs.
Contingency: The methods used to mitigate the risks.
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