• Study Demonstrates How to Boost Employees' Performance
• New Series Showcases Hospitality Industry Expertise
• Featured Advisory Board Member - Paul Brown of Expedia, Inc.
• Research Fellows and Staff at Industry Events
• Featured Corporate Partner- Southern Wine and Spirits

Michael Sturman, Ph.D.

A study of the relationship between pay and performance finds that better pay can lead to better employee performance, but simply offering more money isn’t the answer. Rather, how you pay your employees is critical when designing a successful compensation system, according to Michael Sturman who conducted the study. Sturman, an associate professor at the Cornell University School of Hotel Administration, explains that he wanted to explore two related aspects of pay levels.

“I looked at both how much people are paid, and also how pay increases are given,” he said. “I found that adding 1 percent to a raise pool will increase employees’ future performance, but only by about 2 percent. But if you also change the way you pay, by changing the strength of the pay-for-performance relationship, you can improve performance by up to 19 percent.”

The study, “Using Your Pay System to Improve Employees’ Performance: How You Pay Makes a Difference,” is available at no charge from the Cornell Center for Hospitality Research, at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/.

Looking at the experience of a diversified services company, Sturman found that an across-the-board raise in one year meant better performance in the following year. Indeed, paying above the market meant higher performance. Aware of the expense of across-the-board raises, however, Sturman wanted to compare the results of raises and bonuses when pay was closely related to performance.

“I found that bonuses were a better pay-for-performance tool than were raises,” Sturman said. “While both across-the-board raises and bonuses improved performance, bonuses stood out when pay was linked solidly to performance.”

Sturman notes that since he studied only one company, large though it is, each employer should examine its own situation to create a payroll strategy. “The point is, pay methods can be used strategically to improve performance,” Sturman concluded. “The payroll is not merely an expense to be reduced at all costs.”

Meet and interact with Dr. Sturman, an active member of the executive education faculty at the School of Hotel Administration, when he presents a session in the General Managers Program. For more information, please visit http://www.hotelschool.cornell.edu/industry/executive/gmp.

Series Launches with White Paper by Four Seasons Executive

Barbara M. Talbott, Ph.D.

“The Power of Personal Service – Why It Matters, What Makes It Possible, How It Creates Competitive Advantage” is the first white paper in a new series from Cornell University’s Center for Hospitality Research. The series will draw on the expertise of hospitality industry leaders for their insights on the issues that matter most to senior executives. The new report, is available at no charge from the Cornell Center for Hospitality Research, at http://www.hotelschool.cornell.edu/research/chr/pubs/perspective/.

In the compelling paper that launches the “Industry Perspectives” series, Barbara Talbott, Executive Vice President, Marketing at Four Seasons Hotels and Resorts, reflects on the evolution of service, and offers critical analysis for today’s hospitality industry.

Talbott explains how company founder Isadore Sharp redefined hospitality service in 1971, when he opened the company’s first hotel in London. Quoting Sharp, Talbott recalls the insight that led Four Seasons to focus on the needs of the high end traveler: “When we looked closely, it became clear that the greatest luxury for our customers was time, and service could help them make the most of that.” Thus was born the 24-hour hotel, offering services and amenities tailored to the continually evolving needs of the most discerning business and leisure travelers.

Far from simply a history lesson, Talbott’s white paper explains how Four Seasons has continued to develop its unique service culture even as it has expanded worldwide, notably by carefully selecting and nurturing employees. The result has been industry-leading room revenues and profitability, and a reputation that competitors aspire to.

“The Four Seasons story shows how paying specific attention to meeting customers’ needs can result in a company’s success,” noted Mark Lomanno, president, Smith Travel Service. “I’m pleased that Barbara Talbott has taken the time to share her analysis of how that process was created.” Both Lomanno and Talbott are members of the Center’s Advisory Board.

Future white papers will address other companies and areas of the hospitality industry. “Barbara Talbott’s paper sets an excellent example of the level of material we expect to publish in this series,” commented David Sherwyn, academic director of the Center for Hospitality Research. “I welcome queries from other industry leaders who would like to participate in this forum.”

Paul Brown

Paul Brown leads both Expedia's global Partner Services Group (PSG) and Expedia North America. As the president of Expedia's PSG, Brown is responsible for managing airline, hotel, car and tour-operator supplier relationships across all global points of sale for Expedia, Inc. The Partner Services Group exists to ensure Expedia's supplier partners have a streamlined way to interact with Expedia, Inc. and provides efficient access to its diverse global network of leading trade brands.

As the head of Expedia North America, Brown is responsible for the Expedia points of sale in North America — Expedia.com and Expedia.ca -- as well as overseeing Worldwide Travel Exchange® (Expedia's private label business), Destination Services, and the Expedia business operations group.

Previously, Brown was a partner at McKinsey & Company. While at McKinsey, Brown was based in London and was a leader of the global travel and hospitality practice group. Brown served clients in all sectors of the travel and hospitality industry, including hotels, airlines, tour operators, GDSs, and travel agencies.

Brown has also served as senior vice president of strategic services with Intercontinental Hotels Group, where he was responsible for managing the shared services functions across all brands and global regions. Functional areas under his management included central reservations, loyalty programs, global sales, electronic commerce, and strategic alliances. Prior to his position with InterContinental Hotels, Brown was a manager with The Boston Consulting Group.

Cornell's Center for Hospitality Research, is pleased to announce its participation in The International Hotel/Motel & Restaurant Show^(R) on November 11 - 14, 2006, at the Jacob K. Javits Convention Center in New York City. The International Hotel/Motel & Restaurant Show is the world's largest showcase and exchange of industry products, trends, and developments, attracts every segment and facet of the industry. Each year, over 35,000 attendees and 1,400 exhibitors meet for three days of concentrated and intense business. Please stop by the Cornell School of Hotel Administration booth #2645 at the Javits Center. For more information, please visit: www.ihmrs.com.

Cornell cordially invites the industry to attend the Cornell Hotel Society Reception (CHS) held in conjunction with the IH/M&RS on November 13, 2006. Following last year's success, we are returning to the Bryant Park Grill for a cocktail reception and silent auction benefiting the CHS New York City scholarship fund. Stay tuned for more information about this event, or contact Kimberly Hehir '94 at 212-515-5630 (or email at khehir@lhw.com) if your company is interested in sponsoring this event.

Cornell's Center for Hospitality Research will also participate in The Americas Lodging Investment Summit (ALIS) on January 22-24, 2007, at the Hyatt Regency Century Plaza in Los Angeles, California. ALIS is “the” annual meeting place for hotel executives, investors, lenders, developers and the professional advisory community in the hotel and tourism industry. It is an event that brings together leading experts and investors to discuss important trends and to identify new opportunities. For more information, please visit: http://www.alisconference.com/.

The Center is also a co-sponsor of the Cornell Reception at ALIS to be held on Tuesday, January 23, 2007 from 7:00 - 9:00 p.m. at The Peninsula Beverly Hills Hotel. To join learn more about this reception, or to participate as a corporate sponsor, please contact Joseph Strodel, Jr. at 607-255-4646 or js343@cornell.edu

HR in Hospitality Conference & Expo, March 4 – 7, 2007 at the Wynn Resort in Las Vegas, NV. Produced by Human Resource Executive® Conferences in collaboration with Cornell’s School of Hotel Administration and School of Industrial and Labor Relations, this will be the premier event for human resource management, law and labor relations in the hospitality industry. Hear keynote addresses from Steven Heyer, CEO, Starwood Hotels and Resorts and Arte Nathan ’72, SVP, Chief HR Officer, Wynn Resorts, Ltd. Panel discussions, seminars and session topics by distinguished Cornell faculty, top practitioners and executives include: The State of Labor Relations in the Hospitality Industry, Hospitality and the Politics of Immigration, Aligning HR and Business Strategies and much more! Subscribers receive a $450 discount using promotional code HHCORNELL. For full event details, please visit www.hrinhospitality.com or call 1-800-727-1227. Register today and save!

Founded in 1968, Southern Wine & Spirits of America, Inc. has operations in 20 states. The multi-state distributor currently operates in: Arizona, California, Colorado, Florida, Kentucky, Hawaii, Illinois, Maine, Massachusetts, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, South Carolina, Vermont, and Virginia. On a national basis, Southern Wine & Spirits of America, Inc. employs more than 10,000 team members.

For more information, please visit www.southernwine.com.