On August 13, 2014 at 9:54 pm, Pacific Business News (PBN) announced the closure of JW Marriott Ihilani Resort and Spa at Ko ʻOlina Resort. Also in this article, the Marriot’s management contract ends on December 31, 2014. There have been speculations that Four Seasons hotel bought the JW Marriot Ihilani Resort, but is not yet confirmed. Because of this proclamation that the JW Marriot Ihilani will be closing, there will be many changes in the organization in all levels of positions. Currently, there are 500 employees that are non-union members that who are affected from this closure. Due to this closure, this will result in employee layoffs, positive or negative employee morale and the struggle of finding new jobs for the employees. The way a company manages this change and assist employees through the transition will make a big impact in the organization as a whole.
The change that is happening within Ihilani due to this closure is similar to what other organizations go through as well. Personally, I’ve experienced having to go through the changes in the organization when I used to work for a sushi restaurant called “Sushi Go” as a hostess/waitress. A month before it was announced that the company was closing, there were a lot of changes happening in the organization. There was a rumor among employees that the restaurant was in the verge of closing, but I thought it was a false hoax. However, once we started experiencing major changes, I felt that the rumor was valid. Majority of the items in our menu was sold out and the owner never ordered for more. Also we were advised to save on various items such as napkins, sauces etc. Instead of putting the napkins on the napkin dispensers, we were advised to give only a few napkins to each customer. In addition, we didn’t receive our paychecks on time, or if we did, our checks bounced all the time. A month after I saw these changes in the company, the owner announced that we were closing down and therefore; everyone had to find a new job. A few of my team members were laid off as well when the company they worked for closed down. One of my teammates used to work at the Kahului Chart House, Sam Choy’s, Sharktooth Brewery and the Lahaina Chart House and all these restaurants closed while she was employed with them. All these restaurants closed because they were not profitable. Also, another team member was laid off several years ago due an insufficient grant funding. She worked at University of Hawaii - Nā Pua Noʻeau, which is an enrichment program for gifted and talented Native Hawaiian Children.
We interviewed two members of the JW Marriot Ihilani leadership team, Randi Fernandez, Catering Manager, and Kim Callagher who work closely with HR during this transition. We spoke with them on September 10, 2014. According to them, the Ihilani announced to their employees about the transition the same day that the article was released on PBN. Prior to this announcement, the employees did not receive any other notices. When the employees found out about the this transition, they all responded with questions such as “What will happen?” and “What are they going to do?” Employees were very curious about the status of their employment.
Back when I was in high school, I interned for Aloha Airlines. I just finished my internship when Aloha Airlines announced that they were shutting down. I had the opportunity to interview Marty Woodward who was the HR Director of Aloha Airlines. She had shared with me the changes that she had to go through in the organization. Unlike, the employees of Ihilani who were informed very early on about the closure, the employees at Aloha Airlines didn’t. Under the WARN Act, employees are supposed to be given 60-days notice if a company decides to do a mass lay off. However, at Aloha Airlines, since it was a Chapter 7 bankruptcy, they couldn’t use the WARN Act. In the evening of March 7th, HR was notified about the shutdown. During that night, they prepared all the letters to notify their employees. The next morning, March 8th, the arrival of all the aircrafts and the repositioning of all the aircrafts had to be back in Hawaii. Letters were given to each employee that March 8th morning, so there was no prior notice of this bankruptcy. Aloha Airlines was in a very difficult situation. After the news was announced, many of the employees thought the company would still keep operating and was simply filing bankruptcy similar to how it did in previous years. There wasn’t a thought of Aloha Airlines actually shutting down. Some management employees stayed after receiving their letters, and many workers still helped out. Similarly, I’ve also talked to my boss, who worked at Continental Airlines as a Flight Attendant. She had mentioned that the announcement was unexpected and they were not given a 60-day notice when Continental Airlines decided to do a mass lay off. For a group member who worked in the healthcare industry as one of the HR professionals did the mass layoff herself when St. Francis sold the two medical centers to Hawaii Medical Center. Within two weeks of transitioning 1500 employees to Hawaii Medical Center, their Chairman of the Board informed the Sr. Admin Team that they had to cut one-third of our workforce in two weeks. When they did this layoff, my group member looked into the WARN Act and the HI Dislocated Workers Act. She then suggested to their Chairman that the HI Dislocated Workers Act would then apply to this situation and therefore the employees has to be given a 60 day-notice. However, the Chairman did not listen and followed what his attorney had advised him, which was to notify their employees two weeks prior. Since my teammate was just following directions, she followed his order. As a result, one employee complained about the two week notice and filed a case against the company. This employee won the case because the HI Dislocated Workers Act does apply to this situation. Therefore, the company had to pay $90,000 for not abiding the law.
During this transition process, JW Marriott Ihilani Resort and Spa continues to keep the lines of communication open regarding new developments to all employees. Once the corporate office is notified of any news, the leaders are informed and information is passed on to employees through their leaders. They also have open forums and management meetings. HR is open 6 days a week, and there is an open door policy. Management is very present in the organization, and they encourage employees to ask any questions they might have. The HR team is offering one on one and group sessions and corporate came out to talk in an open forum. The company are very supportive of each other. Similarly, Aloha Airlines communicated to their employees as much as they could during the shut down process. Letters were prepared and were sent to the different stations. They called and coordinated with all the stations. Station managers were told the night before it went public and were advised not to say anything until the letters were handed to employees. Some had to be mailed because logistically they couldn’t get to some employees in the time period necessary. For the Aloha Airlines hub in Las Vegas, they sent out an email to managers and had them print it out and hand letters to employees. A group member from the healthcare industry indicated that when changes are happening in their organization, they provide employees with written notice, regardless of any legal or contract requirement, and information on what would happen to their benefits, PTO/ESL banks, when they would receive their final paychecks and contact information for HR staff, Unemployment, Union reps, etc. They also held open forums and had a hotline number for employees to call and leave questions. The hotline questions with answers would be distributed to employees via email, posted on their Intranet and posted on bulletin boards in the departments. Managers were expected to help get the information out to staff and kept the lines of communication open. Their HR staff would be informed of everything going on even before the leadership group was informed as they had to prepare all the letters and be able to answer questions once the management team was informed. Another team member who works at GSI mentioned that two years ago, a project was planned on the mainland and almost begun, but the developer bottomed out and filed bankruptcy, leaving all 40 site workers without a job. In this situation, the owners of GSI informed the managers & prepped them on how to deliver the main points to the site workers. The site workers were informed via memo/letter and also face-to-face during daily meeting. Also, HR provided information in the memo that explained the main points: Why, Who, What next, etc., and was available for team members’ questions via phone and email.
According to Randi and Kim, one of the biggest challenges for the HR department right now is how they’ll be able to help all these employees that are getting laid off. Some of the ways that they are doing include job fairs, resume workshops, training and assisting employees with new employment whether they wish to remain employed at the Marriott or not. Currently, there’s no retention plan for employees, but HR’s main concern at this time is to help staff members find the right jobs. In addition, employees who are staying with the company throughout the transition will receive a severance package. The transition is scheduled to occur on January 9, 2015. On January 10, those remaining employees will be assisted by employment rapid response, which is a service that assists individuals with unemployment registration. They will have benefits with the severance package but after the hotel closes they will no longer receive benefits from the Marriott. Randi was unsure if there was a separate corporate fund for severance for hotel closures like this.
At Aloha Airlines, they held meetings explaining about how to apply for unemployment for employees. They also had the unemployment office to help with the process so they made it available for everybody. Employees were also given different contacts in case they had any questions. First Hawaiian Bank (Airline’s bank) and other organizations that were in business with Aloha Airlines conducted job fairs. Also, Aloha Airlines had to do what they could to offer COBRA to those whom the insurance company deemed qualified. There weren’t any severance packages because majority of the employees were covered under union contract. There were no furlough clauses in the union contract, therefore severances weren’t offered.
During the transition at Continental Airlines, what helped them a lot was that the State of Hawaii reached out to them and they went on site for them. The State of Hawaii offers a lot of services for layoffs. Therefore, they brought in unemployment so employees could apply. They introduced the employees to “Quest” if they were going to need health care and also shared with them about all the different social services. They talked about the entire different job retraining programs where people could get training anywhere they wanted as long as there were opportunities for growth. For example, they paid for the classes that the flight attendants decided to take. Majority of them went back to school to become nurses. In addition, Continental Airlines froze all their internal positions during this process so they could move the employees around to other positions that were available. One of my teammates mentioned that during the layoff process, they brought in EAP to go over the signs of stress and how to manage it with their management team. They also provide information to employees about EAP services.
It is very important that Ihilani continues to keep their employees engaged during this transition. No matter how challenging it may be for the employees during this transition, the company still wants them to follow the company’s mission, which is “Spirit to serve.” Ihilani’s philosophy is to continue to take care of their employees until the end and by doing that they will continue to take care of their guests. This way of thinking has been working because the company hasn’t lost any reservations because of the closure. In fact, they have gained customers since this is the last opportunity for them to stay with the company.
When Aloha Airlines found out about the closure, it was a very h had the same philosophy, which was to take care of their employees. they still tried to take care of Marty from Aloha Airlines mentioned that no matter how hard the situation was when they told the employees that they no longer had jobs; she had to remain strong so that the people who were still working could do their jobs properly. For example, Aloha Airlines did not close Cargo. There were 8 planes that were still flying cargo route. Therefore, no matter how challenging it was for all the employees during this process, she still wanted these individuals to do their jobs properly. My team mate who works in the healthcare industry indicated that when only a portion of their workforce is being laid off, they have to properly assess who will pick up the responsibilities of those who were laid off. She had seen firsthand that if companies give all the responsibilities to those who are left in the company, they will feel unhappy and wishes that they were laid off. As a result, employees will fail to do their jobs.
Randi agreed that change is dreaded. However, she let the group know that once staff found out, they realized and appreciated how great their team was. Many employees have pulled together, have begun working together better and others are having a great time. Everyone is different, and some people are being promoted during the transition. The change may be opening new doors that wouldn’t otherwise be opening. She also said that she had experienced change management in their organization four times. According to her, everytime it changed, everything was different. The first time it happened was a smooth transition, and in one month they had all moved on. What helped her was her ability to remain calm. She realized the importance of listening to what people wanted to do. She discussed the importance of remaining positive. She prioritizes helping staff to look at all of their options first and not going for the first opportunity that comes their way. She reminds staff that there is time and also not to worry. As for Aloha Airlines, Marty Woodward said that as an HR professional, it was the hardest things that she had to go through. She said it was so hard and it was very emotional to experience the closure. It was one of the hardest things that she had to go through as an HR professional. She advised that if I’m in charge of layoffs in the future, I have to be patient because people will be asking the same question over and over. Also, to keep my composure since I’ll be coming across angry people and to give as much support to employees because they are most likely traumatized or stressed. Finally, to be kind , understanding and great listener when someone needs to vent. In conclusion, the Marriot JW Ihilani is handling the situation very well during this transition process. They are able to provide resources that are beneficial to all employees. making sure that they have an open communication with each employee. In comparison to the other companies, I had seen that no matter how big or small the organization is, everyone becomes one. Everyone gets together and help one another to survive very challenging changes in an organization.
