Evaluating a hotel GM's performance

TLDR

Because every market is different, evaluating a general manager’s performance is complex. Using the resulting efficiency scores, the study identifies the practices of the most efficient general managers and shares that information with other GMs. The authors employ a linear‑programming model that controls for market differences, compares each manager’s resource use to a peer group, computes an efficiency score as the ratio of resources consumed to expenditures, and derives a composite target general manager profile.

Abstract

Because every market is different, evaluating a general manager's performance is complex. By controlling for market differences with a linear programming model, a chain can develop benchmarks for a group of similar hotels and score the hotel managers' levels of efficiency. Using such scores one can identify the practices of the most efficient general managers and then share that information with other GMs. By comparing each manager's use of resources with that of a peer group of managers (similar environment, similar revenues, similar services), an objective benchmark for resources consumed can be determined for each general manager. That efficiency score is the ratio of resources consumed to the actual expenditures. Using the input factors a composite "general manager" is derived as a target for a particular GM.