Besides addressing all three premises The Contribution Factor can be an excellent way for hotels to evaluate their performance and take a proactive stance if profits are not where they should be.

Simply stated, every management employee (and every hourly employee as well) needs to contribute to profitability. Worldwide markets are simply too competitive. No business can afford to carry dead wood. American industry downsized (right-sized, or re-engineered) because it had to.

Years in same job	Expected contribution to profit
Hotel, Resort, Conference Center Management Positions
1st year	Improve operating profit by 5 times their total compensation.
2nd year	Improve profit by 3 times compensation.
3rd year	Improve profit by 1.5 times compensation.
4th year & thereafter	Improve profit by 1 times compensation.
Sales & Marketing Positions (including Corporate Sales/Marketing Positions)
Every year on job	Minimum contribution to profit of at least 10 times their annual compensation.
Corporate Management Positions
1st year	Improve profit a minimum of 10 times their annual compensation.
2nd year	Improve profit 7 times annual compensation.
3rd year	Improve profit 5 times annual compensation.
4th year	Improve profit 3 times annual compensation.
5th year & thereafter	Improve profit 1.5 times annual compensation.

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Updated June 2005