The impact of the hospitality tourism and leisure industry

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The impact of the hospitality, tourism and leisure industry is very huge. It is considered to be one of the biggest employers even during the global financial crisis. It was forecasted that the reduction in international hospitality industry may have bottomed out (WTO, 2009). The hospitality industry is made up of many countries and culture and has its origin in the Feudal times of European Society (Baum, 2006). The industry has had a huge impact on the world economy. The literature review aims to establish the connection between human resource management and the hospitality industry.

The hospitality industry is a high involvement work system. High involvement work systems reflect meaningful, interrelated patterns of work practices that are intended to increase organizational performance (Van Buren and Werner, 1996). The organizational practices found in high involvement work systems are designed to treat people as organizational resources in which to invest, rather than costs to be controlled (see Barling HYPERLINK "#idb9"et al.HYPERLINK "#idb9", 2003; Pfeffer, 1998). A growing body of research (e.g. Bailey HYPERLINK "#idb8"et al.HYPERLINK "#idb8", 2001; Patterson HYPERLINK "#idb41"et al.HYPERLINK "#idb41", 2004; Zacharatos HYPERLINK "#idb55"et al.HYPERLINK "#idb55", 2005) provides strong support for the correlational relationship between high involvement work systems and various positive outcomes for employees, organizations, and their customers. Adoption of employee-friendly HR practices has been linked consistently with a host of beneficial organizational outcomes including higher productivity (e.g. Arthur, 1994; Huselid, 1995), profitability, customer satisfaction and retention (e.g. Hoque, 1999), better workplace safety (Zacharatos HYPERLINK "#idb55"et al.HYPERLINK "#idb55", 2005), and lower turnover, waste, and inefficiency (e.g. Arthur, 1994).

The evolution of human resource management must be understood to get a clear perspective of how it originated and what have been the major developments in that field. The human resource management and human resource personnel have been influenced by management theory, which has evolved as economic, social, political and industrial relation factors have changed. War, technology, globalization, and unionism have impacted on the development of new management theories (Davidson, 2010). The foundation of the HRM paradigm is based in the notion of the welfare of employees (Carey, 1999), as first seen in the 1940s with the use of welfare officers in organizations. According to Taylor in his management theory he stated that welfare and administration stage of human resource management is the most mechanistic process simply dealing with the mechanics of having employees and the need to hire, pay, and fire. A company aligned with this process was run by line managers who performed this function with administrative assistance. The next stage according to Taylor was the staffing and training phase which saw the resurgence of unionism and behavioral science. In management theory the HR movement began to make a significant impact with the famous 'Hawthorne experiment'. The Hawthorne Studies, which were conducted in the 1920s and 1930s at Western Electric, sparked an increased emphasis on the social and informal aspects of the workplace. Interpretations of the studies emphasized "human relations" and the link between worker satisfaction and productivity (Dessler, 2004). The passage of the Wagner Act in 1935 contributed to a major increase in the number of unionized workers. In the 1940s and 1950s, collective bargaining led to a tremendous increase in benefits offered to workers. The personnel function evolved to cope with labor relations, collective bargaining, and a more complex compensation and benefits environment (Dessler,2004).. The human relations philosophy and labor relations were the dominant concerns of HRM in the 1940s and 1950s. The new approach of theorists in regards to human resource management showed that the way in which employees were treated and consideration of their motivations were critical factors in achieving productivity. From the 1970s onwards, the view of Human resource management changed drastically because there was great level of emphasis on the quality and the strategic results of human resource management (Nankervis, 2008). This was largely due to the development of general management thinking in a very holistic fashion like the Japanese Approach and the emergence of systemic management of employees in the organization as a whole. According to Davidson there was significant research being done in understanding the importance of a work culture and climate that was peaceful and cordial.

In the twenty-first century, the interpretation of Human resource management was about high performance by the employees, talent management and the reevaluation of what strategic Human resource meant in the workplace and how it related to the organizational structure. Human capital and knowledge management became key talking points in the organizations. This led to the modification of the contingency theory of management. The contingency theory states that that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. Contingency theory has sought to formulate broad generalizations about the formal structures that are typically associated with or best fit the use of different technologies. The perspective originated with the work of Joan Woodward (1958), who argued that technologies directly determine differences in such organizational attributes as span of control, centralization of authority, and the formalization of rules and procedures.

Hard and Soft Human resource management are two different perspectives to understanding what human resource management is all about. The Hard Human resource management or the Michigan model focuses upon the crucial importance of integration between the HR policies and systems with business requirements, in terms of activities and strategies, utilitarian instrumentalism (Legge, 1995). Hard approach to human resource management is said to be tough and calculative (Michigan Model) (Fombrun, 1984). The soft HRM approach (Harvard Model) (Beer, 1984) looks for ways to unleash the resourcefulness of employees through commitment and involvement with the organization that in turn increases their effectiveness (developmental humanism) (Legge, 1995). The soft approach according to Beer laid a lot of importance on the human relations school which tried to highlight the need for communications, team work, and individual contributions at the same time maintaining the view of what the large number of the stakeholders wanted. The stakeholders included the government, community, employees, managers and shareholders. It also drew on the concept of the resource of employee in order to accomplish goals within the organization itself. Beer further suggested that Soft HRM is all about the intellectual capital or the knowledge worker as opposed to the physical or manual skills of the worker and requires a certain amount of sensitivity and complex management approach for the human resources to reach its full zenith. This was seen as a way to imbibe the stakeholder's interests with the human resource management and business strategies (Beardwell, 2004). But in Hard HRM (Fombrun,1984), the only purpose was the effective use of all the employees and highlight the quantitative, calculative and business aspect of managing personnel as just an economic factor (Edgar and Geare,2005). Further research by Legge suggested that even though the basic requirement of HRM is soft in reality the approach is mostly hard with the organization's interests given the first preference rather than how the employees are being treated in the company. Hard and soft HRM tries to lay emphasis on the intellectual ability of the employees rather than just the physical work embodied by the employees.

The other perspective of how Human resource management is viewed would the Unitarian approach and the pluralistic approach. The Unitarian approach states that t here is a common interest between employers and employees, attempting to encourage commitment from both (Guest, 1987). It includes the proper utilization of communication and reward systems but it is very exclusive in the dissolution the union membership (Worsfold, 1999). The pluralist approach emphasizes the need for employers and employees to show conflict of interest and that the Human resource management will be required to bargain and resolve the issues in order to meet the company goals that have been set (Worsfold, 1999). These two perspectives have provided the rudimentary ideas for a lot research in Human resources and to a great level it helps in proposing lot of new innovations and modifications to the management and industrial relations theory.

There are a lot of other Human resource theories that includes things like efficiency, effectiveness, productivity, labour flexibility and competitive organizational advantage (Davidson, 2010). There are also many varieties of cultural, country and industrial relations environments that need to be analyzed separately as they cannot be defined within on e single Human resource management model (Nankervis, 2008).

Strategic Human Resource management is called the fourth paradigm of Human resource management (Carey, 1999). Strategic Human resource Management focuses on uniting all the business operations of the organization with HRM, giving a lot of importance to the strategic role of setting and achieving business goals (Davidson, 2010). Strategic HRM has had the ability to develop a competitive advantage as it gives an exclusive identity to the organization. (Davidson, 2010). Dowling and Fisher (1997) see that strategic HRM is highly specific and does not resemble any other approach of HRM mentioned above.

The other element associated with strategic human resource management would be the emergence of High performance work systems and work practices (HPWP) (Davidson, 2010). HPWP imbibes important things like training, job security, decentralized management, employee motivation, fair remuneration, fair policies and ethics, good benefits which are taken into consideration by the management ( Davidson,2010). This can be done only when there is a good work culture in effect between the employees and the management. Boxall and Mackay (2009) suggested that there is a lot of research that has to be done in this area concerning labour economics, industrial relations, Strategic HRM, organizational operational management. Despite all this, there is no clear definition as to what defines HPWP. Boxall and MacKay came up with the idea that HPWP can be segregated into two distinct categories namely high involvement work systems (HIWS) and high commitment management (HCM). According to them, HIWS is about the involvement an employee has through practices such as skill development, training, empowerment and flexibility while HCM is based on the notion that the management is capable of getting the optimal way to put organizational settings into place like the work culture and the climate that leads to better job satisfaction and involvement.

In order to get a better understanding of what HPWP is, Orlitzy and Frenkel (2005) developed a more strategic model. In this model, they provided empirical evidence within the service sector. They state that service industries tend to have less well developed strategies than manufacturing industries where selection processes are more strenuous. The model has few methodological flaws and is much skewed in its approach; it helps in getting a better understanding of what is the connection between labour productivity using HRM strategy and HPWP with an increased level of communication and interest amongst the employees in the organization.

To further substantiate the role of strategic human resource management in the hospitality industry it is important to note that there have been many definitions what Strategic HRM is all about. Strategic management involves two important aspects that starts at the corporate level and the globalized level. Corporate strategy issues include brand imaging, brand positioning and social factors that pertain to the organization. How does corporate governance play a vital role in the functioning of the organization should be another key factor that has to be taken into account while examining the systems and skills needed to manage people in the hospitality industry.

Future hospitality researchers in this area should address: What governance

mechanisms at the corporate and leadership levels help hospitality firms manage uncertainty,

change, and risk? How does change affect the ideal composition of the board or top management

team in hospitality settings? Is there a connection between hospitality executive pay level and

firm performance? How can hospitality firms' growth be fueled through acquisition or alliance in

a dynamic environment? How does political and economic uncertainty affect strategic decisions

on the level and nature of geographic and product/service diversification? Does the nature of the

current financial markets, market sectors or country affect the desirability of particular corporate

strategies for hospitality firms?

Several recent studies have considered how extensions of operations across national

boundaries affect a hospitality firms' overall risk and performance (e.g., Graf, 2009; Lee, 2008;

White et al., 2007). While more and more hospitality firms look to multi-national means for

growth and diversity, most hospitality research limits its contribution by minimizing cross-national effects and focusing on one specific country setting. Therefore, future research should seek to address this limitation and look at: How multi-national hospitality firms deal with risk and uncertainty? Which benefits and pitfalls are associated with international hospitality

operations (e.g., global competitiveness, stakeholder issues, or global R&D/service innovation)?

How can international risks be mitigated by hospitality firms? And, how might international

hospitality organizations deal with inconsistent polices across its markets?

This research area focuses on the activities, practices and routines that impact the

formation of strategies as well as the performance implications at the group, business-unit,

corporate, and network levels of analysis. This area receives less attention in both the general

strategic management and hospitality strategic management literatures. While much of

hospitality research appears more tactical and applied in nature, it seems this more applied

approach by researchers in the field would provide many opportunities to fill the numerous gaps

in this literature stream. Recent studies in this topic area specific to hospitality include cultural

affects on the strategic process (Ayoun and Moreo, 2008a; 2008b), environmental scanning

behaviors (Jogaratnam and Law, 2006) and strategy-making models (Harrington, 2005).

Numerous questions remain to be addressed by researchers that would contribute to a

greater understanding of connections among: hospitality strategy process capabilities associated

with conditions of uncertainty; performance consequences of strategic processes used in

hospitality; and determining which processes lead to consensus-building.

The strategy process area overlaps with more traditional organizational behavior topics

and the impact on strategy formation. Therefore, given the diverse backgrounds of hospitality

researchers, it seems likely that hospitality research groups bringing together a variety of

knowledge areas would provide contributions to the large gaps in this research topic area. In

particular, research providing new insights into issues such as decision-making and the decision

making process during greater uncertainty; group, business-unit, corporate or network factors

that influence the evolution of strategic initiatives; the role of emotions and micro-practices in

strategy processes; and how techniques or tactics can be designed to improve strategic processes

or decision-making are important topics for future research.

While early work in service quality management was steeped in Taylorism and saw the

employee as an unthinking cog (Wyckoff, 1984), views have changed and the performance of

employees in hospitality is seen as a critical dimension of quality (Wong et al.,1999). As far as

the customer is concerned the employee's performance constitutes the service (Groonroos as

cited in Hartline et al., 2003) and employees play a significant role in enhancing the guests' self image

and status involvement and ultimately, their loyalty (Skogland and Siguaw, 2004).

Further, the customer's perception of service quality has at least two elements - satisfaction with

what was provided; and the way in which this was delivered by the front line employee

(Chapman and Lovell, 2006). Sim et al. (2006) also determined that hospitality was a significant

indicator of customer satisfaction and that the perception of hospitality was primarily associated

with employee actions in this study.

The movement away from the production line reflects in part the recognition of the important role that individual employee actions play in customer satisfaction as well as the impact of new

models such as relationship marketing and the service-profit chain (Berry, 1995; Heskett et al.,

2008). Increasingly, employees are being used as 'walking billboards' (Zeithmal and Bitner,

2003 as cited in Nickson et al., 2005). Moreover, they are no longer passive elements in the

company's brand strategy but are required to live the brand (Brexendorf and Kernstock, 2007).

In addition, service organizations are increasingly dependent on the authenticity of their service employees since authentic employees may have a greater impact on the customer's emotional state than non authentic employees (Hennig-Thurau et al., 2006). Managers therefore have to be concerned about hiring and retaining those employees who are motivated to perform the emotional, aesthetic, scripted, and voluntary acts that are such an important part of service. In

particular, they have to be concerned about the performance of emotional labour as employees

may withhold smiles and even courteous behavior or 'go into robot' (Hochschild, 1983).

Punjaisri et al.(2008) found that the relationships that employees had with colleagues and their

leaders were influential in their attitudes and performance in delivering the brand promise.

Specifically, when employees felt comfortable with colleagues and their colleagues were

supportive, they felt part of the hotel brand which increased their commitment and intention to

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