Human Resource Management Practices In Hotels Management Essay

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One of the fundamental indicators of a companys performance is the level of dedication of its employees. in spite of the various resources and supplies that a company might need, human resource (HR) remains the principal resource because without labor force, no business can operate (Milkovich 1997). Employees of a company design and produce goods and services, manage quality, apportion financial resources, market the products, set overall strategies and objectives for the company, etc. Undeniably, Human Resource Management (HRM) is the heart

of almost all organizations.

In any customer driven business, especially in tourism and hospitality businesses, HRM is crucially important. In essence, HRM is a series of integrated decisions that shape the employment relationship (Milkovich 1997). The literature has highlighted that various HR practices are linked to organizational outcomes (Erras, 2002; Guest & Hoque, 1994; Hoque, 2000). These practices embrace teamwork, self-managed and self-directed teams, flexibility, sophisticated recruitment and selection, formal training programs, quality teams, formal performance appraisals, internal promotion opportunities, performance-related and incentive pay, profit sharing, formal and regular communication, attitude surveys, and job security (Erras, 2002). As such, HRM practices have been argued to positively influence customer-oriented behaviors, commitment and satisfaction among employees (e.g... Browning, 2006) as well as organizational performance (e.g…Hoque, 2000). However, Sisson (1994, p. 7) observes that the prescriptions on hand to manage people are based on a number of features that certainly include functional flexibility, team working but, their principal aim is to "develop a highly committed and adaptable workforce willing to learn new skills and tasks".

The role of human resource specialist in a big travel company like "Thomas Cook" differs immeasurably from that of a small tour agency. It therefore implies that, larger businesses have to devote much more time to human resource; firstly, because much more people are involved in the business, secondly, the more employees are involved, the more effort is required to manage these employees. Therefore, it is a huge routine system that requires clear division of labor, and thus, establishing a human resource department is a must in organizations that are hospitality-based.

) has assumed greater


From time immemorial, the role of HR in a hospitality-based company has been administrative in nature. Fulford and Enz (1995) documented this administrative definition, which they described as personnel administration, in the HR department of a multi-unit restaurant chain. A national trend in HR is to move from the administrative role to the inclusion of HR in strategic planning. This movement was aided by the development of the concept of human capital or human assets in an organization. Human capital is defined as including "skills, judgment, and intelligence of the firm's employees" (Barney & Wright, 1998, p. 32).

In the present day, in some companies, the HR department is being viewed as a source of competitive advantage and has become a strategic partner at the executive level (Kearns, 2004). This has served to distinguish companies with a strategic HR emphasis from those without. As per to Cooper (2005), what discriminates great companies from their peers is the ability to hire, develop, and retain the best people.

Building on the view of HR as human capital, strategic human resources management (SHRM) includes approaches for connecting people to business strategies (Miles & Snow, 1984). Strategic HR managers see the personnel as a source of strategic advantage and not a cost to minimize (Pfeffer, 2005).

Implementing Strategic Human Resource Management

A SHRM approach is mainly about integrating the HR functions into the strategic planning and operations of a business, predominantly in situations where customers and employee interaction occurs frequently. SHRM can be portrayed as the alignment and amalgamation of an organization's business strategies and its HR management strategies which involves environmental scanning to achieve an organization's goals (Nankervis, Compton, & Baird, 2005; Schuler & Jackson, 1999). A strategic approach in HR management requires HR managers to be reactive to changes in their business environment (Devanna, Fombrun, & Tichy, 1981). According to Wilton (2006), larger hotels in urban areas adopt higher levels of HR 'best practice' in comparison to small independent hotels. HR 'best practise' refers to the HR practices systems suggested by SHRM scholars (Hoque, 2000; Nankervis, 1995). Hotels in such urban areas are also likely to face labor shortages due to the availability of more employment possibilities outside the industry (Wilton, 2006). These results indicate that an establishment's approach to employee relations is dependent on its location and the labour market. This is important because 'firm resources are not valuable in a vacuum, but, rather are valuable only when they exploit opportunities and counteract threats' (Barney, 1995, p. 52). In SHRM, focusing on people is a means to developing an organization's competitive advantage (Barber, Huselid, & Becker, 1999; Becker & Huselid, 1999). The HR manager plays a significant role in the development of the organization's business plan and strategic planning

(Artis, Becker, & Huselid, 1999). There exists effective communication and shared information between managers and the subordinates, which encourages them to be implicated in the strategy formation and implementation (Barber et al., 1999; Becker & Huselid, 1999).

Human Resource Practises v/s Human Resource Functions

SHRM requires the amalgamation of HR practices and the discussion of these practices entirely instead of focusing on individual HR functions only (Becker & Gerhart, 1996; Becker & Huselid, 2006; Combs, Liu, Hall, &Ketchen, 2006; Lepak & Snell, 2002; Schuler & Jackson, 1987; Wright & Mc Mahan, 1992). HR practices complement each other and are interdependent and the incorporation of these HR practices in a system which may lead to firm's competitive advantage because it is complex, unique, firm-specific and difficult to imitate (Pfeffer, 2005; Wright, Dunford, & Snell, 2001). HR practices systems have various names and this variation reveals the various ways of aligning a HR practices system with a specific organization's strategy. An organization's strategy may change as the business environment evolves and the HR practices system should change correspondingly (Schuler & Jackson, 1987). Most organizations encompass at least two HR practices systems, one for management and the other for non-managerial employees (Hall, Hall, Andrade, & Drake, 2009). Multiple HR practices systems craft what is known as 'HR architecture' (Lepak & Snell, 1999). Organizations often implement HRPSD by assigning a high investment to the HR practices system for the core employees of the organization (Lepak & Snell, 2002; Lepak et al., 2003; Lepak et al., 2007).

Strategic Human Resource Management in Hotels

There has been mixed reviews of HRM approaches in the hotel industry around the world. As such, Price (1994) and Lucas (1995) have been unsympathetically critical to the United Kingdom (UK) hotel industry, which they outlook as having poor working conditions, high staff turnover, and a lack of fundamental professionalism in personnel practice. Nevertheless, a number of studies such as Buick and Muthu ( 1997) in Scotland and Anastassova and Purcell ( 1995) in Bulgaria have emphasized that there have been some attempts to introduce team-working, career structures and a consultative management style in these hotels. Hoque (2000) found that in the UK, there was considerable significance attached to strategic HR issues and a mounting level of interest in HRM. Additionally, he also found that larger hotels were more liable to the need to improve and develop HR policy and practice.

HR Planning and Reorganization

According to Snell and Bohlander (2007:48), Human Resource Planning is "the process of anticipating and providing for the movement of people into, within and out of an organisation". Simultaneously, Nel et al (2008:216) maintains that HR Planning "ensures that a predetermined amount of employees with appropriate skills, knowledge and abilities are available at a specified time in the future.

Schuler & Walker (1990) on the other hand, focus on how the dynamic nature of today's business environment requisites that HR planning focuses on short-term and immediate issues. This new focus contrasts noticeably with the traditional notion of HR planning which is argued to be characterized as "…the process by which management determine[d] how the organization should move from its current to its desired human resources position" (Schuler & Walker, 1990: Moreover, it is argued that as strategic business planning is becoming more tentative in the constantly changing business environment of today, HR planning is considered "…useful more as a tool for provoking thought and discussion" (Schuler & Walker: 1990:4).

In the words of , Armstrong (1990), HRP guarantees that organizations know and achieve what they want in the way of people needed to run the organization at present and in future. It starts from strategic business objectives of the organization and an analysis of the Human Resource required achieving them. It sets out requirements in both qualitative and quantitative terms and evaluates how to meet those requirements. HR planning therefore systematically identifies what is needed to be able to guarantee their availability".

Strategic planning must include planning for human resources to carry out the rest of the plan. The figure below shows the relationship among the variables that ultimately determine the HR plans an organization will develop.

(Fiigure name & reference)

Job analysis helps in identifying employment and training needs, clarifying tasks to be performed, and meeting the equal opportunity employment requirement (Amba-Rao & Pendse, 1985). Such analyses also boost employee satisfaction and motivation. The findings of Kotey and Slade (2005) imply that job descriptions that minimize errors in the recruitment and selection process are implemented early in the growth process as employees unknown to the owner/manager join the firm and jobs are not always clearly defined even in the larger firms. They have also noted that job descriptions in small firms are vague because over time jobs change or develop, and employees often create their own jobs.


Service failure may, "…occur due to a lack of, or inaccurate, communications and result in both unhappy customers and frustrated employees" (Lewis and Clacher 2001, p. 173). Communication is an exchange of both formal and informal information between parties within a relationship (Sin et al., 2005). Communication satisfaction is born by communication that offers information and work tasks, and by communication interactions with co-workers and superiors (Anderson and Martin, 1995).

". . .Companies need to articulate the values inherent at the heart of the organization and to ensure the mechanisms are in place to translate these values into action" (Wilson, 1994, p. 51). In a survey, Barnes et al. (2004) found that management was withholding information from employees because the organization had formerly remunerated and promoted staff based on specialized knowledge. Moreover, horizontal communication within and between departments were weak. Finally, there existed "us vs. them" feeling between employees and management. Employees had stopped making suggestions to superiors about enhanced service because they felt that they were not being rewarded for their efforts, and they classically never saw suggestions put into action. Communication satisfaction positively correlates to job satisfaction

(Pettit et al., 1997). Researchers have shown low communication satisfaction among employees associated to lower employee commitment, increased absenteeism, higher turnover, and lower productivity (Hargie et al., 2002). Where employees benefit from appropriate communication, favorable organizational outcomes can be expected (Gray and Laidlaw, 2004).

Employee Relations

Examining the informality of relations between employers and employees has been a key subject in small business literature (Coetzer, 2001). Informality thus portrays employee relations in small firms (Wilkinson, 1999) and informality is still deemed as the most suitable approach to effective working relationships in the small business environment (Harris, 2002). The quality of personal relations within small firms, both between employer and workers and between workers themselves, is such as to promote a spirit of collaboration, mutual understanding, and moral attachment-in brief, industrial agreement (Boer et al.,1997). Also Barrett (1999) defined industrial relations in small firms as harmonious as and qualitatively better than those in large firms. Arthur (1992) says that employee relations are commitment-maximizing systems that enhance employee participation and involvement in the decision-making processes. A number of studies (Gittell, Nordenflycht, &Kochan, 2004; Hammer&Stern, 1986) showed that amplified employee power and participation in organization management led to higher employee satisfaction, and hence increased employee motivation, resulting in higher service quality and employee performance. Good employee relations also add to an environment that boosts competitive advantages through positive employee attitudes and commitment (Judge

et al., 2001) and improved customer satisfaction (Koys, 2001). A firm's bottom line is significantly influenced by employee attitudes such as job satisfaction, which affects employees' efficiency and job performance (Fulmer, Gerhart, & Scott, 2003). The importance of job satisfaction emanates from the research concept that pleased workers are more productive ones (Judge et al., 2001).


As per Ulrich, D. (1997), much of the change today and even more of it in the future will be driven by information and communication technology (ICT). This is also the case for human resource management (HRM) processes. As per DeSanctis, G. (1986), HRM implemented ICT somewhere between the late 1970s and early 80s and was used for administrative tasks like payroll clarifications. From the early 1980s the focus has moved from single applications to more complex HR portals. According to Cedar Crestone (2010), a survey conducted in 2009 -2010 report companies lengthening the scope of their electronic HRM applications, it appears that companies are prepared to invest more in e-HRM technology in order to add value.

Lengnick-Hall, M.L., & Moritz, S. (2003) state that, the present business case for the adoption of e-HRM technology has been argued on a number of basis. For example, e-HRM can augment efficiencies by reducing HR transaction costs and headcount. E-HRM can also replace physical capability by leveraging digital assets, i.e. HR information can be used flexibly on an unlimited number of occasions at little or no marginal cost. Moreover, the effective use of integrated e-HRM systems can convert the HR ―business modelâ€- by liberating the HR function to provide strategic value to the business that it formerly could not do. Additionally, organization can gain from improved cross-group learning and knowledge sharing practices through a common information base where HR staff can benefit from improved career development. Lastly, Strohmeier, S. (2009) and Bondarouk, T.V & Ruel, H.J. (2009B) reveal that there can be better customer satisfaction via better service specification and overall better management of information.