Evaluating Human Resource Planning At Shandrani Hotel

For any business to perform well, it must acquire and optimize the deployment of people with talent. Identifying the right talent to fill particular positions and roles is critical to an organization’s effective functioning. All, too often, though, businesses fail to devote sufficient attention to this issue. Organizations and jobs will never be the same eternally. Changes are based on the global economy, on changing technology, on our changing work force, on cultural and demographic changes, and on the changing nature of work itself.

We need to learn new skills and develop new abilities, to respond to these changes in our lives, our careers, and our organizations. HR planning is a decision making process that combines three important activities which are: identifying and acquiring the right number of people with the proper skills, motivating them to achieve high performance and creating interactive links between business objectives and people planning activities.

The purpose of this assignment is to document on the human resource planning at Shandrani Hotel as HR planning is based on the belief that people are an organization’s most important strategic resource. We will try to show how far theory can be put into practice as it is difficult to predict the future and also the policies and strategies within the organization can shift suddenly from one priority to the other. Moreover there is lack of evidence that Human Resource Planning really works as there has been little research evidence of increased use or of its success.

To assess future requirement of new staff both in terms of numbers and of levels of skills and competences, formulating and implementing plans to meet those requirements through proper recruitment and training.

Due to huge competition and globalisation around the world, managers have, to train and develop their employees to make them more efficient in the workplace. Human resource planning refers to the process of employing the right person for the right job. In all industry, organisation have now realised the importance of human resource planning, and all organisation may have different approach to HRP, however, this assignment lays focus in one particular sector, that is the tourism sector. Tourism sector which is labour intensive compared to other industries, for instance, sugar industry which is machine intensive. Therefore the application of human resource planning shall differ and be applied according to the need of the organisation.

Chapter 1 gives an idea about what is the position of tourism in Mauritius, we can therefore deduce from past figures that tourism industry is growing, thus very profitable for Mauritian economy

Chapter 2 defines the Human Resource planning since its year of introduction to its actual use in the market. We have compiled the views of various theorists on HRP.

Chapter 3 shows the procedures followed to gather information for the assignment, with particular reference to Shandrani Resort and Spa.

Chapter 4 gives an overview about Beachcomber group and presents Shandrani Resorts and Spa.

Chapter 5 will focus on the process of Human Resource Planning at Shandrani Resort and Spa.

CHAPTER 1: OVERVIEW OF TOURISM SECTOR IN MAURITIUS

The tourism sector, besides facing cut-throat competition knew an excellent performance for the first semester of 2010. Figures from the Central Statistical Office (CSO) of Mauritius has revealed that tourists’ arrivals for the period January-June 2010, has attained its 439,150 compared to 413,504 in the corresponding year of 2009, thus representing an increase of 6.2%. The tourism industry is of such paramount importance for the Mauritian economy, that the figures indicating the importance for the Mauritian economy towards GDP is expected to rise from 26.5% (MUR 77.8bn) to 32.4% (MUR216.4bn) in 2010.

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The credits of the massive increases go to a combination of factors, such as aggressive advertising campaigns abroad, the opening up of air access to the country coupled with the increased capacity of airlines already serving the route and the greater consensus amongst all the industry stakeholders.

At the end of June 2010, there were 104 registered hotels in Mauritius, with a total room capacity of 11,362 and 23,168 bed places.

For the first semester of 2010, the room occupancy rate for all hotels averaged to 64% compared to 59% in the corresponding semester of 2009 while the bed occupancy rate was 56% against 52%.

Data from Bank of Mauritius indicates that gross tourism receipts for the first semester of 2010 were MUR 19,869m that is an increase of 8.5% compared to MUR18.249m for the same period of 2009. Based on data available on tourist arrivals for the first six months of the year 2010 and information gathered from various stakeholders, the Central Statistical Office (CSO) and the Mauritius Tourism Promotion Authority (MTPA) forecast of receiving nearly 1 million tourists this year, representing 5% year on year.

According to Bank of Mauritius, tourism receipts for this year will be around MUR 935 millions, representing an increase of 6.3% over last year figures.

Moreover, in order to tap the hospitality industry in Mauritius, major Indian hotel chains’ are aggressively setting up hotels in the country. According to Vijaye Haulder, Deputy Director, Mauritius Tourism Promotion Authority (MTPA), about 5 major hospitality chains in India are in talks with the Mauritian government for getting land to build hotels. All these hotels are expected to add about 1500 rooms in the next three-four years. The Sagar Hotel Group which is already running two luxury hotels in Mauritius is planning another hotel spread over 20 acres in the country.

The tourism industry is a colossal pillar for the Mauritian economy because we have a lot to give, sell and share with the world.

CHAPTER 2: LITERATURE REVIEW

2.0 Introducing HRP

Organizations are presently operating in a rapidly changing and competitive environment. Managers have to optimize the use of the available employees in order to be competitive. HRP therefore attempts to reconcile organisation’s needs for resources with available supply of labour.

HRP therefore results in matching people to the job, that is, the right people doing the right thing. HRP needs to be adjusted from time to time because the goals and objectives of an organization are not stable due to various uncertainties.

2.1 Defining HRP

Walker (1980) defines it as “…a management process of analyzing an organisation’s human resource needs under changing conditions and developing the activities necessary to satisfy these needs.” Similarly, Vetter (1967), Burrack and Mathys (1985) define it as a process aimed at assisting management to determine how the organization should move from its current staffing position to its desired position.

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 … Hr planning therefore systematically identifies what is needed to be able to guarantee their availability.”

As defined by Bulla and Scott (1994), it is “the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements.”

From the definitions of Human Resource planning proposed by the various researchers and practitioners, it is possible to attempt to define what HRP is in today’s circumstances. It is in our terms a management process designed to translate strategic objectives into targeted quantitative and qualitative skill requirements, to identify the human resource strategies and objectives necessary to fulfill these requirements over both the shorter and the longer terms,

As Quinn Mills indicates, human resource planning is “a decision-making process that combines three important activities:

1) Identifying and acquiring the right number of people with the proper skills,

2) Motivating them to achieve high performance, and

3) Creating interactive links between business objectives and people-planning activities.”

However, it must be recognized that although the notion of human resource planning is well established in the HRM vocabulary it does not seem to be established as a key HR activity.

As Rothwell (1995) suggests: ‘Apart from isolated examples, there has been little research evidence of increased use or of its success.’ She explains the gap between theory and practice as arising from:

The impact of change and the difficulty of predicting the future – ‘the need for planning may be the inverse proportion of its feasibility’;

The ‘shifting kaleidoscope’ of policy priorities and strategies within organizations;

The distrust displayed by many managers of theory or planning- they often prefer pragmatic adaptation to conceptualization;

The lack of evidence that human resource planning really works.and to provide necessary feedback mechanism to assess progress. Overall the purpose of the planning is to invoke an institutional learning process and to generate information which can be utilized to support management decision-making in all staffing areas.

2.2 The process of Human Resource Planning (HRP)

Organizations engage in the process of HRP to identify HR needs and the ways of meeting those needs.

Business strategic plan; Defining future activity levels and initiatives demanding new skills.

Resourcing strategy; Contributes to the formulation and implementation of business strategies. It refers to planning in order to achieve competitive advantage by developing intellectual capital – employing more people than rivals; these people will have a wider and deeper range of skills and behave in ways that maximize their contribution-The organisation attracts such people by being an ’employer of choice’.

Scenario planning; assessing in broad terms where the organisation is going in its environment and the implications for human resource requirement. Scenario planning has been fairly described “as a formal process but it can also be regarded as an informal approach to thinking about the future in broad terms, based upon an analysis of likely changes in the external and internal environment.”(Armstrong 2001)

The next stage in the process involves predicting how the need for and the availability of Human resource is likely to change in the future.

Demand forecasting; estimating the future quantity and quality of people required. The ideal basis of the forecast is an annual budget and longer term business plan, translated into activity levels for each function and department or decisions on downsizing.

Various demand forecasting methods are available and they will be analyzed below:

managerial or expert judgment

This is the most common method and it simply requires management to sit down and estimate the human resources necessary to achieve corporate goals.

ratio-trend analysis

It is carried out by identifying past trends, using statistical and mathematical techniques and project these into the future to determine requirements.

work-study techniques

This is effective when individual components of jobs can be measured. This job is broken down into discrete tasks, measure the time taken to complete each component and calculating the amount of labour required.

modeling

Mathematical modeling techniques using computers help to prepare demand forecast.

Supply forecasting; measuring the number of people likely to be available from within and outside the organization having allowed for absenteeism, internal movements, and promotions among others.

The forecast will be based on:

1) An analysis of the existing human resources in terms of skills, occupations

2) Forecast losses to existing resources through attrition/labour wastage.

3) Forecast changes to existing resources through internal promotions

4) Effects of changing condition of work and absenteeism

5) Source of supply from within the organization

6) Source of supply from outside the organization in national and local labour market

Analysing internal human resources

The review of current resources needs to cut organizational and occupational boundaries to provide inventories of skills and potential. It may be important

1) To know how many people with potential promotion exist and where they can be found

2) To know how many people have special skills and abilities in the organization

3) To identify the problems that may arise from retirement

In fact the above can help to ensure that the organization is making the most efficient use of its existing resources and can help to identify any potential problem areas.

Analysing external supply

External supply of potential employees needs to be indentifies- some factors which can have important impacts on the supply of manpower at local and national market are:

Population densities within reach of company

The attractiveness of the company as a place to work in

The effect of changing educational patterns, students staying longer in schools

Analysing demand and supply forecasts

The demand and supply forecast can then be analyzed to determine whether there are any deficits or surpluses in human resource. This provides the basis for recruitment, retention and if unavoidable, downsizing plans.

It refers to the analysis of the number of people leaving the organisation. It provides data for use in supply forecasting, so that calculations can be made on the number of people lost who may have to be replaced.

Moreover, an analysis of the number of leavers and the reasons behind their leaving the company will indicate whether actions are needed to improve retention rates. The most common method of measuring labour turnover is expressed as follows:

Number of leavers in a specific period x 100

Average number of employees during same period

This measure is used most effectively on a comparative basis and frequently provides the basis for internal and external benchmarking.

Investigations into reasons for turnover are undertaken via exit interviews and leaver questionnaires or even through attitude surveys.

Reasons for leaving are:

More pay

Better career prospects

More security

Poor relationships with manager or team leader

Bullying, harassment

Labour turnover can be very costly since it represents an opportunity cost of time spent by HR and Line Manager in recruitment, loss arising from reduce input from new starters until they are fully-trained, direct costs of introducing induction course.

Work-environment analysis

It refers to the analysis of the environment in which the people work in terms of scope it provides for them to use and develop their skills and achieve satisfaction.

Operational effectiveness analysis

Analysing productivity, the utilisation of people and the scope for increasing flexibility to respond to new and changing demand.

Human Resource Plans

The HR plans are derived from the resourcing strategy and takes into account data from a combination of scenario planning, demand and supply and forecasting and labour turnover analysis. Again there is a lack of certainty and predictability.

“The plans often have to be short term and flexible because of the difficulty of making firm predictions about HR requirement in times of rapid change.” (Armstrong 2001: 375)

Plans need to be prepared in the areas of resourcing, flexibility, retention, downsizing and productivity

Resource planning

This is primarily concerned with preparing plans for finding people from within the organisation, recruiting externally and attracting high quality candidates as the “employer choice”

Internal resourcing is the first step to analyse the availability of suitable people from within the organisation, by referring t assessments of potential and a skill database- decisions can be made to promote, redeploy and provide extra training to eligible staffs.

The recruitment plan would include the number and type of employees required to make up any deficits and when they are needed. The likely sources of recruits are colleges, advertising.

Plan for trapping alternative sources such as part timers

How recruitment programme will be conducted

Employer of choice plan

Recruitment plans should include plan for attracting good candidates by ensuring that the organization will become an employer of choice. Initiatives to become an ’employer of choice’ might include

Providing opportunities for development and career progression

Addressing work life balance issue

Better remuneration packages

Retention Plan

Man Fred De Vries (cited in Williams 2000:28) stated that ‘today’s high performers are like frogs in a wheelbarrow: they can jump anytime”

Various organizations recognize this and are turning their attention to key staff. Retention measures can include the following:

Pay and benefit – competitive rates of pay, flexible benefits

Recruitment and selection – set appropriate standards, match people to posts, provide an accurate picture of the job

Training and development – good induction processes, provision of development opportunities to meet the needs of the individual and the organizations.

Job design, provision of interesting work as much autonomy and ream working as possible.

Management ensures that managers and supervisors have the skills to manage efficiently.

Flexibility Plan

Planning for increased flexibility in the use of Human Resource to enable the organization to make the best of its people and adapt swiftly to changing circumstances.

Armstrong suggests that the aim of the flexibility plan should be to

Provide for greater operational flexibility

Improve the utilization of employees skills and capabilities

Reduce employment costs

Help to achieve downsizing smoothly and avoid the need for compulsory redundancies

Increase productivity

Thus strategies like job sharing, home working, tele working, subcontracting and employing part time workers should be implemented.

Productivity Plan

It sets out programmes for improving productivity and reducing employment costs in such areas as:

Improving methods, systems and processes

Mechanization, automation and computerization

The use of financial and non financial incentives

Downsizing plan

The downsizing plan is implemented as last resort ‘if all else fails’ It may be necessary to deal with unacceptable employment costs/surplus number of employees by downsizing. The downsizing plan should be based on timing of reductions and the process itself.

The plan should set out the following:

The number of people who have to go and when and where this need to take place

A forecast of the likely numbers who will be volunteer to leave

Arrangement for informing and consulting with employees and their trade unions

2.3 Aims of HRP

Planning of human resource is extremely important as it enables the optimum use of the most valuable asset of an organization in the attainment of its objectives and goals.

To find gaps and devise solutions. As we say, nobody plans to fail; they just fail to plan.

To attract and retain the number of people with the appropriate skills, expertise and competencies

To anticipate the problems of potential surplus and deficits of people

To develop a well trained and flexible workforce, thus contributing to the organization’s ability to adapt to an uncertain and changing environment

To reduce dependence on external recruitment when key skills are in short supply by formulating retention as well as employee development strategies.

2.4 Factors affecting HRP

Employment

HRP is affected by the employment situation in the country i.e. in countries where there is greater unemployment; there may be more pressure on the company, from government to appoint more people. Similarly some company may force shortage of skilled labour and they may have to appoint people from other countries.

Technical changes in the society

Technology changes at a very fast speed and new people having the required knowledge are required for the company. In some cases, company may retain existing employees and teach them the new technology and in some cases, the company has to remove existing people and appoint new.

Organizational changes

Changes take place within the organization from time to time i.e. the company diversify into new products or close down business in some areas etc. in such cases the HRP process i.e. appointing or removing people will change according to situation.

Demographic changes

Demographic changes refer to things referring to age, population, composition of work force etc. A number of people retire every year. A new batch of graduates with specialization turns out every year. This can change the appointment or the removal in the company.

Shortage of skill due to labour turnover

Industries having high labour turnover rate, the HRP will change constantly i.e. many new appointments will take place. This also affects the way HRP is implemented.

Multicultural workforce

Workers from different countries travel to other countries in search of job. When a company plans its HRP it needs to take into account this factor also.

Pressure groups

Company has to keep in mind certain pleasure. Groups like human rights activist, woman activist, media etc. as they are very capable for creating problems for the company, when issues concerning these groups arise, appointment or

2.5 Human resource activities

Human Resource (HR) planning is imperative to an organization’s success. It serves as an analysis of the current and future needs of the organization. This process helps guide an organization in several areas, such as staffing, development, training, and benefits and compensation designs.

Staffing

Staff, or personnel, planning is one of the most common activities conducted by HR departments, according to an article on AllBusiness.com. It typically is comprised of using the current staff size and design to predict staffing levels for the upcoming year. HR departments may utilize a company’s strategic plan as a resource for information. For example, if an organization intends to launch a new interactive website in the following year, the HR department will budget for additional staff to build and maintain the website.

Training and Development

HR departments create training and employee development plans as well. This type of planning must be conducted in advance of the company’s needs in order to prepare for them, both from financial and resource perspectives. Training for new employees and product rollouts may be included. Teaching current employees new skills is considered an aspect of development. Organizations benefit from having streamlined and consistent training programs

Career Development

Career development is imperative in order to prepare an organization for upcoming retirements, as well as to retain long-term employees. Companies need to have a strategic plan on how they intend to replace their management with qualified leaders. This means that current employees should have career road maps and plans that incorporate both short-term and long-term goals. For example, if an organization is grooming a top, young salesperson for the management track in five years, training should begin now. This may include time management courses, classes on how to coach others and a mentor program.

Downsizings

When companies foresee an upcoming need to downsize, it’s in their best interest to have their HR departments plan for it in advance to ensure that the process is smooth and orderly, and complies with all legal requirements. This type of planning also may prevent loss of knowledge and resources. Some companies begin the downsizing process by eliminating non-essential personnel. Others lay off administrative staff, but keep money-generating positions. Organizations may be hit by lawsuits and high unemployment costs if downsizing is not strategically planned.

2.6 Advantages and disadvantages of HRP

HRP, in both its traditional and more contemporary forms, can be perceived to have a number of distinct advantages. Firstly, it is argued that planning can help to reduce uncertainty as long as plans are adaptable. Although unpredictable events do occur, the majority of organizational change does not happen overnight so the planning process can provide an element of control, even if it is relatively short term.

Taylor (2002 : 73-74) suggests that in the HR field there is potentially more scope for change and adaptation in six months than there is in relation to capital investment in new plant and machinery. Thus he argues that many of the assumptions about the difficulties of planning generally are less relevant to HR.

Other advantages relate to the contribution of planning to organizational performance, for ex, the planning process can make a significant contribution to the integration of HR policies and practices with each other and with the business strategy, i.e. horizontal and vertical integration.

Marchington and Wilkinson (2002: 280) suggest that HR plans can be developed to ‘fit’ with strategic goals or they can contribute to the development of the business strategy, but conclude that ‘either way, HRP is perceived as a major facilitator of competitive advantage’.

Another way that HRP can contribute is by helping to build flexibility into the organization, either through the use of more flexible forms of work or through identification of the skills and qualities required in employees.

IRS (2002c) report that a number of organizations have predicted that jobs are likely to change radically over the next few years and so are using selection techniques to assess core values rather than job-specific skills.

2.7 Difficulties in implementing HRP

Planners face significant barriers while formulating a Human Resource Planning. The major ones are the following:

People question the importance of making human resource practices future oriented and the role assigned to the practitioners in formulation of the organisational strategies. Their argument is simple- there are people when needed offer attractive package of benefits to quit when you find them in surplus.

HR practitioners are perceived as experts in handling personnel matter, but are not experts in managing business. The personnel plan conceived and formulated by the HR practitioners when enmeshed with organisational plan, might make the overall strategic plan itself defective.

HR information often is incompatible with the information used in strategy formulation. Strategic planning efforts have long been oriented towards financial forecasting often to the exclusion of other types of information.

Conflicting may exist between short-term and long-term HR needs. For example, there arises a conflict between the pressure of getting work done on time and the long term needs, such as preparing people assuming greater responsibilities. Many mangers are of the belief that HR needs can be met immediately because skills are available on the market as long as wages and salaries are competitive. These managers fail to recognise that by resorting to hiring or promoting depending on short term needs alone, long term issues are neglected.

There is conflict between quantitative and qualitative approach to HRP. Some people view HRP as a number game designed to track flow of people across the departments. These people are strictly quantitative approach to planning. Others take a qualitative approach and focus on individual employee concerns such as promotability and career development. Best results are accrued if there is a balance between the qualitative and quantitative approaches.

Non involvement of operating managers renders HRP ineffective. HRP is not strictly an HR department function. Successful planning needs a coordinated effort on the part of operating managers and HR personnel.

CHAPTER 3: RESEARCH AND METHODOLOGY

This chapter examines the methodology used to carry out the research survey so as to collect data for the topic under consideration that is ”the process of Human Resource Planning with particular reference to Shandrani Resorts and Spa, member of the Beachcomber Hotels. It involves the examination of the whole research process from beginning to end.

3.1 Problem definition

”A problem well defined is half-solved.”Kotter.

Human resource planning is assumed to consist of 4 clear steps: 1)forecasting future needs, 2)analyzing the availability and supply of labour, 3)drawing up plans to meet supply to demand, 4) monitoring the implementation of the plan.

The main issue of this assignment is to analyse the process of human resource planning and the focus of the research is on the hotel industry.

3.2 Research objectives

The survey was most specifically carried out at Shandrani Resort and Spa and its objective is

To assess future people requirements both in terms of numbers and level of skills and competences, formulating and implementing plans to meet those requirements in terms of recruitment and training.

3.3 Research design

For the purpose of this assignment, the most appropriate strategies used were exploratory and descriptive as the research is analysing the process of HRP.

On a first instance, an exploratory research was made to reach a better understanding of the research of the research problem. It took the form of an in-depth interview with professionals working at Shandrani, and for the Beachcomber hotels as well. The in-depth interview took the form of a question list with open-ended questions.

3.4 Data collection methods

Secondary data

Secondary data were collected from books, journals, articles, and appropriate websites. Information about the hotel has been collected from Shandrani Resorts and Spa documents, namely the Beachcomber group manual and Shandrani’s Livret D’accueil.

Primary data

An interview was carried out with top management to gather primary data. A questionnaire was therefore designed for this purpose. (See Appendix)

Other primary researches

Interview with the Director of Shandrani .

Face to face interview with Director of Human Resource.

Interview with Director of Beachcomber Training Academy for 3 hours.

Interview with the Quality assurance manager.

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