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Human Resource Management in UK Hotel Industry

1 Introduction

Human Resource Management is a consistent and productive approach towards the management of employees who are ‘valued assets’ to the organization. And managing resourceful humans requires a constant balancing between meeting the human aspirations of the people and meeting the strategic and financial needs of the business. Hence linking the HRM more explicitly to the strategic goals to improve the business and foster innovation and flexibility, thus serves the overall purpose.

Through best possible use and application of HR policies in the organization, commitment can be encouraged thus leading to better performance, improve staff attitude and lower labour turnover, this is the ideal aim of the human resource practices which has been argued to neglect the fact that HR specialists and line managers have a major impact on how these HR policies are implemented at the hotels and whether all the HR practices are universally applicable.

Human resource management is the techniques businesses incorporate to maintain an effective workforce & to meet operational requirements. It is the organizational function that deals with issues related to people such as compensation, hiring, administration, organization development, employee motivation, wellness, benefits, safety, communication, performance management, and training. Human resource practices implemented in an organisation are used for recruitment, selection; training and development, reward management, performance appraisal etc. Human Resource Management strategically manages people and work place environment and culture. Effective HRM practices enable employees to contribute effectively and productively towards the attainment of the organization’s goals and objectives & facilitates overall company mission.

HRM practices are one of the channels of communication for an organization with its employees it consists of the actual programs, processes and techniques. It conveys as to what the organization desires as valuable and appropriate behaviors. The workers on reception of such a message build up their own distinct perceptions and through a self-assessment (evaluation) process subsequently shape their attitude and behavior. For instance, if an organization implemented a training program for their workers, it will develop workers’ knowledge, skills and capability, and thus cultivate better employee commitment due to contented experience with the organization; however, such correlation may at times be misleading or unpredictable i.e. even though some employees may think this training as useful and recognize the implementation of organizational HRM practices, but on the contrary, other workers may see the program as non-effective and view it as a trouble that hamper their regular work timetable, hence this may work in an unintended way by bringing down their satisfaction with the organization and negatively effect their commitment. This is the very reason why employees’ individual view plays as a vital intermediary in the association between organizational HRM practices and the real disclosure of employee’s outlook and behaviors. Therefore, from this point of view, one can argue that HRM practices in its dominating effect alter an employees’ affective commitment, by first impinging upon their perception of organizational HRM practices and consequently further alter or transform their emotional commitment towards the organization. That’s why, by the means of implementation of high-commitment HRM practices, i.e. intensive training and development, high level of compensation, promotion from within, socialization, etc. convince the employees that the organization’s purpose is in conformity with their insight, and it impinges upon them to reciprocate with advanced commitment and stronger deference to devote and put in for the organization.

Therefore this research will try to establish a correlation between HR practices and their effects on employee commitment. The HR practices that will be examined in the research will be Selection and Recruitment Process, Training and Development programs, Performance management, Reward management and industrial labour relations. These are some of the main HR practices followed by the hotels aiming for the more committed team. But the researcher is interested in knowing whether these HR practices really result in more committed employees. And if these HR practices really result in committed employees then is it universally applicable in all countries of the world or all types of industries. These are some of the questions that have encouraged the researcher in conducting this research.

1.1 Research Aim

The aim of this dissertation is to examine the HR practices implemented in UK hotels and their impact on employee commitment.

1.2 Objective

The objectives of this research were to:-

  • Examine the current HR practices prevalent in UK hotels.
  • Evaluating these current HR practices against the existing literature to find out whether they match or not.
  • Evaluating the factors leading to employee commitment and how many factors come by conducting HR practices in the company.

2 Literature review

2.1 Philosophy of Human Resource Management

Human Resource Management is shifting its traditional stance from personnel, administration, and transactional roles, which are being increasingly outsourced. HRM is now focusing more and more towards adding quality and value to the strategic exploitation of employees and that employee development programs impact the business in tangible terms. This new approach towards revolution in HRM involves strategic direction and HRM metrics and measurements in tangible terms to gauge the effect of these practices. Some of the HRM practices studied in this project are selection, benefits, training, performance feedback, communication systems, standard operating procedures (SOPs) and employee participation. David E. Guest (1987) says that human resource management is the tool for attainment of the managerial objectives in the organizations that have accepted the need for the optimum utilization of human resource to achieve competitive advantage and stay viable in their businesses.

The primary objective of HRM is amalgamation of company’s mission and goal with the HR practices. David E. Guest argues that formulation of a comprehensive corporate strategy is a major factor that decides the continuing business success of any organization.For matured managers human resource planning is not just a fundamental component of strategic planning, but somewhat flows from it. This holds especially true in today’s context where the accomplishment of the process of adjusting to change warrants an escalating level of individual and group participation, for the seamless integration of human resources into the strategic plans.

HRM also focuses to attain employee commitment, this involves classification of the type of commitment required e.g. attitudinal, behavioral. Commitment of an employee can be at different levels it could be towards the organization, to his job, for individual career advancement and numerous such like things. Commitment in an employee’s context can be defined as approval of enterprise mission and goals, and could be reflected in behaviour adopted by him/her that furthers these goals. David further proposes that theoretically the combination of organizational commitment and job related behavioral commitment constitutes a high degree of employee satisfaction, motivates them for high performance, longer tenure with their organisations and prepares them to willingly accept changes.

The third goal of strategic HRM is to exercise flexibility and adaptability, which basically translates into the ability to manage change and innovation and to react swiftly to transforming market demands and changes. Thus arises a need for a HRM policy which is favorable to change at all levels of the organization, an arrangement which is practical not bureaucratic, functional and adaptable, with an absence of rigid job divisions and with capable of functional flexibility i.e. flexible skills and motivation to move from one assignment to another. Promoting these is possible only according to David if the employees at all levels exhibit a high degree of organizational commitment, their trust towards the organizational policies and have high levels of intrinsic motivation.

Attaining and maintaining total quality is the fourth goal of HRM. This highlights the importance of policies and practices to recruit, development and retention of skilled and flexible employees, and the formulation of established performance standards and performance procedures. This can be further subdivide into two broader goals i.e. building a integrated organizational culture and achieving and maintaining competitive advantage through the dynamic use of human resources.

Guest (2002) has argued that the effect of human resource management practices on overall performance of a firm will depend upon response of the employees to the implemented HRM practices; therefore the impact will be more or less a translation of the perception of HRM practices by the employee. Wood (1999) and Guest (2002) have stressed upon the need to build a competent, committed and highly involved work force is the one required for best implementation of business strategy. Huselid (1995) discovered that the effectiveness of employees is directly related to the impact of HRM practices on behavior of the workforce. Patterson et al (1997) while arguing about the effect of human resource management practices on business performance have said that HR practices in selection and training influence performance by providing appropriate skills. HR practices have a potent impact on performance even if it just measured in terms of overall productivity.

Huselid (1995) stressed that the adoption of best practices in selection will lead to inflow of best quality of skill set & ultimately will result in adding to the value towards the skills inventory of the organization. He also highlighted the role of personnel training as an accompaniment of selection practices through which the organizational culture and employee behavior can be integrated with the organization goals to produce positive results. Cooke (2000) has included competence and effectiveness as the vital ingredients of performance apart from competitiveness and productivity. She further amplifies training as the tool to grow knowledge and skills and as way of improving individual’s performance (efficiency and effectiveness). Singh (2004), whose interpretations are more pertinent in our cultural context, says that compensation is a mechanism that aligns the behavior of employees with the firms’ business strategy. William et al, have argued that Career planning is a tool that works in sync with the strategy and future HR needs of the organisation and encourages employee to attain their individual goals for personal development. By encouraging employee involvement, the firm will profit from increase in efficiency of theemployee due to improved commitment of the employee. Financial participation schemes are more beneficial for the organizations than the associated cost (Summers & Hyman, 2005). In high growth industry use of best HR practices result in a stronger association with firm’s productivity (Datta et al, 2003).

Wright et al (2003) have said that if proper performance management system is in place and is complemented by a just compensation system that is linked with the performance management system an employee will exert unrestricted effort to improve his performance.

Similarly to improve performance the need is to clearly define the jobs.

“Job definition is combination of job description and job specification. It clearly outlines duties, responsibilities, working conditions and expected skills of an individual performing that job” (Qureshi, 2006).

Ichniowski (1995) while studying productivity of steel workers have argued that harmonizing HR practice System positively effects employees performance.Sels,2006 & Collins (2005) in a study of similar character targeting small business have also argued that efficient HR practices affect employee productivity to a great extent.

Meyer and Allen (1997) indicated that HRM practices have been considered to be valuable and effective tools for elevating organizational commitment, especially affective commitment. However, there are some other perspectives also on this subject; De Coninsk and Stilwell (1996) argued that what directly influences employee’s affective commitment is not the actual practices itself, but the employee perceptions of fairness of practices that affects organizational commitment. Ogilvie (1986) found that, even with personal and work characteristics controlled, employees’ perceptions of two characteristics of HRM practices, namely, the accuracy of the merit rating system and the fairness of promotions, contributed to the prediction of commitment. Gaertner and Nollen (1989) also found that employees’ commitment was related to the perceived HRM practices, including internal promotion, training opportunities, and employment security. Ostroff and Bowen (2000) made use of “meso” theory to explain that the implementation of HRM practices helped to amplify worker’s identification with their organization through employees’ psychological contracts.

Therefore, just as what the above mentioned scholars stated, the HRM practices itself cannot have impact on employee’s commitment, it is after the implementation of the HRM practices that triggered employees’ own perceptions and then assess whether the practice is considered fair or favorable to them and consequently influence their attitudes and behaviors. Therefore, if the HRM practices that an organization implements permit the employees to acknowledge it as highly committed, consequently, this will lead to reinforced trust and concurrently generate higher emotional attachment with his/her serviced organization.

Despite several experiential studies that have established a relationship between HRM practices and organizational commitment, however, such a connection seems to be a little too straightforward (Paul & Anantharaman, 2004; Ulrich, 1997; Wimalasiri, 1995). Ostroff and Bowen (2000) projected that it was the psychological bond of an individual that unified how an organizational HRM practice influenced employees’ mind-set and behavior. This also entails that HRM practices may conjointly manipulate employees’ organizational commitment obliquely, and must go through by means of individual’s psychological alteration system.

Guzzo and Noonan (1994) said that

“An organization’s HRM practices influenced employee commitment since they are communications from the employer to the employee. How employees interpreted and made sense of their organizational HRM practices affected their psychological contract with their employer and, ultimately, their commitment to that employer.”

Zucker (1983) also suppose that the organization members’ attitudes and behaviors are subjective and are governed by organization’s official communication of ‘common understandings’. Term common understandings denoting what were considered the appropriate, essential and meaningful behaviors within an organization. Basically, the official organization communication of common understandings will direct its members to alter their own personal attitudes and behaviors so that they can match organizational expectations and requirements.

2.2 Human resources practices

HRM propose that there is a universal ‘one best way’ to administer people. By assuming a best practice method it is argued that organizations will attain improved commitment from people leading to better organizational performance, top levels of service quality and eventually boost in efficiency and profitability, Usually couched in terms of ‘bundles’, the HRM practices that are offered in support of a high commitment and performance model are generally fairly consistent. A range of HR practices which are suggested as being important to organizational strategies aimed at securing high-quality service are:-

2.3 Recruitment and Selection

One of the main and most basic HRM practice is of Recruiting and selecting staff with the correct attitudinal and behavioral characteristics. The process of selection is AIMED at picking out the most probable candidate from a bunch of applicants who best suites the needs of the organisation. According to Vlachos the person who is most suitable is chosen based on his educational and/or professional qualifications and the focus of the whole process is to decrease the cost for the organisation and employ such employees who have merit and talent and can maximize the profits. A variety of considerations in the selection process should be employed to assess the work values, interpersonal skills, personality and problem-solving capabilities of likely employees to evaluate their ‘service orientation’. To maintain the high degree of competitive advantage an organisation requires capable and skillful personnel (Liao & Chu 2006). Huselid (1995) has established that organisational productivity and high degree of performance is dependant upon the selection of the appropriate person, which is also a way to reduce employee turnover. Michie and Sheehan-Quinn (2001) recognized a positive link between hiring employees, and the creation of the appropriate culture for organisational growth. Cho, et al. (2006) established a positive and considerable connection between HRM practices adopted by a firm and the various recruitment & selection techniques implemented like the recruitment resource, screening test, behavioural tests & interviews i.e. structured and unstructured to improve the fiscal performance. Therefore, it made compulsory for the organisations to attract qualified candidates and recruit them for survival and growth.

2.4 Performance Appraisal

Performance appraisal has attracted an immense degree of interest. Levin (1986) identified uses of performance appraisal, like potential analysis which assesses the performance of the employee in past, need for training, remuneration expectations- salary, employee merit appraisal, suggestion for and by the employee, employee career development etc. Thang (2004) in his study has shown as to effect of suitable HRM related decision on how well employees are performing their jobs.

Performance appraisal is a constant procedure rather than a ‘once a year’ fatigue. It is an official arrangement where periodical assessment of an individual’s or team’s performance for a particular task is carried out and a feedback is given on the same. Stone (2002) said that in order to survive in a highly competitive environment a firm must focus on improving its performance. In addition, in the fast changing surroundings, tighter finances, downsizing and demands for enhanced responsibility and accountability on the part of the employees and thus result in more emphasis on performance appraisal in order to enable the management to attain the organisational objectives. To achieve optimum performance requirements performance related rewards target those who meet the expectations of the organisation (Stone 2002, Cho, et al. 2006, Chand & Katou 2007). Information in regard to employee salary, training needs, compensation, promotion as well as employee development, transfer and employee feedback is provided by performance appraisal (Huber 1983). Appraisal systems have also moved away from conventional top down approaches to appraisal in more modern and pertinent terms such as customer evaluation, team-based performance, the appraisal of managers by subordinates and peer review. Generally, all of these performance appraisal methods should focus on the quality objectives of the organization and the behaviors of employees required for maintaining these.

Performance appraisal has both administrative and individual development focus and organization’s sincerity towards performance appraisal goes a long way in developing commitment and trust among people. Overall attitude towards HRM department’ is a significant predictor of organizational commitment. This aspect of HRM practice refers to how people see their HRM department, with respect, with disdain, with indifference and so on. It refers to the fact that the acceptance of various HRM practices depend largely on the overall image of the HR department.

Hospitality industry needs to rely on the commitment of a well-trained, multi-skilled workforce in order to achieve a competitive position, especially in terms of providing high quality customer service. This suggests that hotels need to adopt HRM organisational practices that enhance the motivation of employees and improve organisational effectiveness.

2.5 Reward Management

Huselid (1995) asserts that compensation and employee merit are directly related and finally contribute towards the firm outcomes. Compensation by its definition means all payments in terms of money and all commodities provided in kind i.e. instead of financial to recompense employees. The reward system was organized to attract and motivate so as to keep employees. More so, employee influence was tailored on controlled authority and decision making. The expectancy theory (Vroom 1964) suggests that rewards, that can be comprehended as a form of direct and indirect recompense packages, have the ability to manipulate employee work enthusiasm. Thang (2004) suggests that to achieve concerted efforts from the employees & to fulfill the organisational goals compensation and reward can be used as powerful tools. On the same lines, Wan (2008) argued that compensation should be measured depending on employees’ performance & not on the basis of position or seniority in the organization.Pay practice is one of the tools of human resources management practices which manage wage, salary, pay and benefits etc. for the employees.

Reward management has got an important role in HRM. A high level of pay and remuneration in comparison to that of rivals ensures the attraction and retention of high-quality employee, however this may impact negatively on the company’s overall labor expenditures. Also by connecting pay with performance, the company can educe desired standards of performance as well as specific task orientation from employee (Noe et al., 2006). Generally, pay practice is very significant for the organizations and firms which can attract employees to apply for the job as recruitment. Attractive pay practices play a major role in attracting talent and are very helpful during the recruitment process. Similarly for the employees this means that they are required to show a continuously high level of commitment and performance in order to keep their jobs.

Pay packages also have a degree of connection with the job satisfaction of an employee. Ting (1997) asserts that the job satisfaction can be gauged by the pay structure. He further explains two different type of effect of pay practices on job satisfaction; first is the satisfaction with pay itself and second is the satisfaction with financial prospects in the future. There is a venerable interest of these two things which are correlated with job satisfaction. Thus, it is pertinent to understand the relationship between job satisfaction and pay practices which eventually materializes in terms of higher productivity. Efficiency wage theories also suggest that paying higher wages can often result in increased efficiency. There are three main channels that are addressed in these theories that improve productivity, as described by Katz, 1987. Firstly it means that the harder the employees of an organization work higher will be the punishment for someone who is caught shirking and higher will be the probability of losing job of the employee getting caught. Thus higher wages means an increased effort on part of the employee due to the enhanced probability of losing job in a high performance environment. In other words, wage and pay practice are directly responsible for employees’ productivity and turnover. Secondly, a higher wage translates directly into workers loyalty towards organization thus improving employees’ efforts. Also it is a pertinent deduction that higher wage structure plays considerable amount of restraint on the employees to turnover their jobs. Thirdly, in more tangible terms higher wages are responsible for reducing firm’ employee turnover and recruitment costs.

2.6 Training and Development

‘Training and development (T&D) is a very important tool of HRM’ (Vlachos 2008). According to Li, et al. 2008 Training is the set of activities which prepare the employees to attain needed skill sets and to deliver more efficiently in their current jobs. In the environment of today’s’ business an employee is needed to cope with various pressures and are required to keep their skills and knowledge current to stay competitive. Tai (2006) asserts that more adaptability, ability, flexibility, motivation, maintenance of skills and efficiency are greatly enhanced by proper training and development of employees.

According to Vlachos training and firms’ performance are indirectly related. In most of the manufacturing industry, the prevailing training programs are mostly unstructured & on the job is the most preferred mode. Bartel (1994) in her study found a positive and significant relation between training and labour productivity. Guidetti and Mazzanti (2007) found that high performance and training activities are positively associated. It is also affected by labour flexibility in various directions. Apospori, et al. (2008) in their study of southern European countries have discovered the impact of training on firms’ performance. Equipping of service level staff enables them towards ‘service orientation’.

Training is the planned effort that facilitates the acquisition of job related knowledge, updating of skill sets, and impacts the behavior of an employee. In the implementation of HRM tools training is an important factor responsible for productivity. Higher productivity observed in firms is a direct outcome of training programs.

“High-Involvementpractices such as autonomy, team collaboration, and training are helpful in reducing employee turnover and enhance productivity. Untrained workers tend to change job more often. An increase in high-performance work practices converts into decrease in turnover” (Bradley, Petrescu & Simmons, 2004).

Training programs are particularly helpful when an employer is experiencing a high degree of employee turnover more so during the times of economic uncertainty. Even during the times when the business is flourishing an organization should proactively earmark their investment for on the job training and other training programs balancing the cost of training with the perceived benefits of productivity. On the other hand, a trained worker has got the required skills and knowledge and can be a candidate for job turnover. Therefore, job satisfaction is crucial factor to retain the employee from shifting his jobs. Bradley, Petrescu and Simmons (2004) explained that job satisfaction can be effectively imoproved by creating on-going learning as well as training in workplace; moreover their study indicates that training increases satisfaction levels of an employee which in turn enhances employee motivation and commitment. Therefore it is argued that acquisition or knowledge or training has a positive impact on job satisfaction.

2.7 Traditional and Recent HR Practices in Hospitality Industry

Keep and Mayhew (1999) in their study regarding the personnel problems in the tourism and hospitality industry some of them areas follow: low pay, no fixed hours and shift. Poor career growth, seasonal employment; informal recruitment methods; lack of good HR practice; high attrition rate and retaining employees. Riley et al. (2000) to recognize the reality of traditional and poor HR practices, he said that determining factor for HR policies and practices in tourism and hospitality industry is the key economics. Riley et al. says that it carries a very important meaning in tourism and hospitality industry, as in this service sector there is every thing which is intangible.

According to (ILO, 2001: 6).Employers’ and the organizational representatives consider employee turnover in the industry as not the major issue according to them it is the part of working they have not realized that what are its causes and reasons, retaining staff is costlier than hiring new for them. When the organizations will realize that poor HR practices like low pay & benefits, lack career opportunities, work life imbalance are the main reason employee turnover. That day the organizations will be successful in real terms.

The inability of the businesses and the industry to recognize the most glaring issues can be attributed to the hostility and opposition from employers’ associations in the industry such as British Hospitality Association (BHA), to governmental initiative such as the minimum wage and working time directive. BHA is still apprehensive of these initiatives despite support from other quarters who favor these initiatives (Lucas, 2004).

It is to a great extend clear from the above researches which supports the fact that tourism and hospitality industry is a poor employing sector. Kelliher and Perrett (2001), Kelliher and Johnson (1997) have clearly said that “the dominant paradigm has tended to stress the negative aspects of working in the hospitality sector”.

It is not surprising to see a long history that supports the fact that hospitality remains a poorly employing sector. Kelliher and Perrett (2001) did an analysis of a designer restaurant. These types of ventures were supposed to be implementing sophisticated HRM approaches as they aimed at building competitive advantage. Although the restaurant had adopted a more modern and sophisticated approach towards, training and development and focused on an innovative strategy ‘there was little real evidence that human resources were seen as a source of competitive advantage’ (p. 434). Instead, the HRM approaches adopted by the restaurant were much more reflective of immediate environmental constraints, such as the difficulties in recruiting and retaining staff.

In short, any number of reasons for poor HR practices in the tourism and hospitality industry. Economic determinism, the predominance of SMEs, a low-skills base, employer antipathy to a more progressive approach to HRM, labour market characteristics, organizations ensuring best fit HRM practices to support a high volume, low-cost strategy; all are plausible reasons for a view of HRM which is not necessarily premised on high-skills, high-wages and a high-quality route to competitive advantage. That said, it would be equally wrong to paint a wholly pessimistic picture.

Hoque (2000). On his work of good practice in the hotel sector, says that the hotels have started taking the issues seriously and have come up with good HR practices for the employee commitment. He further says that argues that arguments which give a picture of the industry as backward and un strategic is now outdated, hotels have started taking it seriously as there main aim is customer satisfaction which is possible only through strong employee commitment. In fact, he says that the management has become very serious regarding the practices and polices of HR .The hotels have started experimenting with innovation approaches, quality enhancement of HRM polices and practices. The hotels industry has started paying well, have revised appraisal system, proper training programs for employees skills development, schemes for proper balance between work and life, special advantages to women, job rotation, employee empowerment, performance based pay, teamwork etc. the implementation of all these polices and practices helps in gaining employee commitment and customer satisfaction.

The focus of hospitality

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