Castle's Family Restaurant in the Hospitality Sector - Research Paper Example

?Executive summary The resources-based theory suggests that human resources are the most important resource of an organization. Retaining staff is the most critical issue facing most organizations, which is even more pronounced in the hospitality sector. The hospitality sector comprises of a young workforce with most being part-time workers. Retaining staff includes enhancing capabilities in several business functions such as motivation, training, performance appraisal and growth and development of the staff. HRIS has grown beyond focus on administrative tasks such as payroll. With the focus on a small group – Castle’s Family Restaurant – it has been found that strategic HRIS can help an organization to enhance performance, reduce costs and retain staff for enhanced service delivery. However, smaller from should outsource such activities and the choice of the vendor should be done after evaluation of its past performance. Introduction Castle’s Family Restaurant, a small group with under 350 workers has eight units which require the HR manager to travel frequently to each of the units to interact with the workers. Human resources are the greatest asset of the firm and an organization would need to invest in it to develop the capabilities. In the hospitality sector particularly, human resources must have unique capabilities to be able to deliver excellent service. Staff retention is a critical issue in the hospitality sector. The organization is considering implementation of HRIS which could help the organization save costs while reducing staff turnover. This study evaluates the types of HRIS that would best help the organization to retain staff. Stage I Business Assessment Family restaurant, a part of the hospitality sector, is a high potential, high-competition sector. While demand is high, staff attrition rate is also high. Prolonged job stress and high employee burn-out lead to high staff turnover in the sector (Buick & Thomas, 2001). It thus becomes absolutely essential for Castle’s Family Restaurant to attract, motivate and retain staff. This perhaps prompts the HR and the operations manager to travel to each of the eight restaurants every week to take care of scheduling, recruiting, hiring, and interacting with the staff. While the number of staff is not very high, managing staff at eight different locations can be challenging. It is essential to satisfy their queries and listen to them. Travelling every week is not cost-effective apart from the time taken in travelling. Therefore an alternative feasible solution has to be devised. Identification of problems The main HR functions that need attention at Castle’s Family Restaurant include task scheduling, recruitments, payroll preparations and answering the questions of the staff. While each of these tasks can be handled through the implementation of HRIS, staff retention is critical to service in this sector. Most of the staff is part-time, which adds to the challenge of retaining staff. The hospitality industry requires staff with strong practical skills and soft people management skills rather than analytical skills (Connolly & McGing, 2006). The staff has queries of day-to-day operations as well as queries related to personal issues. Each of these needs to be addressed timely as it makes the staff feel their concerns are addressed and paid heed to. Staff retention implies staff motivation and talent management to ensure continuity. Listening to their concerns is a great motivator and a good listener is one who encourages the people to express. Staff retention is essential to ensure service quality in the hospitality sector. Lower staff attrition also results in higher base of organizational knowledge and less deterioration of experiential learning (Bontis & Fitz-Enz, 2002). Constant turnover also impacts the dynamics of staff interaction. High staff turnover also results in recurring costs in recruitment and training. HRIS needs assessment HR functions have now been transformed to digital formats and technology is yet to be optimally utilized. However, it is being used for selection, recruitment, training, promoting, and complying with legal formalities. However, getting the staff to adapt to a new system can be challenging. Only when the staff and the management understand the benefits of using HRIS and are willing to accept it, does it bring benefits to both parties concerned. Human Resource Information Systems (HRIS) can ensure improved, accurate, timely and quick access to information, apart from cost savings. HRIS can effectively be used for staff retention as it can help in scheduling and allocating duties to suit individual talent; it can help identify training needs and consider flexible work schedules. This is particularly important because most of the staff in the hospitality sector comprises of young students who would want flexible work schedules. Introducing HRIS in staff retention would help several HR functions thereby leading to enhanced organizational performance and lowering staff retention. For HRIS to facilitate retention management, three items are considered very important – competencies of the HR manager, the way in which the HR department has been organized, and the application itself (Beulen, 2009). Thus it involves the individual, the organization and the system for HRIS to be effective in retention management. The important HRM activities include human resource planning, staff development, performance appraisal and compensation and benefits administration. This is totally focused on the employee and hence closely monitoring human efforts is the key to success in retention of staff. Human resource planning enables the organization to assign responsibilities to suit individual development. Job rotation is important so that an employee receives orientation in several business functions. Retention would also include an efficient performance management system which again can be bifurcated into performance management and talent management. This helps identify training needs and allotting an individual counsellor helps in effective growth and development of the employee. All of these are a step towards employee retention. Other elements in retention management include benefits administration, and staff development and regulatory compliance. Stage II HRIS Type While HRIS is generally defined as a system used to acquire, store, manipulate, analyse, retrieve, and distribute information about an organization’s human resources, HRIS can be used in two different ways to manage human resources (Ball, 2001). HRIS can be used for administrative purposes, which helps reduce time and costs or it can be used for analytical decision support. Payroll and benefits administration, and maintaining employee records electronically was considered unsophisticated usage of HRIS as it only transformed the system from filing cabinets to an electronically maintained filing system. Using IT in HR could be used for sophisticated purposes such as recruitment and selection, in training and development, in performance appraisal and HR planning. This was considered sophisticated because the information generated could provide support for decision involving expert judgment. In addition to these two types, the size of the organization also matters, apart from evaluating the costs and the risks involved in implementing HRIS. Small firms can have teething problems in implementing the new software. The first approach helps reduce costs while the second approach, in addition to cost reduction, would help in enhanced organizational performance. The sophisticated usage of HRIS is strategic HRIS which helps in the decision-making process (eHow, 2012). The administrative information is used to analyse an employee’s value to the company. Hence it is very important for retention of people. It tracks employees’ progress and stores information regarding their time and work efficiency. HRIS also traces benefits availed by the employee, and ensure they are timely and accurate. Thus, for Castle’s Family Restaurant, HRIS would be extremely useful in retention management. The sophisticated or strategic HRIS would be used to reduce work load, costs and time. This is essential because the hospitality industry has high turnover rate and engaging and involving staff through different techniques are essential. Strategic HRIS would help Castle’s obtain information real time on the work and time efficiency of each worker. Since most workers are part-time and since the sector is service-delivery dependent, such analysis would help the organization to evaluate whether they are in the right direction or whether they need to change their staff. They could then identify the high-returns employees and focus on their growth and development. HRIS vendor choice Vendor selection for implementing HRIS can be challenging. However, each vendor has its own strengths and weaknesses. Hence vendor selection would depend on the sectors they specialize in, on the expected services. Engaging a vendor is better than in-house implementation because vendors continuously innovate and update technology. Again, the same technology, for instance, SaaS may be employed for performance management by one vendor while others may use it for enhancing payroll system. Therefore, the right vendor selection would help achieve the desired value through HRIS implementation. Two vendors have been evaluated for the services they have been rendering in HRIS – Geolearing and PeopleMatter. GeoLearning (www.geolearning.com) has serviced 13 million employees through SaaS platform (HRO Today, 2008). It provides managed learning programs and hosts learning platforms. The service provider has clients spread all across the United States. It provides metrics to clients and helps them transfer the acquired learning to intended behaviours in the work environment. Clients using their services have achieved enhanced ROI, enhanced learning, better quality, increased sales and reduced accidents. However, they have not enhanced their technology platform. Moreover, for employee retention certain other HR functions are critical such as employee scheduling and performance appraisal. Under the circumstances, PeopleMatter (http://peoplematter.com/) appear to be the most appropriate vendor for Castle’s Family Restaurants. PeopleMatter have launched their latest technology platform called the Schedule, which is geared towards the restaurant, convenience stores and the hospitality sector. They focus on changing how the hourly workforce works and this is precisely what Castle’s need as most of their workers are part-time. PeopleMatter help in recruitment, training and optimizing shifts apart from rewarding and connecting tech-savvy workers. All of these functions are critical to retention management. Besides, PeopleMatter have experience in the hospitality sector where GeoLearning does not. Their Scehduler software particularly leverages the power of mobile HR technology (Miller-Merrell, 2012). Forecasts can be made from the location computer based on prior sales and peak time history. Once the schedule is posted employees can access their own schedules by downloading it in their mobile phones without having to drive down to their location computers. Through the same system employees can even request shift changes. Stage III HRIS recommendation Castle’s Family Restaurants have eight locations with 300-340 employees with most being part-time workers. To enhance performance, to reduce the workload and to reduce costs, the organization intends implementing HRIS. HRIS should typically be outsourced rather than implemented in-house as this is not merely cost effective but it becomes possible to constantly innovate and benefit from enhanced technology. Thus, the first step would be to decide to outsource HRIS. Implementing it in-house would not be cost effective with just 300-340 workers on payrolls. In-house is cost effective for larger organizations with large number of employees where they even have their own system analysts (DeSanctis, 1986). Within the resource-based theory of the firm, human resource is one of the major resources. The human resource-based theory of the firm recognizes that each firm has its own unique resources and competencies. The firm is viewed as the nexus of resources and capabilities which help it achieve competitive advantage. A firm’s resources and capabilities must be scarce ad valuable and they should not be imitable by the competitors (Olalla, 1999). Human resources capabilities, skills and potential are crucial for a firm’s success. Through the implementation of HRIS Castle’s Family Restaurants can achieve competitive advantage as they could enhance the capabilities of their human resources as they would then be able to deliver better products and services highly valued by customers. Thus Castle must create a situation that makes it difficult for crucial employees to leave. The staff must be seen as an important resource which should be provided with motivation, training, incentives and opportunities for growth and development. Training and performance appraisal also help enhance the value of the human resources of the firm. Competitive pressures have transformed the way companies work. The most critical function at Castle’s is retaining the staff. This is because of the high attrition rate in the hospitality sector which comprise of students and young workers. The hospitality sector also prefers young graduates because of seasonal work and because it is cost effective. However, such a workforce prefers flexible work schedules as most are still students. At the same time, the restaurant sector is based on the delivery of service, critical to its survival and growth. Therefore the task before Castle’s is challenging – retaining a young, ambitious workforce while being able to service the customers efficiently. While Castle’s focus is on cost savings, HRIS should not be implemented merely to save costs. Managers and employees need to first understand the benefits of using the system before they introduce it in the organization. HRIS positively contributes to retaining staff as it provides support for allocation of employees, including scheduling and training (Beulen, 2009). HR staff has limited power of employee retention because once the decision has been taken, it is difficult to reverse it. However, the HR managers can influence staff retention indirectly by allowing the company’s culture and values to influence the HR strategy. This would have an impact on the functions directly related to staff retention. HRIS is of two types and the type most suited for Castle’s would be the strategic or the sophisticated HRIS as retention involves training and development, performance appraisal and HR planning. HRIS can have definite benefits for the organization, for the workers and for the management. Motivating the staff requires sustaining their interest and making them feel valued. Motivation is critical to staff retention and this requires enhanced interaction between and among employees and the management. HRIS can facilitate such collaboration and enhanced interactions (Paauwe & Farndale, 2004). Based on the resource-based theory, the HRIS type that deals with administration work would not suffice. Implementation of strategic HRIS is essential to achieve the intended benefits. HRIS also enables to maintain work-life balance which is essential for this sector because of high level of stress and burnouts. With an IT platform they would be able to deal with personal tasks along with work. Fast decision making is possible on scheduling, development, planning and performance appraisals. More HR related reports can be generated and the focus shifts from HR to strategic HRM. As HR operations improve, it leads to increased competitiveness. Training is an essential component in retention management. Training programs can be enhanced through modern computer-based multimedia as electronically controlled graphics, animation, and text and audio are increasingly being used (Shani & Tesone, 2010). It also becomes easier to transfer training materials to a wide range of employees. Because of work pressures workers can access the training programs at their convenience. Even if the workers at Castle’s do not have their own systems at home, the organization can make arrangements for several systems at the workplace facilitating training to be undertaken at individual convenience. Introducing automation through the application of technology in measuring performance can help eliminate biases, improve perception, sense of control and fairness among the employees. Performance can also be measured against work speed and efficiency. Shani and Tesone (2010) contend that this could shift the focus towards quantitative rather than quality but this limitation may not be applicable in the hospitality sector. The workers at the restaurants would not be rewarded for the number of clients serviced, and hence this limitation is not valid in the case of Castle’s. HRIS would enable the managers to evaluate performance of all workers against training as well as past performance as all information would be available at one place. Software of PeopleMatter enables such measurements and evaluation as they focus on the hospitality sector. This analysis would also help identify the training gaps and determine the training needs for future. Overall, the appraisal process could become less cumbersome and more meaningful. Thus, all functions relevant to employee retention would be served through HRIS. However, technology brings with it certain challenges as well. Storing learning programs on CDs can be cumbersome and hence Castle’s can provide internet-based learning program through their corporate network. Web-based training programs would be cost effective as the employees can access them from anyone of the eight locations. Developing such training programs may be costly initially but distribution and implementation would be cheaper than conducting regular ongoing training programs for all the employees. However, it is also likely that all workers are not computer literate and many may not know how to download and access the program or even the schedules on their mobile phones. Such workers may experience anxiety due to lack of human contact in web-based training. Besides, training programs usually require high bandwidth because of audio and slow connections can hamper the smooth function of the training programs. Another drawback of online training programs is the lack of human contact. Such programs hence cannot inculcate qualities such as leadership, service quality and training in dealing with difficult customers. This may require Castle’s to outsource some of its training program to offline vendors, especially in areas where human contact becomes essential. HRIS is more frequently used to meet the administrative needs but in the hospitality sector it should be used to meet analytical needs. HRIS should be used to enhance interactions between and among workers because service delivery is a group process and not an individual process. PeopleMatter is the ideal vendor as they also enable task scheduling and flexible schedules to suit individual requirements, in addition to providing for enhanced interactions. The HR manager at Castle’s has to visit the eight units regularly to answer the queries of individual employees. All of these could be shifted online and the workers could interact more frequently than just weekly. However, using technology has other risks that could be pervasive. A small firm such as Castle’s may find it difficult to absorb the downtime, training time and teething problems associated with technology implementation. A smaller firm would be more cautious in adopting technology and hence would take longer to adapt to more sophisticated uses of technology. Conclusion Nevertheless, the research concludes that HRIS implementation would help Castle’s Family Restaurant gain competitive advantage. It could help enhance the capabilities of the human resources thereby enable them to offer better services. The main issue with the staff currently is that they have queries and they need to interact with the HR manager frequently. This can be achieved in a cost effective manner at higher frequencies while also enhancing interaction between the workers. Castle’s should employ strategic HRIS through an external vendor that has expertise in the field – PeopleMatter – as they have been focusing on extending such services in the hospitality sector. Challenges do exist but they can be overcome; moreover the benefits far exceed the challenges. Castle’s family Restaurant is thus advised to enter into agreement with the recommended vendors which would help it focus on retention management. References Ball, K.S. (2001). The use of human resource information systems: a survey. Personnel Review, 30 (6), 677-693 Beulen, E. (2009). The contribution of a global service provider’s Human Resources Information System (HRIS) to staff retention in emerging markets: Comparing issues and implications in six developing countries. Information Technology & People, 22 (3), 270-288 Bontis, N., & Fitz-enz, J. (2002). 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