Human Resource Management of Tourism Industry - Essay Example

Human Resource Management Today, hotel and tourism industry is one of dynamic branches of hospitality and tourism economy. It is the growing industryin the UK and around the world. The development of hospitality and tourism industries is a present day need. High rates of its development, great volumes of currency receipts have an active influence on various sectors of economy that promotes formation of hotel and tourism industries. In the infrastructure of hospitality and tourism operators service quality is the major question. Without qualitative service the hotel and tourism enterprises are not capable to achieve the overall objectives. The history of development of various corporations of this sector, as a rule, testifies, that the level of profit is a result of quality. The main objective of hospitality and tourism operators is to maintain the level of service quality and develop strategies to improve their services (Bardi, 2002). Service quality is closely connected with Human Resource Management (HRM) and concepts and methods it employs. In literature there was a debate concerning the effectiveness of different approaches in hotel and tourism industries and their impact on service quality improvement. In general, the concept of resource-based strategic HRM is founded on the belief expressed by Hamel and Prahalad (1990) that competitive advantage is obtained if a firm can obtain and develop human resources which enable it to learn faster and apply its learning more effectively than its rivals. Resource-based strategy indicates, can develop strategic capability. The strategic goal will be to 'create firms which are more intelligent and flexible than their competitors' by hiring and developing more talented staff and by extending their skills base (DeFranco, Noriega, 1999). A convincing rationale for resource-based strategy has been produced by Grant: "When the external environment is in a state of flux, the firm's own resources and capabilities may be a much more stable basis on which to define its identity. Hence, a definition of a business in terms of what it is capable of doing may offer a more durable basis for strategy than a definition based upon the needs which the business seeks to satisfy" (Grant, 1991). So, it is possible to single out two basic approaches used in hospitality and tourism industries. The "best practice" approach is based on belief that there is a set of superior HRM practices which, if adopted, will lead to better organization performance. The "best fit" approach, which is based on the belief that there can be no universal prescriptions for HRM policies and practices (Rutherford, 2001). Present day situation in hospitality and tourism industries is marked by two factor - specification, which is to do with the "design quality" of service, and conformity, which is to do with the 'process' quality which is achieved are of particular importance to customers. Each of the HRM approaches determines the quality levels provided by hospitality and tourism industries to its customers. These two factors however are themselves determined by other factors. Service concepts are based on understanding the unique environment in which hotels operate. Service concepts include improvement of communication, and the environment composed of all the individual services used for implementation of the group communication primitives. But, "best-practice" and "best fit" approaches solve these target aims using different methods and techniques. The HRM of hospitality and tourism organizations based on "best practice" approach helps to ensure customers satisfaction and improve service quality uses a set of best HRM practices and that adopting them to superior organizational performance. It helps hospitality and tourism operators to achieve their goals through the people who are employed in the sphere and their training. That is why maximizing each employee's potential as an individual and as a team member will be a key to maximizing the profitability of each hotel. To improve operations, an administration introduces employee bonus programs and support continuing education programs for all of its employees. These and other programs will improve and bring advantages in recruiting and retaining employees (DeFranco, Noriega, 1999). The "best practice" approach helps to achieve effectiveness of performance and specific goals including maintenance of high standards in order to deliver customer satisfaction. Unique talents among employees, including superior performance, productivity, flexibility, innovation, and the ability to deliver high levels of personal customer service are ways in which people provide a critical ingredient in developing an organization's competitive position. People also provide the key to managing the pivotal interdependencies across functional activities and the important external relationships. It can be argued that one of the clear benefits arising from competitive advantage based on the effective management of people is that such an advantage is hard to imitate. An organization's HR strategies, policies and practices are a unique blend of processes, procedures, personalities, styles, capabilities and organizational culture (Introduction to Management, 2002). In current management practices it is supposed that "best fit" approach is more important than "best practice", but still the latter is more widely used today. Taking into account the "best fit" approach and peculiarities of the hospitality and tourism industries (such as environmental changes connecting with service quality), it is evident that this approach fits industries current needs more than the "best practice" one. This does not mean that "good practice", (including practice that does well in one environment) should be ignored. Benchmarking has its uses as a means of identifying areas for innovation or development which are practiced to good effect in hotel and tourism sectors, but having learned about what works and, ideally, what does not work in comparable organizations, it is evident that the "best fit" approach helps to decide needs and goals of organizations faster and more effectively (Hayes, Ninmeier, 2003). The "best fit" approach allows tourism and hospitality industries "to execute personalized campaigns based on available inventory levels, targeted customer purchasing patterns, and estimated customer lifetime value. These campaigns deliver relevant and compelling offers to the customer while maximizing revenue from perishable inventory" (Fahy, Smithee, 1999). The best fit approach leads to a smooth task management process, helping both industries manage complex tasks across multiple properties in a consistent, efficient manner. Most companies face two critical challenges in planning and executing tasks. First, planning and execution is a complex process that entails the coordination of a number of assets and internal teams as well as frequent scheduled interactions with the customer. Second, it is often difficult for companies to provide a consistent set of services and products for tasks across multiple properties, a fact that often negatively impacts brand equity (Dittmer, 2001). Nevertheless, it is p to the firm to decide what may be relevant in general terms and what lessons can be learned which can be adapted to fit its particular strategic and operational requirements. The starting point should be an analysis of the business needs of the firm within its context (culture, structure, technology and processes). This may indicate clearly what has to be done. Thereafter, it may be useful to pick and mix various 'best practice' ingredients, and develop an approach which applies those that are appropriate in a way which is aligned to the identified business needs. Specification in the hotel and tourism industries are determined as a result of an organization's policy, which in turn resulted from decisions on its market policy, which in turn resulted from its consideration of the market or customer needs, requirements, and the activities of competitors. This is the process of designing quality into the service. These could all be regarded as 'good practice' but it is difficult to accept that they universally constitute 'best practice'. What works well in one organization will not necessarily work well in another because it may not fit its strategy, culture, management style, technology or working practices. But there are some disadvantages with the "best fit" approach, which explain why its high effectiveness does not make it a popular one. The mian limit of this approach is the impossibility of modeling all the possible variables, the difficulty of showing their interconnection, and the way in which changes in one variable have an impact on others. So, hospitality and tourism organizations are unable, in many cases, to implement this approach into practice and receive high revenue and high level of customer satisfaction. So, this approach much more sensitive to processes of organizational change so that they can "avoid being trapped in the logic of rational choice" (Hayes, Ninmeier, 2003). To improve existing customer service hotel industry should consider time as the important factor of delivering service, Consider first the cost of goods, a customer takes into account the delay or wait involved between the expression of a want and the subsequent satisfaction of that want. This delay or wait will normally be evident as the period of time between placing an order and receiving the service. This is clearly an important dimension of customer service, because hospitality industry is depended upon providing services at the exact time. This is a measurement which is, to some extent, within the control of the administration. It is possible to distinguish two aspects of costs: price and expenses. To ensure customer satisfaction hotel industry should balanced price and quality of service. According to recent studies and practical examination this goal is impossible to and the outcome of such references.achieve if an organization from the hospitality or tourism sector employs "best fit" approach. The following criteria to measure effectiveness were included: employee retention and turnover rates; absenteeism rate; ratio of suggestions received to number of employees; number of usable proposals from quality circles or improvement groups; cost savings arising from suggestions and/or quality circle recommendations; frequency/severity rate of accidents; ratio of grievances to number of employees; time lost through disputes; number of references to industrial tribunals on unfair dismissal, equal opportunity, equal pay, harassment, racial discrimination issues etc. The results show that "best fit" approach allows to achieve these tasks quickly and effectively, but the level of errors are higher, which has a great influence on a companies profitability and ensuring customer satisfaction. The most important is that the level of errors and faults are lower in the hospitality and tourism organizations employ the "best practice" approach in comparison with "the best fit" one (Bardi, 2002). To conclude is possible to say that both approaches employed by the hotel and tourism industries are effective, but the level of their effectiveness differs to some extent. Taking into account the specific criteria as organizational effectiveness, specified goals, specified quantified measures, stakeholder perspective, it was found that "best practice" approach is more widely used by hospitality and tourism organization because it allows to reduce the level of mistakes to a minimum in contrast to "best fit" approach, which shows high effectiveness, but cannot be used in all types of organizations in these two sectors. As the aim of a resource-based approach is to improve resource capability - achieving strategic fit between resources and opportunities and obtaining added value from the effective deployment of resources, the "best practice" approach helps to realize this objectives without profit loss. In line with intellectual capital theory, resource-based theory emphasizes that investment in people adds to their value to the firm of any sector, including hospitality and tourism market segment. References 1. Bardi J.A. 2002, Hotel Front Office Management Wiley; 3 edition. 2. DeFranco A., Noriega P. 1999, Cost Control in the Hospitality Industry. Prentice Hall; 1 edition. 3. Dittmer P. R. 2001, Dimensions of the Hospitality Industry, 3rd Edition, 4. Fahy, John and Alan Smithee. 1999. "Strategic Marketing and the Resource Based View of the Firm." Academy of Marketing Science Review. Available at: http://www.amsreview.org/articles/fahy10-1999.pdf 5. Grant, R.M. 1991, "The resourced based theory of competitive advantage". California Management Review, #33. pp. 114-35 6. Hayes D.K. Ninmeier J.D. 2003, Hotel Operations Management Prentice Hall; 1st edition. 7. Introduction to Management in the Hospitality Industry, 2002, Seventh Edition and NRAEF Student Workbook Package, Wiley. 8. Prahalad, C.K., Hamel, G. 1990. The core competence of the corporation. Harvard Business Review, May - June. 9. Rutherford D.G. 2001, Hotel Management and Operations, 3rd Edition. Wiley, 3 edition. Read More