Employees as a Labor Expense - a Hospitality Issue - Coursework Example

TREATING EMPLOYEES AS A LABOR EXPENSE: A CONTEMPORARY HOSPITALITY ISSUE Introduction satisfaction is what is being sold in the service or hospitality industry. This goes on with saying that hotels do not sell a place to sleep, nor is it food that restaurants sell. Rather, they sell customer satisfaction and comfort, making it important for hospitality and service industries to focus on this aspect. However, meeting the customer service satisfaction is not easy. It takes staff skills to prevent conflicts with customers, a staff skilled enough for recovery from complaints, a staff that value time as not to be engaged in squabbling and conflict with coworkers, and a staff that gives utmost importance for teamwork (Resources to Prevent and Deal with Workplace Conflict for Service and Hospitality Staff. Retrieved: April 26, 2008). Conflict prevention is one aspect that the management team should focus itself on since it saves time, stress, and keeps things in control. A good hospitality and service management scheme will lead towards having everybody as winner ( Georgiades and Macdonell 1998). Customers feel that they are treated well and received a good treatment, employees feel that they are treated well by the management and experience a strong liking for their job, and the management feels happy that it meets its objectives by employees working together and customers who keep coming for service satisfaction. Hospitality and service workplaces are however not as ideal as what this paper attempts to describe. Instead, they are assailed by a myriad of issues and problems. Diverse attitudes, perspectives, beliefs, and preferences of each customer, employee, and member of the management basically cause this. Streamlining these preferences and attitudes will entail a probing of what kind of service the customer wants to receive. There is also a need to streamline management objectives with that of the needs of the employees since they are the direct performers of these services. Employees as a Labor Expense: A Hospitality Issue Managers view employees as labor expense than a capital asset. This may be seen in lack of training and skills programs regularly conducted on employees and staff to enable them to be equipped enough with skills development. Gravish (2006) points out in a study conducted on hotel employee satisfaction that skills development training is considered only when there is a problem to be addressed or an imminent difficulty to be resolved. Training activities for employees are not conducted in a regular basis, but only as a resolution for some problems. In the study, it was found out that “recurring skills improvement training was non-existent, unless in response to specific problems or mandated by the brand” (ibid). Another way by which employees are seen as labor expense in a hospitality issue is the little feeling by employees of financial security or long-term job. Pay raises are not seen as sufficient enough as to positively affect the turnover rate (Gravish 2006). This paper intends to analyze and review this hospitality issue, including why it prevails in service industries. Evaluating the Issue on Employees as a Labor Expense A factor seen as to why most hotel management teams provide a conduct of skills improvement activities only in an occasional manner is the cost entailed in conducting such event, which would certainly eat up a certain portion of the company’s budget. The thought that the focus of the job must be the mainstream job itself where employees and staff learn from real-life-situations, and are thus better than conducting a regular skills training activity is also a factor. It goes on with saying that the enemy in hospitality problems is not unmotivated employees in situations where they seem to be observed that way, but the lack of efforts on the part of the management team to act upon the felt need for lack of skills and motivation. When given adequate resources, employees improve their service commitments and develop an “I care about you” attitude. A study sows that few employees were ever discharged for unsuitability or a lack of desire to do their jobs. In the contrary, guest service ratings were generally above average and for several months, the hotel’s guest satisfaction level ranked in the top three with its brand peers (Gravish 2006). Since managers view employees as a labor expense, the manner by which they regard employees is in cognizance with this view. Skills training programs and additional benefits and pay raises are seen as additional expenses that will cut off the budget. This paradigm can only change if the management starts seeing the employees as a capital asset rather than a labor expense. As such, job satisfaction and commitment will prevail in the work environment and a slow turnover will be its result ( ). Likewise, the company’s reputation will improve and will serve as its flagship. This may be undertaken if the company gives due importance to its employees instead of raking more and more profits as the primary objective. The lack of human resource importance is seen in the example of British Airways, which retrenched 5,000 employees in order to address a financial problem, and the remaining ones went on strike, leaving the company lose as much as £200 million (Arrowsmith, et al 2000). This example only illustrates the likelihood if employees are regarded as only a labor cost. The loss is greater when people resource is regarded this way, compared with regarding them as a capital asset where the management can invest in and surely rake in better financial and management outcomes. The management should give due importance to both skills development and monetary improvements of the employees to foster an atmosphere of commitment and job security. With a regular skills development program, esteem and a high regard for work are developed alongside with increased job commitment. These would tend to result in an improved hospitality service and a genuine customer care. With an improved remuneration and benefits, employees will tend to feel an improved sense of self and security, are motivated, and committed. A study shows a direct relationship between economic factors and job satisfaction, although not sufficient to motivate an employee entirely; thus the need for skills activities that will foster this esteem need. It is important to point out that the manner in which management in hospitality industry regards its people (i.e. as a labor expense or a capital asset) is reflective of its culture. As already emphasized, a fast-paced labor turnover is its result and thus, a likely culture to prevail in the workplace. A lacking professionalism may also emerge, alongside with animosity and hostility. The feeling of animosity and hostility is pushed by the fear that they might be the next to go with the company’s experience of financial problems and its contemplation of employee cut (Branston, et al 2006). Central to the hospitality issue is providing quality and excellent services for customer satisfaction, which customers really buy in a hospitality industry (Barrows and Bosselman 1999). Although there seemed not to have a direct relationship between lack of a good remuneration and providing good service to customers (as Gravish’s study suggests that customer evaluation of employee service is generally above average), it does not mean to say that the management can just ignore this monetary issue. Allowing people to go due to job dissatisfaction and replacing them with a set of new ones would entail much cost since the company has to train them all over again. With improved skills and sense of self, employees are seen to resolve conflicts among themselves and foster a sense of cooperation and commitment (Higday-Kalmanowitz and Simpson 2005). Likewise, with a better remuneration, they would feel empowered and secure, without being assailed of the fear of a labor turnover should the company experience financial dearth (Ledwidge 2007). With a culture of people resource given importance, the management assures its employees that it will resort to other resolution schemes rather than considering firing them to save itself from financial losses (Zeitlin, Maurice, 1974; Grugulis and Wilkinson 2001). Conclusion Hospitality and service industries have a responsibility to fulfill. Of utmost priority of this is providing excellent service to clients and customers and bring about customer satisfaction. It takes a great deal of strategies and planning on the part of the management in order for this to take place. At times, market research is even considered to find out what is new and what is the ongoing trend with which the industry should cope. As already pointed out, what are sold to customers and clients are not the products, which they are initially after, but the service and comfort which the company is enabled to dispense. This would explain the customers’ preference to dine in a cozier and more expensive restaurant than in one that provides a limited service even though the food is as palatable and attractive. Customers buy service, not just the product that they are after, and there might be an insight if it is indeed the product, which a customer purchases, or only the service. Hospitality management looks into this aspect and becomes the groundwork in dealing with customers. However, reinforcing this aspect entails a host of strategies and maintenance of variables that prompt customers to stay and pursue what the service company offers. With an objective of providing quality and excellent service, the hospitality and service industry should also focus on the very people who directly render these services, the employees. Ensuring that employees and staff perform their tasks in a good quantity and quality is also an obligation of the management. Unfortunately, people are not machines, which can function as the ignition is turned on, and off they go as it is turned off. Employees have esteem needs, a need for recognition, and even a need for cognition, not to mention economic and security needs. All these must be addressed by the industry in order to obtain a quality and excellent workforce working hand-in-hand towards the attainment of company goals. This is not easy if the management vehemently ignores these needs and focuses only on financial outcomes through customer satisfaction. This is because the level of satisfaction, which the customers receive, depends on the enthusiasm and genuine care by employees, which is motivated by their job satisfaction or the lack of it. Employees might not exhibit their dissatisfaction in the quality of service they give as suggested by Gravish’ study, but leaving the company is an ultimate step of this dissatisfaction. Most service and hospitality companies do not give high regard to employee skills development programs nor increasing their pay and benefits because they do not see the employees as capital assets who can offer much more skills and commitment. Rather, they view them only as a labor expense equivalent to other labor expenses such as electricity consumption and technology maintenance and improvements. However, best practices show that more losses are raked by loss of morale of employees. These views show that it is important for service industries to start seeing employees as assets who can work with them with utmost commitment. REFERENCES Arrowsmith, James, Edwards, Tony, and Sisson, Keith, 2000. Industrial relations at British Airways: Setting a new course? IRRU. Barrows, Clayton W. and Bosselman, Robert H., 1999. Hospitality management education. Haworth Hospitality Press. Branston, J. Robert, Sugden, Roger, Valdez, Pedro, and Wilson, James, 2006. Generating Participation and Democracy: An Illustration from Electricity Reform in Mexico. V20 N1. p. 47-68. Georgiades, N. and Macdonell, R., 1998. Leadership for competitive advantage, London: John Wiley. Gravish, Joseph M., 2006. Hotel management /employee Issues: real enemy seldom the employee. Retrieved on April 26, 2008 from http://www.hotel-online.com/News/PR2006_4th/Nov06_EmployeeIssues.html Grugulis, Irena and Wilkinson, Adrian, 2001. Culture and Structure. Business School Research Series: Research in Employment and Management. Paper 2001: 4. ISBN 1 85901 172 1. REAM Paper No. 10 Higday-Kalmanowitz, Carrie (Editor), Sandra E. Simpson (Editor), 2005. Implementing service and support management processes. van Haren Publishing..  Ledwidge, Jonathan, 2007. New approach would leave the airline less prone to disruptions and PR blunders. Emerald Group Publishing Limited. ISSN: 0967-0734 Resources to prevent and deal with workplace conflict for service and hospitality staff. Retrieved on April 26, 2008 from http://www.work911.com/conflict/secser.htm Zeitlin, Maurice, 1974. “Corporate Ownership and Control: The Large Corporation and the Capitalist Class”, American Journal of Sociology, vol. 79(5), pp. 1073-1119. Read More