HR Management, Planning, Recruitment and Employment Law - Case Study Example

HR Management, Planning, Recruitment and Employment Law Table of Contents HR Management, Planning, Recruitment and Employment Law Table of Contents 3 Role and importance of HRM 4 HRM in Intercontinental Hotel Group (IHG) 5 2.1 Employee Relations 7 2.2 Compliance with Laws 10 3.2 Comparing Recruitment Process 12 4.1Role of Training and Development 13 Methods used in Training 14 Effectiveness of training and skills improvement 15 Evaluation of Training 16 Reference List 17 1.1 Definition of HRM Human resource management can be defined as a system of actions and strategies that focuses on managing employees of an organization in a proficient manner so that they can achieve organizational goals (Enz, The Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy, p. 7). This definition implies that human resource management helps an organization to achieve its goals by coordinating the human assets of the company. In short, human resource management encompasses all strategies, principles, functions, activities and decisions pertaining to the management of people. Role and importance of HRM Human resource management techniques of the hospitality industry are almost similar to the management practices of any other organization. The labour-intensive nature of the hospitality industry makes it very important to manage the human resources in a productive manner. There are six basic functions pertaining to the management of labour in the hospitality industry namely, planning, organizing, staffing, supervising, controlling and appraising. Hospitality managers in this industry have the role to attract an efficient workforce, maintain the workforce by providing them appropriate benefits like rewards and develop strategies to retain the workforce (Timothy R. Hinkin & Bruce J. Tracey , “What makes it so great?”). According to the researchers, it has been found that there are two basic elements of human resource management in the hospitality industry namely, resource flexibility and coordination flexibility. Resource flexibility in the hospitality industry is related to multi-skill training, job rotation, cognitive staffing and involvement in the decision-making process (Clare Kellihe & Keith Johnson, ‘Personnel management in hotels—an update: a move to human resource management?’ 321-331). Empirical research that has been conducted regarding human resource management in the hospitality industry has shown that organizations following resource flexibility have the power to gain competitive advantage over its rivals. Coordination flexibility in hospitality management refers to the way in which firm’s human capital is organized and re-organized between contingent employees and self-directed teams. HRM in Intercontinental Hotel Group (IHG) The purpose of this paper is to explore the human resource management practices of Intercontinental Hotel Group. IHG is one of the leading hotel chains in the world that have emerged as one of the top players in the hospitality industry. There are nine hotel brands working under the corporate umbrella of IHG and presently the hotel chain operates over 100 countries across six continents. IHG is a British based hotel chain that has its headquarters in Denham. The human resource management practices of IHG are in line with the vision statement of the company which states that it wants to become the largest companies in hotel management (IHG, “Overview”). The various aspects of human resource are: Planning and forecasting: The planning of human resource management in IHG is done according to the overall strategic planning of the board. People from finance background and professional human resource managers are hired so that they can support the overall planning of the organization. The overall planning and forecasting of the required talent pool is done at the top management level and strategies are integrated with the overall organizational goals (IHG, “Training & development”). Recruitment: The recruitment process of IHG group is done in a diligent manner to attract the best talent in the industry. It is done by employing a tool called Taleos software. The software has the power to examine where in the world an individual intends to work and in which field. Use of Taleo’s by IHG has the advantage of hastening up the recruitment process by finding the most appropriate employees for a particular task (BusinessUK, “InterContinental Hotels Group to recruit 400,000 staff globally”). The company also boasts of its induction program to ensure that the new recruits can adapt to the work culture in a fast manner. Employee Monitoring: Measurement of employee’s progress is one of the key agenda of IHG group. It is done both by the internal supervisor and external agency to check the progress of employees. Human Resource Business partners have been appointed by IHG to maintain a constant vigilance over the progress of the employees to ensure that they are complying with the set standards expected of them (Ofsted, ‘Intercontinental Hotels Group Services Company: Re-inspection monitoring visit report’). Training and development: Continuous training is provided to the employees for improvement in the areas of revenue management, housekeeping, sales and marketing, supervisory leadership and maintenance. Employees are provided with learning curriculum activities to upgrade their existing skills to serve customers. The development programs are also aimed for improvement of the senior level managers. Purpose of soft HRM and hard HRM: Researchers have claimed that the purpose of hard HRM in the organization is to ensure that the labour cost of the organization is minimized. It is an economic approach in which the strategic management devises HRM practices to gain competitive advantage. Soft HRM on the other hand involves taking a more humane approach to the development of HRM based on greater commitment to employees (Europa, ‘Human Resource Management for the Hospitality and Tourism Industries’). The HRM of IHG can be classified as a combination of both soft and hard HRM as profit maximizing objective is integrated with humane approach for employee development. 2.1 Employee Relations The current state of employee relations in the IHG hotel chain is guided by principles of effective listening and providing support to the employees. The hotel clearly explains the type of behaviour that is expected from their employees by integrating this with the overall organizational goals. The employer-employee relationship in the IHG is guided by four main principles namely room to have a great start, room to grow, room to be involved and room for you (IHG, “Corporate Responsibility Report”). All of these four pillars aim to enhance the professional growth of employees. The existing literature in hospitality management has argued that the presence of trade union in the industry is highly limited which has often been perceived to have a negative impact on employee motivation and morale (Hoque, Human resource management in the hotel industry: Strategy, innovation and performance, p. 67). The role of Union: Though the IHG hotel chains claims to promote the “room for yourself” policy to promote the welfare of employees, yet it has an anti-union stance regarding trade unions (IHG, ‘Corporate Responsibility Report’). There is no union or methods of collective bargaining for their U.K. workforce. The “room for yourself” strategy can be considered as the employer side deal with the workforce. Private and secret ballot of voting is entitled to the employees to ensure that no external pressure or intimidation policies are imposed on them. The Union polices of the company are somewhat different for each of the countries in which it operates. For instance, according to the labour laws of the U.S.A. and Canada, 20% of the hotel employees are organized into union members of organized labour union. Therefore, it can be argued that collective bargaining regarding employee wages is only followed in these countries. Other regions like Middle East, Africa and Europe do not have any provision of collective bargaining mechanism. Interests of employees are presented through formation of Work Councils. Both employees and members of the Union are informed in advance about any material changes. Reward policies: The human resource strategies of IHG ensure that the employees working with the company are rewarded in a positive manner. The human resource management team of IHG guarantees that the employees of the company are rewarded for their fruitful contribution to the company. The company operates in multiple countries that have different levels of acceptable wages in their country (IHG, “IHG Annual Report and Financial Statements 2010”). IHG ensures that the employees are paid according to their level of worth based on the wage structure of the local market. Employee Development Policies: The employee development policies of IHG are centred on the professional growth of the employees. Employees are engaged to create a development plan with their managers to supervise their career graph in a smooth manner. General Manager training programs are aimed at developing brand managers for the group to drive organizational success. Additionally numerous management development programs are devised by the company to enhance professional skills of managers. Involvement and conflict management: Resolution of conflict management is a crucial aspect of smooth organizational operation. Conflicts often arise in the management of hotel as interests of external stakeholders are in direct opposition of the profit maximization policy of the hotel. IHG maintains a high level of business integrity and refrains from any type of business malpractices that could smudge the public image and reputation of the company. Conflict of interest training is provided to employees in order to ensure that conflicting interest of senior management with external stakeholder can be managed in a smooth manner. The Corporate governance of the Intercontinental Hotels group asks the Board to identify potential conflicts in any area and report the same to the Company Secretary. Regarding the management of conflicts at an operational level among employees at middle and lower hierarchy of the organization, the organization relies on the supportive role of the senior managers. Listening to the problems of the employees is one of the strategies employed to cater to the conflicts. Employee involvement is offered by the management as a part of its “room to be involved” approach which involves putting individuals in teams where they can learn from their peers. Team meetings, intranets, informal briefings and in-house publications are few of the communication strategies that are involved to provide clear message to the employees. Grievance methods: IHG ensures that the employees work in an intimidation free environment by allowing them to raise any issues of grievance in a timely and appropriate manner. The company has a whistleblower policy that allows employee to raise any type of grievance through a web based employee platform. Indeed, IHG’s relation with its employees is satisfactory since the business fully offers support to its employees by formulating policies that eradicate any kind of deleterious insolences. It handsomely rewards its employees by offering effective remuneration and other fringe benefits, fostering a sense of inclusion and diversity, personal growth opportunities and effective policies and procedures of handling employees’ grievances in a harmonious and effective approach. Although IHG is somewhat against the existence of trade unions, it has been able to positively handle the needs and expectations of its employees thus fostering the development of strong employer-employee ties that have bolstered the productivity and performance of the business. 2.2 Compliance with Laws According to the labour laws of the U.K. the company is required to maintain a minimum level of funding for its ongoing liabilities. Efforts include providing retirement benefits to the past and the existing employees. Following the legislation of anti-discrimination in the labour laws of the U.K., the management ensures that the culturally diverse group of employees in the organization are not discriminated against on grounds of sex, race and colour. Considering that the black and minority ethnic communities make about 8% of the actively working population, the enactment of the Equality Act in 2010 implied that IHG had to take more proactive strategies in its HR policies and procedures. It had to ensure that its employment practices are fair by offering recruitment schemes that target the minority and encourage the underprivileged groups to apply by undertaking tasks such as using images of minority employees in advertising and publicity materials (Hinkin et al. 2010). Moreover, internal networks for minority groups were set up and policies to ensure diversity and inclusion in the workplace had to be adopted. The emergence of RFO (race for opportunity) implied that IHG’s supplier diversity, community involvement and leadership were highly assessed and HR manager had to realign the organization’s HR practices to guarantee that they are in line with the law and in best interest of the community (Enz, 2010). Moreover, the recent legislation requiring organizations to give a 45 consultation period when undertaking collective redundancy has transformed the UK HRM sector. Consequently, HR managers have restructured their HR policies and procedures to accommodate this new demand. It implies that managers have to use highly specialised and sensitive policies that will effectively and efficiently enable it to declare more than 100 employees redundant within a short period (Hinkin et al. 2010). This practice enables HR managers to easily forecast labour demand and supply and formulate and implement the best strategies that will help in plummeting overhead costs. According to the health and safety act of the country, it must be ensured that no employees are subjected to any type of exploitation or danger. The HRM practices of the IHG is in line with the law as full coverage is provided regarding employment of men and women, people of different culture and race and benefits regarding ill health retirement. Organizations have had to develop policies that offer ‘reasonable care’ for their workforce (Enz, 2010). Additionally, to comply with this law, IHG had to formulate HR policies that are based on risk management by providing enhanced physical and emotional security, particularly job security. Remuneration packages are designed in line with the minimum wage standard of the U.K. Labour laws to ensure that employees are remunerated in a fair manner. Disciplinary actions like termination are followed in cases of employee misconduct with or without notice. Compliance with the legislation affects an organization’s ability to plummet profligacy on human resources and has significantly upsurged the budgets of HR departments (Hinkin et al. 2010). However, organizations restructured their selection and recruitment procedures to ensure people with required skills, proficiency and aptitude are employed and remunerated in accordance with their performance and task performed and responsibilities assigned. 3.2 Comparing Recruitment Process Recruitment process of famous hotels and restaurants in the service industry is a prolonged process. This segment of the report compares the recruitment process of IHG hotel chains with that of McDonalds’s. The reason for choosing McDonald’s is that it is one of the biggest fast food restaurants in the world which also emphasizes on recruiting the best service providers. The recruitment process of IHG group can be described as a formal one where the job vacancies in different countries are posted on a separate web based platform where the candidates looking for jobs can apply. Separate recruitment teams shortlists the profile of candidates that are best suitable for jobs and contacts them through e-mail. Formal interviews are conducted on selected candidates and they are selected based on factors like experience, qualification, skill set and other specific requirements of the selected job posts (Job-Applications, ‘InterContinental’). The recruitment process of McDonald’s is a four staged one. The steps involved are online application, personality questionnaire, on-job evaluation and personal interviews (Target Jobs, ‘The four steps of the McDonalds application process’). The process is relatively simpler compared to the one that is followed by the IHG group. The recruitment process of IHG hotel chains and McDonald’s has certain similarities and differences between them. For instance, IHG have different departments like front office management, housekeeping, kitchen staff, corporate department and reservations sections. Employees can apply in any of the profiles however in case of McDonald’s the job roles are rather limited. There is a similarity in the way in which candidates can apply for the posts. After application, the process of evaluation of candidates is somewhat different for both the institutions. For instance, in case of the IHG it has been found that separate departments conduct the evaluation of employees whereas in case of McDonald’s the interviews are done by operations managers of the outlets. Barriers to entry in the entry-level jobs are less for both the institutions. For instance, both IHG and McDonald’s do not have low barriers for the entry-level positions. No prior experience is required to apply for the basic jobs in front-line, kitchen and housekeeping departments. McDonald’s also does not require prior experience for applying in the waiting jobs. Despite the difference in the job roles there is a basic similarity in terms of selection of candidates. Both IHG and McDonald’s searches for candidates who have the basic competency of making customers feel comfortable whenever they visit the institutions. Researchers have pointed out that effective recruitment of employee recruitment in the hospitality industry is affected by factors like high-labour turnover, absenteeism, ineffective management and supervision and low morale of employees. All of these factors contribute to high employee turnover in the hotel employees and causes problems in staff selection. These barriers of staff selection are also there for the chosen companies which make the selection process expensive. Locating the appropriate skills for employee is also a difficult task for employers as success in the service industry largely depends on the soft skills of employees including linguistic skills, customer-service skills and personal traits of employees. These problems are common for both. 4.1Role of Training and Development Hospitality industry is a highly competitive one whose success greatly depends on the quality of human assets. Training and development of staff creates an atmosphere of learning within the organization that has a direct relation with the increase in overall productivity of the organization. Training in organizations has the capability to motivate employees, enhance their skills and improve their overall knowledge base. Impacts of training on organizational and employee performance are well documented in the existing literature (Ursula Kriegl, ‘International hospitality management: identifying important skills and effective training’, 64-71). It has been observed that training and development have the capability to arrest attrition rate in the hospitality industry by providing motivation to employees, allowing them to develop their personal and professional goals and enhancing their job satisfaction (Valentini Kalargyrou & Robert H. Woods, ‘Wanted: training competencies for the twenty-first century’ 361-376). IHG hotel group have recognized the importance of training programs and has implemented number of them to increase organizational effectiveness. Online training programs have been devised with the Hospitality Research Institute to customize learning process according to the needs of employees. Senior Leadership Programmes have been introduced to improve efficiency of senior level managers. Therefore, it can be argued that IHG group’s successful business strategies are largely affected by its training and development programs. The primary aim of the management is to ensure that the training effectiveness can be maximized and the training costs can be minimized. Training of employees is organized in a manner that can improve the overall level of job satisfaction. Employees are made to work in good teams to enhance their overall productivity. Methods used in Training Customized training and development programs are linked with attainment of overall organizational goals in terms of three basic variables namely improvement of productivity and efficiency of existing staff, improvement of sales revenue and overall improvement in the level of profitability. It can be argued that IHG have introduced the training programs in order to improve the overall financial performance by capitalizing on the cost savings that can be accrued from the improvement of employee efficiency through training programs. IHG hotel group have carefully crafted the training programs so that the company can gain competitive advantage over its competitors. It banks on the improvement of technology for development of the workforce. It has been observed that cognitive training methods or off-job training methods are best methods to improve knowledge base of employees and behavioural training and on-job training methods are best suitable for development of skills (Briscoe & Schuler, International human resource management: policy and practice for the global enterprise, p. 131). IHG hotels use both methods of training in order to train staff for providing better service. Computer based training methods are implemented through e-learning modules to improve cognitive learning of individuals. IHG has introduced the Accelerated Leadership Development Programme (ALDP) to develop graduates into future leaders. Role plays and simulation activities are introduced into the curriculum to prepare candidates for future job roles. On-job training is promoted through team work where the new recruits can learn from peer members (IHG, “Training & development”). Effectiveness of training and skills improvement One of the major factors driving the success of IHG hotels is the highly efficient work force the company has developed through its highly successful training programs. 90% of the employees working for the company suggest that they can perform their current job roles because of the training support that they receive from their seniors. The training programs of IHG are a part of the overall “room for improvement” scheme that the company follows for the overall development of employees (IHG, ‘Corporate Responsibility Report’). Evaluation of Training The purpose of training programs is to improve the overall level of efficiency of employees to enhance the profitability of organization. In order to make the training programs effective, the IHG hotel groups have introduced a number of evaluation strategies. The training programs of IHG are programmed in a way which can measure the performance of employees against a set standard. The objectives of the training program are fixed at the beginning of the year which allows employees to understand what is expected of them. Close monitoring of the performance is done on a half-yearly basis to check any deviation from the expected goals. Self-review and manager’s review is conducted on the performance of employees to provide them ratings. The training programs are ongoing and improvement of performance of employees in any year can be attributed to the training programs that are introduced by the company (IHG, ‘Corporate Responsibility Report’). Reference List Briscoe, Dennis R. & Schuler, Randall S. International human resource management: policy and practice for the global enterprise. (New York: Psychology Press, 2004). BusinessUK. 2012. InterContinental Hotels Group to recruit 400,000 staff globally. Enz, Catherine. A. The Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy. (Berlin: Sage, 2010). Europa. 2007. Human Resource Management for the Hospitality and Tourism Industries. Hinkin, Timothy R. & Tracey , J. Bruce., ‘What makes it so great? An analysis of human resources practices among Fortune’s best companies to work for’, Cornell Hospitality Quarterly 51: 2, 2010, 158-170. Hoque, Kim. Human resource management in the hotel industry: Strategy, innovation and performance. (London: Routledge, 2013). IHG, 2010. IHG Annual Report and Financial Statements 2010. IHG, 2014. Corporate Responsibility Report. < http://www.ihgplc.com/index.asp?pageid=758> IHG, 2014. Overview. < http://www.ihgplc.com/index.asp?pageid=576 > IHG, 2014. Training & development. < http://www.ihgplc.com/index.asp?pageid=576 > Job-Applications, 2014. InterContinental. < http://www.job-applications.com/intercontinental-application/> Kalargyrou, Valentini & Woods, Robert H. ‘Wanted: training competencies for the twenty-first century’, International Journal of Contemporary Hospitality Management 23:3, 2011, 361-376. Kelliher, Clare & Johnson, Keith. ‘Personnel management in hotels—an update: a move to human resource management?’, Progress in Tourism and Hospitality Research 3: 4, 1997, 321-331. Kriegl, Ursula. ‘International hospitality management: identifying important skills and effective training’, The Cornell Hotel and Restaurant Administration Quarterly 41:2, 2000, 64-71. Ofsted, 2013. Intercontinental Hotels Group Services Company: Re-inspection monitoring visit report. Target Jobs. 2014. The four steps of the McDonalds application process. Read More