Managing a Diverse Workforce in Tourism and Hospitality Industry - Literature review Example

Managing a Diverse Workforce in Tourism and Hospitality industry With the increasing levels of globalization resulting mainly from liberalization of markets, efficient flow of information, and integration of economies, the level of movement by people from one part of the world has increased tremendously. This has created more opportunity for the tourism industry. However, the industry is yet to address the issue of diversity of its workforce. With the current integration of people emanating from different parts of the world, it has been critical for the workforce to be a representation of the whole population. Organizational diversity has therefore, become an important element towards improving the reputation of companies in the local and international markets. However, firms in the tourism sector should be keen not to fail to observe the important cultural elements that are held closely by the local population. The reason is that this is the population that forms the largest market segment. However, when managing the workforce in this sector, it is important to ensure that their interests are taken into consideration. Introduction The hospitality and tourism industry has undergone tremendous growth over the past several decades (Okoro, 2013). The industry has also played a particular role in supporting the global economy in the event of the recent global recession. The practice of international tourism has a considerable effect on a country’s balance of payments (Shin and Park, 2013). Tourism has grown to be a major source of income for many countries, particularly emerging countries like India and Brazil, and it stimulates the economic development of both the source and host countries. Statistical evidence reflects that the international tourism receipts increased to US$1.03 trillion in 2011, posting a rise of 3.8% from the previous year (World Tourism Organization, 2012). With the development of the global tourism and hospitality industry, the workplace diversity also grew in the international market, and hence it became really a challenging task for leaders to manage the diverse workforce effectively (Shin and Park, 2013). A diverse workplace comprises employees from different countries. These are people who emanates from different cultures, religious affiliations, gender, different sexual orientation, and racial backgrounds. As a result, they have different ways of doing things while in a working environment. Therefore, today it is vital for tourism sector managers to develop better cross-cultural communication skills to manage their workforce. This paper will discuss the management of international employees and the diversity of employees in the tourism and hospitality industry. In addition, it will discuss on the important of having a diversified workforces especially in the current globalized world. Furthermore, the paper will also focus on the working of employee performance appraisal system and reward system when it comes to managing diverse employees. However, the paper will not just discuss only the different aspects of diversity but also other complex issues related to human capital composition. Literature Review The emergence of globalisation led to the elimination of cross border trade barriers and the situation in turn enhanced the flow of capital, labour, cultures, and ideas across the borders. The increased cross border flow of people widened the scope of global tourism, and today hospitality and tourism industries account for a significant percent of the national GDP. Although through the hospitality and tourism sectors countries gain foreign currency, support the growth of small scale enterprises, and improve the unemployment rate, the formation of a diverse workplace in these industries led to serious human resource management issues. To explain, as the scope of global tourism increased, tourism and hospitality sectors in different countries sought to recruit foreign employees so as to serve their clients’ needs with utmost care and quality. As a result, the workplace comprised of employees from different countries and cultures and the situation made it extremely difficult for HR managers to combine their employees’ skills and abilities for the accomplishment of shared organisational goals. To worsen the situation, some organisations operating in the tourism and hospitality sectors are giving particular focus to overseas expansion so as to tap potential opportunities in the foreign market. This situation also leads to the development of cultural diversity in the workplace (Shin and Park, 2013). When operating in a global market context, companies face a series of cultural issues due to cultural diversity in the workplace and external market environment. Different cities and countries have a multicultural setting. As a result, today it is a challenging task for organisations to operate in a global marketplace because currently, businesses in different countries seek to increase their market sensitivity with regard to their own cultural differences and specialties so as to benefit from customers’ emotional attachment with their cultures (Okoro, 2013). This is because the local population holds their culture dearly. As a result, companies should be sensitive not to override the important cultural elements with the global culture. Considering the growing cultural diversity in the worksite environments, it has become vital for managers to develop greater cross-cultural communication skills. Several studies indicate that managers’ inability in communication, lack of inter-cultural skills, weakness in facilitating cross-cultural exchange, and unacceptable practice of business ethics may contribute significantly to the failure of global business ventures (Ibid). As each country has a unique national culture, multinational corporations need to address greater differences in social and cultural values, beliefs, and attitudes. Ethical and diversity-related issues that exist across countries and cross borders pose great threats to organisations operating worldwide (Rowley & Warner, 2013, p.26). “Two important challenges facing global organisations are to appreciate the differences that exist between countries and then to benefit from this new global knowledge to improve organizational behaviors and procedures” (Jennifer, 2009, p.20). Workplace diversity is not just limited to employee differences based on nationality and ethnicity. A business manager should also consider all other aspects of diversity in order to gain a clear understanding of the complexity of human capital composition (Shin and Park, 2013). The categories of diversity observed in a workplace can be classified into three such as demographic diversity, organisational diversity, and socio-cognitive diversity. Demographic diversity refers to the workplace diversity caused by differences in age, gender, ethnicity, and nationality (Ibid) (Shin and Park, 2013). Organisational diversity is related to the diverse perspectives of the workforce in the organisational context resulting from employees’ designation and functions, the firm’s seniority, and the organisation’s hierarchical structure. The socio-cognitive diversity reflects the differences in cultural and religious values, knowledge level, and personality traits (Ibid) (Pereira, 2013). According to Pereira (2013) ‘Hofstede’s cultural dimensions’ is an analytical model developed by the psychologist Geert Hofstede. He conducted a study over the people working for the same organisation in 40 countries worldwide and identified four distinct cultural dimensions initially to distinguish one culture from another in a sensible way (Mind Tools: Hofstedes Cultural Dimensions, n.d.). Hofstede added the fifth dimension later to increase the scope of this model. According to the Hofstede’s model, the five dimensions of national cultures are power distance index, individualism, masculinity, uncertainty avoidance index, and long term orientation (Ibid). Power distance index refers to the degree of inequality exists in a society between people with and without power. Individualism gives particular emphasis to personal achievements and individual rights; and in contrast, in collectivist societies, individuals work combinedly as members of a cohesive group or organisation (Sears & Jacko, 2007, p.366). The third dimension (musculinity) indicates the allocation of emotional roles between males and females. Masculine culture promotes values such as competitiveness, assertiveness, materialism, ambition, and power while feminine culture gives great emphasis to relationships and quality of life (Boonstra, 2012, p.na). Uncertainty avoidance index deals with a society’s tolerance for uncertainty (Bargiela-Chiappini, 2009, p.318). It is also stated as the degree of anxiety that members of a society feel in uncertain or unknown circumstances. Finally, long term orientation indicates the extent to which a society values long-standing traditions and values (Ibid). The Hofstede’s model can be really helpful for managers to address the cultural challenges associated with international operation because this model can identify the cultural variance between two countries. This analytical model can greatly assist managers to recognise whether a country promotes individualist or collectivist views, which is a major factor influencing organisational diversity. A clear understanding of the degree of masculinity and power index in a society is also beneficial for the business to reduce the complexities related with international operation. When the organisation is well informed of the cultural values and traditions of a society/country, it can shape its organisational behaviour thoughtfully to manage the employee diversity in the workplace environment. The Hofstede’s model is of particular importance in the tourism and hospitality industry because tourism and related hospitality services are greatly linked to the cultural dimensions of a country. It is necessary for the organisation to structure its employees’ norms and values in such a way to par with the cultural perceptions of the local communities. Scholars opine that Hofstede’s cultural considerations are extremely advantageous in the context of international tourism management and cross-cultural leadership (Pereira, 2013). For every organisation, particularly that operating in the tourism and hospitality sectors, it is very important to make decisions based on the country’s customs and values. HRM in hospitality and tourism industry The intensity of competition in the local and international market has significantly increased in different global industries, and tourism and hospitality industry is no exception. As a result of the high degree of rivalry in the market environment, organisations were forced to increase their productivity and cut down costs in order to remain attractive to the existing and prospective customers. In an attempt to achieve this strategic position, today organisations take intense efforts to keep their employees highly productive and innovative and thereby gain competitive edge over rival in the marketplace. Modern organisational management believes that keeping employees motivated is the key to promoting employee creativity and productivity, and hence they employ different tools of intrinsic and extrinsic motivation to inspire employees. Currently performance appraisal and reward systems are extensively used by organisations across the globe to motivate their employees and to ensure that employees contribute considerably to the overall organisational productivity. An employee performance appraisal is a managerial process by which the top management evaluates and suggests on employee job performance with intent to appreciate the efforts of quality performers and to encourage below-standard workers to improve their performance. Likewise, organisations use a reward system to recognise and encourage the efforts of good performers and to keep them loyal to the company in the long term. However, use of employee performance appraisal and reward systems becomes increasingly difficult when it comes to managing diverse employees. Under such circumstances, the organisation cannot rely on a single approach or criterion to measure employee performance to reward employees accordingly. As the workforces are becoming more and more diverse in the tourism and hospitality industry, people may be suspicious about the accuracy of performance evaluation reports mainly because of some firms’ dependence on subjective evaluation approaches (Lepak & Gowan, 2009, p. 283). Due to this subjectivity, there may be concerns regarding the probability of biases in terms of age, gender, or ethnicity. Companies are suggested to incorporate more specific evaluation criteria into their rating formats so as to assist performance raters to avoid the possibility of biases (Ibid). This is an important tool to enable them achieve equality. This strategy may also benefit the performance raters to obtain a clear understanding of specific performance appraisal dimensions that need to be emphasised (Ibid). If the management fails to convince the employees that the firm’s performance evaluation system is adequate enough to address the concerns over workplace diversity, then it would be really a tough task for the organisation to keep its workforce motivated and satisfied. Actually a manager faces a range of communication challenges while dealing with the implementation of a performance appraisal system, and these challenges would be more intense in a diverse workplace environment (Pereira, 2013). When the worksite is comprised of employees from various cultures, it will be certainly difficult for the manager to enlighten all employees about the features and requirements of the performance management system. The managers may communicate expectations or provide feedback using vague and colloquial terms that would be unfamiliar to many employees; and this situation may lead to a great deal of confusion and most of the employees would hesitate to request clarification (Ibid). In most times, a particular way of measuring performance outcomes may not be acceptable for all employees in a diverse worksite, and therefore the manager would be forced to make a series of subsequent changes to the proposed programme. Similarly, managing a reward system is a complex task in a diverse workplace because all the employees cannot clearly understand how they can actually benefit from the particular reward system. It is clear that rewards are generally used to motivate employees to perform their tasks effectively. Simply, an organisation’s reward system must be based on the sound understanding of what motivates people at work. Such an understanding is inevitable to design a potential package of compensation and benefits that can enhance employee motivation (Chan, n.d.). Evidently employees from different cultures constitute a diverse workplace, and therefore motivational factors would not be the same for all employees. Hence, it is very difficult to design an employee reward system that can meet the interests of a diverse workforce. It is identified that designing and maintaining a reward system in a diverse workplace may be unaffordable for the organisation because the reward system needs frequent updations and revisions under such an environment. As a result, the costs implementing and monitoring a reward system would outweigh the benefits of doing so. Conclusion and Recommendations From the above discussion, it is clear that tourism and hospitality sectors are growing rapidly today. For instance, statistics indicate that the number of tourists moving from one country to the other is increasing tremendously. This current trend could be attributed to the cross cultural flow of people, capital, and cultures resulted from the emergence of globalisation. Although this changing market scenario opened doors to infinite business opportunities in the tourism industry, it also led to formation of culturally diverse workplace environments worldwide. Managing a diverse workforce is always a challenge for business managers because diverse employees may follow contrasting norms and values, and therefore making them to work as a single unit would be a difficult task. In the current market context where workplace diversity is the key determinant of organisational success, managers who lack cross-cultural communication skills would fail to influence their audience effectively. Demographic diversity, organisational diversity, and socio-cognitive diversity are three categories of diversity identified in a workplace environment. The tourism and hospital industry managers can use the Hofstede’s cultural dimensions model to distinguish the cultural differences between two countries and manage a diverse workforce in such a way to serve the cultural perceptions of local customers. The most potential feature of this analytical model is that it can assist organisations to promote decision making based on the custom and values of countries in which they operate. In the discussion section, it was observed that managing employee performance appraisal system and reward system in a diverse worksite environment is extremely difficult for managers. As workplace diversity has become an unavoidable option for modern international business ventures, it is recommendable for the tourism and hospitality industry to consider managing workplace diversity as an integral part of its organisational culture. Establishing strong policies of equality is fundamental to the effective management of a diverse workplace (Cornelius, 2002, p.26). Hence, the organisation’s all HR policies from hiring to promotions and terminations must be purely based on employee performance. No employee should be provided with additional facilities or advantages on the ground of ethnic background, politics, religion, or sex. Once these basic policies are in force, the organisation can implement further diversity measures throughout the entire organisation. Managers are advised to encourage their followers to report all instances of discriminatory behaviour and there should be a definite process in place for dealing with these issues. Such a strict worksite policy would influence employees to sense a feeling of equality and belongingness, which in turn would keep them loyal to the company in the long term. Likewise, it is an advisable strategy for managers to conduct periodical training programmes for the entire staff on the benefits of maintaining diversity in the workplace (Esty, 1995, p.196). During those training programmes, the managers may encourage productive discussions on how the organisation could manage workplace diversity in a better way. References Boonstra JJ (2012) Cultural Change and Leadership in Organizations: A Practical Guide to Successful Organizational Change. US: John Wiley & Sons. Bargiela-Chiappini (2009) The Handbook of Business Discourse. US: Edinburgh University Press. Cornelius N (2002) Building Workplace Equality: Ethics, Diversity and Inclusion. Cengage Learning EMEA. Chan A (n.d.) The Challenges of Human Resource Management. Planning Resource Center. 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