Human Resource Functions in Hospitality - Case Study Example

Human resource functions in hospitality Name Here Name of Institution City, State Date Introduction Employment within the hospitality industry plays an overwhelming role since it accounts for a significant number of people working in this industry both in developing and developed countries. In 2006, the World Travel and Tourism Council reported that close to 8.7 % of all employees work in the travel and tourism firms, where hospitality industry falls (UNWTO, 2009). Indeed, there is clear evidence that human resources are a significant component of the hospitality industry where service deliver is essential. While the number of jobs in the hospitality industry is massive in all accounts, there are widespread concerns about the quality of these jobs. More specifically, there seems to be a perennial problem within the hospitality industry that raises concern on labour availability, employment relations and human resource management. Even with the number of jobs growing in this industry, there are concerns that many jobs are low skill and poor paid while few are high skill and well paying. This phenomenon, not to mention economic constraints facing the industry, has pitched many service providers against their employees worsening their relations, affecting labour and limiting human resource management. With focus on China and Australia, this paper reveals the dynamic relationship between service providers and their employees with reference to the above areas—HRM, employees relations and labour market. The paper also outlines essential recommendations that may reduce impact of resulting challenges. Notably, the paper discusses direction of HRM in the hospitality industry in China and Australia. Comparison between China and Australia In recent decades, Asia has emerged as robust tourist destination with countries such as China and India reaping the most from this trend. On the other hand, Australia has been one of the leading countries with a significant number of tourist attractions. Consequently, Australia has a credible footprint in the hospitality industry. China and Australia growth in tourism and travel presents a myriad of challenges in their hospitality industry given the significant number of employees they have. Increasing, service providers in this industry face challenges in catering for their clients and managing their human resources to support their business goals amidst increasing competition from international players. With players in the hospitality industry using quality of service and reduced costs as sources of competitive advantage, issues such as labour market, employee’s relations and HRM functions act as counterculture to the business objectives. Employee relations Employees in the hospitality industry are the single most important drivers of success, which underscore the need of a robust employee’s relation. Changes in management theory reflect a system evolution of various facet of management such as industrial relation and social factors (Michael et al. 2011). Human relation schools have placed focus on the need for organizations to integrate human resources to achieve business goals. In the hospitality industry, Unitarian and pluralism approach guide how organizations undertake employee relations. Research in the hospitality industry reveals that there is less focus on employment relation as many players view it as being more “manufacturing-based” (Michael et al. 2011, p. 508). Over years, the hospitality industry has been synonymous with part time employment and casual labourers (Australian Bureau of Statistics, 2012). In China and Australia, many hospitality industry players have few permanent employees, which have lowered their commitment to enhancing employee’s relation. With increased motivation to outsourcing and subcontracting specific functions, many hospitality industry players place less focus on employee relation. These strategies tend to reduce the commitment of an organization to employee relation since it exempts an organization from the design of flexible reward and incentive system (Namasivayam et al., 2007). In addition, prevalence of permanent jobs has reduced the number of employees in unions, which complicates employee relations between the employees and their employers. In a study, Namasivayam et al. (2007) found that shortage of skills and generalization attitude have curtailed growth of employee relations. In fact, none of the Australian firms had formal individual performance in place that would otherwise enhance employee relation. Some Chinese firms pay close attention to employment relation. A Hewitt study (2004) found that some employees commit themselves to improving employee relationship by offering training, which boosts the esteem of employees (Best employers in Asia Study, 2005). In most cases, Chinese firms such as hotels employ workers based on their personality rather than skill. This emphasis in this case is one relationship, which cements the interaction between the employer and the firm. Nonetheless, prominence of casualization has lowered union density affecting the level of employee relationship in China. The hospitality industry, a category of service industry is increasingly placing much focus on casual employees. The growth of outsource and subcontracting, which are consistent with cost reduction, have motivated organizations to have less focus on employee relation. Nonetheless, other forms of communication and interaction between employers and employees work towards enhancing employee relation. With low union density, hospitality firms in China and Australia have a lot to achieve. In the absence of unions and frameworks to boost employee relationships, it is vital for firms to encourage direct communications and introduce innovative strategies to curb not commitment among workers and motivate them into owning the company’s goals. Labour market There is a strong relationship between labour markets and turnover rates in any labour market. When there are high unemployment levels, the turnover rates become low due to lack of alternate jobs. While economists observe that there is a relationship between labour market and turnover rates, the hospitality industry in China and Australia depict a high rate of turnover (Jou, 2011). In the hospitality industry, many firms face the challenge of attracting suitable labour and stemming turnover rates, which prevent firms from benefit from investments such as training and personal development. While turnover seems to have an overarching effect on hospitality industry, there are other factors such as limited career development, which define the lack of internal labour market for this industry (Jollife & Farnsworth, 2003). As in the case with Australia, China faces significant challenge in maintaining a stable labour market. In Australia, a significant number of employees work as casual labourers in various firms within the hospitality industry. This trend is the same in China where a huge proportion of employees are casual and do not enjoy high salaries. Davidson et al. (2010) report that close to 32 % of Australian hotels employ casuals. The implication of this trend is an increase in turnover rates owing to the limited security of these jobs. Because labour market motivate (or demotivate) employees, a lack of job security will prompt movement of workers from one industry to another. In China and Australia, the availability of large number of unskilled labour has lowered labour markets and fuelled turnover of employees. The lack of trade unions in China and Australia has removed flexibility in labour markets, but introduced an acute uptake of people with the best skills in the industry Human Resource Management HRM practices remain an integral component of success for the hospitality industry. Apart from being the largest employers, players in the hospitality industry focus on using human resources to deliver high quality services. Despite the shorting comings of the hospitality industry, many placers are now placing emphasis on human resource practices such as training and development. In the absence of HRM practices such as training, an organization is likely to suffer due to lack of qualified employees. Moreover, lack of training on communication skills could also lead to poor job satisfaction (O’Connell and Kung, 2007). While Chinese and Australian firms tend to outsource some of their functions and subcontract some of their services, they still provide training and emphasis on skill development for some employees working in these firms. With China and Australia being tourists’ destination for many international tourists, players in the hospitality industry are emphasising on training to improving skills among their workers. In China for instance, many hotels offer training to employees on how to communicate and offer excellent customer service (Fulco, 2012). The same is true with Australia where the stress is on improving efficiency among workers. While skilled workforce are better equipped to handle customers and provide quality services than unskilled workforce, lack trends such as casualization and subcontracting continue to hurt Chinese and Australian industries. This is because the trend may limit the use of training and other HR efforts to improve workforce efficiency. Conclusion The use of an integrated HR approach could solve some of the challenges facing Chinese and Australian firms. The use of training and improving job security may transform the hospitality industry where there is low job security. More important, the introduction of appraisal systems and training programs may help firms align their workforce with their business goals. While the industry lacks consistent HR practices, commitment on equipping the workforce with appropriate skills will contribute to low turnover and improved performance of the industry players adopting this strategy. On employee relation, the use of direct communication and involvement strategies is likely to increase commitment among employees (Sun et al., 2007). This would improve service delivery and enhance job satisfaction among employees. The use of training and hiring of permanent employees is likely to reduce turnover and strengthen labour market by increasing job security. These strategies are likely to boost players in the Chinese and Australian hospitality industry. References Australian Bureau of Statistics, 2012, “Employee Earnings and Hours, Australia”, Retrieved 28th January 2013, http://www.abs.gov.au/ausstats/abs@.nsf/mf/6306.0/ Best Employers in Asia Study 2005, “The Hewitt Quarterly Asia Pacific”, Hewitt Associates, Vol. 4, p.1. Davidson, M.C.G., Timo, N. and Wang, Y. 2010 “How much does labour turnover cost? A study of four and five star hotels”, International Journal of Contemporary Hospitality Management, Vol. 22 No. 4, pp. 1-31 Fulco, M. 2012, “Shanghai hotels face intense competition, high turnover” Retrieved 28th January 2013 http://www.china.org.cn/business/2012-05/08/content_25329288.htm Jollife, L. and Farnsworth, R. 2003 ‘Seasonality in tourism employment: human resources challenges’, International Journal of Contemporary Hospitality Management, Vol. 15 No. 6. pp.312–316. Jou, E. 2011. “Hotel industry struggles to provide service with a smile”, China Daily Retrieved 28th January 2013, http://usa.chinadaily.com.cn/epaper/2011-03/04/content_12115648.htm Michael C.G. Davidson, McPhail, R. & Barry, S. 2011, "Hospitality HRM: past, present and the future", International Journal of Contemporary Hospitality Management, vol. 23, no. 4, pp. 498-516. Namasivayam, K., Miao, L. and Zhao, X. 2007, “An investigation of the relationships between compensation practices and firm performance in the US hotel industry”, International Journal of Hospitality Management, Vol. 26 No. 3, pp. 574-87 O’Connell, M. and Kung, M.-C. 2007 “The cost of employee turnover”, executive summary, Industrial Management , Vol. 49 No. 1, pp. 14-19. Sun, L-Y., Aryee, S. and Law, K.S. 2007, “High-performance human resource practices, citizenship behaviour, and organisational performance: a relational perspective”, Academy of Management Journal, Vol. 50 No. 3, pp. 558-77. 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