The New Zealand Hospitality Industry - Essay Example

Performance Management Model Application: The New Zealand Hospitality Industry

Introduction

Performance management plays a crucial role in the human resource framework of any organization. The process is typically set by organizations to ensure that stakeholders are aware of the levels of performance they are to display in their specific roles as well as the as any individual objectives they are needed to achieve to contribute to the achievement of the overall organizational objectives. Different organizations in different industries adopt different performance management systems based on different performance management models; however, the difference in these systems lies in the approach the organization's tale as some adopt formal approaches while others prefer informal approaches towards their employees. Even so, any approach can be applied in any given industry or organization. One such performance management model is the strategic model of management of performance by Nankervis, Baird, Compton and Coffey (2013). The model identifies seven key elements that tie the performance review process directly to the overall strategic objectives as well as the human resource strategies that support the said objectives. These elements include strategic business plan, the dynamic environments of vision and key stakeholders, human resource strategy, human resource plans and policies, performance management strategies and policies and performance management. This model can be applied to the New Zealand hospitality industry in theory while citing the best practice in its design and implementation and specific structural and workforce issues that may influence its implementation.

Strategic Business Plan

In the hospitality industry, a strategic business plan drives the development of a given organization and sets limits for its human resource strategy (Davidson, McPhail, & Barry, 2011). With a human resource strategy, gaps in human capital in the organisation are identified and closed with performance management systems. Given that only 108,000 people worked in New Zealand’s hospitality industry in 2015, there is a shortage of workers and skilled chefs (New Zealand Immigration, n.d). In addition to this shortage of workers according to Career-New Zealand, some businesses in hospitality also find it difficult to find and recruit managers. Given this hurdle, a business in New Zealand has to plan strategically on how to engage workers and achieve productivity through optimal performance. To achieve this, working hours have to be agreed upon by both the employee and the employer. In the hospitality industry, working hours may be long and possibly involve shift work (Neill, 2013). For this reason, a business has to plan strategically to fill in all the gaps. A strategic business plan is vital in a performance management system since it is through this strategy that an employee can be identified to be working below his or her capacity thereby creating a performance deficit which may impact the performance of the organization.

Dynamic environment: vision

One aspect that contributes to a strategic business plan is the dynamic environment made up of global, regional, national and local environments, which eventually incorporates the vision stated in a business plan (Nankervis et al., 2013). The New Zealand hospitality industry is susceptible to influence from all kinds of environments (Hall, & Rusher, 2013). Given that the global economy is becoming increasingly transparent, New Zealand’s hospitality industry is increasingly changing to match the advancements enjoyed through globalization. The global environment affects the hospitality industry in the sense that there is rapid movement of people, capital, and information across national borders (Cline, n.d). It is through these changes that the New Zealand’s hospitality industry is welcoming employees from other nations to fill in the gaps in the workforce sector. Following the shortage of skilled chefs, Immigration New Zealand has listed the role as a long-term skill shortage and welcomes migrants to venture into the country’s hospitality industry (Yaduma, Williams, Lockwood, & Park, 2015). Regionally, during high demand periods, a critical shortage of hotel rooms has been noted in five regions: Auckland, Wellington, Rotorua, Queenstown, and Christchurch (Baum et al., 2016). This has been caused by the exceptionally quick growth in the demand for hotels over the last decade combined with the little change seen locally in hotel inventory. The effects of these combined environments spark gaps and trends in the hospitality industry for which businesses have to envision to fill and adopt respectively. This forms the ‘vision’ element of a strategic business plan. Vision, in this case, is important since it contributes to identifying performance deficit noted from unachieved targets and goals that make up the vision.

Dynamic environment: key stakeholders

One other factor that directly contributes to a strategic business plan in the strategic model of management of performance is the dynamic environment made up of key stakeholders (Nankervis et al., 2013). The key stakeholders in New Zealand’s hospitality industry derived from a dynamic environment include the economic, political, and social aspects. The economic aspect of the New Zealand’s hospitality industry affects the hospitality workforce chiefly in the wages and remunerations they enjoy for their services they offer in their working hours. With the economy growing and doing well, the minimum wage offered to workers is increasing. However, average pay depends on the region or location of the business as well as the skill level of the worker (Neill, 2013). On average, chefs earn between $16 to $25 per hour. Politically, there exist several laws on minimum employment rights that protect workers enjoy including those in the hospitality industry (New Zealand Immigration, n.d). There is also the 90-day period that gives employers the chance to employ employees who are best suited for positions. The social aspect in as far as the workforce is concerned is characterized by generational perspectives and stereotypes that limit the recruitment of older workers, while on the other hand, women are disadvantaged where they earn lower wages and are concentrated in jobs of a lower quality than their male counterparts (Poulston, & Jenkins, 2013) & (Mooney, 2014). This element is key in forming the strategic business plan as identifies the roles economic, political and social players play in building a business. This knowledge contributes to how the human resource is viewed and managed together with its performance.

Human resource strategy

A human resource strategy is essentially the process set to complete the responsibilities of the human resources department (Nankervis et al., 2013). These responsibilities include searching for and training employees, conflict resolution among employees, as well as organizing and helping them with benefits. The human resource strategy is directly linked to an organization’s vision, mission, overall goals and future aspirations. It adopts a proactive approach to enable employees to have the necessary attitudes and tools to propel the company in the direction of the strategic business plan. The human resource strategy adopted by companies in the New Zealand hospitality industry, given the shortage of workers, is by design directly responsive to business requirements identified in the industry. This necessitates the 90-day trial period offered to new employees. With the shortage of workers, businesses employ attraction and retention strategies as well as remuneration strategies to enable the businesses to get their hands on the best talents who drive productivity through performance (Hall, & Rusher, 2013). The element of human resource strategy is important in the sense that it responds to the industry's business requirements, which consequently inform the specific plans and policies in the next element – human resource plans and policies.

Human resource plans and policies

Human resource plans and policies give the framework upon which a business is to manage its workers (Nankervis et al., 2013). Plans and policies give specific guidelines to human resource managers on matters concerning their engagement in the industry, and the intent of the business on aspects such as promotion, recruitment, training, selections and compensation among others. Here, employees are made aware of their employment in the business, whether full-time, part-time, or casual (New Zealand Immigration, n.d). The policies, for example, control how public holidays are to be handled and how sick leaves and bereavement leaves are treated in the organization. In addition, they include human resource management evaluation strategies and processes. This element is key in that the human resource plans and policies work to guide the eventual development and refinement of all practices and systems of the human resource, which are expected to be clearly integrated with each other and with human resource plans and strategies.

Performance management strategies and policies

Further, in the model, human resource managers also engage performance management strategies and policies to guide how performance management is to be conducted and the policies involved in the process (Nankervis et al., 2013). Hospitality employers in New Zealand are keen in the hiring process and invest a lot in their recruiting efforts. The efforts are also furthered into the screening and interviewing processes and further extended in the 90-day trial period (New Zealand Immigration, n.d). This is before they are convinced that they are making the right decision. In addition, the employers set expectations after which they are trained about the policies and procedures. In addition, they provide on-the-job training opportunities where new recruits are set to work with high performers to ease them into the system. They also put conditions for the dismissal of a worker in case they prove to be poor performers even after the 90-day period. This element is key in managing the performance of employees and directly links to the performance management process a business adopts as a result of the strategies and policies set.

Performance management

This is the last element of the strategic model of management of performance. The element includes several aspects that drive the needed in the performance management process. Here, the performance review is conducted, where the review is focused on the organizational, individual, and departmental objectives and how the employees perform against them. In this process, key performance indicators specified for an employee’s role are reviewed (Nankervis et al., 2013). Employees are also taken through employee counselling, where they are given advice according to their performance and instructed on how to improve. Employees are also sensitized on the element of discipline, especially given that the hospitality industry is sensitive to how employees behave and perform (Walker, Damanpour, & Devece, 2010). They are also warned on the course of action to be taken if they are found to be indiscipline. Further, given the shortage of skilled workers in New Zealand’s hospitality industry, absence from work by employees is costly for businesses. For this reason, in the process of performance management, businesses seek to also address the absence of employees. Lastly, termination of employees in the service industry, like in any other industry, is commonplace and employees and employers agree on how an employment relationship is to be terminated as a strategy of performance management. Upon review and scrutiny, if an employee is found to perform poorly regardless of the counselling and training they are taken through, they are issued with a notice of termination. However, if the employee is terminated within the 90-day trial period, no written notice is required.

Conclusion

In summary, overall, performance management is important chiefly because it assumes a pivotal role in the human resource framework of an organization. Performance management strategies target to provide the ways through which better results from performance can be obtained from individuals and the organization by understanding and managing performance within the confines of a framework of planned objectives competence requirements on the part of employees. Various models are used to effect strategic performance management. The strategic model of performance of management by Nankervis, Baird, Compton and Coffey (2013), can be applied in the New Zealand hospitality sector to evaluate how the seven key elements of the model are applicable amid workforce issues and features as well as the demographic composition of the country.