Human Resources Management for the Hospitality and Tourism Industries - Literature review Example

Human Resources Management for the Hospitality and Tourism Industries Literature Review The tourism and hospitality industries are among the fastest growing industries in the world (Nickson, 2012). Their rates of growth have even overshadowed some of the world’s most vibrant industries in the form of oil and electronics industries. Zainal et al (2012) noted that the tourism and hospitality industries have also grown their influence and now affect every aspect of the global economy. For instance, it is estimated that these sectors create an average of US $300 billion annually and employ over 1 billion persons directly since the turn of the millennium (Ball, Homer and Nield, 2012). In most of the developing countries, tourism is seen as one of the core source of foreign exchange. Given this crucial roles they play in modern economy, it is not a surprise that many researchers have focused their work on the growth and characteristics of these industries. Most scholars have, in the end, established that the tourism and hospitality industries are still lagging behind in their human resource management practices (Boley, 2011). The human resource practices in the tourism and hospitality industries have evolved, just like those of other industries. However, the rate with which they have evolved to match the changing circumstances is not satisfactory (Jago and Deery, 2004). Furthermore, in their evolution, human resource managers have had to adopt some practices that are only unique to the hospitality and tourism industries and which are irrelevant or have little significance in other industries. The practices and recruitment criteria have been influenced by commercial, legislative and ethical factors (Guerrer and Deery, 1998). Tesone (2004) noted that while the new practices are meant to maximise profitability, they have also caused problems of their own, most notably low job satisfaction and high employee turnover rates. It is important to note that human resource decisions have a profound effect on the organisational efficiency and, ultimately, the enterprise’s profitability (Kusluvan, 2003). Scholars have established that there is a positive correlation between the performance of a business and the human resource practices instituted and applied. The recruitment process and the criteria used were, especially, attributed to the level of turnover rates, employee absenteeism and level of job satisfaction. HR Practices and the Employee Turnover rates A research conducted by the National Restaurant Association established that the annual turnover costs for frontline employees for a single firm may be around US $5,000 and $50,000 for managers (Kirkley, 2013). These expenses greatly reduce a firm’s expenses and need not be there at all if the right recruitment criteria are used. It generally follows that a reduction in operational expenditure leads to a greater profit margin. It is, therefore, true that employees, especially the frontline employees, affect an organisation’s fortunes (Sachau, 2007). Apart from losses caused by employee turnover, the way the frontline employees treat the customer determines whether they will return or not. According to Adler (2012), the frontline employees are the face of the organization and are a major communicational vehicle between the organization and its customers and prospects. However, some scholars, like Thirkittle and Korstanje (2012), have been critical in attributing the organizational performance to turnover rates and employee behaviour. These scholars, instead, are of the view that it is actually the organizational performance that influences whether the employees leave the firm and how they interact with customers. These claims have, however, not been adequately substantiated. HR Practices, Recruitment criteria and employee turnover rate Human resource practices and criteria used in the recruitment processes affect the type of employee netted by a company in the hospitality and tourism industry (Singh, 1997). The criteria have changed over time. Originally, just like in other industries, recruiters used to review technical knowhow and skills of potential recruits to decide on whom to offer the employment opportunity, but the focus has now changed. Recruiters nowadays do not necessarily attach much importance on possession of technical skills but on the ability to learn new skills and knowledge fast (Crouch and Ritchie, 1999; Chalip and Costa, 2012). The employees in the hospitality and tourism industry are increasingly being comprised of amateurs. Professionals are, on the other hand, increasingly becoming fewer and fewer even as governments try to promote courses that relate with these industries (Kusluvan, Kusluvan, Ilhan and Lutfi, 2010). Recruiters are favouring shortcuts; they design their recruitment criteria to get employees who can become productive in a very short period of time. Baum (2007, p. 1390) captured the essence by noting that, “Both parties know very well that there will not be a long-term commitment to the working relationship but that, while it lasts, both sides should seek to maximise respective benefits”. It is, therefore, general knowledge to both parties that the industry is not suited for linear progression of careers. The length of engagement in the industry has decreased drastically over the past decade, and is still reducing. Nearly 30% of the employees in the hospitality and tourism industry last for less than 2 years in the industries (Songshan and Hsu, 2008). This has placed the limited employment opportunities up for grabs for students and immigrants. These are demographic groups that view employment in the hospitality and tourism industries as transitory employment. They intend to hold their positions in the mean time as they search for better employment opportunities (Boley, 2011). As a consequence of this view, recruiters find it very hard to net employees who have the technical expertise and are geared towards advancing their careers linearly in these industries. The recruiters are forced to water down their requirements which, in turn, dilute the quality of services offered in these industries (Cho, Woods, Jang and Erdem, 2006). Due to this transitory nature of employment, recruiters are forced to look for young persons, mostly under the age of 24 years, who are yet to make up their minds on their career paths. Jolliffe and Farnsworth (2003) assert that administrators figure out that if they manage to hire young people who are not professionals in the field they can save their resources through minimal training and hassle-free disengagement when the tourist season ends. The move is, therefore, not only a short run profit maximisation strategy but also a long term since no pension and contract termination expenses are incurred (Chung-Herrera, Enz and Lankau, 2003). Whereas it is unethical and unprofessional to employ inexperienced individuals for the purpose of optimising profits, it is a wide spread practice that is increasingly being adapted across the board. If this trend continues to be adopted by recruiters, the level of quality of services offered may be negatively affected in the long run. Given that technical knowledge and skills are not prioritised during recruitment, recruiters now screen candidates for what Baum (2007) calls “generic skills”. These skills include communication skills, technological skills and personality skills such as the ability to express emotions and other aesthetics. Characters with these “soft skills” are given preference even over professionals who have “hard skills” as focus continues to shift (Kusluvan et al, 2010). Recruiters are looking for people with the highest level of emotional intelligence. The recruitment criteria accommodate the candidates who can offer emotional labour (Baum, Amoah and Spivack, 1997). Emotional labour is where an employee is paid to manage their emotions adequately to impress the customers (Baum, 2007). This may entail smiling when offering services and displaying a wide range of emotions as and when required. The emotions have to be expressed in such a way that the customers are convinced that they are deeply held by the employee. The display of emotions by the employee should make the customer feel good about the employee and the services provided which should, in turn, create a good impression of the firm. However, some scholars, including Cho et al (2006) and Boley (2011), have faulted this criterion stating that it is hugely misleading and highly volatile. These scholars have pointed out that the fact that the persons given the employment opportunities are the best pretenders, and not necessarily the best qualified in the sectors, raises the employee turnover rate. According to proponents of this view, maintenance of emotional façade is quite tricky and if the employees are really not happy it may be hard to wear a smile all day long (Ball, Homer and Nield, 2012). Ultimately, one gets exhausted with the pretence and quits the job. Baum (2007) further argues that emotional intelligence and aesthetic labour also require a certain level of skill and should not be treated as a second-tier qualification. Baum (2007) refutes the claim that recruiters have lowered the standards of the industry by shifting the focus from technical skills and knowledge to emotional intelligence and aesthetic labour. He opines that to learn how to look, say and adequately portray emotions is a skill only a handful of people can posses. The industry would have been better placed in service delivery if the recruiters strike a balance between technical skills and emotional intelligence. Recruiters are also increasingly testing the general knowledge of the applicants more than they did 15 years ago (Kusluvan et al, 2010). The recruiters have been testing for this knowledge since time immemorial but have, of late, found a new dimension and use for it. A prospect with a wide pool of general knowledge is preferred to a professional who does not possess the same depth of knowledge in general matters of any conceivable topic. Recruiters are now looking for an employee who can engage the customers in a wide range of topics from politics, sports, environment and many others (Zainal et al, 2012). Again, just like emotional intelligence, this should not be treated as a soft skill (Sachau, 2007). It, actually, takes a certain level of education and curiosity to stay abreast of new happenings and developments across the globe and disciplines. Lastly, the recruitment processes and criteria are now increasingly favouring those who seek employment opportunities in the hospitality and tourism sectors on a part-time basis (Jago and Deery, 2004). Administrators are wary of employing individuals on a full-time basis because modern, cheaper ways of outsourcing labour have been developed. For instance, there are agencies that have been set up to offer hospitality and catering services such as housekeeping and banqueting. These agencies are suitable for firms in these industries that intend to operate the “just in time” model. The firms outsource the services just when they are needed and can save on operational expenses by avoiding incurring costs when it is not necessary (Tesone, 2004). The rapid response mechanism is gaining popularity among the stakeholders in the hospitality and tourism industries because, unlike other contemporary measures that have been taken, it enables saving on costs yet the quality of services does not have to be sacrificed in the process. Job satisfaction of employees in the hospitality and tourism industries One of the research objectives of this study is to try and gauge the level of job satisfaction in these industries. The general assessment is that the level of job satisfaction among employees in these industries is low. This is evidenced by the high turnover rates. Woods (1997, p. 1198) adequately captured the mood of the employees when he asserted that, “Hospitality work is largely exploitative, degrading, poorly paid, unpleasant, insecure and taken as a last resort”. Many studies have substantiated this assertion. The outstanding reasons for the low job satisfaction and staff morale was an unmotivated workforce, poor compensation, lack of respect towards employees and less rewards. The employees were not motivated because of the poor remuneration. Their contributions to the firm were also not well recognized and, henceforth, initiative taking did not feature as a priority among employees as efforts were not being rewarded (Adler, 2012). Employment opportunities in the hospitality and tourism industries are seen as a preserve for the youth and amateurs (Thirkittle and Korstanje, 2012). Administrators are, therefore, not willing to remunerate them at the same level they would for professionals. Furthermore, students and immigrants, both legal and illegal, make a substantive percentage of these employees. Managements are, therefore, encouraged to exploit them and pay them poorly because they have fewer economic rights (Zainal et al, 2012). They are not protected by trade unions and the minimum wage laws may not apply to them. It is not a surprise that the general job satisfaction in these industries is low. Lastly, with most people taking the jobs as a last resort, many employers have figured out that such employees do not have much choice but to accept the employment opportunities even if they are degrading in terms of the working hours and remuneration. Conditions are, however, improving as people get more information. Soon, the number of people who are willing to work in these industries will decrease and will necessitate the industry players to improve the working conditions so as to get employees (Boley, 2011). Job satisfaction among employees is bound to increase in the near future, but until then, the employers will continue outsourcing cheap labour at the expense of employing professionals who have low tolerance to adverse working conditions. Nature of the industry The last objective and research question involved establishing the inherent characteristics of the hospitality and tourism industries. From the above discussions it is clear that these industries are characterised by acquisition of easy, transferrable skills. The internal labour markets are weak as a result and organizations are drifting towards throughput (Jago and Deery, 2004). The weak cost structure has enabled the acquisition of cheap labour which, in turn, has led to deteriorating market conditions. The minimum wage standards introduced in many countries would have been of great help to the hospitality and tourism industries, but since many people treat these jobs as transitory the standards have not been implemented to the achieve the desired effects. The most striking characteristic of these industries is the imbalance in expectations (Baum, 2007). As earlier noted, the administrators and the employees in these industries have impliedly expressed their preferences and terms of contracts. However, the contemporary administrators have come up with relational principles that are only apparent in the hospitality and tourism industries (Adler, 2012). For instance, these administrators demand that an employee show emotional intelligence and be paid for emotional labour but the management is not willing to take care of the employees’ emotional needs. The employees are required to work for many unsocial hours for less than proportional remuneration. The element of work life balance is still not a common phenomenon in these two industries (Chalip and Costa, 2012). The managements also demand that employees have ideas since they are the ones in contact with clients, but they have little or no say in decision making and are not allowed to raise objections. They are required to be creative in their undertaking, for example, by starting and sustaining small talks with the clients on topics of general interests but in no event are they expected to misbehave, even if the client is the one in the wrong (Sachau, 2007). They are expected to adhere to the codes and procedures of a firm and to remain flexible all the time, to remain highly motivated but only towards the firm’s undertakings and to play as a team member even though performance appraisal is individual-centred (Baum, 2007). In conclusion, it is quite clear that the profile of the hospitality and tourism industries have drastically improved across the globe. They are now among the key industries driving the global economy to the extent of rivaling the oil industry. However, the element of professionalism in these industries is fast diminishing especially in the tourism industry (Kusluvan, 2003). This has been necessitated by the shift in recruitment criteria. The focus is no longer on professional skills but on generic skills and ability to provide emotional labour. Recruiters are also giving preference to the young people and immigrants who view the job opportunities as transitory. The combination of all these factors has completely revolutionised the criteria used for recruitment in these industries (Zainal et al, 2012). The level of job satisfaction and employee morale is diminishing. This is because the managements demand more from the employees yet the remuneration barely matches the efforts being demanded (Adler, 2012). These low levels of job satisfactions, ultimately, lead to low quality of services and higher employee turnover rates which negatively affects a firm’s revenue. In explaining the nature of tourism, the industry was painted as one requiring easily transferrable skills, has weak internal labour markets and, generally, has weak workplace conditions (Jago and Deery, 2004). It is imperative to note that these characteristics may change according to the country and the level of operation of a firm in the hospitality and tourism industries. Some high-end firms in these industries have shown conflicting characteristics, but they remain the exception at the moment, not the rule. References Adler, H., 2012. Should we really care whether our employees are happy or satisfied? Journal of Business & Hotel Management, 51, pp. 20-22. Ball, S., Hormer, S. and Nield, K., 2012. Contemporary Hospitality and Tourism Management Issues in China and India. New York: CRC Press. Baum, T., 2007. Human resources in tourism: Still waiting for change. Tourism Management, 28, pp. 1383-1399. Baum, T., Amoah, V., and Spivack, S., 1997. Policy dimensions of human resource management in tourism and hospitality industries. International Journal of Contemporary Hospitality Management, 9, pp. 221-229. Boley, B., 2011. Sustainability in Hospitality and Tourism Education: Towards an Integrated Curriculum. Journal of Hospitality and Tourism Education, 23(4), pp. 22-31. Chalip, L. and Costa, R., 2012. Clashing Worldviews: Sources of disappointment in rural hospitality and Tourism Development. Hospitality & Society, 2(1), pp. 25-47. Cho, S., Woods, R., Jang, S., and Erdem, M., 2006. Measuring the impact of human resource practices on hospitality firms’ performances. Hospitality Management, 25, pp. 262-277. Chung-Herrera, B., Enz, C., and Lankau, M., 2003. Grooming future hospitality leaders: A competencies model. Cornell Hotel & Restaurant Administration Quarterly, 43(2), pp. 17-25. Crouch, G. I., and Ritchie, J. B., 1999. Tourism, competitiveness and societal prosperity. Journal of Business Research, 44, pp. 137-152. Guerrer, Y., and Deery, M., 1998. Research in hospitality human resource management and organizational behaviour. Hospitality Management, 17, pp. 145-160. Jago, L., and Deery, M., 2004. An investigation on the impact of internal labour markets in the hotel industry. Service Industry Journal, 24(2), pp. 118-129. Jolliffe, L., and Farnsworth, R., 2003. Seasonality in tourism employment: Human resource challenges. International Journal of Contemporary Hospitality Management, 15(6), pp. 312-316. Kirkley, D., 2013. Hospitality and Tourism- Linking Industry to the Classroom. Techniques: Connecting Education and Careers, 88(3), pp.44-47. Kusluvan, S., 2003. Managing Employee Attitudes and Behaviors in the Tourism and Hospitality Industry. Chicago: Nova Publishers. Kusluvan, S., Kusluvan, Z., Ilhan, I., and Lutfi, B., 2010. The human dimension: A review of human resources management issues in the tourism and hospitality industry. Cornell Hospitality Quarterly, 51(2), pp. 171-214. Nickson, D., 2012. Human Resource Management for the Hospitality and Tourism Industries. London: Routledge. Sachau, D., 2007.Resurrecting the motivation-Hygiene Theory: Herzberg and the positive psychology movement. Human Resource Development Review, 6, pp. 377-393. Singh, S., 1997. Developing human resources for the tourism industry with reference to India. Tourism Management, 18(5), pp. 299-306. Songshan, M. and Hsu, C., 2008. Recent Tourism and Hospitality Research in China. International Journal of Hospitality and Tourism Administration, 9(3), pp. 267-287. Tesone, D., 2004. Development of sustainable tourism hospitality human resource management module: A template for teaching sustainability across the curriculum. Hospitality Management, 23, pp. 207-237. Thirkittle, A. and Korstanje, M., 2012. Tourism: Science of Hospitality. Journal of Tourism, 13(1), pp. 125-142. Woods, R., 1997. Working in hotels and catering (2nd ed.). London: International Thomson. Zainal, A., Radzi, S., Hashim, R., Chik, C. and Abu, R., 2012. Current Issues in Hospitality and Tourism: Research and Innovations. Istanbul: CRC Press. Read More