HR Akanksha

Human Resources – Acute Labour Supply in Hotels
DECLARATION
I hereby declare that this project is the result of my individual effort, and conforms to
university and course regulations regarding cheating and plagiarism.
Akanksha Halbe
24 May’2008
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ACKNOWLEDGEMENT
I would like to acknowledge Mrs Vaishali Shinde Sharma, Institute of Hotel

Management, Aurangabad, for her valued inputs in the assignment.
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TABLE OF CONTENTS
DECLARATION…………………………………………………………………………1
ACKNOWLEDGEMENT..................................................................................................
TABLE OF CONTENTS…………………………………………………………………3
SYNOPSIS……………………………………………………………………………… 4
INTRODUCTION……..................................................................................................... 5
Human Resource Management………………………………………………………….. 6
Global Challenges of Human Resources………………………………………………… 7
CONTENT
Staffing…………………………………………………………………………………. 13
Training and Development……………………………………………………………... 14
Motivation........................................................................................................................ .20
Maintenance..................................................................................................................... .22
CRITIQUE
Competitive Recruitment Methods.................................................................................. .23
Demographic Trends........................................................................................................ .24
Strategies of Compensation.............................................................................................. 25
Flexible Work Timings.................................................................................................... .27
Rewards/ Compensation/ Benefits.................................................................................. .28
Training and Development............................................................................................... 30
Skilled and Unskilled Labour of Workforce Diversity.................................................... 30
Outsourcing Employees.................................................................................................. ..33
Trends in Motivation....................................................................................................... .37
SOLUTIONS
A Global Scenario........................................................................................................... .42
An Indian Scenario.......................................................................................................... .48
CONCLUSION............................................................................................................... .50
BIBLIOGRAPHY.............................................................................................................55
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SYNOPSIS
An organization is as good as its people, and nobody can deny the fact that manpower is
the greatest asset of a company. Moreover high attrition rates incur major costs to the
company including recruiting expenses, training expenses, unemployment insurance and
guest service of a quality less than one has been striving for. Turnover has an immediate
effect, particularly in customer service-dependent areas of the business. Thus, in the case
of Hospitality industry, attrition rates are increasing and acute shortage of talented labour
is crunching the hope of hotels to survive. It is very evident that to retain employees, in
this sector, is rather difficult considering the lifestyle of hotels seems to unhealthy leaving
no time to social and family life. Thus, this document encompasses the various reasons of
attrition and shortage of labour, in the hospitality sector, coupled with appropraiate
examples to accentuate the issue. It critiques these reasons by benchmarking best
practices followed in hotels, globally. Also, after analyzing, the current scenario in local
as well as international hotel chains, rational conclusions has been formulated.
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HUMAN RESOURCES
INTRODUCTION
“People, not buildings, make a Company successful.”
Human Resources Management is essentially required for balancing the rapid state of
flux that takes place at a fast pace today. I t tries to secure the best from people by
winning their whole hearted cooperation. According to Invancevich and Glueck, HRM is
concerned with the most effective use of people to achieve both organisational and
individual goals. HRM is pervasive and continuous in nature. HRM in short should
ideally lead to employee satisfaction and fulfillment. Physical and monetary gains alone
cannot improve efficiency or contribute to an increased rate of return on investment.
With the increase in competition, locally or globally, organizations must become more
adaptable, resilient, agile, and customer-focused to succeed. And within this change in
environment, the HR professional has to evolve to become a strategic partner, an
employee sponsor or advocate, and a change mentor within the organization. In order to
succeed, HR must be a business driven function with a thorough understanding of the
organization’s big picture and be able to influence key decisions and policies. In general,
the focus of today’s HR Manager is on strategic personnel retention and talents
development. HR professionals will be coaches, counselors, mentors, and succession
planners to help motivate organization’s members and their loyalty. The HR manager
will also promote and fight for values, ethics, beliefs, and spirituality within their
organizations, especially in the management of workplace diversity.
Fig1.
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The role of the HR department is summarised above figure. The vertical dimension
represents the focus of a future or strategic orientation versus a day-to day operational
orientation. The activities are shown as people versus process represented by the
horizontal dimension
Good HR practices can help attracting and retaining the best people in the organization.
Planning alerts the Company to the types of people it will need to in the short, medium
and long run. Effective management of HR helps employees thus, promote team work
and team spirit among themselves, offers excellent growth opportunities to people who
have the potential to rise and allows people to work with diligence and commitment.
A systems approach to HRM implies the need of HRM to be the Central Subsystem in an
enterprise.
Fig 2: Central Subsystem
Product Subsystem
HR SUBSYSTEM
Procurement
Finance Training Marketing
Subsystem Compensation Subsystem
Appraisal
Records
Technical
Subsystem
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The world economy is growing at a slower pace

The labour market has shown a strong development during the past year and a slightly
increased demand for labour will continue in 2008. This is demonstrated by the latest
survey done, covering 13 000 workplaces within the private sector and almost all primary
municipalities and county councils. The results illustrate that the rate of growth in the
demand for labour has been decreasing and this will prove to have a greater impact
during 2008. This implies that the employment rate is decelerating and the decrease in
unemployment is slowing down.
Global Challenges of Human Resources

Functions such as operations, sales, and marketing have generally made great progress in
adapting to the global reality. However, the HR function has typically lagged behind in
developing policies and structures that support globalization. The general challenges for
Global HR functions are as follows:
1. Coordination of activities in many different locations.
2. Understanding the continual change of the globally competitive environment.
3. Building a global awareness in all HR departments/divisions.
4. Creating a multicultural HR team.
To meet these challenges, organizations need to consider the HR function not as just an
administrative service but as a strategic business partner. These are the issues which lea
to framing the Strategic Management drivers of Human Resources.
Coordination of activities in many different locations.

International companies face many challenges when trying to make HR practices
consistent across all locations/offices. The top three challenges include:
1. Variations in social, political, and economic circumstances.
2. Different locations/offices have their own way of doing things and are resistant to
change.
3. The perceived value of the HR function varies across locations/offices.
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Understanding the continual change of the globally competitive environment.

Today, a global village, a concept in which telecommunication and transportation
technologies have essentially reduced time and distance effects to produce a single world
wide community have increased the pulse of businesses thus implying pressure on the
existing as well as new employees. To be effective in this environment organisations
have to adapt to cultures, systems and techniques of their own.
Owing to the increase in similar businesses catering to a general audience, the
competitive edge that each hotel fights to reach is very high. Human Resources greatest
challenge is to equip and sustain employees with special skills who can adapt themselves
quickly to changing technology, surroundings and diversify with trends. Listed below are
some of the global practices followed by HR to remain competitive in today’s ever
evolving market
• Managing Workplace Diversity
• Training and Development
• Performance and Productivity
• Employee Satisfaction Tracking System
• Reward Programs
• Strategic Development of Human Capital Resources
• Reducing Employee Turnover
• Vocationally Educated Staff
Building a global awareness in all Human Resources departments/divisions.

Globalization particularly in the business arena is a fact of life in today's world. The
technology explosion over the past two decades has caused barriers to international
commerce to come crashing down. Increasingly, global forces are shaping the business
environment and human resource management practices.
Even well-known products are losing their traditional national identity: BMW--the
exemplar of German engineering and performance--is building cars in South Carolina;
Chevrolets--as American as apple pie--are being assembled in Mexico; and the parts for
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these automobiles come from every corner of the world. These exemplify the global need
for HR professionals to expertise in a worldly aspect for providing the cutting edge.
Creating a multicultural Human Resources team

Expertise in global HR will become a to contribute to a company's success. The need to
keep abreast of key employment legislation in Europe, Asia or Latin America; track
cultural issues, demographic trends and social policy developments in foreign regions;
and, more than likely, become fluent in another language.
The turmoil in today's world has made travel more problematic and the safety of overseas
employees a major concern. As an HR professional, one could be called on to balance
business needs against security. Protecting expatriate employees and their families will be
critical. Thus, managing such similar challenges in the employees in a Company is the
bigger challenge.
The key to creating a consistent corporate culture across multiple locations is maintaining
the critical balance between a strong corporate culture and local cultural differences.
Top Challenges faced by Human Resources

Employee Turnover
Employment turnover is a reflection of whether hotels have done a good job in retaining
staff.The constraints that the Human Resources is facing worldwide is in terms of
employee management in this dynamic environment. With the increase in competition,
locally or globally, organizations must become more adaptable, resilient, agile, and
customer-focused to succeed. And within this change in environment, the HR
professional has to evolve to become a strategic partner, an employee sponsor or
advocate, and a change mentor within the organization. In order to succeed, HR must be a
business driven function with a thorough understanding of the organization’s big picture
and be able to influence key decisions and policies. In general, the focus of today’s HR
Manager is on strategic personnel retention and talents development. HR professionals
will be coaches, counselors, mentors, and succession planners to help motivate
organization’s members and their loyalty. The HR manager will also promote and fight
Halbe.A 9
for values, ethics, beliefs, and spirituality within their organizations, especially in the
management of workplace diversity.
The nature of the tourism and hospitality industries is very much interdependent. The
challenges faced by both are the same. Organizations and managers in the tourism and
hospitality industry face real challenges in recruiting, developing and maintaining a
committed, competent, well managed and well-motivated workforce which is focused on
offering a high-quality ‘product’ to the increasingly demanding and discerning customer.
At the recent ISHC Annual Conference held in Miami, Florida, ISHC members
participated in a series of roundtable discussions to identify the ISHC Top Ten Issues in
the Hospitality Industry for 2007. The topmost concern of he Human Resources across
the globe in hospitality has been Acute Shortage of Qualified and Skilled Labour.
By the start of 1970’s, a new age was gaining momentum. This was based on
information. Technological advancements were eliminating many low- skilled, blue
collar jobs. Moreover, the information wave was transforming society from
manufacturing focus to one of service. Many of the countries, whether employer,
employee or consumer, are beginning to feel the effects of a shrinking labor force in the
service industries, but few understood the causes of a smaller workforce. In the 21st
century, the world economy is a service-economy. Services require people. Therefore,
any worker shortages have a greater impact on the service industries, such as hospitality,
leisure, recreation, childcare, healthcare, assisted living, long term care and other
personal services. The number of available jobs in the USA is projected to increase by
22 million by 2010. Yet the labor force is projected to increase by only 17 million,
according to the Bureau of Labor Statistics. The US hospitality and leisure industry is
expected to grow by 2.1 million jobs between 2002 and 2012 (17.8 percent) which
represents a faster increase than the 14.8 percent job growth for all industries.
The hotel industry, is one of the most volatile industries in the world economy. With the
increase in tourism, according to the latest UNWTO World Tourism Barometer,
international tourism arrivals expanded by 6% in 2007, to 898 million international
tourist arrivals, as compared to 2006.
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“Economic and tourism growth are driven by emerging markets and developing
economies. While mature markets remain the leading destinations in the world, the faster
growth rate of new markets confirms UNWTO’s main message of tourism’s potential for
the developing world,” said UNWTO’s Secretary-General, Francesco Frangialli.
There are several reasons why development is slowing down. The main explanation is the
slowing down of world economy in the coming year. Another important factor is the lack
of skilled labour, especially in certain areas, to sustain the high pace of employment
growth. This is a result of the inflexibility of the education system, which cannot
completely meet the labour market demands.
Responses to cyclical labour trends are difficult to predict. In the 1990’s economy was
robust and labour markets were tense. At this crucial time, HR professionals were
propelled onto a path of ever-changing demands and uncompromising challenges. In the
nineties, developing countries in Asia benefited from strong and consistent economic
growth in the United States and Europe.
From 1990 until 1996 the annual real GDP growth of East Asian economies (with the
exception of Japan) averaged 6 - 8 percent. The role of HR during this growth period was
one of supporting management in coping with business expansion. In Asia especially,
rapid growth created more and more jobs so that recruitment and retention of staff
became a high priority. Staff turnover was a primary concern since this impacted
recruitment and training costs.
On the other hand, given this trend, employees expected rapid promotion and salary
increases to match, regardless of individual or company performance. Companies risked
employees leaving for better paid jobs elsewhere and, based on market trends, they had
little choice but to grant salary increases across the board. HR professionals across Asia
became adept at identifying and recruiting skilled workers, attracting experienced
professionals and negotiating attractive compensation and benefits packages. They
kept their finger on the pulse of the market to ensure that their companies’ compensation
levels remained competitive.
During this period, there was also a focus on technical skills training and management
development. Technical skills training was needed to upgrade the skills of an expanding
workforce, while management development focused on providing young and often
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inexperienced managers with leadership skills along with exposure to world-class

management practices. Growing economies fuelled the blossoming field of training and
development.
All the above observations, are of importance to the hospitality HR representatives as
they address concerns of the basic soul of the HR.
In order to realize company objectives, it is essential to have a manpower plan. Human
resource Planning is a system matching the supply of people with openings the
organization expects over a given time frame.
HUMAN RESOURCE MANGEMENT FUCTIONS LINKED TO LABOUR

SUPPLY
Human resource is an important corporate asset and the overall performance of

companies depends upon the way it is put to use. What makes South west Airlines so
successful today is the fact that the HR that is People management imbibes what it is to
be an employee in this airline and what is expected out of them. To addres the issue of
acute shortage of labour in the hospitality industry the researcher has given an insight into
the roots of the problem which originates from the basic HR functions. To be precise, HR
functions are broadly divided as:
1. Staffing
2. Training and development
3. Motivation
4. Maintenance
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Given below are the essential statistics that have supported the content that follows in his
document.
Fig3.
What is the most important to employees?

PERCENTAGE
35
30
25
20 %
15
10
5
0
enviornment
Training
for promotion
Recognition
Rumeneration
Opportunities
Options
Share
Office
Peer
ATTRIBUTES
(Source: ArabianBusiness.com readers website)

In the following analysis, each of these functions is translated into practice through
Employment, Training and Development, Compensation as benefits and Employee
Relations through effective communication programs.
STAFFING
Activities that are concerned with seeking and hiring qualified employees form the basic
staffing function. Job Analysis is the most important protocol in this function. It is the
systematic approach exploration of activities within a job. The various challenges that a
hospitality HR firm faces are as follows:
1. Understand the supply and demand of human resources.
2. Weigh the advantages and disadvantages of internal and external recruiting.
3. Distinguish among the major selection methods and use the most legally
defensible of them.
4. Make staffing decisions that minimize the hiring and promotion of the wrong
people.
5. Provide reasonable job expectations to new recruits.
6. Understand the legal constraints on the hiring process.
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Now, this supply and demand position of the industry according to the latest statistics of
March 2008,of the United States Labour market, proves that 5 industries, food and
accommodations in the United States of America, have shown the highest rate of both
hires and separations thus implying the need of constant hiring and recruitment cycle.
The hiring process is simply divided into 3 steps:
Recruitment
Selection
Socialisation
Recruitment
Internal and External recruiting could also be the drivers of shortage of employees in a
way that the most effective method of recruitment which appeals to the employees most
should be applied to attract the right kind of people in to the firm. Often external
recruitment efforts taken by the company are not appreciated as they may not specify
budget and job specifications as also college campus interviews are not well
acknowledged as they are perceived rather superficial in nature. Thus, if there is lack of
communication or an unclear picture of the offer then the possibilities of applying itself
are reduced thus making the first step towards losing on opportunity to gain good
workers. The cost that goes into hiring and training employees: For each mis-hire, costs
of up to 30-50 per cent of the employee’s annual salary are accumulated in lost
productivity and expenses associated with finding a replacement.
“When someone leaves, it messes up your employee teams, messes up your productivity,
and messes up the service you provide to your guests”
- Richard Bell-Irving, vice president of human resources for Marriott International
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Some reasons why recruiting is done more so often internally: It builds good public
relations, morale building, encouragement of ambitious employees and members of
protected groups, availability of information on existing employee performance, internal
candidates’ knowledge of the organization, it saves cost, prepares to build mid- and top-
level managers who can further work the company without additional training costs. Cast
members at Disney, for example, stay on as numerous opportunities for advancement
exist. In fact, two thirds of Disney’s salaried employees, such as marketers, designers,
and managers, are acquired from within the company. This in turn motivates the
employees and the chances of their survival in the Company are also high.
If internal recruitment does not match the job profile considered, then a viable option
would be valuing internal recommendations for jobs or referrals from employees. Now,
this eventually saves time as well costs on hiring a new employee through an agency.
Internal Searches include Human Resources Information System references while
external sources are the headhunters. Recruitment agencies and websites in India include
ECR Hospitality Recruitment, Global Hospitality Executive, Vira International, and
websites like timesjobs.com, ehotelier.com, catererglobal.com, naukri.com. Also
independent Contractors are contacted for subsidiary jobs.
It is essential to understand that constraints on recruiting efforts include the
organization’s image; job attractiveness may bring about many sects of people,
government influence in procedural working such as discrimination laws and the like and
largely the recruiting costs incurred. but what really matters is that the applicants who
approached before should be given more weight age as their survival rate would be
higher.
The management responsibility in recognizing the employee’s needs is a key area of
concern wherein the company can reduce turnover. Practices like feedback between
employees and management, empowerment of employees in solving problems, two way
communication system, team building, flatter organization structure, employee
satisfaction surveys, effort to improve the work environment, salary benefits, and
frequent recreational facilities when implemented would strive to reduce the employee
turnover rate.
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Selection is the process of making a “hire” or “no hire” decision regarding each applicant
for a job. The process typically involves determining the characteristics required for
effective job performance and then measuring applicants on those characteristics. The
characteristics required for effective job performance are typically based on a job
analysis. Reliability, validity, utility, acceptability are the key words to and selection
method tool. Often selecting the most suitable selection method for a particular job also
makes a huge difference in the mind of the applicant. For eg. The selection process for a
General Manager’s post would be a comprehensive approach method though expensive,
is the most realistic and takes into account the weaknesses as well as the strengths of an
employee. Differing from the one of a Front Office Assistant which could be of a discrete
approach. It shows the width of the Company’s vision and Culture. That is the punch line
of a Company which induces applicants to apply for the same.
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The Selection Process basically consists of the following steps:

Fig 4.
Initial Screening Interview
Completion of the Application Form
Employment tests
Comprehensive Interview
Background Investigation
Conditional Job Offer
Medical Physical Examination
Permanent Job Offer
Thus, this model is the standard form of an ideal selection process.

‘It is costlier to hire a new employee than to sustain an old one’ .A company’s basic
policy of promotions and hiring often decides the motive of the management. Today,
with booming packages, it is very difficult to sustain an employee at the same post for too
long. Promotions, if not given at the right time, may lead to shortage of skilled
employees. Given below are statistics that clearly show the need to design packages with
more substance for personal growth, job enlargement, and promotions.
Meeting expectations of new recruits, is one of the largest challenges faced by hotels
today. As applicants and trainees, the picture painted to them is very colourful until the
working atmosphere, pressure, long hours of work and consistency, the darker truth is
revealed to them. Socialisation which involves orienting new employees in the
organisation and to the units in which they will be working. It is important that new
Halbe.A 17
employees become familiar with the company’s policies, procedures, and performance
expectations. Socialization can make the difference between a new worker’s feeling like
an outsider and feeling like a member of the team. If not given enough importance, could
lead to immediate separations from the company. Thus, hiring new employees becomes
easy but sustaining them is the challenge. The answer to this staffing question is that
companies require finding a better way in choosing their employees by improving their
recruiting process. Business owners are starting to understand the importance of
thoroughly screening potential employees and of matching those employees to the
specific job requirements. In particular, much more attention is being paid to the
personality and psychological content of potential employees. This exploration deep into
the make-up of potential employees demonstrates the emphasis companies are placing on
the emotional content of those who occupy the front-line jobs. Companies such as
Disney, Goodyear, and Service Master, for example, use this “life themes” approach to
evaluate prospective employees which, simply put, involves identifying their passions
and then fitting them to the appropriate position. (Kuemmler .K et. al, 1996)
Hotels also hire contingent workers, like employee leasing if need be as they are
contractually (The Contract Labour Act) attached to the Company.
Finding, developing, and retaining global leaders, tops the priority list of international
companies. International, or expatriate, assignments are often used as a way to develop
the talent of global leaders. Many international companies use expatriate assignments,
which last an average of 2.65 years. International assignments are quite expensive.
Most international companies report pending more than two times an expatriate’s salary
during the span of the assignment. What gives them an edge over the Inpatriates, thus, is
their capability of lending their peculiar cultural characteristics to the place. This decision
is thus taken depending upon the need and nature of the business. Thus, the preference of
expatriates, though risky often imparts negative feelings among the employees thus
resulting into quitting of jobs.
Thus, the staffing function of Human resources could be well related to marketing one’s
own hotel for prospective applicants.
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TRAINING AND DEVELOPMENT
Training and Development is a learning experience and seeks a relatively permanent

change in their employees to improve job performance. Shortage of skilled labour
implies the need of training and development in hotels worldwide. Today, every hotel
requires well adjusted, trained and experienced people to perform its activities. As jobs in
today’s atmosphere have become more dynamic, the need for employee education has
also increased. Employee training is cost oriented and risk taking considering the
turnover rate in the hospitality industry almost reaching 30%. Employee development
refers to future oriented training hat focuses on employee’s personal growth. This, is a
very important consideration for acceptance of a job. This is where a Company could
differ in its policies to attract applicants, for eg: The Mariott Chain of Hotels follows the
Cross training opportunities which in turn help employees educate themselves in the
department of interest for perhaps future plans. High salary packages in today’s world
have become a common phenomenon thus, what really adds values to any job proposition
are these fringe benefits like job rotations, outdoor trainings, simulations and committee
assignments, employee participation programmes. Various innovative training methods
are practiced by hotels, thus making these sessions rather interesting. The reasons for a
higher turnover of employees in hospitality are also the demanding skills required for the
job. the best known hotels in the world for training is the Ritz Carlton chain of Hotels.
There is massive diversity in the types of jobs generated, in relation to the hospitality
jobs, technical and skills’ demands, educational requirements, terms and conditions and
the type of person that is likely to be attracted to employment in them. According to
Baum (1997-98), while the physical product is important, for most tourists the quality of
their experience is likely to be also reliant to a large degree on the interactions they will
have with the variety of front-line staff in the travel, tourism and hospitality industry.
These so-called ‘moments of truth’ (Carlzon, 1987) are therefore crucial for
organizational effectiveness, success, competitiveness and profitability. Indeed, within
an industry that is characterized by diversity and heterogeneity in terms of the purpose,
size, ownership and demands of the enterprise, the only real point of homogeneity is
delivering service to customers and the need to manage people in such a way that they
Halbe.A 19
offer a quality service. The corollary of this point would be the belief that such front-line
staff would therefore be sufficiently well paid, trained and motivated to offer outstanding
service. The reality however is that often such staff have the lowest status in the
organisation, are the least trained, and are the poorest paid employees of the company.
Research has proved (Graph1) that employees consider training as an extremely
important element in retaining their jobs. Thus, models offered for business today in large
as well as small industries are Six Sigma and TQM. These models demand training on
regular basis as they are constantly gaining new information and insights from its
customers, external environments, and processes, using that knowledge to respond with
new ideas, products, services and improvements, and then measuring the results and
learning still more. Thus, eventually, each hotel implements various training sessions in
accordance to their need.
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MOTIVATION
This function of HR is the most essential in retaining and development of skilled
employee turnover. Employee turnover staisistcs of United Kingdom, voted as the best
places to work for the hospitality industry, 2007, by Caterer and Hotelkeeper’s indicate
that the reason of attrition observed rating highest in the hospitality sector, is changing
career paths. This only shows that all employees are not been able to sustain their
motivation and passion work in hotels for too long. There could be various causes of the
same but moreover, the various theories followed in thee hotels should be effective
enough to keep the employee’s interest going. It also depends upon their areas of interest.
The concept of motivation is situational and its level varies between different individuals
and at different times. If you understand what motivates people, you have at your
command the most powerful tool for dealing with them.
Implications of Motivational Theories

Some motivational theories are well known to most practicing managers, but recent
theories have given more data to research motivation of employees. Managers must be
sure that the performance evaluation system is designed to provide feedback to
employees regarding their past performance , while simultaneously addressing any
performance weaknesses the employee may have. A link should be established between
employee compensation and performance. the various theories that have helped in the
past, and are roots of the new ones are Maslaw’s hierarchy of Needs, Douglas
McGregor’s Theory X and Y, Frederick Herzberg’s Motivation hygiene , David
McClelland’s Achievement, Affiliation and Power Motives , Equity theory of J. Stacy
Adams and Expectancy theory of Victor Vroom.
Workplace motivation can be defined as the influence that makes one do things to
achieve organizational goals: this is a result of one’s individual needs being satisfied or
met so that we are motivated to complete organizational tasks effectively. As these needs
vary from person to person, an organization must be able to utilize different motivational
tools to encourage their employees to put in the required effort and increase productivity
for the company because an organization requires people for one main reason which is
survival.
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In this changing workplace and competitive market environments, motivated employees

and their contributions are the necessary currency for an organization’s survival and
success. Motivational factors in an organizational would include working environment,
job characteristics, and appropriate organizational reward system and so on. The
development of an appropriate organizational reward system is probably one of the
strongest motivational factors. This can influence both job satisfaction and employee
motivation.
Reward schemes are used to support quality initiatives. Authorities on quality
management state that more than financial incentives, it is methods of recognition that are
significant in rewarding quality. For example, promotions, peer nomination for employee
awards, etc. While pay clearly is an important reason why most people work, numerous
studies demonstrate that pay levels and pay satisfaction explain relatively little variance
in actual turnover behavior. There’s little dispute that, in the short-term, bonuses and
raises improve a firm’s ability to retain talent. However, there are natural limits on how
much a firm can pay its people and remain competitive over the long run (e.g., the ability
to raise prices for products or services). Thus, wages often converge within industries.
So, while helpful, paying people well is typically not enough. Perks that are unique to a
firm can help it differentiate itself. The reward system affects job satisfaction by making
the employee more comfortable and contented as a result of the rewards received. To be
effective, an organizational reward system should be based on sound understanding of the
motivation of people at work.
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MAINTENENCE
The last phase of HRM process is called maintenance function. It is concerned with
maintaining employee’s commitment and loyalty to the organization. Employee
Retention is the fourth and the most challenging portion of Human Resources. The role of
the Human Resource Manager is evolving with the change in competitive market
environment and the realization that Human Resource Management must play a more
strategic role in the success of an organization. Organizations that do not put their
emphasis on attracting and retaining talents may find themselves in dire consequences, as
their competitors may be outplaying them in the strategic employment of their human
resources.
With the increase in competition, locally or globally, organizations must become more
adaptable, resilient, agile, and customer-focused to succeed. And within this change in
environment, the HR professional has to evolve to become a strategic partner, an
employee sponsor or advocate, and a change mentor within the organization. In order to
succeed, HR must be a business driven function with a thorough understanding of the
organization’s big picture and be able to influence key decisions and policies. In general,
the focus of today’s HR Manager is on strategic personnel retention and talents
development. HR professionals will be coaches, counselors, mentors, and succession
planners to help motivate organization’s members and their loyalty. The HR manager
will also promote and fight for values, ethics, beliefs, and spirituality within their
organizations, especially in the management of workplace diversity.
Thus, the four functions of Human Resources Management have shown that all these
form challenges faced by the HR globally and the implications of the weaknesses
experienced in these areas are all finally resulting into hgh turnover o employees in
hospitality.
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CRITIQUE
“Core employees are the essence of defining and maintaining quality within five-star
hotels.”
The researcher has found that all the approaches practiced for implementing the four
functions of Hospitality HR have to be enhanced in a way that make them compatible. to
deal with current challenges. In today's scenario ATTRITION has become the most
dangerous alarm to all HR employees' ears and Organization is facing troubles to fight it
out. High turnover is detrimental to the establishments, through additional “costs and a
loss of sustained knowledge acquisition”. Further, there is the potential for departing
employees to take their knowledge to competing companies (Yang and Wan,2004).
To just say “That’s the way it is” would be wrong. Resolving the challenge of shortage of
labour is the need of the hour. With the rise in Tourism and Hospitality related products
and services, this sector is booming tremendously. Turnover costs employers a bundle.
For example, in the lodging business, where some 60 percent of frontline workers and 25
percent of managers leave their jobs each year, turnover costs employers, on average,
almost $6,000 per frontline worker and almost $10,000 per manager, reports a new
Cornell study. By far, the biggest expense is lost productivity -- up to 70 percent of the
total cost in some cases, report Professor Timothy Hinkin and Associate Professor J.
Bruce Tracey in Cornell's School of Hotel Administration. "Most of the damage to
productivity is caused by the inexperience of new employees," said Tracy, noting that lost
productivity is also the costliest turnover expense in other industries as well.
This indicates the importance of Staffing. “Customer Satisfaction begins at the doorstep
of Human Resources” said by Mary Gober. Thus, when it comes to recruitment and
selection the best ways to reduce attrition rate, the following policies could be used to
keep a balance.
Recruitment methods: mostly unsolicited walk-in applications, internal transfer and
from a sister company
Recruitment criteria: experience, foreign language, business ethics, ability to
Halbe.A 24
perform in a team culture, vocational knowledge, military service obligations for males,
technology savvy.
Benefit arrangements: in-house training programs, external training programs, visual
aided training etc.
Demographic Trends
Changing demographic trends have also presented challenges to HR professionals. Asia
became and still is a much coveted global source of talent for jobs in IT, health care,
finance, and the hospitality industry. The consequences of an aging workforce in
developed economies is another part of the demographic equation. However, its impact
on the developing economies of Asia has been less well documented. Nevertheless, as the
population in Asia ages, companies will face increasing pressure to fill vacant positions
with people who have the requisite skills set.
Older employees -- more than one-quarter of the workforce -- bring experience to their
jobs. Research proves they are as productive as youth. And by understanding aging,
employers can make them even more productive. By Robert J Grossmen
There is no correlation between age and job performance,” insists Richard Johnson,
principal research associate at the Urban Institute in Washington, D.C., citing a
statistically validated report that combines the results of many research studies of worker
performance from ages 20 to 65. “Our stores with older workers had much lower
turnover, did better financially, [and] all the workers were happier,” Smith says. Looking
at workers age 50 and over vs. those under 30, the comparison was startling as to loyalty
and stability. “Older workers were more satisfied, were staying longer, and customer
service seemed to be better in their stores. It became clear that we had to make these guys
a bigger segment of our population.” These examples clearly indicate that Human
Resources should not shrug off the older generation immediately until thy reexamine the
myths and realities related to them as experience is not monetary.
Halbe.A 25
STRATEGIES FOR COMPENSATION BENEFITS
Acute Shortage of Labour for a Company could be linked to the benefits and policies that
the Company practices. Having a good salary package is not the only important aspect an
employee looks into . According to a survey conducted by Team lease Services in
Mumbai, ( The Economic Times, 23/05/08),the youth of the city felt that as much as
importance should be given to the Brand Image of the Company, compensation and
benefits also matter equally. Proximity to Workplace was one of the most important
reasons to decide to take up a job. This only proves that Compensation and benefits need
to be very competitive today, for any concern, as what people believe is that attrition is
caused due to stress of job security and work-life imbalance.
Global compensation managers increasingly deal with two areas of focus. They must
manage highly complex and turbulent local details, while concurrently building and
maintaining a unified, strategic pattern of compensation policies, practices and values.
Job Evaluation is the process whereby an organisation systematically establishes its
compensation programmes. Employees exchange wok for rewards in which the most
obvious one would be a monetary reward. The goal of compensation administration is to
design a cost- effective pay structure that will attract, motivate and retain competent
employees. there are various compensation plans that differ from one another with
respect to Incentive Compensation Plans, Group Incentives, Plant wide Incentives,
Paying for Performance, International Compensation Plans etc. There is a wide variety of
legal constraints that are attached to compensation benefits and programmes like The
Civil Rights and the Equal Pay Act, 1963 which mandates that an organisation
compensates equal to men and women working in the Company with the same rate of
pay.
When a Company formulates its Compensation programme, it also customizes its
benefits from this package considering the staff categories. For e.g. Ford and Delta
provide every employee with a computer and internet access for personal use. Benefits
are generally membership based but are regardless of performance levels. There are
certain legally required benefits for the United States of America like Social Security
Premium, unemployment Compensation and Workers Compensation etc.
Halbe.A 26
Flexible Work Timings

When flexible work arrangements are introduced as an employee perk or an
accommodation to individual employees, companies often fail to realize these benefits. In
contrast, a team-based, results-focused approach to the introduction of flexible work
arrangements capitalizes on the shared need of both companies and their employees for
increased flexibility. The experience of Ten American companies in a variety of
industries proves that, when flexible work arrangements are introduced with the two-fold
purpose of enhancing performance and creating more flexibility for employees, everyone
wins.
Given below are the benefits of one of the World’s Largest Hotel, The Venation.
THE VENATION- LAS VEGAS, USA

• PPO/HMO Medical Plan Selections
• Dental Plan
• Vision Plan
• On-Site Child Care Center
• Computer Purchase Program for Team Members
• Well Baby Program
• Prescription Coverage with Free Generic Prescriptions
Company Paid Short Term Disability Coverage
Company Paid Life Insurance
Company Paid Dependent Life Insurance
VISTA Team Member Assistance Programme
On-Site Wellness Center Accessible 24/7
Free Meal Daily at the Team Member Dining Room, Ristorante Ciao (During Workdays
Only)
401(k) Plan with Company Match
Halbe.A 27
Choice Hotels is First Major U.S. Hotel Chain to Offer Hospitality Care. Affordable
Health Benefit Plan Designed for Employees of Choice Hotels. (Hospitality Net’2008)
Choice Hotels has over 4,400 domestic franchised hotel properties, the Hospitality Care
plan will be available to an estimated 40,000 employees. Choice Hotels is the first major
U.S. hotel chain to offer Hospitality Care, a limited benefit health insurance plan,
available to its franchise owners and their employees. Over 260 hotels have already
signed up to make coverage available to their employees.
This totally new and unique plan has not before been made available on this scale in the
hospitality industry. It's a way of doing our part to make health care more readily
available to the hard-working hotel employees and continues our commitment to help
franchisees find innovative solutions to better their business.
Hospitality Care is administered by PAI, a national limited benefits administrator.
Hospitality Care plans are designed and sold through Insurance Applications Group
(IAG) of Greenville, SC, and underwritten by BCS Insurance Company of Oakbrook, IL
and Companion Life Insurance Company of Columbia, SC. PAI has more than 20 years
experience providing flexible and dependable service, quality plan administration and
superior employee customer service. The new plan offers an easy to understand complete
package of affordable limited health benefits to hourly workers with no required
minimum participation and full employee eligibility.
The plan starts at under $20 per week for the employee only and is available in three rate
tiers allowing the employee to opt for coverage for themselves, their spouse and their
children. Employees can also choose to add dental, vision, short-term disability or life
insurance options to their plan.
Halbe.A 28
Total Rewards/Compensation and Benefits
• Executive compensation, transparency and compliance: HR professionals will

need to develop their own competencies and awareness of the organizational and
economic factors that influence executive compensation in order to ensure proper
oversight and compliance with regulations.
• Impact of an aging workforce on compensation and benefits will be significant,

with organizations emphasizing phased retirement, chronological diversity and
other programs.
• Risk and cost shifting has become a significant factor in total

rewards/compensation and benefits. These shifts are generally occurring between
the government and employers, as well as between employers and their
employees.
• Talent management: total rewards practices and initiatives play a key role in the
acquisition and retention of key talent for now and in the immediate future.
• Total rewards, as a retention strategy that ensures competitiveness and explains a

company’s value proposition, today requires a broader definition that includes not
only compensation and benefits but other initiatives such as career development
and work/life balance.
• Performance management and alignment, and their tie-in with company culture
and total rewards strategies, are a strategic necessity in today’s ultra competitive
and highly accountable business environment.
• Global mobilization of workers/weakening of the dollar will require that

organizations flex their total rewards strategies to adapt to different cultures and
ensure competitiveness in international markets.
• Effectively communicating the value of total rewards to employees is critical in

order for organizations to maximize total rewards programs as a competitive
advantage now and in the immediate future.
Halbe.A 29
TRAINING AND DEVELOPMENT DOR SKILLED AND UNSKILLED LABOUR

Fig 5. Labour Union Focus’2008
( Source: www.manpower.com)
An example for skilled labour training would be, by the Gallup Hospitality Consultancy,
in Chandigarh which carried out innovative training methods which resulted into
increased sales in Food and Beverage and Front office Departments. They implemented
Strengths-Based Selection method of training. Gallup consultants recommended a long-
term selection and hiring strategy aimed at hiring more associates with talents similar to
those of their best associates and upgrading the levels of talent within the following roles:
• Sales managers
• Food and beverage managers
• Food and beverage servers
• Property managers
• Front-desk staff
Working closely with client management, Gallup consultants created a strengths-based
selection profile for each position that was tailored to the client's business needs. Gallup
consultants began by studying the client's structure and business strategy. Consultants
reviewed the client's job performance criteria and studied the best performers in each role
to identify the talents that contributed to their success. Gallup consultants then developed
success models, which were used to construct customized, structured interviews to assess
job applicants. Follow-up Gallup Business Impact Analysis determined that Gallup's
Halbe.A 30
process and system delivered a higher success rate for new hires who achieved high
scores on the Gallup selection interviews.
This shows that if enough planning is put into developing new and suitable ideas for
Companies, they are very profitable and worth the expense, in the long run.
Halbe.A 31
Workforce Diversity
J. Christensen (1993) examined the forces that influence the understanding of and
responses to diversity in the work place, with reference to the hospitality industry.
Conceptually, diversity may either be understood as variety, in which all people are
regarded as unique individuals, or as difference, in which specific groups of people (e.g.,
non-whites and women), are regarded as being different with respect to a dominant group
(e.g., white men). From either perspective, today's work force is becoming increasingly
diverse as a result of changes in immigration patterns; demographic trends; and the
increasing polarization of society with respect to education, skills, and wealth. In the past,
because of the influence of mechanistic management principles, hospitality organizations
typically responded to diversity by minimizing or eliminating differences. In the future,
the particular needs of select groups of people will likely be accommodated. In the distant
future, organizations that fail to acknowledge the full range of variety inherent in their
employee or customer populations will have difficulty surviving. Where diversity is
ignored, conflicts will emerge, and neither the hotels nor their employees will reach their
true potential. Thus, work-life balance to sustain employees and reduce attrition rate is
very essential. One of the main reasons for ineffective workplace diversity management
is the predisposition to pigeonhole employees, placing them in a different silo based on
their diversity profile (Thomas, 1992). In the real world, diversity cannot be easily
categorized and those organizations that respond to human complexity by leveraging the
talents of a broad workforce will be the most effective in growing their businesses and
their customer base. Until long-term sustainable solutions can be found, the obvious
short-term answer is for hotels to make their organizations best places to work. Hiring
right is crucial. Creating and fostering a culture with strong communication is essential.
Retaining quality staff is top priority.
Eg: Hotel Four Seasons is one of the leading hotels providing the best places to work.
“If you take care of the people, the business will take care of itself.” Dan Amos,
CEO of Aflac For example,
When Four Seasons went into Maui in Hawaii when relevant employees were scarce, and
they signed up a lot of labourers from the sugarcane and pineapple fields, workers
Halbe.A 32
carefully screened for positive attitudes. And within a year they made Four Seasons Maui
number one in the island. And every year that service culture grows stronger. They
see the effect every day in every hotel. Employees develop a camaraderie that deepens
year by year, creating a sense of community that makes cooperation the norm. They pay
as much attention to employee complaints as to guest complaints. They upgrade
employee facilities whenever we upgrade a hotel. Disallow class distinction in cafeterias
and parking lots. Establish career paths and promotion from within. And they augment
the physical atmosphere with a wide range of benefits. As one employee quoted by
Fortune puts it, a little exuberantly perhaps: “Great pay, great perks, great food.... I'm
treated like a five-diamond hotel guest.” that is what each employee says. Also,
Marriott’s Chain of Hotels of the United States of America ranked in the Fortune 500 list
of best employers in the World. The same goes for Raffles Resorts of Singapore, ranked
among the top three in the country as the ‘ Best Employers of 2007’.
According to Caterer and Hotelkeeper’s inaugural awards ceremony for the Best Places
to Work in Hospitality, 2006, effectively highlighted and rewarded employment best
practice in the United Kingdom’s hospitality industry.
Halbe.A 33
Outsourcing : A Boon or a Bane
The initial business case for outsourcing emerges by way of significant opportunities in
labor cost arbitrage. Organizations have realized this potential and are beginning to move
their non-critical, people intensive segments to third party vendors or establishing captive
units and shared service centres. Typical services that can be off-shored would include
functions such as 24/7 global reservation centres, customer helpdesk, outbound sales
support, frequent guest program management, RFP response centre and other similar
services.As the industry matures, in its collective learning and experience, global
outsourcing will move into its second phase; that is, to gain benefits , the that extend
beyond cost arbitrage. There will be a rapid shift away from tactical off-shoring to a more
transformational approach that seeks not only to leverage low cost labor but also to
transform the organization by making it more efficient, more flexible, more productive
and better equipped to handle external market dynamics.
As the market for outsourcing services within the hospitality industry undergoes a
significant shift the potential for work that can be done offshore will increase, leading to
products and industry-specific solutions that span the entire gamut of hospitality services.
Core operational functions such as finance and accounting, human resources,
procurement and supply chain management which were traditionally done internally in
the organization can off-shored to remote locations. This change is also being driven by
the phenomenon that service providers are developing global capabilities to perform
complex hospitality operations and processes. The process and vertical domain expertise
of service providers will efficiently be leveraged by industry players to design vertical
specific solutions and service end-to-end functions within hotels.
While it is true that there are various opportunities in the outsourcing space that an
organisation can leverage upon, measurement of tangible benefits is critical. Enhanced
Customer experience can be one of the transformation measurement that can be used for
reference. Eg: Owing to high attrition rates and rising employee retention costs,
companies are finding it easier to outsource recruitment and training processes. This is
where Just In Time comes handy by ensuring that their new recruits are productive from
day one. Companies with large manpower requirement for frontline functions like BPOs,
Halbe.A 34
financial services and retail firms are opting for this service. ( The Economic
times’2008). Thus, this example could be implemented in the hospitality sector as well.
Understanding Cross Cultural Differences in the Context of Tourism

International travel has increased rapidly over recent decades. Increased contact between
people of different cultures is, however, often problematic. A. Milman (1990) discussed
the concept of culture. He argued that the central issue is not how much visitors from
different culture areas differ from each other, but some of the reasons behind the
divergence in perception about ways of life and thought. A model for tourism cultural
understanding evolved. It takes into account the three major constructs which may
account for the variation among tourists and host communities: environmental,
organizational and individual.
Organizational Barriers to Diversity in the Workplace

Although diversity training was thought to be an important strategy to enhance sensitivity
to diversity issues, it was ineffectively and inconsistently administered. Second,
institutional inertia characterized most diversity efforts. Many agencies were not
responsive to change and new programmatic initiatives. It has been identified that
consistent inequitable practices in hiring, promotions, and job placement practices based
on race and gender. Research suggests that park and recreation agencies, like other
human- service agencies, often unknowingly participate in inequitable and exclusionary
behavior.
The reasons for failure and the attributes required for hotel-management success abroad
appear to be particular to the industry. Personal, family and work related issues may
contribute to expatriate failure. People skills, adaptability, flexibility, and emotional
maturity are the most desirable attributes for expatriate managers. The results suggest that
comprehensive cross-cultural training may be an effective way to reduce expatriate
failure and enhance success.
Halbe.A 35
Organizational Culture
Organizational culture is described along a continuum of valuing similarity and diversity
in the organization. It is argued that the benefits of cultural diversity (e.g., creativity,
challenge, constructive conflict) will be realized when an organizational culture of
diversity underlies the management of that diversity. These benefits are heightened when
the situation dictates a high degree of task interdependence and complexity. They also
discussed the implications for increasing cultural diversity. Developing an organizational
culture that values that diversity is a social responsibility and a contributing force to
organizational performance.
Halbe.A 36
Trends in Motivation
Fig 6..
Employee Motivation 2008
40
35
30
25
%
20 Series1
15
10
5
0
enviornment&
enviornment
Training
for promotion
Recognition
Rumeneration
Opportunities
Options
atmosphere
Share
Office
Peer
Office
ATTRIBUTES
(Source: ArabianBusiness.com readers website)

The above diagram clearly shows that the two most important drivers of motivation for
current employees in this industry are Remuneration and Opportunities for Promotion.
Thus, on basis of this graph, the researcher’s analysis to practice motivation would be to
introduce a robust feedback system. To survive in the 21st century, companies must build
competitive advantage by relying on their employees to implement improved service
quality. This cannot be achieved if the turnovers are high or if the employee does not feel
motivated to feel involved. It is thus extremely crucial for the organization to ensure that
its ‘internal’ customers are motivated and as satisfied as well as their external customers.
This is where the Human resources steps in. The key role of the Human Resource is to
ensure that the employees are content and motivated and to create opportunities for
employee growth and development. The HR has therefore integrated certain policies and
tactics like employee participation, involvement and empowerment to ensure
optimum job satisfaction which in turn also plays a critical role in the success on the
organization.
Halbe.A 37
EMPLOYEE PARTICIPATION
According to Farnham (1997) Employee Participation is defined as ‘a process of
employee involvement designed to provide employees with the opportunity to influence
and where appropriate, take part in decision making on matters which affect them’. The
distinct quality of all participative management is the use of joint decision making.
Operationally, the term ‘employee participation’ can be divided into two primary
categories: financial and work-related participation.
Employee Share Ownership Plan

In 1989, the first employee share ownership plans (ESOPs) were given statutory
approval. This plan can offer much higher share proportions to employees. The US
Public Trust defines ESOPs as “A trust set up by a corporation to allot some of its
stock/shares to its employees over time. It may also be known as a stock purchase plan”.
The objective of ESOP is to reward, retain, attract talent and create a sense of ownership
in the company, they however also provide certain tax benefits to the company and thus
are beneficial to the employees as well as the companies.
ESOP is such a dynamic HR tool for retention of talented employees that nearly all the
progressive firms and organizations have implemented it or are in the process of doing
so. Its popularity is such that it has become the USP of recruitment advertisements.
Vermont-based Carris Reels which is an innovator when it comes to pairing employee
ownership with significant employee participation in decision-making. Their employee-
management committee brings together shop-floor workers and senior management to
deliberate over major issues--an uncommon employee involvement technique, even in the
most participatory firms. Carris Reels has been recognized by the Boston Globe, the
ESOP Association, and the National Center for Employee Ownership as a pioneer in the
field of employee ownership.
Halbe.A 38
EMPLOYEE INVOLVEMENT
Employee involvement is ‘a range of processes designed to engage the support,
understanding and optimum contribution of all employees in an organization and their
commitment to its objectives’. Essentially, employee involvement is creating an
environment in which people have an impact on decisions and actions that affect their
jobs. Employee involvement is not the goal nor is it a tool, as practiced in many
organizations. Rather, it is a Human Resource management philosophy about how people
are most enabled to contribute to continuous improvement and the ongoing success of
their work organization.
The underlying objective is that by involving employees in the working of the

organization, employees will become more motivated, more committed to the
organization, more productive and more satisfied with their jobs. However, employee
participation is not the same as involvement. Participation is a more limited term. Most
involvement practices require participation, albeit participation in itself is narrow and
limiting.
How to involve employees in decision-making and continuous improvement activities is

the essential function of the HR department along with the management of the
organization. It can include such methods as Upward/downward communication,
suggestion systems, manufacturing cells, work teams, quality circles, continuous
improvement meetings, Kaizen (continuous improvement) events, corrective action
processes, and periodic discussions with the supervisor. Also, intrinsic to most employee
involvement processes is training in team effectiveness, communication, and problem
solving; the development of reward and recognition systems; and frequently, the sharing
of gains made through employee involvement efforts.
Halbe.A 39
Communication
Communication is one of the pillars of effective involvement. It essentially involves a
two way communication strategy. Organizations need to be structured in such a way as to
maximize the benefits of communication processes. This is why team structures are so
useful because they open up a multi-flow channel of communications. Downward
communication flows (top management down to line staff) may involve written
information (e.g. staff newsletters notice-boards, staff handbooks, house journals) and
other formal channels such as team/cascade briefings and staff forums.
Upward communication flows (formal and informal) may involve such tools as employee
suggestion schemes (paid/unpaid), surveys of staff (general/attitudinal), appraisal
schemes (traditional/upward (boss) appraisal, and is sometimes linked to quality
management TQM tools such as quality circles, quality improvement teams etc.
Large organizations like Corus and Travis Perkins recognize the importance of multi-
channel communications and have therefore created team working structures. Teams are
organized into multi-disciplinary groups in order to draw on a range of expertise. The
teams are encouraged to make decisions rather than to wait for commands from above.
EMPLOYEE EMPOWERMENT
Beginning in the late 80's Empowerment is still an extremely popular concept. Many
believe that it is one of the most influential motivational tools and the key to the success
of organizations. Empowerment essentially means putting people in charge of what they
do. In relation to the service industry it may be described as “A method of improving
customer service in which workers have discretion to do what they believe is necessary,
within reason, to satisfy the customer, even if this means bending some company rules.”
However, empowerment is not just related to the service industry. It has a history of
success in nearly all forms of business.
Empowerment is an essential component of TQM (Total Quality Management - a
philosophy of management that is driven by the constant attainment of customer
satisfaction through the continuous improvement of all organizational processes'';
accurate measurements; and employee empowerment, while still keeping the costs down
and maintaining a profit (Robbins 1996). Empowerment is of critical importance to
Halbe.A 40
service driven businesses, like hospitality as it enables employees to make on the spot
decisions to satisfy customers completely.
Eg: The Hampton Hotels, US introduced the 100% Satisfaction Guarantee, in 1989, the
first ever offered in the hotel industry. The Hampton Inn 100% Satisfaction Guarantee
concept not only changed the way hotels operate, but also how many companies operate
them today. The Guarantee empowers all employees in the chain, from the president to
the housekeeper, to refund a guest’s money if he or she is not completely satisfied with
their stay. The concept was a success and in 1999, the Hampton celebrated the 10th
anniversary of the scheme. The hotel had spent more than $6 million trying to satisfy
guests. In an interview, Phil Cordell, senior vice president, was quoted as saying,
“Compared to the more than $6 million in free rooms we’ve given away over the past
decade due to invoking the Guarantee, we have been able to track more than $41 million
in repeat business, a nearly seven-fold return. But more than just dollars and cents, we’ve
converted unhappy guests into satisfied customers across the country, loyal to the
Hampton Inn brand.”
Halbe.A 41
SOLUTIONS
A Global Scenario
Offering a limited benefit health plan to their hourly wage and temporary employees
could give franchisees a competitive edge in recruiting and retaining the best employees.
A study done by Society for Human Resource Management rated health insurance the #1
most effective employee retention tool, even higher than salary.
Service industries like hospitality are seeking cost-effective solutions for attracting and
retaining employees, and many companies are turning to limited health benefits to meet
their goals. Companies offering health benefits often experience a substantial reduction in
employee turnover rates, leading to lower costs associated with hiring and training,
improved customer service, and better employee morale."
Hoteliers need to regularly review the economic packages and benefits, career prospects,
training and working environment they are offering and honestly question whether what
they are offering is in line with the competition and more importantly, in line with their
vision and mission. A strong brand name or high economic package will not suffice to
keep talented personnel in the long-term.
A common guideline to reduce employee turnover has been suggested as below.
The following are a few points to remember while planning strategies for employee
retention:
Respect
Any relationship blooms under the swathe of respect. It is, therefore, important for the
employers to honor cultures, languages, traditions, and age of their employees.
Transparent policies and Procedures

After induction, employees need to be educated about the policies and working
procedures of the hotel. Keeping them transparent, fair and consistent will help
employees see you in good light.
Halbe.A 42
Economic package
If you are looking for high calibre candidates, ensure that you are paying them the market
rate, as a minimum. Lower salaries only attract less qualified and skilled staff.
Suitable personnel
Recruiting the right type of personnel for a particular job is not always easy, especially if
the spa is small and requires flexible staff with more varied experience. However, an
uncaring and unfriendly personality will not make a good hospitality staff, irrespective of
the experience he or she might have in the industry. Each department in the hotel requires
a different set of skills and it is therefore essential to find the right person with the
adequate qualities to perform the required role.
Optimum work atmosphere

A comfortable, positive and conducive working environment will call for a happier and
more efficient team. Ensure that your team looks forward to coming into work and that
they are motivated to perform and attend to clients.
The City Inn prides itself as an extremely friendly company with a nice working
environment. The directors are very involved in the business - right down to building
design - and are approachable and easy to get hold of. Getting an answer to your question
is immediate. On completion of a 13-week induction program, employees are invited to
stay with a relative or partner at the property, in recognition of their achievement and to
get to know their colleagues better.
Providing adequate tools

One should not compromise tools in order to merely offer a service in line with what the
market is offering. Speak with your staff and understand their requirements. This will
allow the professional to work more comfortably and provide the appropriate level of
service to your clients.
Halbe.A 43
Short-term strategies
Training
India's emerging international services sector requires a well-educated population in the
future to maintain its intellectual capital and its knowledge-based advantage. Because the
market is constantly changing, employee skills should be sharp and relevant. This
benefits both the employee and employer, empowering the former with superior
knowledge/skills/ attitude which not only improve current productivity, but can also be
leveraged in case of a job change. At the same time, training provides a mechanism for
establishing and building a strong company culture, inculcating core company values and
reinforcing key business objectives. Thus employee training is the key success factor to
improving their performance. It may be through any mode like classroom or e-platform
training, mentoring, coaching, paid memberships and company libraries. Raffles' enables
its managers to earn certificates from Cornell University in related fields such as
Hospitality Management, Foodservice Management and Leadership. Measures such as
these have kept their attrition rate - at two per cent every month - in check. Multinationals
typically invest between five-ten per cent of the payroll cost in developing people, as they
know that they can harvest 25-30 per cent return on that investment.
This is undoubtedly one of the most important points. Training defines the standard with
which treatments are performed and services are delivered. All the staff must be trained
on the menu and offerings, but they also need to be trained and understand your spa
philosophy. The whole hotel team must live and practice your hotel vision and mission.
But training is not only time-consuming but also expensive. Grand Hyatt Beijing under
Hyatt International Corporation annually invests 800,000-1 million yuan (US$97,561-
121,951) in training. At Kempinski Beijing, training costs account for 2.5 per cent of
revenue. PRC Shanghai puts 1 million yuan (US$121,951) into training every year. Staff
at all levels in Marriott can get 40 hours of training.
Providing cross-training in other departments is a very powerful method of training in
international hotels. This ensures that all employees are aware of all departments in the
hotel. It also keeps them motivated and opens up to them the possibility of learning about
other areas of the hotel business that they might want to move on to later, preventing
them moving on for promotions elsewhere.
Halbe.A 44
Empowerment and Freedom

Empowerment increases morale, which is directly linked to achievement. Morale,
accordingly, is defined as the feeling a worker has about his/her job based on how the
worker perceives himself in the organisation and the extent to which the organisation is
viewed as meeting the worker's own needs and expectations. A higher degree of
employee empowerment correlates directly with a higher service orientation and acts as a
perceptible differentiator in a crowded space called the 'brand world'.
Hyatt's core philosophy values diversity. 'Workplace values' is mandatory awareness and
sensitivity training that allows employees to work more efficiently by developing
effective management practices to include treating others with dignity and respect.
'Valuing differences' is a management development training focused on valuing styles,
abilities, and motivations, regardless of race and gender.
Mentoring schemes
Mentoring schemes, such as those offered by Mandarin Oriental, not only motivate and
give more responsibility to more senior personnel, but also help newer and less
experienced staff to gain knowledge and progress far quicker by shadowing their mentor.
Successful schemes promote understanding of the ins and outs of the hotel and encourage
communication and transfer of skills within the hotel. At the same time, the scheme
assists staff to adjust to their new roles. However, it is important to note that mentoring is
separate from appraisal and line management responsibilities and that it does not
substitute, but instead complements, the employee induction programme within the hotel.
The mentor benefits from a broadening of skills; experiencing a different dimension to
their current job while at the same time increasing motivation; and the chance to
demonstrate additional management and supervisory skills in developing other staff.
Regular performance evaluations

Performance evaluations can sometimes be intimidating and might seem like a test.
However, if conducted properly and on a regular basis, performance evaluations of all
staff members not only improve communication between management and the rest of the
Halbe.A 45
team, but encourage both managers and staff to take dual responsibility for the
development of each and every team member. Before implementing performance
evaluations, all staff need to be educated on the fact that these are not to be used as a tool
for criticism, but instead as an aid for both staff and management to assist in the
development of their staff and improve communication within the hotel.
For instance, as spa director of the Six Senses Spa at Sharq Village & Spa in Doha, Qatar,
implemented a performance evaluation system. She conducted evaluations every three
months. These evaluations comprised of questions that were not broad in nature asking
the employee what they thought were their areas of weaknesses and what they would do
to improve them. These types of questions are very disconcerting and staff are not likely
to write negative things about themselves.
Mutual goals are then set and line management and the staff take dual responsibility to
ensure that weak areas are worked on together and personal and professional goals are
achieved for the benefit of the whole team. Performance evaluations should be formal
documents that are filed with the employee records so that management teams can
monitor the development of their staff, who, in turn, should also have access to these
evaluations in order to take pride in their own progression.
Recognition and Reward

According to Hewitt's Attrition and Retention Asia Pacific Study 2006, turnover was
highest at the professional /supervisor/technical level at 39 per cent of total attrition, and
lowest among senior/top management at just 0.5 per cent of total attrition. Interestingly,
attrition among employees identified as high performers was considerably lower than that
of other employees, indicating that most organisations are successfully retaining their top
performers. Good talent management therefore promotes people based not only on their
performance, but also on the manner in which they have made their mark. Coaching and
developing the employee would be a contemporary strategy in the sector for developing
and retaining employees. With independent research from The Jackson Organisation and
analysis by best-selling leadership experts Adrian Gostick and Chester Elton, a
breakthrough study of 2,00,000 people over ten years found dramatically greater business
Halbe.A 46
results when managers offered constructive praise and meaningful rewards in ways that
powerfully motivated employees to excel. Great managers lead with carrots, not sticks,
and in doing so achieve higher productivity engagement, and improved business.
Market Image
This industry suffers from a negative perception worldwide with its notoriety for long
hours, night and weekend shifts. It's also perceived as a low-skill, low-tech and low wage
job. Interestingly, an Associated Chambers of Commerce and Industry of India
(ASSOCHAM) study in 2007 showed that hospitality along with aviation and journalism
are the 'urban youth's new emerging choice for career making'. As these fields offer
greater job security and more moderate and regulated working conditions than BPOs,
youngsters are opting for them. This shows that at least a future talent supply exists.
Career development programmes and Enhanced Education

In an extremely competitive market it is essential that we do everything to keep our staff
motivated and take responsibility for their career development. Offer promotional
incentives. As the world's largest democratic republic and home to a substantial English-
speaking population, India is poised to establish itself as a powerful engine for global
economic growth. To ensure that this service-driven economic engine does not run out of
fuel, there must be a constant supply of a well-educated and skilled workforce that
provides the impetus for future growth. The hospitality sector, too, should form its own
regulatory board that inspects the professional schools offering education in this field,
like the medical board. This would ensure that minimum standards of excellence are
created, as well as a skilled resource pool.
Halbe.A 47
An Indian Scenario
The hospitality industry is seeing a surge in the northern region with all major groups
setting their foot in the country. But rising attrition rates are posing a major threat to the
hotel groups. Even though there has been an increase of over 15-20% in packages being
offered to the youngsters here, they seem to be testing foreign waters for more lucrative
opportunities. Countries like the United States of America, United Kingdom, Canada,
Dubai, Australia etc are being explored by the aspiring youth to start a career in
hospitality industry.
A study conducted by the Associated Chambers of Commerce & Industry of India
(Assocham) reveals that the attrition rate in the hospitality industry in India is set to
double to nearly 50% by 2010, up from the earlier 25% growing at an alarming rate of
10% per annum. With rapid expansion on account of Commonwealth Games (CWG)
2010, fuelling huge demand for trained and skilled personal in large number in next three
years. The economic growth since 2003 represents a structural increase rather than
simply a cyclical upturn. A large proportion of India's growth comes from high
technology processes requiring skilled labor, in which exports of services have played a
key role. This growth pattern has resulted in services becoming the largest component of
the Indian economy - contributing to 51 per cent of the GDP - making India's situation
unique in the developing world.
Key Findings (livemint.com)

• Indians preferred since quality of education imparted in hospitality management
schools considered better.
• Indian staff likely to work longer hours.
• Positions to be filled in overseas hotels.
• 300 million job opportunities for hotel professionals likely to come up by 2008,
leading to higher attrition rate.
• Manpower crunch more pronounced at entry and junior management levels.
• Students from catering institutes prefer overseas jobs, working in cruise liners and
airlines rather than opt for budget hotels in India.
Halbe.A 48
• Assistant housekeeping manager with two to three years experience on the

Cunard lines makes about $1,900 (Rs 82,650) a month while an assistant purser
front desk receptionist for the same liner, with some experience, will get about
$1,650 (Rs 71,775).
Recommendations
Industry to work on how to attract good talent and retain existing workforce. Deal with
poaching legally since these results in at least 30 to 35%. India has hotel room inventory
of over 1,10,000 across all categories in the organized hospitality sector. Utilize this
during peak and non peak seasons.
The economic growth since 2003 represents a structural increase rather than simply a
cyclical upturn. A large proportion of India's growth comes from high technology
processes requiring skilled labor, in which exports of services have played a key role.
This growth pattern has resulted in services becoming the largest component of the
Indian economy - contributing to 51 per cent of the GDP - making India's situation
unique in the developing world. According to survey conducted by Hewitt Associates,
The sectors that would experiencing salary hike would be banking/finance (16.9 per
cent), retail (16.2 per cent) and accounting/consulting/legal (16.1 per cent). the Arabic
Journal Survey portrays that the average hike in salaries in the Hospitality Sector in 2007
has been between 5-10% which is lesser than the other service industries.
Also the best paid industries are Mining, Oil& gas,
Halbe.A 49
CONCLUSION
A Plan for Success- Passion is the key

It is clearly visible that in spite of all the different strategies used by hotels to retain
employees, the attrition rate still is dealt as a pressing task. Finally, it all shapes to frame
one opinion that hotels, even though their basic recruitment needs are academic
credentials, work experience and English skills, for most hotels, there are two things even
more important personality and potential.
Successfactors Software
Hilton implemented the succession software solution from San Mateo, California-based
SuccessFactors. The software automates the performance review process, creating a
searchable database laying out relevant employee information including skill sets,
interests, career aspirations, willingness to relocate, experience and languages. The
benefit of broad, standardized employee profile visibility is obvious for large hotel
companies like Hilton and others using SuccessFactors, including Mandarin Oriental
Hotel Group and Marriott International, but even tiny startups have found value in the
product. Vancouver-based Boutique Hotels & Resorts of British Columbia, which began
operations last year and has a portfolio of five properties, uses Success Factors as much
for staff retention as for succession. “One of the biggest gifts you can give someone is
feedback on their performance,” McLeod, Boutique’s director of culture and people
development says. Especially now that this time span is feeling the pinch of tight labor
market, managers are often afraid to give people feedback because they don’t necessarily
have the words to give feedback that could be construed as negative. They are afraid their
staff is going to leave and they cannot replace them. But on the contrary, it only helps
employees improve their career growth and enhance their skills.
The Hyatt Way

To cater to quicker supply of labour the Hyatt Hotels is making use of Head hunters
online as a strategy as its very cost effective and fast. It has signed up with New York
based online headhunting marketplace BountyJobs.
Halbe.A 50
Ritz- Carlton Hotels

The recruitment policy of Portman Ritz-Carlton Shanghai (PRC), which has been ranked
as the best employer in Asia and China for three consecutive years by Hewitt Associates,
is simple. "We only get highly-talented people," says Ralph Grippo, vice-president area
general manager. PRC (Portman Ritz-Carlton) enjoys the lowest turnover of 17 per
cent annually.
The group has developed a quality selection process known across the world when
recruiting staff, to test whether candidates fit its culture. Usually, high-level management
aside, most hotel employees are local. The sources are various, including graduates from
hotel-related training schools, talents from other industries or hotels, and internal
recommendation. At PRC, (Portman Ritz-Carlton) people through recommendation from
its own staff compose the major source, accounting for 50 per cent of its total workforce.
"It is an efficient way, as our staff knows who would be the most appropriate for PRC,
and we reward those who succeed in any matchmaking with 500 yuan (US$62)," says
Ralph Grippo. Vive President and Area General Manager, Shanghai
Emerging Markets
According to the National Geographic Adventure, India has been ranked as one of the top
5 upcoming tourist destinations of 2008, specially known for its Road trips. China is
another country with great employment potential.
These developing countries trying to retain employees for meeting the tourist demands
must remember to search for passionate people to provide hospitality to their guests. This
is finally the key to success for reducing the shortage experienced in skilled labour for the
hospitality industry.
To conclude, in the war for talent-retention, the focus must shift from reactive counter-
offers to proactive training and skill-enhancement exercises; from across-the-board salary
increments to performance-based compensation packages; from pre-defined bonus levels
to cost-of-living-linked flexi-benefits. An employee-centric environment is the order of
the day with more methods devised to 'bond' employees to their companies. Companies
Halbe.A 51
must find non-monetary ways to connect with their employees, such as celebrating
birthdays and anniversaries of employees, making work fun, and looking for ways to
encourage team spirit. 'Mercenary Darwinism', or offering money as an incentive to sign
on should be avoided as it perpetuates employees looking for another sign-on bonus
when the contract period is up. Developing a positive work environment with real
opportunities for advancement, combined with creative strategies for recruiting and
improving employee productivity will all be increasingly essential skills as the workforce
continues to shrink in the foreseeable future.
Halbe.A 52
BIBLIOGRAPHY
ARTICLES
Marin E, (2004) ”Who’s kicking whom? Employees’ orientations to work”, International

Journal of Contemporary Hospitality Management, Volume 16 ,Number 3, pp. 182-188
Birdir K.,( 2002) “Finding, training and keeping the best service workers”, International
Journal of Contemporary Hospitality Management, Volume 14 · Number 1, pp. 43-47
Kuemmler K and Kliener B,(1996) “ Finding, Training and Keeping the best service
workers”, Managing Service Quality, Vol 6, No.2 , pp 36-40.
O’Brien F and McDonnell J., (2003), “Predicting hotel managers’ turnover cognitions”
Journal of Managerial Psychology,Vol. 18 ,No. 7, pp. 649-679
Ross D., (1998), A practical theory of motivation applied to hotels, International Journal
of Contemporary Hospitality Management, Volume 10, Number 2, pp. 68-74
Collins A., (2007),” Human resources: a hidden advantage?” International Journal of

Contemporary Hospitality Management, Vol. 19 No. 1, pp. 78-84
Halbe.A 53
WEBSITES
www.The Manufacturer COM - Promoting best practices in manufacturing.htm

www.Going global a smart move for HR professionals HR Magazine - Find Articles.htm
www.Human Resource Management - Human Resources Internet Guide.htm
www.Introduction to Human Resource Management - Problems for discussion and
analysis.htm
www.comparison of cross mobility of carrers.mht
www.Employee aspirations up, services face maximum attrition Survey - livemint.htm
www.Gallup Consulting.htm
www.Global, US hospitality industry need workers.htm
www.High attrition hits hospitality sector ijn india.htm
www.Hotel Chain Strengths-Based Selection eg in training.htm
www.Major job trends for 2008 - CNN_com.htm
www.Hospitality Net - Industry News - Choice Hotels is First Major U_S_ Hotel Chain
to Offer HospitalityCare.mht
www.Staff hiring Passion is key!.mht
www.Arabian Business.com
www.Best Places to Work in Hospitality 2007 - 18 May 2006 - CatererSearch.mht
Halbe.A 54
Halbe.A 55

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Human Resources – Acute Labour Supply in Hotels

I would like to acknowledge Mrs Vaishali Shinde Sharma, Institute of Hotel

“People, not buildings, make a Company successful.”

The world economy is growing at a slower pace

Global Challenges of Human Resources

Coordination of activities in many different locations.

Understanding the continual change of the globally competitive environment.

Building a global awareness in all Human Resources departments/divisions.

Creating a multicultural Human Resources team

Top Challenges faced by Human Resources

inexperienced managers with leadership skills along with exposure to world-class

HUMAN RESOURCE MANGEMENT FUCTIONS LINKED TO LABOUR

Human resource is an important corporate asset and the overall performance of

What is the most important to employees?

(Source: ArabianBusiness.com readers website)

The Selection Process basically consists of the following steps:

Initial Screening Interview

Completion of the Application Form

Conditional Job Offer

Medical Physical Examination

Permanent Job Offer

Thus, this model is the standard form of an ideal selection process.

TRAINING AND DEVELOPMENT

Training and Development is a learning experience and seeks a relatively permanent

Implications of Motivational Theories

In this changing workplace and competitive market environments, motivated employees

STRATEGIES FOR COMPENSATION BENEFITS

Flexible Work Timings

THE VENATION- LAS VEGAS, USA

Total Rewards/Compensation and Benefits

• Executive compensation, transparency and compliance: HR professionals will

• Impact of an aging workforce on compensation and benefits will be significant,

• Risk and cost shifting has become a significant factor in total

• Total rewards, as a retention strategy that ensures competitiveness and explains a

• Global mobilization of workers/weakening of the dollar will require that

• Effectively communicating the value of total rewards to employees is critical in

TRAINING AND DEVELOPMENT DOR SKILLED AND UNSKILLED LABOUR

Outsourcing : A Boon or a Bane

Understanding Cross Cultural Differences in the Context of Tourism

Organizational Barriers to Diversity in the Workplace

Employee Motivation 2008

(Source: ArabianBusiness.com readers website)

Employee Share Ownership Plan

The underlying objective is that by involving employees in the working of the

How to involve employees in decision-making and continuous improvement activities is

Transparent policies and Procedures

Optimum work atmosphere

Providing adequate tools

Empowerment and Freedom

Regular performance evaluations

Recognition and Reward

Career development programmes and Enhanced Education

Key Findings (livemint.com)

• Assistant housekeeping manager with two to three years experience on the

A Plan for Success- Passion is the key

The Hyatt Way

Ritz- Carlton Hotels

Marin E, (2004) ”Who’s kicking whom? Employees’ orientations to work”, International

Collins A., (2007),” Human resources: a hidden advantage?” International Journal of

www.The Manufacturer COM - Promoting best practices in manufacturing.htm

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