Oct 25, 2021
16 mins read
This study identifies the human resource practices used in the hospitality and tourism industry through the review of articles published in the hospitality and tourism journals (45 articles, 10 journals) and the other non-hospitality journals (26 articles, 17 journals). The review suggests that key HR practices used in the industry are recruitment/selection, performance management, compensation, training and development, employee empowerment, employee recognition, and reward. The study also identifies the focus of past HR research in the hospitality and tourism industry. HRM practices, employee turnover, employee retention/intention to stay or leave, job satisfaction/dissatisfaction, work-family conflict/work-life balance/work-family issues/flexible working/employee well-being, customer satisfaction/firm performance among others have been the dominant aspects of past research. The study also presents a range of gaps in HR research in the hospitality and tourism industry for potential future research.
Keywords: HR practices, Hospitality, and Tourism industry
With growing global competition and increasing consumer expectations, the competitive edge for organizations and destinations and the ability to deliver quality products and services within tourism and hospitality will depend on the human resource dimension (Baum et al. 1997). In this process, the ability to hire high-quality employees and maximize their contributions to the firm plays an important role (Chow et al. 2007). The labor-management aspect has drawn the considerable interest of academics and researchers in the hospitality-related literature (Davidson et al. 2006). Although HRM development had its origin in the large manufacturing sector it is gaining popularity in other sectors. For example, in the hotel industry, Worsfold (1999) noted that there is a correlation between size and the presence of HRM practices in the form of written contracts - provision of equal employment opportunities has also been evident in firms that employed more than 30 employees. Management literature suggests that HRM is positively associated with employee outcomes and organizational performance (Voorde et al. 2011). However, Lucas and Deery (2004) argued that the establishment of this relationship has been vague.
The hospitality industry is characterized by poor pay, poor employment conditions, and low take-up of HR practices/informal HR policies (e.g. family leave, paid maternity leave, equal employment opportunity, health and safety policy, grievance procedures, communication mechanisms) and relies on low cost and temporary workforce (Knox and Walsh 2005). It has also been found that the hospitality industry particularly in Australia does not plan for sustainable labor practices and employee retention as casualization has been the dominant strategy to manage the changing demand for labor (Davidson and Wang 2011). A high level of turnover at both managerial and operational levels is evident in the Australian hotel industry leading to loss of productivity, lower profitability, and increasing level of training and replacements costs (Davidson and Wang 2011).
Hence the purpose of this review is to identify the various HR practices that have been used in the hospitality and tourism industry, identify the key themes of HR-related past research, and identify the gap for future research.
In reviewing the literature on HR issues in the tourism and hospitality industry, the keywords used for identifying the relevant articles were human resource practices in tourism/hospitality, flexible work arrangements in the tourism/hospitality industry, staff turnover, and job satisfaction in tourism/hospitality industry using Google Scholar. The search produced a large number of articles published in tourism and hospitality journals and also in other management and HR related journals as the HRM is influenced by management theory which has evolved with changes in the environmental factors such as economic, social, political, technological factors (Davidson et al. 2011). Using a random approach, altogether 45 articles were reviewed published in the key hospitality and tourism journals (n=10) and 26 articles were reviewed published in the non-hospitality and tourism journals (n=17). The articles reviewed included the quantitative (empirical/survey) approach, qualitative approach (interviews/focus groups and case studies), and meta-analysis approach.
HR practices used in hospitality and tourism industry
Understanding how HR can be managed to improve creativity and enhance productivity is a very important task both for researchers and practitioners as they can be a major component in a firm’s cost structure (Combs et al. 2006). The literature suggests that HR practices can be a source of competitive advantage if they are aligned with a firm’s competitive strategy (Panayotopoulou et al. 2003, Schuler 1992). Some of the high-performance work practices (HPWPs) that have been widely discussed in the human resource literature include self-managed teams, decentralized decision making, employee empowerment, open communication, information sharing, flexible work arrangements/job assignments, performance-based pay, rewards and incentives, training programs to develop knowledge/skills and abilities, staffing based on person-job and person-organization fit, assessment of attitude, job design, grievance procedures, labor-management participation programs, comprehensive employee recruitment and selection procedures, promotion, and extensive employee involvement in the decision-making process (Huselid 1995, Evans and Davis 2005; Wang et al. 2011; Karatepe 2013). Posthuma et. al. (2013) presented a taxonomy of high-performance human resource architectures in four levels: high-performance work (HPW) principles, HPW policies, HPW practices, and HPW products.
HR practices used in the hospitality and tourism industry include recruitment and selection, manpower planning, job design, training and development, quality circle and pay system (Chand 2010); information sharing, job analysis, internal recruiting, attitude surveys, labor-management participation surveys, grievance procedure, pre-employment tests, compensation on job performance, performance appraisals, promotion criteria (seniority, merit, etc.), and training (Cho et al. 2006); selection policies, participation in decision-making, training, performance appraisals, empowerment, and compensation (Tang and Tang 2012); job analysis, staffing, career planning, performance appraisal, pay-for-performance, employee voice, dispute resolution, and job security (Chow et al. 2007); recruitment and selection ‘consisting of: harmonised terms and conditions, single status for all staff, internal promotion norm, employment test criteria, merit element in selection, multi-skilling and experience’, manpower planning ‘consisting of: formal manpower planning, work culture, career planning, involvement of all departments’, job design ‘flexible job description, development of learning organisation, cross-cultural job design, team working’, training and development ‘consisting of: need based T&D criteria, formal system of induction, learning organisation, formal T&D’, quality circle ‘consisting of staff involvement in objective setting, production/service staff responsible for their service, employees are involved in quality circles, regular use of attitudes surveys’, and pay system ‘consisting of: staff informed about market condition and company performance, merit element in pay package, formal appraisal for all staff, no financial incentives, social appreciation and recognition (Chand and Katou 2007). Some of the skills that the employees demonstrate in their application include human relation skills, oral communication skills, interpersonal skills, problem-solving skills, teamwork skills, related work experience, critical thinking skills, leadership skills, business knowledge skills, written skills, office information system skills, computer software application skills, computer literacy, and non-verbal skills (Chan and Kuok 2011).
Some of the examples of bundles of HRM practices are: 1) performance appraisal, remuneration, and training; 2) recruitment/selection, training and development, compensation and benefits; 3) training, communication, empowerment, performance appraisal; 4) hiring the right people, developing employees, empowering employees, providing support systems and retaining the best people; 5) employee recognition, respect, and reward (Kusluvan et al. 2010).
Research gaps in hospitality HR: a brief review
Kusluvan et al. (2010) reported that there is a gap between theoretical propositions/empirical findings and the realities of people management in the tourism and hospitality industry. The possible reason why such gap has arisen has been attributed to several factors which include a pool of low-skilled and easily replaceable employees, deficiency in the methodologies used in past studies, unprofessional managers and owners, high costs and small profit margins, unstable and insufficient demand, seasonality effect, competitive pressure on organizations, etc. (Kusluvan et al. 2010: 192). To address this issue more conceptual and empirical studies have been recommended. The second issue they have identified is the conceptual developments in the selection of the right employees to incorporate employee personality, service orientation, emotional intelligence, etc. as there is growing importance attached to these dimensions of people management. In terms of methodologies, it has also been argued that most of the empirical studies are based on subjective perceptions of managers – the use of objective data incorporating the views of employees and customers could make a worthwhile contribution to the HRM literature (Kusluvan et al. 2010). Although there are several studies available in the area of HR issues in the general and strategic management literature, the validity of many of the propositions and models presented in the HR literature has not been tested in the tourism and hospitality industry. Management of employment / human resources in the tourism and hospitality industry is challenging because of seasonality effect/variations in demand with time (Joliffe and Farnsworth 2003) which suggests that there is a need for further research in this area. The hospitality industry is expected to grow with time not only in developed economies but also in developing economies giving rise to different ways of handling hospitality to match the specific culture which calls for innovative and location-specific models as a one-size-fits model does not work (Davidson et al. 2011). Therefore, further research is needed to explore the applicability of universal HRM in the hospitality industry and examine whether there are any barriers to its application (Hughes 2002).
Although past studies suggest that employee turnover in the hospitality industry can be attributed to inappropriate work placement, inappropriate recruitment process, dissatisfaction with the compensation (salary, benefits, etc.), job stress, and burnout, there is still a gap in understanding of the factors that lead to turnover (Yang et al. 2012). It has also been discussed that job stress and burnout are some of the aspects of employee well-being leading to employee turnover. However, there is still a gap in understanding of how and why HRM leads to specific types of well-being (e.g. happiness, health, relationship) and whether they are associated with employee and organizational performance (Voorde et al. 2011). It has also been highlighted that despite the availability of several studies dealing with job involvement, organizational commitment, job satisfaction (intrinsic and extrinsic), and turnover intentions of hospitality employees, many of them are ‘somewhat anecdotal in nature’ (Zopiatis et al. 2014: 136). Therefore, further studies on employee turnover can be justified on the grounds that employees have a big role to play in the hospitality product and there is a need to develop and implement the policies to mitigate employee dissatisfaction and their intention to quit (AIBattat and Som 2013). The gap in the understanding of the relationships between organizational factors such as intrinsic motivation, supervisory leadership, participative decision-making, job satisfaction, and employees’ intention to stay or leave has also been discussed (Kim and Jogaratnam 2010).
Based on a review of over 100 HRM-related papers, Lucas and Deery (2004) noted that HRM research in the hospitality sector is basically a replication of mainstream HR research or hospitality data that has been used to test generic HR theory. Therefore, they have proposed that HR research should be extended to make it more specific to the hospitality industry so that the research becomes more relevant and useful. They also have drawn the attention of researchers in addressing the following issues: 1) ‘the role of HR in managing the 24/7 work environment and the impact of shift work on health, work and family life, 2) managing the safety and wellbeing of employees in dangerous environments, and 3) the conflict between the cultural values of the owners and managers of large global companies and those of the host company’ (Lucas and Deery 2004: 471).
Through the review of the literature, Solnet and Hood (2008) made an assessment of the impact of the new generation of employees entering the hospitality workforce and presented a research framework linking the following factors: 1) external influences (societal, political, technological, and historical) on Gen Y work values (respect, recognition, input and involvement, continuous development, supportive management, fairness, tolerance, equity, concern for individual welfare); 2) organizational influences (vision, mission, values, resources, expertise, strength of culture, service orientation) on HRM strategies (recruitment and selection, induction, training and development, empowerment, supervisor support, intrinsic and extrinsic benefits, communication, performance management); 3) the influences of Gen Y work values and HRM strategies on Gen Y work attitudes (job satisfaction, motivation, and organizational commitment); 4) influence of Gen Y attitudes and Gen Y behaviors (level of absenteeism, standard of performance, and intention to stay and leave); 5) the influence of Gen Y behaviours on organisational outcomes (profitability, turnover, market share, customer retention, reputation as an employer, and competitive advantage). Although Park and Gursoy (2012) incorporated generational (Baby Boomers, Gen Xers, and Millenials) differences in work engagement in their investigation of the relationships between work engagement, job satisfaction, and turnover intention, there is still a need to test the various relationships in the framework proposed by Solnet and Hood (2008).
In relation to hospitality employee turnover, Deery (2008) focused on the following four key themes that frequently appeared in the literature: job attitudes (e.g. job satisfaction, organizational commitment), personal employee dimensions (e.g. stress re role clarity, and resource inadequacy, job burnout, exhaustion, job overload through ‘deliberate understaffing, temporary staff shortages, unrealistic task criteria’), work-life balance (e.g. job stress, job characteristics, work-family conflict), and organizational strategies to assist employee retention (e.g. HR practices – recruitment and training). Based on this review, Deery (2008: 803) presented a framework linking: 1) organizational and industry attributes (long and unsocial working hours, low pay, low skill requirement, educational mismatch, lack of career development) with personal employee dimensions and work-life conflict, 2) personal employee dimensions and work-life conflict with improved organizational strategies, and 3) improved organizational strategies with increased job satisfaction, organizational commitment and employee retention. Deery (2008) also made a number of recommendations which include the provision of flexible working hours, flexible work arrangements, etc. so that hospitality organizations will be able to retain their talented staff. Deery (2008) also argued that employee turnover causes stress, work overload, low job satisfaction, and little organizational commitment which needs to be addressed. There is also a need to examine work-life balance issues in the hospitality and tourism industry and its relationship with organization outcomes (employee turnover, absenteeism, quality of work-life, and performance) and propose a framework for testing and further refining (Deery and Jago 2009).
Seasonality, low income, poor social protection, job, and income insecurity, work-life conflict, and stress are some of the characteristics of the service sector (e.g. hospitality, agriculture) making employment in the sector precarious (McNamara et al. 2011). Despite the requirement for long, irregular, and unpredictable hours of work leading to a higher level of employee turnover in the hospitality and tourism industry, work and family issues have received little attention of researchers in terms of their assessment of current practice, future potential, and health effects (McNamara et al. 2011; Cleveland et al. 2007; Lockwood and Guerrier 1989).
Blomme et al. (2010a) suggested that there is a need for in-depth research in examining the relationship between the measures of psychological contract and employees’ intentions to leave in the hospitality industry. A psychological contract refers to the relationship between employer and employees e.g. how an employer treats its employees and what kind of contribution the employee makes to the job. It is important to ensure that there is a good understanding of the expectations of inputs and outcomes from both sides. Attention has also been drawn to applying psychological contract theory in examining employees’ work-related behavior in the hospitality industry for the delivery of high-quality service (Lu et al. 2016).
Although HR managers are aware of the adverse impact of employee turnover on productivity and service quality, there is a need for further study to examine the time and money spent by hotels in training new employees and their implications on employee performance (Davidson et al. 2010). The role of HRM practices in the hospitality industry in promoting incremental and radical innovation has also been discussed particularly the use of the ‘hire for skill and train for skill’ strategy (Chang et al. 2011: 816). The innovation research in tourism is, however, at the early stage and it needs to be addressed in multiple ways using several methodological approaches (Hjalager 2010). Some of the themes of innovation that have received patchy coverage include innovation processes in tourism enterprises, driving forces of innovation, innovation and economic performance (what type of innovation produces what type of results and in what kind of enterprises), technological innovations, diffusion of innovation, the role of entrepreneurship, innovation policy issues, the nature of innovations in public tourism service provision, in destination management and governance, development of tourism innovation theories (Hjalager 2010).
Tourism involvement demonstrates an individual’s participation in vacations, encompasses an individual’s long-term attitudes toward tourism activities which in turn can influence an individual’s behavior over time e.g. sharing information, sharing experience, adjusting lifestyle, and spending more time in tourism-related activities (Yeh 2013). Despite its significance, tourism involvement remains under-researched particularly with respect to work engagement and job satisfaction among frontline hotel employees. Therefore, it is necessary for hospitality firms to develop an understanding of the conditions that contribute to work engagement and job satisfaction as engaged and satisfied employees can enhance service quality (Yeh 2013).
Through a critical review of the literature over a 10-year period (2005 to 2014), Baum et al. (2016: 1) argued that the tourism and hospitality HR aspect has not only been under-researched but also ‘suffers from piecemeal approaches at a topic, analytical, theoretical, and methods levels’. For advancing workforce theory, policy, and practice, Baum et al. (2016: 18) proposed the following platform for future workforce research that includes studies which:
draw explicitly on their social science discipline origins and clearly articulate their methodological and theoretical contributions to social science;
extend beyond a ‘problem solving’ managerial perspective on workforce research and seek to engage with an explanation as a starting point in seeking change;
investigate discourses of work and how tourism employment perpetuates or challenges these narratives;
enunciate a just and sustainable glocal vision for tourism and its co-workers.
Through a review of strategic HRM literature, Madera et al. (2017) identified the research gaps in the hospitality and tourism sector. Their review suggests that there are very few studies that deal with the relationship between strategic HRM and financial measures of firm performance. Therefore, Madera et al. (2017) presented a conceptual model for future research linking HRM strategy with the first level of outcomes (employee measures) which is then linked with the second level of outcomes (operational measures) which is then linked with the third level of outcomes (financial measures). Contextual variables proposed in their model are national culture, legal contexts, economic contexts, educational contexts, technology, and leadership (Madera et al. 2017). Various components of HRM strategy proposed in the model are: individual HR practices, high-performance work systems, high commitment systems, high involvement systems, and high investment systems. Employee measures in the first level of outcomes include job satisfaction, organizational commitment, employee engagement, employee helping behaviors, employee skills, employee motivation, perceived organizational support, turnover intentions, and perceived fairness. Operational measures in the second level of outcomes include service speed, service quality, innovation, safety behaviors, customer service behaviors, customer satisfaction, labor productivity, creativity, workforce turnover, and customer loyalty. Financial measures in the third level outcomes include profit, revenues, sales, stock price, sales growth, return on invested capital, return on assets, market share, market return, net revenue per employee, cash-flow, and profit to earnings ratio (Madera et al. 2017: 59).
Based on a review of 45 hospitality-related journal articles and 26 non-hospitality-related journal articles, this study identified the various HR practices used in the hospitality and tourism industry. The study also identified a range of research gaps in the HR area in the context of the hospitality and tourism industry for future research.