A Review of Human Resources Management Issues in the Tourism and Hospitality Industry

Human resources are often seen as one of the most important assets of tourism and hospitality organizations. Numerous studies have examined how employee performance can be managed to contribute to the organizational bottom line. This article is a structured review of the literature regarding key human resources management (HRM) issues in the tourism and hospitality industry. Based on this review, the authors offer an assessment of emerging trends in HRM and a summary of what has been advocated in the literature for managing employee performance.

Keywords: human resources management; organizational culture; internal marketing

The Critical Role of the Human Resources for Tourism and Hospitality Businesses

Few people would reject the proposition that the human element in tourism and hospitality organizations is critical for service quality, customer satisfaction and loyalty, competitive advantage, and organizational performance. This belief is supported by many theories, models, and empirical studies in the strategy, service, and tourism management pieces of literature that stress the critical role of human resources for organizations. On the theoretical front, resource-based theory (Barney 1991; Grant 1991; Wernerfelt 1984) and its variants— dynamic capability theory (Eisenhardt and Martin 2000; Teece, Pisano, and Shuen 1997), competency-based theory (Prahalad and Hamel 1990), knowledge-based theory (Grant 1996), organizational social capital theory (Leana and Van Buren 1999; Nahapiet and Ghoshal 1998), and intellectual capital theory (Edwinsson and Malone 1997; T. A. Stewart 1997)— posit that firm-specific resources, assets, and capabilities that are valuable, rare, nonsubstitutable, or imperfectly imitable can be an important source of sustainable competitive advantage and performance differential among firms. In this context, it is argued that human capital or assets, including employee knowledge, skills, experience, ability, personality, internal and external relationships, attitudes, and behaviors are essential for creating firm-specific advantages. Employee attributes are directly influenced by human resources management (HRM) policies, practices, and capabilities of the organization, as well as organizational culture and climate (Barney and Wright 1998; Coff 1997; Lado and Wilson 1994; Mueller 1996; Wright, McMahan, and McWilliams 1994; Wright, Dunford, and Snell 2001). Similarly, models developed in the service management literature, such as the gap model of service quality (Parasuraman, Zeithaml, and Berry 1985), the service profit chain model (Heskett et al. 1994), and many others (see Ghobdian, Speller, and Jones 1994), acknowledge the role employees may play in service quality, customer satisfaction, and organizational performance.

Many authors have convincingly explained how and why employees affect competitive advantage and firm performance. The essence of the argument is that human capital or assets, which are directly influenced by management policies, practices, systems, capabilities, and organizational culture and climate, “contribute to sustained competitive advantage through facilitating the development of competencies that are firm-specific, produce complex relationships, are embedded in a firm’s history and culture, and generate tacit organizational knowledge” (Lado and Wilson 1994, 699). These arguments can be summarized in a basic model where the human capital stocks of the organization, HRM practices, internal marketing, organizational culture and climate, and business and HRM strategy encourage and reinforce employees’ work-related behavior, thereby driving customer value, product-service quality, and customer satisfaction and loyalty—which are, in turn, the basis of organizational performance.

Because the chief output of tourism and hospitality organizations is services, researchers have investigated the features of services that are most critically driven by human resources. The result is a familiar litany: services are intangible; they are produced and consumed simultaneously, usually at the service providers’ location; and customers are present or participating in the service, usually with interpersonal interaction between customers and service providers. Owing to these features, services are made tangible in the personality, appearance, attitudes, and behavior of the service provider; thus, employees become part of the product, represent the organization, and help to form the image of the organization (Bitner, Booms, and Tetreault 1990; Hartline and Jones 1996). For these reasons, employees and how they are managed are key determinants of service quality, customer satisfaction and loyalty, competitive advantage, organizational performance, and business success (Bitner, Booms, and Tetrault 1990; Nickson et al. 2002; Schneider 2003).

Empirical studies also indicate that the service providers’ personality, knowledge, skills, attitudes and behaviors, HRM practices, organizational culture and climate, and business and HRM strategy can be linked to essential customer and organizational outcomes. These arguments point to the fact that the treatment and management of the employees should be a crucial concern for managers in the tourism and hospitality industry.

Management of Employee Performance in the Tourism and Hospitality Industry

We now review studies on major trends that have helped shape current modes of thinking on people management in the tourism and hospitality industry. As we discuss below, most of the contemporary literature that has relevance for the management of people seems to fall in one of the following categories (although there are other issues):

(1) employee personality and emotional intelligence.

(2) emotional and aesthetic labor.

(3) HRM practices.

(4) internal marketing.

(5) organizational culture and climate.

(6) business and HRM strategy.

(7) employee job attitudes and behaviors.

Employee Personality, Emotional Intelligence, and Outcomes

Personality is defined as “those characteristics of the person that account for consistent patterns of feeling, thinking, and behaving” (Pervin and John 1997, 4). Employee personality seems to be gaining importance as a selection criterion for tourism and hospitality organizations due to its role in employee performance. Employers often use terms such as “good attitudes,” “social skills,” and “personal characteristics” to define the skills requirements for tourism and hospitality employees. Many researchers and industry practitioners argue that employee personality influences customer service attitudes and behavior, customer service skills, and overall performance of service providers, which may be critical for service quality, customer satisfaction, loyalty, and organizational success. Employee personality is assumed to influence organizational performance through its effects on employees’ attitudes, behavior, and service performance (Kusluvan 2003b). Accordingly, much empirical research has been carried out on the connection between employee personality and employee performance. In the context of the tourism and hospitality industry, G. L. Stewart, Carson, and Cardy (1996) researched the relationship between personality and employee self-directed behavior (desirable internalized behavior that occurs in the absence of formal control) among hotel employees in the southwestern United States and found a significant correlation between personality dimensions of conscientiousness, agreeableness, emotional stability, openness to experience, and supervisor evaluation of employee performance. Another study in the foodservice industry found significant relationships between personality characteristics (especially extroversion and agreeableness) and proper customer service behaviors and managers rated employee performance (Hurley1998). A similar study carried out in the food-service industry indicated significant correlations between basic personality traits (i.e., emotional stability, conscientiousness, agreeability, and the need for activity) and self-rated and supervisor rated performance ratings of service employees, mediated by customer orientation of employees (Brown et al. 2002). Yet another study of restaurant employees in the United States showed that regardless of the level of service climate and the existence of service-supporting HRM practices, conscientiousness and extroversion had significantly positive relationships with employee service performance, whereas neuroticism and agreeableness were not significantly related to employee service performance (Liao and Chuang 2004). Another study interestingly found that sociability, flexibility, result orientation, and innovativeness were negatively related to employee performance and serving, whereas conscientiousness was positively related to performance (Papadopoulou-Bayliss, Ineson, and Wilkie 2001). That same study found that ambitious (results-oriented, flexible, and innovative) employees were found to not perform well. In addition, as a personality trait, self-efficacy was found to have a strong effect on employee performance and service quality (Hartline and Ferrell 1996). Similarly, personality traits of competitiveness, self-efficacy and effort are significant predictors of frontline employee performance in the hotel industry (Karatepe et al. 2006). Self-efficacy and effort depict significant positive relationships with frontline employees’ job satisfaction (Karatepe et al. 2006). The displayed authenticity of the service provider also enhances friendliness and customer satisfaction in the hotel industry (Grandey et al. 2005).

At the personal level, personality characteristics that are congruent with providing good service are variously called “service orientation” (Hogan, Hogan, and Busch 1984), “service predisposition” (Lee-Ross 2000), or “customer (service) orientation” (Brown et al. 2002; Saxe and Weitz 1982). Hogan, Hogan, and Busch (1984, 167) defined service orientation as “the disposition to be helpful, thoughtful, considerate, and cooperative.” They suggested that service-oriented people are also self-controlled, dependable, well-adjusted, and likable, and they have considerable social skills and a willingness to follow rules. Alternatively, Lee-Ross (2000, 149) defined service predisposition as “personal satisfaction with service provided.” Customer orientation is defined as “employees’ tendency or predisposition to meet customer needs in an on-the-job context” (Brown et al. 2002, 111). Service providers’ customer orientation was found to be strongly related to customers’ satisfaction with service (Susskind, Kacmar, and Borchgrevink 2003). It was also found that customer orientation promotes job satisfaction, commitment, and organizational citizenship behavior in the food industry (Donavan, Brown, and Mowen 2004). In the restaurant industry, customer-oriented behaviors were positively related to customer satisfaction and customer commitment (Donavan and Hocutt 2001). Although service orientation or predisposition is thought of as a personality characteristic, it is argued that cultural values can improve or diminish service predisposition through specific job attitudes (Johns, Chan, and Yeung 2003). In summary, these studies suggest that employee personality, coupled with cultural values, can be an important determinant of employee performance, job satisfaction, employee commitment, and organizational citizenship behaviors, as well as service quality, customer satisfaction, and customer commitment. Another concept that is closely related to personality characteristics is emotional intelligence. Emotional intelligence “consists of the ability to: perceive one’s own and others’ emotions and accurately to express one’s own emotions; facilitate thought and problem-solving through the use of emotion; understand the causes of emotion and relationships between emotional experiences; and manage one’s own and others’ emotions” (Salovey, Mayer, and Caruso 2002, as quoted in Kernbach and Schutte 2005, 438). Higher emotional intelligence of the service provider is associated with greater reported satisfaction with the service transaction in general (Kernbach and Schutte 2005). Furthermore, emotional intelligence is also associated with job satisfaction and job performance (Bachman et al. 2000; Goleman, Boyatzis, and McKee 2002; Prati et al. 2003; Wong and Law 2002). However, the empirical evidence for this is scant in the tourism and hospitality industry (Zeidner, Matthews, and Roberts 2004). One exception is a study by Sy, Tram, and O’Hara (2006), who have examined the relationships between employees’ emotional intelligence, their manager’s emotional intelligence, employees’ job satisfaction, and performance for 187 food-service employees from nine different locations of the same restaurant franchise. They found that employees’ emotional intelligence was positively associated with job satisfaction and performance. In addition, managers’ emotional intelligence had a more positive correlation with job satisfaction for employees with low emotional intelligence than for those with high emotional intelligence (Sy, Tram, and O’Hara 2006).

Emotional and Aesthetic Labor and Outcomes

It is argued that emotional and aesthetic labor has increasingly gained currency as required skills for service employees. In the context of work, emotional labor (a term coined by Hochshild 1983) has been defined as “the effort, planning, and control needed to express organizationally desired emotions during interpersonal transactions” (Morris and Feldman 1996, 987) or “the act of displaying appropriate emotion (i.e., conforming to a display rule)” (Ashforth and Humphrey 1993, 90). Studies carried out in the tourism industry showed that working in tourism-related industries requires considerable emotional labor (Constanti and Gibbs 2005; Seymour 2000), and displaying this may result in employee burnout (characterized by emotional exhaustion and cynicism) (Anderson, Provis, and Chappel 2001). On the other hand, aesthetic labor is the employee’s capacities and attributes for “looking good” or “sounding right” at the point of entry into employment (Nickson, Warhurst, and Dutton 2005; Warhurst et al. 2000). Employers in the hospitality industry consider aesthetic labor important, and they seek employees who will look good and sound right (Nickson, Warhurst, and Dutton 2004, 2005). Aesthetic labor was found to create a distinct image and provide a competitive advantage in the hospitality industry (Nickson, Warhurst, and Dutton 2005). Yet there is little empirical evidence of the relationship between employing aesthetic labor and tourism companies’ business performance. Besides, one must consider the ethics of employing people based on their appearance, which is the essence of an aesthetic labor approach.

HRM Practices and Outcomes

HRM is concerned with the “design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals” (Mathis and Jackson 2000, 4). HRM involves a series of activities and decisions relating to manpower planning, job design and analysis, recruitment and selection, orientation, training and development, team building, compensation and benefits, promotion, motivation, employee involvement and participation, empowerment, performance appraisals, health and safety, job security, employee and labor relations, and terminations (Biswas and Cassell 1996; Boella 2000; Dessler 2000; Jerris 1999; Mathis and Jackson 2000; Tanke 2001). In recent years, a more strategic approach to HRM has been applied, in which employees are viewed as strategic and valuable assets to be invested in and developed, rather than costs to be controlled. In that regard, a highly committed, capable, empowered, involved, and the motivated workforce was seen as the way to competitive advantage and sustained business success (Storey 1995). The alignment of HRM with business strategy is also advocated within this perspective. For developing committed, capable, satisfied, and motivated employees, authors have alluded to appropriate bundles of HRM practices by various names, including high-involvement practices, flexible production systems, high-commitment systems, high-performance work systems (HPWS), and best HRM practices (Wood 1999a, 1999b). HPWS is defined as “a set of distinct but interrelated HRM practices that together select, develop, retain, and motivate a workforce: (1) that possesses superior abilities; (2) that applies their abilities in their work-related activities; and (3) whose work-related activities result in these firms achieving superior intermediate indicators of firm performance and sustainable competitive advantage” (Way 2002, 765-66). High-performance work organizations are characterized by HRM practices such as selective hiring, extensive training, self-managed teams, decentralized decision making, reduced status distinction, information sharing, performance-based compensation, employment security, broad job design, flexible job assignments, employee participation and involvement, internal promotion, employee stock ownership, transformational leadership, and group-based high compensation contingent on performance (e.g., gain sharing, profit sharing) (Guthrie 2001; Pfeffer 1998; Way 2002; Wood 1999a; Zacharatos, Barling, and Iverson 2005).

Two streams of research have examined HRM practices in the tourism and hospitality industry. In one stream, a number of studies examined individual HRM practices such as recruitment and selection (Anderson, Provis, and Chappel 2003; Garavan 1997; Ineson 1996; Janes 2004; Martin and Grove 2002), empowerment and involvement (Brymer 1991; Corsun and Enz 1999; Dewald and Sutton 2000; Fulford and Enz 1995; Hales and Klidas 1998; Lashley 1995a, 1995b, 1999, 2000; Sparrowe 1994), leadership and managerial styles (Anastassova and Purcell 1995; Deery and Jago 2001; Hales and Tamangani 1996; Lee-Ross 1993; MacFarlane 1982; Nebel and Stearns 1977; Purcell 1987; Tracey and Hinkin 1994; Worsfold 1989a), performance appraisal (Umbreit 1986, 1987; Umbreit, Eder, and McConnell 1986; Woods, Sciarini, and Breiter 1998), and wages (Lee and Kang 1998).

The other stream comprises a few studies analyzing the state and impact of various bundles of HRM practices. The systems view has emerged as the dominant trend in linking HRM practices to an employee, customer, and organizational outcomes. Both streams of research have concluded that individual or bundles of HRM practices in the tourism and hospitality industry are unprofessional, underdeveloped, and inferior when compared to other industries and are not practiced in a way that generates employee commitment, satisfaction, and motivation (Anastassova and Purcell 1995; Fulford and Enz 1995; Guerrier and Lockwood 1989; Head and Lucas 2004; Hiemstra 1990; International Labor Organization [ILO] 2001; Kelliher and Johnson 1987, 1997; Lucas 1993, 1995, 1996, 2002; Lucas et al. 2004; McGunnigle and Jameson 2000; Nankervis and Debrah 1995; Nolan 2002; Pizam 1999; Price 1994; Taylor and Davies 2004; Timo and Davidson 2005; Wood 1997; Worsfold 1999). For example, there is ample evidence that a substantial number of minimum wage earners are working in the tourism and hospitality industry, and its organizations pay their employees less on average than do other businesses (Boella 2000; ILO 2001; Woods 1999). An overwhelming majority of studies report little evidence of adoption and implementation of progressive, high-performance, or high-involvement HRM practices by the industry. In terms of the current state of HRM practices, the only (and partial) evidence of good personnel management and practice are observed in a small number of large, foreign-owned, international chain establishments (Hoque 1999a, 1999b; ILO 2001; Lucas 1996, 2002; McGummigle and Jameson 2000; Price 1994; Worsfold 1999). For this reason, the tourism and hospitality industry has a reputation for poor human resource practices and managing people in a traditional and exploitative way. Accordingly, tourism and hospitality firms are described as “bleak houses,” or “ugly” and “bad” establishments in employment terms (Lucas 1996). However, it would be a mistake to disregard the increasing number of tourism and hospitality organizations that have highly effective HRM practices, as documented, for example, by Bonn (2003); Dubé et al. (1999); Walsh, Enz, and Siguaw (2003); and Williams and Watts (2002). Certain hospitality firms (e.g., Four Seasons, Kimpton Hotels, Marriott International, and Starbucks) are listed in “100 best companies to work for” in various business magazines (see Hinkin and Tracey 2010.

Regarding the consequences of such HRM practices, individual and various combinations of HRM practices were related to employee, customer, and organizational outcomes such as turnover, organizational commitment, job satisfaction, service quality, customer satisfaction, and organizational performance. Exhibits 2 and 3 summarize some of the most important examples of such studies.

Internal Marketing and Outcomes

Internal marketing views all employees as customers—including other employees and departments in the organization to whom employees are also internal suppliers. The internal marketing approach asserts that to deliver quality service and satisfy external customers, internal customers should themselves be satisfied and motivated. Internal customers should be satisfied not only with their employment conditions and the organization’s HRM practices but also with the internal services they receive from coworkers during service delivery. In line with this philosophy, internal marketing is defined as “the application of marketing, HRM, and allied theories, techniques, and principles to motivate, mobilize, co-opt, and manage employees at all levels of the organization to continuously improve the way they serve external customers and each other” (Joseph 1996, 55). Organizational practices espoused by internal marketing are similar to the high-commitment or high-involvement HRM practices explained above.

A growing number of studies confirm gains enjoyed by those adopting employee-friendly internal marketing practices in the tourism-related industries. For example, Wildes (2005) provided evidence that increasing internal service quality given to restaurant workers resulted in higher employee satisfaction, reduced employee turnover, and an increase in employees’ recommending their jobs to others. Similarly, Arnett, Laverie, and McLane (2002) demonstrated that internal marketing strategies in the hotel industry contributed to both job satisfaction and pride in the organization, which both resulted in an increase in positive employee behavior, including good service, cooperation with other employees, and commitment to the organization. In the airline industry, the internal marketing practices of Southwest Airlines were found to be responsible for extremely happy, motivated, and productive employees who contributed to excellent customer service, competitive advantage, and organizational performance in terms of profits, market share, safety records, and cost reduction (O’Reilly and Pfeffer 2000; Pfeffer 1998). These causal relationships led some researchers to develop a model linking internal marketing practice to external marketing outcomes, mediated by internal customer attitudes and behavior.

Organizational Culture and Climate and Outcomes

Organizational culture and organizational climate are two constructs that are believed to influence employee attitudes, behaviors, performance, and organizational effectiveness. Yet the distinction between organizational culture and organizational climate is neither obvious nor clear-cut. Organizational culture is generally described as the deep structure of “the shared values, attitudes, beliefs, assumptions, and core values of organization members which influence not only the behavior of members but also the systems created” (Ferris et al. 1998, 240); whereas organizational climate is seen as relatively evanescent, involving changeable perceptions, interpretation, and attributions by employees about the work environment, how an organization operates, and what it sees as important (Ferris et al. 1998; Schneider, Gunnarson, and Niles-Jolly 1994). More specifically, “employees’ perceptions of the events, practices, and procedures, as well as their perceptions of the behaviors that are rewarded, supported, and expected, constitute the climate of the work setting in an organization” (Lytle, Hom, and Mokwa 1998, 457-58). In general, organizational climate is seen both as one surface-level manifestation of an organization’s culture (Schein 1990) and “an empirical substitute for the richer term culture and a feature of rather than a substitute for culture” (Poole 1985, 84).

In the context of tourism and hospitality organizations, one can rather speak of “service culture” and “service climate.” Gronroos (1990, 244) defined service culture as “a culture where an appreciation for good service exists, and were giving good service to internal and, ultimately, external customers is considered a natural way of life and one of the most important norms by everyone.” Similarly, service climate is defined as “employees’ perception that practices and procedures were in place to facilitate the delivery of excellent service, and management rewarded, supported, and expected excellent service” (Schneider and Bowen 1993, 39).

Many researchers have argued that organizational or service culture and climate directly or indirectly influence employee attitudes and behaviors, which, in turn, have an impact on organizational performance (Denison 1996; Ferris et al. 1998). For this reason, organizational or service culture and climate are seen as precursors of organizational effectiveness. For example, according to the social context model, the culture of an organization affects the types of HRM systems and practices that are in place; these systems and practices, in turn, influence employee attitudes and behaviors, either directly or through their effects on climate; and these attitudes and behaviors, in their own turn, influence organizational effectiveness. Others argue that HRM practices influence the organizational and service culture, which in turn affects employee attitudes and behaviors, which, once again, drive organizational performance (Zerbe, Dobni, and Harel 1998).

In the context of tourism and hospitality, most research deals with the consequences of organizational culture on organizational performance, whether directly or indirectly. Studies carried out in tourism-related industries showed that organizational culture is related to overall organizational effectiveness and performance (Doran, Haddad, and Chow 2004; Glover 1995; Kemp and Dwyer 2001; LeBlanc and Mill 1995; Tidball 1988, Wilkins and Patterson 1985); profitability and employee commitment (Tidball 1988); employee turnover (Deery and Shaw 1997, 1999; Tidball 1988); employee satisfaction and intent to remain (Tepeci and Bartlett 2002; Tepeci 2005); service culture and competitive advantage (Hallowell, Bowen, and Knoop 2002); service giving behaviors of employees (Tidball 1988; Zerbe, Dobni, and Harel 1998); market share, profitability, customer satisfaction, and loyalty (Gray, Matear, and Matheson 2000); commitment to organizational values; guest and employee centeredness; openness to learning and change; teamwork; increased creativity; shared goals and values; organizational stability and growth; effective peer relations; employee participation and decentralized decision making; and employee motivation, commitment, and role clarity (Kemp and Dwyer 2001). In a similar vein, organizational climate predicted service quality, employee turnover, burnout (Vallen 1993), guest satisfaction (King and Garey 1997), intrinsic and extrinsic employee job satisfaction, positive and negative leader reward behaviors, intention to quit (Jackofsky and Slocum 1988), and customer satisfaction and financial performance (Davidson, Manning, and Timo 2001; Davidson and Manning 2004). Other tourism-related studies of organizational culture and climate focused on how organizational culture and climate can be measured (Davidson et al. 2001; Deery and Shaw 1997, Kemp and Dwyer 2001; Manning, Davidson, and Manning 2005; Tepeci and Bartlett 2002) or changed and managed (Brownell 1990; Kusluvan and Karamustafa 2003; Mwaura, Sutton, and Roberts 1998; Ogbonna and Harris 2002; Watson and D’Annunzio-Green 1996; Woods 1991).

Business and HRM Strategy

Several researchers have tried to identify a relationship between business and HRM strategy in the tourism and hospitality industries. Some studies developed conceptual models or frameworks aimed at understanding and classifying the strategic approach to HRM in the tourism and hospitality industries. In an early, thoughtful study, Lashley and Taylor (1998) explored the relationship between the service operation type adopted by the organization and the style of HRM practices that best fit with it. They proposed four service operation types, based on the degree of standardization and intangibility of services (i.e., professional service, mass service, service factory, and service shop) together with four HRM strategies that fit with the four operational types (i.e., professional style, participative style, involvement style, and command and control style). In hospitality retailing, for instance, they identified that command and control, employee involvement, and employee participation strategies were used in the management of employees (Lashley 1998; Lashley and Taylor 1998). In another important conceptual model, Jolliffe and Farnsworth (2003) developed a theoretical dichotomous model for managing employees strategically in the face of seasonality in tourism. They argued that HRM practices and strategies of businesses would be different depending on whether they embraced seasonality or challenged it. This model may be useful for understanding and guiding hospitality HRM practices for core and peripheral staff. In yet another classification of HRM strategies, Hughes (2002) developed a framework for understanding HRM strategies in the tourism and hospitality industries. She identified the following four types of HRM strategy: traditional HRM, integrative HRM, strategic HRM, and universal HRM. She argued that empirical research supports universal HRM.

Empirically, Timo (1999) found two labor utilization strategies in the Australian hotel industry, which were influenced by managerial practices, organizational changes, and product market changes. One strategy, the cost minimization approach, used a flexible and segmented labor market (core and peripheral labor) that enabled hotels to reduce cost and afforded them a competitive edge based on price. In this approach, it was argued that flexible seasonal workers, part-time or on-call employees, students, and volunteers could be used for a cost-reduction strategy (Graham and Lennon 2002; Jago and Deery 2002). The other approach, quality enhancement, was a “model of employment relations and competitive advantage driven by a more stable, better skilled and motivated workforce” (Timo 1999, 63). In this analysis, it is argued that the quality initiative and strategy of quality enhancement can be a catalyst for a strategic approach to human resource development (Maxwell, Watson, and Quail 2004). Finding cost reduction to be widespread in the industry, Timo (1999) commented that this strategy would be difficult to change. Reflecting on the business strategies of cost-reducer, quality enhancer, and others, some researchers have grouped HRM strategies in the tourism and hospitality industry into HRM cost-reducer, HRM quality-enhancer, and HRM others (Alleyne, Doherty, and Greenidge 2006; Alleyne, Doherty, and Howard 2005; Hoque 1999a). In another empirical study, in the hotel industry in Spain, Soriano (2005) found a binding relationship between organizational size and human resource strategy as well as human resource strategy and other functional strategies such as marketing and finance.

In terms of the relationship between strategy implementation and HRM, Hartline, Maxham, and McKee (2000) examined the dissemination of a customer-oriented strategy through a management and employee-initiated control mechanism in the hotel context. They found that customer-oriented strategy could be implemented by the corridors of influence, namely, workgroup socialization and organizational commitment, formalized organizational structure and behavior-based employee evaluation, and empowerment of customer contact employees. Overall, the literature indicated that tourism and hospitality organizations rarely adopted a strategic approach to the management of human resources, and there was not a clear relationship between the business strategy and the approach to HRM (Hughes 2000; Kelliher and Perrett 2001; Lucas 1995; McGummigle and Jameson 2000; Nankervis and Debrah 1995). For this reason, a call for human resource and line managers to take a more influential role in strategic planning and HRM practices were advocated (Tracey and Nathan 2002).

Employee Job Attitudes, Behaviors, and Outcomes

Job attitudes and behaviors that are widely researched in the tourism-related industries are turnovers, job satisfaction, motivation, job stress, and organizational commitment. Much research has focused on determining the antecedents and consequences of these job attitudes and behaviors. The factors that influence them, their consequences, and the relevant literature. Linking with the basic model of the strategic role of HR for an organizational performance presented in these employee attitudes and behaviors denote processes, whereas their consequences refer to outcomes. An examination of Exhibit 8 indicates that antecedents of such job attitudes and behaviors as turnover, job satisfaction, motivation, job stress, and organizational commitment are alike and closely related, and they lead to similar consequences. A closer examination of the factors influencing job attitudes and behaviors shows that the HRM practices of the organization and management, job design, job characteristics, the social ecology of the organizational environment, and structure and stability of the tourism and hospitality industries are the major determining factors. An overwhelming majority of studies on job attitudes and behaviors concluded that turnover and job stress are high in the tourism-related industries, whereas job satisfaction, organizational commitment, and motivation are low. The consequences are said to be negative in terms of employee performance, employee retention, service quality, customer satisfaction, organizational performance, and competitive advantage.

Another group of studies examined overt employee behaviors and their consequences. Dobni, Zerbe, and Ritchie (1997) identified a group of the desired service behaviors or behavioral repertoires that are pivotal for job performance in the service industries. These behavioral repertoires form a basis for clarifying service employee roles and providing service according to service quality specifications. Behavioral repertoires (i.e., industrial, entrepreneurial, ultrareliable, compromise) identified by Dobni, Zerbe, and Ritchie are useful for developing, guiding, and controlling service behaviors of employees in tourism and hospitality organizations. In a similar study in the restaurant industry, Winsted (2000, 2003) identified a number of overt positive and negative employee behaviors that were highly correlated with customers’ satisfaction with the service encounter. These behaviors were grouped into promptness, courtesy, friendliness, caring, authenticity, personalization, control, and formality. In further analysis of the data, Winstead (2003) expanded the list of dimensions to civility, personalization, remembering, conversation, congeniality, delivery, authenticity, basics, concern, and formality. Winstead (2000, 2003) indicated that these dimensions are highly correlated with customer satisfaction and that the importance of these dimensions could be different in different cultures. Keung (2000) explored hotel employees’ questionable job-related behaviors in Hong Kong from the perspective of tourists and discovered that tourists disliked any infringement of their privacy, unethical employee behavior, and hotel employees disobeying hotel rules and regulations. Finally, a number of studies indicated that service employee behaviors, effort, and performance strongly affected positive customers’ affective responses and satisfaction (Mohr and Bitner 1995; Price, Arnould, and Tierney 1995), service quality and value (Hartline and Jones 1996), and corporate image (Nguyen 2006).

Other Issues

In addition to these main perspectives, other issues found in the literature that have implications for managing employee performance are staff and skill shortages and difficulty of attracting and retaining personnel; the need to train employees in new communication and information technologies, HIV/AIDS issues, and security issues; employment law and minimum wages; cross-cultural awareness of operational staff; managing a diverse and multicultural workforce; low prestige and status of tourism and hospitality jobs; aging population and advantages and disadvantages of older workers; recognition of tourism and hospitality diplomas internationally; mobility of workers internationally; and restrictive government policies. (Farrell 2001; ILO 2001; Magd 2003; OECD 2003; Powell and Wood 1999).

Emerging Issues from the Literature

Looking at emerging issues and trends, the most noticeable are the contradictions and gaps between theoretical propositions, empirical findings, and the realities of people management in the industry. Both theoretical approaches and empirical studies state that human resources and effective HRM are essential and that employee performance is associated with service quality, customer satisfaction, competitive advantage, and organizational performance; however, people management practices and employment conditions of many sectors and organizations of the tourism and hospitality industry do not seem to reflect the importance of effective HRM. Accordingly, the contribution of HRM to organizational performance is undervalued in comparison to other business functional areas (Umbreit and Sweeney 1995). Due to the poor state of HRM practices prevalent in the industry, some researchers have questioned the role of employees as the most important determinant of service quality, customer satisfaction, and organizational performance (Johns and Lee-Ross 1997; Losekoot, Wezel, and Wood 2001; Nickson et al. 2002; Ostrowski, O’Brien, and Gordon 1994). As a result, we see a need to explain the contrasts between academic studies, theoretical models, managers’ explanations of the role of employees, and the realities and state of people management in the industry. We see one or more of the following factors as possible sources of this contradiction: the pool of low-skilled and easily replaceable employees; the existence of a large, unemployed labor pool; deficient methodology of studies; the competitive pressure on organizations; lack of unionization; unprofessional managers and owners; the hypocrisy of managers and owners; high costs and small profit margins; unstable and insufficient demand; stark necessities of the structure and conditions of the industry such as seasonality and small and medium-size organizations; and a low cost–low price business strategy. More conceptual models, theories, and empirical studies are required to explain the gap between words and deeds as well as that between theories, models, empirical research, and reality.

A second emerging issue relates to the conceptual developments in the selection of the right employees for tourism and hospitality organizations. Recently, employee personality, service orientation, emotional labor, emotional intelligence, and aesthetic labor are gaining importance as selection criteria for tourism and hospitality employees. Although some progress has been made in regard to the right qualities and characteristics of employees to be employed in the industry, more research is needed to define the personality traits and emotional and aesthetic qualities of prospective employees as well as how these traits and qualities actually affect employee, customer, and organizational outcomes and whether such people are willing to work in and have a vocational commitment to the industry, given the often poor employment conditions. It is yet to be seen whether tourism and hospitality organizations will embrace the use of personality tests. Tourism and hospitality industries have a reputation for selecting employees intuitively (or opportunistically) and not adopting even established practices such as structured interviews and cognitive ability tests (Anastassova and Purcell 1995; Hoque 1999b; Ineson and Kempa 1997; McGummigle and Jameson 2000; Rowley and Purcell 2001).

The third issue that requires further conceptual development is in the area of the best bundles of HRM or high-performance work practices. Although many researchers have looked at various combinations of HRM practices and their consequences, no consensus exists on the most appropriate bundles of HRM practices that create the desired consequences in terms of the employee, customer, and organizational outcomes (Warech and Tracey 2004). In this respect, researchers in tourism and hospitality can benefit from progress made in general and strategic management and organization science literature. A related issue concerns the methodology of such studies. Almost all of the studies on HRM practices are based on data received from subjective perceptions of managers or department heads. It is possible that managers’ responses on the issue may be distorted due to a social desirability effect. Advanced measurement should be applied for more objective data, and the views of employees and customers should also be taken into consideration in such studies (see vol. 53 of Personnel Psychology). It is important to note that before searching for the best bundles of HRM practices, researchers need to develop considerably more basic knowledge of effective HRM practices and how to get managers to adopt those good practices.

The fourth issue requiring further study relates to the testing of the theoretical models of HRM practices developed in the strategic management literature. We see three different modes of theorizing in the field (Delery and Doty 1996; Ferris et al. 1999). The universalistic approach to HRM posits that there are certain “best” HRM practices that will contribute to increased organizational performance regardless of the industry or organizational strategy (Ferris et al. 1999). According to this view, all organizations should adopt these best practices (Delery and Doty 1996). In contrast, the contingency perspective argues that HRM practices of an organization should be congruent with an organization’s strategy and its competitive and strategic position. Finally, the configurational approach suggests that an organization’s HRM practices should be in line not only with its strategy, characteristics, and competitive position (vertical or external fit) but also be internally consistent and complementary (horizontal or internal fit). Thus, this perspective assumes that “there are certain, specific systems of HRM practices that result in the highest internal consistency and complementarity, as well as congruence with organizational goals. The configuration of practices that provides the tightest horizontal and vertical fit with any given strategy, then, would be the ideal type for an organization pursuing that particular strategy” (Ferris et al. 1999, 391). Here again, the onus is on tourism researchers to test these theoretical approaches in different organizations in terms of size and strategy, as well as different subsectors of the tourism industry, and link them with organizational performance outcomes.

The final issue emerging in the industry’s employee management literature is the confusion in the definition and operationalization of constructs such as HRM practices, internal marketing, and organizational culture and climate. A closer examination reveals that the domains, dimensions, and items used to measure these constructs are similar. For example, rewards, training, management style, job security, supervisor or leader support, style and facilitation, role conflict, role ambiguity, job variety, challenge and autonomy, coworker support, and friendliness are all used in the measurement of internal marketing, organizational culture, organizational climate, and HRM practices (Deery and Shaw 1999; Manning, Davidson, and Manning 2004). Researchers seem to be studying similar phenomena but labeling them differently. We need to distinguish these constructs from each other or make it clear that they are actually referring to the same thing.

Implications for Practical Management

The complexity of the tourism and hospitality industries and their employment structures complicate the matter of determining the implications of research relating to them. These industries’ employment, workforce, and labor market characteristics make the management of people difficult and different from many other industries. Even using the umbrella terms tourism and hospitality, we note the vast number of interrelated and complementary businesses and the variety of products and organizations of various sizes. As a result, it is impossible to prescribe a single set of HRM practices for all organizations or employees in the hospitality and tourism industries. With those caveats in mind, we offer the following general guidelines for hospitality and tourism employee management.

Be Selective in Staffing

Tourism and hospitality organizations should benefit from more selective staffing to ensure essential personality traits and the ability to provide emotional labor, emotional intelligence, and aesthetic labor. Some people, by natural disposition, seem to be more comfortable and happy in jobs that demand constant interpersonal relations. Beyond that, research indicates that important personality traits include conscientiousness, agreeableness, emotional stability, openness to experience, extroversion, empathy, self-efficacy, authenticity, the need for activity, self-control, and adjustment. The literature offers a number of instruments or scales for measuring service orientation (Alge et al. 2002, Baydoun, Rose, and Emperado 2001; Brown et al. 2002; Donavan, Brown, and Mowen 2004; Groves 1992; Hogan, Hogan, and Busch 1984; Kim, McCahon, and Miller 2003; Lee-Ross 2000; McBride, Mendoza, and Carraher 1997; Sirakaya, Kerstetter, and Mount 1999). In addition to personality tests, we have already suggested the use of such established and valid practices as structured interviews and cognitive ability tests. Career aspirations, expectations, and education, and other demographic variables of employees may also be important in selecting the right employees. For example, older workers may be more tolerant, emotionally mature, and sympathetic with guests, while younger employees may be more energetic. Certainly, no age group has a monopoly on charm. Researchers have concluded that women generally understand people’s to service orientation, emotional intelligence, and cognitive ability tests; roleplaying during job preview; past experience in selling or customer service roles; structured interviews; realistic job previews; employee referrals; inclusion of guests in selection; examination of biodata; career expectations; and demographic variables.

Provide Orientation and Training

Proper selection is only the beginning of the process of developing superior employee performance. Orientation and training are essential so that employees become acquainted with their work roles; job-related tasks; and organizational values, beliefs, and social norms. Additionally, new employees desire to be welcomed socially. A study of newcomer socialization in the tourism and hospitality industry found that employees valued “elements of being appreciated, recognized, and praised; and being made to feel part of the family or team” (Young 2003, 307; see also Lundberg and Young 1997). Proper orientation and periodic training can provide such benefits as superior employee performance, employee productivity, commitment and job satisfaction, role clarity, intention to remain in the organization, and service quality. The literature provides solid guidelines and coverage of effective orientation and socialization (Young 2003) and training programs, tactics, and strategies (Janes 2003). Notably, since tourism is an international activity and many employees are from different cultures and ethnic origins, cultural differences of various customer and employee groups should be considered during orientation and training.

Offer Competitive and Fair Pay and Benefits

The low pay and poor benefits commonly found in hospitality and tourism operations are among the most important causes of low job satisfaction, low motivation, and low organizational commitment and job involvement—all of which drive high employee turnover. Meager compensation often conveys the message that employees’ efforts and contributions are little valued. Together with a physical and emotional workload, hospitality employees face perceptions of low social status and prestige, along with poor employment conditions and unsocial and irregular working hours. We suggest that hospitality employees’ compensation should be more generous to balance their unfavorable employment conditions. This means that pay and benefits should be based on job evaluation, seniority, education and training, positions held, and above all, employee effort and performance. Performance-based incentives and benefits are often an important tool for influencing employee performance and can take many forms, including monetary incentives and nonmonetary incentives and benefits. (For various types of incentives and benefits, see Boella 2000; Lucas 1995; Riley 1996; Ohlin and West 1994; Sturman 2006; Themduangkhae 2002; Woods 1997).

Practice More Friendly and Humane Supervision and Management Style

Inappropriate management style is also a pervasive feature of the tourism and hospitality industry. Researchers agree that the tourism and hospitality industry is characterized by hierarchical and autocratic styles of management, variously expressed as a directive, arbitrary, paternalistic, impulsive, unpredictable, amateur, and despotic (Kusluvan 2003a). Poor management style is often attributed to unprofessional or unqualified managers and “unbridled individualism,” characterized by a high level of management prerogative due to the lack of a strong internal labor market and unionized labor force (Lucas 1996). Researchers have identified such management issues as poor communication and rapport; insensitivity to employees’ wants, needs, problems, and culture; insufficient career and work guidance; injustice; inability to involve and guide employees; uncaring, unsupportive, rude, disrespectful attitudes, and behaviors towards employees; and lack of appreciation of the work done by employees. To remedy such managerial deficiencies, organizations must hire and develop leaders who can create a commitment, trust, success, and a motivating work environment. Department heads should be trained about the wants and needs of the employees, and their managerial skills should be developed. In short, there is a need for more humane and people-oriented managers in the industry.

Consider Job Characteristics and Job Redesign

Job design refers to “the process of defining job tasks and the work arrangements to accomplish them” (Schermerhorn, Hunt, and Osborn 2005, 146). One of the most influential job design theories, the job characteristics model, argues that skill and task variety, task identity, task significance, job autonomy, and feedback from the job produce three psychological states in employees, namely, the experience of the meaningfulness of the work, the experience of the responsibility for outcomes of the work, and knowledge of the actual results of the work activities. In turn, these psychological states collectively influence motivation, satisfaction, and work performance (Hackman and Oldham 1980). Others argue that other job features do this for employees, including the opportunity for skill use; social contact; learning and personal control; externally generated goals (job or task demands, workload, work pressure, role conflict, role ambiguity, family-work conflict, and role responsibility); physical security; valued social position; cognitive, physical, and emotional demands; surveillance and supervision; environmental clarity (role clarity, task feedback, and absence of job insecurity); and income level (Warr 2002).

To state the obvious, many tourism and hospitality jobs can be dull, routine, low-skilled, and low-status. Numerous studies propose ways to design work so that it is meaningful. Practices such as job rotation, job enlargement (increasing task or skill variety by adding new tasks of similar nature), job enrichment (increasing job content by giving workers decision-making responsibility and autonomy), semiautonomous workgroups, and self-managing teams can be used where applicable. Parker (2002) argues that job rotation and job enlargement can make work more interesting and alleviate some of the physical strain and boredom, as can job enrichment and autonomous workgroups. Needless to say, individual differences may modify the approach taken to job design, so jobs should be designed to match jobs with employees’ characteristics, needs, and talents. Work simplification may be the best way to motivate and satisfy some employees, whereas others could be happy with highly enriched and autonomous jobs.

Involve and Empower Employees

The tourism and hospitality literature has so far indicated that managers in the tourism and hospitality industry do not use a participatory decision-making and management style, leaning instead toward autocratic, authoritarian, and command and control based supervision (Deery and Jago 2001; Okumus 2003). It is no secret that such a nonparticipatory managerial style is not the best way to gain employee commitment, satisfaction, or performance. Employee involvement and empowerment techniques can be used to conquer the hearts and minds of employees and help generate employee commitment, satisfaction, and performance. Lashley (2003) introduces a number of participative, consultative, and commitment forms for involving and empowering employees. Participative forms include autonomous workgroups and job enrichment; consultative forms consist of quality circles and team briefings; and commitment forms cover some high-performance or high-commitment work approaches such as high and fair pay, careful selection and recruitment, training and development, good and fair performance review, open and good communication between management and employees, and treating employees with dignity, fairness, and respect. Other writers have pointed out empowerment initiatives such as self-esteem and communications training, open-door policies, self-directed work teams, cross-training, task forces, management by walking around, employee surveys, sensing groups, information sharing, delegation strategies, involving employees in identifying causes of poor service quality, encouraging and rewarding employees for suggestions and innovative ideas, and empowering employees to respond to guest needs (Enz and Siguaw 2000; Hughes 2003). Employee involvement and empowerment techniques can increase employee satisfaction, self-worth, commitment performance, and service quality, while they decrease employee turnover and labor costs (Enz and Siguaw 2000; Hughes 2003; Lashley 2003).

Recognize, Respect, and Reward Employees

Although all workers seek recognition and respect, it seems that tourism and hospitality employees seek even greater levels of accolades than those in other industries. We note numerous studies showing that tourism and hospitality employees complain about being undervalued; unappreciated; and not recognized, respected, or rewarded on par with their efforts. Certainly one reason for this is a low status or low prestige typically accorded to hospitality and tourism jobs (Kusluvan 2003a). We see that employment conditions and HRM practices are the second sources of employees’ weak esteem. Undoubtedly, these two factors influence and reinforce each other. Consequently, anything that enhances employees’ self-esteem and conveys the idea that they are appreciated, valued, recognized, and respected will increase their satisfaction, commitment, and performance. The literature suggests that this will be accomplished by some or all of the following: measuring and rewarding achievements and service performance; paying high and fair wages; increasing employee skills and competence through training and development; internal promotion; open communication with employees; involving and empowering employees; participatory managerial style; treating employees with respect, dignity, and politeness; organizational fairness and support; fulfilling employees’ needs and acting in their best interest; valuing employee contributions; providing job autonomy; forming autonomous workgroups; recognition programs and incentive rewards for achievements; providing adequate resources for doing jobs; supervisor and coworker support; and social activities to develop workgroup cohesion (Cyr 1992; McAllister and Bigley 2002; Newstrom, Gardner, and Pierce 1999). Managers and supervisors have a special role in recognizing and respecting employees. As Cyr (1992, 1) noted, “Error-probing questions, the criticism of subordinates in the presence of peers, the display of an attitude of superiority when speaking with clerical staff, and faultfinding in major projects are some of the verbal affronts to self-esteem. Belittling the assigned tasks of employees, holding grudges that are reflective of disapproval of specific employees, and the uneven distribution of work are among the actions which supervisors must guard against. The failure of supervisors to listen, to commend employees on a job well done, and to seek the input of qualified personnel are also damaging to the employees’ self-esteem.”

Reduce Job (Work Role) Stress

Job stress or work-role variables influence employees’ job satisfaction, work performance, and turnover. Job stress “exists when an employee is unable to fulfill the demands of his or her job” (Price 1997, 499). While some stress may stimulate people to perform at higher levels, chronic stress can cause health problems, loss of productivity, accidents, absenteeism, and turnover (O’Driscoll and Cooper 2002). Intrinsic job characteristics, hazardous work, role conflict, role ambiguity, heavy workload, resource inadequacy, interrole (work-family) conflict, job insecurity, interpersonal relationships at work, lack of career development, and organizational structure and climate are the major stress variables (O’Driscoll and Cooper 2002; Price 1997). For hospitality employees, job characteristics, interpersonal relationships (managerial style and support and coworker cohesion and support), role conflict, role ambiguity, heavy workload, job insecurity, work-family conflict, and lack of career development are the main stressors. With regard to role conflict and ambiguity, employees are often torn between the demands of the management and organization, customers, and their own personal responsibilities. To mitigate such stress, employees’ roles should be clearly defined, and they should be empowered to decide when acceding to customers’ wishes overrides the guidelines of the supervisor or organization. Work overload can be reduced by remedying staff shortages, employing extra personnel during high-demand periods, and reducing long and irregular working hours. Ensuring job security is challenging, due to the seasonal and unstable nature of hospitality demand. Still, managers can seek to forge long-term employment relationships for productive, talented core staff who want to make a career in the industry. The core staff can be complemented with students, part-time workers, or on-call employees during the high season, provided that they are effectively trained to do their jobs. Likewise, the industry’s irregular and long working hours often interfere with employees’ nonwork responsibilities. The stress from this conflict can be mitigated by family-friendly policies, such as on-site daycare, child-care and elder-care referrals, flexible hours, compressed workweeks, job sharing, convenient and flexible work schedules, and allowing child-care leave and career breaks. Finally, career guidance and growth opportunities can reduce employees’ stress and encourage their retention. The idea of career ladders is attractive in theory, but the fact is too many people would be chasing too few high-level positions. While big and chain organizations may have some opportunity to offer job rotation and internal promotions for their talented employees, it may be impossible for small and medium-size independent firms to provide such career opportunities. For smaller firms, the best strategy is to be realistic in terms of hiring and promotion.

Improve the Conditions of Employee Accommodation

Many tourism and hospitality organizations, especially those that operate seasonal resorts, provide food and accommodation for their employees. A number of studies have shown that such physical facilities for, and services are given to, employees may occur in de-motivating conditions and may contribute to job dissatisfaction and turnover (Kozak and Akoglan 1995; Kusluvan and Kusluvan 2000). In fact, the poor physical conditions of employee dormitories, dining halls, and bathrooms may convey the idea that employees are not valued or cared for. To prevent such misconceptions, physical facilities and services for employees should be improved.

Create a Culture Conducive to Organizational Performance

Organizational culture can be a critical influence on employee performance, service quality, customer satisfaction and loyalty, and organizational performance. We do not accept the assertion by some researchers that, due to the high labor turnover and poor employment conditions and HRM practices, it is impossible to create an organizational culture that supports success (Iverson and Deery 1997; Ogbonna and Harris 2002). Instead, we note that examination of highly successful service firms shows that organization-wide cultural values can be modeled and cultivated by strong leadership (Berry 1999). Berry (1999) identified the following success-sustaining values in high-performance service companies: excellence, innovation, joy, respect, teamwork, integrity, and social profit. Two models suggest how tourism and hospitality organizations can create an organizational culture conducive to success. The first model, developed by Kusluvan and Karamustafa (2003), begins with an organization-wide cultural audit (Exhibit 10). If the current culture is not consistent with organizational missions, objectives, and strategies, then management must seek to embe