Challenges of HRM Practices in Hospitality Industry: Employee Attraction and Retention

The report thoroughly discusses the challenges of HRM practices in the hospitality industry, specifically employee attraction and retention. It emphasizes the importance of strategic planning for HRM and suggests various factors influencing employee retention, such as employee development, compensation, work-life balance, and employee involvement in decision making.

Running Head: HRM
[ManagIng Human Resources]
2018
Australia

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Human resource management is the key element contributing in the success of an
organization. HRM practices different activities in order to help operational and functional
departments of the organization to achieve their goals by providing efficient and skilled
employees to them. When hospitality industry is concerned these practices have more
importance as in this industry, employees play more significant role than the other industries.
This industry depends more on the employees and also faces several critical challenges
regarding human resourcing. Most critical challenges for HRM practices in this industry are
the attraction and retention of the employees. The discussion below thoroughly describes
these two most critical challenges of HRM practices in the industry and also describes briefly
the important factors and their influences as well, which affect these challenges. The analysis
of these factors and influences may help HR management for strategic planning for the
evaluation and improvement of such specific activities. A strategic approach for these aspects
of HRM in hospitality industry is much needed as per the requirement of industry. Industry
also needs to recruit skilled and educated employees for the better understanding of their
responsibilities to achieve their goals along with the organization’s success.
Hospitality industry depends on the human resources more unlike other industries.
Human resources play key role in the success of any organization in hospitality industry. This
makes it more important to maintain retain the skilled and educated employees for as long as
possible. This makes the discussion even more important to understand the basic essentiality
of employee retention to form effective strategies for the employee retention purpose. One
particular industry to explore the importance of human resource attraction and retention is
tourism and hospitality. The World Tourism Organization states that the total receipts of
international tourism in the year 2003 were around 6% of the total worldwide exports of
goods and services. In this industry the success and prosper of an organization cannot be
achieved without the contribution and support of its employees. Identifying and recruiting the

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right candidates for the job are two initial steps of HRM activities, but for the development of
an organization it is more important to maintain or retain the employees. In many studies it is
defined that that one of the main motive of development of tourism and hospitality industry
in any economy is provision of the employment to the people of that economy.
Human resource practices in the hospitality industry face many challenges like
employee attraction for the job and retention of the employees as long as possible. Attraction
of the employees is very challenging for the HRM executives as they are operating the
tertiary sector of the economy where service is provided to the customers instead of the end
products. This report consists of the thorough discussion about the challenges faced by the
HR management in process of attracting the employees as well as retaining them for a time
period in the organization.
Human resource planning is the key element of the organization’s strategy planning. A
strategic HR planning helps the organization in achieving its goals successfully.
Organizations complete their financial plans routinely to achieve the organizational goals,
however, they does not consider the workforce management plans most of the time. But,
integrating the human resource management with the other strategic plans associated with the
business help the organization to achieve its improvement goals as the employee need meet in
this manner (Esenyel & Mahafzah, 2016). Therefore, according to the researches which have
done in previous human resource management can be defined as the management and control
of the human resources. The department of human resource management is responsible for all
the activities related to human resources starting from recruiting to the retention of
employees. The human resource management of an organization integrates the performance
improvement and the strategic planning of the organization (Saad S. K., 2013).

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A number of constraints and problems in tourism industry have concern with the
development of human resource. It is found that majority of the employees working in
hospitality sector agree with the fact that an effective management of human resource should
be considered as a major influencing factor for the enhancement of efficiency and to increase
the productivity of the organization (Khan, 2008). Although most of the tourism and
hospitality organizations are concern to provide a high quality of service to their customers,
maximum staff of their organizations consists of the low or semi-skilled employees. Apart
from the planning for recruitment of high skilled and educated employees, managers in the
industry are able to recruit relatively low skilled employees just for temporary requirement
and face some alarming problems like low productivity of the organizations and low
efficiency of the employees (Saad S. K., 2013).
In this industry the nature of the practices of their relevant service production are
inextricably associated with the involvement of the customers and some behavioural norms
are to be established for the customer satisfaction, expectations and exceeding their
expectations. Researches defined that the ethical practice of the services in hotel business is
very critical, specifically in the HRM practices. Employees’ view of ethical climate of their
organization is completely depends on their job satisfaction, organizational performance, and
the commitment of the organization (Pettijohn, Petttijohn, & Taylor, 2008). Ethical problems
of the industry mainly reflect the key challenges which occur in the specific case based
industry. Ethical violation is not a new term for the industry as 44% workers in restaurant
industry had reported that they had stolen case or other merchandise from their workplace.
Another recent study states that in the year of 2008, one out of the 30 employees working in
the retail restaurant and food-sector has been caught while stealing from the respective
employer.

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In this industry, as per the common laws, an employer is responsible for the reasonable
care of the safety of its employees. The breach of an employer’s duty is considered as a form
of omission. Therefore, in the situations where an employer would see the possibility of harm
or any other injury to its employees, and fails to take the essential steps in order to avoid such
harm or injuries, employer will be considered in the breach of his common duty to take care
of employee safety. In this way employee can also sue the employer for the breach of his
contract in terms of the common law. Moreover, an employee can also claim for the safe
working environment, on the employer’s common law duty.
In hospitality industry success depends on the efficient contribution of its employees
for their respective organization. In this order organizations want skilled, educated and
professional employees for their business (Barlett, Johnson, & Schneider, 2016). Researches
states that employees attract more towards the job satisfaction in many terms like job profile,
working hours, salary paid for the job, workplace environment, development opportunities,
and compensation. In this way HR management needs a strategic management to attract the
employees. This strategic management ensures the main objective of job satisfaction to the
employees (Gannon, Doherty, & Roper, 2012).
Performance management is a comprehensive process undertaken by the organization
around the world in order to improve their employees’ performance efficiently. In hospitality
industry performance management can be compared to the financial management of the
organization because as the financial management is important for an organization
performance management in this industry is equally important. Since measure of the
management is much needed, in order to evaluate the effectiveness of the performance
management five different factors are identified namely, (1) nature of performance appraisal,
(2) how it is implemented, (3) effectiveness of the communication within the system, (4) how

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the data is used for the appraisal of performance, and (5) employee’s perception for the
system (Ratnawat & Jha, 2013).
Performance management of the organization is practiced by HRM. HRM is the
responsible body of an organization for developing talent and people required by the
operational and functional departments of the organization. HRM helps the departmental
achievements by recruiting desired skilled employees within the company or organization
and also provides them with appropriate tools to develop and train them for the maximum
efficiency (Chand, 2010). In Hospitality industry employees being the key element of the
organization’s success they are required to give their maximum efficient work. In this way to
get the maximum efficient work, implementation of employee motivation strategies increases
the employee performance significantly (Wlodarczyk, 2011). This statement is justified by
the researches showing that motivated employees perform better than the employees not
motivated (Lussier, 2011). In this order to attract and retain the employees HR management
practices some employee performance appraisal activities. In such activity practices
management manages some training and development sessions for their employees to
enhance employee’s efficiency. These programmes make employees feel like working in a
better environment to work in and ultimately influence their psychology to stay in the same
organization for a longer time (Kramar, et al., 2014).
Every person has his or her own unique set of desires like, beliefs, expectations, values,
attitudes, personality, experience, and intellectual qualities. This makes the task of employee
motivation much challenging for Human Resource Management. Some of the employees
have a very strong desire to work hard and wants to increase their responsibilities while
others are inactive and have a lack of aspiration. Some of the factors which influence
employee motivation are such as, income, working environment, and job description other
factors which influence the employee motivation in a negative aspect is work burden. Recent

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Researches found that pay for individual performance (PFIP) is associated with a higher level
of competence and intrinsic interest (Fang & Gerhart, 2012).
It is suggested by the Equity theory that managers in Hospitality industry should
recognize multiple simultaneous needs of an employee, in other words it can be quoted that
focusing on one need at a time will not be considered as an effective employee motivation as
it will not affect the employee’s motivation psychology (Grifffin & Moorhead, 2011).
In the hospitality and tourism industry, staff retention is the most critical factor as the
industry is labour intensive. Employee retention is more like encouraging the employees to
remain in the organization as long as possible or a maximum time period. Employee retention
is defined as “a strategic technique opted by the organizations or management in order to
maintain an effective human resource with achieving the organizational goals at the same
time. Another definition of employee retention states that “it is a systematic effort to create
and maintain an environment which encourages employees to stay in the organization for a
maximum time period (Al-Refaie, 2015). Retention of the employees is a systematic effort of
the employers in order to create and maintain a foster environment which encourages the
existing employees to be employed in the same organization as long as possible. Employee
turnover the concern of whole hospitality industry in the global scenario, and is an obstinate
problem that results in the high expenditure for the organizations. There are many factors
which encourage the employees to switch for the other organization.
Profession development of the employees is one of the major factors encouraging
employee retention. Professional as well as the personal growth of employees is a
determining factor for the employee retention. Researchers suggest that employees work
longer for the organizations which provide better opportunities for their professional and

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personal development. Effective promotion influences retention of the employees positively
(Danniels, VanLeit, Skipper, Sanders, & Rhyne, 2007).
The relation between pay and retention of employees has been the subject of interest for
many researches. Some of the studies suggest that the satisfaction of employees with their
earnings is strongly related with their positive decision of staying in the organization for a
long time whereas some suggest that there is not a direct relation of pay with the employee’s
decision to remain in the organization. Research suggests that although compensation is not
one of the major factors which influence a non-management turnover but it can act like a
critical factor to increase commitment and reducing the managerial turnover (Moncarz, Zhao,
& Kay, 2009).
A balanced work-life is equally important for the engagement of employees and affects
the retention in a positive way for the organization. A complete balance between professional
and personal life is associated with the sacrifices that the individuals are ready to make the
expenses of other aspects of the life. It is observed that giving the holder a possibility to fulfil
his/her personal or family responsibilities always increases the employee retention (Loan-
Clarke, Arnold, Coombs, Hartley, & Bosley, 2010).
In the modern era businesses always keep their employees informed with almost all the
important business affairs and also involve them decision making process of these affairs
(Kramar, et al., 2014). Main motive of doing so is to explore the talent of their employees but
researchers state that employee’s involvement in such activities of decision making develops
a psychological sense of owning the work for employees which results in creating a
favourable working environment and also contributes in building a better employee-employer
relation (Kramar, et al., 2014).

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Nature of the HRM practices has created the necessity of evaluation and improvement
of HRM. HRM development of the past few decades influenced by many changes in the
practices and view of the management itself such as, workforce flexibility and productivity
improvement, organizational changes, HRM strategy elaboration, improvement in partnership
role of employees (Bratton & Gold, 2017). Several other surveys and studies also determined
the necessity of the evaluation and improvement of HRM. Studies in 2006 indicated that the
transforming HRM into a strategic part of the organization is one of the future challenges.
Later in 2008, researchers stated that today many executive have created a dashboard dialog
on their computers which provides a quick picture of their company’s performance matrices
of finance and business. Then it was suggested to highlight the qualitative and quantitative
matrices of the company performance (Pieseniece & Volkova, 2010).
The above discussion develops an understanding about various practices of HRM and
specially the challenges of HRM in hospitality industry. Discussion concludes that the
importance of HRM practices increases significantly when it comes to the hospitality
industry. In hospitality industry its importance increases due to the significance of employee
importance in the industry. The management has to face so many challenges related to the
employee attraction and retention in the industry. HRM executives have to make extra efforts
in comparison to other industries to attract and retain their employees for a long time period.
In this context this discussion was much needed to understand the importance and
significance of strategic HRM practices in hospitality industry. This discussion made it easy
to understand the various aspects and factors that influence the effectiveness of employee
retention in different ways.
References

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