Increasing revenue through strategic human resource management

This report analyzes the impact and benefits of an effective strategic management of managing the human resources in the hospitality sector. The report uses quantitative data collected from secondary sources provided by the Australian Bureau of Statistics and on the Hilton hotel website. The findings indicate that the revenue in the hospitality industry is directly related to the effective management of HR in the industry. The report recommends that the managers in this industry should deduce effective human resource practices that are aimed at motivating the employees towards the service delivery, which will translate to the additional generation of revenue in the industry.

Running head: INCREASING REVENUE THROUGH STRATEGIC HRM
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Increasing revenue through strategic human resource management
Name of Student
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EXECUTIVE SUMMARY
This report is a study about the impact and benefits of an effective strategic management
of managing the human resources in the hospitality sector. The report is divided into different
sections including the introduction, the literature review, methodology, findings and discussion,
conclusion, and the recommendations section. In the introduction, the report explains the
background information to the research, aims, justification, and the research questions that seek
to find out the relationship between revenue generation and the strategic human resource
management. The literature review criticizes the past similar studies and the impacts they
brought to the hospitality industry.
The report further uses quantitative data collected from the secondary sources provided
by the Australian Bureau of Statistics and on the Hilton hotel website. Moreover, regression and
descriptive analyses were used to analyze the data. In the findings and discussion sections, the
report illustrates the results and explanation of the descriptive and regression analysis. The
findings indicate that the revenue in the hospitality industry is directly related to the effective
management of HR in the industry. The report recommends that the managers in this industry
should deduce effective human resource practices that are aimed at motivating the employees
towards the service delivery, which will translate to the additional generation of revenue in the
industry.

INCREASING REVENUE THROUGH STRSTEGIC HRM
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Table of content
EXECUTIVE SUMMARY...........................................................................................................2
INTRODUCTION.........................................................................................................................5
BACKGROUND INFORMATION.....................................................................................................5
JUSTIFICATION............................................................................................................................5
THE AIM OF THE RESEARCH.......................................................................................................6
RESEARCH QUESTIONS................................................................................................................6
RESEARCH PLAN..........................................................................................................................6
LITERATURE REVIEW.............................................................................................................7
METHODOLOGY......................................................................................................................10
DATA COLLECTION...................................................................................................................10
DATA ANALYSIS.........................................................................................................................11
FINDINGS AND RESULTS.......................................................................................................11
DESCRIPTIVE STATISTICS.........................................................................................................11
REGRESSION ANALYSIS.............................................................................................................14
Regression analysis output: Output summary.....................................................................14
Regression analysis output: ANOVA...................................................................................14
Revenue trend line.................................................................................................................15
DISCUSSIONS.............................................................................................................................15
DESCRIPTIVE ANALYSIS............................................................................................................15
Multiple R..............................................................................................................................16

INCREASING REVENUE THROUGH STRSTEGIC HRM
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R Square................................................................................................................................16
Standard error.......................................................................................................................16
Significance F.......................................................................................................................16
Revenue trend line.................................................................................................................16
LIMITATIONS OF THE RESEARCH.....................................................................................16
CONCLUSION............................................................................................................................17
RECOMMENDATIONS............................................................................................................17
GAUNT CHART.........................................................................................................................19
REFERENCES............................................................................................................................20

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Increasing revenue through strategic human resource management
Introduction
Background information
Revenue in any organization is the key driver to the existence and operation of different
businesses (Geys and Benny, 2016, pp.769-788). There are a number of ways to increase the
revenue of a business organization but this study will be focusing on the strategic human
resource management as a means to increase the revenues of the organization. To accomplish
this the researcher used the Hilton Hotel in Australia as a case study to the research. The industry
having been reported to experience growth and competition in the market calls for the proper
management of the human personnel in the industry (Boella, 2017). For the hotel to increase its
revenues, it has to perform well in the market implying that there are achieving customer
satisfaction at the hotel. Reports indicate that the strategic HRM plays a major role in these
operations as well as increasing the revenue obtained for the hotel organization.
Justification
There have been reported gaps in the strategic management especially for the human
resources in the hospitality sector, which requires proper strategies to be addressed (Tang,
Guiyao, and Yang 2015, pp.163-184). The poor coordination of the human personnel has led to
the loss of revenue directly or indirectly thus causing a drop in the market value of a certain
organization. The research has chosen the hospitality industry due to the wide range and ever-
changing customer demands and desires (Han and Heesup, 2015, pp.22-33). According to (Hill
and Nigel, 2017), in order to fully attain the customer satisfaction as well increase the revenue of

INCREASING REVENUE THROUGH STRSTEGIC HRM
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the hotel, there must be an elaborate framework to link that coordinates the employees in order to
eliminate any source of liabilities at the workplace that could drive the customers away.
The aim of the research
The research aims at mobilizing human resource management at the Hilton hotel in order
to increase the revenue by outlining the proper strategies that would contribute to the
performance of the employees to generate more revenue.
Research questions
These methodological means guide the research in attaining a deduction. Below are the
research questions for this study.
1. What is the relationship between the revenue of the Hilton hotel and the management of
the human resources?
2. What are the strategies to be laid in place in the management of the human resource that
would enable the Hilton hotel to gain a competitive advantage in both local and
international market?
The search for the answers presumes the determination of the two variables, which are made up
of Human Resource Management practices as an independent variable while the performance of
the Hilton hotel in terms of the revenue generated as a dependent variable.
Research plan
The research plans to create a smooth flow of processes at the Hilton hotel. First, an
introduction to the research, which entails justification for the study, the aims, and the questions

INCREASING REVENUE THROUGH STRSTEGIC HRM
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to the study. Then a critical literature review of the topic followed by the methodology section,
the analysis section, results and findings, and finally the conclusions and recommendations.
Literature review
There has been a lot of research conducted on the strategies that enable the smooth
running of organizations such as hotel management in the hospitality sector (Nazarian et al.,
2017, pp.22-32). Many reports published attribute to the success of hotel management to
effective management of their human resource personnel as attained by (Alonso-Almeida et al.,
2016, pp.97-106). However, it is all upon the management to mobilize their workforce towards
the required objective of the hotel or to close the existing gaps in the workforce. There has been
contradicting views about the success of a hotel organization. While some claim it is measured in
terms of the revenue generated through profits, some attribute the success to the continual
growth rate of the organization (Vertes and Petra, 2015, pp.299-320). Additionally, growth has
also been defined in varied ways by different scholars. Some view growth the rate at which the
organization is hiring, opening more branches, and increasing the taskforce, while some
acknowledge growth in terms of the profits generated at a given period in comparison to the prior
period.
(Paauwe and Jaap, 2018) acknowledges that the best way to understand the strategic
human resource management is through comparing it to the human resources management. The
HRM focuses on hiring or recruiting the best employees and giving them training, the
development they need while providing proper compensation and benefits for them. However,
the strategic HRM aligns these responsibilities with the goals of other departments and maps
them to the overall objectives of the entire organization (Kaufman, 2015, pp.389-407).

INCREASING REVENUE THROUGH STRSTEGIC HRM
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Furthermore, the findings of his report claim that it is upon the heads of the human resources at
the different departments to ensure that all the objectives of the department are aligned with the
organizational goals, vision, mission, and most importantly the organizational ethics and values.
However, (Boxall, Peter, and James, 2016, pp.103-111) attributed that strategic HRM as
a practice of attracting, developing, rewarding, and retaining of the employees for the benefit of
the firm and the individual employees. Laying of the trained and experienced employee in the
task force is a loss to the firm. This is in the sense that the time and the resources taken in the
recruitment and training are gone to waste and the firm will have to spend further to go all over
the process again. (Boxall, Peter, and James, 2016, pp.103-111) further claims that this will
cause an unnecessary spending of the firm’s revenue and resources while it incurs the time taken
to give orientations to the newly recruited staff who require some supervision before they attain
the expected experience. When the departments at the hotel interact, reflect on the performance,
and support the goals of the organization as a team, they can eliminate such instances by creating
and implementing the strategic practices that make up the strategic human resources
management (Fraj et al., 2015, pp.30-42). This could help to save the revenues and the time as
the organization focusses on the winning of the market and expansion agenda.
In addition, when a HR manager strategically comes up with the plans based on the
organizational goals, it is ensuring that the organization is aligning to its success in the market
(Kaiser et al., 2015, pp.126-139). However, if the particular department does not coordinate with
the other departments, it would lead to the departmental success but not the entire organization.
For the firm to perform well it needs to have its internal hindrances to success removed before it
can fight the external factors to win the market opportunities. Therefore, the previous studies

INCREASING REVENUE THROUGH STRSTEGIC HRM
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indicate that resolving the inter-departmental conflict is the start of a successful journey for the
players in the hospitality industry (Esendemirli, Turker, and Atluntas, 2015, pp.27-51). This
being a crucial sector that goes hand in hand with both local and international tourism, a slight
off-track activity could result in a bad reputation that could tumble down the entire organization,
or require a substantial amount of revenue to fix the damages. For this reason, (Esendemirli,
Turker, and Atluntas, 2015, pp.27-51) recommends a high ethical standard from the junior to the
senior employees that would enable a smooth coordination of activities in the organization.
According to the results and findings of (Nankervis, Baird, and Coffey., 2016), the best
ways to increase the revenues in the hotel business is through the following strategic human
resource practices. The first measure he puts across is keeping the employees happy and
encouraging them to be the sales representatives. He narrates that the employees being the most
important asset to the firm if motivated in the right direction, they could come up with ways to
cut the operating costs, maximize the customer services, and increase revenues. Happy
employees positively engage guests, which leads to customer satisfaction. Furthermore, (Ross,
2017) encourages the provision of outstanding services as the happy guests pay the dividends
since they will narrate to their families and friends about their experiences at the hotel.
Additionally, creating a high-perceived value can be achieved through the employees. When
guests feel the service offered is worthy 30$ yet charged 15$ is a win to the hotel. Moreover,
(Zervas et al., 2017, pp.687-705), in their study, acknowledges that auditing everything at the
hotel could lead to an enormous saving of the costs. For instance, the hotel can spend up to 40%
of their operational budget on cooling which could be more cost-effective if the HVAC system
could be installed.

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However, (Eissa, 2016) maintains that the main means to increase the revenues of an
organization in the hospitality sector is through massive advertising and marketing. He claims
that this could be through collaborating with the local vendors such as the restaurants, the rental
car companies, among others. (Eissa, 2016) Explains that advertising is a very powerful tool in a
business and if well conducted could lead to many customers and clients who are the core
determiners of business growth as supported by (Mittal, 2018). Another way that this could be
done is through marketing directly to the customers including gathering their contact
information, providing a review section where they can give comments about the services, and
encouraging the quest referrals through rewarding free discounts or gift in their next visits at the
hotel.
Methodology
Data collection
The data for this research collected was purely quantitative data from the secondary
sources. The research based on the quantitative data because of the consistency and reliability of
the data sources unlike using the qualitative data (Walliman, 2017). After collection, the data
was sampled based on its relevance to the research questions and the aims of the research
findings and results. This data was obtained through downloading it from the Hilton group of
hotels website at http://newsroom.hilton.com/assets/HWW/docs/2018/2018-Q2-Earnings-
Release-FINAL.PDF. Additionally, the organizational progress of the Hotel as the case study of
the hotel based on the revenue variable from 2009-2017 was downloaded at
http://www.statista.com/statistics/297760/revenue-of-hilton-worldwide/. These sources of data
were the results of the strategic human resources management at the Hilton group of hotels.

INCREASING REVENUE THROUGH STRSTEGIC HRM
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Another additional source of information where data was obtained is at
http://ir.hilton.com/~/media/Files/H/Hilton-Worldwide-IR-V3/quarterly-results/2017/q4-2017-
earnings-release.pdf.
Data analysis
After collecting the data, descriptive analysis was done on the quantitative samples with
well-presented graphs and charts. These were derived from the data samples. The data was
further analyzed using the regression analysis techniques where the independent variable was
depicted as the strategic human resource management data while the dependent variable as the
revenue reports data from the Hilton quarterly and annual reports (Mohammed et al., 2015,
pp.99-110). The regression analysis was done in MS Excel by integrating the regression analysis
tools via the following steps. Open the MS Excel-click on FILE menu- Options- Add-Ins – Click
on Analysis ToolPak the press Go button. This opens the Add-Ins menu. Select the analysis
Toolpak from the list and click OK. This brings the data analysis icon on the DATA menu in
Excel with the regression analysis option (Wong, 2016). From here the data range of the X and Y
inputs were entered from the data on Excel for the analysis.
Findings and results
Descriptive statistics
From the second quarter results of the 2018 financial report, the Hilton hotel reported to
having a 54% increase in the diluted Earnings per Share (EPS) from the same period in 2017.
The system-wide RevPAR was expected to undergo an increment of 3% to 4% on a comparable
and neutral basis compared to 2017, which was at 1%. This is shown below

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2017 2018
0
0.5
1
1.5
2
2.5
3
3.5
4
PerVAR increment graph between 2017-2018
RevPAR
calender year
percentage increment
The Net income is projected to range between $808 million and $826 million for the entire year
which showed an increase in projections from the previous year which was between $802 and
$837 M respectively. The quarterly net income was recorded to be $215 to $229 M as opposed to
the previous year, which was $138M and $152M for the first quarter. The rapid increment in the
net income across the year can be shown below.
These increments are clearly shown in the pier chats below

INCREASING REVENUE THROUGH STRSTEGIC HRM
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39%
61%
First quarter Net
income
1st Qtr 2017 1st Qtr 2018
Final net
income
2017Net income
projection
2018
Net income for 2017 and
projected 2018
Final net income 2017
Net income projection 2018
The general and administrative expenses, which are entirely related to the human resource
management, operations, and maintenance, were projected to be between $420 M and $440 M.
First Quarter 2017 Final year Net income
2017 First Quarter 2018 Final Year Projection
2018
0
100
200
300
400
500
600
700
800
900
Comparison of net income between 2017 and 2018
calender year
Net Income in $ Millions

INCREASING REVENUE THROUGH STRSTEGIC HRM
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Regression analysis
The research used 30 data samples for the revenues of different hotels as the dependent
variable while a scale of the strategic human resource management as the independent variable
and carried out the regression analysis. The results obtained are given below.
Regression analysis output: Output summary
Regression Statistics
Multiple R 0.793591
R Square 0.629787
Adjusted R
Square 0.555744
Standard Error 2.33553
Observations 30
Regression analysis output: ANOVA
ANOVA
df SS MS F
Significanc
e F
Regressio
n 1
1092.93
7 1092.937 8.505722 0.03315
Residual 29
642.471
6 128.4943
Total 30 1735.40

INCREASING REVENUE THROUGH STRSTEGIC HRM
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9
Revenue trend line
0 5 10 15 20 25
0
10
20
30
40
50
60
70
Linear regression
Discussions
Descriptive analysis
From the descriptive analysis, the net income, which amounts to a major divide of
revenue, is observed to increase from the previous year 2017 to the first quarter of the year 2018.
Moreover, the projections for the entire year of 2018 depicts an increase in the net income for the
hotel. This could be due to the increase in the human resource management practices such as
massive hiring and equipping the taskforce with knowledge and skills through training and
proper orientation of the new recruits (Johnson et al., 2016). The data obtained from the
Australian Bureau of Statistics indicates there was an increase in the number of the recruits who
joined the hospitality sector. This could be the root cause for the increase in the revenue due to

INCREASING REVENUE THROUGH STRSTEGIC HRM
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the better services being offered that attracts both local and international customers in the
industry (Mohring et al., 2018, pp.120-127).
Regression analysis
Multiple R
This correlation coefficient is used to measure the strength of a linear relationship
between the variables. This coefficient ranges between -1 and 1. From the analysis, it was
0.793591 indicating that the variables have a strong relationship towards the positive side.
R Square
This is the coefficient of determination used as an indicator of best fit. From the analysis,
it was found to be 0.629787 showing that the values were 63% best fit.
Standard error
This shows the precision of the analysis. The smaller the value the more accurate the
regression equation.
Significance F
The significance F value from the ANOVA table gives an idea of how reliable the results
obtained are. Is this value is less than 0.05 it indicates that the analysis model is viable
(Darlington and Richard, 2016).
Revenue trend line
From the graph, it is evident that the hotels’ revenue increase with appropriate strategic
human resources management practices in place.

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Limitations of the research
The data collected was limited to 30 samples, which could lead to bias in the results. A wide
range of data samples projects more accurate results and findings of the study.
The time required for conducting the research until submission is limited to the semester’s
time of the study, which could not allow for enough time for an intensive research (Lam and
Wai Yin, 2015).
Conclusion
From the literature reviews and the findings of this report, strategic management of the
human resources is a vital practice that among other factors plays a major role in determining the
revenues of the hotel. Employees, which are the core assets in human resources, are proven very
important through the utilization of their skills in delivering services to the clients at the hotel.
The research further found that the managers in the human resource department are obligated to
ensure that the strategic practices are well implemented into the organization’s daily operations
for effective coordination of the activities (Fraj et al., 2015, pp.30-42).
Moreover, the literature review of the research study claims that the happiness of the
employees is the root foundation to the success of the hotel’s business organization. This was
proven to string up a series of events from customer satisfaction, to positive feedback from the
customers thus paving way for business growth and thus the increase in revenue generated. This
coordination of events in the taskforce at the hotel calls for well-structured strategies that make
way for the generation of more revenue and business growth in the sector (Stoyanov, 2018).

INCREASING REVENUE THROUGH STRSTEGIC HRM
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Recommendations
For the human resource management team to make a great contribution in increasing the
revenue, it should consider implementing a number of the following strategic practices. The
human resources managers are called upon to balance the cost cutting over different departments
but not to be limited to the staff costs in order to boost the service quality and increase the
revenue (Barrows and Clayton, 2008). Additionally, the managers should pay attention to the
cost structure through activities such as regular audits and proper financial planning to gain the
transparency in departmental cost accounting.
The managers are also recommended to raise awareness among the employees to have
businesses minded motive during their daily operations and duties. The managers and the top
management should motivate their workforce through various means in order to increase the
individual employee performance (Zhang and Xiaomeng, 2010, pp.107-128). This would
translate to the organizational success, which will in return build the reputation of the hotel
through referrals thus enabling the increase in the generated revenue. (Gelb and Betsy, 2014,
pp.95-112) acknowledges that employees are the immediate brand ambassadors, their
performance heavily affect the revenue generated, and therefore, they should be well catered for.

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Gaunt chart

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