Talent Management Practices in South African Hotel Groups

This article sheds light on the use of talent-management practices in some of the major hotel groups in South Africa. Results reported in the 2008 Travel & Tourism Competitive Report issued by the World Economic Forum indicate that as far as the Human Resources dimension of companies in this industry in South Africa is concerned, they fare fairly poorly. The research was undertaken in a subcomponent of the tourist accommodation industry, namely hotels. A cluster of 14 hotel groups participated in the survey. Despite the negative finding of the WEF, the results indicate that the hotel groups to a large extent apply the principles underlying talent management within their companies. However, some problem areas do exist, and recommendations are made in this regard.

1Southern African Business Review Volume 13 Number 3 2009
Talent management: An empirical study of
selected South African hotel groups
P.A. Grobler & H. Diedericks
A B S T R A C T
This article sheds light on the use of talent-management practices in
some of the major hotel groups in South Africa. Growing numbers
of organisations globally as well as in South Africa are embracing
the concept of talent management, as it has a major impact on the
company’s competitive advantage. Results reported in the 2008
Travel & Tourism Competitive Report issued by the World Economic
Forum (WEF 2008) indicate that as far as the Human Resources
dimension of companies in this industry in South Africa is concerned,
they fare fairly poorly. As this industry is people intensive, a
closer investigation of this aspect was necessary. The research
was undertaken in a subcomponent of the tourist accommodation
industry, namely hotels. A cluster of 14 hotel groups, representing
33 995 hotel rooms (approximately 77% of all the hotel rooms
in South Africa) participated in the survey. Despite the negative
finding of the WEF, the results indicate that the hotel groups to a
large extent apply the principles underlying talent management
within their companies. However, some problem areas do exist, and
recommendations are made in this regard.
Key words: talent management, talent retention, talent development, talent deployment,
human capital management, talent pools, talent value, competencies,
skills, distinctive capabilities, competitive advantage, talent supply, talent
demand, competency inventory
Prof. P.A. Grobler and Ms H. Diedericks are in the Department of Human Resource Management, University of
South Africa. E-mail: [e-mail]

P.A. Grobler & H. Diedericks
2
Introduction
The greatest challenge facing countries in the world today is the creation
for their citizens. One strategy to achieve this is to provide jobs for as ma
as possible. However, this can only be achieved if the country experience
economic growth. According to the World Economic Forum (WEF) (WEF 20
travel and tourism has become a major player among the key industries i
wealth over the last 60 years. This industry now accounts for approximate
of the global gross domestic product (GDP), 12.2% of world exports and 9
world investment (Blanke & Chiesa 2008b: 3). It is also one of the fastest
industries in terms of foreign exchange earnings and job creation, as hea
and tourism sectors provide important opportunities for countries to
standards and – particularly in the developing world – to tackle poverty al
(Blanke & Chiesa 2008a: xiii). From the foregoing, it is clear that the worl
and tourism industry is profitable and expanding. Moreover, in South Afric
industry has a major impact on the economy, with approximately 8
international tourists visiting the country in 2006 (Visser 2007: 43–44). Th
is no doubt that this segment of the economy needs to be constantly imp
expanded.
Problem statement
According to the 2008 Travel & Tourism Competitiveness Report co
World Economic Forum (2008: xvi), of the 130 countries participatin
project, South Africa was ranked at number 60. The country was evaluate
different pillars. This is cause for concern, as this industry can have a ma
on the economic growth of the country. It is even more disturbing that in
of Human Resources (HR), the country was ranked 118th out of 130. Plea
that certain HR components, such as the training of staff, did receive a ve
rating, while others such as hiring and firing practices were rated very low
the people component needs to be managed as an integrated who
company to obtain and maintain its competitive advantage, and all practi
to be synchronised.
Talent management
As a service industry, tourism is highly people intensive, and in thi
the management of employees working in the industry is a critical
The continued success of any organisation in this industry is depen

Talent management: An empirical study of selected South African hotel groups
3
employees’ contribution and commitment (Baum & Kokkranikal 2005: 86
can no longer be measured alone by the amount of money a company ha
talent it possesses in the form of its employees’ skills and competencies,
organisational capability, has become the key to success in today’s highly
business environment (Lockwood 2006: 2; Lawler III: 2008: VII). So why is
so important? According to Cheese (2008: 39–40), the following rea
identified:
• Talent generates high performance, which in turn attracts new talent a
the means to reward it.
• Talent drives improvements in productivity, quality, innovation and
satisfaction, which in turn feed into the bottomline results.
Without talent, the industry is thus doomed. While the industry o
qualified individuals such as graduates exciting and rewarding career opp
it also needs a vast number of operational staff. Low entry barriers and h
pose particular HR challenges to management in this area (Haven-Tang &
2006: 91). Against the background of the poor human resource results ob
the question can be asked: “How can this important and vital asset be nu
The answer can be found in the relatively new concept of talent m
(Armstrong 2006: 289; Becker 2007: 42–61; Corsello 2006: 12; Goff
2007: 72–79; Ingham 2006: 20–23; Joerres & Turcq 2007: 8–13; Landes 2
29; Meisinger 2006: 10; Oakes 2006: 21–24; Reindl 2007: 38–41; Silverm
11–15). According to Schweyer (2004: 22), talent management can be de
follows:
… the sourcing (finding talent); screening (sorting of qualified and unqualified applica
selection (assessment/testing, interviewing, reference/background checking etc. of a
onboarding (offer generation/acceptance); retention (measures to keep the talent tha
tributes to the success of the organisation); development (training, growth, assignme
deployment (optimal assignment of staff to projects, lateral opportunities, promotion
renewal of the workforce, with analyses and planning as the adhesive, overarching in
Thus, for talent-management initiatives to be effective, organisations n
processes, with many stakeholders involved and strong links between lea
talent to translate into specific organisational value-based behaviour (see
In order to successfully tie together all these activities indicated in Figu
leaders in human capital management should actively pursue a number o
which will be explained later in this article. Before this is done, it is impor
mention that talent management will only be effective if the following con
exist:

P.A. Grobler & H. Diedericks
4
Source: Armstrong (2006)
Figure 1: The elements of talent management
• Talent must be viewed by senior management as a strategic ass
importance for the company must be regularly communicated to every
organisation.
• Sufficient resources (funds) should be made available to support all the
management efforts.
• An effective talent-management plan and programme must be aligned
company’s vision, culture and overall strategy.
• Peopleand positionsmustbe trackedthrougha technology-basedtalent-
management system.
• A healthy working relationship between the human resource mana
department and line managers must exist.
• It is not the talented individual that is important, but the processes tha
manage and organise talent. These include having the right structures,
processes and practices fitting together in a coherent whole. For
organisations may have talented personnel but may not manage to sup
correctly.
y

Talent management: An empirical study of selected South African hotel groups
5
• The key elements of a complete talent-management system will
employer brand, a recruitment and selection process, a training and de
process, a performance management system that is tied effectively to
system and an information system that includes data on satisfaction, m
talent development, talent utilisation and performance. There shou
a process to assess an organisation’s competencies and capabilities (T
Pellant 2007: 3–4).
Where then does the process of talent management start? The first step is the
business strategy (see Figure 1). In determining a business strategy, it is important
to take cognisance of the existing talent within the company. The capabil
similar companies in the same industry also need to be identified in order
company to develop distinctive capabilities with a view to gaining the com
advantage. In the hotel industry, this could be customer service. The stra
indicate where the company will be heading, usually within the nex
With the strategy in place, the HR department, in conjunction with line m
(normally within each discipline, namely, Marketing, Finance, Produc
Research and Development), will identify the competencies needed to ac
company’s goals (talent demand). The written description of all the comp
needed within the organisation is known as a competency model (K
Ruse 1996: 23–24). Competencies are not static, however, and companie
continually develop new capabilities and competencies as the environme
which they operate changes. Such capabilities have been referred to as ‘d
capabilities’(Wright,Dunford& Snell 2001:712).Thus, organisationsmay
require new skills sets, necessitating the release of some existing e
the acquisition of new employees. Having identified the competencie
at the different levels within the company, an audit can be done o
competencies within the company. In a talent-management process,
beyond the old style of skills inventory (educational qualifications, trainin
work duties and responsibilities) to become a competency inventory that
and enables easy access to what people can do and the results th
for example, their skills and personal, functional, technical and other com
(DuBois, Rothwell, Stern & Kemp 2004: 64–67). Issues that will also be co
at this stage will include the effective deployment and redeployment of e
well as external workforce demographics. The result obtained here will be
the talent supply. Comparing the results of the two processes will probab
a talent gap. This will lead to the next step, namely the recruitment and s
talented new staff. In the talent-management process, extensive informa

P.A. Grobler & H. Diedericks
6
to be available to execute the recruitment and selection process properly
al. 2004: 102–103). For example, in the case of filling an existing post, th
must already have conducted an assessment of existing staff comp
placed the information in a competency inventory, which can then be use
layout of the advertisement. In the case of the selection process, key com
that are the biggest predictors of job success need to be identified
by the managers seeking the applicants. It is important to note tha
having only one interview with the candidate, multiple interviews w
This will ensure that the candidate actually possesses the competencies r
Although time consuming and costly, it will be worth the effort if top perfo
are ultimately selected. Once a candidate has been appointed, a training
written and executed. This will help employees to perform their current jo
effectively, prepare them for the next job on the career ladder, and prepa
a job in a different discipline (Paul 2005: 3). It is important to note that be
need for more training related to providing knowledge, building skills or im
attitudes, the competency-based approach must also include issues such
the motivation levels of employees and cultivating and developing person
to produce exemplary performers (DuBois et al. 2004: 130–137). In this p
a mentoring programme can play an important role. Measuring the
performance is the next step. This will help to identify the strengths and w
within the organisation. To assist in this regard, it is important that compe
profiles containing clear descriptors are developed to enable employees t
is expected of them. In evaluating the softer skills, such as interpe
use can be made of assessment/development centres as well as fie
– 360˚ appraisals (DeNisi & Griffin 2008). Using
performance appraisal will help identify the development needs of individ
map out routes to career advancement and progression. This information
be used in the redeployment of employees, enabling the company to hav
supply of talent. This is vital, as the organisation must know where it has
– which workforces and areas of business have the greatest strategic imp
critical in maintaining the distinctive capabilities of the company. Depend
the outcome of the performance management process, a reward can be g
employee. By linking compensation directly to individual contributions tha
a difference to the company, an organisation can maintain the highest ca
workers. According to research undertaken in this area by Horton (2002:
following are the main reasons why employers use competency-based re
• To motivate people and to encourage better performance
• To increase flexibility among the workforce

Talent management: An empirical study of selected South African hotel groups
7
• To change employee behaviour
• To give employees access to job progression and to allow some
progression where no other form of promotion opportunities exists.
Thus, the talent-managementprocesshelpsto leveragethe strengthsof
individuals and to unleash their potential in ways that are less likely to oc
traditional work-based system.
Applying these practices skilfully can lead to a number of benefits for o
as identified by Joerres and Turcq (2007: 12), namely:
• Enable human capital management to be aligned into a single system c
to business strategies
• Break down silos and force strategic consistency between different HR
areas, such as recruitment, training and compensation
• Allow more appropriate investments in people, based on talent value
• Increase the scalability and flexibility of business activities through mo
talent sourcing
• Facilitate better-informed decisions about changes in people strategies
greater understanding of potential benefits and risks.
In view of the numerous advantages to be gained when applying
management practices, it was decided to establish the extent to which th
are being utilised within the travel and tourism industry in South Africa. T
of the study will be on the accommodation subsector of the industry. As n
conducted research on the issue could be found in the literature, this stud
as exploratory. The aim of this paper is to present the findings of the inve
The accommodation sector in South Africa
All overthe world,traditionaltouristaccommodationhas undergonemajor
changes over the decades. In South Africa too, changes have taken place
establishment of a large number of lodges and guest houses. These deve
are not surprising, as tourist numbers have grown substantially each year
2007: 8–10). Today, tourist accommodation is by far the largest su
tourism industry (Sharpley 2005: 15). According to the website, Exploring
(accessed on 18 November 2008), the different types of
found in South Africa are indicated below. The rooms or sites that were av
in South Africa in each of these categories in 2005 are indicated in bracke
2007: 114):

P.A. Grobler & H. Diedericks
8
• Hotels (44 000)
• Caravan parks and camping sites (11 000)
• Guest houses and guest farms (11 000)
• Other accommodation (33 000).
Thus, a large variety of accommodation is available to the tourist in So
As far as hotel accommodation is concerned, the Tourism Grading Counci
Africa (TGCSA) indicates that more than three-quarters of the accommod
this component has been graded (TGCSA 2008). The star-grading criteria
TGCSA relate to the functional and physical characteristics of the establis
seeking grading, and to the range and level of services that the e
provides for its guests (Caras 2007: 118). The grading varies between on
lowest and cheapest) to five stars (the highest and most expensive).
Research methodology
Sample selection
As mentioned earlier, the focus of this study was to establish the extent t
management practices were being utilised within the travel and tourism i
South Africa. Due to time and money constraints, it was decided to focus
on the largest component within this industry, namely tourist accommoda
South Africa, this subsector can be divided into the following four c
(1) hotels, (2) caravan parks and camping sites, (3) guest houses and gue
and (4) other accommodation. As the focus of talent management is on p
was decided to choose the component with the highest people concentra
the study, namely the hotel group. During the research project, however,
clear that no single database with the names of all hotels in South
be found. This meant that the exact number of hotels in South Africa coul
be established. Faced with this dilemma, the researchers decided to mak
judgement sampling technique (Struwig & Stead 2001: 111). In this case,
in the subject of the survey choose what they believe to be the best samp
study. Respondent selection thus depends on the researcher’s judgemen
people are experts on the subject and consequently will provide th
required information. There are some drawbacks to using this approach, h
the sample may be biased and thus unrepresentative, and generalis
beyond the sample may not be possible (Struwig & Stead 2001: 115). In v
these restrictions, the researchers decided to compile a list of all the maj

Talent management: An empirical study of selected South African hotel groups
9
groups found in South Africa. These are groups that are fairly familiar to t
public. In many cases, these hotel groups have a presence in all the prov
country. A list of 15 such hotel groups was compiled. After finalising the l
HR Director at corporate level of each hotel group was contacted by telep
establish whether they would be prepared to participate in the survey. On
group declined due to heavy workload. The final sample thus comprised 1
groups. The researchers believed that this group was representative
groups in the country.
Survey design
After an extensive literature review of the subject area, questions were g
and a questionnaire drawn up. In this process, use was also made of the 2
Management Survey undertaken by the Society for Human Resource Man
(SHRM) in the USA (SHRM 2006). The questionnaire
• Section 1: HRM activity in the company
• Section 2: Staffing
• Section 3: Training and development
• Section 4: Retaining employees, with the following subsections:
4.1 Compensation, 4.2 Performance appraisal, 4.3 Labour relations,
4.4 Employee health and 4.5 Innovation and creativity
• Section 5: Motivation to commitment
• Section 6: Communication
• Section 7: Culture
• Section 8: Involvement in leadership
• Section 9: Policy and procedures
• Section 10: Management involvement.
For the majority of the questions, use was made of a four-point Likert s
scale ranged from strongly disagree (1), disagree, (2), agree (3) to strong
Pre-testing of the questionnaire
In this study, no formal pre-test was conducted, but inputs were obtained
in the Human Resource Department of the School of Management Scienc
University of South Africa. It was decided to followth
in this department are specialists in the different areas covered in the qu

P.A. Grobler & H. Diedericks
10
Statistical analysis
The primary method used to analyse the data collected was frequency an
study does not attempt to prove correlation or causality between the vari
frequency analysis was therefore considered adequate for the purposes o
The statistical analysis was carried out using the SPSS programme (SPSS
Response rate
The questionnaires were sent to the respondents (14 in total) by e-mail. A
useable questionnaires were returned, representing a response rate
is interesting to note from Table 1 that the respondents represent a tota
hotel rooms out of a possible 44 000 hotel rooms available in South Africa
2007: 114). The sample thus represented 77.2% of all hotel rooms in the
and can be regarded as representative of the hotel groups in South Africa
Table 1: Room profile of respondents
Hotel group N Number of rooms
available
A 1 10 522
B 1 7 595
C 1 4 773
D 1 4 459
E 1 3 500
F 1 2 200
G 1 620
H 1 623
I 1 38
J 1 25
Total 33 995

Talent management: An empirical study of selected South African hotel groups
11
Results and findings: Talent development
Section 1: HRM activity in the company
Nineteen items appeared in this construct. The items mainly
department at corporate level in the hotel group and its activities, but als
some demographics pertaining to the workforce of the company. There is
that for the talent-management process to work effectively, it is essentia
properly structured HR department at this level with suitably qualified sta
results show that all the respondents have an HR department at this leve
staff complement ranging from 2 to 171. This is understandable, especial
one looks at the size of the hotel groups participating in this study (see Ta
well as the number of staff employed by the groups, which ranged betwe
6 000. The results also show that in the case of the majority of the hotel g
(7 companies), the person responsible for HR was recruited either f
the HR department, or was an HR specialist from outside the organisation
is important, as an in-depth knowledge of HR activities is vital when deve
talent within a company – especially the use of best practices in this field
the different HR activities are concerned, it appears that activities not ou
to external providers include payroll, selection, HR information syste
processing of routine questions, whereas the majority of the companies (
outsourcedpensionsto a greatextent/completely.Regardingbenefits,only a
minority of companies (4) have to a great extent/completely outsourced t
Concerning training, the majority of companies (9) have to a small/
outsourced this activity, while the majority of companies (6) have not out
workforce outplacement/reduction at all. In the case of recruitment, the m
of the companies (6) have to a small/some extent outsourced this activity
important activities that can play a role in the talent-management
being managed by the companies themselves. An issue closely rela
HR activities is the development of policies governing these practices. Th
show that in the majority of companies (5–7) the HR department, in consu
with line management, formulates the policies in the following areas: (1)
benefits, (2) recruitment and selection, (3) training and development, (4)
relations and (5) workforce expansion/reduction. These policies all have a
on the flow of talent within the company, and a partnership between HR a
management is necessary for the talent process to succeed. Having easy
the talent inventory in a company is important. To realise this, the compa
have a computerised human resource information system (HRIS) in

P.A. Grobler & H. Diedericks
12
results show that the majority of companies (8) have some form of compu
system, ranging from a separate stand-alone system to an interface
system. This is a positive finding. The areas in which this system is used i
payroll, benefits, recruitment/selection, training and development, and po
practices. The areas where it is not used by the majority of companies at
include performance management, career planning/succession plannin
scheduling, health and safety and the measurement of HR performance. T
somewhat worrying, as these are important components in the deve
talent. Unfortunately, the systems used at present b
companies do not allow managers to complete HR processes online, nor d
allow employees to access personal information and perform simple HR t
as maintaining personal data, which can also be constraining. In order to
active role within the organisation, it is also important for the HR departm
understand how the company operates. For this to be possible, the depar
have a place on the board or equivalent top executive team. The results i
the majority of companies (8) do have such a place at the highest level fo
departments, which again is a positive finding. Closely related is the issue
strategies. For HR to make a meaningful contribution, it must be guided,
others, by a mission statement and a business strategy. The findings indi
the majority of companies (7–10) have the following in place: a mission st
business/servicestrategy,personnel/HRMstrategy,corporatevaluestatement,
diversity statement, code of ethics, corporate social responsibility st
lastly a communication policy. These are all important building bloc
creation and development of talent within a company. It was also found t
case of the majority of the companies (8), the HR director was involved fr
outset in the development of a business/service strategy. Measuring the p
of the HR function is essential in the talent environment. At present, mos
companies (8) only undertake this task to a small/some extent. If the con
of the HR function to the organisation is to be meaningful, this iss
to be addressed. The majority of the respondents indicate that whe
does take place, the following stakeholders’ views are considered: top ma
line management, employees and HR. This is a positive finding, as consul
between multiple groups of stakeholders is important. Having all the com
of the talent process in place is essential, but if the process is not conside
high priority by the company, it will be meaningless. The findings indicate
a majority of the companies (8), talent-management initiatives are seen a
priority and some such initiatives are in place. Unfortu
companies (4) have an employee that is exclusively responsible for overs

Talent management: An empirical study of selected South African hotel groups
13
initiatives. None of the HR activities can be driven s
process without an adequate budget. The findings indicate that in the ma
companies (6–9), the hotel groups have formal budgets for recruiting indi
as well as for the further development of staff; unfortunately this is not th
respect of the retention of employees. This is a serious weakness, as the
talent is vital for future competitiveness. At present, employee turnover a
groups varies between 2% and 36%, and this is cause for great concern.
among staff is also relatively high (between 2.3 and 10 days per employe
while the age profile of the staff seems acceptable, with 45–70% of the st
the age category of over 25 and under 45 years of age.
However, the educational levels among staff are somewhat low, with b
4.4% and 47% being in possession of a university degree. It is interesting
when respondents were asked what they consider to be the three major c
for HRM over the next three years, they mentioned the following: talent a
talent retention and talent development. This shows the importance
management.
Section 2: Staffing
Thirteen items relating to staffing issues were included here. Activities no
associated with the staffing process include recruitment, selection, placem
human resource planning (determining the supply and demand for t
the talent-management process to work effectively, it is essential th
make some kind of commitment regarding how they value the talent they
This undertaking is normally included in the mission statement of the com
The results indicate that 60% of the companies have indeed included a co
relating to their human resources in their mission statement. This i
finding. Developing a pool of talent demands a number of actions, the firs
to determine the future talent needs of the company. Issues to consider h
include the expansion/reduction plans of the company as indicated in the
strategy. All hotel groups indicate that they pursue this activity stro
talent supply side, some activities must also be undertaken, which includ
at labour turnover – thus losing talent. It appears that only 30% of the com
actually do this, which is disturbing, as the loss of talent needs to
very carefully, especially in view of the high turnover rate, as alrea
Determining the demographics of the national workforce is also imp
recruitment purposes. In this instance, 50% of the companies indicate tha
this, while 50% indicate that they do not, which represents a void in their

P.A. Grobler & H. Diedericks
14
effort. Having determined the supply of and demand for talent, the comp
have to look at its budget allocated for staffing. It is interesting to note th
the companies do this, which is a positive finding. Comparing the two pro
indicate in many cases a talent gap – normally a shortage of talent. Havin
a possible gap, a number of recruitment strategies must be developed to
talent pool that will realise the future company goals. The majority of com
(60%) indicate that they do this, while 40% indicate that they do not. If th
done, the recruitment efforts of the company will not be effective or effic
available options are to recruit staff from their competitors, and als
strategy to prevent competitors from trying to recruit the company’s emp
appears from the findings that neither of these options is pursued by the
This could impact negatively on the talent pool. As far as the selection pr
concerned, companies must be able to determine the developmental pot
employees at the time of appointment. If this is not done, the company w
recruiting talented staff. The results show that 90% of the companies do
is very positive. Linked closely to this is the assessment of the potential c
skills/competencies, and more than 90% of the respondents indicate
undertake this activity. This will impact very positively on the talent-mana
process.
Becoming the preferred employer among potential employees is impor
the talent process to succeed. Determining why employees join a compan
contribute greatly to enhancing recruitment efforts. Only 30% of the resp
are doing this at the moment, which is disappointing. Placing the r
in the right jobs is important for talent management, as people need to g
develop. The majority of the companies (90%) indicate that they do
is positive. Having completed this process, it is important that the whole
is monitored on a regular basis to establish whether the talent it possesse
contributing to goal achievement. The majority of the companies (60%) in
that they actually do this, while 40% do not at present. To summa
appear that the staffing component receives positive attention, which wil
influence the supply of talent to the company. This finding somewhat con
that of the WEF that was mentioned earlier. Only a few issues remain pro
namely monitoring labour turnover, establishing why employees join the
developing strategies to recruit employees from competitors and de
strategy to prevent competitors from recruiting the company’s employee
need to be looked at again. This finding is not surprising, as there is a goo
relationship between the HR departments and line management reg
policies/procedures pertaining to recruitment and selection (as already di

Talent management: An empirical study of selected South African hotel groups
15
The use of a computerised system in this regard appears to be very limite
and will have to be more fully developed if it is to add value to the proces
Section 3: Training and development
Ten items related to training and development aspects were include
main focus areas can be identified, namely training and development. Th
these areas is to build a deep reservoir of successors and talented emplo
It is important to note that the environment within which compan
themselves is in a continuous state of flux. The implication of this is that
competencies of employees need to be updated regularly to meet the ne
facing the companies. To achieve this, training and development program
be aligned with the future goals of the company. This will help achieve th
focus for the training and development efforts. The findings indicate that
the companies actually do link their training and development goals with
company goals. This is a positive finding. Having done this, their next ste
audit the existing skills of all employees on a continuing basis. This will id
any gaps that might exist between what the company at present has, and
need in the future. The results show that all the respondents do have suc
in place at present, which is important. The shortcomings identified
properly addressed as soon as possible. This will create a pool of talented
This process is in place in the majority of companies that participated in t
Employees, especially ‘A performers’, need to grow continually, and the c
needs to develop diverse career paths linked to its long-term goals to acc
these employees. It appears from the findings that this process only exist
minority group of companies at present. This is worrying, as employees w
trapped will soon leave the company, which will negatively impact on the
pool. It is important that once these career paths have been created, the
are given the chance to expand their skills and thus improve their
results indicate that these opportunities are provided by the majority of c
This finding is somewhat contradictory when considering the previou
which indicated the lack of such career paths. It would thus appear that, w
few exceptions, the companies improve employees’ skills without pr
upward mobility. This situation can, however, impact negatively on the co
talent pool. The importance of teams working together within comp
also not be ignored. This is especially true in the hotel industry, w
inclusive service is provided to the customer. It appears that the respond
again equally divided on this matter, which can be seen as a weakness. D

P.A. Grobler & H. Diedericks
16
future leaders within the company is essential, especially for succession p
purposes. However, a special effort needs to be made to do this through
known as assessment centres. It is interesting to note that the responden
divided equally on this aspect. The impact of the size of the hotel group o
decision is not clear at this stage. Conducting training and development a
is bound to have some impact on the functioning of the organisatio
important that the effectiveness of training and development programme
monitored regularly. One way in which this can be done is to determine t
of these programmes on the productivity levels within the company
show that only a minority of companies have teams studying their
levels. This is therefore a negative finding. The findings indicate, however
majority of the companies do make an effort to monitor the effectiveness
training and development programmes. To summarise, it appears that th
and development efforts within the hotel groups are working well f
perspective. This is in line with the findings of the WEF. The only negative
relates to the monitoring of productivity levels, while the sample is equal
in relation to the use of assessment centres to identify management deve
needs, the institution of formal team-building efforts and the linking of ca
to long-term company goals; there is thus some room for improvem
areas. This finding is not surprising, as there is a good working relationsh
the HR department and line management regarding the policies and proc
pertaining to training and development (as already discussed). Many hote
have in-house training academies, which shows that they place a high pri
this activity. They also have a formal budget for training and developmen
as already indicated, the better and more effective use of the computeris
resource information system in this area needs to be addressed urgently.
enable companies to track their employees’ careers and indicate in summ
the available competencies within the company.
Section 4: Retaining employees
One of the biggest challenges facing companies today is the retention of
employees. However, to do this successfully, a budget for this purpose ne
place. As already indicated, the hotel groups do not have a formal budget
for this purpose at present, which can be seen as a weakness. A number
could enhance this issue, however, and a discussion pertaining to this asp
follow in this section.

Talent management: An empirical study of selected South African hotel groups
17
This sectionconsistsof the followingsubsections:4.1 Compensation,4.2
Performance appraisal, 4.3 Labour relations, 4.4 Employee health and 4.5
and creativity. Each section will be discussed separately. It should be not
was decided to discuss section 4.5, which addresses the issues of innovat
creativity, in the last part of this article under the heading of ‘Talent enga
Subsection 4.1: Compensation
Ten items relating to compensation issues were included here. Compensa
an important role in any organisation. The issues of fairness and distribut
are particularly paramount. To address these issues, companies nee
place a compensation structure that is designed to meet future company
results indicate that 60% of the companies do have such a structu
indicate that they do not. This is considered to be problematic, as the com
process is an integral part of achieving company goals, and therefore can
piecemeal or on an ad hoc basis. Evaluating jobs for salary purposes is an
process and, with new demands constantly being made on organisations,
need to be effected to ensure that the job content remains relevan
that job analysis information should be regularly reviewed. The results sh
60% of the companies do this, while 40% of the companies indicate that
not. This is problematic, as staff members may be performing tasks/dutie
no longer relevant. Changing job content would inevitably also impact on
individual’s job is designed, and what new competencies are required to p
the job. This is an important issue in building a talent pool. As with the pr
finding, 60% of the companies do this, while 40% indicate that they do no
a serious weakness that can impact on the talent-management process.
Pricing the job after the redesign process must result in a fair process,
consideration the job requirements, experience and quality of work.
must thus be seen as fair. In the case of 70% of the companies, this proce
as fair, while 30% do not agree. The next step is implementing the compe
structure in the job environment. This means that employees should be re
according to their job performance. An interesting result in this reg
50% of the companies agree that employees are rewarded accordin
performance, while 50% do not agree with this. This finding can pr
attributed to the fact, for example, that employees who work overtime ar
compensated for their additional effort. This is not uncommon in the hote
as many additional hours are sometimes worked without extra remu
Closely related to this aspect is the way in which the salaries that employ

P.A. Grobler & H. Diedericks
18
relate to the industry norm. The majority of the companies (60%) i
they agree that their salaries are as good as any in the industry, while the
do not agree with this. The salaries thus appear to be acceptable. Apart f
remuneration, employees are also given fringe benefits. To provide some
in this regard, companies normally offer a list of benefits from which emp
can make a choice according to their needs. The majority of the compani
indicate that they follow this procedure, while 40% indicate they do not. E
needs differ, and they should therefore have the opportunity to choose th
they need. Such an approach will help to retain the talent pool of the com
question can be asked whether employees are satisfied with their benefit
Again, the results show a 50% agreement, and a 50% disagreemen
uncommon, as the literature shows that no completely acceptable system
of the benefits package involves providing employees with a pension. The
indicate that 80% of the companies provide a pension plan for their empl
a system to function properly, good communication with all employees is
The results indicate that the majority of the companies (80%) are satisfie
way in which compensation/benefit programmes are communicated to all
summarise, it would appear that the compensation component is positive
conducive to talent building. Two issues appear to be problematic, howev
rewarding employees according to their job performance as well as
package offered to employees, and these issues should be addressed. Mo
use of a computerised system in this instance seems to be limited at this
will have to be investigated further.
Subsection 4.2: Performance appraisal
Four items relating to performance appraisal issues were included h
individual as well as the employer, it is important to establish the extent
individual’s talent is being utilised to the benefit of both parties. This can
through a process known as performance appraisal (PA). Employee perfor
measures common to most jobs includes: quantity of output, quality
timeliness of output, presence at work and cooperativeness. Effectiv
apart from being used to make decisions about pay, promotion and reten
also significantly contribute to the satisfaction and motivation of employe
again influences talent utilisation. For these systems to be effective, they
be regularly reviewed to establish whether they still reflect future compa
If this does not happen, employees will be evaluated on aspects no longe
to the company’s needs. The findings indicate that 50% of the responden

Talent management: An empirical study of selected South African hotel groups
19
do this at present, while 50% indicate that they do. This is a serio
Employees’ shortcomings need to be identified and rectified as soon as p
frequency with which performance appraisals are conducted is therefore
The findings indicate that in only a minority of cases (30%) are th
undertaken twice a year. This is problematic, as the organisation’s
can be affected negatively should problems exist. The results of a
appraisal can also influence decisions about training and developme
important for the talent-management process. According to the findings,
the companies use it for this purpose, while 20% indicate that they do no
a positive finding. Unfortunately, the performance a
great extent to track potential leaders’ performance. This is problematic.
of the companies do this, while 60% do not. Developing leaders for the or
is important, especially with a view of succession planning. To summarise
appear that the use of performance appraisals within the hotel groups is
in areas such as the frequency of appraisals, the development of systems
future company needs and the tracking of potential leaders’ performance
to be addressed as soon as possible. Problems in this area have a seri
on competency development. The shortcomings identified here can be re
a number of issues, including ineffective job placement, insufficient job tr
ineffectual employment practices, lack of attention to employee needs or
inadequatecommunicationwithin the organisationand unclearreporting
relationships. Moreover, the failure to use a computerised system in this
great concern, as information pertaining to employees is not readily avail
also needs to receive attention.
Subsection 4.3: Labour relations
Seven items relating to labour relations issues were included here. Witho
labour relations – or better still, work relations – companies will not achie
of becoming more competitive. As the hotel industry is labour intensive, t
should receive high priority. To manage this process successfully, it is imp
some future forecasting is done. The majority of the respondents (80%) in
that they do undertake some forecasting activities, which is a positive fin
numerous labour laws govern the relationship between the employer and
it would be sensible to inform employees of these issues. The findings ind
90% of the companies do this, which is again very positive. Where unions
within companies, it is also important that a written strategy should
pertaining to negotiations with these unions. The majority of compa

P.A. Grobler & H. Diedericks
20
indicate that they have such a strategy, which is sensible, as many impor
need to be discussed with unions from time to time. N
function without incidents; there should thus be a grievance and di
procedure in place to regulate any problems. The findings indicate
majority of cases (90%), both a written strategy relating to negotiations w
as well as a grievance and disciplinary procedure can be found wit
groups. It is important that disciplinary action should only be taken when
and it appears that this is the case in the majority of the companies (90%
the composition of the workforce since the new democratic dispensation
being in South Africa in 1994 is still a high priority. One aspect related to
employment equity. The government has provided some guidelines for co
to follow. The results show that in the majority of cases (80%), the human
department strives to meet the goals in this area, which is positive. To su
the labour relations component is very positive. This is not surprising, as
relationship exists between the HR department and line managemen
the formulation of policies pertaining to this component. This will inevitab
in a better relationship between the parties and have a positive effect on
management process.
Subsection 4.4: Employee health
Four items relating to employee health issues were included here. Having
but not being able to utilise it to the full can be frustrating. Companies ha
note of the potential impact of health-related problems in the work enviro
and have implemented numerous employee assistance/wellness prog
address these issues. From the findings, it is clear that in the case of the
of companies (90%) the human resource department acts as an informati
regarding general health programmes for its employees. It also runs
maintenance programme for the staff (56%). This is a positive finding. Th
no doubt that the hotel industry can be a stressful environment in which t
and this issue also needs to be looked at. From the findings, it is clear tha
the companies do not make provision for stress forecasting in the workpla
45% do. Job stress is considered to be a rising concern in many organisat
South Africa, affecting employees in many different ways. For example, it
to low productivity, increased absenteeism and turnover, and an assortm
employee problems including alcoholism, drug abuse, hypertension and a
cardiovascular problems. All these aspects can impact directly on the tale
company. Another issue that can also directly affect service delivery is ab

Talent management: An empirical study of selected South African hotel groups
21
It is interesting to note that in the case of the majority of the companies (
forces are established to investigate employee absenteeism; this is a pos
in view of the high absenteeism rate in the hotel groups (as alread
To summarise, it would appear that the issue of employee health i
important within the hotel groups. This is very positive. However, again th
a computerised human resource information system would make the man
of this issue much easier, and this needs to be investigated further.
This concludes the discussion of the human resource managemen
involved in talent management. However, the way in which the talent tha
generated is engaged within the organisation needs to be more closely sc
This will be the focus of the next section.
Results and findings: Talent engagement
Having observed that management spends time and money on generatin
for the organisation, a number of questions can now be asked, namely: ‘W
talented people want?’ ‘What conditions do talented people thrive in?’ an
do talented people like to be managed?’ These questions will be answere
following sections: Section 4.5: Innovation and creativity, Section 5:
to commitment,Section6: Communication,Section7: Culture,Section8:
Involvement in leadership, Section 9: Policy and procedures and Sec
Management involvement.
Subsection 4.5: Innovation and creativity
Seven items relating to innovation and creativity were included here. Acc
Thorne and Pellant (2007: 104), talented people want the following: recog
a feeling of achieving something significant, excitement, variety, stimulat
a feeling of making a difference. From the results obtained, it is cl
environment of innovation and creativity exists within the hotel groups pa
in the survey. This is a positive finding. If talented people cannot be conti
stimulated with new challenges, and management does not also play an a
in this regard, the company will lose the talent it has. To summarise, it wo
that the hotel groups take the creation of an innovative and creative envi
seriously.

P.A. Grobler & H. Diedericks
22
Section 5: Motivation to commitment
Twenty-one items relating to motivation and commitment were inclu
Creating the right environment for talent to thrive in is no easy task. Acco
Mackay (2007: 29), who based his recommendations on an extensive lite
the following components need to be in place in a company in order to m
employees to be committed to the company: approval, praise and
trust, respect and high expectations, loyalty, building confidence and self
removing organisational barriers to both individual and group perfor
enrichment, good communication and financial incentives. From the
it is clear that the statements that address these issues are all strongly su
by the hotel groups. Some relatively small problems are evident, h
example, conducting regular employee attitude surveys and recognising
achievements are issues that the companies should address. To summari
appear that the hotel groups take the issue of motivation seriously.
Section 6: Communication
Eleven items relating to communication were included here. The importan
good communication within the work environment cannot be undere
According to Porter, Smith and Fagg (2006: 203), the effects of poor com
can include: (1) drastic effects on production and employee relations, (2)
misunderstandings and (3) confusion, mistakes, wastage, and even accid
high labour turnover. The impact on the utilisation of talent within a comp
thus be devastating. The findings indicate that the majority of companies
than 70%) apply good communication practices within their organisations
essential in a customer-service environment such as a hotel. To summari
appear that communication is considered important by the hotel groups.
Section 7: Culture
Nineteen items relating to culture were included here. R
that culture within an organisation plays an important role, namely:
• It is a method of control whereby the values and attitudes of staff are m
• It is a framework of behaviour that unites all members of staff.
• It makes a statement about the individuals who work in a particular org
• It defines what is acceptable and what is not.

Talent management: An empirical study of selected South African hotel groups
23
The findings indicate that the majority of companies (50–100%) h
clear cultural values within their companies. The individuals working with
companies therefore know what is expected of them and what they can e
the organisation. This is a very positive finding. To summarise, it would ap
culture is considered important by the hotel groups.
Section 8: Involvement in leadership
Seven items relating to involvement in leadership issues were inclu
Involving employees in the decision-making processes of the compa
very important, indicating that companies have faith in their employees’
and further strengthening the level of trust between the employer and em
The findings indicate that the majority of companies (50–100%) highly va
principles pertaining to participative management. The only exceptio
to be the involvement of employees at the lowest levels in project
majority of the companies (60%) do not agree with this involvemen
gaining grassroots support can open up new possibilities for these organi
To summarise, it would appear that involving employees in the leadership
company is considered important by the hotel groups.
Section 9: Policy and procedures
Five items relating to policy and procedures issues were included h
are guidelines to management’s thinking and help management to
organisation’s objectives, whereas procedures indicate the manner in wh
are done, for example, the recruitment procedure. To be effective, policie
be in writing and should be communicated to all employees. From the fin
is clear that in the majority of companies (90–100%), employees are well
about the policies and procedures of their companies. They also perceive
very fair. The only negative finding relates to the involvement of employe
formulation of company policies/procedures, in that the majority of the co
do not regard this as necessary. However, the overall findings are
summarise, it would appear that the policies and procedures are well com
communicated within the hotel groups.
Section 10: Management involvement
Fifteenitemsrelatingto managementinvolvementwereincludedhere.As
mentioned earlier in this paper, the involvement of management with the

P.A. Grobler & H. Diedericks
24
managementprocessis important.Managementnot only becomesdirectly
involved with employees, but is also responsible for the general planning
organisation, as well as for building the organisational culture. From the fi
is clear that in the case of the majority of the companies (60–100%), thes
are at present being performed by the managers. This is a positive findin
is no doubt that a hands-on approach is the only way in which things can
To summarise, it would appear that the managers within the companies a
involved in supporting the talent-management process.
Conclusions and recommendations
The primary objective of this study was to determine the extent to which
management practices were being implemented in companies within
accommodationindustry,focusingon the hotelsector.Almostall the major
hotel groups in the country participated in the survey, which make
representative of the hotel groups in South Africa. Despite the negative fi
2008 Travel & Tourism Competitiveness Report (WEF 2008) with regard t
of hiring and firing practices (on which South Africa was ranked 128th out of the 130
countries surveyed), the overall findings of this study pertaining to human
management were quite positive. The following shortcomings were i
however, and need to be addressed within the industry. It is recommende
South African hotel industry should:
• Have a fully integrated computerised human resource information
(HRIS)
• Measure the performance of the human-resource management fun
regular basis by making use of the Balanced Score
the HR Scorecard (Becker, Huselid & Ulrich 2001)and
(Huselid, Becker & Beatty 2005)
• Appoint a person/persons whose sole role within the company wo
manage the talent within the organisation
• Establish a budget for the retention of employees
• Investigate the reasons for high turnover on a continuous basis
• Improve the education levels of staff
• Make an in-depth study of the national workforce through skills profiling
labour force
• Become more innovative regarding recruitment strategies
• Work on becoming the employer of choice (company branding)
• Develop proper career paths for staff

Talent management: An empirical study of selected South African hotel groups
25
• Improve the issue of teamwork
• Focus more pertinently on developing future leaders within the compan
• Monitor productivity levels on an ongoing basis
• Design a proper compensation structure linked to the future goal
organisation
• Monitor changes in job content as a result of the changing organ
environment
• Redesign jobs on a regular basis as a result of new challenges facing th
• Provide more flexibility for staff in choosing benefits
• Re-examine the issue of employee compensation, especially when
work overtime
• Evaluate the company’s performance appraisal systems on a regu
assess whether they are still appropriate
• Increase the frequency with which performance appraisals are conduct
• Make stress awareness a high priority
• Make better use of company surveys
• Involve more junior staff in decision-making processes.
Talent management is thus a critical business function in any economic
the acquisition and retention of top talent should be an ongoing process.
organisations know that exceptional business performance is driven
talent (Taleo Corporation 2008: 9).
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