Principles of Managing and Monitoring Financial Performance in Hospitality Business

This report discusses the principles of managing and monitoring financial performance in the hospitality business, including the double entry book-keeping system and trial balance. It also explores the stages of the HR life cycle, the importance of performance management, and the legislation that hospitality organizations have to comply with. Additionally, it covers different functional roles in the hospitality sector and methods of communication.

Hospitality Business

Table of Contents
Hospitality Business.....................................................................................................................1
INTRODUCTION.......................................................................................................................4
LO1..............................................................................................................................................4
Principle of managing and monitoring financial performance .............................................4
Double entry book-keeping system ........................................................................................4
Trial Balance ..........................................................................................................................5
LO2..............................................................................................................................................7
Stages of HR life cycle...........................................................................................................7
Performance management plan..............................................................................................8
LO3............................................................................................................................................10
Legislation hospitality organisation has to comply .............................................................10
Employment and Contract Law............................................................................................11
LO4............................................................................................................................................13
Different functional role in hospitality organisation ............................................................13
Covered in PPT.....................................................................................................................13
Method of communication....................................................................................................13
Conclusion.................................................................................................................................13
REFERENCES .........................................................................................................................14

INTRODUCTION
Hospitality is a service sector that involve wide range of services such as lodging
services, food, drinks, restaurants, event management and various other associated services.
This report is based on the case study of the Ritz hotel. Ritz Hotel is luxury hotel based in
London. Ritz hotel was established in the year 1906. Architecture of the hotel was designed by
Charles Mewas and Arthur Dewis. In this report various principles related to the managing
and monitoring financial performance will be reported. Summarised information in respect to
the double entry book keeping system will be reported. Trial balance will also be reported.
Different stages of HR life cycle in regards to the job role of managing talent has also
summarised in this report. A performance management plan has also reported. Various
legislation related to the hospitality legislation has also reported. Different functional role
within the hospitality sector has also reported. Different communication methods has also
specified in this report.
LO1
Principle of managing and monitoring financial performance
Financial Transaction: Financial transaction is specified as the agreement or communication
between two or more person in respect to making payment or any suitable transfer in form of
payment (Babiy and et.al., 2019). To record the financial transaction accounts department of
Apex Hotel London use double entry book keeping system, Trading account and Profit and
Loss statement.
Principle of Managing and Monitoring Performance: Analysing and assessing the financial
records of the organisation is specified as the principle of managing and monitoring
performance. Profit and Loss account and balance sheet is analysed by the management to
manage and monitor the performance of the hotel (Bailey and et.al., 2017).
Double entry book-keeping system
To register the transaction related to the sales and purchases double entry book keeping
systems is used in Apex Hotel.

Principle of Double entry book keeping
Double enrtry book keeping is a system in which all the expenses and assets of the
company get debited and all liabilities and incomes of company get credited (COCA
GAMITO and Baltos, 2019).
Trial Balance
Purpose
Trial balance is among the crucial financial statement in the corporate organisations.
Purpose of the trial balance is to record all the expense irrespective of the nature of expense
and all the liabilities to analyse about the flow of cash in the organisation operations (Corrado
and et.al., 2017).

Types of cost
Cost is considered as all outgoing cash flow activities associated with the business
operations. Cost are of various types based on the nature.
Fixed cost: All the cost that generate returns of more then one year is considered as fixed cost.
Fixed cost usually entertained to generate assets for the organisation (Datta and Jain, 2017).
All the fixed cost are utilised for the longer period of time. Apex Hotel engage with various
fixed cost such as buying property’s, furniture and all other related cost that will provide
advantage for more than a year. Usually fixed cost require huge investment and hotel
management can improve the profitability by reducing fixed cost with the help of repair and
development cost engaged with the sustainability of all the existing assets. Reinforcement of

existing assets will improve the utility of such assets and the hotel management won't be
require to invets in such assets for the longer period.
Variable cost: All such cost that interacted with every year from the management is
considered as variable cost. Utilization of variable cost is restricted only for the year. Variable
cost involve material cost for production like in food department cost of vegetables and other
regular used items are considered as variable cost. Management can improve profitability with
the proper planning in respect to variable cost.
Semi variable cost: All such cost that are partially fixed in nature and partially variable is
considered as semi variable cost. Hotel management can improve profitability with the proper
operational planning that will guide to restrict the semi variable cost in a limited amount
(DiStefano, 2017).
LO2
Stages of HR life cycle
Human resource management (HRM) is a strategic approach towards managing the
human resources in the organisation. HRM involve various actions in process to acquire new
talents and also to sustain and grow the existing human resources of the organisation.
Activities involved in the life cycle of HRM in Ritz hotel in order to manage the human
resources in the organisation.
Attraction: Attract skilled and talented human resources to fill the various position is a crucial
part of HRM life cycle. The HRM attract talent with the support of marketing campaign.
Different marketing channels also use by the HRM to channelise marketing advertisement for
recruitment and selection.
Recruitment: To fulfil various organisation need HRM recruitment human resources at
various position and designation in the organisation. Recruit human resources is among the
major role of HRM life cycle (Kinter and et.al., 2020).
On-boarding: On-boarding is also an important part of HRM life cycle in HRM of Ritz
Hotel. On boarding is a process in which HRM need to introduce new employee's to the
organisation.
Entablement: In process of entablement HRM needs to introduce new employee's from the
vision and mission of the company. This also involve guiding employee's towards the paper

work and functions attached with the joining. Guidelines of the company also guided in this
process to the new employee's.
Development: Proving development and growth opportunities to employee's is also an
important aspect of the HRM life cycle. Development also involve guiding employee's
towards the right direction to achieve the effective career growth.
Retention: HRM also play the major role in maintaining ans effective employee turnover rate
in favour of the organisation by retaining employee's for the longer period. Employee's
retention also seek an efficient and positive organisation culture. HRM run effective practices
such as training and development and other practices like rewards to retain employee's for the
longer period (Latinopoulos, 2018).
Separation: HRM also play an effective role in employee separation as a part of life cycly.
HRM needs to follow all the guidelines of Ritz Hotel in respect to separation.
Importance of HRM life cycle:
 Solving employee's issues
 Maintain the positive work culture in organisation
 Improve the efficiency of employee's with the support of training.
Importance of retaining and developing talent:
 Improve operational efficiency
 Improve profitability
 Enable to achieve the higher customer satisfaction
 Higher growth of the hotel
Performance management plan
Performance management is specified as the process to manage and improve the
performance with the help of development activities. Performance management also involve
acquiring new skills to perform the task more effectively.
Performance Management Plan
Performance management plan for the food and beverage manager of Ritz Hotel.
Aquired skill Area of
Improvement
Resources Actions Improvement
Measure
Target Time
 Time
mana
 Decisio
n-
 Profes
sional
To improve
the decision
Feedback will
be taken from
3 Month

geme
nt
skills
 Deleg
ation
skills
 Listen
ing
skills
 IT
skills
 Conce
ptual
skills
making
skill
 Proble
m
solving
skill
 Resour
ce
manag
ement
skill
consul
tancy
 Semin
ars
 Guida
nce
from
senior
making,
resource
management
skills and
problem
solving skills
consultancy of
expert
professionals
will be taken.
Support of
senior
designated
colleagues
will also be
taken towards
suitable
development.
Professional
training for all
the skill
improvement
will be
implemented
(Lussier and
Hendon,
2017).
all the
colleagues
and senior
management.
Training for improvement
Training from experts and professionals will be conducted for the development of all
the target skills. Training will involve resource management training, time management

training and decision making training to improve the all skills for better performance as a food
and beverage manager.
LO3
Legislation hospitality organisation has to comply
Equal Pay Act 1963: Equal Pay Act enable the effective work culture in the organisation. To
ensure the equal pay irrespective of any discrimination this act is implemented over Ritz
Hotel. Hospitality organisation need to pay equal equally to employee's at the same level in the
organisation without discriminating on the basis of the gender (Marks, 2019). This act create a
positive impact over employee's engagement in various hospitality functions. Equal wage rate
also motivate the HRM to retain human resources in the organisation for the longer period.
This act also ensure the professional development of employee's in the organisation.
Equality Act 2010: To ensure the equal employment and growth opportunities for all the
human resources the government in UK implemented Equaltity Act over all corporate
organisations. Equal employment and development opportunities also enable the effective
organisation and work culture in the organisation. This act improve the employee moral and
also improve the employee engagement in various organisation functions. This act also
support in maintaining the beneficial employee turnover by sustaining employee for the longer
period in the organisation. Equality in the organisation ensure professional development of
human resources in the organisation as all employee's get equal growth and development
opportunities based on the skills and talent that also motivate employee's to perform more
productive task.
Data protection Act: To ensure the data safety in the organisation UK government has
drafted Data Protection Act in 2018. At the time of selection process the HRM in Ritz Hotel
take various personal and professional information of employee to analyse about the
background of the candidate. This act enable the corporate organisations to keep the personal
and professional information of employee's of the organisation safe. Data protection also
ensure the good and healthy corporate culture which effectively improve the employee
engagement for various operations of the hotel. Effective work culture also ensure the
employee retention in the organisation as the healthy work culture impact positively over
decision making of employee's related to switching of job or position.

Labour Law: Labour law is a crucial law that needs to be cope up by the corporate
organisation. Labour law ensure the minimum wage rate for all the employee in process to
fulfil the responsibilities in the hospitality organisation. Effective salary also improve the
employee engagement in all the operation's of hotel (Rahimi, R. and Gunlu, 2016). Effective
pay also enable the organisations to retain the employee's for the longer peruiod as the
employee don't need to look for other job in process to earn a satisfactory amount. Effective
salary causes to professional development of employee's as employee's can also focus over
improving skills like time management, personality development that will also improve the
productivity of employee's in the organisation.
Employment and Contract Law
Ritz Hotel London also need to cope up with employment and contract law in process
to conduct organisation operations. To ensure the rights, responsibilities and duties of
employee's in corporate organisation UK government has implemented Employmenta and
Contract Law over all hospitality organisations. At the time of recruitment and selection of
employee's contract is frames between Ritz Hotel and employee's that specifies about the
roles, responsibilities, duties and rights of employee's in process to fulfil the employment in
the organisation. HRM of the Ritz Hotel also need to involve the regulation and rules attached
with other employment law like equality, equal pay act and other associated law while taking
decisions in respect of giving employment opportunities to employee's. Employment decision
making will also involve time and number of hours in a day as per the law of the UK that
specifies about the 8 working hour per day which comprises with 48 hours in a week and
HRM has to ensure the regulation attached with law while offering the respective working
hours to employee's (Roy, 2016). Employee contract law also assure organisation that
employee will fulfil all the roles and duties effectively in process to cope up with the
employment responsibilities. Employment contract law also influence the decision-making in
respect to offering leaves to employee's. As per the UK law an employee must have the
facility to have the leave of 48 hours in a year which will also be recognized as paid leaves.
Employment contract law ensure the healthy work culture in the organisation that also
improve the sustainability of employee's in the organisation.
Implication of employee legislation

Employee legislation can be potentially implemented in Ritz Hotel. Major implication
of legislation is in manner.
Recruitment and Selection: Recruitments and selection of human resources is an important
and crucial aspect of the organisation. All corporate organisation achieve all its targets with
the support of human resources of the organisation. HRM of the Ritz Hotel can implement
equality act while giving employment opportunities to human resources. Recruitment and
selections in the organisation must be on the basis of skills, talent and knowledge of the
employee irrespective of gender, religion and other social factors. Giving equal employment
opportunities will support the organisation in achieving all its targets as the deserving people
will be in the right position of the hotel. For example management in the Ritz Hotel must
ensure recruiting human resources in the hotel for various position on the basis pf the skills
and knowledge of candidates irrespective of gender.
Setting working hours: Legislation in UK specify about the number of working hours in a
day that should be not more then 8 hours. Implication of this act is like a mandatory aspect for
the Ritz Hotel management. Working hours in hotel keep fluctuates in respect to changing
shifts of employee's and this act play the crucial role in such a respect. For example
management in Ritz Hotel must ensure to give 8 working hours in a day to all its staff in
process to cope up with the requirements of the legislation.
Ethical issues
Ethical issue is defines as a situation in hospitality organization in which the
employee's of the hotel needs to decide in a specific situation between the right and the wrong.
Various ethical issues employee's face in hospitality organization.
Toxic Work place culture: Toxic work culture is one of the major ethical issue employee
face in respect to fulfil the employment duty. Many times in hotel due to busy season's
employee face hectic and busy work schedule even more than 8 hours a day that create a huge
ethical issue for employee's of the organization (Sanders and Yang, 2016). Legislation guides
the organization to keep only a 8 hours a day as working hours and this will also result into
healthy work culture at hotel.
Discrimination: Various discrimination can be seen at the hospitality organization based on
different aspects like gender, caste, religion, colour and in many ways that also created a huge
ethical issues for employees suffered from such discrimination at work place. With the

effective implication of legislation management in Ritz Hotel can strictly apply law to control
the discrimination at the work place and also strictly implement actions against such
discrimination like resignation and other conditions to cope up with such a ethical issue.
LO4
Different functional role in hospitality organisation
Covered in PPT.
Method of communication
Covered in PPT.
Conclusion
This report concluded various impacts of financial transaction over organization
profitability. Recording of various financial transactions with the use of books and accounts
has concluded. How different cost like variable cost, fixed cost and other associated cost
impact the organization profitability has concluded. Various aspects of human resource
management in the organisation has concluded that also involve impacts over profitability and
operational efficiency of the organization. Performance management model has also
concluded to determine the aspects of performance improvements. Various impacts of
legislation over decision-making like deciding wage rate, ensuring equality in organization
and in other associated ways has concluded. Impacts of coordination and communication
channels has also conclude over effective flow of operation in a specific department in hotel.

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Online:
Hospitality sector in UK, 2020. [Online]. Available Through:
<http://www.investinuk.net/industry/hospitality-tourism/hospitality-tourism>.