Principles of Financial Performance Management in the Hospitality Sector

This assignment discusses the principles of financial performance management in the hospitality sector. It covers topics such as making key financial statement reports, maintaining proper records of stock, and evaluating overhead costs. The assignment also includes a performance management plan and techniques to resolve negative behavior, as well as the impact of company, employment, and contract law on business decision making in the hospitality sector.

The Hospitality
Business Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................1
P1. Principles of financial performance management............................................................1
P2. Apply double entry bookkeeping system of debit and credit record sale and purchase
transactions in general ledger.................................................................................................2
P3. Prepare trail balance.........................................................................................................3
TASK 2............................................................................................................................................4
P4. Review the stages of HR life cycle..................................................................................4
P5. Develop a Performance management plan and apply techniques to resolve negative
behaviour................................................................................................................................5
P6. Legislations that a hospitality organisation must comply and adhere to..........................7
P7. Potential impact of company, employment and contract law over business decision
making in hospitality sector....................................................................................................7
TASK 4............................................................................................................................................8
P8. Interrelation between different functional role within hospitality sector.........................8
P9. Different methods of communication, coordination and monitoring within hospitality
organisation............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Hospitality sector is a flourishing corporate sector which encompasses accommodation,
restaurant, recreation, lodging, travel and tourism and so on (Chan and Hon, 2020). The current
assignment is on “Juicy Pulp” which is a newly opened juice and smoothies centre functioning at
Moorgate in London EC2Y. This venture is being converted into a thriving entity. It holds
specialisation in salads that are offered with blended juices and smoothies. The business mentor
of this entity has come up with the idea of integrating alcoholic spirit with the current beverages
to give competition to the nearby bar. The report includes principle of management of financial
performance along with performance management plan. Further, it contains HR life cycle and
impact of laws on business decisions. At last, methods of monitoring, coordination and
interaction are covered.
P1. Principles of financial performance management
Financial performance is defined as the extent to which an entity is able to employ the assets in
an effective manner to facilitate high revenue generation (Rhou and Singal, 2020). There are
several principles which provide aid in monitoring as well as management of financial
performance. These principles are discussed in context of Juicy Pulp as follows:-
Making key financial statement reports:
This principle is keen upon development of essential financial statements such as Profit & Loss
and Balance Sheet with a view to provide an overview of the current financial performance of
the organisation. By preparing such reports, Juicy Pulp will be able to gain knowledge of the
areas whereby the entity can facilitate improvements to inflate the performance next year.
Maintain proper records of stock:
This principle is keen upon maintenance and development of proper records of the purchases
done by the company in terms of raw materials and other essentials. This provides Juicy Pulp
with knowledge regarding the wastage that has taken place during the inventory purchase and
stocking process.
Evaluating the overhead cost:
This principle is keen on gaining an insight into the extra expenditure done by entity over and
above the expenses associated with organisational operations. Through maintenance of all the
records of the extra expenses, Juicy Pulp will be able to ascertain the cost of those expenses that
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can be cut down in the next year in order to deflate overhead cost and enhance the profit
margins.
P2. Apply double entry bookkeeping system of debit and credit record sale and purchase
transactions in general ledger
Double Entry Book keeping is an accounting system which states that each and every
business transaction tends to have a dual effect on the finance of company. Transactions are
recorded within this system by applying the golden rules of accounting (Redmond and
Sharafizad, 2020). Every transaction affects the debit and credit side and the total of both the
sides are equal to ensure that the accounting equation gets verified. In this regard, below
mentioned is an example of the book keeping system of accounting whereby sales and purchase
transactions are recorded:-
Sales account
Particulars Amount Particulars Amount
To balance b/d 7500 By Bank account 5000
By Ms. Jane account 2500
Total 7500 Total 7500
Purchases account
Particulars Amount Particulars Amount
To bank account 6000 By Balance b/d 6500
To Ms. Rochelle account 500
Ms. Jane account
Particulars Amount Particulars Amount
To bank account 6000 By balance b/d 6500
To Ms. Rochelle account 500
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Ms. Rochelle account
Particulars Amount Particulars Amount
To balance b/d 500 By bank account 500
Total 500 Total 500
Bank account
Particulars Amount Particulars Amount
To Sales account 7500 By Purchases account 6500
By balance b/d 1000
Total 7500 Total 7500
P3. Prepare trail balance
Trial balance is deciphered as the book keeping system whereby the records of debit and credit
balances of general ledger accounts of an entity are reflected (Sota, Chaudhry and Srivastava,
2020). The total of the trial balance gets matched in the end. An example of the preparation of
trial balance is shown below by presenting the trial balance of above presented general ledger
accounts:-
Particulars Amount Particulars Amount
Bank Account 1000 Sales Account 7500
Purchase Account 6500
Total 7500 Total 7500
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TASK 2
P4. Review the stages of HR life cycle
HR is considered as the most important asset of a company which is engaged in execution of
business activities and processes as per the organisational requirements. In this regard, it is
important for a firm to effectively manage the human resources in order to retain them for a long
period of time in future context. This will even provide assistance in inflating their existent level
of operations. In this regard, whenever a new candidate is selected and comes in a company, they
are made to undergo certain stages of HR life cycle in order to enable their effective
development. Within the confines of Juicy Pulp, a candidate is admitted at the designation of
Accounts Assistant. Thus, the employee will undergo the stages of HR life cycle as explained
underneath:-
Attraction:
This stage is associated with attracting skilled, proficient and talented employees to the
company. For this, Juicy Pulp would offer decent compensation package and work place benefits
to Accounts Assistant. This will gain the attention of the candidate and attract them towards the
company.
Recruitment:
This stage is linked with the placement of right individual at the right place within the confines
of the company. In this regard, Accounting has been ascertained to be that domain of
organisation which requires in depth knowledge and experience in order to handle the financial
data of entity in a proper manner. In this regard, Juicy Pulp will recruit the selected candidate at
the position of Accounts Assistant.
On-boarding:
This phase of the human resources life cycle is associated with the development of appropriate
skills, knowledge and competence among the recruited employee in order to ensure that they
properly carry out the work as per their position within the company. For this purpose, Juicy
Pulp would conduct training sessions for the candidate whereby they would be given knowledge
of the accounting terms and financial handling skills.
Development:
This is a stage linked with maintenance of work quality and enhancement of performance
delivered by the employees within the confines of a company. In this regard, it is highly crucial
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for the company to enable development of the new candidate appointed at the post of Accounts
Assistant by conducting learning programs. This will allow the individual to upgrade their
knowledge as per the requirement of Juicy Pulp.
Retention:
This stage is concerned with undertaking all such measures which ensure that the employees are
happy and satisfied with the working atmosphere and organisational culture. This stage is one of
the most important stages of the HR life cycle as the cost of replacing an employee is much more
than training and developing employees. Thus, Juicy Pulp would provide positive working
scenario to the new candidate so that they can derive contentment at workplace.
Separation:
This being the last stage of the human resource life cycle is concerned with the employee coming
to a stage whereby they are ready to retire. Hereby, Juicy Pulp would ensure that the Accounts
Assistant retires without causing any harm or disruption to the existent working of the firm.
P5. Develop a Performance management plan and apply techniques to resolve negative
behaviour
Performance management can be determined as a constant procedure involving all time
interaction taking place between the subordinates and superior. The sole aim of this is alignment
of staff performance with the organisational requirements. This encompasses constant
supervision as well as direction given on the part of supervisors to the employees with the motive
of enhancing their overall performance within the company. This inflates the scope of
achievement of organisational goals and objectives within due course of time. Juicy Pulp
conducts performance management with a view to reduce the negative behavioural conduct and
facilitating increment in the output delivered by the employees. Given below are the stages of
performance management plan for Juicy Pulp:-
Stipulation of performance objective:
The first stage is to lay down the performance milestones. This is important in order to
identify the variance lying between the actual and desired performance of employees within the
confines of Juicy Pulp. The objectives are set fulfilling the criterion of SMART which stands for
Specific, Measurable, Attainable, Realistic and Timely.
Provision of training:
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The next phase is to identify the need of conducting training and thereby consequently
conduct the sessions for enrichment of skill set and knowledge base employees. This will boost
their morale and encourage them to perform in a productive manner for the attainment of
corporate goals.
Evaluation of employee performances:
Post the provision of training to employees, the next stage in the process of performance
management is to evaluate the performance given by workforce. Through this, the performance
of Accounts Assistant would be evaluated by Juicy Pulp. This will aid the organisation in
identifying the impact that the training session had upon their performance.
Comparison of current performance with the benchmarks:
After the examination and evaluation of performance given by Accounts Assistant, the
further step is comparing it to the performance objective set by Juicy Pulp at the beginning of the
process. By ascertaining the gap underlying between current and desired performance, the entity
identifies the scope for improvement. This paves way for undertaking measures through which
such gap can be addressed and effectively filled.
Monitoring and controlling:
The last stage is to develop an improvement plan through which the gap between actual
and desired performance is filled. In this regard, Juicy Pulp is making performance improvement
plan to improve the performance of Accounts Assistant in an effective manner.
Performance Management Plan for newly appointed Accounts Assistant
Objective Provide Training Review performance Monitoring & control
Development
of knowledge
of General
Accounting
The individual should be
given on-the-job training
whereby he must be given
handbooks and reading
material associated with
Accounting.
Performance review
would be executed
after a time span of 3
months.
The gap will be filled by
providing the employee
with further training and
informative materials.
Enhancement
of Data
The employee would
operate under the
The performance
review will take
Proper guidance is given as
well as training sessions
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Handling Skills supervision of senior
Accountant who will
provide him with support
and direction for handling
the financial data
appropriately.
place after the lapse
of 5 months.
are held for the Accounts
Assistant.
P6. Legislations that a hospitality organisation must comply and adhere to
There are certain laws that a hospitality firm such as Juicy Pulp needs to comply with in order to
ensure long term existence in market place. Below explained are certain legislation which needs
to be considered by the concerned company:-
Alcohol Licensing Act, 2003:
As per this law, the alcoholic content within the new range of smoothies and juices should be in
accordance with the provisions of this act. Further, Juicy Pulp should have the license to sell
alcoholic content within the premises. This will ensure the organisational offerings are given to
customers while acting in the best interests of law.
Management of Health and safety at Work Regulation, 1999:
As per the provisions of this act, it is important for a company such as Juicy Pulp to take into
account effective health and safety measures so that the employees protection can be ensured
within the premises at all times. When proper safety measures are taken, the company is able to
retain the employees for a long period of time in future context of time.
P7. Potential impact of company, employment and contract law over business decision making in
hospitality sector
Contract law, employment law and company law directly place major impact over the
business decision making of every company especially hospitality sector. Here, it is essential for
the organisation to follow all the laws in order to execute their business activities in the timely
manner and take rightful business decisions for them. Impact of employment law, company law,
and contract law over Juicy Pulp Company is specified as below in detailed manner:
Company Law:- It is mainly associated with the code of conduct and standards that are
required to be followed by business associations with the motive of executing their business
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activities in the ethical manner. In context of Juicy Pulp, it can be said that the overall decision
making process of the company is influenced with company. This is so because, its management
team is required to focus on following each and every guideline covered in this section while
making required decision in the company. This also helps them out in keeping themselves away
from any kind of legal obligations in the near future.
Employment Law:- This type of law is mainly associated with the employer and employee
relations in which human resource manager of the company assures that they will comply with
each and every guidelines and standards developed by government for them. In context of Juicy
Pulp, it can be said that its HR manager have to adhered to all recruitment norms as well as
guidelines while planning for workforce within the company. This shows appropriate influence
over employment law over the decision making of HR department of Juicy Pulp.
 Contract Law:- Contract law is mainly related with organisational contract in which two
or more parties are involved and agreed to terms and conditions mentioned in it. With
reference to Juicy Pulp, it can be said that the respective manager of the company has to
initially go through the employment contract agreed by them before making any sort of
changes in their working policies. This directly places higher influence over the decision
making of Juicy Pulp.
TASK 4
P8. Interrelation between different functional role within hospitality sector
Business function in every organisation is interrelated with the one another. This
interrelationship helps them out in executing their business performance effectively and also
contributes in the quick attainment of their respective departments as well as organisational goals
and objectives in quicker manner. In context of hospitality sector, it can be said that their main
concern is on customer and places every possible effort to improve their satisfaction level. For
this, each and every department of this company focuses on maintaining their relationship with
one another in order to attain business success in rapid manner. With reference to Juicy Pulp, it
can be said that interrelationship between different functional department along with their role is
specified as below:
 Financial and Marketing department:- In this marketing and finance department are
linked with one another as finance department provides required amount to the marketing
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manager for executing their promotional activities in effective manner. Here, both the
departments maintain adequate interaction with one another so that requirement of each
one can get fulfilled and operational activities of both one can be accomplished in
appropriate manner.
 Human resource and Food & beverages department:- The main role of HR
department in every company is to manage workforce within the company in appropriate
form. With reference to Juicy Pulp, it can be said that Food & Beverages department
always shares positive relation with the HR department in order to aware them about the
requirement of workforce in this unit. Also, they can ask for specific training and
development classes from HR department in order to develop their skills according to
changing demand of the customer which further supports them in executing their
operational activities in rapid manner.
P9. Different methods of communication, coordination and monitoring within hospitality
organisation
Coordination, communication and monitoring are determined as the effective methods that
are adopted by managers of hospitality sector in order to manage performance of their workforce
in adequate manner. In context of Juicy Pulp, it can be said that respective manager of the
company makes use of all factors along with the sub methods included in this. All of them are
specified as below in detailed manner:
Communication:- It is considered as the effective medium of interaction through which
individuals exchange and share information with one another. Communication plays essential
role in the every organisation as through this manager aware employee about new policies as
well as their work according. In context of Juicy Pulp, communication within this company is
effectively performed by email and meeting session. In Email written information is shared with
the employees in formal manner. Whereas, meeting session is the two communications in which
manager and employees indulges in direct communication. Here, they can effectively discuss
about the new plans, laws, issues and future growth with one another.
Coordination:- Coordination is considered as the effective process through which two or
more people performs their work effectively with the support of one another in appropriate form.
In order to attain success in rightful manner, the respective manager of this company must ensure
that appropriate coordination must be practiced by their employees. This could be effectively
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practiced with two way communication. This helps employees in sharing their viewpoint and
perception with one another and reduces the chances of conflict which ultimately leads to
development of effective coordination and attainment of organisational objectives in quicker
manner. Another influential method of coordination is sound planning of organisational work.
this directly develops effective alignment work which improves coordination among employees
and support them in attaining organisational objectives in rapid manner.
Monitoring:- It is seen as the effective process through which business manager
effectively checks that employees are performing their work in assigned manner or not.
Monitoring can be effectively practiced within Marriott by two methods that is performance
appraisal and formal survey. In performance appraisal manager monitors performance of
employees and further compare it with the pre planned criteria. As a result they are able to
determine gap and guide employees about the ways through which the performance can be
improved in rightful manner. On the other hand, formal survey could be effective practiced by
taking feedback from the employees by asking them to fill survey. This directly contributes in
monitoring performance growth of the employees.
CONCLUSION
As per the above discussion, it can be said that the primary concern of hospitality sector
is upon creation of organisational offerings that can cater to the needs and demands of people.
There are several principles of financial management that need to be considered by an entity.
Further, it is acknowledged that performance management plan enables an employee to facilitate
improvement in their performance by receiving training. Also, it is recognised that human
resource life cycle consists of certain stages which assist an organisation to retain an employee
till the time of their retirement emerges. All the business functions with hospitality sector are
interrelated with one another which directly support them in serving their customers in more
appropriate manner. Besides this, it has been evaluated that manager of the company must
practice right method while executing communication, coordination and monitoring related work
so that they can attain organisational objectives in rapid manner. Also they are required to
practice all business activities by adhering with company, employment and contract in order to
remain ethical.
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REFERENCES
Books & Journals
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Wu, B., 2020. Performance Planning. In Government Performance Management in China (pp.
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