Human Capital Management Report: Hotel Industry Expansion in Cambodia

This report provides a comprehensive analysis of human capital management strategies within the context of a hotel and hospitality business expanding into the Indo-China region, specifically Cambodia. The report addresses key aspects of human resource management, including the recruitment of middle to senior managers, considering their origins and the optimal mix of senior and junior staff. It delves into the importance of qualifications versus experience, and discusses the design of competitive compensation and benefit packages. Furthermore, the report examines acclimatization and training programs for expatriate employees and strategies for employee retention. The analysis considers the competitive landscape, organizational structure, and the specific challenges of operating in a new cultural and geographical context. The report highlights the importance of a multi-tiered management system, the balance between experienced and enthusiastic staff, and the need for both qualifications and practical experience in building a successful workforce. The report provides a detailed overview of human capital management practices and policies to ensure effective expansion and long-term success.

Running head: MANAGING HUMAN CAPITAL
Managing Human Capital
Name of the Student
Name of the University
Author Note

1MANAGING HUMAN CAPITAL
Executive Summary:
Management of Human Capital involves activities such as recruitment, management,
development and optimization of human capital. The report aimed to analyze the strategies of
managing human capital in a hotel and hospitality industry. The industry is based in
Malaysia, and aims to grow its business operations to the Indo-China region of Cambodia,
across three key destinations: Bokor Hill Station, Kratie, Koh Ker and Angkor Wat. The
organization plans to grow in the next 3 years with a total budget of 6 million USD. The
organization however have some competitions from Five Star Hoteliers such as Marriot,
Sofitel, Rosewod, Belmond, Raffles, J7 and Borei, however the competition in the selected
location is very less. The project would require about 300 employees and 70 people for
management positions. Each of the projects would be made on 20 acre plots and would have
many amenities for the guests and customers such as Banquet halls, swimming pools, bars
and mini-bars, restaurant, spa and fitness centers. In the given report, the following aspects
are discussed: the number of employees to be recruited for management positions and from
where would they be recruited, the need for senior and junior management and the optimum
ratio of the two, the need for qualifications and relevant experience of the employees, the
benefit and compensation packages that would be offered, acclimatization and training
programs that would be used to help expatriates adapt to the new working environment and
culture and how to retain the employees.

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Contents
Executive Summary:..................................................................................................................1
Introduction:...............................................................................................................................4
Managing Human Capital:.....................................................................................................4
Aim of the report:...................................................................................................................4
The business:..........................................................................................................................4
Size of operations:..................................................................................................................4
Competitors:...........................................................................................................................5
Home Country:.......................................................................................................................5
Organizational Expansion:.....................................................................................................5
Structure of the report:...........................................................................................................5
Discussion:.................................................................................................................................6
The number of middle to senior managers to recruit and where would they be recruited
from........................................................................................................................................6
Need to hire senior and junior managers and the optimal mix for both.................................7
Need for the employees to have university and institutional qualification versus relevant
work experience.....................................................................................................................9
Determining an attractive yet competitive compensation and benefit package for the
employees.............................................................................................................................10
Acclimatization and training program that can assist expatriate employees to adapt to new
culture and environment:......................................................................................................12
How to retain this group of employees................................................................................13

3MANAGING HUMAN CAPITAL
Conclusion:..............................................................................................................................15
References:...............................................................................................................................17

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Introduction:
Managing Human Capital:
Management of Human capital can be understood as a complete set of activities that
includes recruitment, management, development and optimization of human resources. This
is also known as Human Resources management (Greer et al. 2017). Here Human Capital or
Human Resource refers to the collective knowledge, skills and creative possessed by
individuals within an organization (Allen et al. 2015; Ketchen et al. 2017)
Aim of the report:
The aim of this report is to assess the strategies of human capital management and its
related practices and policies within a particular organization. The purpose is to understand
the importance of such strategies, policies and practices and develop effective strategies,
policies and practices for the organization that can be used to manage the human capital.
The business:
The chosen business for this report is in the hotel and hospitality industry. The
organization is based in Malaysia, and plans to extend into the Indo-China region. The
organization plans to open several hotels across the Indo-Chinese regions of Cambodia in the
next three years.
Size of operations:
The organization plans to invest about USD 6 million over the next 3 years on this
project, setting up resorts on Bokor Hill Station, Kratie, Koh Ker and Angkor Wat. The
resorts would employ about 360 employees, including 30 in managerial and senior
managerial positions.

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Competitors:
Competition within these regions are not very high, with only a few high ranking (5
star and above) hospitality industries having their businesses in Cambodia such a Marriot,
Sofitel, Rosewod, Belmond, Raffles, J7 and Borei. Most of these resorts provide luxury
accommodations which cannot be afforded by majority of the public (Koens and Wood
2017).
Home Country:
The organization is based out of Malaysia, with its headquarters in Kuala Lumpur.
The organization runs its main operations from Malaysia.
Organizational Expansion:
The organization plans to expand its business into Cambodia, by setting up resorts in
three tourist attractions in Cambodia, namely: Bokor Hill Station, Kratie, Koh Ker and
Angkor Wat. Each of the resort would employ 300 employees and 70 people in management
position. Each of the resorts would cover an estimated 20 acre land, and include amenities
such as Banquet halls, swimming pools, bars and mini-bars, restaurant, spa and fitness
centers.
Structure of the report:
In the given analysis, the strategies, policies and practices for human capital
management used by the organization would be analyzed and outlined, such as the number of
middle and senior management that needs to be hired for the project, and how they would be
recruited; the need for senior or junior managers; optimal mix of managers; need for
qualifications and experience by the managers; the compensation and benefit package that

6MANAGING HUMAN CAPITAL
would be offered; acclimatization and training program that can be utilized and how the
managers can be retained in the organization (Collings et al. 2018).
Discussion:
The number of middle to senior managers to recruit and where would they be recruited
from.
The number of management positions that would be needed for the expansion of the
organization in Cambodia includes 4 people in senior management positions, 12 people in
middle management positions and 54 people in the position of lower management. The
hierarchy of the management would start from the CEO (Chairman Ex Officio) to whom the
CFO (Chief Finance Officer), COO (Chief Operations Officer) and Business Manager Head
would report to. The CEO, CFO, COO and Business Managers would represent the upper or
senior management of the organization. The Middle management would include the
managers reporting to the CFO, COO and Business managers. This could include Logistics
and Supply Chain Finance Manager, Marketing and Sales Finance Manager, Accounting
Manager and Productions Manager who would report to the CFO; Operations Managers to
the COO; Human Resources Manager, Sales manager, IT manager, Security manager,
Housekeeping Managers, Quality manager, Food and Beverages managers and Regional
managers who would report to the Business managers (Heyden et al. 2018). The lower
management would include people who would be reporting to the middle management
positions and would include supervisors, front office managers, accountants, business
development managers, customer relationships managers, sales managers, housekeeping
executives, purchase officers, inventory controllers, Food and Beverage controllers, training
managers, chief engineers, Safety officers, security officers, quality analysts and inspection
officers (Evans 2017; Ladkin and Kichuk 2017).

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The lower management would be mainly selected from Cambodia, because this level
of the management would be at the maximum point of contact with the workers. Since the
workers would also be selected from Cambodia, it selecting lower management from the
same country would help in better communication between them. Also, selecting workers and
lower management from the country of operation can reduce the costs since employing
foreign nationals or expatriates can increase the recruitment expenses at that level. The
middle management can include nationals from Cambodia, as well as expatriates from other
countries, with relevant experience in the specific line of work. This can ensure that the
organization hires individuals with the right amount of experience, qualification and expertise
to help the functioning of the organization at the optimal levels, thereby supporting further
growth. The upper management would be hired from Malaysia, and can include Malaysian
Nationals, Foreign Nationals or Expatriates (Boon et al. 2018). This strategy would ensure
proper collaboration with the upper management of the headquarters of the organization that
is based in Malaysia. Since the upper management would have the maximum responsibilities,
it is important to keep a wide option in the selection of the right individuals for upper
management based on their skills, experiences and qualifications that can allow them to take
care of their responsibilities (Lasserre 2017).
Need to hire senior and junior managers and the optimal mix for both.
Both senior and junior management levels are vital for the smooth running of an
organization. The multi tier system of management helps in a more organized way of
handling and taking care of responsibilities, where the managers higher up in the hierarchy
would be responsible for larger amounts of responsibilities and managers lower down would
have more specific responsibilities. The lower management would in turn be reporting to the
middle or upper management, thereby allowing the upper management to monitor
performance of the organization at the ground levels through the lower management

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(Kermanshachi et al. 2018). The lower management can also ensure a comprehensive focus
in each aspect of the organizations process in a better manner, since each manager in the
lower level would have specific responsibilities to take care of. Hiring both Senior and junior
managers can also help in the incorporation of experience as well as enthusiasm and energy
in the organization (Benoliel 2017). Senior managers can help to impart their experiences in
the business process which can help them to monitor the performance of the lower
management and the organization, while the lower management can incorporate energy and
enthusiasm. Many authors have supported that managers who are relatively new and
inexperienced tend to have more enthusiasm and energy, as they are eager to prove
themselves and their competencies as the managers; they tend to take more risks and chances,
while experienced managers tend to be more deliberate and cautious and are in a less hurry to
prove their abilities, since their experiences already shows it (Oke et al. 2018; Brandon-Jones
et al. 2016). Thus hiring both senior and junior managers’ helps to bring not only experience
but also energy and enthusiasm in the organization, and help to motivate people to perform
better. Senior and experienced managers also helps to mentor the inexperienced or new
managers in their roles and responsibilities, thereby helping them to develop their
competencies and take up more responsibilities in the organization. Thus such mentoring
roles help in the growth of the managers (Hillson and Murray-Webster 2017).
It is vital to maintain an optimal ratio between the experienced and inexperienced
managers within the organization. According to some studies, a ratio of one senior manager
to 2-4 junior managers can be considered as the most optimal ratio. The small number of
junior managers can ensure that the senior managers are able to give proper attention to the
performance of the junior managers reporting to them, analyze their strengths and limitations.
This ratio can be used for Upper and Middle management since only a few managers would

9MANAGING HUMAN CAPITAL
be present at the upper management (Csikszentmihalyi 2014; Soltis et al. 2018; Marchington
2015).
Need for the employees to have university and institutional qualification versus relevant
work experience.
University and institutional qualifications as well as work experiences are vital to
ensure the proper management of the workforce and direct the organization towards growth.
It is vital therefore that both these ‘human capitals’ be focused on by the Human Resources
Management, ensuring that individuals with qualifications and experiences are hired to run
the organization. For the junior managers or inexperienced managers, qualifications can help
to understand the extent of knowledge and skills possessed by the individuals that can help
them to take up their responsibilities. Since the new managers often does not have significant
amount of relevant experiences, their qualifications can be an indicator of their knowledge
and expertise (Sheehan 2014). Here qualification can imply both the different academic as
well as professional degrees held by the person, the specialized knowledge possessed by the
person as well as the individual merit and competency that can be attributed by their
academic performances. Relevant academic and professional qualifications can help to
develop knowledge about the various theories, principles, philosophies and strategies that can
be used for planning, organizing, managing and leading people in the organization (Debroux
2017). Individuals with good qualifications can be expected to become efficient managers,
thereby supporting that the qualifications can be indicators of their competencies and
capacities. Also, it has been suggested that individuals who are highly competent and
motivated tend to have more qualifications and degrees to support them (Jackson et al. 2014).
At the level of the employees, qualifications are equally important as it can help the managers
to assess how competent the employees might be to execute their work, and to identify how
best to utilize their talents in the organization. For new employees who lack experience, the

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qualifications can be a key index for the recruiters for the selection process (Darwish et al.
2016).
Work experience is another important factor that needs to be considered by the
recruiters, as it can help to understand the extent of practical and operational capacity of the
managers or employees. Individuals who are more experienced have faced more real life
scenarios, and know how to utilize their knowledge in professional work (Peltonen and
Arenius 2016). Good work experience can support effective team work, problem solving and
communication skills in both managers and employees, which can help them to do their work
in a better manner and also to help the new employees or managers with their work, thereby
improving their employability skills. According to authors, work experiences can help to go
beyond the theoretical knowledge gained through the qualifications, helps to implement
practical application of the gained knowledge thereby improving competency as well as
provide provides an advantage to the organizations through increased competency of the
employees or managers (Hsieh 2016; Csikszentmihalyi 2014; Soltis et al. 2018; Marchington
2015)
Determining an attractive yet competitive compensation and benefit package for the
employees
Developing an attractive and competitive compensation and benefit package for the
employees is crucial to attract skilled and competent individuals in the work profile and the
organization and also ensures that the organization does not exploit the human resources or
end up overpaying them thereby causing losses for the organization. A competitive
compensation or benefit package takes into account the current industries standards followed
in the country or for a particular job post, offering a comparable benefits and packages for the
employees (Gupta and Shaw 2014). The organization can also set their standards and

11MANAGING HUMAN CAPITAL
reputation among the employees, for example organizations paying the best competitive
packages have better reputations and retention of the employees compared to organization not
providing similar packages or compensations (Frandsen 2016). A comprehensive employee
benefit package can include many components such as health insurance for all employees,
options from paid time off or paid leaves from work (which can include paid holidays, paid
sick leaves, paid vacation leaves, paid personal leaves and leaves for bereavement), short
term and long term disability insurances, dental insurance, life insurance, retirement plans
and Flexible Spending Accounts for healthcare (Kristal 2017; Xavier 2014; Yan and Sloan
2016).
For determining compensation for each employee, the industries standards should be
analyzed (that is what other companies in the industry pay for similar job roles) to identify
the range of salary or compensation (minimum to maximum) that is paid for a particular job
role (Kristal 2017). From this range the compensations can be given based on the
qualifications and experience of the employees as fixed during the recruitment. For the
employees, the compensation can range from 1800 to 3000 Malaysian Ringgit. For
management, the package can range from 3000 to 6000 Ringgit per month. The benefits can
include health insurance coverage for 12000 Ringgit per annum for employees and 24000
Ringgit per annum for the management. The number of paid leaves for all employees can be
calculated at 30 per annum, to include the sick leaves, personal leaves and vacations. Leaves
such as Sabbaticals, maternity leaves, leaves for bereavement and funerals can be considered
from case to case and provided additionally. Disability insurances are also important as it can
help to support employees injured in the line of work, with the organization taking care of all
healthcare expense of the employees, therefore having not expense caps. Additional Flexible
Spending Accounts can be given to the employees to help their medical expenses. Healthcare