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1 Chapter 1 Managing Human Resources Learning Objectives • Explain the impact of human resource management to the organization’s overall performance. • Define human resources management and the functions associated with its actions. • Discuss the importance of the role of the manager with human resources responsibilities • Discuss ethical issues in HRM Ask yourself: “How important are human resources management skills to you as you graduate and enter the work force as a future manager?” Introduction In the hot el or restaurant business, or in any type of hospitality and tourism operation (Table 1.1), almost everything depends on the physical labor of employees. For example, restaurant operation need to have people who cook, mix drinks, was h dishes, wait on table s, check guests in and out, clean rooms, carry bags, mop floors. These employees provide the service to the customers and the customers’ satisfaction relies heavily on their performance. Table 1.1: Sample career occupations in Hospitality and Tourism Operation Type of Hospitality and Tourism Sample Career Occupations Operation Lodging bell captain, front desk clerk, front desk supervisor, laundry attendant, night auditor, reservationist, shift supervisor, room attendant Recreation, Amusements, and Attractions animal handler and trainer, club manager, event planner, parks and garden security, parks and garden ranger, theme park ride operator Restaurants and Food and Beverage food and beverage manager, catering and Services banquets manager, chef, cook, banquet server, cocktail server, bus person, waiter and waitress, host or hostess Travel and Tourism director of visitor services, destination manager, travel agent, meeting planner, convention services manager, welcome center supervisor, tour guide Source www.careercluster.org 2 The hospitality industry is comprised of many jobs related to the “service” of guests while they are away from home. The tourism industry includes many interrelated businesses, from lodging and restaurants to airlines, cruise lines,car rental companies, and tour operators. Many of these fields are expected to see an increase in employment. For example, as in Table 1.2, the employment for gaming and meeting and convention planners is projected to increase by 23 and 20 percent, respectively, between 2006 and 2016, which is approximately as fast as or faster than the average for all occupations. Table 1.2: U.S. long-term occupational projections (selected hospitality and tourism jobs) Occupation Title 2006 Projected Percent Employment Change (2006-2016) Meeting and Convention Planners 51,000 20.0 Food Service Managers 149,000 4.1 First Line Supervisors/Managers of Food 592,000 10.8 Preparation and Serving Workers Recreation Workers 320,000 13.0 Travel Agents 101,000 1.0 Gaming 174,000 23.0 Museums, Historical Sites, and Other Institutions 27,000 18.0 Lodging Managers 71,000 12.0 Source: The Occupational Outlook, Bureau of Labor Statistics. http://www.bls.gov/oco/cg/cgs0.6.htm. Human Resources VS. Company Performance Managers and economists traditionally have seen human resource management as a necessary expense, rather than as a source of value to their organizations. Economic value is usually associated with capital —cash, equipment, technology, and facilities (Neo, Hollenbeck, Gerhart, ad Wright, 2009). Under the old Human Resource Paradigms, managers perceived their employees as an unfortunate and unavoidable obstacle. They believe that hired labor does not care about their business. From this traditional concept, managers view t heir people as a source of risk , such as the shortage of employees, people doing sloppy work, an employee refusing to take on additional responsibility, or a key employee leaving two months after completion of a one -year training program . During the past decade, the hospitality industry faces up to both present and future competition resulting from increased globalization, competition, higher customer turnover, growing customer acquisition costs and rising customer expectation so hotel executives and managers have faced significant challenges. Beside, the rise in employee turnover rate which is seen as the common situation has dramatically affected negatively on the service quality and profitability of the organizationMany successful hospitality organizations reveal that HRM practices have direct impact on their success. Decisions such as whom to hire, what to pay, what training to offer, and how to evaluate employee performance have significant impact on employees’ motivation and ability to perform that customers value. The high- performing hotel companies, such as Choice Hotels, 3 Marriott International, Motel 6, and Day Hospitality, attempt to increase their competitiveness by investing in new technology and promoting quality throughout the organization also invest in staffing, training, and compensation practices (Enz and Siguaw, 2000). Human resources skills have always been important especial ly for the hospitality industry and become the most important set of skills for a manager to have. One of the greatest concerns in the hospitality and tourism industries over the past decade has been the lack of trained managers and employees . Some hospitality and tourism organizations are more successful than others. Simply from a customer perspective it is possi ble to identify companies that produce superior services compared to their competitors. The quality of service provided to the customers depends largely on how well the employees are managed. If they are not managed well, the product or the service suffers and the establishment is in trouble. Imagine trying to run a restaurant where a manager has to replace every employee two or three times a year. This manager constantly had to find, hire, and train new employees – and rely on inexperienced people to keep customers happy. Under this bad situation, the restaurant was failing to meet sales goals. Human Resources Management Human resources management can be defined as t he implementation of the strategies, plans, and programs required to attract, motivate, develop, reward, and retain the best people to meet the organizational goals and operational objectives of the hospitality and tourism enterprise (Tanke, 2001). Human resources in hospitality and tourism business include all management and labor personnel, f ull-time and part time people, and seasonal and year round employees . Employees are important in helping the business to handle risk, for example, employees use their creativity to solve unexpected problems, they go the extra mile for the good of the orga nization, and a key employee redesigning their own job to avoid unnecessary delays in getting work done, or an employee persuading a talented friend to apply for a position in the business. Employees become one of the keys to success in risk management. They are creative and an important source of new ideas. Importantly, appreciated people will respond with dedication and loyalty. The concept of “human resource management” implies that employees are resources of the employer. As a type of resource, human capital means the organization’s employees described in term of their training, experience, judgment, intelligence, relationships, and insight – the employee characteristics that can add economic value to the organization. For an organization to be succeeded, it needs employees with certain qualities, such as particular kinds of training and experience. Employees are not interchangeable, easily replaced parts of a system by the source of the organization’s success or failure (Neo, et al., 2009). As seen i n Figure 1.1, by influencing who works for the organization and how those people work, human resource management therefore contributes to such basic measures of an organization’s success as quality, profitability, and customer satisfaction. 4 Figure 1.1: Impact of Human Resource Management Source: Noe. R., Hollenbeck. J.H., Gerhart. B.and Wright, P.M. (2009, p3) Human resource management is a process that can be broken down into specific activities. These activities are also necessary to keep human resources in harmony with the risk management tools adopted by the management team . Understanding these activities helps explain the relationship between human resources and risk. On the other hand, failure to successfully carry out these activities increases risk and penalizes the business by not taking advantage of what its people could be contributing. The activities or functions required by human resources management serve to assist the hospitality organization in improving the over all performance as well as adapting to the changing workplace. Table 1.3 lists the numerous functions of human resources management. Table 1.3 Human Resources Management Functions Human Resources Management Functions Human Resource Planning Compensation Administration Job Analysis and Design Benefits planning and Administration Recruitment Discipline Selection Counseling Hiring Termination Placement Employee Relations Orientation Managing diversity Training Retention Development Information systems Coaching Employment law Teambuilding Improving work environment Performance Management Source: Tanke (2001, p. 5) 5 According to Noe, et al. (2009), human resource management is critical to the success of organization because human capital has certain qualities that make it valuable. • Human resources are v aluable: Employees provide a needed service as they perform many critical functions. • Human resources are rare in the sense that a person with high levels of the needed skills and knowledge is unique. • Human resources cannot be imitated . To imitate human resources at a high-performing competitor, you need to find out which employees are providing the advantage and how. Then you can recruit people who can do precisely the same thing and set up the systems that enable these people to imitate your competitor. • Human resources have no good substitutes. When people are well trained and highly motivated, they learn, develop their abilities, and care about customers. It is difficult to imagine another resource that can m atch committed and talented employees. Table 1.4 Responsibilities of Human Resource Departments Function Responsibilities Analysis and design of work Job Analysis; job design; job descriptions Recruitment and selection Recruiting; job posting; intervie wing; testing; coordinating use of temporary labor Training and development Orientation; skills training; career development programs Performance management Performance measures; preparation and administration of performance appraisals; discipline Compensation and benefits Wage and salary administration; incentive pay; insurance; vacation leave administration; retirement plans; profit sharing; stock plans Employee relations Attitude surveys; labor relations; employee handbooks; company publications; labor law compliance; relocation and outplacement services Personnel policies Policy creation; policy communication; record keeping; HR information systems Compliance with laws Policies to ensure lawful behavior; reporting; posting information; safety inspe ctions; accessibility accommodation Support for strategy Human resource planning and forecasting; change management Source: Noe. R., Hollenbeck. J.H., Gerhart. B.and Wright, P.M. (2009, p13) Human Resource Departments The human resource department plays a critical and increasingly involved role in assisting the hospitality organization in meeting its goals and objectives. It is responsible for the functions of human resource management. Table 1.4 details the responsibilities of human resource departments . These responsibilities include the practices introduced in Table 1.3 and Figure 1.2 plus two areas of responsibility that support those practices: 1) establishing and administering personnel policies and 2) ensuring compliance with labor 6 laws. These acti vities shape many aspects of work that give employees their greatest satisfaction. However, it is critical to note that although the human resource department has responsibility for these areas, many of the tasks may be performed by supervisors or others i nside or outside the organization. In some companies, the human resource department actively advises top management. In others, the department responds to top- level management decisions and implements staffing, training, and compensation activities Figure 1.2: Skills of HRM Professionals Source: Noe. R., Hollenbeck. J.H., Gerhart. B.and Wright, P.M. (2009, p13) Skills of HRM professionals With the above responsibilities, the human resource department needs to bring together a large pool of skills. These skills fall into the four basic categories shown in Figure 1.2. • Human relations skills – the ability to understand and work well with others is important. HR professionals must be skilled at communicating, negotiating, and team development. • Decision-making skills – HR managers must make a wide variety of decisions that affect whether employees are qualified and motivated and whether the company is operating efficiently and complying with the law. • Leadership skills – HR managers need to play a leadership role with regard to the company’s human resources. Fulfilling this leadership role includes diagnosing problems, implementing organizational changes, and evaluating results, especially in terms of employees’ skills and attitudes. • Technical skills – in human resource management, professionals need knowledge of practices in such area as staffing, training and development, performance management, rewards, organizational design, and communication. 7 HR responsibilities of Managers In the hospitality industry, all managers are human resources managers, or more appropriately, all managers have responsibilities that include their human resources. Dealing with people is what hospitality business is all about. When providing services to the guests, the primary resource is people, workers, employees. Being such a labor - intensive industry, it would be hard to ne glect these valuable resources. The practice of managing human resources is mission critical to all successful hospitality organizations. Hotels and restaurants are dependent on large numbers of people to fill low -wage entry- level jobs that have little interest and no perceived future. Human resource management need to be part of managers’ skills and knowledge base. Perhaps as assistant food and beverage director the only human resources function will be that of training. A front office manager involves in selecting, hiring, training, evaluating and responsible for initiating disciplinary actions. Beside, m any HR activities are carried o ut by line supervisor who typically have responsibilities related to all the HR functions. Figure 1.3 shows some HR responsibilities that supervisors are likely to be involved in. Figure 1.3: Supervisors’ Involvement in HRM: Common areas of Involvement. Source: Noe. R., Hollenbeck. J.H., Gerhart. B.and Wright, P.M. (2009, p. 14) Ethics in Human Resource Management Ethics refers to a set of moral principles that provide guideline for right and wrong behavior. Many ethical issues at work involve human resource management such as conflicts with coworker or supervisors and sexual harassment. The concern for acting ethically continually challenges the hospitality industry. Interesting and complex ethical issues impact this broad business which ranges from restaurant management to senior living to tourism-based operations and beyond. Some of the common problems faced by managers today have been occurring for years. To get an idea of how ethics are involved in the workplace, let’s look at these scenarios. • The human resource managerhas completed interviewing a number of candidates for a security position. One of the top three candidates is a relative of a supervisor in housekeeping department and this supervisor is one of his close friends. Therefore, the HR manager hasbeen getting pressure from his friend to hire this 8 candidate. He doesn’t want to disappoint his friend, so he hires this candidate even though one of the other candidates is more suited for the job. • Executive chef and manager have been extorting commissions from suppliers, accepting short weights on food deliveries and generally using the hotel’s property for personal gain and profit Hospitality managers always encounter frequently evoke descriptions of ethical issues between employees or employees and customers. It is because the situations where the right ethical decision is not always clear and how diversity and multicultural backgrounds increase the complexity of some ethical dilemmas. There are ethical consider ations in many of the decisions made by managers. Some hospitality operations have written their own code of ethics to prevent unethical behavior because there are so many temptations in the workplace such as stockrooms full of supplies that can be used at home, any kind of alcoholic beverage, empty hotel rooms, gambling, high-stress jobs, irregular hours, and pressures to meet guests’ needs. It can be easy to lose a sense of right or wrong. The following questions can be used as a guideline to decide how ethical a certain decision is: 1. Is the decision legal? 2. Is the decision fair? 3. Does the decision hurt anyone? 4. Have I been honest with those affected? 5. Can I live with my decision? Employee rights Noe, et al. (2009) said that m anagers must view employees as h uman being who has certain basic rights: • Right of free consent —employees have the right to get informed and they willingly to be treated, for example, employees should know the nature of their job; the employer should not deceive them. • Right of privacy —employees have to right to do as they wish in their private lives, and they have the right to control what they reveal about private activities. Keeping employees’ medical records confidential is an example. • Right of freedom of conscience —employees have the right to refuse to do what violates their moral beliefs, as long as these beliefs reflect commonly accepted norms. A supervisor cannot demand an employee to do something that is unsafe or environmentally damaging if it conflicts with the employee’s values. • Right of freedom of speech—employees h ave the right to criticize a company’s ethics, if they do so in good conscience and their criticism does not violate the rights of others. • Right to due process —if employees believe their rights are being violated, th ey have the right to a fair and impartial hearing. 9 Standards for Ethical Behavior Ethical and successful companies pay attention to four principles. First, they emphasize mutual benefit to strengthen the relationships with customers, and vendors. Second, the employees assume the responsibility for the action of the company. Third, such companies have a strong sense of purpose/vision that employees value and use in their work. Lastly, they emphasize fairness. For ethical human resource practices, the mana gers and business owners must satisfy the three basic standards summarized in Figure 1.4. Figure 1.4: Standards for Identifying Ethical Practices Source: Noe. R., Hollenbeck. J.H., Gerhart. B.and Wright, P.M. (2009, p. 17) Human resource management practices must result in the greatest good for the largest number of people. Employment practices must respect basic human rights of privacy, due process, consent, and free speech. Also managers must treat employees and customers equitably and fairly. References: • Enz, C.A., and Siguaw, J., 2000, Best Practices in Human Resources, Cornell Hotel and Restaurant Administration Quarterly, 41(1), 48-61. • Noe, Hollenbeck, Gerhart, and Wright (2009) Fundamental of Human Resource Management. 3 ed. McGrawhill, Singapore. • Tande, M.L. (2001) Human Resources Management for the Hospitality Industry. 2 ed. Delmar, New York. • Walker, J.R., Miller, J.E. (2010) Supervision in the Hospitality Industry: Leading Human Resources. John Wiley & Sons, Inc. New Jersey. 10 • Woods, R.H. (2006). Managing Hospitality Human Resources, 4 ed. Educational Institute, American Hotel & Lodging Association. • The Occupational Outlook, Bureau of Labor Statistics. http://www.bls.gov/oco/cg/cgs0.6.htm. Retrieve on 25 July 2010. • www.careercluster.org. Retrieve on 30 August 2010.
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