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A Case Study of Human Resource Practices in Small Hotels in Sweden

Lorna Young-Thelin a & Karla Boluk b

a Consultant, Ludvika, Sweden

b Department of Human Geography, Dalarna University, Borlänge, Sweden Version of record first published: 10 Aug 2012.

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print / 1533-2853 online DOI: 10.1080/15332845.2012.690683 A Case Study of Human Resource Practices in Small Hotels

A Case Study of Human Resource Practices in Small Hotels in Sweden

LORNA YOUNG-THELIN

Consultant, Ludvika, Sweden

KARLA BOLUK

Department of Human Geography, Dalarna University, Borlange,¨

Sweden

The competitive advantage of organizations in the hotel industry is their human resources. The aim of the authors in this article is to investigate the human resources practices in small hotels in Sweden. They examine the practices of hotels in three main areas of human resource management, namely: hiring, training, and performance evaluation. Although the hotels find their human re- sources important there has been a lack of attention devoted to the development of human resources systems and processes. Accord- ingly, the implementation and development of human resources systems and procedures depends on the background of the hotel manager or operator and available financial resources.

KEYWORDS Human resource management, recruitment and se- lection, training and development, performance management and appraisal, hotel industry, Sweden

INTRODUCTION

Hiring, training, and performance evaluation systems all play major roles in almost all formal organizations. They have been strategically designed to meet corporate objectives and ensure business continuity. This does not however, imply that the other areas are less important. In fact, organizational development and competency profiling are two of those areas that are highly complex in nature and have constantly been developed and studied in recent years.

Address correspondence to Karla Boluk, PhD, Department of Human Geography, School of Technology and Business Studies, Dalarna University, SE-791, Borlange,¨ Sweden. E-mail: kbl@du.se; Lorna Young-Thelin, Droverksv¨ agen¨ 21, 771 92 Ludvika, Sweden. E-mail:

la.thelin@yahoo.com

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In the hotel industry, it is the employees who provide the competitive advantage to the organization since they are the intermediary delivering the products and services. Unfortunately, the hotel industry has neglected its human resources (HR). Accordingly the hospitality industry has a reputation for being demanding, requiring frontline staff to work long, irregular, and unsociable hours while paying low wages (Janes & Wisnom, 2010). As a consequence of such poor working conditions hotels seemingly spend more on administrative costs; which affect their revenues (such as separation pay, hiring and training, low productivity) and ultimately the profitability of the organization. Hence, Baum (2007, p. 1386) urges the hotel industry to adopt “good human resource management practices” since in this industry, “the human resources are their most important resource.” Furthermore, Baum (2007) purports that in most service industries it is the HR that creates the competitive advantage to the organization. The aim of the authors in this article is to investigate the HR practices in six small hotels in Sweden; specif- ically examining the practices in three areas of human resource management (HRM) including hiring, training, and performance evaluation. Three objec- tives support this aim:

1. To explore the processes in recruiting and selecting new employees.

2. To examine the ways and purposes of training and development in the hotel industry.

3. To investigate how hotel managers monitor and evaluate the performance of their employees.

The following research questions guide us in this study: what are the current methods in recruitment and selection? Are these aligned with an established job description? What are the purposes of training and development? Is training based on individual needs? How often are employees’ performances evaluated and carried out? Are these based on pre-set agreed objectives?

LITERATURE REVIEW

Concepts of HRM

HRM is comprised of practices and processes that shape the behaviors and experiences of employees to encourage higher performance levels (Cabr- era & Bonache, 1999). Such practices are expected to positively influence the quality of service (Consten & Salazar, 2011; Heskett, Jones, Loveman, Sasser, & Schlesinger, 1994). Young–Thelin (2011) suggests that HR has the potential to directly affect an organization’s business operations enhanc- ing performance and ultimately increasing profitability. Although HRM has evolved from a traditional/integrative approach to a more strategic approach, Hughes (2002) and Nankervis (2000) still encourage the need for systems and

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processes to make HRM sustainable. Strategic HRM focuses on the leader’s value management, strategic partnering, human resource process and em- phasis on talent, knowledge, and human capital management (Nankervis, 2011; Davidson, McPhail, & Barry, 2011). Strategic HRM is also considered to apply the “best-fit” or “external-fit” approach whereby the company’s HRM policies and procedures addresses the company’s strategy (Hughes, 2002). HRM as defined by Armstrong (2008, p. 5) is “a strategic and coherent approach to the management of an organization’s most valued assets—the people working there, who individually and collectively contribute to the achievement of its objectives.” Nakervis (2011) and Townsend and Lee (2010) describe HRM to include the functions of planning, hiring, training, and optimizing talents based on the needs of the “market place.” Torrington, Hall, and Taylor (2008) states that HRM should be carried out effectively to maintain, if not gain, its competitive advantage. The competitive advantage of an organization should be reflected in the positive results of its finances and how it responds to corporate social responsibility. Hence, HRM should be designed in such a way that it addresses the needs of the organization in terms of facing the business environments. The basic HRM philosophy Torrington et al. (2008) describes is two-pronged. Firstly, employees use their skills to meet the objectives of the organization. Secondly, the organization ensures that employees’ skills are well-developed through proper training and development programs. HRM models have developed through the years although Devanna, Fombrun, and Tichy (1984) is most often cited as best illustrating the fun- damental functions of HRM. Lundy and Cowling (1996) explain that the essential HRM functions of: “selection, appraisal, rewards and develop- ment” develop in different stages of the “organizational development cycle” (pp. 69–71). Most of the time, these systems are installed in the organiza- tion on a gradual basis, whenever the needs arise or when the organization is ready. As such, whenever “managerial tasks” are performed, Lundy and Cowling (1996) suggest that the fundamental HRM functions are always con- sidered. The formalization of these functions into established systems in the organization depends on the readiness and the needs of the organization.

Functions of HRM

Huang (2001) suggests that high-performing organizations pursue innovative HR practices by placing emphasis on recruitment, broad and updated job descriptions, extensive employee interaction, training and development, and the use of performance appraisals. The quality of these practices directly af- fect the motivation level of the organization and its workforce (Hughes, 2002) especially when employees perceive the HR practices as distinctive, relevant, legitimate, and internally consistent (Sanders, Dorenbosch, & Reuver, 2008). Harrison (1993) best illustrated the role and methods of HRM (see below in

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at 12:06 19 February 2013 330 L. Young-Thelin and K. Boluk FIGURE 1 HRM roles and

FIGURE 1 HRM roles and methods (Harrison, 1993, p. 259).

Figure 1). He (1993) concurs with Harrison’s (1993) model purporting that regardless of the size of the organization, the type of environment it operates in and the nature of business it has, the organization needs to perform these three HRM functions in order to survive, become competitive, and adopt the best practices. The best practice concept started in the early models of HRM. Accord- ingly, organizations are challenged to analyze and identify the best HR practices that might suit the organization. While there is no hard and fast rule on HRM, the principle of best practices is to implement processes that will yield high performance while ensuring that these processes are aligned and consistent with the organization’s strategy (Cho, Woods, Jang, & Er- dem, 2006; Baum & Odgers, 2001; Bamberger & Meshoulam, 2000). The term “high-performance” is usually interchanged with terms like “high com- mitment” and “high involvement” (Gould–Williams, 2004). Studies in high- performance challenge the organizations to identify a set of best practices in the industry through the process of benchmarking (Farndale, Hope–Hailey, & Kelliher, 2011; Whitener, 2001; Yasin, 2002). Boxal and Purcell’s (2000) study provides a best practice model stressing the importance of improving employee capability through good recruitment, training, and understanding the role of rewards through performance management. Alleyne, Doherty, and Greenidge (2006) and Pfeffer (1998) both support the notion that selec- tive hiring, extensive training, and performance related pay should be part of the best HR practices. High-performance HRM requires a long-term employee relationship. It enhances employee’s skills and their motivation improving productivity (Sun, Aryee, & Law, 2007). This however does not discount the need to change or adjust HR practices depending on the current development stage of the organization of formation, growth, maturity, or decline (Hughes, 2002).

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Recruitment and Selection

Recruitment and selection (R&S) is the process that an organization un- dertakes to ensure that the right person or persons are available and that activities that need to be performed by the person or group of persons are carried out. Chanda, Bansal, and Chanda (2010) and Gold (2007) describe R&S as a process of attracting a pool of candidates applying to the organi- zation for employment in a timely manner. While the recruitment function engages in sourcing for people and attracting the right candidates, the selec- tion process is focused on choosing the most qualified candidate from the number of job seekers. In general terms, these activities are considered as

the staffing function of a manager (Bogardus, 2004), which includes various processes needed to attract, hire, and retain qualified employees. The use of appropriate techniques in the R&S of the candidate significantly affects the career development of the individual. Therefore, R&S is considered to be a significant HRM function as it covers all organizational practices and decisions (Chanda et al., 2010). The objective of R&S is to attract the right number of people with the right skills and competencies for the right job in the most cost-effective man- ner (Anderson, Lievens, van Dam, & Ryan, 2004; Breaugh & Starke, 2000).

A common problem in R&S is poor planning which could be a reflection of

how the HRM policies and procedures are designed. Effective R&S policies include R&S procedures, the assessment and identification of an organiza-

tion’s criteria, determination of a candidate’s talents, and understanding up- to-date information on the current labor market. Following such procedures allow the deployment of appropriate employees at the right time (Breaugh

& Starke, 2000). Two indicators of an effective implementation of the R&S procedure

are having an effective job analysis and updated job descriptions (Chanda

et al., 2010). The job description identifies the duties and responsibilities of

a position and the characteristics, skills, and competencies required by the

job from the future employee. It also provides the necessary information that would guide the recruiting manager in choosing the right person by matching this information with the applicant’s existing skills, competencies, abilities, and previous experience. Figure 2 describes how the job description makes the R&S process more systematic, whereby the manager has a greater

potential to choose the right person by consulting all relevant information.

Training and Development

Training and development (T&D) is a key responsibility for human re- source managers. T&D is a process that provides “experiential learning and growth opportunities” which positively affect employees’ behavior. Such positive behavior has the potential to increase employee competency and productivity (Consten & Salazar, 2011). T&D involves providing

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at 12:06 19 February 2013 332 L. Young-Thelin and K. Boluk FIGURE 2 Matching the job

FIGURE 2 Matching the job description with the job applicant (Young–Thelin, 2011, p. 7).

employees with the skills and competencies in handling the current job functions. It is also an avenue to prepare an employee for duties and respon- sibilities expected at a higher position. T&D also ensures that the absence of required skills is acquired through learning programs which demonstrates the organization’s commitment to its workforce of self improvement and career development. Employees who are given the opportunity to acquire new skills as part of their job often perceive this as organizational support. Hence, they have stronger attachment, commitment, and loyalty to their organizations (Kyriakidou & Maroudas, 2010; Spector, 1997).What differen- tiates training from development is training focuses on the short-term needs and is administered to solve existing problems, while development has a longer-term focus such as increasing the knowledge and skills or building new competencies to prepare an employee for duties and responsibilities of a higher position (Bogardus, 2004; Lundy & Cowling, 1996). T&D fosters communication, leadership, actions, and behaviors in an organization. All of which are essential in developing human assets. T&D often takes place in a supportive environment where there is a clear link between T&D and the organization’s strategy (Kyriakidou & Maroudas, 2010). Bogardus (2004) claims that in order for T&D programs to be effective they should be able to address the needs of the employee through a training needs assessment (TNA). Iqbal and Khan (2011) describe this as an initiative in analysing and diagnosing the organization, task, and person to determine the best intervention and produce the desired results. TNA encompasses the areas of “training plans, goal setting, employee development, manag- ing change, career development, knowledge, skills, and attitude, learning motivation, cost effectiveness, and performance appraisal” (Iqbal & Khan,

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at 12:06 19 February 2013 HRM in Small Swedish Hotels 333 FIGURE 3 Training and development

FIGURE 3 Training and development process (Young–Thelin, 2011, p. 9).

2011, p. 460). The value of TNA is that it provides a systematic process on identifying problems in the organization through data-gathering (such as in- terviews, surveys, observations, etc.) which allows the organization to use the data and come up with an appropriate training solution (Iqbal & Khan, 2011; Leatherman, 2007). Rossett (2009) and Tracey (2004) however empha- size that best practices in TNA indicate the need for performance analysis to make the training more appropriate since it is designed to determine performance gaps that can be addressed by training. Unfortunately, most organizations do not consider this process as this is considered to be time consuming and is perceived to derive little value. The typical T&D process is summarized in Figure 3 starting with the review of the employee in terms of his performance in the current position.

Performance Management and Appraisal

While performance appraisal is the review of past performance, perfor- mance management, is the alignment of an employee’s performance with the organization’s objectives. As such, managers will discuss their expecta- tions, measures, results, and rewards with their staff which has the objec- tive of increasing employee and organization performances (Farndale et al., 2011). Both performance appraisal and management processes strengthen employer–employee relations. It is through these processes that the man- agers are able to guide their employees on how to use their skills for the benefit of both the employees and the organization which create the no- tions of high-performance (Guest et al., 2003). Through open communica- tion there is an opportunity for employees to give feedback. Farndale et al.’s (2011) study reveals that performance management and appraisal (PM&A) creates a perception of “organizational justice” if: (1) policies and practices are implemented at an organizational level, (2) the employee is the ultimate recipient of the system, and (3) the employee understands the effects on their

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at 12:06 19 February 2013 334 L. Young-Thelin and K. Boluk FIGURE 4 Performance management and

FIGURE 4 Performance management and appraisal process (Young–Thelin, 2011, p. 11).

performance. These three characteristics reflect an effective PM&A. Similar to the T&D process, the PM&A process is also considered to be time consuming because it should be done individually. However, unlike T&D, the PM&A is

a process that hotels cannot afford to skip as it is extremely important for employees’ performances to be in tune with the business objectives. Figure 4 below illustrates that managers should be able to decide what performances to measure and communicate this to employees. However, managers should involve their employees in deciding the action plans for their personal development. An effective PM&A is designed in such a way

that it allows regular appraisal feedback, involvement in objective setting, compensation options, and appraisals leading to the development of op- portunities and higher objectives (Farndale et al., 2011). Objective setting

is believed to create effective performance management as this clarifies the

expectations in relation to the employee’s performance and contribution. It ensures that individual objectives are aligned with the organizational objec- tives and eliminate unnecessary work (Young-Thelin, 2011). Bogardus (2004) claims that a job description which describes the duties and responsibilities of the job is essential in performance appraisal. Reviewing performance becomes more important when poor perfor- mance is elicited from the employee. This process becomes an opportunity for identifying the training needs of the employee and for the organiza- tion to fulfil its promise of ensuring self-development. Furthermore, re- viewing performance is also an opportunity for employees to fulfil their promise to the organization by giving their best to meet the organizational objectives.

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HRM in the Hotel Industry

Hotels play a major role in the tourism industry. The very nature of the industry is to provide hospitality which involves the provision of food, drink, and accommodation. It requires the use of HR in delivering these goods and services (Page, 2007). It is said that the competitiveness of the hotel is often based on the quality of its employees (Locker & Scholarios, 2004). Hence, the development of effective HRM becomes a major concern. According to Hoque (1999), in order for the hotel to maintain its competitive advantage, the quality of service is crucial, which requires skilled employees that can meet the expectations of the customers.

The story of successful tourism enterprises is one that is largely about people—how they are recruited, how they are managed, how they are trained and educated, how they are valued and rewarded, and how they are supported through a process of continuous learning and career development (Failte´ Ireland, 2005, p. 10).

The irony is, Human Resource Management systems are not fully de- veloped in the hotel industry and very little effort is put into ensuring their development. In spite of the numerous studies on tourism development, the presence of systematic HRM processes, policies, and procedures are not common in most hotel organizations (Baum, 2007; Liu & Wall, 2006; Gold- smith, Nickson, Sloan, & Wood, 1997; Locker & Scholarios, 2004; Schneider & Bowen, 1995). A lack of attention is apparent in the absence of HR pro- cedures (Powell, 2009). This perspective is justified by Redman and Wilkinson (2009) through a description of the economic and social pressures that the hotel industry is faced with. The hotel industry operates in a labor market whereby there are shortages of qualified candidates coupled with strong competition. Hence, especially for smaller hotels, they will have difficulty competing with bigger hotels which have more resources. The limited number of quality applicants due to the generally perceived poor image as an employer, forces smaller hotels to use more informal methods in recruiting people. Thus, smaller hotels usually end up with employees who are less qualified. The poor image emanates from the general practice of low salary, low job/position status, poor prospects in terms of career development, unstable, seasonal employment, “anti-social working hours, hard word and isolated locations” (Redman & Wilkinson, 2009, p. 103). This stigma is one of the contributing factors for high turnover rates in the context of hotels (Wildes, 2007). F ailte´ Ireland (2005, p. 66) believes that “good HR practices will be adopted be- cause they deliver bottom line profitability.” These practices include, among others, performance management, recognition and learning and develop- ment. Thus, the question is, does this premise hold true to smaller hotels? A

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study by Enz and Siguaw (2000a; 2000b) noted the best practices in the ho- tel industry. It was revealed that regardless of the size and market segment, there are commonalities in HR practices. Among others, selection, training, and performance appraisal are included (Hughes, 2002).

Current HR Practices in Hotels

The R&S of employees has remained a problem in the hotel industry, espe- cially for smaller hotels. A particular challenge faced by the industry, due to its poor image, is recruiting quality applicants. As such the hotel indus- try has to manage its public image as a way to source and recruit quality employees. The more common R&S practices used in the hotel industry are outlined below.

1. R&S in smaller hotels depends on the attitude of the owner or manager (Nolan, 2002).

2. There is an absence in the use of relevant selection tools like pre- employment testing. Testing and other selection tools are considered use- ful in hiring the right candidate (Cho, Woods, Jang, & Erdem, 2006).

3. Retention of good, trained employees becomes difficult since competition is fierce. In most cases, smaller hotels do not have enough interested applicants and are forced to hire unqualified candidates just to address current needs (Page, 2007).

4. The use of casual, part-time, and contractual employees to lower admin- istration costs has become a common practice in the hotel industry due to the difficulty in predicting the volume in the industry and the wide va- riety of guests with different needs and expectations (Hoque, 1999). This also allows hotels to address the irregularity in the volume and “eliminate surplus in staffing” (Lai and Baum, 2005). This type of strategy is believed to “compromise” the quality of service the organization delivers (Baum,

2007).

5. Small hotels engage in non-instrumental aspects in their hiring such as norms, values, and beliefs of the organization and match this to the norms, values, and beliefs of the candidate. Hotel managers feel that it is more important that the candidate fits in with the organization and is liked by the others, more so, because of limited financial resources (Cetinel et al.,

2008).

R&S practices can be an indication of the dilemma the industry is facing. The lack of understanding and professional skills makes it difficult for man- agers to implement a systematized R&S system. When this is coupled with the hotel’s difficult financial situation and unpredictable volume, it becomes more difficult to justify the need to invest in its employees.

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Shortages of qualified applicants are believed to be caused by the hotel industry itself. The industry has not been keen on investing in developing its employees through T&D programs (Baum, Amoah, & Spivack, 1997). Below are the more common T&D practices in the hotel industry.

1. While hotel managers consider T&D to be important, only 50% implement non-managerial training. This is attributed to the fact that employees who get trained and become better might transfer to a bigger hotel which pays more (Powell, 2009).

2. T&D is not seen as “an intervention or a strategy” in achieving organiza- tional objectives. There are no training plans on how to develop employ- ees and link their skills to the organizational objectives. The lack of skilled managers within the industry is largely because of the remiss in training (Nolan, 2002). Hence, training is conducted on an informal, reactive basis (Ram, Marlow, & Patton, 2001).

3. T&D has become purely a “motherhood” statement to managers, despite their strong belief in it. Managers consider training as an operational ex- pense rather than “investment” (Nolan, 2002).

4. Hotel managers or owners who lack professional skills have difficulty iden- tifying the training needs of their employees. Training programs that are implemented are mostly informal and on-the-job. However, professionally trained owners and managers tend to value formal training and actively encourage the employees to engage in further development (Nolan, 2002).

5. Bosworth (1989) claims that smaller organizations have a lesser ability to carry out and implement internal training programs due to the high cost of training.

6. In India, hotel managers are not willing to invest substantially in training, hence, they often hire high school educated candidates who have little or no interest in learning (Bagri, Babu, & Kukreti, 2010).

T&D processes are clearly a neglected HRM area which results in the lack of quality employees. Although managers understand the need for their employees’ to acquire new skills, there is an inability to implement T&D for three primary reasons Firstly, the limited financial resources do not allow the organization to invest in its employees. Secondly, the benefits of T&D can be felt in the longer-term. Accordingly, with the heavy use of temporary employees, it does not make sense to invest in people who will not stay in the organization (Baum, 2007) and finally, there is an absence of professional skills in implementing training. The PM&A process falls in line with the current thinking of open com- munication and allowing employees to give feedback. This process is used not only to improve the relationship between management and employees but it also helps to increase the level of performance of both the employees

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and the organization. Below are some of the more common PM&A practices in the hotel industry.

1. Employees do not see the link between their performance and the salary they receive (Alleyne et al., 2006).

2. There is failure or an obvious neglect of “even the basic steps” of per- formance appraisal and reward systems which have an impact on the motivation and retention of employees. This type of management does not allow employees to understand their role and contributions to the organization which causes job dissatisfaction (Olsen, Crawford–Welch, & Tse, 1990). This creates the impression among employees that the industry is practicing poor employment tactics since salaries and benefits are not based on performance appraisals (Powell, 2009).

3. Smaller hotels always face high risk situations or failures due to high oper- ational costs. Hence, there is a strong tendency to engage in “fire-fighting” activities such as the termination of poor or below average performing employees without the benefit of performance appraisal (Nolan, 2002).

In the absence of the performance appraisal, the hotel industry does not provide employees the motivation to perform better and the ability to design their career. At saturation point, employees seek bigger hotels that could provide new challenges (Baum, 2007). Small hotels are often faced with financial difficulties. Performance reviews have a close association with salary and rewards which are deterrents for managers and as such they often avoid this process as this might put them in an uncompromising position. Smaller hotels do not have room for sub-standard or poor performances as these significantly affect their business operations. However, small hotels do not choose to hire permanent employees and spend time on reviewing performances but rather rely on the use of temporary employees who can be easily replaced or terminated; especially during peak seasons. Thus, the PM&A is seen to be insignificant to the business.

Best HR Practices in Hotels

It is believed that the adoption of best practices can improve the attitudes and behaviors of employees, lower the levels of absenteeism and turnover, and increase the skill levels of employees which can lead “to enhanced quality and efficiency and improved productivity” (McKeena & Beech, 2008, p. 36). Although there are no hard and fast rules in HRM, the main challenge is for organizations to determine which among the best practices is best suited to the organization’s internal and external environments. The following are the findings of recent studies on best HR practices which are implemented in the hotel industry:

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1. Ritz-Carlton recruits the best employee by putting more focus on the behavioral skills of the candidate. They also “brand” themselves as a good organization to attract candidates. T&D processes are in place and 80% of training is conducted in-house to have direct control over the appropriate training method. Performance is reviewed twice a year and this is linked to pay and aligned with organizational objectives (Lynch & Worden, 2010).

2. Kimpton Hotels & Restaurants carefully select employees and “self lead- ers.” They provide extensive training and coaching for employees to help them fully use their skills. Job transfers and internal promotions are com- monly used (Jones, 2006).

3. Collins and Han (2004) reported in their study that hotels publicize the awards they receive to make the organization appealing to candidates and attract more qualified applicants.

4. Hinkin and Tracey (2010) studied three hotels that have best HR practices, namely, Four Seasons, Kimpton Hotels and Restaurants, and Marriott Ho- tel. Four Seasons developed an online job preview that gives prospective candidates a realistic picture about the working environment in the ho- tel. All hotels have a high standard for selection whereby managers are required to follow the hiring procedures such as formal testing. Hotels provide extensive training programs that are mostly facilitated by the se- nior managers. Performance reviews are “comprehensive, continuous, and open-book” (p. 166) assessment.

The key research questions that we address in this article are: What are the current recruitment and selection processes in the Swedish hotel industry? What is the purpose of T&D? Are these aligned with the individual needs of the employees? How often are employees’ performances evaluated and how are these evaluations carried out? Are these based on pre-set agreed objectives?

METHODOLOGY

We decided that a qualitative method would be best to address our aim of this study of investigating the HR practices in six small hotels in Sweden. Veal (2006) suggests that qualitative research provides an opportunity for a more in-depth understanding of the themes being studied. The selection of hotels took into consideration time and cost constraints as such convenience sampling was employed. The researchers contacted a total of 13 hotels in a 50 km radius covering the areas of Borl ange,¨ Fagersta, Grang arde,¨ Lud- vika, Smedjebacken, and Soderb¨ acke¨ in south central Sweden. Initially, hotel managers were contacted by email which was followed by telephone calls. Of the 13 hotels which were contacted six agreed to participate in this study. The research sample is contained to small hotels and is specifically interested

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in those involved in the process of HRM. Although there are several cate- gories of small hotels, this research is using United Kingdom’s Department of Employment’s category review (Harrison, 1993) stating that small firms are those with less than 20 people. An interview guide was prepared to ensure the effectiveness of the data collected. All interviews were recorded and transcribed. The interview guide covered the three themes including R&S, T&D, and PM&A. Specif- ically, the researchers asked about the hotels’ recruitment methods, for- mal recruitment policies, training systems, employee training, and questions about performance appraisals. A purposeful sampling technique was used in determining the respondents by interviewing persons who are respon- sible for the HR functions. All of the interviews were carried out on each of the participating hotel sites in the managers’/owners’ offices providing a familiar and comfortable environment for each of the participants. Each in- depth interview lasted approximately 45 minutes. To guarantee anonymity letters A–F were used to denote the 6 hotels. The letters assigned to a particular hotel were done at random and do not follow any particular chronology.

RESULTS

Table 1 provides some information regarding the demographic characteristics of the participating hotels in terms of the formal role of the respondents in the organization, the number of rooms and employees, average occupancy level during a 1-year period, and employee to room ratio.

HR Practices of the Participating Hotels

R&S P RACTICES

Most hotels confirmed that they did not prescribe to formal policies as they found their respective organizations to be “too small.” The general sentiment was that formalized systems are only applicable to bigger organizations

TABLE 1 Demographic Characteristics of the Participating Hotels

 

Hotel A

Hotel B

Hotel C

Hotel D

Hotel E

Hotel F

Respondent/s

Hotel

Hotel

Hotel

Owner

Owner and Owner partner

manager

manager

manager

Number of rooms Number of employees Average occupancy level Employee:room ratio

92

52

97

20

27

18

15

14

7

2

4

1

47%

49%

35%

15%

30%

48%

1:6.13

1:3.71

1:13.85

1:10.00

1:6.75

1:18.00

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which are more complex while “small” organizations should fill the vacancy as quickly as possible to ensure the continuity of the operations. The use of job descriptions as a tool in selection was also found to be inappropriate by Hotels D, E, and F. These hotels felt that it was not necessary and the assessment of the skills of the candidate/s could be done during the orientation period. A subjective experience was expressed by some of the managers who referred to relying on a good “feeling” regarding

a specific candidate and if they could handle the job. Only then would

a job offer be made. The basis for hiring was described differently by the

informants and involved factors such as: interest in the candidate, personality, and individuals who could easily fit into the “family”. Internal announcement of vacancies were carried out in four hotels. Al- though this is not a formal process, internal recruitment is always considered. Respondents explained that because “everybody knows everybody,” em- ployees openly discuss issues both in formal and informal meetings. Hence,

even without formal announcements, employees are aware of the existing vacancies. If there were no qualified internal applicants for the vacancy, the use of other recruitment methods may be considered. There seemed to be a significant reliance on walk-in applicants which was the general practice in five hotels, followed by advertising in the government employment agency. Referrals were also considered by Hotels C, D, and E. Even with enough candidates, hotels found it difficult to find the “best” candidates. Hotels A and B use printed media such as newspaper advertisements whenever higher level positions were required. Other hotels use the corporate website, central recruitment file, and schools in searching for candidates.

RESPONDENTS O VERALL P HILOSOPHY ON R&S

Hotels managed by the owners and/or partners expressed their reliance on

their “feelings” or intuition in the process of recruiting the right person. The orientation day seemed to play a pivotal role in confirming whether the can- didate chosen demonstrated the necessary skills required by the job. Hotels which are part of the chain, have more formalized systems. All hotels believe that they should select only the best person for the job to be competitive.

A significant consideration was gauging whether the candidate would be

liked by the rest of the employees and could be considered as part of the “family”. Respondents described their philosophies on certain issues on R&S in a variety of ways. For example, on internal hiring Hotel A said: “If they [employees] have the right skills, they should be given priority.” However in selecting an external candidate, the methods and criteria used by the par- ticipating hotels differ from each other. Hotel B placed value in hiring team players as expressed in this statement:

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I try to get good people [

for the job. The personal behavior is more difficult to change or develop.

Before they [applicants] are employed, they have to be liked by my staff as well. He should be able to work for the entire team.

] we look for the best man

] it’s very hard [

The use of feelings and intuitions was used as a selection method as described by Hotel E: “We [Owner and partner] go with feelings. We are experts [at] seeing what people are like. We look closely like on a personal level. It’s like a family, he [the applicant] must be liked.” Similarly Hotel D said this: “I just want to have one day, going [around the hotel] and look and see when they [applicant] are good.” In terms of the ownership of the process Hotel B said this: “I make the final decision because it’s mine. I’m responsible for the business.” The research findings reveal that the R&S process in the participating hotels is not fully developed as shown in Table 2. Although three hotels use the job description in their selection process, only one hotel has an estab- lished recruitment policy. The methods in attracting the candidates are not deliberate in relation to the current need or vacancy. Despite the difficulty in finding the “best” candidate, there seems to be a preference for using meth- ods that do not require additional financing such as walk-ins, referrals, and employment agency. Smaller hotels managed by the owner and/or partners rely on their “feelings” and intuition in selecting the best candidate. In terms of staffing, especially during peak seasons, the use of casual and contractual employees is common in the industry.

TABLE 2 Informants’ Practices of Recruitment and Selection

Criteria

Hotel A

Hotel B

Hotel C

Hotel D

Hotel E

Hotel F

Recruitment policy is in

Newspaper

1

place Use of job description in recruitment

111

 

Internal announcement of

111

 

1

vacancies Recruitment methods:

1

1

Walk-ins

1

1

1

1

1

Referrals

1

1

1

Employment agencies

1

1

1

1

Special invitations

1

website File, website

school

Others Use of casual and contractual employees.

1

1

11

1

Note. “1” = Complies with description. Blank = Non-compliance or not applicable with description.

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T&D P RACTICES

Four hotels admitted to regularly training their employees. Hotel D revealed that they were unable to offer regular employment thus they could not justify training. Hotel F, managed single-handedly by the owner, did not find this issue applicable in his organization. Although training programs were offered to employees and the objec- tives for training were clear, only two hotels followed a systematic method of determining the needs of its employees. Hotel A and B carry out an in- dividual development plan for its employees to ensure that the employees attend training programs that would address their poor performance or pre- pare them for higher responsibilities. Hotels D and E administer training programs based on how they “feel” and how they perceive employee’s in- terests. These hotels feel that training should be given to employees who show interest in their jobs and are willing to be trained.

RESPONDENTS O VERALL P HILOSOPHY ON T&D

Participating hotels understand the importance of T&D. Hotels that are part of the chain ensure that employees go through training during the year. Ho- tel B has training targets in terms of the number of training days, while Hotel A’s employees undergo safety training once a year which is an indication of

regularity in training employees. Hotel A exerts effort in ensuring that “every- body” is trained when she said: “When we train, we train them [employees] all. If we pick out one person, it’s for a special reason. Otherwise, we train everybody.” This is aligned with Hotel B’s philosophy when he said: “We

we try not to send the same persons [em-

ployees] on the same type of education.” Unfortunately, this does not hold true for hotels managed by the owners and/or partners. Reasons for training seem to depend on how the hotel owners feel which can be described when Hotel D said: “I train him [employee] because I want him to be better and I like his personality very much.” Decisions on training depend on how the hotel assesses the “interest” and the “personality” of the individual employee as reflected in Hotel E’s comment: “The person [employee] must have the

you [employee] must have that feeling of joy. If you want to grow,

you have to show interest.” Hence, training becomes more of an employee responsibility rather than a management role. The use of coaching or informal methods in training was found to be common among participating hotels specifically in Hotel C when the informant said: “We use written instructions and [the employees] learn by ‘walking beside.”’ All employees are required to understand and be able to work in all areas of the business. This is justified by the fact that business operation should not be suspended because of a shortage in employees. There is however a tendency to forget the formal TNA process and focus training on employees that do not perform well when Hotel B said : “I think

heart

try to be as fair as possible [

]

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it’s very common to forget those who are good enough because they are doing their best already. It’s a lot easier to find those who don’t fit the profile.” Hotels A, B, and C demonstrated an established T&D policy, however, Hotels A and B preferred the individual development plan that ensures a systematic process so that training programs address the needs of each employee. Hotels managed by owners and/or partners base their training decisions on the interest elicited by the employee (Hotel E) or his “per- sonality” (Hotel D). Hotels A, B, C, and E expressed an interest in training their employees but only Hotel B demonstrated a commitment to training through an established training objective and had a number of training days per employee. Most hotels rely on informal training such as coaching and orientation. Almost all hotels believe in T&D and understand the impact it has on the performance of the organization.

Performance Management and Appraisal Practices

Among the three HRM themes covered in this study, the PM&A is the least developed or most neglected. Table 4 reveals that only Hotels A and B have a formal system in place that ensures regularity in performance review. These hotels align the performance with the job description and organizational objectives. They understand how PM&A can be used as a tool in improving the organization’s performance. Hotels A and B have a formal performance policy in place that is based on the job descriptions and individual objectives which ensures that the em- ployees perform the duties and responsibilities required by the job. Both hotels ask the employees to sign the job descriptions which become a contract between the management and the employees. The communica- tion and setting of performance objectives is also performed by Hotels A and B. Hotels A, B, D, and E extend rewards and incentives to their employees for good performances. While there is no reward system in place, Hotels A and B ensure that rewards and incentives are accorded to deserving employ- ees for exemplary performances. Hotel D and E also provide rewards to their employees. However, the basis of reward is not on individual performance but on the overall performance of the organization. Hence, all employees enjoy the same benefits of the rewards regardless if there are differences in the levels of performance and contribution.

RESPONDENTS O VERALL P HILOSOPHY ON PM&A

Participating hotels which are part of the chain see the value of the PM&A system. Performance reviews are based on the job description and followed by the performance objectives. This type of goal-setting is described by Hotel

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] eco-

nomic goals and our values. Everything [performance] is based on the job description.” The formality is indicated with the signing of the job description by every employee. Although there are no indications of automatic salary increases for good performers, the respondents indicated their belief in re-

warding good performers. Most of the respondents provide rewards that are simple but “appreciated” as described by Hotel B when he said : “They [good performers] could have a weekend in one of our hotels or something small but often very appreciated. Another way of acknowledging and inspiring employees was described by Hotel A when she said: “It’s inspiring for our staff to see that when they do something special we notice. People tend to put an extra effort into the work.” For hotels with fewer employees, rewards were given on the basis of organizational performance. Hotel E, however, described rewards as a form of de-motivation to employees who do not perform well and justified this by saying that it is likely that people who do not perform well have unsettled personal issues and should be supported by creating an environment of equality specifically when he said: “Rewarding good performance would never encourage the

] like those with personal prob-

person [employee] struggling to be better [

B when he stated: “The owners give our objectives for the year [

lems at home.” Hotel E felt that this process is purely “bureaucracy and a waste of time” and is only applicable to bigger organizations. Some hotels did not have formal PM&A systems and review of perfor- mance was neglected. This process was not found useful or applicable by hotel managers running small hotels although performance was informally reviewed. For example, Hotel E said: “We [Owner, partner, and employ- ees] eat together.” This sentiment was also reiterated by Hotel D when she

stated: “We are so small [

] we do it over a coffee. But we don’t have people

[employees] who are staying here very long.” Hence, the formal review of performance is found unnecessary when owners could remind employees of their poor performance or confirm their good efforts in casual settings. Only

one, Hotel C linked performance to continuous employment when he said:

“One need(s) to improve to achieve happy visitors then they recommend to others and new visitors provide jobs.” Overall, the PM&A process is widely neglected in the participating ho- tels. Only Hotels A and B consider this as part of their management role. Those hotels which understood the importance of PM&A have an established

systematic process. Table 4reveals that those hotels with performance policy

in place, regularly review the performance of its employees which are based

on the job descriptions and set objectives. Rewarding good performance dif- fered among hotels. Hotels which are part of the chain rewarded individual employees for exemplary performance, while hotels managed by owners or partners extended rewards to all employees based on organizational per- formance. While rewards were generally seen as a positive reinforcement, Hotel E found it to be de-motivating.

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DISCUSSION

HR systems in hotels covered in this study depend heavily on the background of the hotel manager, their available resources, and finances. Although the respondents confirmed the importance of HR systems, it is ironic that little effort was exerted to ensure its development. Hotels justified the absence or neglect of the HRM functions with the size of the organization. Smaller hotels with limited financial resources claimed to be restricted in developing and implementing HR systems comparable to bigger hotels. While hotel man- agers/owners and/or partners have appreciation for the need for HRM, the lack of professional skills in HR did not allow them to implement systematic HR processes and understand the impact it has on the organization. The research findings reveal that leading hotels understand the impor- tance of hiring the “best” employees through a more systematic R&S process (Baum, 2007). Those hotels that do not have the ability or neglect the use of relevant methods in hiring are forced to spend more time in recruiting and selecting candidates (Cho et al., 2006). Hotel managers who are not willing or cannot afford to invest in the recruitment processes hire candidates even though they do not have the right skills and competencies to simply meet their hiring needs (Chan & Kuok, 2011). The R&S process in smaller hotels managed by the owners (Hotels D and E), depends on the attitudes of the owners (Nolan, 2002). The erratic and unpredictable volume in the indus- try also forces the hotels to engage in a “flexible” (Baum, 2007) headcount through the use of casual and contractual employees (Hoque, 1999). The more common R&S methods demonstrated a reliance on walk-in applicants and referrals and the use of the government employment agency (refer to Table 2). Hotels are also up-to-date with emerging technologies and corporate websites as an avenue to recruit applicants. Most of the methods used are those which are considered cost effective and that do not cost the organization substantial investments. Hotels select the best candidate which can become “part of the family.” On occasions when there is an erratic increase in demand, the use of casual and contractual employees is considered. Hotels which have access to corporate HR systems have a systematic recruitment and selection process. All hotels agree that employees should be trained to improve per- formance or develop of the employee (Table 3). Understanding the cur- rent needs and expectations of their customers is another purpose to train employees. Other purposes of T&D are those triggered by company-wide initiatives such as, computerization and safety programs. Two hotels have been systematic in identifying training needs with the use of training needs tools. However, smaller hotels are reluctant to invest time in determining training needs-based decisions on the interests exhibited by their employ- ees. The hotel industry has a reputation of poorly training their employees and most of the training programs that take place are driven by legislative

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TABLE 3 Training and Development Practices of the Participating Hotels

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Criteria

Hotel A Hotel B Hotel C Hotel D Hotel E Hotel F

Training and development policy is in place

111

 

Regular employees are trained

1

1

1

1

Established training days per year Purposes of training and development

1

Self-development

1

1

1

1

Poor performance

1

1

1

1

Presence of individual development plan

1

1

Note. “1” = Complies with description. Blank = Non-compliance or not applicable with description.

requirements. This general lack of training could be due to the high training cost, no direct return on training investment, and the formality of a training needs assessment is seen to be burdensome (Kyriakidou & Maroudas, 2010). The under-investment in training by small- medium-sized hotels results in low productivity and poor performance (Ashton & Felstead, 2001). The findings reveal that most hotels do not practice PM&A and appro- priate reward scheme systems (Olsen et al., 1990). This makes it difficult for employees to understand the meaning of good performance and how this is linked to rewards. Employees are not motivated to perform better and are always in constant search for other opportunities outside the organiza- tion (Alleyne et al., 2006). Hotels reward their employees in different ways for different reasons. Rewards are mostly non-monetary but acknowledge good performance and are generally appreciated. Accordingly such rewards serve as an inspiration to others. However, there are hotels that use the continuity of employment as a form of motivation. Clearly, the absence of a

TABLE 4 Performance Management and Appraisal Practices of the Participating Hotels

Criteria

Hotel A Hotel B Hotel C Hotel D Hotel E Hotel F

Performance management and

1

1

appraisal policy is in place Formal review of performance

1

1

review Communication and setting of

1

1

performance objectives Job description as basis for performance

1

1

Rewarding high performers

1

1

1

1

Note. “1” = Complies with description. Blank = Non-compliance or not applicable with description.

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performance process creates confusion to employees as to how their efforts are recognized (Baum, 2007). Hotels with fewer financial resources did not see the reason for PM&A since in most cases, employees do not stay long in the organization. Hence, the performance is informally discussed as a form of feedback to the em- ployee, normally during coffee breaks. Most hotels do not have job de- scriptions which enumerate the duties and responsibilities of the job. Hence, performance is based on what was agreed during the orientation and is built- up over time based on how the manager, owner, and/or partner perceive the employees. Hotels which are part of the chain ensure that PM&A is based on the agreed upon job description and communicated objectives (Table 4). In some cases, the set objectives are aligned with the organizational objectives. The evaluation of performance in two hotels is implemented by the manager at least once a year.

CONCLUSIONS AND IMPLICATIONS

Through this article we sought to explore the HR practices in six small ho- tels in Sweden. As such, we found evidence that although hotel operators perceive HR practices to be important, little value is given to develop them and as such they are often neglected. The researchers have suggested that the participating hotels assess their organizations and implement the ba- sic HR processes based on the size of the organization and the available resources. Specifically, it was established that R&S is not given enough at- tention. Hotels generally do not have formal R&S policies that would guide them in choosing the best candidate but rather use recruitment methods that do not require financial resources. In comparison, larger hotels seemingly have more flexibility and options in terms of methods. With regard to T&D, this is not administered in a systematic method that makes training delib- erate and according to the need of the employee. Hotels with formalized training processes try to train everybody but the identification of training needs for individual employees is not established. Furthermore, hotels man- aged by their owners and/or partners are guided by their “feelings” and/or intuition whenever they need to make decisions regarding training. PM&A is not generally seen as a strategic tool in improving overall organizational performance in smaller hotels. Two hotels have integrated PM&A in their organizations and have understood the impact it brings to the organization, and there are indications of the desire to improve the system. A few practical implications have emerged from this study. First, the study found that a significant deterrent to training hotel employees were the costs associated. As such, perhaps a viable option would be for small hotels to plan joint training sessions focused on delivering safety programs, the expected level of service delivery, and ways to empower staff. Such

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collaboration efforts could also provide an opportunity for joint skill de- velopment and the training of hotel employees. Another opportunity (and cost-saving mechanism) might be for hotels to establish connections with hospitality and tourism schools. Such strategic collaboration could be bene- ficial for hotels interested in capitalizing on passionate individuals, with little experience as such representing a “blank canvas” with formal training and a wider perspective of the hotel and broader tourism industry. Further, perhaps it would be beneficial to have hospitality training pro- grams for hotel managerial staff. This particular study demonstrated the in- formal nature of the hospitality industry and the lack of planning and co- ordination within small Swedish hotels, as well as between hotels. Thus, similar to networks that provide support for entrepreneurs in Sweden per- haps a network that would support hotel managers in the context of the hospitality industry is timely. The researchers argue that hotels should at the very least address the basic requirements of each HR process to ensure that it is systematic, functional, and effective. To do this in a smaller scale is realistic to every organization within the industry. Accordingly, the implementation of the basic HR systems discussed R&S, T&D, and PM&A should to some extent create benefits for the organizations. In the context of implementing a hospitality network perhaps it would be of some benefit to have an auditor demonstrate the financial imperative in the systematic implementation and monitoring of HR practices. The study has created opportunities for further research. The researchers call for an investigation exploring the financial impact of HR systems. This may help justify the importance of HR processes in organizations. Another opportunity for further research is the study of the feasibility of shared HR services especially designed for the hotel industry. This will assist hotels including those with limited resources to implement HR systems through outsourced HR services. Basic HR tools, policies, and systems can easily be re-designed according to their needs.

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