HR Practices, Roles and Processes of Hilton Hotel as an Example of Hospitality Industry - Assignment Example

Executive Summary Introduction The hospitality industry comprises of hotels and restaurants mostly that serve public and keep staff to efficiently perform diverse tasks. Human resource is the most valuable asset of an organisation which is managed by a distinct entity called human resource management. HRM of a hotel or restaurant endeavours to free the organisation from conflicts and administers the tasks to optimally run organisation so it may expand and compete in the market. However it is found that there is lack of research in the service sector especially in hospitality industry which is the fourth largest industry of UK. This study attempts to provide detailed analysis of role of human resource management for entire industry in the UK in context with the laws and recommendations are provided to strategically manage the human resource in improved way. This study focuses on HR practices, roles and processes of Hilton Hotel as an example of hospitality industry of the country. Role of Human Resource Management As a human resource manager of a hospitality organisation, the role and purpose of HRM is to formulate and execute strategies that are best fit for the organisation so as to achieve efficiency and organisational objectives. A set of multiple HR activities and strategies is briefly discussed as follows: Recruitment and Selection The most important HR function of an organisation is to select right people for the right jobs keeping in view skills, aptitude, motivation, etc for the long run. This is a complete process comprised of several steps designed to filter and choose the right candidate. Hilton Hotel focuses to hire people through testing, interviewing and screening; however it can further improve the process by applying psychometric tools so that the pool of applicants becomes large and candidates are systematically filtered in less time. Training and Development The existing and new employees need to be trained and equipped according to the dynamic external environment so as to effectively compete in the global and domestic market. Training Need Assessment (TNA) is a process to grasp the lagging skills and potential of the people in organisational context which helps to design training programs effectively. Hilton Hotel has training programs mostly focused around customer services while management training, sustainability and competitiveness training can add value to human capital of the organisation despite keeping a single focus as it is reported that skill gap is 21% in the industry. Retention The employees once selected and trained become an asset for the organisation and they need to be retained to save cost and time. Currently the turnover rate for the industry is around 11% since last three years. Hilton Hotel should create loyalty among employees through motivation and offering better compensation than the competitors which will save the greater cost in long run. Appraisal Performance of employees is measured through appraisal process to ensure their fitness and efficiency. This function helps to provide information for the other HR functions of an organisation to take strategic remedial measures. Hilton Hotel should employ bi annual appraisal system focusing to match behaviour and work quality in context of its vision and objectives. Contemporary 360 degree feedback process also helps to increase the extent of vibrant appraisal. Reward System Bonuses, rewards and recognition can help to motivate employees and increase their work efficacy. Employees should be rewarded for their additionally performed responsibilities and their quality of services must be recognised. Hilton Hotel has a culture for rewarding employees like retention bonus, performance award, etc. HRM of the hotel should prioritise to nurture a culture of recognising efforts of employees in formal and informal ways so that they develop a sense of ownership within themselves. Team Work Team work is necessary for an organisation to integrate cohesiveness and synergise the processes of organisation. Hospitality organisations have several independent and semi-autonomous functional areas that require collaboration to accomplish the tasks. Therefore the functional and cross functional teams hold high significance to serve the customers and attain their goals. Hilton hotel needs to conduct ice breaking activities to enhance communication within the organisation and to enable collective thinking. Cross functional teams should be formed to maximise the customer satisfaction which is core of the industry. Leadership It is an attribute that distinguishes a prosperous employee from ordinary members of the organisation. It helps the leader to lead a team efficiently by positively influencing the processes and individuals. Leadership comes up with innovation and independence in critical thinking and decision making which is extremely important in the hospitality industry because of diverse situations faced every day. Hilton Hotel should design training program to develop leadership potential among employees and give them due knowledge to implement decisions autonomously rather than wasting time in seeking hierarchic approvals. Employee Engagement Enhanced engagement of employees results in creating more autonomous, cooperative, self controlled and creative workforce to perform the work processes. Employees should be given sense of ownership and should be involved through participative and educative mechanisms like quality circles, briefings, etc to generate a supportive and empowered environment. Hilton Hotel management should conduct periodic meetings and develop a feedback process to let the employees engage in decision making processes. Grievance Management Employee dissatisfaction stems out of grievances that need to be sorted out immediately to avoid turnover or escalating conflicts. Human resource management needs to listen to grievances of employees and provide them acceptable solution with assurance of avoidance in the future. Hilton Hotel employees find the work overburdened and show dissatisfaction. The employees should be remunerated adequately and there must be distinct responsibilities of each employee to avoid conflict. Also there should be a way to register one’s grievance and to resolve conflicts that are not substantive. Human Resource Plan The external condition of labour market of hospitality industry is analysed briefly prior to formulate / suggest HR plan for the Hilton Hotel: Job separation means voluntary or involuntary termination of working relationship amid employee and employer. The tourism and hotel industry of UK has shown the highest rate of separation i.e. 3.1% while the level of education was seen the lowest i.e. 0.7%. The hospitality industry has generated around 27.7% of the total jobs growth during 2010 to 2012. More than 2.7 million people have been working in hotel and tourism industry of the country. This industry employs 10% of the entire workforce of the country and 53% students who leave school tend to choose hospitality sector as their career. It is seen that the competition has been increased in the industry and average number of candidates who apply for a job is 21 which was 15 in second quarter of 2010 and the trend is going up. It can be implied from statistics that the supply of labour in the industry is greater than the demand despite consistent growth in the industry. There are three major driving factors in the human resource planning which are: Reduced cost of labour Maximising labour determinacy through attitude than skills Optimising balance between flexible corporate needs and labour retention to manage workers’ mobility Keeping in view the external factors mentioned above, following is devised HR plan for the Hilton Hotel: Organisational Vision and HRP Human resource planning must be well aligned and be integral part of vision of the organisation such that the strategies and plans support to accomplish long term organisational objectives. Vision of Hilton is hospitality, integrity, leadership, teamwork and ownership which must stay as focal point in the planning process. Analysis of Issues First step in HR planning is to analyse the situation (internal and external) and identify the issues. Business Needs The need of organisation must be assessed to grasp the current scenario of employees, their skills and fitness with the dynamic internal and external environment of the industry. Hilton Hotel is struggling to retain employees like other hospitality organisations. It also needs to dynamism and self motivation in the employees to manage global expansion. External Factors Hospitality industry of UK has been rapidly growing and competition over all job positions is also increasing. Another factor is high rate of job turnover and job separation which is detrimental for the organisations. Hilton Hotel has been facing competition in the UK and around the world and rival firms attempt to hire experienced staff at higher wages. There is dearth of branding experience in the industry that the company also faces. Internal Supply Analysis This analysis helps to recognise the valued human capital as well as the gapped skills and required positions and manpower in the organisation. Hilton Hotel is under staffed and lacks skills like independent decision making, handling diverse customers and situations, etc. Forecasting Requirements This is the second step in HR planning that helps to determine the equilibrium of future supply and demand of workforce. Staffing Level The organisation is analysed whether it is understaffed, overstaffed or at appropriate level at current time and in the future as well. Future forecasted levels are quite important for the organisation to plan workforce. Staffing Mix Hard and soft skills of the staff are analysed so that the skill gap is found and future skill need is incorporated in the workforce plan. Qualities, attributes, behaviour and attitude of employees are also assessed in the step. Hilton Hotel needs to apply certain psychometric tools to assess behaviour and work quality of the employees to identify and develop the missing attributes in the organisation. Organisation and Job Design All key positions are analysed to identify whether additional responsibilities need to be assigned or if there is any need to mould the roles and responsibilities of personnel. De-layering and rightsizing is also the part of process. Hilton Hotel needs to assess hierarchies and roles to assign vertical as well as horizontal workload along with job rotation. Available Resources Physical resources like capital, current capacity, expansion plans, etc are studied to find adequate resources for hiring, training and rewarding employees accordingly. Dearth of resources may hamper the HR planning a great deal. Hilton Hotel keeps separate funding for the process of training, rewarding and compensating that needs to be channelized in order to be invested at right HR venture. Net Requirements Staff requirements, skills, roles and responsibilities and available resources are listed and compiled to formulate the third and final step to execute action plan accordingly. Action Plans First two steps of HR planning help to diagnose issues that are endeavoured to rectified in the final step which is discussed as follows: Staffing Authorisation HR department needs to seek authorisation to hire new candidates in terms of number of positions to be filled and the job roles as well. Usually executives or the board authorises this process. HRM of Hilton Hotel also seeks approval before staffing; however web based authorisation process is suggested to keep the vacant positions and roles updated and are approved in least time. Promotion and Transfers Before hiring, the organisations may attempt to transfer the roles or place / positions of the existing employees as a reward or reinforcement so that the net requirement may be brought forward to hire certain number of people with peculiar skills. Hilton should perform this action based on periodic appraisal of the employees but the core of process is to encourage employees even if they lag in performance. Recruitment Once hiring is authorised by the executives / board, next is to hire the right candidates out of large pool of applicants. Hilton Hotel should develop a database of candidates who apply for the jobs and the database should be filtered so potential candidates remain in focus for hiring at any stage. Recruitment committee should be formed by taking one member from each key functional area so that the knowledge, skills and abilities of candidates are appropriately judged. Training and Development This is an investment over employees that benefit the organisation in the long run. With the help of performance appraisal, training needs can be assessed and programs are then designed accordingly. Hilton Hotel should focus to develop strong management team and lagging skills like branding, customer management, etc. Compensation and Benefits The hired employees should be offered a competitive compensation along with fringe benefits so that they are retained in the organisation and never feel de-motivated or grieved to work at lower wages than the industrial benchmarks. Hilton Hotel should offer higher compensation for branding experienced personnel as the skill is lagging at the moment in the industry. Labour Relations Management of an organisation needs to keep a healthy relationship with the employees by listening to them and providing them space to express their grievances and act to resolve their conflicts in least time. Hilton Hotel should conduct formal and informal gatherings to the workers break ice and be more expressive and participative. Current Employment Relation The concept of employee relation has been changed with time and now the meaning is different from the past when employee relation was termed as union relation. In contemporary mode, the employee relation is more individualistic than unionised due to declining trend in union density. Following is analysed situation of employee relation from different dimensions in the hospitality industry of UK and the potential impact over Hilton Hotel: Employment Relations Act Main objective of this act is to minimise the extent of conflict between employees and employers and to promote a sense of partnership for the long run. The act also provided statutory route for the recognition of union by introducing works council. It extended rights of individual employees and set minimum wage of an employee across the country so that it came in proximity with the social policies of European Union. The act has left a net positive impact over the hospitality industry as the employees feel more empowered while the influence of unions has also been curtailed a great deal. Hilton Hotel aligned its wage standard with the national minimum wage band which did not add too much to its cost as the company has already been offering competitive wages. However the workers became more motivated and loyal to the company. Employment Appeal Tribunal Recently the Employment Appeal Tribunal has ordered that overtime for the employees must be included in the holiday pay. Employees have welcomed the decision while industry experts are uncertain of potential impacts of the decision. According to Chairman of British Hospitality Association, there will be a nominal impact of decision on the hospitality industry. However few people argue that it can be negative for the growth in industry and new investment ventures can be slowed down. Hilton Hotel will be affected a great deal as it has high number of employees in all hotel branches across the country. Thus the cost per employee will be augmented and net profitability will be decreased. Personal Productivity Hospitality industry of the UK is found to be on top of all sectors when it comes on personal productivity of the employees. According to a study, those employees maximise their psychological capital of success and stay motivated and those are the happiest people found at work. Hilton Hotel endeavours to keep employees happy through addressing their grievances, engaging them in decision making and listening to their feedbacks. Additionally it should offer incentives based on attaining targets like revenue, number of served customers, profit per share, etc which will help to retain the employees and gain their loyalties. Source of Motivation According to a research by iOpener Institute of People and Performance, young employees of the hospitality sector cannot be effectively motivated by money rather they need healthy relationship with management and sound work environment. The study found that social purpose and pride in work and organisation is strongly correlated with the job retention while job fulfilment is also strongly correlated factor with the job retention while increased level of pay found to have no correlation. Hilton Hotel needs to provide healthy working environment and should attempt to lower the extent of job stress as the company is already paying handsome rewards but due to high job turnover in the entire industry, Hilton Hotel must focus to reduce the burden through job rotation and right sizing. Zero Hour Contracts Several employers attempt to exploit the rights of workers through certain clauses of contracts. Zero hour contract is also taken as quite negative but it has shown many benefits for employees and employers in context of hospitality industry. Due to high turnover ratio, employers do not need to re-hire or make effort to retain the staff based on zero hour contracts. This is also good opportunity for the employees who like to work casually and on multiple assignments. However Hilton Hotel has been incurring plenty of cost on developing employees as a strategic objective, therefore this is only feasible for keeping casual employees while skilled employees should not be contracted on zero hours. Employment Laws Employments laws have been changing with a rapid pace in the country, hence it requires employers to stay updated and review their current employment contracts and policies. Recently employment laws have been amended and the government has tried to assure that employees may get their due rights and the extent of exploitation by employers may be reduced. Some recent legislative developments in context of human resource management of the hospitality industry and specifically of Hilton Hotel are discussed as follows: National Minimum Wage National minimum wage has been amended and from October 2014, minimum wage for people aged 21 and above will be £6.50 per hour while £5.13 for workers aged between 18 and 20. Hospitality industry has not been primarily impacted by such an increment in the wage as the cost is covered up due to inflationary trend in the sector. Hilton Hotel complies by legal wage benchmarks and revises pay structure to align with industry and government minimal limits. Pre Claim Acas Conciliation From April 2014, it has become mandatory to early conciliation (EC) through Acas in a period of one month prior to launch the claim in Employment Appeal Tribunal. If the early conciliation fails or any party refuses to accept the solution, then the matter can be preceded to the tribunal. Hilton Hotel been positively impacted by the change as this will help to reduce the cases of conflicts and it will save much of expense in shape of claimed money. Discrimination Questionnaire From April 2014, the section 138 of equality act has been demolished that demanded discrimination questionnaire and employees can obtain discriminative information from employers to use as evidence for proceeding in the tribunal. Hilton Hotel has been to assure to diversity and equality in the organisation and has shown this in the vision statement as well as in practice. However the company has to review the historic cases and events to avoid any future case of discrimination. Flexible Working From April 2014, any employee with service period of 26 weeks and above can request for flexible working hours. The law has introduced statutory code for allowing flexible working hours. Hospitality industry has been affected by the decision as mostly the organisations operate 24/7 and workers perform their duties in the shifts. Hilton Hotel should rotate the schedule shifts of the employees so they may not feel retardation and it should deny any other unjustified request of flexible working hour by providing a business reason given by the statutory code. Financial Penalties From April 2014, the tribunal has discretion to impose penalty on the employers who lose their case and the tribunal can give monetary value to the non financial claims. Hilton Hotel should make radical changes in grievance management and 360 degree feedback process so that the conflicts are resolved within the organisation to save repute and financial loss. Sickness Absence management The govt. Endeavours to launch sickness absence management by providing free occupational health assistance to the employers and employees. The purpose is to help the sick workers to get back to work after getting right treatment. Hilton Hotel has seen high job turnover like rest of the hospitality industry, hence it should provide work flexibility to avoid stress and keep the employees in sound mental and physical health while this legislation has a positive impact as the govt. Shares responsibility of the employer. Equal Pay Audit From October 2014, govt. Agencies will review and audit the pay structure of all employers and if the employers found guilty of practicing inequality in terms of pay, will be penalised. This step is to assure avoidance of gender based discrimination in any organisation. Hilton Hotel has a vision of equality and diversity at workplace; however the need is to further review the pay structure to align with the legal requirements. Overall, the legislation has no net impact on the hospitality industry as the wage rate is same for all except experience and skills that count for additional wages. 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