Hospitality Management at Harbour Inn - Case Study Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2013 Discussion and Analysis. Despite continuous operation, Harbour Inn has had a higher level of staff turnover (considered as way above the industry level) recently. This is highlighted in the management style and the manner in which employee expectations are addressed. Complaints raised include coaching problems, lack of incentives and rewards, poor workplace relations, and unfulfilled promises. These problems have a significant impact on the quality service delivery within an organization and the entire industry. Quality service delivery within the hospitality industry reflects a growing focus on the intangibles and the already styled “human factor”. As such therefore, human resources are key players in the execution of the business strategy and the realization of the business goals, objectives, and competitive advantage. Harbour Inn is composed of diverse workforce in terms of gender and nationality. During a high employee turnover rate, like in the case of the Harbour Inn hotel, there is a tremendous loss to the business in terms of skills and costs. Without analysis of the primary causes of such a trend and the subsequent implementation of necessary amendments, the primary factor of the production in the hotel (employees) will still remain a huge challenge to the hotel. Loi, et al. (2006) points out that employee turnover, like in the case of Harbour Inn, presents a significant problem to any organization with reference to talent loss, additional staffing and coaching costs. This is also a reflection of turnovers in the hospitality sector highlighted by the Bureau of Labour Statistics. It indicates that the overall voluntary turnover in the country increased from previous 22 percent to an annual average of 23 percent, thereby making a slight increase. The greatest turnover is dominated by accommodation and the sector of food service. Same sectors as well realized the greatest turnover growth recently while the hospitality industry increased by 5 percent. Such turnover costs raise business expenses by a significant amount of dollars. Such costs include the staffing and coaching costs and the productivity loss. 25 percent of the standard employ salary is frequently quoted by the industry experts as the turnover cost conservative estimate (http://www.nobscot.com/library/retention.cfm). According to Loi, et al. (2006), previous research proposes that the organizational commitment of the employees and their intention to quit the employment are two crucial turnover antecedents. Samad (2006) argued that the most effective method of reducing the actual rate of turnover lies in the identification of factors determining the turnover intentions. Conway & Briner, (2005) also highlight that researchers studying both the conceptual and the empirical turnover models have strongly supported the behavioural intentions (leaving intention) affecting the very behaviour (turnover). Organizational commitment is considered as among the most vital predictors of both the turnover and the intention of quitting, as in Harbour Inn. According to Caykoylu et al. (2007) there is a realization that highly committed employees had little intent of leaving in comparison to the less committed employees. Loi, et al. (2006) also analysed the relationship existing in three attitudinal turnover antecedents; turnover intention, organizational commitment, and job satisfaction. Upon examining their whole model to verify the relationship existent in the three attitudinal antecedents, their discovery was that the organizational commitment considerably predicted the turnover intention while job satisfaction was ineffective to the turnover intention. This finding therefore implies that the committed employees have little intention of abandoning their employers. A study conducted to investigate the relationship of the Organizational commitment (OC) and the job satisfaction to the leaving intention among the government doctors, according to Samad (2006), indicated that organizational commitment had the highest intention to leave variance. Scholars have also widely studied the organizational commitment due to its major impact on the leaving intention among the employees, which consequently reduces the turnover, according to Samad (2006). This vital effect of the organizational commitment on the turnover has provoked increased attention on the possible organizational commitment antecedents. According to Cullinane & Dundon (2006), Human resource experts have investigated organizational commitment in light of the social exchange theory. Hall (2003) describes Social exchange as a process entailing cooperation between any given parties for their mutual benefit. There has been a significant increase in the adoption of social exchange and a wide endorsement among the researchers as the theoretical basis of understanding the employee-employer relationship (CoyleShapiro & Conway, 2005). According to Hall (2003), social exchanges entail unspecified obligations, whereby one individual offers the other a favour in anticipation of some expected future return which is neither specified nor time-bound; hence no clarity in the specifications of such expected favours. Social exchange therefore has its basis on the undeclared commitment and trust. Social exchange occasionally engages the act of reciprocity. Hall (2003) refers to reciprocity as a norm obligating the benefit recipient to reimburse the donor through some way (Rewards - Costs for A = Rewards - Costs for B). As such, employee-employer relationship may be perceived as a form of social exchange. Chang, ( 2005) states that the employer or manager may recognize an employee’s contribution through offering the employee various benefits and opportunities, and in return for such favours the employee may be compelled by feelings to reciprocate hence consequently feeling more endowed to the business thereby becoming more committed to the organization (Total Costs + Total Rewards = Relational Profit). Loi, et al. (2006) also applied a social exchange framework in arguing that the employees with a perception that there is a high support from the organization have tendencies of being obligated and consequently being committed (Behaviour (Profits) = Rewards from interaction - Costs due to Interaction). In Harbour Inn, however, the frustrated David is quick to point out that there are no incentives and rewards in place to improve employee performance. The HRM practices in Harbour in Therefore fall short of the standards hence responsible for lack of organizational commitment. HRM practices have been considered as having a greater influence in the increase of organizational commitment among the employees, according to Edgar et al. (2005). Founded on the social exchange theory, Coyle-Shapiro & Conway (2005) proposed that the perception of employees on the HRM practices illustrates reciprocity and organizational commitment level to employees when employees perceive the organization as caring for their wellbeing and acknowledges their hard work and commitment. According to the organizational support theory, the employees form common beliefs on the level at which the given organization acknowledges their contributions while also caring about their own wellbeing, as already evidenced in David’s complaints about Harbour Inn(Edgar et al., 2005). Founded on the reciprocity norm, such perceptions on organization may enable an organization realize its objectives or lead to organizational collapse. While targeting the reduction of labour cost, employers seem to reduce or ignore some benefit packages, despite the reality that several employees are dependent on the same benefits for satisfaction of their basic and security needs. This transpires into a conflict primarily between the expectations of workers and the employer practices translating into the violation of the employee’s psychological contract, according to Conway & Briner, (2005). This is actually portrayed in Harbour Inn where, for instance, Susan was promised a parking space and an increase in working hours which was never fulfilled. She resents the walking distance to and from the car day and night without security and can not make enough income to meet her requirements. Her training is also progressing at a lower pace. She is a frustrated lady hence her psychological contract has been violated. The relationship between organizational commitment and diversity has also commanded tremendous attention in the modern organizations, just like in Harbour Inn. Diversity to some implies equal opportunity to people of selected characteristics as ethnic heritage, age, or gender. To others, this implies legal concerns as equal opportunities of employment. This has a huge impact on the organizational commitment and the perceived commitment. Diversity is also evident in Harbour Inn, where employees aged between 18 years to their 50s belong to nationalities ranging from Australians, Vietnamese, Indians to Chinese, with Australians dominating the managerial positions. When managed well then diversity comes along with innovativeness. However, Powell (2011) states that diversity may have serious impact on business when there is no proper management and clear communication. An instance is in the Harbour Inn, where youths (18-25) are working alongside elders (40-50s). It is already indicated by David that there is no communication between the managers (40s-50s) and them. Noteworthy is the fact that some managers find difficulty in interacting with other different generations since doing so may not only challenge their individual beliefs but also values. In addition, this may compel them to accept the change and the conflict impacts, and give an impetus for communication modification in them. Such diversity may have catapulted the hotel’s turnover due to perceived and organizational commitment, and seeking of growth opportunities among the younger generation. Work-related ethnic majority and minority perspective among the employees is also highlighted by David who states that most managers are Australians. Recommendations Many problems in Harbour Inn originate from poor management. As such, enhancing the performance of managers could turn around the ugly situation. According to Hayes et al. (2008), the key problem relates to shortage of specific skills in technical and managerial areas leading to lack of professionalism. This is often attributed to the reluctance of given businesses, as Harbour Inn, to invest in developing the skill of their managers and other key personnel. Training managers will result in transformation from the autocratic style to the consultative approach, in addition to gaining quality management skills. Just as the managers, other employees like Susan should be trained to be able to provide quality service. The problem due to the diversity in the business can be effectively handled by initially involving employees considering it as positive. However, anxious or fearful employees need time as their attitude change will not be easy. However, a lifelong learning, ongoing self-improvement, and a personal commitment may be effective in changing the attitude. Ethnic majority and minority perspectives among the employees should be addressed through proper balancing (Powell, 2011). In solving the employee-employer conflict, Budhwar et al. (2005) highlights that decisions resulting in the fulfilment of the psychological contract should be reached. This could involve lowering employee benefit costs without terminating the benefits. This could involve trading off the unused benefits for the pay purposes, emphasizing on the welfare programs and developing measures on preventive health care (Total Costs + Total Rewards = Relational Profit). 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Powell, G., 2011, Managing a Diverse Workforce, SAGE, New York. Samad, S., 2006, Predicting turnover intentions: The case of Malaysian government Doctors, Journal of American Academy of Business, Cambridge, vol 8, no 2, pp 113-119. Read More