The Gravity of HR Management Practices in Small/Medium Hotels

By Philia Tounta General Manager, Apokoros Club Hotel & Villas | March 17, 2019

Human Resource Management (HRM) in a small business can be a vital task leading to success. Specifically in the service sector, service quality depends mostly on the quality of personnel since it is labor intensive and requires face-to-face interaction with customers. For a firm to be successful, effective management of the employees is crucial which depends on a significant extent on human labor.

As Baum (2007) supports; in most service industries it is the human resources that creates the competitive advantage to the organization. It is imperative to point out that the economic performance of every country's economy is strongly linked to the SME sector and SMEs rely seriously on their workforce and on their HRM practices for their success. In the hospitality industry, the quality of customer services and staff responsiveness has a direct impact on the image and reputation of the hotel.

What drives the true competitive of a hotel is the performance of its employees. To stay ahead, it is essential to attract, train, develop, and retain passionate, competent, and accountable employees, and find ways to keep them engaged and motivated to perform their best.

It is a fact that the small and medium enterprises (SMEs) are playing vital role in the economies around the world in irrespective of the countries development stage. SMEs are now considered as the leading source of economic growth. However, as a result of the dynamic environment and globalization, SMEs are struggling for their smooth survival. Internationally there are thousands of small-medium sized hotels that are facing challenges relating to service quality aspects.

The hotel industry is a service industry and hence it strongly relies on human labor; that is, its service quality is directly connected to its staff quality. It is widely known that internationally the Hotel and Catering Industry has a number of personnel related problems and poor employment practices and conditions, especially the smaller hotels. A study in small hotels of Sweden, by the consultant Mrs. Lorna Young, demonstrated the informal nature of HRM, the lack of planning and coordination, lack of R&S policies and the absence of systematic method of T&D. Larger hotels are advantageous in relation to recruitment and development .The higher level of remuneration and benefit they can offer makes them a number one choice for highly competent and skilled staff.

Hotels justify the absence or neglect of HRM functions with the size of the hotel. Smaller hotels with limited financial resources claim to be restricted in developing and implementing HR systems in comparison to larger hotels. Undoubtedly, small and large hotels differ in terms of resources, money, and time. Still, all businesses-whether small or large-must hire employees to run the daily operations. Despite the size, employees are vital assets. A well- established and maintained HR department offers a solid structure which is an organizational advantage that is vital to success.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.