The Human Resource Challenges And Issues Faced By The Hotel Sector Worldwide In

Managing The Acute Shortage Of Labour Due To Explosive Growth Of The Hotel Industry
And High Attrition Rate Of Workforce.

ACKNOWLEDGEMENT

I would like to take this opportunity to thank Ms Vaishali Shinde faculty of Human
Resource Management, librarians Mrs. Rupa Mathew, Mr Gajanan, Mrs. Bhagwati
Bhainsara, and Ms. Monali Sarode for helping us in finding appropriate books for
compiling the above document. This is an assignment, which was undertaken to enable us
to gain knowledge about the human resource management.
SYNOPSIS

It is party time for hotel companies in India and various countries around the world !
Domestic companies are aggressively adding rooms and setting up green-field projects.
Foreign hotel companies are making full use of the relaxed norms for foreign direct
investment in India. In the next five years, we should expect to see around 40 different
hotel brands dotting the Indian landscape. Four years ago, hotel managers talked of
raising occupancy and average rate as their biggest challenge. Matters like Human
Resources were low on their list of priorities. Today, however, hotels are vying with each
other to capture the best talent. Most of the time, it simply a matter of numbers: as more
rooms and more properties are added, a larger number of people are needed – to lead, to
manage and to execute the various functions involved in operating a hotel. Hotel
managers are acknowledging the short supply of quality manpower to be the biggest
obstacle they face. Trained personnel are being actively recruited not only by competing
hotel companies but also by sunrise sectors like retail, BPO and aviation. The ‘balance of
power’ is steadily shifting from employers to employees. The addition of even one new
hotel in a city seriously impacts the HR equilibrium of existing hotels with similar market
orientation. If the present situation is disturbing, the not-so-distant future is frightening!
This article aims to assess the human resource requirement for the hospitality industry
and the steps Human Resource should take to survive from the acute labor shortage.
TABLE OF CONTENT
|NO |INDEX |PAGE No |
|A |DECLARATION |1 |
|B |ACKNOWLEDGEMENT |2 |
|C |SYNOPSIS |3 |
|D |TABLE OF CONTENT |4 |
|1 |INTRODUCTION |6 |
|2 |HUMAN RESOURCE MANAGEMENT |7
|
|2.1 |IMPORTANCE OF HUMAN RESOURCE MANAGEMENT IN ORGANIZATION..
|8 |
|2.1.1 |AFFECT OF EXTERNAL INFLUENCES ON HRM……………………………………
|9 |
|2.1.2 |THE HRM STRATEGIC ENVIRONMENT……………………………………………...
|10 |
|2.1.3 |GOVERNMENT LEGISLATION…………………………………………………………
|10 |
|2.1.4 |LABOUR UNIONS………………………………………………………………………….
|11 |
|2.1.5 |MANAGEMENT THOUGHT……………………………………………………………...
|11 |
|2.2 |MEANING OF Human Resource Management……………………………….
|11 |
|2.3 |need for human resource management…………………………………...
|12 |
|2.4 |human resource objectives…………………………………………………….
|13 |
|2.5 |downsizing and rightsizing……………………………………………………..
|14 |
|3 |HUMAN RESOURCE MANAGEMENT PROCESS
|15 |
|3.1 |STAFFING…………………………………………………………………………………..
|16 |
|3.1.1 |RECRUITING……………………………………………………………………………….
|17 |
|3.1.2 |PERFECTING INTERVIEW PROCESS…………………………………………………
|19 |
|3.1.3 |EVALUATING CANDIDATES……………………………………………………………
|20 |
|3.2 |TRAINING AND DEVELOPMENT………………………………………………………
|20 |
|3.2.1 |VARIOUS TRAINING METHOS…………………………………………………………
|22 |
|3.2.2 |DETERMINING TRAINING NEEDS…………………………………………………….
|24 |
|3.2.3 |ORIENTATION……………………………………………………………………………..
|25 |
|3.3 |MOTIVATION………………………………………………………………………………
|25 |
|3.3.1 |MASLOW’S HIERACHY OF NEED THEORY…………………………………………
|25 |
|3.3.2 |HERZBERGS THEORY OF MOTIVATION…………………………………………….
|27 |
|3.3.3 |APPRAISALS………………………………………………………………………………..
|28 |
|3.3.4 |REWARDS AND BENEFITS………………………………………………………………
|29 |
|3.3.5 |COMPENSATION…………………………………………………………………………..
|30 |
|3.3.6 |PAY STRUCTURE………………………………………………………………………….
|30 |
|3.3.7 |INCENTIVES………………………………………………………………………………..
|31 |
|3.3.8 |EMPLOYEE BENEFITS……………………………………………………………………
|31 |
|3.4 |MAINTENANCE…………………………………………………………………………….
|32 |

|4 |GLOBAL HUMAN RESOURCE PRACTICES

|34 |
|4.1 |MAHAGING WORKPLACE DIVERSITY………………………………………………
|34 |
|4.2 |TRAINING AND DEVELOPMENT………………………………………………………
|35 |
|4.3 |PERFORMANCE AND PRODUCTIVITY……………………………………………….
|35 |
|4.4 |EMPLOYEE SATISFACTION TRAKING SYSTEM…………………………………...
|35 |
|4.5 |REWARD PROGRAMS……………………………………………………………………
|36 |
|4.6 |STRATEGIC DEVELOPMENT OF HUMAN CAPITAL RESOURCES……………
|36 |
|4.7 |REDUCING EMPLYEE TURNOVER……………………………………………………
|37 |
|4.8 |VOCATIONALLY EDUCATED STAFF…………………………………………………
|37 |
|4.9 |LEGAL CONSTRAINS AFFECTING HRM……………………………………………..
|38 |
|5 |BALANCE SCORECARD |41
|
|5.1 |ADVANTAGE OF BALANCE SCORECARD…………………………………………...
|44 |
|5.2 |SHORTCOMING OF THE BALANCE SCORECARD…………………………………
|45 |
|5.3 |BALANCE SCORECARD: HOTEL PRESPECTIVE…………………………………...
|45 |
|5.4 |LIMITATIONS ON APPLICATION OF BALANCE SCORECARD………………….
|46 |
|6 |PERFORMANCE MANAGEMENTR SYSTEM: AN OVERVIEW
|47 |
|7 |INDIAN HOTEL SCENARIO |52
|
|8 |CONCLUSION |54 |
|9 |BIBLIOGRAPHY |57 |
1. INTRODUCTION

The most important resource of an organization is its human resources – the people who
work in the organization. People are vital for the effective operation of a company. To meet
the challenges and competitive atmosphere of today’s business environment, managers
must recognize the potential of human resources, and then acquire, develop and retain
these resources. This forms the basis of human resource management (HRM). HRM is the
management of various activities that are designed to enhance the effectiveness of the
manpower in an organization in the achievement of organizational goals. Acquiring skilled,
talented, and motivated employees is an important part of HRM.

Human resource management forms a crucial function in organizations of all sizes. Larger
firms usually have a separate HRM department. Small organizations, however, cannot
always afford to have a separate HRM department that can continually follow the
performance of individuals in the organization and review their accomplishment of goals.
Instead, in such organizations, each manager is responsible for utilizing the skills and
talents of the employees under him, effectively. Traditionally, HRM departments had a
relatively small role to play in the organization’s overall mission and plans. They
developed staffing plans, handled complaints, determined benefits and compensation, and
conducted performance appraisal programs.

These activities were, and still are, very important in managing an organization. However,
today HRM departments are playing a more strategic role in charting the course of their
firms.

Changes in the environment, such as increasing costs, changing demographics and

limited skilled labor supply, rapid technological changes and the need for new skills, have
created a strategic need for HRM expertise. These changes have led to the
acknowledgment that human resources need careful attention and are vital to the success
of any business.

We will first discuss HR planning. The other steps in the HRM process – staffing, training
and development, performance appraisal, and compensation will also be discussed. The
later part of the chapter will discuss the two important elements of staffing – recruitment
and selection. The chapter concludes with a description of the socialization process of
new employees.

2. Human Resource Management

According to Metter E., 1995, “A Human Resource is a single person or employee within
your organization”. Human resources are the most important part of an organization and
without the presence of Human resources; a company or an organization would not be
able to move.

According to Dessler G., 1997, Human Resource Management, “the policies and practices
one needs to carry out the people or human resource aspects of a management position,
including recruiting, screening, training, rewarding and appraising”. Human resource
management refers to the practices and the policies you need to carry out the people or
personnel aspects of your management job. These include

• Conducting the job analysis (determining the nature of each employee’s job)
• Planning labor needs and recruiting job candidates
• Selecting job candidates
• Orienting and training new employees
• Managing Wages and Salaries (how to compensate employees)
• Providing incentives and benefits
• Appraising performance
• Communicating (Interviewing, counselling, disciplining)
• Training and developing
• Building employee commitment
2.1 IMPORTANCE OF HUMAN RESOURCE MANAGEMENT IN ORGANIZATION:

Prior to 1960’s Human Resource Management departments were called the health and
happiness crews. Their earlier work was planning picnics, allotting vacations, enrolling
workers for health care coverage, ad planning retirement parties. That has changed during
the past three decades. Federal and state laws have placed on employers many new
requirements concerning hiring and employment practices. Jobs have also changed. They
have become more technical and require employees with greater skills. There are no
longer job boundaries which mean in the past a worker performed job in a specific
department, working with people who did similar tasks, however now a days workers find
themselves working with people all across the organization. Global competition has
increased the importance of improving workforce productivity and looking globally for the
best qualified workers. Thus organizations now need Human Resource Management
specialists trained in psychology, sociology, organization and work design and law.

Federal legislation requires organizations to hire the best qualified candidates irrespective
of sex, caste, religion or national origin – and someone must ensure that this is done. The
training of employees is very important and again someone must oversee this and
continuously work towards the personnel development of the employees someone must
ensure that the workers maintain their productive affiliation with the organization.
According to Boella M J, 1992, The work environment must be structured to encourage
worker retention and attracting new applicants. All this while, someone’s that we refer to
are the Human Resource professionals.

Today’s Human Resource professionals have got an elevation in their jobs and the
importance of Human Resource professionals has increased with time. Although the term
personnel and human resource management are frequently used interchangeably, the two
have quite different meanings. The Human Resource head, once as ingle individual
heading the personnel function, may be a vice president sitting on executive boards ad
participating in the development of the overall organizational strategy.

2.1.1 Affect of external influences on HRM

The four HRM activities are highly affected by what occurs outside the organization. It is
important to recognize these environmental influences, because any activity undertaken in
each of the HRM processes is directly, or indirectly, affected by these external elements.

[pic]
External Influences of HRM

2.1.2 THE HRM STRATEGIC ENVIRONMENT

It has been observed that the only constant during the life time is change. Therefore one
must be prepared for the events that have a significant effect on the lives. HRM is no
different. Many events help to shape this field. Some of the obvious include globalization,
technology, work force diversity, changing skill requirements, continuous improvement,
work process engineering, decentralized work sites, teams, employee involvement and
ethics.

2.1.3 GOVERNMENT LEGISLATION

There are certain laws which are proposed by the government supporting the employer
and employee. For example, today employees who want to take several weeks of unpaid
leave and return to jobs without any loss of seniority have an easier time making the
request. Although some employers may think such an application negatively affects the
work flow, government legislations have given employees the right to take this leave.
Laws supporting this and other employer actions are important to HRM process.

2.1.4 LABOUR UNIONS

Labor unions were founded and exist today to assist workers in dealing with the
management of the organization. They act on behalf of their members by negotiating
contracts with management. They constrain management from making unilateral
decisions

2.1.5 MANAGEMENT THOUGHT

The last area of external influence is current management thought. Since the inception of
the first personnel departments, management practices have played a major role in
promoting today’s HRM operations. Management principles, such as those from scientific
management or based on the Hawthorne studies influence the practice of HRM.
More recently, continuous improvement programs have had a significant influence on
HRM activities.

2.2 MEANING OF Human Resource Management

Human Resource Management is a process of bringing people ad organizations together

so that the goals of each are met. It is that part of management process which is
concerned with the management of human resources in an organization. It tries to secure
the best from people by wining their wholehearted cooperation. According to Invancevich
and Glueck, Human Resource Management has the following features:
✓ Human Resource Management is pervasive in nature as it permeates all levels of an
organization.
✓ Human Resource Management is action oriented as it focuses attention on action
rather that on records.
 ✓ Human Resource Management is individual oriented as it helps in the personal
development of individuals.
✓ Human Resource Management is people oriented as it all about people at work as
individuals or groups.
✓ Human Resource Management is development oriented as it intends to develop the
full potential of employees.
✓ Human Resource Management tries to build and maintain cordial relations between
people at various levels.
✓ Human Resource Management department exist to assist and advise the line to do
work properly.
✓ Human Resource Management is a continuous function.

2.3 Need for Human Resource Practices

Statistics have proven that the service industry is responsible for over three-fourths of all
employment and is expected to account for almost all the net job growth during the next
decade. It is predicted that as this industry grows in size and in economic importance,
companies need to rediscover the value of those who deliver service in their organization.
These would only be possible if the companies find creative approaches to finding,
training and retaining the best customer contact employees. While, unfortunately, most
companies still view them as mindless robots, a few have managed to realize their
importance and have made headway in encouraging them through conscientious
management programmes in the façade of the human resources division in an
organization such as in hotels and restaurants.

A large chunk of the GDP is provided by this section of people, therefore making it fair to
say that the prosperity of the service oriented companies, as well as the economy as a
whole, depends to a growing extent on the workers who provide such service. Yet while
this customer contact employees, front line service providers constitute of a large section
of development in India, they sometimes remain less appreciated.

According to Kuemmler .K et al, 1996, This being the scenario, companies require to work
harder to please their value driven customers, more emphasis is being placed on the
process of finding, training and keeping those employees who can provide extraordinary
service. This does not necessarily mean employers are looking for workers with advanced
levels of education, technical expertise, or experience. It just means that as expectations
are increasing and organizational hierarchies are flattening, people are needed who are
imaginative yet compassionate, ambitious yet competent, and flexible all at the same time.

The company’s priority goal should however be to find and keep these people. Companies
are encouraged to hire friendly people, treat them kindly, provide them with the finest
technology, and encourage emotional bonding between the company and employee. In
addition, to survive this period of rapid evolution, companies must grant these employees
more authority, provide them with more training, and link at least part of their pay to
customer satisfaction. In natural succession then, both customers and profits would be
expected to show.

2.4 Human Resource Objectives

According to Torrington Hall and Taylor, 2002, Human resource management is a series of
objectives which first: enables working people and the organization which uses their skills
to agree about the objectives and their nature of the working relationship and, secondly,
ensures that the agreement is fulfilled.

In training and development, the human resource department performs as in house

trainers, particularly in management development. Increasingly the term ‘consultant’ is
used instead of officer or manager to describe the training specialist’s role, indicating a
shift towards a situation wherein the line managers determine the training that they want
rather then the training section providing a standardized portfolio of courses.

2.5 DOWNSIZING and Rightsizing

Once upon a time the rule was very simple; you hire in the good times and you let go in
the bad ones, but no longer hold true. Organisations are laying off thousands of
employees from their overall staff. This trend of downsizing is due to the attempt being
made by organisations to become more flexible, creating flatter hierarchy and redesigning
work structure to increase work efficiency, thus requiring fewer employees. Downsizing as
become a strategy being implemented by organisations to balance staff to meet the
changing needs. But on the other hand is the fact that organisations are increasing staff in
order to add value to the organisation. Known as ‘rightsizing’, this term bridges staffing to
organisational aims and promotes the use of outside firms to provide the necessary in
order to become more flexible and responsive to the continually changing environment.
3. HUMAN RESOURCE PROCESS

Various functions performed by the human resource management are the following:
❖ Staffing
❖ Training and Development
❖ Motivation
❖ Maintenance

3.1 STAFFING

According Kuemmler .K et. al, 1996, Finding an employee who can devote himself for the
success of the company along with his growth is highly crucial in staffing of an
organization. To find a front-line worker who will not only stay with the company, but will
provide the services in such a way as to represent the quality and character of the
company is very important for the success of the company.

The cost that goes into hiring and training employees: For each mis-hire, costs of up to
30-50 per cent of the employee’s annual salary are accumulated in lost productivity and
expenses associated with finding a replacement.

As for finding a replacement, costs can accumulate in many ways in just filling the lowest-
wage positions. First, there are the expenses involved in advertising. Then, as the
interviewing process begins (again), staff time is taken away from business and used in
interviewing applicants. Secretarial help is needed also in completing benefit forms.
Finally, once the new applicant is hired, training is often necessary for even the most
rudimentary job. On the other hand, other problems may transpire if the wrong person is
hired and does not leave. In such a case the cost may be even higher. He/she may make
costly mistakes, damage the morale of other employees, and may even ruin customer
relations.

According to Kuemmler .K et. al, 1996, The answer to this staffing question is that
companies require finding a better way in choosing their employees by improving their
recruiting process. Business owners are starting to understand the importance of
thoroughly screening potential employees and of matching those employees to the
specific job requirements. In particular, much more attention is being paid to the
personality and psychological content of potential employees. This exploration deep into
the make-up of potential employees demonstrates the emphasis companies are placing on
the emotional content of those who occupy the front-line jobs. Companies such as Disney,
Goodyear, and Service Master, for example, use this “life themes” approach to evaluate
prospective employees which, simply put, involves identifying their passions and then
fitting them to the appropriate position.

A recent article suggests that due to staffing issues, some of the restaurants in parts of
Europe and America have actually found strategic solutions because of the same. Casual-
dining companies, over the past five years of increasingly intense competition for talented
workers, have instituted new programs to find them, expanded benefits to keep them and
provided enriched training to motivate them, human resources executives in the segment
say. According to Ruggless. R 2000, the market is divided into three segments and the
people are recruited based on the type of people who come to restaurants, old people
serve the old, the young serve the young and the medium aged serve the medium aged
creating a knowledge based understanding. Hence increasing the available labor market,
which was empty than before.

Once an organization identifies its human resource needs through employment planning,
it can begin the process of recruiting potential candidates for actual or anticipated
organizational vacancies.

3.1.1 Recruiting

Trying to locate those employees who provide the “right fit” is one task managers must
face in recruiting. Recruiting brings together those with jobs to fill and those seeking jobs.

A good place to look for a recruit is within the organization. This is because; the people
within organizations recruit themselves much more easily, as opposed to those acquired
through an outside agency. Some reasons why recruiting is done more so often internally:
It builds good public relations, morale building, encouragement of ambitious employees
and members of protected groups, availability of information on existing employee
performance, internal candidates’ knowledge of the organization, it saves cost, prepares
to build mid- and top-level managers who can further work the company without
additional training costs. Cast members at Disney, for example, stay on as numerous
opportunities for advancement exist. In fact, two thirds of Disney’s salaried employees,
such as marketers, designers, and managers, are acquired from within the company.

Another possibility, should no one in the company fit the opening properly, is through
referrals provided by other employees. Hiring through the referral process not only saves
some of the administrative costs, but those employees are also more likely to stay with the
company longer than those obtained through job agencies or advertisements.

The advantages in this case include boosting employee’s motivation to make a good
recommendation, the availability of accurate job information for the recruit and more so
employee referrals tend to be more acceptable applicants, to be more likely to accept an
offer and to have a higher survival rate.

Constraints on recruiting efforts include the organization’s image; job attractiveness may
bring about many sects of people, government influence in procedural working such as
discrimination laws and the like and largely the recruiting costs incurred.

In any case, whatever means is taken to get in contact with potential employees, in
choosing among candidates preference should be given to those who have approached
the organization themselves. Given that they made the first move, there is a greater
chance they will stay.

The management responsibility in recognizing the employee’s needs is a key region where
the company can reduce turnover. Practices like feedback between employees and
management, empowerment of employees in solving problems, two way communication
systems, team building, flatter organization structure, employee satisfaction surveys,
effort to improve the work environment, salary benefits, and frequent recreational facilities
when implemented would strive to reduce the employee turnover rate.

The attitude of In-patriates versus Expatriates

Expatriates are brought from primary organizations to control the working of an overseas
operation which deals with the parent job. Since, this employee comes from a different
culture trying to impart more of his characteristic to the destination where he is employed
it gives him an edge over an in-patriates who might apply for the same position. However
its consequences also need to be matched. Operating across cultures effectively will be a
critical success factor for managers in the global marketplace which could prove to be a
failure. With respect to an expatriation strategy, these individuals are typically used for a
single assignment and ‘have earned their stripes’. Therefore, each time there is an
overseas assignment there is a great deal of uncertainty regarding the turnover behaviour
the monitoring success of the expatriate. Motivation needs can be applied to friction in
this area to sort out operational issues.

Some of the recruiting agencies that are prevalent in India are Vira International, JCG
Associates, Phoenix HRD, Allied Boston Consultants India Pvt Ltd and Mafoi India.

3.1.2 Perfecting the interview process

The interviewing process itself is a task managers must perfect in order to hire the correct
person. This first involves being aware of the common failures of untrained interviewers,
which are: not fully analyzing the requirements of the position; failing to ask the right
questions to determine whether or not they are suitable for the position (which includes a
discussion of their strengths and weaknesses); and relying too much on a “gut” feeling
rather than an objective evaluation. With this in mind, the interviewer can now prepare for
and hold interviews. Before the date and time of the interview the manager should make a
list of the duties of the position. This does not mean an in-depth job description, but rather
a concise and concrete narrative of what the position entails. Next, as the interview itself
gets under way, the manager should avoid cantering the discussion on the applicant’s
résumé. Instead, the interview should be structured around the job to be filled. Finally, the
manager must be ready to listen. The skilled interviewer learns to listen at least 80 per
cent of the time and talk only the remaining 20 per cent. Obviously, each organization, with
different people, different cultures, and different needs, will have, in addition to the basics
just mentioned, a particular set of criteria for judging applicants and/or a unique way of
going about the whole interviewing process.

3.1.3 Evaluating candidates

In evaluating the applicants, companies want to know what each of their levels of
motivation is. In particular they look for accomplishments. This is often a difficult task as
the interviewer must be able to determine to what extent the task was truly accomplished
by the individual and what part of the story might be a mere exaggeration. As companies
want more than just job participation from their workers, they must be able to ask
questions strategically which, when answered, will pinpoint exactly what the applicant’s
involvement was in the accomplishment. A way of aiding in this is to check the references
named on applicants’ résumés. While this “networking” can be helpful, it must, however,
be taken for what it is and not taken necessarily too seriously. With a list of candidates
now in hand, companies can go even one step further in determining their suitability with
the company by submitting the applicants to some sort of testing. IQ tests, for example,
may well predict a worker’s future performance. Lie detector tests can be used to verify
whether applicants have ever stolen. The expense involved must also prove worth the
trouble.
3.2 TRAINING AND DEVELOPMENT

Training is an activity which helps in learning a lot of experience and in that it seeks a
relatively permanent change in an individual that will improve an individual’s performance
of a particular job which he or she is performing. Training involves a lot changes to be
bought in an individual, any individual who will be recruited in our company must have
worked earlier in a different company and must have adopted the previous company’s
skills, so they need to be changed according to our own company, it also includes an
overall change in terms of his knowledge according to the new work which will be
performed by him or her, and also a vast change in terms of his or her attitude or
behaviour. They will also be trained regarding how to deal with different customers and
also the co – workers and supervisors.

According to De Cenzo. D A, 2005, On the other hand, development is more future oriented
by design, and also is more concerned with education than employee training. The word
education, should not be misinterpreted in terms of an individuals qualifications, in fact it
is more about the activities which will be installed for an employee development which will
attempt to in still sound reasoning processes to enhance one’s ability to understand and
interpret knowledge rather than imparting a body of facts or teaching a specific set of
motor skills. Development, therefore, focuses more on the employee’s personal growth.
Successful employees prepared for positions of greater responsibility, have analytical,
human, conceptual and specialized skills. The employees have better thinking and
understanding. More over training is something, which cannot overcome an individual’s
inability to understand cause and effect relations, to synthesis from experience, to
visualize relationships, or to think logically. As a result, it can be suggested that an
employee development be predominantly a more of an education purpose rather than a
training process.

There is a great need of training and development, as it is a vital and necessary activity in
all the organizations. It plays a major role in determining the effectiveness and efficiency
of the establishment. If training and development is practiced in an organization it reduces
the learning time for an individual. The learning time can be reduced by having qualified
instructors; they can carefully control the learning situations. Training and development
also helps in improving the overall performance of an establishment. It is something which
is not only applicable for the new employees but also helps the experienced people as
well, as it helps in increasing their level of performance and thus, finally an improved
performance of an establishment. Main motive of a training and development activity is to
bring all the employees towards the common goals of an enterprise, which also helps in
moulding employees attitudes to achieve support for company activities and then to
obtain better corporation and also greater loyalty.
3.2.1 Various training methods

The most popular training methods used by various organizations are:

➢ On the job Training
➢ Off the job training

On the job training includes, job rotation, apprenticeship, committee assignments, etc.

Off the job includes vestibule training, role playing, lecture methods, conferences,
programmed instructions etc.

All the training programs whether they are on the job or off the job Training they all are
very helpful in making an individual work more effectively and efficiently, and thus making
an organization more profitable.

It also aid in solving various operational problems. If the activity of training and
development is performed for both the supervisory and hourly aid employees can helps to
reduce turnover, absenteeism, accidents and also grievance rates. Training and
development department is the only department which takes an initiative in solving low
morale, poor customer service, excessive waste and scrap loss, and also poor work
methods as, solving all these issues are one of the major responsibilities for them to
perform better and better.

Last but not the least, training and development is something which will help in gaining
benefits for the employees themselves, because of this department the employees tend to
acquire new knowledge and job skills as well. As they can perform better with more and
more of useful skills, so, the values of an individual employer increases and thereby
increase in their job security as well. Further, qualifying an individual employee for a
promotion is giving him more responsible jobs. (CBSE, NCERT)

There is a lot of difference between training and development but still the two words are
used together. Training is something which is referred to as teaching skills and behaviour.
It is usually reserved for people who have to be brought up to performing level in some
special skills. The skills are almost always behavioural as distinct from conceptual or
intellectual. Development, in contrast, is considered to be more general than training and
more oriented to individual needs in addition to organizational needs. Thus, it is more
often aimed towards management people. Basically, the intent of development is to
provide knowledge and understanding that will enable people to carry out non – technical
organizational functions more effectively, such as problem – solving, decision making and
relation to people.

Author, had an experience of working in one of the Hotels, in New Delhi where she noticed
that the utility workers being not very educated and don’t know much about how to handle
things in an effective manner, so they were given a training for fire Fighting so that they
can handle the situation when ever necessary, and after that they were also taken to the
fire exit area, and were given a practice for the same, the whole process of training was
organized by the human resource department, training is nothing just a learning
experience which is designed to achieve a relatively permanent change in an individual
that will improve the ability of an individual to work. There is a lot of need of training in
today’s world because the time is changing so fast the customers expect that where ever
they go they should have the best experience.

3.2.2 DETERMIMNING TRAINING NEEDS

|Is there a need of Training |

| |
|What deficiencies, if any do incumbents have |
|in the skills, knowledge, or abilities, |
|required exhibiting the necessary job |
|behaviour? |
| |
| |
|What are the Organization’s Goals? |

| |
| |
|What tasks must be completed to achieve its |
|goals? |

| |
|What behaviours are necessary for each job |
|incumbent to complete his or her arranged |
|tasks? |

Thus, training is meant for operatives, and development is meant for the managers.

3.2.3 Orientation

An orientation is basically, all about introducing every selected employee to his fellow
employees. With the process of orientation is becomes easy for the newly recruited
employee to understand the various rules and regulations of a particular organization. An
employee is assisted in making personal adjustments as essential for his effective
performance as a member of the work team. This also involves becoming acquainted with
associates and the duties of the job, as well as being oriented to company’s policies and
goals.

3.3 MOTIVATION

Motivation refers to the entire class of drive, desires, needs, wishes and similar forces.
Motivation is to inspire people to work, individually or in groups such as to produce the
best of results. It is the will to act by exerting high level of efforts towards achieving
organizational goals, conditioned by smart and efficient working and the ability to satisfy
some individual needs. It comprises the abilities to communicate, to set an example, to
challenge, to encourage, obtaining feedback, to involve, to delegate, to develop and train,
to inform, to brief and to provide a just reward. There are various theories supporting
motivation. The author would like to explain two of the theories in detail and motivation is
one of the most important part of the

3.3.1 MASLOW’S HIERACHY OF NEED THEORY

One of the most mentioned theories of motivation is the hierarchy of needs theory put
forth by psychologist Abhram Maslow. Maslow saw human needs in the form of hierarchy,
ascending from the lowest to the highest, and he can concluded that when one set of need
is satisfied, this kind of need says to be a motivator. The hierarchic theory is often
represented as a pyramid, with the larger, lower levels representing the lower needs, and
the upper point representing the need for self actualization. Each level of pyramid is
dependant on the previous level. For example a person does not feel the second need until
the demands of the first have been satisfied.

•
• Physiological needs – these are the basic needs for sustaining human life itself, such
as food, water, warmth, shelter and sleep. Maslow took the position that until these needs
are satisfied to the degree necessary to maintain life, other needs will not motivate people.
• Security and Safety needs – These are needs to be free of physical danger and of fear
of loosing the job, property, food and shelter.
• Affiliation, or acceptance needs – Since people are social beings, the need to belong,
to be accepted by others.
• Esteem needs – According to Maslow, once people begin to satisfy the needs to
belong, they tend to want to be held in esteem both by themselves and by others. This
kind of need produces such satisfactions as par, prestige, status and self confidence.
• Need for self-actualization – Maslow regards this as a highest need in his hierarchy. It
is the desire to become what one is capable of becoming to maximize ones potential and
to accomplish something.

3.3.2 HERZBERGS THEORY OF MOTIVATION

Frederick Herzberg developed a second historically significant theory of motivation

referred as two factor theory; it was first introduced in the late 1950’s and gained
popularity only later. Herzberg referred two groups of factors that affect motivation:
[pic]
1. Hygiene Factors – Those factors must be addressed to avoid dissatisfaction.
2. Motivating Factors – Those factors which motivate an individual.

The initial framework for the two factor theory was derived from interviews with two
hundred accountants and engineers in the Pittsburgh area. Using what is known as the
critical incident method the accountants and the engineers were asked to provide
interviewers with examples of times when they felt exceptionally good or bad about their
jobs. The examples were analyzed and showed that the factors producing job satisfaction
was entirely separate from those producing job dissatisfaction. Thai is, although an
unpleasant work environment might be a reason given from job dissatisfaction, a pleasant
work environment might not be sighted as a reason for job satisfaction. This suggested
that job satisfaction and job dissatisfaction are not simple opposites. Hence, it was
concluded that a two factor theory was needed to explain employee motivation.
Traditionally managers had viewed job satisfaction and job dissatisfaction as opposite
ends of the same continuum. In contrast, Herzberg’s findings suggested that the opposite
of satisfaction is not dissatisfaction, but simply no satisfaction.

These two theories along with various other theories have proven how employees get
motivated.

3.3.3 APPRAISALS

Appraisals meaning getting a feedback for the work you have done in the organization.
They say money is not the only way to motivate your employees. Along with money there
are several other factors which lead to motivation for the employees. For every employee
it’s different for example for someone it might be saying a word of praise to an individual
whereas for others it might be giving a bonus or promotion. Appraisal is one of the ways
to motivate employees.

There is an appraisal process that is followed in the organization. It is a step by step

process that is followed. First and foremost the standards of the organization are set
along with the employees. Once the standards are set then along with employees the
mutual goals are set. After this is done the performance of the employee is measured in
different terms. Then comes the comparison of the set standards with the measured
performance. Then the appraisal is marked and discussed out with the employee. And the
last step if necessary some corrective actions are taken.

There are different kinds of appraisal methods as well:-

• Evaluating Absolute Standards.
• Critical Incident Appraisal.
• Checklist Appraisal Behaviourally Anchored Rating Scales (BARS) ad may more.
• 360-degree Appraisals – These are one of the most important appraisal methods used
in the organizations to motivate employees. In this Performance evaluation is done I which
peers, supervisors, employees, customers and the like evaluate the individual.

3.3.4 REWARDS AND BENEFITS

What’s in for me? That’s the question every employee asks when he joins a new
organization. Our knowledge of motivation tells us as to what the employees need to
satisfy themselves. The most obvious reward that employees receive from their work is
pay. However it might be other things such as promotions, smile, and acceptance and so
on. Amongst the several ways to classify rewards the most basic classification is intrinsic
and extrinsic rewards. Intrinsic rewards are satisfaction derived from the job itself, such
as pride in one’s work, a feeling of accomplishment, or being a part of the team ad
extrinsic rewards must be benefits provide by the employer, usually money, promotion or
benefits. The author in short through a diagram would like to explain various rewards.
There are financial rewards like commissions, compensations, incentives, cost of living
etc, there are no financial rewards like lunch hours, business cards, own secretary,
impressive titles, Performance based rewards like commission, bonus and Membership
rewards like protection programs, pay for time not worked a so on.

[pic]

3.3.5 COMPENSATION
Employees exchange work for rewards. Probably the most important and the most
obvious one is money. Compensation is another term that relates to motivation of
employees. The goal of compensation administration is to design a cost effective pay
structure that will attract, motivate ad retain competent employees an also the structure
should be fair enough for all the employees. The government also plays a big role in the
compensation administration. It has laid forward various acts which help in the designing
of the compensation program. There are two acts which are designed for this one being
the Fair Labor Standards Act (FLSA) and the other being The Civil Rights and Equal Pay
Act.

3.3.6 PAY STRUCTURE

The pay structure of the organization depends upon the job evaluation that is done.
Accordingly the wage structure and the wage curve is derived. A wage structure means a
pay scale showing ranges of pay within each grade. Whatever the structure of the pay is it
is very important that the employees are informed about it and communicated about how
the structure is designed. It develops a sense of tryst among employees ad ultimately
leads to motivation.

3.3.7 INCENTIVES
Not all the employees are ready to leave their family and friends for a long time. Thus
mobility inducements to go o foreign assignments are regularly offered. These may
include monetary payments or services such as housing, car, chauffer ad other incentives.
But companies nee to pay attention to what their incentives will be. This is another way of
motivating employees.

3.3.8 EMPLOYEE BENEFITS

When an organization designs its compensations program one of the most critical area to
think about is what benefits to provide? Today’s workers expect more than just a hourly
wage or a salary, they want additional considerations in an employment setting are called
as employee benefits. As the time passes by there is a considerable increase in the
demand of employee benefits. Today’s organization must satisfy the diverse benefit needs
of their employees. Consequently they adjust benefit programs to reflect a different focus
to achieve the goal of “something of value” for each worker. Employee benefits are
classified as:

1. Legally Required Benefits –These benefits have to be provided to the employees as

they are a part of the governmental law. These benefits are like Social Security which
means retirement, disability ad survivor benefits paid by the government. Unemployment
compensation - employee insurance which provides some income continuation in the
event when employee is laid off. Workers compensation act- Employee insurance that
provides income continuation if a worker is injured on the job ad the last is the family and
medical leave act.
2. Voluntary Benefits – These are limited by the management’s creativity and budget.
Health insurance, Health Maintenance Organization, Preferred Provider Organizations and
Employer Operated coverage is included in this.
After all thee benefits there are certain retirement benefits also which the employee
receives after he retires from the organization.

3.4 MAINTENANCE
The last phase of the HRM process is called the maintenance function. As the name
implies, the objective of this phase is to put into place activities that will help retain
productive employees. When one considers how job loyalty of employees has declined in
the last decade -- brought about in part by management responses to leveraged buyouts,
mergers, acquisitions, downsizing, changing family requirements and increased
competition -- it is not difficult to see the importance of maintaining employee
commitment. To do so requires some basic common sense and some creativity.

HRM must work to ensure that the working environment is safe and healthy; caring for
employees' well-being has a major effect on their commitment. HRM must also realize that
any problem an employee faces in his or her personal life will ultimately be brought into
the workplace. Employee assistance programs, such as programs that help individuals
deal with stressful life situations, are needed. Such programs provide many benefits to the
organization while simultaneously helping the affected employee.

In addition to protecting an employee's welfare, it is necessary to HRM to operate

appropriate Communication Programs in the organization. Included in such programs is
the ability for employees to know what is occurring around them and to vent frustrations.
Employee relations programs should be designed to ensure that employees are kept well
informed and to foster an environment where employees' voices are heard, if time and
effort are expended in this phase.

HRM may be available to achieve its ultimate goal of having competent employees, who
have adapted to the organization's culture, with up-to-date skills, knowledge, and abilities,
who exert high energy levels, and who are now willing to maintain their commitment and
loyalty to the company. This process is difficult to implement and maintain but the
rewards should be such that the effort placed in such endeavors is warranted.

Below given are few points to be done to maintain the employees in the organizations.
• Schemes for occupational sick pay, extended sick leave and access to the firm's
medical adviser;
• Schemes for bereavement or other special leave;
• The rehabilitation of injured/unfit/ disabled employees and temporary or permanent
move to lighter work;
• The maintenance of disablement statistics and registers (there are complicated legal
requirements in respect of quotas of disabled workers and a need for 'certificates' where
quota are not fulfilled and recruitment must take place);
• Provision of financial and other support for sports, social, hobbies, activities of many
kinds which are work related;
• Provision of canteens and other catering facilities;
• Possibly assistance with financial and other aid to employees in difficulty (supervision,
maybe, of an employee managed benevolent fund or scheme);
• Provision of information handbooks,
• Running of pre-retirement courses and similar fringe activities;
• Care for the welfare aspects of health and safety legislation and provision of first-aid
training.

The location of the health and safety function within the organization varies. Commonly a
split of responsibilities exists under which 'production' or 'engineering' management cares
for the provision of safe systems of work and safe places and machines etc., but HRM is
responsible for administration, training and education in awareness and understanding of
the law, and for the alerting of all levels to new requirements.
4. Global Human Resource Practices
This part of paper will highlight on how practices in the hospitality sector enable
organizations to remain competitive in today’s ever evolving market."Human resource
management aims to improve the productive contribution of individuals while
simultaneously attempting to attain other societal and individual employee objectives."
Schwind, Das & Wagar (2005). Enlisted below are some of the Global Human Resource
practices today:
• Managing Workplace Diversity
• Training and Development
• Performance and Productivity
• Employee Satisfaction Tracking System
• Reward Programs
• Strategic Development of Human Capital Resources
• Reducing Employee Turnover
• Vocationally Educated Staff
The researcher has identified the above as the most widely used Human Resource
practices, based on these critical points the researcher shall explain the global human
resource practices to stay on top in today’s competitive world.

4.1 Managing Workplace Diversity

In today’s modern and competitive world workplace diversity includes a lot of areas but
are not only restricted to the ones mentioned below “age, ethnicity, ancestry, gender,
physical abilities/qualities, race, sexual orientation, educational background, geographic
location, income, marital status, military experience, religious beliefs, parental status, and
work experience.” According to the researcher handling workplace diversity is one of the
most crucial and difficult practice that the Human resource department performs on a
daily basis.
4.2 Training and Development
As hospitality organizations plan for the training and development of their employees in
the future, they will clearly need to work more on their planning process as the current
view is fairly negative. As to training methods "on the job" appears to be the most
preferred theme, although this approach should diminish somewhat in the future. Some of
the more popular development programs include multi-skilling, cross-training and career
succession and there are clear plans to significantly expand their use in the future. There
also appears to be widespread use of employee participation programs.

4.3 Performance and Productivity

As human capital becomes more expensive to recruit, train and develop, increasing
attention is being devoted to those factors that affect productivity. Empowerment,
education, training, recognition programs and technology will all play different roles in
this area in the future. The area with greatest prospective impact on productivity appears
not surprisingly, to be training.

4.4 Employee Satisfaction Tracking System

Employee recognition programs, the opportunity for career advancement and exposure to
training followed in order of impact. Improving performance is desirable but it also needs
to be measured. And while most organizations tend to rely heavily on an employee's
immediate supervisor for performance review, the increasing popularity of alternative
systems such as self, peer and subordinate review to provide "360 degree feedback" are
well worth noting as are those involving customers. The leading yardstick appears to be
employee turnover. Employee surveys are destined for much greater usage in the future,
along with upward evaluations.
4.5 Reward Programs
Reward programs generally refer to incentive plans that involve employees in a common
effort to improve organizational performance, and are based on the concept that the
resulting incremental economic gains are shared among employees and the company. In
most cases, workers voluntarily participate in management to accept responsibility for
major reforms. This type of pay is based on factors directly under a worker’s control .
Gains are measured and distributions are made frequently through a predetermined
formula. Because this pay is only implemented when gains are achieved, gain-sharing
plans do not adversely affect company costs.

4.6 Strategic Development of Human Capital Resources

It was globally identified that human resources(HUMAN RESOURCE) is an important
feature of long term planning, it is also seen that many companies believe that human
resource practices, polices and procedures were aligned with their overall business
strategy.

As to the impact of technology, opinion was evenly split as to whether it will reduce the
number of general staff required in the future, although there were some important
differences regionally. Globally it was discovered that advent of technology will
necessitate a change in the skills people require. Adding to which it was also stated that
technology could improve job motivation and job satisfaction.

Clearly the human resource function of the future will have a more bottom-line business
orientation than it has had in the past. For this transition to be effective, however, a
greater alignment of human capital management with the core business strategy will be
required, coupled with more sophisticated measurements of performance. While the
human resource function gets redefined within the organization, its component parts are
on offer without. Increasingly popular as a tool for more effective business management,
outsourcing appears destined to make in-roads into the Human Resource function, part of
a larger trend toward increased use of specialized vendors and other partners. In the
future, we can expect to see more Human Resource functions outsourced.
4.7 Reducing Employee Turnover
Sound recruitment planning is critical to the establishment of adequate human resources
within the industry, but it is seen that very few have any such processes in place. In the
absence of a solid recruitment plan, hiring can only be reactive - a less than desirable
practice given the industry's problem with high turnover and the ever-increasing
competition for qualified labor from better-paying industries. Recruiting people to one’s
organization is unfortunately only one of today's human capital challenges. Employee
retention appears to be just as big a headache and it may get worse before it gets better.

To counter this, all organizations plan an array of strategies, including the increased use
of incentive pay, more job enrichment programs, improved working conditions, improved
screening tools and increases in benefits. Once recruited, the number of various
strategies used to reduce employees turnover some effective, others less so. Improving
the work environment, sharing information and increasing employee involvement in
decision making are some of the leading choices.

4.8 Vocationally Educated Staff

The relevance of a vocational background with addition to required surrogate skills for the
employee to be hired must be a must. Also the organizations should encourage younger
people to go in for professional courses relevant to their organization, by setting up
institutions for them or by providing affiliated certificate course. This is a progressive tool
for conditioned hiring and also to know your employee beforehand. It is what they call an
acid-test method for the safety and progress of an organization.
4.9 LEGAL CONSTRAINS AFFECING HRM

WALKMAN COMPENSATION ACT - 1923

According to this act, it says that in case of any accidents that happen organization has to
give him or her benefits in terms of money. Depending on the amount of disablement the
amount of money is given to the accident affected employee.

FACTORIES ACT - 1948

This act is now applicable even to Hotel industry. It has many sections which is hard to
discuss. It talks about the different provisions available eg. Time span of people to work,
spread over of work for women should be equal to men i.e 14 hours of shift. It also talks
about decided shift timings for employees, overtime pay, rectory safety, rules to be
followed. It also has section stating within how much time the factory should be painted,
description of ventilation system, for how much staff hoe much water cooler to be kept
atc. This act is basically made to see that employee working at his work area gets the
essential treatments which are their rights.

EMPLOYEE PROVIDENT FUND AND MISCELLANEOUS PROVISION ACT- 1952

Applicable to every establishment which is a factory engaged in any industry specified in
Schedule I and in which twenty or more persons are employed. Clauses of this act are
inferred as follows, the employer deducts 12% from basic salary amount of money from
wages of the employee. Employer also puts in 13.6% of basic salary amount of money and
both the amount are summed up and submitted to Provident Fund Commissioner before
15 days of disbursement of salary. When the employee leaves the organization he gets all
the money with 8.5%interest.

ESIC ACT
This is applicable to employees earning salary less than 13000 rupees. Where the
employee doesn’t get company benefits but will get generous benefits from ESIC. There
are many benefits such as employee availing ESIC cannot be fired, 3 months maternity
leave for ladies with salaries, medical benefits, ritual benefits, death benefits, etc.
Provisions: 1.5% deducted from employees basic salary + 3.75% employee’s basic salary
put by employer that is to be submitted to Provident Fund Commissioner before 21 days
of disbursement of salary.

PAYMENT OF GRATUITY ACT – 1965

This act says that an employee who works for 5 or more than 5 consecutive years is
eligible for gratuity. Where employee gets basic salary + 15 days salary as gratuity every
year after 5 years.

MODEL STANDNG ORDER ACT – 1946

In an organization there are various types of employees like casuals, permanent; contract
labour etc. law has decided certain activities by employees in organization as
misconducts. As act designer cannot know everything, a particular organization can
modify to some limits and presume them as misconducts. To bring it in action all
employees must sign on it and both the parties should agree on it.

INDUSTRIL DISPUTE ACT

This act is about maintaining harmonic relations between employee and employer. Where
the employer cannot close hi/her organization without informing the labour department.
There are various segments to this act. The employer has to get permission from labour
commissioner, and provide notice to employees 2 months prior in case of more than 100
employees.
CONTRACT LABOUR REGULATION AND ABOLITION ACT – 1971
If the task is not of perivial in nature and if it is not fundamental task of organization, then
employer can deploy contract labour. Today the condition is different, even main
employees are contracted, but Fixed Term Contract (FTC) where the employer can gt rid of
this provision.

APPRENTICE ACT - 1962

It is an act where objective is to create a space for new students who are studying.
Companies require basic trate skills which the institute does not provide, so this is
practiced to gain practical knowledge. On successful completion of this certificate to the
employee is provided. The candidate gets very nominal salary where no labour laws,
ESIC, provident fund, are applicable. Only they are registered under apprentice act and
only this is applicable.

MINMUM WAGES ACT

Each state government declares D.A salary twice a year. Each employee deserves the
basic salary that has been decided by law according to their grade of skill, unskilled, level

SHOP ESTABLISHMENT ACT

This is also a state act that governs all hotels, restaurants, shops that are governed on
similar lines of factories act. Eg. Beginning and ending of shifts, hours for each shifts etc.

EQUAL REMUNERATION ACT

This act states that the female employees working should get the same salary as men
working at same level in the organization. There should be no discrimination on basis of
caste, colour, religion, sex etc
5. BALANCE SCORECARD

A new approach to strategic management was developed in the early 1990's by Drs.
Robert Kaplan (Harvard Business School) and David Norton. They named this system the
'balanced scorecard'. Recognizing some of the weaknesses and vagueness of previous
management approaches, the balanced scorecard approach provides a clear prescription
as to what companies should measure in order to 'balance' the financial perspective.

The balanced scorecard is a management system (not only a measurement system) that
enables organizations to clarify their vision and strategy and translate them into action. It
provides feedback around both the internal business processes and external outcomes in
order to continuously improve strategic performance and results. When fully deployed, the
balanced scorecard transforms strategic planning from an academic exercise into the
nerve center of an enterprise.

Kaplan and Norton describe the innovation of the balanced scorecard as follows:

"The balanced scorecard retains traditional financial measures. But financial measures tell
the story of past events, an adequate story for industrial age companies for which
investments in long-term capabilities and customer relationships were not critical for
success. These financial measures are inadequate, however, for guiding and evaluating
the journey that information age companies must make to create future value through
investment in customers, suppliers, employees, processes, technology, and innovation."

The balanced scorecard suggests that we view the organization from four perspectives,
and to develop metrics, collect data and analyze it relative to each of these perspectives:
A. The Learning and Growth Perspective:
This perspective includes employee training and corporate cultural attitudes related to
both individual and corporate self-improvement. In a knowledge-worker organization,
people – the only repository of knowledge -- are the main resource. In the current climate
of rapid technological change, it is becoming necessary for knowledge workers to be in a
continuous learning mode.

Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things
like mentors and tutors within the organization, as well as that ease of communication
among workers that allows them to readily get help on a problem when it is needed. It also
includes technological tools; what the Baldrige criteria call "high performance work
systems."

B. The Business Process Perspective.

This perspective refers to internal business processes. Metrics based on this perspective
allow the managers to know how well their business is running, and whether its products
and services conform to customer requirements (the mission). These metrics have to be
carefully designed by those who know these processes most intimately; with our unique
missions these are not something that can be developed by outside consultants.

In addition to the strategic management process, two kinds of business processes may be
identified:
a) Mission-oriented processes, and
b) Support processes.

Mission-oriented processes are the special functions of government offices, and many
unique problems are encountered in these processes. The support processes are more
repetitive in nature, and hence easier to measure and benchmark using generic metrics.

c. The Customer Perspective.

Recent management philosophy has shown an increasing realization of the importance of
customer focus and customer satisfaction in any business. These are leading indicators: if
customers are not satisfied, they will eventually find other suppliers that will meet their
needs. Poor performance from this perspective is thus a leading indicator of future
decline, even though the current financial picture may look good.

In developing metrics for satisfaction, customers should be analyzed in terms of kinds of

customers and the kinds of processes for which we are providing a product or service to
those customer groups.

d. The Financial Perspective:

Kaplan and Norton do not disregard the traditional need for financial data. Timely and
accurate funding data will always be a priority, and managers will do whatever necessary
to provide it. In fact, often there is more than enough handling and processing of financial
data. With the implementation of a corporate database, it is hoped that more of the
processing can be centralized and automated. But the point is that the current emphasis
on financials leads to the "unbalanced" situation with regard to other perspectives. There
is perhaps a need to include additional financial related data, such as risk assessment and
cost-benefit data, in this category.

So, the balanced scorecard suggests that we view the organization from four
perspectives, and to develop metrics, collect data and analyze it relative to each of these
perspectives:
• The Learning and Growth Perspective
• The Business Process Perspective
• The Customer Perspective
• The Financial Perspective

5.1 ADVANTAGEs OF BALANCE SCORECARD:

Implementing a balanced performance measurement system can have far-reaching effects

on your organization. It can be used for:
• deciding what the key drivers of performance are
• refocusing and stimulating activity on these key business drivers
• drawing attention to goals and targets
• creating a culture of achievement
• noticing in advance any trends affecting the business so that changes can be made in
good time.

5.2 Shortcomings of the Balanced Scorecard

As the Balanced Scorecard (BSC) is not a multiple stakeholder framework:
• Suppliers are excluded: through suppliers may be considered within the Process
Perspective, this approach does not give suppliers the visibility they now deserve,
especially in new business models characterized by outsourcing of almost all non-core
functions and vertical integration
• Regulators are ignored: many non-negotiable standards have to be met, but they do
not fit into the Balanced Scorecard's framework.
• Community and environmental issues are missing: nowadays environmental issues
and local communities are closely linked and companies need to measure and monitor the
impact they are having. If they don't, they may find themselves subject to attack by
pressure groups who can damage the companies' reputation and ultimately destroy the
business.
• Competitors are ignored: Besides shareholders and customers, companies need to
monitor the business environment to track the competitor activity and technology. BSC is
designed to answer the efficiency question, 'Is the chosen strategy being implemented?'
but fails to ask the effectiveness question, 'Is the chosen strategy the right strategy for our
business?' It does not monitor threats from non-traditional or future competitors.
5.3 Balance Score Card: Hotel Perspective

Although Balance Score Card is followed to a large extent across the hotel industry, there
has been a limited literature data on Balance score cards with regard to strategic
measures and implementation in general and focusing on the BSC approach in particular.
Although hotels are generally thought of in a service context, in reality they summarize
three different types of industrial activities – Rooms, Food and Beverages – which exhibit
differing cost structures and business orientations. The underlying diversity of activities
and their differing cost structures, can be argued, call for a diverse set of relevant
performance measures, which a framework such as BSC can incorporate.
Implementation of BSC is generally a useful tool, that it brings together previously
disparate measures of performance in a coherent model, thus helping it to unify all the
parties involved i.e. Stake holders, internal and external customers. The success of
implementing BSC will owe a great deal to the organization’s unique circumstances (e.g.
histories, strategies, opportunities and constraints) but however it is it imperative that the
BSC approach is modified to take into account individual circumstances.

5.4 Limitations on application of Balance Score Card

The application of Balance score card is both dated and limited in its scale as the area of
focus is restricted to a particular property and not to the entire organization. There has
been an obvious benefit in using the technique but however the Balance Score card for an
individual hotel is likely to vary from a scorecard implemented for a group of hotels, and
the measures would need to be continually reviewed in order to retain their relevance, and
that components need to be prioritized. In such case hotels predominantly focus on the
short term with little strategic use of information. Short term financial orientation includes:
• Increasing corporate ownership of hotels leads investors to set demanding financial
targets whilst paying little attention to the processes driving the results.
• A large number of senior, managers may be promoted from operational roles
consequently tend to focus on real time operational control rather than future oriented
strategic intent.
6. Performance Management systems in Organizations - An Overview

The hotel organizations have been measuring and thereby managing their performance on
the basis of financial measures using the traditional accounting methods. The
performance measurement system that solely focuses on financial metrics would not
facilitate the organizations in valuing their intangible and intellectual assets. Intellectual
assets such as motivated and skilled employees, responsive internal business process,
satisfied and loyal customers need to be valued in this competitive business environment,
as they are critical components of any business that determines success.

It is the need of the hour for organizations to expand their financial accounting model so
that there is a provision for intellectual asset valuation.
[pic]

Balanced Scorecard is a Performance management system (not only a measurement

system) that enables organizations to clarify their vision and strategy and translates them
into action. The balanced scorecard (Kaplan and Norton, 1996a.) is a Strategic
Measurement systems that contains outcome measures and the performance drivers of
outcomes, linked together in cause-and-effect relationships (Kaplan & Norton, 1996a,
Kaplan & Norton, 1996b) thereby making the performance measurement system a feed
forward control system. The crux of the BSC is the linking together of the measures of the
four areas in a causal chain, which passes through all four perspectives. The objectives
and measures are derived from an organization’s vision and strategy and these views
Organizational Performance from four perspectives: The Perspectives are Financial,
Customer, Internal Business Process and Learning and Growth. Thus Kaplan and Norton
(1996b) emphasize that non-financial strategic objectives should not consist of an
arbitrary collection of measures, instead, they should involve a balanced representation of
financial and non-financial measures:
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Customer perspective
This perspective captures the ability of the organization to provide quality goods and
services, the effectiveness of their delivery, and overall customer service and satisfaction.
Many organizations today have a mission focused on the customer and how an
organization is performing from its customers’ perspective has become a priority for top
management (Kaplan and Norton, 1992).

Internal business processes perspective

The business processes perspective is primarily an analysis of the organization’s internal
processes. Internal business processes are the mechanisms through which performance
expectations are achieved. This perspective focuses on the internal business results that
lead to financial success and satisfied customers’ expectations. Therefore, managers
need to focus on those critical internal operations that enable them to satisfy customer
needs (Kaplan and Norton, 1992)

Learning and growth perspective

This perspective looks at issues, which includes the ability of employees, the quality of
information systems, and the effects of organizational alignment in supporting
accomplishment of organizational goals. Processes will only succeed if adequately skilled
and motivated employees, supplied with accurately and timely information, are driving
them.

Financial Perspective
Financial performance measures indicate whether the organization’s strategy,
implementation, and execution are contributing to bottom-line improvement. By making
fundamental improvements in their operations, the financial numbers will take care of
themselves, according to Kaplan and Norton (1992).

Link between Features of Innovation and BSC

|Innovation (Features) |Futures In Details |BSC Features |Rationale
for BSC & Innovation |
|Relative Advantage |Degree to which an innovation |Incorporates financial and
non |Extension of the traditional |
| |is superior to ideas it |financial measures |accounting
model |
| |supersedes | | |
|Compatibility |Degree to which an |BSC is linked to the vision and|Top
management commitment, |
| |innovation is consistent with |strategy of the organization |culture
vision of firms plays a|
| |values and past experiences of | |key role in BSC
usage. |
| |adopters | | |
|Complexity |Degree to which an innovation |BSC revolves around the |
BSC demands the employees to |
| |is relatively difficult to |strategy of the business. |share a
common understanding of|
| |understand and use |Construction of Strategy maps |goals,
objectives, measures, |
| | |requires great care |vision and strategy to
avoid |
| | | |implementation failures. |
|Divisibility |Degree to which an |BSC’s Corporate level, |Pilot BSC’s
for individual |
| |innovation can be tried on a |divisional, departmental & |business
units are also done |
| |limited basis |personal level exists. | |
|Communicability |Degree to which the results of |Communication of BSC |
BSC firms try to make strategy |
| |innovation is diffused to all |results gives intrinsic |as everyone’s
everyday job. |
| |members |motivation to employees |
|

Empirical evidences on the contingency factors that facilitates BSC adoption

• Firm Size
• Market Position
• Product lifecycle stage
• Type of strategy and structure
• Environmental uncertainty
• Investment in intangible assets

Indian Organizations and BSC:

• Tata Engineering
• Infosys
• Goodlass Nerolac Paints
• Godrej-GE
• Ericsson India
7. Indian Hotels Scenario:

The table below will show the new room supply expected to enter 10 key hotel markets in
India. This encompasses the development of branded as well as quality independent
hotels in India.

According to study conducted by HVS, India today needs more than 53,000 hotel rooms,
all corresponding to hotels with brand affiliation, are in various stages of planning and
development in the above ten cities, and expected to enter in a phased manner by 2011.
As, there are two major sports events lined in coming years such as Commonwealth in
2010 and ICC World Cup in 2011. Rather than these two major sports event India is
booming in at tremendous pace in IT industry, Aviation & Automobile industry. Despite all
the interest generated by mid-market and budget hotel development, around 53% of the
development is still concentrated in the luxury and first class (Five-star Deluxe and Five-
star) segment. This segment is also characterised by its higher service orientation, which
makes it particularly vulnerable to the manpower crunch.

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The table shows the manpower requirement all over the India in regards of new room
supply and its growth in coming years.

As indicated before, branded hotels in the ten selected hotels market cities will require
approximately 94,000 employees in next few years that is twice the existing requirement.
In the terms of larger number of new rooms being added in luxury and first class hotels
and these segments will naturally require huge number of manpower.

According to study conducted by HVS, A major portion of demand is from cities like
Delhi/NCR and Mumbai, which account for around 23% and 21%, respectively. However,
the real challenge will be presented by cities like Bangalore, Hyderabad and Pune. Though
individually they only require around 12%, 11% and 6.5% of the demand pie, the
percentage increase in manpower is the highest in these markets, ranging between 500-
900%. These cities have a relatively low room base and hence would find it more difficult
to cope up with the explosive growth. Presently, these three cities offer a comparatively
lower cost of living and higher quality of life, to their residents. The cost to company of an
employee in these cities will start increasing once demand starts kicking in. It is expected
to be comparable to Delhi and Mumbai by 2008. Thereafter, the low manpower base and
comparable salary levels would force these cities to look at established hotel markets like
Mumbai and Delhi to obtain managerial and supervisory levels of hotel staff.
8. CONCLUSION
Today the coming together of different corporate psychologies in a competitive business
environment makes a hotel professional move from one hotel to another and on a larger
canvas makes him move out of the hotel industry to other sectors. The reasons can be
many…a different work challenge, the expectation of faster career growth, aspirations for
better work-life balance, a hospitality career being a poor fit with one's personality, or a
combination of some of these factors. Last but not the least, the temptation of better pay
is, more often than not, a prime driver. Research shows that money is like Prozac. Neither
necessarily makes you happy, however assists in preventing different forms of
unhappiness --in the case of the former, less financial anxiety, affording better housing,
better and bigger car, good schooling for the children, metro locations and softer loans.
To summarize, it’s a fine mix of employee aspirations, the mirage of other sectors and the
finesse of an executive search firm that leads to migration from hotels!

According to Ambika Mehta, 2005, A growing list of industries and sectors, that are
witnessing hectic activity, expansions and are passing through a boom. A brief sector
analysis is presented below.

Retail - Market liberalization and an increasingly assertive metropolitan consumer

population is now sowing the seeds of a prolonged retail transformation in India. The retail
boom witnessed in India over the last 18-24 months has started bringing in bigger Indian
and multinational operators on to the Indian retail scene. International brands such as
Wal-Mart, Tesco and Carrefour are eyeing India as their next expansion destination.
According to a recent study undertaken by the Associated Chambers of Commerce and
Industry of India (ASSOCHAM), organized retail is expected to register an annual growth of
6.0% over the next five years and touch total business of US$17bn against its current
business volume of US$6bn. According to India Retail Report 2005 conducted by KSA
Techno park, India’s distinct advantage is that it is amongst the least saturated of all major
global markets in terms of penetration of modern retailing formats. Amusement park,
convention centre, serviced apartments and hotel are some mixed-use concepts that are
being combined with retail to present a complete product mix. The opening up of the retail
sector in India throws major challenges to the hotels for a majority of retail functions are
identical and it enables the retail players to go higher in the hierarchy of poaching,
targeting mid to top level executives across key functional areas.

Aviation – International and domestic travel in India is growing by leaps and bounds. It has
been estimated that the aviation sector in India is likely to witness a 20.0% YOY growth
over the next five years in passenger traffic from the existing almost 60mn. The entry of
several low cost airlines in the domestic market, the Open Sky Policy that provides an
opportunity for domestic carriers to fly to international destinations and keen focus by the
central government on airport infrastructure development is key growth drivers for the
sector. In the aviation sector today, apart from trained pilots, engineers and operational
staff, there is also a great need for trained staff that can manage key functions such as
reservations, yield management, guest relations, sales and marketing. Attractive perks
and role enhancement make hotel employees a soft target for poaching since they come
with specific expertise, are highly presentable, well spoken and are trained in customer
service and guest interactions.

Business Process Outsourcing (BPO) - According to NASSCOM, the projected revenue of

the BPO industry in India is expected to touch US$12bn in 2006. The sector hired an
average of 400 people on every working day of the year in 2004/05. With annual growth
projected at 11.0%, the sector is expected to employ over 1.2 million people by 2008.
Various BPO’s in India have enhanced their service portfolio by handling knowledge-
based activities like budgeting or resource planning, giving their customers access to a
complete menu of end-to-end processes in functional areas like HR, finance and customer
care growth. With their economic success BPO’s are now moving up the value chain and
many such outfits are being transformed into Knowledge Process Outsourcing companies
or KPO’s. The global KPO sector is expected to grow at a CAGR of over 45% to reach
US$17 billion by 2010. India, with its highly qualified professionals well versed with the
English language, is emerging as the location of choice for a wide variety of KPO work.

BPO industry is on a spree to hire hotel industry graduates. The hospitality industry in
India today employs a large number of young executives in different areas of hotel
operations. These employees are well trained in different aspects of guest service and
interaction, have excellent service orientation and command over English. There is also
demand for good chefs, stewards and housekeepers to undertake facilities management
related functions. Flexible work schedules, an informal work environment and good pay
are some aspects that facilitate the movement of employees from hotels to the BPO
industry.

Real Estate – The commercial and residential real estate industry in India is moving closer
to the people. No longer is a purview of larger-than-life egos and insatiable developers, the
real estate industry more focused on the wants and needs of the consumer. The industry
is emphasizing more on branding, and on the marketing of buildings as products that can
provide ‘experiences’. The real estate industry has been successful in attracting quite a lot
of hotel professionals since they are assumed to excel in selling ‘intangibles’ and provide
that unique experience to its demanding customers. Stories of poaching are also rife in
emerging sectors like media, finance and investment banking, and insurance.

This paper has shown how HRM, today is not only HR managers job it is job of every
manager in the organization with context to operation development project. This has
expanded the knowledge of Functions of HRM and how external factors affect them.
Showing ahead the challenges, legislations and trends that would help the future
managers of tomorrow to have a better hand on their employees and lead the organization
in better way by increasing profits and satisfying employees.
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