11.1: In the Beginning...

Origins & Evolution

Hospitality businesses depend on employees to operate. Small family operations where parents worked alongside their children to check-in guests or to prepare a wonderful dinner evolved into larger organizations with even more employees. As the number of employees grew, so did the need for ensuring there were enough people to work, that those people were properly paid, and that they had all of the knowledge they needed to do the work according to standards. Businesses formed personnel offices that focused on processing paperwork including employment applications, allocating payroll, and completing termination forms. 

A shift has occurred in the past forty years from these procedural tasks to a more strategic approach to employees with the business function entitled Human Resource Management (Goss-Turner & Boella, 2013; Legge, 2005; Storey, 2007). While employees often visit the Human Resources or “HR” department when they have questions about pay or problems with management, organizations have increasingly relied on their Human Resources professionals to make strategic business decisions to leverage employees so they can meet the company goals and mission. 

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Key Operational Processes

The Human Resources department is responsible for work that involves employees for all operations of the organization. The U.S. Bureau of Labor Statistics (onetonline.org) defines the role of a Human Resource Manager as one that oversees recruiting, interviewing, selection, training, appraisal, and performance management of employees as well as serving as a liaison between department management and employees to resolve issues and build relationships. The HR department also ensures the organization is following required labor laws and engages with labor unions if the business’s employees have sought union representation. If that wasn’t enough, HR staff are also tasked with developing employees for promotions, establishing pay and compensation rates, determining and administering benefits like health insurance and employee recognition programs, ensuring a safe workplace, and instilling corporate ethical policies. There certainly is no shortage of work for HR professionals.

In addition to these functions, many organizations feature human resource policies as a prominent part of the overall business plan linking virtually every management decision to how it impacts their employees. Some strategic human resource departments focus on ensuring high commitment employee engagement, the development of a strong corporate culture, and the implementation of high-performance work systems. Human Resources as a strategic aspect of the overall management practice is the integration of corporate strategy and organizational culture which hopefully results in a high achieving workforce that remains employed with the business for a long tenure. 

Basic Management Functions

The main goal of a Human Resources department is to implement a variety of objectives strategically designed to both attract and maintain a competent workforce. A well planned human resources strategy can significantly improve the service of a hospitality business and can positively impact the company’s profitability. Human resource professionals are responsible for planning and forecasting. Through job analysis and strategic planning, businesses are able to forecast staffing needs and to identify the specific positions necessary to meet business goals. Once the plan of which jobs and how many employees have been established, Human Resource staff work to recruit and select qualified employees. Recruitment refers to using various sources to attract suitable applicants from relevant labor markets. Selection is the process of choosing which of the qualified candidates is best suited for each position and for the organization. 

After employees are hired, Human Resources is responsible for the orientation and training of new staff. Orientation is the initial introduction to the company to provide essential information as well as to welcome the new employee to the team. Training is the process of developing employee knowledge, skills, and abilities to perform the tasks of their new roles. Human Resource staff also manage compensation and benefits for employees. HR professionals determine appropriate types and levels of pay and incentives including wages, bonuses, benefits, and rewards. The HR department coordinates performance management which provides feedback to employees on their work performance including positive acknowledgments as well as coaching and progressive discipline to address unsatisfactory job performance. In larger organizations, Human Resource employees are also tasked with risk management, investigations, and service recovery. 

Throughout all of these tasks, HR professionals must communicate with employees and applicants continually to establish and maintain a good working relationship between the organization and the employee. Human Resources often helps to solve problems in the work environment between employees and supervisors or managers. HR staff work to gather data and information to ensure the work environment allows everyone to perform at their highest levels. The work done by Human Resources impacts the entire business and relates to all aspects of an organization’s success. 

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Organizational Structures

An organizational structure is a framework for a department that lays out the priorities through people and the decision-making process. There are several organizational structures found in hospitality Human Resources departments, with some being very simple and others very complex. In seventy percent of businesses with 5-49 employees, HR responsibilities are added to managers on top of their other responsibilities (Davies, 2019). Think about a restaurant manager also being responsible for hiring, performance management, training, and payroll. Human Resource functions can be difficult to manage in addition to other duties. As the number of employees grows, companies may add one HR professional to join the team in a generalist role where he/she is responsible for all HR functions. As the number of employees grows, the amount of work increases, and there typically is a need to expand the HR department.

For larger organizations, HR departments can be structured in a variety of ways to meet business goals. Some organizations have a centralized or corporate HR office that serves as a decision making authority and supplies HR services to the entire organization. In these types of structures, HR employees are traditionally specialists and focus their efforts on one specific function of HR, like recruiting or employee relations. Other businesses have a decentralized or autonomous structure with HR functions housed in each property or restaurant that operate and make decisions mostly independently of other sites in the business. Still, other organizations use a combination of a shared corporate HR body combined with some localized HR responsibility, which balances the centralized and decentralized approach. Some businesses choose to outsource HR functions to external companies for things like payroll or benefits administration. This can be helpful but also expensive. Outsourcing HR typically occurs in businesses where Human Resources is seen as a procedural function as opposed to a strategic function of the organization.

HR in Hospitality

Hospitality organizations rely on their employees to help create service offerings. The nicest hotel can be constructed, yet it is the person checking in the guest and describing the amenities and the employee cleaning the guest room diligently who make the guest feel truly comfortable. Similarly, the restaurant can have fresh, farm-to-table ingredients but it is the server that describes the daily special with specific details and the chef that sautees the entree perfectly who make the dining experience memorable. Human Resource functions are critical in hospitality organizations as the employees of these businesses are creating the service experience. Hotels, restaurants, event venues, and other hospitality businesses depend on employees. The Human Resource department must find and select employees who not only possess the right knowledge, skills, and abilities to do the job but also fit well with the organization’s culture to deliver the service that guests expect from the business. 

The hospitality industry is one of the largest employers by industry. The turnover rate, or the rate at which employees leave an organization, is extremely high at around 70% which is significantly higher than the national average of 15% (Ferrin, 2020). Some of this turnover is due to seasonality with workers being hired for high season and laid off during slower times. Human Resource departments can make a difference in managing and controlling turnover. A 2018 initiative by Hilton Hotels to make employee work more productive and meaningful resulted in a drop in its turnover rate by 13% (Ferrin, 2020).

In addition, Human Resource professionals help to ensure that the hospitality business is following employment laws, working effectively with unions and ensuring a safe work environment for the organization. Some hotels and restaurants have recently been charged with harassment and failure to pay wages claims, which can be costly and time consuming to address (Elyssa, 2020). Many hospitality organizations have employees who have elected to have union representation. Human Resource managers are typically responsible for negotiating the collective bargaining agreement (or labor contract) that states the wages, benefits, and working conditions for employees represented by the union. Human Resource departments also ensure that the business is following the Occupational Safety and Health Administration (OSHA) standards for things like hazard prevention, chemical safety, and preventing workplace violence.