With the rising time, role and importance of HRM has undergone several changes. Earlier it was viewed as a function of management which increases the cost of the company without adding much value to it (Guest, 2011). But now the role and function of HRM has changed immensely. Nowadays business organizations pays attention to this concept to retain their competent and skilled employees, to enhance productivity and efficiency. With this scenario in focus this report is being prepared to identify main HR issues faced in service industry. Regarding this Huntsman Hotels is taken into account. This chain of hotels has more than 60 hotels in UK. The MD of Huntsman is Giuseppe Salieri who owns 51% of shares. In 2007 he inherited the company from his father.
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Core HR Issues Faced By Huntsman Hotels
As the hotel industry is facing a fierce competition from groups like Travelodge, Lbis, Premier Inns etc. there is increasing shortage of managerial staff within the industry. The hotel is suffering with the problem of staffing. This in turn is making a bad impact on growth plans and objectives of the company. Sometimes this has led to cancellation of bookings at short notice due to illness which is harming the reputation and goodwill as well as creating frustration among the staff. Due to this issue, use of agency staff occasionally has become a necessity . Consequently the company is having a high turnover of staff, especially in senior management.
Along-with this problem there are certain other problems also like flat organization structure in the company. The decision making power is in the hands of Giuseppe himself. In the past there were sporadic industrial disputes in the company although recently there has been improvement in the relations. No formalized wage structure is there in the company and any rises are being made on 'ad-hoc' basis. The disgruntled employees have made accusations of favoritism on the Managing Director as mostly family members are holding the top positions in the organization as well as owning the remaining company shares (Middlemiss, 2012). The culture which is existing in the company is 'them and us' as junior staff is being blamed if anything goes wrong. The image of the managing director is of a shrewd individual who takes swift actions where he thinks to be any under-performance or laziness. He does not hold the competency and talent to manage people.
The newly appointed HR head is facing a formidable task as he is aware of company’s poor reputation for managing people. He is having very less time to identify the key issues and find out the solutions as he may be the next to be given 'pink-slip'.
By identifying these problems the key HR issues in Huntsman are detailed here:
- Employee morale and trust:The employees of the company are having a very low morale and trust towards the Top Management. Long working hours, stressful minds, especially when the business is under-staffed gives a negative impact on their morale (Boxall, Purcell, 2011). They are frustrated because of weak HR practices in the organization. This in turn is decreasing their productivity and performance and making an overall impact on the company's profits and growth.
- Management skills:The company has placed family members and close relatives on the top positions of upper management without paying attention on their skills, knowledge, competencies and potential. They do not have proper training and experience of leading and managing staff.This kind of practice by the top management is creating a negative image in the employees as they their talent and skills are getting wasted here.
- Retention of talented employees:The Company is not able to retain its skilled and valued employees as there are no proper HR policies and procedures which is making them leaving the organization. The top management and its officials are very swift and rude towards the employees and are not being taken care. Due to this reason many employees are leaving the organization as they do not get due respect and recognition.
- Unfair dismissal: The company fires employees on continuous basis even the employee makes a small mistake. This type of action discourages the employee and creates a tension and threat in other employees also (Werner and DeSimone, 2011 ). So they work with stress and fear which results in lower productivity. Ultimately it is affecting the long term goals and objectives of the company because how they are going to achieve it if there is not enough workforce to perform.
- Non Existent Policies and Procedures:In this industry HR finds himself mired in legal matters and proceedings like unemployment hearings and employment lawsuits. Here in this case also the HR head is concerned about the two recent tribunal cases where substantial damages were paid because of discrimination and irregularities. This creates problem for the employees as well as for HR department too.
- Labor Shortages:This is one of the major issue in the company. They are unable to get enough staff and so they typically react by either cutting back on services for visitors and guests or increase in working hours of the current workforce. Service cutbacks leads to lower satisfaction, few repeat visits, and negative feedback. Working for long hours may keep visitors happy and satisfied but it is making the employees exhausted, stressed, frustrated and putting a question mark on their career choice (Dann, 2012). Also the customers are not satisfied because the employees are too much tired to provide friendly, efficient services and the quality of food is not unto the standards due to shortage of staff.
Recommendations In Light Of Analysis to Recruitment And Selection Processes:
By describing the core issues related to HR policies and practices it is now clear that what exactly the company is facing. These issues are not just harming the employees but damaging the company's reputation and goodwill also. They are becoming an obstacle in accomplishing the vision and mission of the company which can result to serious damages on financial basis(Bloom and Van Reenen, 2011). To avoid these consequences the company can adopt the following procedure which could help it in handling the situation:
Job Analysis:The company does not know what it actually needs. For this they have to critical examination of its existing human resources and the other important resources. The gap which comes out between existing and the future needs will indicate what it needs to go forward. This gap can be described in functional terms such as responsibilities, tasks, roles, skills etc. This will give a clear picture of the situation and the company will be able to deal the problem in an effective manner.
Understanding the Want:It is not just about knowing what it wants but what kind of person it wants, what qualities, skills, potential, traits is required for a particular job profile. In precise terms what type of organization the company want to create and maintain. It is all about values, ethics, communication, level of engagement and involvement. The manner in which visitors and customers are being dealt. The degree of flexibility and the culture of 'We are all together' rather than 'Them and us' should be there in the organization.
Prepare A Job Description:The company should broadly define the roles, responsibilities, accountabilities and tasks. And to perform all these what qualities, attitudes, behavior, skills, competencies, knowledge and personal characteristics is necessarily required. All these elements creates a job description,or a job profile. This should not just be used for recruiting the personnel but also form the base for selection criteria, training and development plans, goal establishment, target setting and performance appraisal (Armstrong and Taylor 2014).
Decide On Selection Process: After deciding the needs and requirements the company should figure out how it is going to receive applications and select the best one from pool of candidates being created. The selection criteria should be clear and based on the job description being formed in the above step (Brody, 2010). It will make the selection procedure easier, reliable, and transparent. The most common form of assessment is interviews. After that it can conduct aptitude tests and psychometric test.
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Identify Sources And Start Search: The company can resort to newspaper advertisements and recruitment agencies. It can go through the route of jobs boards and websites.
It can also go for linkedin, twitter and face book which are all valid, trusted and popular source. It can approach to its own networks and contacts. The more focused it will be, better will be the outcomes.
Shortlist Candidates: The capable candidates are now to be identified on the basis of interviews and tests. Having a marking system for particular criteria will be easy if the company is having a large number of candidates.
Make Selection: Now the next stage after short listing of the candidates is selecting the best candidate fitting the job profile prepared. Following the interview,when having a preferred candidate or two or three candidates, organize reference checks and conduct medical assessment. These things are very important to be done. After this procedure being completed the company can select the most prominent candidate who is matching the company's expectations and desires and his particular job profile also (Burr and Pearne 2013).
Offer: After the above mentioned steps are covered now its time to offer the jobs to most preferred candidates. The offer will be containing details of salary, job role and responsibilities. Offer should be never made after completing the 7thstep. It should be subjected to candidate having provided the company with accurate and honest information.
On boarding and training:Proper induction and orientation of the 'newbie' is to be done. This includes explaining rules, regulations, health, safety, and other policies etc. Expectations regarding behavior and performance should be clearly outlined. This is the on boarding period for settling and making the new employee adjust in the workplace. A little time spent on this step will reap huge benefits later for the company(Lucio, 2013).
Review and evaluation:In the final step the company needs to look back over the recruitment and selection procedure. Did the process went well as it was being planned. Are some bottlenecks and flaws coming out. If yes, then the reason should be find out(Hendry, 2012). More importantly review and assessment of new employee's performance is to be done. The company should always include a probation period in the contract and offer letter at least for six months.
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Implications for employees relating to HRM at Huntsman in light of changes suggested:
There are numerous problems faced by the company which are discussed in the first topic. The major problem was poor people management and shortage of staffing. The changes suggested in the second topic are for the staffing issue in which a standard procedure of recruitment and selection is being proposed to adopt. Effect of these changes on the employees of the company are being mentioned below:
- High morale and satisfaction:The morale and satisfaction of employees will be on a high level if the company adopts decentralized structure in which they can also take part in the decision making process and present their views, ideas and suggestions in front of top management(Gropu, 2013). It will boost their motivational level, confidence and productivity.
- Sense of belongingness:The employees will feel attachment towards the company as their point of view will also be given due respect and attention. They will not be blamed and held responsible by top management on mistakes as new culture of 'we are together' will be promoted in the organization. It will foster team spirit and unity in the organization (Catano, 2013).
- No fear of unfair dismissal: According to our suggestion the company will not fire any employee suddenly as there will be a written contract between the employer and the employee. This policy is beneficial for both the parties. It will create a brand image of the company and add on to its reputation which will attract more and more good talent in the organization.
- Formalized wage structure:If the company follows the recommendations then the employees will not receive wages on ad-hoc basis. It will make employees happy and contended which will encourage them to work efficiently and effectively. The employees can focus on their work with full dedication and will not feel stressed regarding their pay scale.
- Absence of Favoritism: Employees with good leadership and management skills and qualities will be given chance to be on the top management. This will be done purely on the basis of their characteristics, knowledge and abilities and not that the employee is having any personal relations with the managing director(Dessler, 2016). It will create smooth and cordial relations between the top management and the employees.
- Low employee turnover: The attrition rate will decrease as the employees will be happy, safe, secure and satisfied. They will not leave the organization as they are confident enough with the HR policies and practices being implemented in the organization. This major problem of high retention rate will get resolved which will lead to organizational effectiveness.
- Well structured HR policies and procedures: If the company has well formulated HR policies and practices the employees will not be in any confusion or misunderstandings regarding the rules, regulations, wage structure, welfare policies or any other related issue. If a clear and transparent HR policy is there in the organization it will enhance the productivity and performance of the employees.
From the above discussed case study on Huntsman Hotels it has been analyzed that HR policies and practices play a vital role in every organization and industry. This company had no structured and formalized HR policies which was damaging the company's reputation as well as creating difficulties for the workforce too. The major HR issue was shortage of staff and inability of the managing director to manage the employees. Along-with these issue many problems were there like issue of favoritism, low employee morale and trust, centralized structure, poor management of workforce etc. The recommendations being suggested can be very effective in boosting morale of employees, attracting talented personnel in the company, creating customer satisfaction, fostering trust and confidence in the employees, building better industrial relations, retaining the valuable employees and decreasing the attrition rate.
However implementing these recommendations will not be an easy task for the company but as mentioned in the case study the managing director has four main aims which are to increase competitive advantage in UK, expansion into Europe especially the EU, develop strategic partnerships with other hotel organizations,to invite a takeover by a larger group in next few years as he needs injection of capital in another of his business ventures . To achieve these long term objectives the company has to work hard and implement effective HR policies. Following these steps organization can reach heights of success and build a goodwill in the service industry.
Books and Journals
- Armstrong, M. and Taylor, S., 2014.Armstrong's handbook of human resource management practice. Kogan Page Publishers.
- Bloom, N. and Van Reenen, J., 2011. Human resource management and productivity.Handbook of labor economics.4. pp.1697-1767.Human resource management. Routledge.
- Boxall, P. and Purcell, J., 2011.Strategy and human resource management. Palgrave Macmillan.
- Brody, G. R. 2010. Beyond the basic background check: hiring the “right” employees. Management Research Review. 33(3). pp.210–223.
- Burr,W. and Pearne, N., 2013. Human resource development -Learning curve theory and innovation. 39(4).pp. 12-15.
- Catano, M. V., 2013. Recruitment and Selection in Canada.4thed. Cengage Learning publication.
- Dann, R., 2012. Promoting Assessment as Learning: Improving the Learning Process.Routledge.
- Dessler, G., 2016.Human resource management. Prentice Hall.
- Gropu, B., 2013. Mandated Benefits. Aspen Publication.
- Guest, D.E., 2011. Human resource management and performance: still searching for some answers.Human Resource Management Journal.21(1). pp.3-13.
- Kaushal, Gr., 2010. Case Study Solutions - Human Resource Development. Macmillan.
- Lucio, M. M., 2013. International Human Resource Management: An Employment Relations Perspective. SAGE publications.
- Middlemiss, S., 2012. The legal impact on employers where there is a sham element in contracts with their workers. International Journal of Law and Management. 54(3). pp.209–221.
- Werner, J. and DeSimone, R., 2011. Human Resource Development. Cengage Learning.