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Human Resource Management in the Hotel Industry

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Table of contents

  1. History and Development of Human Resource Management (HRM)
  2. Issues and Challenges Faced by Small and Medium Hotels
  3. Steps Which Can Be Taken
  4. Conclusion

It is observed that the HRM has a vital aspect of providing high quality service in the service sector. Employed staff will be responsible in providing excellent service so that the customer satisfaction is achieved by the hotels. In most service industries, it is HR that creates the goodwill, brand image, and popularity of the organization. When we glance in the past HRM was not in practice scientifically. Various theories developed implemented and redeveloped. Many hotels justify the absence or neglect of HRM functions with the size of the organization. Regardless of a hotel’s size, employees are vital assets.

It is also important to point out that the performance of every country’s economy is strongly linked to the small and medium enterprises (SME) sector – and SMEs rely heavily on their workforce and on their HRM practices for success.

There is generally a worldwide view that the hotel industry has a number of personnel related problems and poor employment practices and conditions.

History and Development of Human Resource Management (HRM)

If we focus on origins and historical development (Nankervis et al., 2008). HRM have been influenced by management theory, which has evolved as economic, social, political and industrial relation factors and management development of management theories impacted by technology and globalization. The base of HRM is employee welfare if employee is satisfied the organization is healthy (Carey, 1999), as first seen in the 1940s with the use of welfare officers in the organizations. The welfare and administration stage of HRM identifies a mechanistic of hire, pay, and fire. This is similar to the classical management approach that follows Taylor’s scientific management principles. In management theory the HR movement began to make a significant impact with the famous ‘Hawthorne experiment’ and the neo-HR approach of theorists that showed that the way in which employees were treated and consideration of their motivations were critical factors in achieving productivity (Nankervis et al., 2008).

Issues and Challenges Faced by Small and Medium Hotels

The above context we are focusing on the HR planning and practices for small, medium and large hotels and challenges they face while dealing with various human resources issues like hiring, training, retaining them. As per the size of the hotel the challenges will differ. We have focused on few of the challenges.

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Smaller hotels with limited financial resources they don’t take interest in developing and implementing HR systems in comparison to larger hotels. Smaller hotels need to change HR practices compared to larger hotels because of the different manpower requirements and legalities. Specifically, they must focus on improving customer satisfaction and the quality of service through well-organized HR management. A small hotel’s survival may depend on its ability to recruit efficient, qualified people, while providing them with incentives so that they work at full capacity to maximize the property’s profits.

The manager or the owner play very important role in designing HR policies. The implementation of these policies is also a step to a successful entrepreneur. It is challenging for the owner to hire staff and make them efficient who will follow the quality and standards to achieve customer satisfaction.

The issues are not different in medium size hotels. The manager or the hotel owner or the trust face almost the similar issues. The difference between HR policies of the small and medium sized hotels is the professional implementation of those policies. The medium sized hotels have professional approach towards human resource. Small and medium hotels play vital role in developing the economy of country as they generate employment. Hotel industry is labor intensive service industry. The success of these hotels depends upon the technical, social skills of employees. The attitude and social skills of employees are important aspect in making competitive image of the organization.

Steps Which Can Be Taken

Steps that small and medium hotels can take:

  1. Change in view of handling human resource. The reality is that small independent hotels cannot be successful without the presence of an efficient HRM system. Hotel owners play the most important role in establishing such systems, and so they should be the starting point of changes.
  2. Offering attractive pay packages.
  3. Providing effective training. Formal training by larger organizations is generally provided to employees on a yearly basis and offer personal development opportunities. On the other hand, in a small hotel, training is often informal, costly, and done on a voluntary basis by other employees within the company or by the owners. Other options may include the use of student volunteers from local colleges/universities to provide important training and skills to employees. Some options for training may include inexpensive or free training, and advice from groups such as local business groups, or business communities. Some of the most popular tools are seminars/webinars, lectures, videos, and on-the-job training.
  4. Motivating staff to acquire social, technical.
  5. Adopting advanced technology.
  6. Following right HR policies and practices. Small- and medium-size hotels may not function well without proper human resource management practices. There is a need for small/medium sized hotels to use HRM practices that are cost effective and less time consuming instead of the available sophisticated HRM systems. An effective human resources practice by SMEs has the potential to help boost their growth and increase their success.
  7. Staffing. Staffing has been identified as SMEs’ weakest HRM practice. In fact, the most frequent staffing method by SMEs is word of mouth, as it is a low-cost option of attracting candidates. Small organizations can halve staffing through ‘campus recruitment’ as it is a relatively cheaper source of recruitment than recruiting through advertisement and private employment exchanges. Furthermore, new graduates from educational institutions may work with zeal and commitment. More experienced staff may be hired through walk-in interviews. Whatever method, cost-effective staffing requires the development of a clear job description.
  8. Absenteeism is also rooted in poor pay and the lack of a professional approach on the part of superiors in dealing with workers. Small hotels should think of instituting positive measures like counselling, reward systems, improving the work environment, and training to deal with the issue of absenteeism.
  9. Achieving customer satisfaction or fulfilling their expectations: the term ‘luxury’ does not associate the term ‘conservation’. Guests may not like to conserve or to think of green practices during their accommodation. The employee should be well versed in handling situations and provide excellent service to guests.
  10. Follow practice of employee satisfaction survey. Anonymous yearly survey made by hotels to improve their HR policies and practices. Employee feedback act like a mirror which shows the factual figure of the HRM of particular organization.
  11. Announcing feedback analysis. As a key part of the solution, announce survey results via the platform and take the pulse of your hotel workforce more consistently throughout the year. Announcing the results in this way creates transparency with employees and helps establish trust, which is not always easily accomplished between leadership and frontline employees.

In general, being transparent about their challenges makes employees feel heard and understood. If a hotel captures quarterly feedback related to a topic that scored low, it helps provide better visibility for leadership to make a change. On the other hand, it can also validate that employees have in fact felt an improvement. By the time you get to your next annual engagement survey, you are much more likely to improve results with this approach. This is why pulse surveys are increasing popularity amongst hoteliers.


HRM is a vital part of organization. HRM helps in absorbing effective manpower for the organization. When organization has skilled, self-motivated and professional staff then the success of the organization is confirmed. Any organization will not be able to achieve their vision, mission and objectives without human resource. So, to achieve that organization should invest in to provide effective training to the employees, to make them sustainable. Now a days we see advanced technology capturing space in the organization instead of human but if you see further machines will not be operative without human so even if machines are occupying space of human, human being or employee becomes an important aspect of the organization in this paper we have explained focused on the economy of the country and SME is related we have covered the small and medium hotels and their HR practices. The challenges and issues faced by these hotels and how they can overcome of all those challenges that is also put in this paper when guest is staying in a hotel, he might not like to conserve so luxury does not the term luxury does not associate with the term conservation the employee of the hotel should understand that and inculcate attitude accordingly.

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Human Resource Management in the Hotel Industry. (2023, January 31). Edubirdie. Retrieved September 25, 2023, from
“Human Resource Management in the Hotel Industry.” Edubirdie, 31 Jan. 2023,
Human Resource Management in the Hotel Industry. [online]. Available at: <> [Accessed 25 Sept. 2023].
Human Resource Management in the Hotel Industry [Internet]. Edubirdie. 2023 Jan 31 [cited 2023 Sept 25]. Available from:
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