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Strategic HRM issues in hospitality and tourism organizations

Individual HR practices may not be rare, inimitable, and
non-substitutable (Galang, 2002). However, a package of HR
practices which are often embedded in organizational culture
and structure can be rare and hard to imitate. In other words,
HR practices are most effective when they are implemented
together successfully in a coherent system (Harrell-Cook, 2002).
This means that rather than seeing HR practices in isolation,
they should be viewed together as a system. If organizations
are to achieve competitive advantage from HR practices they
have to practice the best selection, training, and reward systems
(Barney & Wright, 1998). The reason for this is that individual
HR practices may not create sustainable competitive advantage.
Certainly, this does not mean that individual HR practices
are unimportant. The challenge for organizations is to develop
a highly interdependent HR system that can create a synergistic
effect and also makes it difficult for competitors to imitate
(Barney & Wright, 1998). The package of interrelated HR
practices which are aligned with the organization’s goals and
strategies can be referred to as a high performance works system
(Galang, 2002). Rather than focusing on each HR practice,
H&T organizations need to look at them as a system and try
to create coordination and synergy among multiple HR practices.
According to Barney and Wright (1998) very few companies
spend much time and resources on coordinating each of
the various HR sub functions and have been able to achieve
synergy among their HR practices. Galang (2002) also states
that designing and maintaining a cohesive HR system is particularly
challenging.
Fitz-Enz (1997) states that an HR leader needs to have the
eight best human asset management practices which include
1. A constant focus on adding value in everything
2. Commitment to a long-term strategy
3. Proactive approach to create a culture where managers are
aware of how culture and systems are linked together for
consistency and efficiency
4. A genuine concern for multiple ways of communication with
all stakeholders
5. Partnering with people within and outside the organization
6. Aiming a high level of cooperation and involvement
7. The willingness and ability to take risk and innovate work
practices
8. Having competitive passion to search for improvement
Enz and Siguaw (2000) suggest that successful hospitality companies
need to bundle multiple good HR practices together.
However, on the other hand, Tracey and Nathan (2002) argue
that HR departments in many hospitality organizations fail to
execute even the most basic HR functions effectively. “Many
firms’ policies and practices are archaic, inflexible and do not
directly benefit those who are most keenly affected by HR
actions” (p. 17). As a result, HR departments are often seen as
cost centers and they cannot prove that their activities positively
influence the company’s performance. The following pages will
discuss measuring impact of HR practices on performance.

Measuring impact of HR practices on performance
Employing numerous good HRM practices together increases
skills and motivation of employees. This then leads to higher
productivity and enhanced worker efficiency (Pfeffer, 1994). In
return, this influences positively customer satisfaction, sales
volume, profit ratios, and reduced cost (Harrell-Cook, 2002;
Pfeffer, 1995). Measuring how specific HR practices and initiatives
influence on organization’s performance can be good
indication of how far an organization is successful in employing
its HR practices. In addition, closely measured practices
will be valued by employees and managers. Therefore, ‘The
need to demonstrate the impact of HR on a firm’s performance
is a current and future priority’ (Warech & Tracey, 2004, p. 377).


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