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The evolving nature of hotel HR performance

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An exploratory study
Article in Journal of Hospitality and Tourism Management December 2013
DOI: 10.1016/j.jhtm.2013.06.002

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Journal of Hospitality and Tourism Management 20 (2013) 68e75

Contents lists available at ScienceDirect

Journal of Hospitality and Tourism Management

journal homepage: http://www.journals.elsevier.com/journal-of-hospitalityand-tourism-management

The evolving nature of hotel HR performance measurement systems and

challenges arising: An exploratory study
Carmel Herington a,1, Ruth McPhail b, *, Christopher Guilding c, 2
a

Macquarie Graduate School of Management, Macquarie University, New South Wales 2109, Australia
Department of Management, Centre for Tourism, Sport and Service Innovation Research, Gold Coast Campus, Grifth University, Queensland 4222, Australia
c
Department of Tourism, Leisure, Hotel and Sport Management, Centre for Tourism, Sport and Service Innovation Research, Gold Coast Campus, Grifth University, Queensland 4222,
Australia
b

a r t i c l e i n f o

a b s t r a c t

Article history:
Received 15 December 2012
Accepted 17 June 2013
Available online

Qualitative interview data secured from 14 HR managers representing large hotels located in Australias
Gold Coast has been collected to examine: (1) what is the extent and nature of change in hotel HR
performance measurement systems, and (2) what are the primary challenges confronted by hotel HR
managers when attempting to implement effective HR performance measurement? Perennial HR
problems such as high staff turnover, employee dissatisfaction and low service standards that continue to
plague the industry highlight the importance of examining HRMs evolution in the dynamic hotel
context. Considered holistically, the studys observations reveal high consensus with respect to perceived
change in HR performance measures. Evidence of devolution of tasks generally associated with the HR
function to line managers a more strategic role for HR managers is also provided. The observations
suggest a substantially altered trajectory for the hotel HR function and this change appears to be
occurring at a rapid pace.
2013 The Authors.

Keywords:
Performance measurement
Strategic human resource
Hotel sector

1. Introduction
From a strategic perspective, human resource performance
measurement systems appear to provide vital information concerning a rms human resource activities and its performance
(Delery & Doty, 1996; Huselid, 1995). Lepak and Shaw (2008)
describe the establishment of associations between HR practice
and rm performance as a distinguishing feature of strategic human resource management (SHRM).
Empirically established associations have been found between HR
performance management and critical outcomes such as rm performance (e.g. Delery & Doty, 1996; Huselid, 1995), employee productivity (Huselid, Jackson, & Schuler, 1997; Wright, Gardner,
Moynihan, & Allen, 2005), and even competitive advantage (e.g.
Barney & Wright, 1998; Huang, 2000; Vlachos, 2008). Although
scepticism has been expressed over the veracity of some reported
ndings (e.g. Wall & Wood, 2005), the overriding opinion is that the
HR function provides important inputs to organizational strategic

* Corresponding author. Tel.: 61 7 555 28600; fax: 61 7 555 29206.

E-mail addresses: carmel.herington@mgsm.edu.au (C. Herington), r.mcphail@
grifth.edu.au (R. McPhail), c.guilding@grifth.edu.au (C. Guilding).
1
Tel.: 61 2 98508989. Website: www.mgsm.edu.au.
2
Tel.: 61 7 555 28790.
1447-6770/$ e see front matter 2013 The Authors.
http://dx.doi.org/10.1016/j.jhtm.2013.06.002

planning, and HR performance metrics constitute vital strategic

information.
There also appears to be an association between effectiveness of
SHRMs strategies and employee retention. Huselids (1995) inuential research not only indicated a positive relationship between
high performance work systems and nancial performance. He also
noted turnover and productivity mediating this relationship.
Huselid concluded that, A one-standard-deviation increase in such
practices is associated with a relative 7.05 percent decrease in
turnover . Since higher levels of High Performance Work Practices
lead to lower turnover, .there appears to be considerable justication for encouraging rms to make such investments from a
public policy perspective (Huselid, 1995, p. 687).
This observation underscores the importance of examining the
value and emphasis placed on SHRM and also the nature of HR
performance measurement system deployment in an industry
plagued by high staff turnover. High hotel staff turnover has been
widely documented (Cleveland et al., 2007; Davidson & Timo,
2006; Karatepe & Sokmen, 2006; Tracey & Hinkin, 2008; Walsh &
Taylor, 2007). Davidson and Wang (2011) reported 39% hotel
management turnover, a factor carrying signicant cost and service
quality implications.
It is notable that there has been negligible prior examination of
SHRM in hotels (Okumus, 2008), signifying we know little of the

C. Herington et al. / Journal of Hospitality and Tourism Management 20 (2013) 68e75

importance attached to hotel SHRM, which is a problem common to

many industries Sheehan, Cooper, Holland, and Cieri (2007).
Indeed, there is evidence of HRM failing to nd its feet as a strategic
partner in boardrooms (e.g. Kochan & Dyer, 1995; Sisson, 1995).
Given the associations found between performance measurement
as a component of SHRM and key organizational outcomes, it
would seem important to further our appreciation of how importance accorded to HR can affect hotel performance. This study is
based on the literary-based premise that a lack of emphasis
attached to hotel SHRM contributes to key issues plaguing the industry, such as high turnover (Davidson & Wang, 2011), poor
employereemployee relationships, lack of advancement opportunities, unprofessional behaviour and poor organisational cultures
(Walsh & Taylor, 2007).
The study also has a resonance with the attention that LengnickHall, Lengnick-Hall, Andrade, and Drake (2009) direct to the
importance of investigating SHRM within different industry contexts, to further appreciate industry specic HR issues. Further, the
study aims to deepen our appreciation of how HR has evolved in
terms of developing performance measurement systems and
appraising whether the functions boardroom level visibility has
increased in recent times.
The objectives of the study are therefore twofold. Firstly, we
seek to gain insights into recent changes in hotel HR performance
measurement systems. Secondly, we explore the nature of challenges confronting the design of hotel HR performance measurement systems, which may shed light on context specic issues such
as links between the hotel employee and customer satisfaction
(Davidson, 2003).
2. Literature review
2.1. Strategic human resource management
SHRM is concerned with how a system of HR strategies can
affect organizational performance (Lengnick-Hall et al., 2009;
Lepak & Shaw, 2008). Two issues are of particular interest in an
investigation of SHRM are: 1) how the business views HR from the
macro level, and 2) how HR activities can be measured to determine performance effects. The rst part of this literature review
focuses on the position of HR within the business, drawing specically on the broader SHRM literature. Then, a review is made of
the literature concerning how to measure and determine the effect
of HR practice and programmes on rm performance.
Huselid (1995) advanced the notion that HR is an important
consideration to the development of a rms strategic business
plan. He provided empirical evidence suggesting a positive association between the adoption of high performance work practice
systems and nancial performance (Huselid, 1995). He also found
consistency across industry sectors.
Recent reviews of the SHRM literature have been undertaken by
Lepak and Shaw (2008), Wall and Wood (2005) and Lengnick-Hall
et al. (2009). Lepak and Shaw (2008) provide a typology of different
theoretical perspectives taken in SHRM research as well as the
types of performance systems examined. Key implications arising
for the hotel industry include focussing on practices rather than
policies, investigating systems at an organization level and being
mindful of industry context.
Lengnick-Hall et al. (2009) adopted an evolutionary approach
when summarizing emergent themes evident in the academic
SHRM literature. They highlight a general lack of attention directed
to HR at the corporate level. Exploring how SHRM has evolved in
hotels could provide a useful industry focused perspective on this
issue. Further, consistent with Lengnick-Hall et al.s (2009)
perspective, exploration of SHRMs standing in the senior echelon

69

of hotels appears a worthy endeavour, in order to further understanding of industry-wide issues such as turnover.
Wall and Wood (2005) provided a critical evaluation of prior
SHRM research. They concluded that whilst there is considerable
research highlighting associations between SHRM and organizational performance, there is no evidence of causality. They also
identied a lack of alternative research methods utilized by researchers. This highlights a need to seek further understanding of
the association between HR performance systems and organizational outcomes.
2.2. Performance management systems
Historically, HR performance indicators relied heavily on rudimentary measures such as manpower (Givan, 2005), which is
sometimes reported in isolation (Wall & Wood, 2005). Because HR
can be viewed as a source of competitive advantage, increasingly
complex systems and measures have been developed to capture
HR achievements. However, whilst there is little consensus as to
what constitutes the perfect system (Lepak & Shaw, 2008; Wall &
Wood, 2005), there is agreement that different systems designed
for specic organizational objectives can yield similar positive
organizational outcomes (Lepak & Shaw, 2008) and therefore the
focus should be on HR practices rather than policies (Lepak &
Shaw, 2008; Wright & Boswell, 2002). Further, in order to achieve strategic t, HRM practices need to be aligned with organizational strategy (Wall & Wood, 2005; Youndt, Snell, Dean, &
Lepak, 1996).
The collection and analysis of performance data should result in
an objective measurement of a functions effectiveness. However,
this goal continues to be elusive (Hansen, 2005) and HR practitioners continue to be asked to justify their role and position as
strategic partners. Despite increased awareness of the potential of
employees to be a source of competitive advantage, it is unclear
how the value added by HR might be measured. Williams and
Beach (2004) note that while organizations invest extensively in
human capital, they are compromised by an inability to measure
the return from this investment.
Gonzalez (2004) refers to the use of leading and lagging indicators noting that nancial measures are lag indicators. Employees and their capabilities, however, are generally viewed as
lead performance indicators. This underscores the importance of
HR. Conventionally used human resource indicators have included:
turnover, absenteeism and employee satisfaction. The following
additional HR key performance indicators are noted by the
Australian Bureau of Statistics (2006): productivity growth, gender
mix, superannuation, training, workers compensation, overtime,
job tenure, occupational injury and incidence of industrial disputes.
Greenberg and Lucid (2004) note managements awareness of
the positive impact human resources can have on the bottom line.
They assert that performance measurement not only supports
achievement of better results, it also supports employee development. Supporting this view, the UK Institute of Personnel and
Development and the US Society for Human Resource Management
contends that human resources should have inuence at senior
corporate levels. Despite these contentions, there is a substantial
body of research suggesting that the HR function struggles to be
taken seriously at senior levels (e.g. Kochan & Dyer, 1995; Sisson,
1995).
It is widely agreed that performance measurement design
should be context dependant. Harris and Mongiello (2001) note
that recognizing industry factors is of utmost importance when
designing performance measures. Despite this, the hotel industry
has been subjected to few HR performance measurement research
examinations (Haktanir & Harris, 2005).

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C. Herington et al. / Journal of Hospitality and Tourism Management 20 (2013) 68e75

Table 1
Participant prole.
ID

Star rating

Main activities

How HR systems have evolved

Challenges faced in implementation of

HR performance system

4.5

Accommodation, F&B and conferencing.

Turning soft issues into hard numbers.

Accommodation, F&B and conferencing.

Accommodation, F&B and conferencing.

4.5

Leisure & conferencing.

Conferencing, sport & leisure.

Executive/strategic role. Costing out functions

to departments. More metrics.
Executive/strategic role. Costing out functions
to departments.
More metrics. Strong focus on turnover.
Costing out functions to departments.
More support. Executive/strategic role.
HR department disappearing.
More metrics.

F
G
H

4.5
5
4

Domestic tourism.
Accommodation
Accommodation

3.5

Accommodation, F&B and Conferencing.

4.5

Accommodation, F&B and conferencing.

3.5

Leisure & accommodation

Accommodation, conferencing & sport leisure.

M
N

4.5
3.5

International and domestic tourists

Accommodation, F&B and conferencing.

More metrics.
Focus on turnover. Executive/strategic role.
Executive/strategic role. Greater importance
for HR.
Extensive change. Work differently. Executive/
strategic role. Costing out functions to departments.
Executive/strategic role. More metrics. Costing
out functions to departments.
Costing out functions to departments
Costing out functions to departments. Expanding
role. Executive/strategic role. More supportive.
More supportive. Expanding role.
More metrics.

2.3. The evolution of HR performance measures

The evolution of organisational performance measurement
stems from Middle Ages accounting frameworks (Bruns, 1998). A
renaissance in performance measurement occurred in the 1980s
when organizations found traditional systems ineffective in
increasingly competitive markets (Johnson & Kaplan, 1987) and
there has been continuing high interest in performance measurement (Kennerley & Neely, 2003).
There have been some particular advances in HR performance
measurement systems. Those with particular pertinence to the HR
function include: the service prot chain (Heskett, Sasser, &
Schlesinger, 1997); the Boston Consultancy Group portfolio model
(Peters, 1993); the Success dimensions model (Shenhar & Dvir,
1996); the Balanced Scorecard (Kaplan & Norton, 1996) and the
Results and Determinants Model (Fitzgerald, Johnston, Brignall,
Silvestro, & Voss, 1991).
Difculties in implementing human resource performance
measures often stem from a perception that they are not needed
and a concern that what is measured may not be what is of
importance. Despite the case for constant HR performance measurement system evolution, there is little evidence of it occurring in
organizations (Kennerley & Neely, 2003).
2.4. The evolution of hotel HR performance measures
Performance measurement has become increasingly important
in todays competitive hotel environment. Like most other sectors,
hotel measurement systems have traditionally been reliant on
nancial measures. Due to increased appreciation of the role played
by employees in the generation of customer satisfaction, however,
alternative measures are being sought. Davidson (2003) found a
positive relationship between employee satisfaction and customer
satisfaction, suggesting the importance of monitoring employee
satisfaction levels. Davidson also noted that hotel service quality, as
measured by customer satisfaction levels, is positively associated
with hotel performance. Studies have noted the adoption of
Balanced Scorecard performance measurement systems in hotels

Turning soft issues into hard numbers.

Getting management buy-in. Turning
soft issues into hard numbers.
Getting management buy-in.
Recognised sufciently to warrant
being measured and invested in.
Creating measures.
Getting management buy-in.
Inclusion at a strategic level.
Getting management buy-in.
Turning soft issues into hard numbers.
Getting buy-in.
Creating accepted metrics. Shifting
to a cost centre.
Easier with support.
Easier with support.
Turning soft issues into hard numbers.

(Denton & White, 2000). This measurement framework, pioneered

by Kaplan and Norton (1996), broadens traditional performance
measurement systems to include dimensions such as employee and
customer satisfaction that appear particularly appropriate to the
hotel context. The attention commanded by the balanced scorecard
contributed to the broad motivation for the study reported herein.
The notoriety of the system and its specic reference to learning
and growth as one of its four pillars may well have triggered
greater importance being attached to HR performance measurement systems.
This literature examination highlights the value of exploring the
evolution of hotel performance measurement systems to further
our understanding of changes that might be occurring and
informing an agenda for future research in this important aspect of
hotel management. Further, identifying the challenges confronted
by hotel HR managers will provide HR managers with insights
concerning the development of effective performance measurement systems.
3. Methodology
In-depth interviews were considered the most appropriate data
collection vehicle for the study. This approach enables the collection of rich data that can yield signicant insights into the phenomenon under examination (Marshall & Rossman, 1999).
Interviews were conducted with 14 Gold Coast HR managers.
The Gold Coast has a high concentration of major international
hotel chains hosting, on average, over 75,000 visitors per day (Gold
Coast City Council, 2011). Prospective participants were initially
approached by phone and invited to participate in the study.
Thirteen of the interviewees were female and they all had substantial hotel experience. The interviews were semi-structured,
enabling exible probing that facilitated deeper exploration of
particular concepts and issues raised by participants.
In order to promote internal reliability, all three members of the
research team were present at all interviews. This enabled a sharing
of interview perceptions amongst the team (Goffman, 2005). All
interviews were recorded and later transcribed, allowing the

C. Herington et al. / Journal of Hospitality and Tourism Management 20 (2013) 68e75

distillation of the raw data into themes and facilitating the generation of ndings.
Content analysis was used to categorise responses and identify
emergent themes. The analysis process followed Wolcotts (1994)
process which incorporates three major phases; description
(relying heavily on verbatim quotes from respondents), analysis
(identifying important factors and themes) and interpretation
(making sense of meanings in context). There was a high level of
agreement among the researchers about the emergent themes.
Table 1 provides an overview of the interviewees. Each has been
assigned an alphabetical reference that appears in the rst column.
The second column records each hotels star rating and the third
column identies the hotels main activities. The nal two columns
of the table provide a summary of key themes emerging from the
interviews with respect to the two research questions.
4. Findings
The research ndings have been structured according to the two
questions lying at the core of the study:
1. How are HR performance measurement systems changing?
2. What are the main challenges confronted by hotel HR managers when attempting to implement effective performance
measurement systems.

4.1. Recent changes in HR performance measurement systems

A consensus view of the fourteen interviewees was that the HR
function has undergone signicant change in recent years. Interviewee N was the only interviewee to claim that this change had
not affected the HR measurement systems employed, although at a
later stage in the interview, this interviewee referred to changes in
the way that employees were surveyed in her hotel. This interviewee noted that her hotel was starting to develop some HR
metrics because of recognition by senior management that HR is
just not giving us the return on our investment. A good summation of the interviewees perspective on the evolution in HR
management within hotels is provided by Interviewee I who simply
observed we work differently. Some interviewees felt that change
was being forced on hotels by an evolving business environment
manifested by an altered labour marketplace and changing workforce dynamics. Such observations are consistent with earlier study
observations (e.g. Lepak & Shaw, 2008).
A particularly apparent theme in the interviews concerns the
recency of change. The interviewees consistently claimed that one
of the greatest areas of recent change concerned HR performance
measurement systems. This change presents an opportunity for
academics to become involved in appraising hotel HR managers
education needs and to undertake research that can support the
industrys apparent re-invention of the way in which the HR
function is measured. The nature of this evolution constitutes the
main focus in the remainder of this section.
4.1.1. Increased nancial accountability
Increased emphasis on promoting greater nancial accountability of the HR function was in evidence. Interviewee C stated
simply we are more accountable for costs than before, while
Interviewee G noted greater accountability with respect to organization-wide issues related to staff turnover and retention.
It was notable that Interviewees A and L used accounting oriented terminology as they spoke at length about their increased
levels of accountability. This development was sufcient to signify
that the HR departments were being treated as cost centres.

71

Elaborating on this development, Interviewee A described how her

HR department was now measured in terms of a per room daily
cost to the organization. She observed: I have to quantify every
dollar spent. . Were measured against a set of organizational e
not personal e goals each year. The extent to which this development was viewed positively by the interviewee was apparent
when she said Its very good from my perspective, because its easy
for us to understand, from where we sit, because we can see this
cost, what our impact is on the business and so we can sit and say
how do we give value for money, etc. All the costs are now very
visible and we are all accountable.
Greater accountability was being sought in some hotels by
increased costing out of HR activities to hotel departments using
an allocation basis aligned to each departments staff quantum. This
cost allocation was designed to hold departmental managers
accountable for turnover, recruitment and training and development costs incurred. In such cases, the HR manager saw their role as
assuming more of an education or advisory nature.
Noting how costing out of HR services to departments resulted
in greater accountability, Interviewee L talked of starting to charge
for services to the rest of the organization, to become a true prot
centre, where we charge out costs to individual departments. She
felt this development will lead to the realization of actually how
much it costs . whereas before we had to carry all costs. . We will
also get an extraction of prot from the whole resort.
Despite this greater nancial orientation, it was still evident that
fundamental importance was attached to the staff turnover metric.
The issue of staff turnover was seen to fall very much within the
domain of HR management.
4.1.2. Importance of quantifying performance measures
Associated with a trend towards increased nancial accountability, there is evidence to suggest a greater importance being
attached to developing quantied HR performance metrics. A
recurring feature in the interviews was frequent reference made to
on-going attempts to identify measurable outcomes. HR work dimensions referred to in connection with this quantication quest
included: employee satisfaction and engagement, staff turnover,
motivation, productivity, and absenteeism.
This quantication quest appears aligned to a belief that the HR
department should be seen as a unit with measurable inputs and
outputs rather that an under-dened and un-accountable
conglomerate. This development is consistent with the already
noted increased perception of HR departments as cost centres.
4.1.3. More strategic use of HR data
This strongly suggests that the HR function is being perceived as
strategically more pertinent, with many respondents commenting
that measured HR overheads are becoming more valued. The interviewees were also aware of receiving greater support and
encouragement to measure HR outcomes and their opinions about
strategic issues were being sought from senior management levels
e often the CEO or General Manager.
These developments appear consistent with greater importance
attached to the HR function. Interviewee D commented: There is a
greater prominence for HR starting to come through. This
heightened importance was particularly apparent in some hotels
where the senior HR managers position had been elevated to the
executive level, or the HR manager had become an important
player in hotel strategic matters. Consistent with this, employee
related measures such as satisfaction, retention and turnover are
experiencing increased prominence at the executive level. A
pertinent insight into the heightened strategic orientation of the
HR function that had resulted in abandonment of the HR title was
provided by Interviewee I: HR has pretty much gone in this

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C. Herington et al. / Journal of Hospitality and Tourism Management 20 (2013) 68e75

company. We communicate as talent management or talent management activity. We found that HR wasnt really going anywhere,
so we have changed the way we work in the hotels. This hotel was
outsourcing many of the functions conventionally associated with
HR (e.g. recruitment and payroll) to other functional areas so that
we can be more in the strategic part of the business . and give
more direction and leadership in where we are going. . for the rst
time ever we sort of feel like we have moved to talent management
and we have changed the way we work. (Interviewee I).
Paralleling this development, Interviewee D predicted a demise
of HR in its conventional form: Our HR function will go . but (I)
will be involved a lot more in executive meetings. I think that will
go out throughout every other industry.
This increased strategic orientation suggests there is a longer
term and more holistic perspective being taken by HR managers.
Associated with this longer term view is a need to promote
employee satisfaction. The importance of this particular employee
factor was noted by Interviewee D who commented: They are
thinking about the employees and that they are being the best
employer to the employees. . That sometimes is enough for me to
be sitting here.
4.2. Challenges confronting the implementation of HR performance
measurement systems
The second research question concerns an examination of
challenges confronting HR managements attempts to implement
effective performance measurement systems. As with the rst
research question addressed, a high degree of consistency was
evident in the interviewees perceptions. This again suggests
achievement of data saturation in the data collection process, as
later interviews failed to yield any new perspectives.
Before commenting on impediments to performance measurement system upgrades, it should be noted that a theme emerging
from the interviews was a view that HR managers are nding it
easier to implement performance measurement system changes,
due to their stronger connections with senior hotel executives.
Interviewee M noted that, consistent with greater importance
given to the HR function, they now had the bosss ear. Despite
this, several other HR performance measurement system challenges were expounded upon.
4.2.1. Senior managements perception of staff turnover
responsibility
A number of interviewees remarked that although senior
management were focused on turnover and retention as major
challenges, these same managers did not see the problem as falling
within their managerial jurisdiction. Rather, they saw the problem
as caused further down the hierarchy of the organization, and that
the responsibility should be seen as a departmental issue, or the
sole responsibility of the HR function. Exemplifying this view,
Interviewee L commented: Senior management still doesnt understand that staff turnover is still part of their responsibility.
4.2.2. Line managers willingness to assume traditional HR
responsibilities
A widely recognized challenge for HR managers is their need to
ensure that line managers can effectively conduct activities that
were traditionally viewed as falling within HRMs remit. The interviewees consistently observed that not only were line managers
not trained in lling these roles, but also these duties were never
included in line managers designated responsibility set. Interviewee L elaborated on the example of chefs increasingly assuming
responsibility for recruitment advertising, even though they had
minimal previous exposure to processes such as preparing job

advertisements, deciding where to advertise, or monitoring

advertising costs. This broadened responsibility for line managers
has resulted in a modied HRM role that is more akin to acting as
overseers (Interviewee L). This description is telling, as an
impediment to HR managers developing stronger performance
measurement systems stems from their inability to force staff to
monitor a particular performance dimension, as the HR manager
generally has no line authority over department heads, signifying
that the HR manager is more an overseer than an enforcer.
An example of HR managers limited capacity to enforce the
cooperation of line managers is evident from comments made by
Interviewee C who gave the example of an HR initiated employee
appreciation week held at her hotel. The event was well supported
by junior staff, but not by managers. Managers lack of support for
the event triggered the negative sentiment experienced by junior
staff. Interviewee C noted that limited management interest in the
event stemmed from the HR managers inability to convince other
managers to treat it as important.
4.2.3. Challenge of quantifying dimensions of performance
Most interviewees noted difculties associated with attaching a
monetary amount to several important dimensions of HR performance. This desire to quantify stems from the management adage
What gets measured is what gets managed. Consistent with this,
Interviewee B, commenting on the importance of quantication,
noted they dont really pay attention otherwise. The desire for
quantication relates not only to a quest for stronger performance
measurement, but also a need for a comprehensive budget package
designed to counter overspending tendencies.
An associated challenge concerns HRMs need to convince
management of the importance of HR performance metrics. Interviewee J commented that the hard numbers related to prot
command more attention than the HR measures. Concern with
this was evident in his further comment: Frustration is felt if
management takes no notice of what statistics we present. At the
same time, several interviewees noted that it was their responsibility to foster and champion the importance of the HR statistics and that they are becoming better equipped to pursue this
with greater vigour as a result of their burgeoning strategic role.
Many of the interviewees commented on difculties arising
from their lack of training with respect to their changed role and
also how HR related dimensions of performance should be
measured. Interviewee N commented: Ill be the rst to put my
hand up and say I just dont think Im qualied to know how to
proceed with that (introduction of performance metrics for HR)
because weve just never done anything with it and were really in
the dark, so we need some guidance. . (It is) so hard for me to
work out how to actually demonstrate the return on our training
dollar investment for the business. I know we can measure the cost
of training and the materials, as well as peoples time, but then how
do we say well thats actually given us a return on our investment.
Some person has grown from here to here and therefore the
business is now better off as a result of that.
Summing up the profound nature of the evolving HR performance measurement quantication challenge, Interviewee N
commented: I would say the industry is in muddy water. . We
have this new way of working in HR. Its now time for us to start to
work out how that is giving us a return on our investment. Is it in
fact working in terms of translating the new way of working into
some sort of quantiable dollar value?
5. Discussion
The aim of this study was to explore the changing nature of HR
performance measurement systems and the challenges relating to

C. Herington et al. / Journal of Hospitality and Tourism Management 20 (2013) 68e75

implementing HR performance measurement in hotels. The ndings reveal a set of coherent changes and challenges. Firstly, it appears there is substantial evolution taking place within the hotel HR
function and this evolution is both recent and rapid. This nding
conicts with Kennerley and Neelys (2003) claim of minimal HR
performance measurement evolution, but supports Lengnick-Hall
et al.s (2009) literature review commentary suggesting
continuing SHRM evolution. This claim of change appears to be
relatively recent, which could partially explain the inconsistency of
these observations, although the degree of evolution noted by this
studys interviewees suggests the evolution has been underway for
several years.
It has also been found that the HR function is growing into a
more elevated sphere of inuence that is increasingly inltrating
the corporate level. This observation supports Lengnick-Hall et al.s
(2009) ndings. Traditionally viewed as a somewhat soft function
in hotels, employee related activities appear to have often been
dropped into the too hard basket with respect to measurement.
The evidence suggests there is an increasing emphasis on metrics in
organizations, heralded by such systems as the Balanced Scorecard,
which resulted in greater importance being attached to the
development of HR related performance metrics. Furthermore,
greater hotel industry awareness of staff turnover costs is likely to
promote a culture more receptive to HR initiated responses to how
this issue might be better managed. It is notable, however, that this
suggestion of enhanced importance attached to HRM is inconsistent with earlier claims (Kochan & Dyer, 1995; Sisson, 1995),
signifying this change has been somewhat recent. The interviewees explanations of how their HR positions now command
greater inuence suggest that these earlier ndings, made in the
1990s, are no longer tenable.
One of this studys more notable ndings concerns an apparent
repositioning of HRM closer to hotels strategic and executive
functions. This signies a broader HR organizational inuence, a
nding supportive of Lengnick-Hall et al.s (2009) observation of a
growing political inuence for HRM. Associated with this change is
greater outsourcing or decentralization of traditional HR functions,
such as recruitment and training, to departmental managers. This
signies that a greater proportion of turnover costs are being borne
by departments outside the HR function. This development can be
expected to result in a broadening appreciation of staff turnover
costs across a hotels functional areas. It will be interesting to see if
this development results in departmental managers attaching
greater importance to staff retention.
The observations of two interviewees predicting the eventual
demise of a segregated HR function are particularly noteworthy.
This perspective is consistent with that of Solnet, Kralj, and Baum
(2013), who highlighted increased decentralization of the HR
function in their review of the nature and structure of HRM in
hotels. This appears as a natural extension of the HR function
assuming more of a strategic orientation, as functions traditionally
associated with HR become assimilated within operating departments. This prediction holds signicant implications for the
way HR is researched and taught. There could well be a need for a
comprehensive overhaul of the manner that HR is conceived of in
classrooms, with greater emphasis attached to all line managers
understanding HRM functions.
Many of the noted challenges confronting HR managers can be
related to the changes observed. For example, interviewees
consistently lamented their problems in convincing executive staff
to assume greater responsibility for limiting staff turnover. They
also face difculty training departmental managers to take greater
responsibility for functions traditionally associated with HRM. This
problem of securing line manager buy-in to HR issues is supported
by previous literature, which points to line managers seeing

73

themselves as carrying an equivalent level of inuence to HR

managers in effecting organizational outcomes (Kochan & Dyer,
1995; Millward, 1994; Sisson, 1995; Storey, 1992). These issues
provide a suggestion for the future direction of HR managers education. Securing the support of executive staff and line managers,
requires HR managers to develop high level negotiation skills as
well as an ability to sell their ideas in a manner drawing on internal marketing techniques including managing upwardly.
A nal major issue widely commented on by the interviewees
concerns the challenge of developing metrics for qualitatively oriented HR activities and outcomes. While there now appears to be
widespread adoption of metrics that focus on gauging factors such
as employee satisfaction and staff turnover rates, there appear to be
fundamental challenges with respect to gauging other HR related
issues such as ROI from training. As half of the respondents specically mentioned the increased use of broad performance measures, this suggests the development of suitable broad metrics
applicable to the hotel HR function is an issue worthy of further
attention from academics and HR practitioners alike.

6. Conclusion
This studys major contribution concerns the exposing of a
denitive change in the nature of the hotel HR function. Several
issues relating to this change have also been identied. In light of
continuing hotel sector evolution, this research is timely in
unearthing possible new research avenues as well as potential new
directions for hotel HR pedagogy. The ndings also highlight a
developing need for traditional HR activities to be added to the core
of generic management education, in light of traditional HR function decentralization to operating departments.
The ndings raise a number of implications for HRM. Not least,
they point to new directions for HR theory development. From a
managerial perspective, the ndings underscore the strategic
importance of HRM and highlight new challenges confronted by HR
managers in assuming this role. Hotel HR managers are likely to
struggle with their enhanced inuence in the senior echelons of
organisational life. If they receive insufcient support when highlighting HR issues at this level, hotels will likely fail to fully realize
latent benets. This issue was evident from a number of interviewees who appeared to lack the requisite condence to promote the HR agenda. This underscores a need for HR managers
receiving appropriate management training to assist their transition into this more senior role.
A second implication for the evolved HR managerial role concerns the responsibility of developing traditional HR capabilities
amongst line managers. This signies a need for HR managers to
develop the capacity to sell the importance of these roles to
department managers. This could be achieved through the development of new training programmes where HR managers assume
the role of training other departmental managers. An area of
particular concern was highlighted by some interviewees who
noted that because they were at an equivalent hierarchical level to
other departmental mangers, they found it difcult to instigate the
involvement and engagement of their management peer group in
HR activities. This poses an organizational management issue and
appears to suggests that the evolving HR strategic role may need to
be matched by the assumption of greater authority. This implies the
need for a major overhaul of the HRM function.
Challenges encountered by line managers have also been noted.
If these managers are expected to assume some traditional HR responsibilities, such as advertising for staff, they will require training
in these areas. This suggests a need to broaden conventional job
descriptions.

74

C. Herington et al. / Journal of Hospitality and Tourism Management 20 (2013) 68e75

Many interviewees commented on the difculty of developing

HR metrics, and particularly the fundamental challenge of quantifying HR achievements. This constitutes a challenge for both the HR
function and the whole organization, in terms of what surrogate
measures should be developed and how these can be effectively
integrated with other organizational metrics. While systems such
as the Balanced Scorecard point towards a structure for developing
an integrated system of performance measures, it appears the
operationalization of such frameworks continues to represent a
profound challenge.
The study has identied a need for senior management to take
greater responsibility for HR issues. It was noted that senior management frequently fail to assume ownership over the cost of staff
turnover. There appears to be little appreciation of the fact that an
organizations culture or actions taken outside an employees immediate department can contribute a staff turnover problem. This
may be a manifestation of an industry culture and organizational
climate, with ingrained attitudes resulting from conventional staff
rewards and remuneration. As an alternative, a number of practitioner authors have highlighted key roles they play in terms of
affecting staff attitude to the rm (e.g. Freiberg & Freiberg, 1998;
Marriott & Brown, 1997; Rosenbluth & McFerrin Peters, 1992, 1998).
The commentaries provided by HR managers interviewed in this
study, lend credence to the signicance of the doctrine professed by
these CEOs.
Senior hotel personnel need to consider consequences resulting
from the changing organizational position of the HR function. The
profundity of this change is sufcient to have caused two interviewees to talk of a demise of the traditional HR department
within hotels. This highlights the need for careful consideration of
the future positioning of HR functions and the locus of dispatching
activities that have conventionally fallen within the HRs realm of
inuence.
From a training perspective, the results ag the need for new
directions in training and educating HR managers, both within the
rm and also in tertiary education institutions. There appears to be
a need to place greater emphasis on leadership, metric development, strategic thinking and negotiation training. Also, internal
marketing training would assist HR managers develop their capabilities to sell the importance of HR activities to line managers.
Further theory development relating to new avenues of research
triggered by this studys agging of key HR evolution is to be expected. Possible avenues include the examination of forces driving
change in the hotel HR function, an area of examination that has
already received some attention from Solnet et al. (2013). This
study also points to opportunities to develop new interpretations of
the HR function. One possibility is to examine how the HR function
can best manage the likely enduring struggle to develop viable
metrics for hotel strategic decision making applications.
The studys ndings should be considered in light of a number of
limitations. These include the qualitative nature of the research, the
size of the sample and hence the compromised generalizability of
the results. A limitation of all qualitative research concerns the
degree of subjectivity that is bound to be invoked by researchers
when deciding what probes to employ when conducting interviews
and when determining how the collected data is to be analysed.
Our understanding of the issues investigated in this study would
be extended by researchers examining the nature of HR performance measurement systems and also how HR managers perceive
their performance measurement needs in other industry and
country settings. Furthermore, the issues uncovered in this research
warrant further investigation, in order to increase our capacity to
extrapolate likely future directions for hotel HR management.
When the contributions of this paper are considered holistically,
it is evident that new and very challenging directions for Australian

hotel HR managers are emerging. The paper provides key insights

for HR theorists and hotel HR practitioners alike. Armed with these
insights, the sector will be better equipped to consider how it
should move forward in developing appropriate HR planning systems that can maximize value added by HR activities. Fundamental
to this consideration is whether HR activities should be undertaken
by a designated HR management function, or increasingly devolved
to other functional areas within the organization.
Conict of interest statement
There are no actual or potential conicts of interest, including
any nancial, personal or other relationships, with other people or
organizations since beginning the submitted work that could
inappropriately inuence, or be perceived to inuence, our work.
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