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Thus poor HR practice is associated with a number of negative work and health
related consequences harming both employees and organisations. The interest of
managing human resource is based around the notion that people at work are the
key source of sustained competitive advantages. We all believe that in this century
organisations are not competing on the basis of product they produce rather the
quality of the people they employ. This belief is based on the expectation that
people can make the difference because of their capabilities and commitment which
are rare, non-substitutable, valuable, and inimitable (Barney (1991)); managing
human resource is the matter of truly strategic importance which distinguishes
successful organisations from the others (Huselid (1995)); managing human
resource is too important because it is recognising an activity which is owned by all
managers (Cunningham & Hyman (1999)); and once HR practices integrated
internally and externally support to achieve its bottom line objective- performance
(Mabey, et al. (1998)).
This clearly exhibits that human resources can contribute a lot to make
organisations more competing and raising value of the firm by making changes at
the workplace. It is believed that the bottom line result of managing human
resource is the performance. Therefore the main concern of managing people in
organisations is to raise performance of employees and subsequently performance
of the organisation. Few authors argued (Schuler (1986); Tsui (1987); Schuler and
Jackson (1987) that there is a kind of bundle and synergetic effect of HR practice
such as recruitment and selection, performance evaluation, training and
development and many other to raise performance. Furthermore there is also a
strong influence of social, cultural, economic and political factors will be on HRM
policies and practices (Budhwar and Khatri, (2001)).
Many researches, therefore, also have exerted their concerted effort to examine
impact of contextual factors on HR practices (Budhwar and Sparrow (1997) Sparrow
and Budhwar (1997)). There is no universally applicable HR practice (Pieper (1990)).
Not surprisingly, countries that are geographically and culturally closer to each
other have similar HRM practices (Dany and torchy (1994); Ryan et al. (1999)). On
the contrary, a number of authors have described about HR best practices (Pfeffer
(1998); Becker and Gehart (1996); Huselid (1995)) that are mostly granted as
culture free. Moreover, few authors have argued that many organisations fails to
use innovative and best HR practices due to little considerations given to the
behavioural factors (Rynes et al. (2001); Adams, (2003)). Thus, contextual and
behavioural considerations are imperative to implement a number of HR practices
instead of direct use of context and culture free HR.
Due to the mixture of products and services, it is more difficult for the hospitality
and tourism companies to attain higher customer satisfaction. Consequently,
increasing customer satisfaction would entail a high increase in costs for the
hospitality and tourism firms (Chi and Gursoy, 2009 and Dotson and Allenby, 2010),
requiring managers to try more vigorously to understand the relationship between
customer satisfaction and its financial performance.
However, an understanding of the costs of the customer satisfaction in the
hospitality and tourism industry has been relatively less scrutinized (Cugini et al.,
2007). Despite empirical research of this topic during the past twenty years that
addressed the idea that tradeoffs between customer satisfaction and a firm's
profitability are more likely to appear in the service industry (Anderson et al., 1997),
few studies empirically examined the effect of customer satisfaction in the
hospitality and tourism industry. A practical investigation of the financial
performance of customer satisfaction has been an increasing demand in the
hospitality and tourism companies because the findings of these studies can
provide companies with the motivation and justification for considering their
customers satisfaction.