Fragments of HRM in hospitality?

Evidence from the 1998

workplace employee relations survey

Rosemary Lucas

The Authors

Rosemary Lucas, Centre for Hospitality Employment Research, Department of Hospitality

and Tourism Management, Manchester Metropolitan University, Manchester, UK

Abstract

Using management and employee data from the 1998 workplace employee relations survey,
this article attempts to trace "fragments of HRM" within the hospitality industry (HI) on a
comparative basis with all industries and services (AIS) in Great Britain. Four themes are
explored: how the management of HRM is organised and practised, "individualism" and
"collectivism", participation and involvement, and other "sophisticated" HR practices. The
impact of HRM on employees is assessed. HRM in the HI is found to be very different, thus
providing an extreme example of the "retaining control/cost control" approach to
management, and a graphic illustration of very "hard" HRM in practice. While HI employees
are much more content with their lot than their counterparts in AIS who are subject to rather
more "favourable" HRM policies and practices, other indicators imply that there is also
dissatisfaction. Qualitative research is necessary to understand whether employees really do
enjoy being "kicked hard". Management might reap greater benefits by adopting more
developmental, "soft" HRM practices.

Article type: Survey, Comparative/evaluators.

Keywords: Human resource management, Hospitality industry, Employee relations.

Content Indicators: Research Implications** Practice Implications** Originality**

Readability**

International Journal of Contemporary Hospitality Management

Volume 14 Number 5 2002 pp. 207-212
Copyright © MCB University Press ISSN 0959-6119

Introduction

A new data set derived from the 1998 Workplace Employee Relations Survey (WERS) (DTI,
1998) covering hotels, restaurants, bars, holiday camps and canteens affords the opportunity
to review the state of HRM in the hospitality industry (HI) from both a managerial and
employee perspective. Further, this can be compared with the state of HRM in all industries
and services (AIS) in Great Britain (see also Cully et al., 1999; Millward et al., 2000). This
article opens by reviewing the question "what is HRM?", then moves to an analysis and
evaluation of the extent to which "fragments" of HRM can be found within HI and AIS
workplaces, and how this impacts on employees. The conclusions address whether HRM in
the HI really is "poor" in comparison with HRM in Britain, where this may lead.

What is HRM?
Satisfactorily defining HRM remains an enigma and, in many respects, what HRM is
purported to represent has not moved beyond some key principles laid down in the 1980s
(Fombrun et al., 1984; Hendry and Pettigrew, 1986; Guest, 1987; Storey, 1989; Armstrong,
2000). Since then, and based on a particular notion of HRM, studies have attempted to
establish whether organisations are subscribing to this new and distinctive approach to the
management of people (for example, Storey, 1992, 1995). Here HRM is integrated within
business strategy, with line managers playing an enhanced role as the delivers of HR
initiatives, thus downplaying the role of HR specialists. The deployment of "bundles" of HR
policies and practices is designed to improve employee performance and to lead to
competitive advantage. This notion embraces two variants. "Soft" HRM emphasises fostering
commitment, improving quality and developing the human resource, whereas "hard" HRM is
contingent and calculating in its utilisation of the human resource (Hendry and Pettigrew,
1986; Storey, 1992). Both approaches embrace notions of flexibility, and are not mutually
exclusive. The segmentation of different elements of the workforce into particular "cores" or
"peripheries", however defined, may result in different approaches being used for different
groups in the same organisation.

Others claim that HRM can lead to specifically measurable business outcomes (for example,
Huselid, 1995). Equally, HRM has its critics (notably, Sisson, 1994; Legge, 1995) both of
whom view HRM as a rhetorical guise to enhance managerial legitimacy where the
management of labour has been intensified and commodified within an enterprise culture (see
Keenoy and Anthony, 1992). The overall conclusions drawn from WERS are that in most
workplaces the broad approach to management was "one of retaining control and doing what
they could to control costs" (Cully et al., 1999, p. 295), with high commitment management
practices adopted on an ad hoc basis. Clearly, then, "soft" HRM is a long way from gaining
currency in Britain.

Within the HI most HRM research has focused on the hotel sector regarded as the sub-sector
most likely to display "good practice". Yet researchers, with the notable exception of Hoque
(1999a, b), have converged on a less than favourable analysis of the state of HRM including
Price (1994), Kelliher and Johnson (1997), Worsfold (1999) and McGunnigle and Jameson
(2000). Although practices observed in the hotel sector are not necessarily generalisable to
the hospitality industry as a whole, Worsfold (1999) concludes that the poor uptake of HRM in
the majority of hotels is no worse than in other manufacturing or service industries. More
comprehensive reviews of the hospitality industry have also tended to support the "poor state"
scenario (Lucas, 1995, 1996; Goldsmith et al., 1997; Wood, 1997).

In taking a rather different approach to what HRM may represent in the HI, this article treads a
similar path to Sisson (1993), who used the Workplace Industrial Relations Survey (WIRS)
1990 data set to trace any increasing presence of HRM initiatives. The survey-based WIRS,
he argued, was problematic as it focused on industrial relations institutions rather than on
HRM processes, where case studies would be a more appropriate research methodology.
Even so he was able to pinpoint and review three areas of HRM: the balance between
"individualism" or "collectivism" in management's approach, the attention paid to participation
and involvement, and management's organisation. Further, he was able to identify how future
surveys might be constructed, so as to give a more balanced view of the employment
relationship.

WERS, a statistically valid sample of workplaces across Britain, now includes very small
workplaces employing 10-24 employees, embraces a more "individual" agenda, and an
employee survey. While it is equally open to the criticism of only being able to produce a
snapshot of essentially institutional arrangements, there are two main benefits here. It
enables a valid comparison to be made of the "state of HRM" between the HI and AIS, and
gives a clearer indication of how empirical, qualitative research in the HI may be directed.
This article builds upon Sisson's three areas of HRM by extending "fragments" to include
other areas of HRM policy and practice, as well as the consideration of any strategic
initiatives. Further, although the term "employee relations" was generally used in the WERS, it
has been taken to mean HRM in this context. This permissive approach may be less than
ideal, but it will establish a more comprehensive account from which more selective
conclusions can be drawn.

Tracing the fragments of HRM

The HI sample provides interview responses from managers in 160 workplaces employing ten
or more employees. In the vast majority of cases these are managers who are primarily
responsible for HR in the workplace, but they are not necessarily HR specialists. The
breakdown by size of workplace and HI sub-sector is indicated in Table I. The employee
sample is based on 1,110 questionnaire responses, plus unsolicited comments given by 338
employees at the end of the questionnaire.

How the management of HRM is organised and practised

Perhaps surprisingly, the HI sample comprises mainly multi-site workplaces (77 per cent).
More than half of them incorporate 100 or more sites, and a large majority (85 per cent)
employ 1,000 or more workers. Indeed there was someone at board level with specific
responsibility for HRM in more of these HI workplaces (71 per cent) than in AIS (60 per cent).
Similarly, many HI workplaces (71 per cent) reported that there was a senior manager at
another establishment who spends most of his/her time on HRM. At workplace level an even
smaller minority of HI establishments (4 per cent) were head offices compared to AIS (11 per
cent). This, and the presence of more very small workplaces, may account for the fact that
half as many HI workplaces (10 per cent) had specialist HR managers than in AIS (20 per
cent). Consequently, HR was in most cases part of a general manager's job. Having said that,
all HI workplace managers spent on average 35 per cent of their time on HR, with over 30 per
cent spending 50 per cent or more. This is a large amount of time given that HR is
management's major job responsibility in only 13 per cent of HI cases. Few HI managers (25
per cent) seek HR advice from outside the organisation, typically a lawyer, whereas this is
more commonplace in AIS (50 per cent). The most time spent on HR occurs in the largest
workplaces employing 100 or more employees, where HR specialists and strategic plan
coverage are also most likely to be found.

Three-quarters of HI and AIS workplaces were covered by a strategic plan, which sets out
objectives and how they will be achieved. In terms of strategic integration, half of the HI
workplaces were accredited as Investors in People (IiP) compared to one-third in AIS. Few HI
workplaces had attained BS 5750 or ISO 9000, less than half the number in AIS. These
structures suggest that HR is more likely to be driven and controlled from beyond the
workplace, especially in the HI, and has the potential to be strategically integrated.

"Individualism" or "collectivism"

Part of the shift towards HRM embodies the marginalisation of representation through trade
unions and collective arrangements in favour of more direct employee participation and
involvement schemes. Of course, "collectivism" has always been a marginal practice in the
HI, with trade union density standing at 2 per cent compared with 34 per cent in AIS. It does
seem that managers who declare themselves neutral about trade unions are reluctant to say
so when asked directly, since most would rather consult directly with employees than with
unions, and this is more marked in the HI. Only one in 16 HI workplaces have non-union
representatives, whose role was generally limited to being consulted or informed. Health and
safety is the one domain where there is some form of representative structure, but only 10 per
cent of HI workplaces have a joint committee, compared to 27 per cent in AIS.
Representatives were most likely to be volunteers and not elected. At an individual level
accompaniment in grievance and disciplinary hearings was a well-established practice in the
HI and AIS prior to the implementation of the Employment Relations Act 1999. In short,
managers' approach is highly "individualised".

Participation and involvement

Despite management's preference for consulting directly with employees, in practice they
tended to take a rather lukewarm approach to this. Consultative committees are rarely found
in the HI (11 per cent), but are more common in AIS (23 per cent). Over half the HI largest
workplaces have a committee. The main agenda item is health and safety, although they
typically discuss a range of issues, and committees are only deemed to be fairly influential.

Team working is less frequent in the HI. Systems of briefing are widespread in the HI and
AIS, but there is less time at meetings for employee questions and views. The HI is less likely
to have problem solving groups for specific problems or to discuss aspects of performance or
quality (16 per cent) compared to AIS (33 per cent). HI employees typically make suggestions
for improving working methods through other channels. A significant minority of HI (43 per
cent) and AIS (39 per cent) workplaces use formal opinion surveys. Perhaps surprisingly in
the case of the HI, the disclosure of information regarding plans about organisational and
establishment financial performance, internal investment, and staff plans is a majority
practice, as it is in AIS. This is communicated via regular meetings. These approaches are
suggestive of a controlling managerial approach, with managers being highly selective in what
they disclose and how they disclose it.

Other "sophisticated" HR practices?

Recruitment is substantially more frequent in the HI, running at 63 per cent of total employees
employed one year ago, nearly two and a half times the rate in AIS. Similarly employment
flows are three times higher than in AIS. The main causes are resignations and dismissals.
The mean rate of labour turnover is 42 per cent in the HI, more than double the rate in AIS.

Recruitment methods are relatively informal, with personal recommendation counting for more
in the HI (54 per cent) than in AIS (37 per cent). Although the main HI recruitment criteria
were motivation, references, skills and availability, they are rarely assessed systematically.
Personality and attitudes tests were rarely used, and performance and competence tests
used by only one-quarter of HI workplaces compared to 48 per cent in AIS. Induction was
widespread, but of shorter duration in the HI. Within one month new starters in the HI would
be up to experienced worker standard in half the workplaces compared to one-third in AIS.
Off-job training was less frequent in the HI and, where given, health and safety and customer
service featured most frequently. Performance appraisal was most likely to be used for HI
managers/administrative staff, although over half the HI workplaces use it for non-managerial
staff.

Although one in seven HI and AIS workplaces have written equal opportunities and diversity
management policies, HI practices are less favourable than in AIS. Half the HI employees
needing a day off at short notice would be required to take unpaid leave compared to less
than one-fifth in AIS. Only 9 per cent of HI workplaces have a written policy giving entitlement
to special leave for fathers compared to 34 per cent in AIS, although men accounted for over
40 per cent of the workforce in both cases.

HI employees are considerably lower paid, with 33 per cent of workplaces having 50 per cent
or more of their employees earning less than £3.50 an hour, compared to 8 per cent in AIS.
Variable pay was quite common in the HI, with profit-related pay and bonuses constituting the
most common forms of variable pay. Although minority practices, employee share ownership
(28 per cent) and deferred profit sharing schemes (14 per cent) were twice as likely to apply
in the HI, HI employees fared considerably less well in terms of benefiting from employers'
pension schemes, company car/allowances, private health insurance, four weeks' paid leave
and sick pay in excess of statutory requirements.

Pay reviews were less likely to conform to the annual pattern observed in AIS. Pay was
essentially management driven in the HI, more particularly from a higher level in the
organisation in nearly half the workplaces. However, HI managers able to determine pay were
significantly more likely than their AIS counterparts to make the decision without consulting
more senior managers. Considerably more HI workplaces worked on very low wage
costs:sales ratios, with 52 per cent having a ratio of less than 25 per cent. HI workplaces were
consequently more cost-conscious in terms of keeping records of sales/fees/budget, costs,
profits and labour costs than in AIS. More HI workplaces reported above average levels of
financial performance, and quality of product or service than in AIS. Conversely, more AIS
workplaces reported above average levels of labour productivity. The HI has been as active
as AIS in introducing workplace change. However, proposed changes to payments systems
were not always implemented.

While most HI employees have access to grievance and disciplinary procedures, notified
usually through the staff handbook, one-fifth of workplaces lacked these formal procedures.
Relatively few HI employees (12 per cent) use the grievance procedure, half the rate in AIS,
perceived to reflect good management/employee relations. More HI employees are
disciplined than in AIS, and the number of disciplinary sanctions is twice as high. The rate of
employment tribunal complaints is higher in the HI (42 per 1,000) than in AIS (24 per 1,000),
and HI complaints are more likely to go to a hearing. Unfair dismissal is the main jurisdiction,
with unlawful deduction from pay also featuring as important in the HI.

Three-quarters of HI employees are engaged on standard contracts, although half the HI

workforce works part time compared to one quarter in AIS. In the HI fixed-term contracts of
one year or more are rare, and temporary agency workers even rarer. Although zero hours
contracts are rare, they are more likely to be found in the HI. Functionally flexible work
practices applied in equal measure in the HI and AIS. In one-third of workplaces half or more
of the workforce of the largest occupational group was trained formally to do jobs other than
their own.

Overall a cost-controlling approach is discernible, with managers relying upon low labour
costs, and regulating staff numbers through the manipulation of readily obtainable and
disposable labour. In short, there is precious little in these HRM practices that can be
regarded as approaching "soft" HRM, or representing any degree of sophistication. Yet 97 per
cent of HI managers rate the state of employee relations as good or very good, slightly more
optimistic than their AIS counterparts (90 per cent).

The impact of HRM on employees

In spite of management's optimism about the state of workplace relationships, the use of a
cost-controlling approach and the marginalisation of employees in workplace life suggest that
the impact on employees should be a negative one. HI employees, only 6 per cent of which
were union members, have to be self-reliant. They are significantly more likely to perceive
their managers as anti-union, and to represent themselves in dealing with employment issues
such as challenging management about their work, in disciplinary proceedings, and in
seeking a pay increase.

However, surprisingly, HI employees show a stronger level of endorsement for the way they
are managed than their AIS counterparts. They are more likely to be proud to tell people who
they work for, and to believe their managers understand their needs towards meeting family
responsibilities and encourage them to develop their skills. They are also more likely to be
satisfied with the respect they get from their supervisors and line managers. HI employees
are more frequently consulted on health and safety matters. Significantly more HI employees
rate their managers more favourably across five areas: keeping everyone up to date about
proposed changes, providing everyone with a chance to comment on proposed changes,
responding to suggestions from employees, dealing with work problems, and treating
employees fairly. On a sixth more general measure, 73 per cent rate management/employee
relations as good, much higher than in AIS (55 per cent).

Equally, HI employees display an impression of overall job satisfaction, rather more so than
their AIS counterparts. They are more secure in their job, worry little about their job outside
working hours, are more likely to have sufficient time to complete their job, and are more
satisfied about the amount of influence they have over their job. However there are no
differences between HI and AIS employees in other areas. Two-thirds of employees are
satisfied with the sense of achievement they derive from work. A large majority believes they
have a lot or some influence at work over the range of tasks done, the pace of work, and how
they do their work. There is sizeable minority dissatisfaction about pay across both groups of
employees.

Verbatims have only been obtained for HI employees, and represent the only opportunity in
the questionnaire for respondents to respond freely, especially about any issues not dealt with
in the questionnaire. These unsolicited comments indicate that employees may be rather
more dissatisfied than the quantitative responses suggest, although we cannot rule out the
possibility that dissatisfied employees are more likely to complain than satisfied ones. Of
these verbatims, 59 per cent were dissatisfactions, 27 per cent satisfactions and 14 per cent
balanced. Hours, pay and conditions of employment prompted the most adverse comments,
followed by general problems within the workplace, such as frequent changes, high turnover,
poor communications and not enough staff. Problems with managers were more common
than problems with colleagues. Most satisfaction was derived from social relationships,
particularly with colleagues.

Is HRM in hospitality really "poor"?

Evidence of board level HRM responsibility, line managers who are highly active in HR
matters and some strategic planning and integration suggest that HI organisations are more
strongly set up than AIS in terms of HRM potentiality. The management approach is highly
individualised and controlling, and employees have few means of collective union and non-
union representation. Participation and involvement is management driven, and affords little
opportunity for employees to express any real influence in workplace and organisational
decisions. Most HR practices can be regarded as poor, in so far as they represent low pay
and poor conditions of employment. The regulation of staff numbers through the manipulation
of readily obtainable disposable labour is a long way from being "soft" and developmental, or
based on the use of sophisticated HR practices. In short, HRM in the HI is very different from
in AIS, although both are variants of the same broad "hard" approach. Thus the HI provides
an extreme example of the "retaining control/cost control" approach to management identified
by Cully et al. (1999), and a graphic illustration of very "hard" HRM in practice.

So, HRM continues to conform to the "poor state" scenario, at least in the view of those
academics cherishing the prospect of a shift to more "soft" HRM or towards a greater
employee representation. Yet this pessimism is not shared among HI employees, who are
much more content with their lot than their counterparts in AIS who are subject to rather more
"favourable" HRM policies and practices, and have greater opportunity for contributing to
decisions through representative channels. One might argue that the employees' questions
were too focused on their own job or work, and that these results merely show that HI
employees enjoy work more than their AIS counterparts, with greater social interaction being
a contributory factor. What it does not show is the impact of HRM on the many employees
who have quit the workplace. Significant differences in employee characteristics (gender, age,
marital status, dependants) and job characteristics (length of service, pay and hours of work)
in the HI and AIS employee samples will also influence the results. Put crudely, HI employees
are kicked harder than their AIS counterparts, but actually enjoy being kicked hard. Or do
they, and if so why? This appears to be the key research issue to be picked up in qualitative
research.

Finally, industry practitioners may well argue that they have more or less developed a
coherent set of people management practices appropriate to their needs. Their rationale and
justification may be founded upon grounds that this managerial approach is necessary to
compete and survive in a highly competitive marketplace. Yet the substance of their HRM
practices does not appear to be designed to foster constructive relations with employees or to
represent a managerial approach that enables developing and drawing out the full potential of
people, even though employees may be broadly satisfied with many aspects of their work. It
is therefore tempting to suggest that the adoption of more "soft" HRM practices might yield
greater benefits.
Table I Hospitality workplaces by sub-sector and number of employees (1998)

References
Armstrong, M., 2000, "The name has changed but the game has remained the same?",
Employee Relations, 22, 6, 576-93.

Cully, M., Woodland, S., O'Reilly, A., Dix, G., 1999, Britain at Work, Routledge, London.

DTI, 1998, The 1998 Workplace Employee Relations Survey, Department of Trade and
Industry, www.dti.gov.uk/er/emar/1998wers.htm.

Fombrun, C., Tichy, N., Devanna, M., 1984, Strategic Human Resource Management, John
Wiley, New York, NY.

Goldsmith, A., Nickson, D., Sloan, D., Wood, R.C., 1997, Human Resource Management for
Hospitality Services, ITB Press,, London.

Guest, D., 1987, "Human resource management and industrial relations", Journal of
Management Studies, 24, 5, 503-21.

Hendry, C., Pettigrew, A., 1986, "The practice of strategic human resource management",
Personnel Review, 15, 5, 3-8.
Hoque, K., 1999, "Human resource management and performance in the UK hotel industry",
British Journal of Industrial Relations, 37, 3, 419-43.

Hoque, K., 1999, "New approaches to HRM in the UK hotel industry", Human Resource
Management Journal, 9, 2, 64-76.

Huselid, M., 1995, "The impact of human resource management practices on turnover,
productivity, and corporate financial performance", Academy of Management Journal, 38, 3,
653-72.

Keenoy, T., Anthony, P., 1992, "HRM: metaphor, meaning and morality", Blyton, P., Turnbull,
P., Reassessing Human Resource Management, Sage, London, 233-55.

Kelliher, C., Johnson, K., 1997, "Personnel management in hotels - an update: a move to
human resource management?", Progress in Tourism and Hospitality Research, 3, 4, 321-31.

Legge, K., 1995, "HRM: rhetoric, reality and hidden agendas", Storey, J., Human Resource
Management: A Critical Text, Routledge, London, 33-62.

Lucas, R., 1995, Managing Employee Relations in the Hotel and Catering Industry, Cassell,
London.

Lucas, R., 1996, "Industrial relations in hotels and catering: neglect and paradox", British
Journal of Industrial Relations, 34, 2, 267-86.

McGunnigle, P.J., Jameson, S.M., 2000, "HRM in UK hotels: a focus on commitment",

Employee Relations, 22, 4, 403-22.

Millward, N., Bryson, A., Forth, J., 2000, All Change at Work?, Routledge, London.

Price, L., 1994, "Poor personnel practice in the hotel and catering industry: does it matter?",
Human Resource Management Journal, 4, 4, 44-62.

Sisson, K., 1993, "In search of HRM", British Journal of Industrial Relations, 31, 2, 201-10.

Sisson, K., 1994, "Personnel management: paradigms, practice and prospects", Sisson, K.,
Personnel Management: A Comprehensive Guide to Theory and Practice in Britain,
Blackwell, Oxford, 3-52.

Storey, J., 1989, New Perspectives on Human Resource Management, Routledge, London.

Storey, J., 1992, Developments in the Management of Human Resources, Blackwell, Oxford.

Storey, J., 1995, "Human resource management: still marching on, or marching out?", Storey,
J., Human Resource Management: A Critical Text, Routledge, London, 3-32.

Wood, R.C., 1997, Working in Hotels and Catering, 2nd ed., ITB Press, London.

Worsfold, P., 1999, "HRM, performance, commitment and service quality in the hotel
industry", International Journal of Contemporary Hospitality Management, 11, 7, 340-8.