ABSTRACT Title: Internal recruitment in the hotel industry a case study showing how this factor affects the

e motivation of employees. Background & Problem: The report reflects the idea of examining whether internal recruitment can be a crucial factor adding to the success of an organization in the hotel industry. It also examines how successfully internal recruitment can raise the motivation and encouragement level to a large extent. This gives rise to two main questions that will be answered in this report:Is a well-known and recognized strategy sufficient as an incentive reward system in hotels? Is there a disagreement between the views and perceptions of the management and the employees of the incentive system in the hotel industry?

Purpose: The main aim of this report is to get an insight of the hotel industry and assess whether internal recruitment exclusively can encourage and motivate the employees. Methodology & Delimitations: This report relies on two approaches. One of the approaches is a qualitative one based on the interviews and other one is a quantitative one, which is carried out through a survey. Both these approaches are included in the case study that has been used in this thesis. Results & Conclusions: The conclusions that were founded were related with the two different types of employees i.e. one who are young and are eager to do a career in the company and the others who were mainly concerned regarding the job security and a stable income. For the former ones, promotion works exclusively as an incentive reward system and for the later group, promotion is not a matter of concern as they would appreciate a higher salary rather. From the analysis a discrepancy can be seen between the views of the management and employees regarding the incentive system, where the workers were not well aware that there is any kind of incentive reward system that existed.

1.

INTRODUCTION

In this section of the report, the author has presented the background, an analysis of the problem and the purpose behind the research. The final part of this section includes the disposition of the thesis. 1.1 Background The world is transforming at a rapid pace. The globalization has affected every industry sector and company globally, but some more than the other ones. One of the industries that are growing at a faster pace is the tourism industry, which according to Stutz (2005) is expected to grow at an annual rate of nearly 3 percent globally. The highest rate of development and growth takes place in the developing nations. Tourism industry has the potential to achieve greater heights but the competition is very fierce. To offer the customers what they want and fulfilling their expectations, the hotel companies need to settle in rapidly and widen their knowledge. Kaufmann (2005) cited that the employees who are motivated and encouraged perform better and develop a stronger feeling of belonging to the company. One of the main factors is to encourage and motivate the employees so that they are capable of providing and offering such services needed by the company so as to succeed. Ljusenus and Rydqvist (2001) considered that employee motivation and a high level of satisfaction within the employees aligned with proficiency to be the key factors of success. When knowing what are the main factors of success are, how do one execute a successful strategy to gain maximum benefits out of it? The companies are making use of reward systems to encourage the workers. Every company uses its own developed incentive system that includes many other systems. Incentive systems exist in many different forms and include four basic processes as described by Merchant (2007):Performance measures Level of targets Evaluating performances Rewards

According to Ahrnborg (1997), one of the most popular and recognized incentive systems is internal recruitment and has an old tradition in the hotel industry. Merchant (2007) mentioned internal recruitment as one of the non-monetary rewards. This makes it an interesting area to examine whether internal recruitment solely can inspire and encourage the employees. The hotel industry has a comparative high labour turnover and is characterized by inadequate academic education. High labour turnover emerges out to be an issue for many companies as new recruitments and learning processes cost a lot and companies also fear the loss of proficiency and productivity. But high labour turnover

can also facilitate the companies in cutting down the expenses for employees, providing them with minimum salary. This makes it very interesting to assess whether it is possible to inspire and encourage workers exclusively via internal recruitment (Jaghult, 2005). 1.2 Problem Discussion The author aimed at examining whether there is any connection between internal recruitment and encouragement and if this motivation can be considered a crucial factor really motivating the workers in the hotel industry. The author has been thinking and considering the doorman, who with excellent work and internal training as well as education, accomplished to become the manager of the Hotel ETAP. The author felt it very impressive and wonders if it is something that workers consider while carrying out their activities and if it has significant impact on their motivation as well as overall performance. Following are the two main questions that need to be answered through this research:Question 1: How can an incentive reward system be designed and developed in the hotel industry? Question 2: How do the workers consider the incentive reward systems utilised in the hotels inspected? It is not sufficient that the employees are encouraged, but they have to be motivated for the right things. This can be said that the motivation of the employees should be connected with the goals and visions of an organization. Here, the author expects that the hotel that is taken into consideration had profitability as its vision. Further on, the author felt that in order to derive any pertinent conclusions he wanted to get a wider perspective of the views of the workers regarding their situation and the factor that truly encourages them. Merchant (2007) asserted that many different aspects follow apart from being recruited internally like increase in salary and increase in responsibility and recognition. It is very significant that the management should be aware of the reward methods followed to motivate the employees. The author carried out a survey for the workers in order to get an idea. This provided the author with answer to his second question and then comparing the answer with the view of the manager of what factors drive and encourages the employees. The author also examined whether there is any opposition among the views of employees and manager on motivation and how shall the management act to develop the internal recruitment strategy of the company. 1.3 Purpose The main aim of this report is to get an insight of the hotel industry and its incentive systems for the workers. The author wanted to examine whether internal recruitment is adequate to encourage the workers and if it could be the crucial factor for success. Further on, the author wanted to examine some topics where little research has been

carried out. Keeping this in mind, the author wanted to answer the main questions that have been described in section above. 1.4 Disposition The author has provided with the disposition of the thesis in a brief manner in this section. This disposition was developed after performing the literature review and other thesis and the author felt that it would help a more logical flow throughout the thesis.

Theoretical frame of reference

The theories that will act as the base of the research are prsented in this section

Methodology

In the methodology section, the author has explained the different emthodological approaches utilised in the research process

Empirics

The data collected including the empirical base for the thesis is presented

Analysis

The empirical daa is analyzed utilising the theoretical frame of reference highlighting the significant findings and to see how theory comply with the reality

The conclusions drawn by analysing the

Conclusion

2.

METHODOLOGY

The author has used two different methods of gathering the data i.e. qualitative and quantitative method. The research process selected by the author for this thesis has been chosen to suit the need of a high level of flexibility so as to change the existing questions. Both the methods are explained as follows:2.1 Research Process

Usually the data can be collected of gathered through two different ways i.e. qualitative method and quantitative method. Halvorsen (1999) asserted that both the mentioned options differ in usefulness based on the kind of study being carried out. Taking into consideration the way in which this research was carried out, the research process was selected from different methods that suited the need of the author regarding the high level of flexibility so as to transfer the existing questions and fact, relying on the kind of information being found accessible as well as motivating to carry on the research or study. Ejvegard (2003) explained that the duality of methodology, where it sees very essential and necessary to attain a high level of flexibility due to different situations influencing the accessible information and the other perception where one have to, as much as possible stick to the actual plan developed in the earlier stages. The author felt that researching on such a general subject area; this approach was perceived necessary so as to perform the planned study of the hotel industry. 2.2 Qualitative Research

Wallen (1996) described qualitative research as an approach of examining the smaller sample of objects in a more thorough manner. As suggested by Trost (2005), a qualitative approach can be utilised by the researcher while trying to portray, explain, and find patterns or just trying to increase the understanding regarding a phenomenon. This is what is being tried to achieve through this research, which led the author to carry out a case study of the hotel in the Hounslow area of UK. A case study has been described in this thesis as data gathered and presented in a particular small group from a population and the small group represents the whole population as close as possible. To answer the problem in a correct manner, a case study has been performed that will suit the time limitation of the author as well. The key advantage of this approach is that the author does not have to examine all the companies in the hotel industry and draw relevant conclusions from the study. The main disadvantage is that the author needs to be very careful with the conclusion drawn by the author and deduce them more as indices that might point in a specific direction. 2.3 Quantitative Research

Denscombe (1998) described quantitative research as a method to utilise numbers rather than words as a base for the analysis. The key objective with a quantitative

research is to collect data and convert what has been collected to quantifiable units. He further claimed that it is generally linked with the analysis, rather than a description and it is especially good when it comes to making a comparison of the data. Usually in statistics, the higher the population of a sample is, the higher the level of validity will be. This research though, will rely on the small scale sample of surveys, being performed at the hotel in the Hounslow area of the UK, so as to look for the discrepancies among the incentive systems being utilised and the ideas of the floor workers regarding the aspects that truly encourages them to stay and work for the company. Denscombe (1998) further emphasizes the significance of isolating the variables, which is to set them free from their correlation with other variables and takes into consideration their independent affection of the issue aligned. As per Denscombe (1998) the key aim of the quantitative study is that the object under study will have a high level of objectivity. Another significant detail regarding the quantitative researches is that they have a set research design and format, i.e. the design of the research process is intended prior to the conduction of the research study. Taking quantitative research in mind, the surveys conducted by the author were performed in line with the hints presented by Denscombe. Although, the author has not considered this research as a purely quantitative one because of insufficient respondents and small scale, but has rather considered it as a more qualitative study carried out with the help of surveys. 2.4 Types of Data Gathered

It is significant to know the kind of data utilised while performing the study. Some techniques perform better than others and some are not relevant enough. In the survey conducted by the author, it has been found that:Data on a nominal scale: The lowest level of assessing like man/woman Data on an ordinary scale: Graded answers like agree completely, do not agree. These types of scales are ranked in numbers and are usually called the Likert scale.

Denscombe (1998) stated that good science usually depends on both the qualitative as well as quantitative sources and that there needs to be a difference as to where the attention and emphasis of an approach lies. In this thesis, so as to attain answers in a more thorough manner, it seemed more appropriate to carry out the qualitative interviews for the management. A survey was selected so as to sort out all the activity differences among the workers related with the floor staff. 2.5 The interviews conducted

So as to get in depth understanding of the situation in the hotel industry, the author has aimed at interviewing the workers at ETAP hotel and Days Inn hotel in the Hounslow area of the UK. The author has selected a qualitative approach via

interviews and quantitative study through a survey carried out with the employees. The employees of the hotel that has been selected by the author to interview were the ones responsible for recruiting. The selection of the employees interviewed was in the context with Trosts (2005) suggestions that the author should aim for a level of saturation in the answers provided. By a level of saturation, Trost (2005) means that when the people who are interviewed give quite same answers to the questions asked, an adequate level of saturation is attained and the validity of the study need to considered high. 2.6 Reliability and Validity of the Research

Ejvegard (2003) stated that reliability is regarding the credibility of the measuring tool that is utilised to carry out a study. In this case, it is related with keeping a high level of honesty and credibility while performing the interviews and not to draw any kind of conclusions that cannot be backed up with relevant theory and empirics and to keep it as unbiased as possible. One of the ways through which the level of reliability can be increased is by creating the questions that were used in the interviews with a strong base from the literature, so that the questions should be more up to date and relevant in nature. Apart from this, the author has decided to utilise semi-structured interviews where open questions were given to the respondents where they could talk more describing about the subject rather than asking the framed questions with yes or no as answers. Ejvegard (2003) suggested this kind of approach so as to perform more in depth study and analysis of the questions structured. The employees with high level of skills and expertise in specific areas that need to be examined by the author were selected so as to make sure that the answers given should be reliable as well as trustworthy. According to Ejvegard (2003), good reliability is an essential, but not adequate decisive factor for good validity. As per Trost (2005), validity can be described as to what level a measuring tool really measures what it is proposed to determine. 2.7 Selection of the Companies

When the author looked into the topic are of internal recruitment, the author discovered a specific business sector where internal recruitment was broadly utilised; the hotel industry. The self experiences of the author from the hotel business were slim to none. So as to obtain a high reliability level, which is essential so as to keep the scientific level of this thesis high, the author decided to select two different hotels in the area of Hounslow, UK, which are not being owned by the same company or group. The author made this selection of hotels as he intended to obtain a wider view than would have been gained by only one hotel chain. So the following listed hotels were selected:ETAP Hotel Days Inn Hotel

2.8

Method Criticism

When the author select to carry out a case study, the author knew that by considering a small sample from a large industry, the results attained might become a bit biased and the outcomes would include indications despite of the actual results. Related with the survey, a small sample was prepared from both the hotels, where the workers had the answer to the same questions, even though both the hotels are different in some areas. The intention of the author related with conducting the survey was primarily to get the answer to the second research question, which was whether there can be found a discrepancy among the ways used by the management to motivate the workers and the thoughts of the employees regarding the motivation and the ways in which the incentive compensation systems can be used by the hotels to encourage them. Among the questions that were answered were: do you feel encouraged. One can hold discussion if the workers felt urged to answer what the manager or leader desired to hear, so as to avoid reprisals from the management, although it was explicitly written that they were 100 percent anonymous. Another question in the survey was: if promotion was the only kind of reward in an organization, would it raise your motivation level? The question is hypothetic in nature and the author is now afterwards being self-critical, developing a sense that the question was not clearly enough defined. A stratified sample cannot be developed, because of the insufficient number of respondents and the author could thus not utilise a statistically secure answer from the different types of workers. Even though a stratified selection cannot be made, the answers obtained, aligned with the two deep-interviewed answers of the respondents gave the author a hint that is described in both the analysis and in the conclusions as well. The reason because of which some of the respondents did not want to answer the questionnaire could be different. Either that something came in between when they were believed to answer it or that they simply did not want to participate in this thesis when not giving them any kind of aware while answering it. Related with the sample of participants involved in the survey, a mere 50 percent of the circulated survey became the actual outcomes. One could hold discussion that the inadequate answers from the workers would show impact on the outcomes in a certain manner, but on the other hand, it might impact it in another way or simply not at all as well. Thus, the author have decided not to draw any conclusions from the insufficient answers, but rather than just citing it. 2.9 Delimitations

The area being examined by the author, internal recruitment in the hotel industry, includes a wide variety of different parts. The author chooses to narrow it down, and as objectively as possible to select the parts that seemed to be most pertinent. After browsing the different resources and appropriate literature, it was determined by

author that in the frame of reference, to emphasize on the areas of internal recruitment, incentive compensation systems and motivation. Of course, the author also had to mention other relevant areas as well like value drivers and the hotel industry in the United Kingdom. They seemed appropriate for attaining a better understanding and a better overlooking picture, so as to develop a strong basis for the questions and the observed part. 2.10 Literature

When the topic was selected by the author, he first searched for appropriate key words at the different data bases and then searched for the books related with the recruitment, encouragement and controlling. The key words that were being searched by the author include: internal recruitment, the hotel industry and incentive systems in the hotel industry. 2.11 A brief summary of the method

Firstly, the topic was chosen by the author and a small background research was made by him. The sources for the authors frame of reference were gathered and began preparing questions to be asked during the interviews. Then the author gathered the information into empirics and by analysing the empirics with the frame of reference in the analysis, the author came up with his conclusions.

3.

THEORETICAL FRAME OF REFERENCE

This section provides a theoretical background that is used to conduct an empirical evidence part. This section is mainly categorized into three different parts i.e. the hotel industry of the UK, incentive reward system and motivation. 3.1 The UK Hotel Industry

According to the Law (2002), the hotel industry in the UK is a big industry, which in the last year had over 2200 hotels and nearly 35 million rooms available, where half of them were utilised during that time. The hotel business is featured as a capital rigorous industry, where majority of the funds are tied up in tangible resources. Further on, it is related with four main factors i.e. high fixed expenses, big fluctuations in demand, big problems and issues with capacity and the fact that they perform their operations in the service sector. Law (2002) categorizes the customers into two different segments and divides foreign customer from the native ones. All the segments accounted for the below listed percentage during the last year; Business travellers: 63 percent Private guests: 37 percent UK guests: 77 percent Foreign guests: 23 percent

3.1.1 The UK Year in Review: United Kingdom The year 2010 proved to be a very challenging year for the economy of the UK. The VAT in 2010 came back to 17.5 percent after a temporary decrease to 15 percent in 2009. Other factors increasing the challenge on economy in 2010 include rise in the inflation rate to 3.7 percent, rise in the prices of oil and energy etc. Despite of the ever changing economic and political scenario, the economy of the UK emerged from the recession in 2010 with GDP growth of 1.3 percent in comparison to -4.9 percent witnessed in the previous year. This lead to a recovery in the conditions of the hotel market for the first time following an economic downturn that started in the year 2008. The continuous growth of the hotel market of London is the most important factor that influences the overall performance of the UK. (HotStats, 2011) UK Full-Service Hotel Performance Indicators 2010 Rooms 73.6 Occupancy (%) Average Room 90.54 Rate () Rooms RevPAR 66.68 2009 72.1 87.09 62.78 % Variance 1.5 pts 4.0% 6.2%

() F&B RevPAR () TrevPAR () GOPPAR () 33.72 108.78 42.23 34.05 105.30 39.72 -1.0% 3.3% 6.3% 1.1 pts 0.3 pts

GOP %age of 38.8 28.6 Total Revenue (%) Payroll %age of 28.3 37.7 Total Revenue (%) (Source: HotStats 2011, UK & Europe)

An increase was witnessed in the average room rate and rooms occupancy during 2010 leading to a significant rise of 6.2 percent in rooms RevPAR. A significant driver for the rise in demand during the period of summer holiday was continued by Staycations as the UK based tourists continued swapping their overseas hotels for the UK regions. The downward trend in the tourism industry of the UK continued during the year 2010 with over 29 million overseas residents visiting the UK. The bad weather of the UK also resulted in a sharp fall in the number of visitors coming to the UK from abroad as heavy snow and rains led to severe travel disruptions. The hotel industry of the UK was considerably affected by the bad weather because of a large number of cancellations and harshly reduced access. There is still a sense of uncertainty around the economy of the UK as well as nations operating environment of the hotel industry with many potential hotel developments and transactions still being postponed because of insufficient funding. (HotStats UK & Europe, 2011) Still many hoteliers are felling optimistic regarding what lies ahead as the operating figures show the signs of recovery that decreased in the year 2009. 3.1.2 The UK Year in Review: London The hotel market of London has continued not only to satisfy but to exceed the expectations in the recent years, with the economic downturn affecting the conditions of the hotel market in a less manner than expected. London, which is considered as a corporate, conference and leisure destination, has highlighted its spirit by showing a significant recovery in the overall operating performance during 2010 as the UK economy emerged out of economic downturn. Many global events have been attracting the demand to the city that includes Wimbledon Championships and the biennial Farnborough Air Show. The hoteliers of London will be much more optimistic about building upon the recovery in the performance during 2010, specifically with the London Olympics in 2012 on the verge. (HotStats, 2011)

London Full-Service Hotel Performance Indicators 2010 Rooms Occupancy (%) Average Room Rate () Rooms RevPAR () F&B RevPAR () TrevPAR () GOPPAR () 82.1 123.32 101.20 33.81 141.22 67.47 2009 80.1 113.23 90.72 32.89 129.69 59.29 45.7 25.2 % Variance 2.0 pts 8.9% 11.5% 2.8% 8.9% 13.8% 2.1 pts 0.9 pts

GOP %age of 47.8 Total Revenue (%) Payroll %age of 24.3 Total Revenue (%)

(Source: HotStats 2011, UK & Europe) The London hotel industry witnessed an increase in both the room occupancy and average room rate in 2010. Despite of the rise in demand for the hotels in London, the passenger traffic at all the airports of London fell. This was because of the rise in fuel prices and many weather disruptions caused during 2010 such as disruptions caused by the ash cloud. 3.2 The Labour Force in the Hotel Industry

The hotel industry is categorized as an industry with a large workforce, which usually lacks adequate academic education and is considered low-paid. Because of the insufficient qualified tasks for the workers, it is also categorized by a high labour turnover. Freedman and Kosova (2010) cited that according to a survey conducted by the American Hotel Foundation between the year 1995 and 1997, showed that the average annual turnover among line-level employees was nearly 40 percent in the US. Freedman and Kosova (2010) found in their research that franchise-owned hotels have stronger incentives to assess their workers than company owned hotel, since they are outstanding claimants because of their franchise framework. While the managers of the hotel chains that are managed by the companies are less willing to observe their workers to a large extent, because they are not entirely tied to the incomes from their properties, but instead have an opportunity to channel money between the different hotels. One of the major reasons to observe their employees was the risk of theft, as the hotels are open 24 hours every day and that they are categorized by a high labour turnover. Freedman and Kosova (2010) also found that the franchise-owned hotels are more pumped up where as the managers who have

invested their money in their hotels work more hard and care a lot about their investments. 3.2.1 Labour Market Trends The analysis made by British Council (2009) showed that there has been a growth in the employment rate in the UK. This is because of the new jobs being created in the areas of cafes, restaurants and accommodation. This places the hotel industry of the UK among the five top employers in the country. The report indicated job prospects as very good and excellent for the chefs and cooks with strong future job growth. There is a very high percentage of the part-time employment in the industry with more than 50 percent of the jobs being part-time; in addition to a rise in the casualisation trend of the employees. 3.2.2 Skills Shortages There are enormous shortages in the skills in the hotel industry, which have been recognized by the surveys conducted by the British Council considering the different leading hotels. The report indicated that over 90 percent of the employers believe that there is a considerable shortage of talented cook, chefs and bakers in the hotels. And also there has been a shortage of skilful people holding the positions and performing the roles as food as well as beverage attendants. 3.2.3 Skill Needs in the Industry The requirements of the skills of the hotel industry are far wider than the technical proficiencies easily recognized. This includes employability skills like problem solving, communication as well as teamwork. These skills are very significant for the success of the hotels in such an ever changing and growing industry sector. To capability of the workers to multi skill is also very significant from the perspective of the hotel employers. Also, the employers of the hotel industry are searching for flexible combination of skills that can be tailored so as to meet and satisfy the needs of the hotel businesses. 3.2.4 Challenges faced in involving young people The hotel industry has been encountering a lot of barriers that need to be overcome so as to engage the young individuals in the industry. They are not limited but include the following: Young individuals still have a perception of the industry as being a job they carry on while waiting to get a real job Inadequate knowledge of the career paths and job results possible in the business sector Difficulty in involving the individuals who acquire the adequate attributes and attitude to enjoy success in the hotel industry

Insufficient promotion of the portability of the abilities learnt in the hotel industry To overcome the view of unfriendly working hours for the young individuals that includes shift work, weekends and highly seasonal work. Incentive Compensative Systems

3.3

The main aim of the incentive reward systems is to tie rewards to the performance appraisals. Merchant (2007) cited that the systems inform and remind the workers regarding the results are significant and encourage the employees to accomplish the outcomes. In order for the rewards to be classified as compensation, it must be a direct link among the results and the reward; it cannot depend on subjective factors. Jaghult (2005) asserted that the incentive reward systems are significant for an organization, so as to provide information to the workers. They also act as incentives to encourage the workers and put an additional effort into their work. They are also personnel-related in regard to attracting the right individual for the role. According to Merchant (2007) when relating high payments to the rewards, the systems tend to attract managers who are less risk-averse and have more entrepreneurial abilities. The rewards in the incentive compensation system are categorised in two categories i.e. monetary and non-monetary rewards. The author has stressed on the utilisation of the non-monetary rewards. Merchant (2007) cited that the non-monetary rewards usually include the following mentioned rewards:Promotion Rising in position or rank Autonomy Personal freedom Recognition that someone taking notice of the employees good behaviour More responsibilities and getting the chance to contribute more in the discussions Group or Individual Based Performance Measures

3.4

According to Merchant (2007), the rewards that depend on collective accomplishments motivate the cultural control. These rewards can be categorized in different forms, but are often state in the monetary terms and work as incentives to encourage and develop a sense of involvement and make workers think in the similar terms as the owners. Merchant (2007) cited that the group rewards in comparison to individual rewards have a smaller connection among the personal efforts made and the outcomes being rewarded. A significant factor for an incentive reward system to work effectively and in a proper manner is its ability to be affected by the actions of the workers. If the workers are incapable of having an impact on the results being assessed, then it has to be

considered as a rather pointless incentive reward system. The main issue with the group rewards is the low level of affection, where the workers in the bigger groups might feel that their performances impact the overall performance in a smaller way. Merchant (2007) described another issue is the free rider effect, where some workers tend to slack and enjoy the luxury ride on the expense of others. 3.5 Use of Non-Financial Measures

Today, many organizations tend to utilise non-financial ways like market share, customer satisfaction or product quality, so as to work as indicators for future financial performances. Banker et al (2000) described the utilisation of non-financial ways as something that is used often in association with financial measures so as to evade long-term goals with the ones that are short-term and overcome investment myopia and offer better information regarding future results. It is also stated that nonfinancial measures could offer more insightful control by going past the limits of combined financial measures. Vaivio (1999) stated that the utilisation of non-financial measures will emphasize the interactive control of top management over particular targets within the firm and leads to a gain in majority of the objects having strategic importance. Banker et al (2000) found in his study that there is a direct link among the customer satisfaction and future financial performances. In this direct link exists an interval of nearly six months between the customer satisfaction and its impact on the financial performances of the coming times in the hotel industry. 3.6 Use of Financial Measures

The main aim of profit-making organizations is to maximize the shareholder worth or value. The term financial measures are separated into two different groups:Market based measures like changes in the prices of stocks, dividends and shareholders returns Accounting based measures like operational profit, enduring income, ROI, return on equity or return on net assets

The above mentioned financial measures are easy to compute but harder to persuade and apparently they are also hard to tie towards performances. Many experts claimed that even though a lot of firms make frequent use of merit increase salary systems, the associations among performances and payments were on average very low. 3.7 Incentive reward systems in the Hotel Industry

The hotel industry belongs to the service sector and the companies in service sector strongly rely on their workers to deliver high quality services and thus require motivate them somehow. Namasivayama (2006) cited that one of the ways of doing so is with the help of incentive reward systems, where the managers design and

developed personal programs to encourage, retain and attract the employees. Chiang and Jang (2008) asserted that motivation is one significant tool that affects the behaviour of the employees as the work in a hotel is categorized by low salaries, rigorous activities, low status and little opportunities to get promoted. According to Simon and Enz (1995), there are four most significant factors to gain encouraged workers in the hotel industry i.e. a good salary, a safe working environment, opportunities for promotion and a healthy organizational culture. Relationship with the boss is considered to be the least significant factor for motivation. According to Meudell and Rodham (1998) the most significant factor for motivation in the hotel industry is the monetary rewards. But they also considered other aspects such as age, length of employment, gender and ethnicity. Meudell and Rodham (1998) found in their survey that there exists a considerable discrepancy among the employees in different age groups, whether what factors make the workers perform better and work hard. Kovach (2001) examined more than 1000 workers within the hotel industry, and asked them to prioritise among the different categories that make them work as well as makes them work harder. From the analysis, they found that the age group ranging from 18 to 24 prefers money and monetary incentives. The age group of 25-34 ranked majority of the factors significant. The 35-44 year age group consider threat of losing the job as the most significant factor, whereas the age group of 45-54 considered healthy and safe working environment as most important. Meudell and Rodham (1998) also considered the factor of the length of employment of workers. The employees who had been working from six months or so stressed more on money and incentives or bonuses. The ones who had been employed for over a year or so emphasized more on the promotion and for the employees working for more than a year promotion and opportunity to compete were recognized as the important factors that make them work hard. Meudell and Rodham (1998) also cited that the worker who are paid on hourly basis show less affection towards their work and most of the times they only care about the monetary rewards. Weaver (2000) cited that where work in its own is not a satisfied work, the most significant and appropriate incentive compensation systems are through the monetary rewards. One of the main problems cited by Anthony and Govindarajan (2007) while developing an incentive reward system in a firm belonging to the service sector is that the fir cannot assess the quality of the product before it meets the customers as a producing firm can do. This shows that the quality can only be inspected in the moment of truth when the customers meet the employees of the company. Gronroos (2002) stated that it is significant that the design of an incentive reward system in a service firm is made in a way so that it shows the workers that the company do consider and recognize a good service minded behaviour.

Namasivayama (1997) found out by studying the compensation systems used in the hotel industry of America that lower turnover rates in the hotels that had pension plans. It is worth describing that the learning cost of worker turnover is negatively associated with customer satisfaction and performance of an organization. 3.8 Value Drivers in the Hotel Industry

As cited by Merchant (2007), What you measure is what you get For gaining a better understanding about the hotel industry and he considerable factors related with measuring the performances, it is important to explain the value drivers. As per the research in the UK hotel industry carried out by the British Council, the core offering of a hotel i.e. price, location and room, contributed for 70 percent of the choice criteria. Graff (2003) cited that based on the kind of customers to be examined; they showed different attitudes towards diverse value drivers. In their research, they categorised them into two different segments i.e. business and leisure travellers. The crucial as well as significant value drivers for the segment of the business travellers seemed to be core amenities, location, and price and loyalty programs. Graff (2002) cited that related with the leisure travellers, the key value drivers were the amenities and the price. Hotels provide services via renting the rooms out and offering comfort to the customers. Kotler (2008) cited that a service is something that is being consumed at the same time it is being developed and can thus not be stored. Thus, a new ownership will not take place. But by viewing the hotel industry through a product perspective, it s very easy to understand the important and considerable factors associated with the hotel industry. By looking at every element and viewing them as value drivers, one can easily analyse what makes the benefits and analyse the way through which they can be made competitive. The companies who are successful first recognize what is being required by the core customers that can be satisfied by the product or a service. Then, they will design the actual product or service and will finally look for the ways to enhance it so as to create many benefits satisfying the customers. Kotler (2008) cited that now-a-days, most of the competitive takes places at the level of product enhancement or augmentation. Kotler (2008) also asserted that the successful organizations add benefits to the offers they provide that will not only help in satisfying as well as delighting the customer. So as to delight the customers and offer them something extra, many different methods are being used by different hotel groups. But as per the article by Ropeter & Kleiner (1997), the crucial factor is related with basic common courtesy. They stated that if a hotel treats every customer, regardless of the situations as a king or queen, offer basic courtesy and attention to every customer, the overall impression received by the customer will be positive. It only takes one bad experience to shift the customer off, but several good ones to make them happy and increase their

satisfaction level. Ropeter and Kleiner (1997) described that a dissatisfied customer will tell ten other people about his dissatisfaction as compared to the customer who is happy and will be telling only three people. Core Product: A room and a bed

Guarantee Quality

Expected Product: TV, sheets etc. Extended Product: Something that stick out, experience

Core Product

Styling Service

(Source: Kotler, 2008) 3.9 The Significance of Selecting the Right Workers

Having the right individuals in the right positions and roles is a very crucial and vital success factor for every organization. The managers and supervisors usually take into consideration the recruitment and selection of the right individuals and them keeping them, as the most significant and crucial factors for an organization in long run. Hessner (2009) also cited that an organization is able to solve its issues and problems and take advantage of the possibilities in a better way when an organization does this. Zeithaml and Bitner (2003) cited that it is very significant for the service firms to have employed the service minded workers, as they are the front and significant tools of marketing. They are the ones who offer services to the customers and who will be remembered. Thus, it is significant to analyse in a careful manner whether the potential worker is ready to emphasize on quality and encouraged to work in a service minded manner, prior to the recruitment of a new worker. Duggan and Croy (2004) stated that an organization has two different choices while recruitment of a new worker need to be made. Either, they employ an individual

internally or externally. If an organization chooses to select externally, they can either recruit a worker with already appropriate abilities or with potential abilities where they need to provide training the worker and educate them. 3.9.1 Elements of Recruiting and Selecting the Right Staff Different elements of recruiting as well as selecting the right workers as described by McKenzie and McKenzie (2007) are listed as follows:1. The organization is a place that workers are proud to be related with Every individual wants to be related with a winner. The word of the positive working environment of an organization will get out into the greater community. The company will be like a magnet, attracting the skilful and talented individuals towards it. Both of them provided information, tools as well as methods for the managers and leaders to make use of creating as well as sustaining a constructive culture for the workers and the organization as a whole. 2. Job descriptions are meaningful and link to the core competencies and desired outcomes of a position It is very important to recognize the needs of a position or role. Job descriptions are too often generic in nature and do not describe the real needs of the role. Good job descriptions as well as job profiles include a list of core competencies needed and necessary for the job. Core competencies lie at the centre of what makes the best people in this role simply most effective and best. 3. An effective recruitment and selection process is in place and being adopted Recruitment as well as selection are viewed and treated as a top most priority for an organization. Time is made available so as to adopt and implement the processes put in place. Leaders need to be directly involved themselves as suitable, and monitor the progress as well as outcomes. The open job roles are filled so as to reduce the stress on the leaders and front line workers. Leaders are involved in the process of hiring and viewed as having a major role in recruiting staff for their departments. 4. The right people are chosen and put in right staff positions The responsibility for recruiting as well as selecting the right people is hold by all the management levels within an organization ranging from execution in charge to front line managers. If the positions are improperly filled or go unfilled it can seriously impact the supervisors as well as front line workers. 5. New people are helped to get off to a great start

An initial experience of a new worker with the administration of the company plays a vital part in the individuals decision either to stay or leave the company.

The organization is a place that staff are proud to be associated with

New people are helped to get off to a great start

job descriptions are meaningful and associate to a position's core competencies and desired outcomes

The right people are selected and put in the right staff positions

an effective recruitment and selection porcess is in place and being followed

3.9.2 Six-step process for Recruiting and Selecting the Right Staff Conducting interviews and selecting the workers for different positions within an organization can be complex and a time consuming process. It is usually feel like trying to search a path through a maze. Selection needs a careful thought-out and repeatable process so as to do it in a proper manner. The staff members who are involved in hiring will need to have a continuous training in the process as well as opportunities to enhance their abilities. Whether taking into consideration internal or external candidates, it needs to be assured that the process must be designed for selecting the people who will properly fit as well as stay in the organization for long-term.

Below mentioned are the six major steps that should be considered for the development of the selection process:-

Determine Needs

Recruit

Screen Resumes

Interview

Compare & Assess

Make Offer

Source: McKenzie & McKenzie (2007)

Step 1: Determining the needs of the position i.e. core competencies and job descriptions Job descriptions are too often generic in nature and not very helpful in defining the main performance objectives associated with the position. Required working experience, educational qualification, basic work functions etc. are usually descried with the job descriptions. Although these pre-qualifications do not actually lie at the centre of what a successful match between the job candidate and job role really is. For providing true help, the job descriptions must properly and clearly define the outcomes as well as achievements that are expected from the position and the skills needed for the role as well. The job descriptions must describe the core competencies that are required to be successful at a specific position. A sample job description form is shown as follows:-

Tool: Sample Job Description Form

Title/Position: Date: (date this job description was written)

Description of the service offered by this position: (What is the aim of this job? Write a brief summary that describes this job. What are the desired procedures utilised; desired results; what are the locations and special conditions in which the job will be performed? What would doing this job successfully look like?)

Primary tasks to be carried out:

(What are the performance objectives related with this role? What are the particular day-to-day, week-to-week, month-to-month tasks that must be performed to achieve success at this position? Make use of verbs like plans, recommends, interviews etc. for describing the tasks and functions. Also illustrate the work timing i.e. what need to be done when or how often, etc.)

Prerequisites needed: (What are the fundamentals for this position that includes academic, certifications etc.?)

Job skill, knowledge and experience and personality traits: (What abilities, knowledge and experience have? Think about the aspects that make people work their best in this position)

Behavioural attributes, attitudes, motivational factors required: (What are the behavioural and overall personality attributes, essential to achieve success in this role?)

Primary people contacted: (Who will the person doing this job be working with that includes customers and peers? Who will the individual performing this role work for?) Step 2: Developing and executing the recruitment plan An organization can be unaware of the opening of a new job or role as an employee can leave the company unexpectedly. The companies need to develop a plan in advance to start the actual job specific recruiting effort that will help them coming out of such unexpected problems. The fundamental components of the plan include the following:Worker policies and plans that seek for advance notice of the recruitment needs of a company in order to fill the vacant positions in a controlled manner, not in a crisis. Job descriptions need to be kept current and available in a place where the recruitment of the supervisors and managers can access the latest version. The file including job descriptions also includes the pre-defined ads for print newspaper and internet.

The company has existing resumes on file that are submitted before the job opening for likewise roles. Management and administrative workers are offered with continuous training in recruitment and interviewing An executive needs to be assigned to manage the process of recruitment and selection. Internal employees need to be made aware of the opening and motivated to refer potential applicants or apply themselves as well.

Step 3: Screen resumes, evaluates and selecting the most promising applicants Develop an objective as well as repeatable process for how the resumes should be collected and processed that includes assigning the responsibility of reviewing and screening them. Different steps that need to be carried out in the process of screening the candidates are:Log in the resumes as they are received Conducting first level screening of the resumes that includes passing initial criteria such as experience, education, legal needs, certification etc. Conducting second level screening of the resumes that includes reviewing each of the core competency of the position. The telephone interviews need to be carried out for the candidates who have passed the first two levels of screening Determine the ways of informing the candidates about the whole recruitment and selection process

Step 4: Conduct the interviews, asking the right questions The interview is a process of carrying out two-way communication. Through interviews an organization can seek to gain information regarding the candidate and the applicant can gain knowledge about the company. This is the time for an interviewer to do some talking and a lot more active listening. A sample of different behavioural interview questions that can be asked during the interview are listed as follows:-

Tool: Sample Behavioural Interview Questions

Decision Making and Problem Solving Provide me an example when you had to keep from contributing or developing a decision because you did not have sufficient information. Give me an instance when you had to be quick while making a decision.

Leadership What is the toughest team that you have had to gain cooperation from?

Mention a time when you faced difficulty in gaining support from others regarding your ideas? What approach was adopted by you and how did it work?

Motivation & Initiative Provide me an instance when you went above and beyond the call of duty. Give me a situation when you were able to have a constructive influence on the action of others. Mention a situation that needed many things to be performed at the same time. How did you handle it and what was the result?

Communication Describe a situation when you had to be assertive so as to get a point across that was significant to you.

Teamwork and Interpersonal Skills Mention a recent unpopular decision made by you and the actual outcome What have been done by you to contribute to a teamwork environment? Mention a circumstance where others working on an assignment disagree with your views. What was done by you? Describe a situation where either you had compromised or guided others to do the same.

Planning and Organization How do you make decision on what gets more priority while scheduling your time? What actions are taken by you when your schedule suddenly interrupted? Provide an example

Technical and Professional Knowledge Mention a circumstance under which you had to request for help or assistance on a particular assignment. Provide an instance of how you have applied knowledge from one task to some other project or assignment. Mention a situation when you found that your performance is not satisfactory as per the expectations of your manager or team leader. What action did you take to improve it?

Step 5: Compare, assess and choose candidates It is very important to look beyond the first impressions and look at the real requirements of the position and the future demands of the company. In doing so,

the actual needs of the job position have to be matched with the skills and abilities of the applicant. Some of the basic individual features essential for resilient worker are:Sense of individual beliefs and mission that is accordance with the values and mission of the company Desire to make a difference in the working of the company Strong sense of effectiveness n performing the different activities Sense of belonging and personal price in the company and its mission

Below described is the formula of traits and core competencies that add up to make a great hire.

Performance
- -The individual's jobrelated skills and commitment to effectiveness Character - The individual's underlying value system, sense of mission etc.

Personality - The indiivudla's selfawareness senitivity to others and ability for managing the relaions

Great Hire
Step 6: Make the offer When a decision is made for selecting a candidate for a job position, implement it. It is very important to be aware of the time it takes from the final interview to the final hiring decision and the offer is made. Candidates have a feeling of urgency and must be treated in a respectful manner. Following needs to be considered while making an offer:Assure that the offer is fair as well as competitive Follow-up the verbal offer along with the written offer, thus avoiding the misunderstanding as well as possible confusion Discussing the offer in a direct manner with the candidate for clarifying the details

3.10

Celebrate Internal Recruitment

Internal recruitment can be defined as when an organization selects the existing employees already working in the company rather than recruiting someone external. The advantages of the internal recruitment include the benefits gained by the companies from their present workforce, provided that the workers are well aware of their roles, understand the company completely and are competent enough. Molander (1996) stated that the major advantage of internal recruitment is its capability of creating an atmosphere of loyalty and job security among the workers, which could be otherwise very hard and difficult to achieve. Another advantage of internal recruitment could be that it helps in saving the time that would have been spent on advertisements and also helps in lowering the training expenses that would be needed by an external employee to understand the company completely. Lockyer and Scholaris (2004) cited that an employer who selects to recruit internally also understand the abilities of an employee in a better way i.e. reducing the risk of selecting an unsuitable worker. Molander (1996) also cited that by using internal recruitment, the workers will have rewards to stay in the company so as to climb the career ladder. This provides a boost to their incentives for effectiveness and enhances their productivity. Internal recruitment has some disadvantages as well as advantages. According to Ahrnborg (1997) the main disadvantage of internal recruitment is the restricted supply of candidates to select and recruit from. She stated that the internal recruitment can be an issue for lethargic firms, as a reason of insufficient influences and the fact that they maintain their slowness and restrict their opportunities for development. This insufficient development and new ideas can raise issues for the firms maintaining their market shares because of threats from new products and competitors. Another disadvantage recognized by Ahrnborg (1997) is that an individual who fills the vacancy is leaving its position and thus a new vacancy will be developed. Lockyer and Scholaris (2004) stated another aspect of internal recruitment as that the workers might feel that they need to be recruited due to the experience they have but are not talented enough. Further on, during the times of recession, a phenomenon might takes place that the firms are trying to maintain their workers, and take internal recruitment to places and shift their workers to the positions they are not competent for. 3.10.1 Stages involved in Internal Recruitment There are six different stages that are involved in the process of internal recruitment. These stages are described as follows:-

Publication Vacant internal posts need to be posted through the developed communication channels of an organization that includes intranet, notice boards in the power stations etc. for fixed duration of time. During this time, the applicants can convey their interest through e-mails to the supervisors or managers. Application All the applicants applying for the vacant position will be requested to send an e-mail, which should also include their reasons for applying. All the applicants will then be sent their resumes to bring it up to date. Pre-selection The candidates who satisfy the requirements of the vacant position the best will be asked for an interview. The applicants who will not be selected for the interview stage need to be informed with immediate effect that their application has been unsuccessful because of them not fulfilling the needs of the position. Assessment All the candidates who are pre-selected will go through the different phases of selection performed by the department of human resources and the heads of the department where the vacancy exists. Selection & Appointment The candidate who will be satisfying the needs for the new position will be chosen and will then let the head of that particular department about the promotion. The people involved in the whole process need to come at an agreement about the start date of the new role. Closing of the Selection Process The candidates who will not be successful should be informed of the reasons behind their non-selection. 3.10.2 Advantages and Disadvantages of Internal Recruitment Advantages It is less expensive that the process of external recruitment Better knowledge of the abilities and skills of the internal applicants than the external pool of talent Internal recruitment will improve the commitment of the organization as a whole as well as job satisfaction Internal recruitment will improve the organizations culture and would carry on his duty successfully without any hesitation. Promotions in the job will help in increasing the confidence of the workers, thus assuring improved and better performance of the role.

Disadvantages Promotion can be painful for the ones who do not get promotion, so the confidence could be down Change is sometimes necessarily significant for the companies and the continuity is not profitable for the company

It hinders the new ways of performing things and the same mistake can be repeated with the continual actions and decisions made by the managers Internal recruitment politics might have the more impact on process of recruiting and selecting internally than external recruitment External Recruitment

3.11

The process of external recruitment is when an organization is recruiting workers outside the company. Usually an organization is making use of another company for the recruitment of new workers. The key advantage of doing this is that the organization then can emphasize on their necessary activities and not spend both time as well as resources on finding the new skilful employees. The organization can also look for and hire new workers by themselves. The companies can carry out this process by using different tools such as advertising. The most significant advantage of the process of external recruitment is that the organization has no restricted supply of applicants and can select the workers from across the globe. As per Duggan and Croy (2004), a problem with external recruitment is that it can be difficult to put words on what particular abilities needed by an organization and in this way cause issues because the consultants misunderstand as well as hire an individual who does not fit for the role. Another disadvantage associated with the external recruitment is that it can decrease the efforts of present workers, because of insufficient promotion opportunities. Chan (1996) claimed that it does not have to be a drawback or disadvantage when an organization uses combination of both internal as well as external recruitment and in fact can turn it into advantage by increasing the motivational level of the workers, because of the fear of external recruitment. 3.12 The significance of keeping the right workers

A man was walking down the street, carrying a heavy stone. A passer-by asked him why? He replied, I am a slave; I have to do it; I am ordered to. Another man was walking down the street, carrying a heavy stone and was asked why. I am building a Cathedral, He replied - ANON Motivation verifies why or even if, an individual gets up in the morning. It is difficult to measure and cannot be reviewed easily. Motivation is related with the incentives which make people act in a particular manner. Whiteley (2002) cited that the organizations with effective methods and approaches towards motivation seek to coordinate the aims of the individual workers with the wider aims of the business. Organizations make use of reward systems for many different reasons and among them one is to motivate the workers. The definition of motivation as defined by the Business Dictionary is:-

Motivation can be defined as the internal as well as external factors that inspire desire and energy in the individuals to be continually interested in as well as dedicated to a job, role, or position and to exert determined efforts in accomplishing the goals. Motivation is the stimulant of performance and mother of all the actions. It leads from the interactions between both the conscious as well as unconscious factors like:Passion of desire or need Inducement or reward value of the purpose Expectations of an individual and of his/her significant others

Management of an organization usually considers clear and well defined objectives, right administration and planning as the most significant factors for the achievement of profits and benefits in a team or group. But due to the huge and fierce competition now-a-days, many firms are gradually looking more likewise in terms of what is being produced or offered by them. And due to this, soft values are gaining more importance. As cited by Hessner (2009), How we perform activities or things is more important than what we do. But the issue with soft values is that it is difficult to see a direct outcome from making an investment in it. For an instance, when making a comparison in investments made in developing the leadership skills with a marketing campaign, the outcome from the marketing campaign will have a high level of visibility. (Hessner, 2009) The view of human resource is emphasized on the abilities of humans and companies and the way through which the relationship among them is shaped and maintained. In the 1930s, it was discovered by Hawthrone that when the workers feel recognized they perform in a better and enhanced manner. This was developed by McGregor into his theory of X&Y. Where theory X assumes that the workers are lazy and thus need to be forced to perform and theory Y assumes that the workers are encouraged and motivated and desire to work but get lazy when their expectations are not satisfied. Bolman and Deal (2005) asserted that the organizations have to therefore try hard to give their workers opportunities to come up to their requirements when they are performing their roles in the company. In this way, the workers remain encouraged and willingly stay in the company.

4.

EMPIRICS

This section forms the part where the author has used the collected information from the interviews and surveys, integrated with the second hand sources from the companys annual reports and information balance sheets. The author has separated this section into two different segments i.e. one part representing the views of management and the second part includes the information gathered from survey, which aims to portray the views and perceptions of the workers.

4.1

A brief overall introduction to the hotels where the interviews were held

4.1.1 ETAP Hotel Introduction ETAP is a European chain of basic-service budget hotels that is owned by the Accor Group. The group has many branches all over the world i.e. Asia and Europe. The main competitors of the chain are the likes of Holiday Inna and Travelodge in Europe and in the UK. The rooms of the hotels are well furnished and include basic amenities like small desk, television, a shower and other basic necessities. The company owns nearly 370 hotels within Europe and most of them are located in France. ETAP Hotel Worldwide An Accor brand, ETAP hotel performs its operations in a network of 462 hotels with over 41,000 rooms in around 15 nations across the globe. ETAP hotel is the leader in Europe in the segment of budget hotels with more than 400 hotels and 34,000 rooms in 10 different nations. The company has been planning to expand its network of operations in over 500 hotels as well as 45,000 rooms in nearly 20 nations. The customer trend of the company includes 60 percent business customers and 40 percent leisure clients. The company owns attractively priced as well as superior quality chain of hotels. ETAP hotel provides its customers with best low cost product in the industry i.e. highly affordable prices such as 34 in the UK. The company offers a comfortable accommodation that includes a toilet and shower and in addition to this a television that offers the customers with an access to a wide schedule of programs. The hotels are also equipped with WiFi internet accessibility. The author has selected an ETAP hotel that is located in the town of Hounslow in the UK. The author made his interview with the HR manager of the company who has been working for nearly 5 years in the hotel at different positions. The manager began his job as a receptionist and advanced to become a supervisor. The HR manager of the hotel is responsible for recruiting the employees and also to make operative decisions of the hotel. The role of manager of the hotel can be easily compared with the position of a CEO if ETAP hotel would have been a private hotel, instead of a crucial part in such a big hotel chain. She is a very effective and good example of an internally recruited manager. She began as a trainee during the summers and continued after ending up being the director of the hotel. the knowledge, experience and position of the manager made her appropriate for the interview. 4.1.2 Days Inn Hotel Introduction Days Inn is among the most popular as well as the leading brands around the globe that is being owned by the largest group of hotels in the world i.e. Wyndham Hotel

Group. It has been ranked as the fifth largest brand after the Hilton Hotels and it is the largest mid-range brand of hotels around the globe. At present, Days Inn is among the fastest growing global hotel brands on the UK with over 321 hotels in the UK and more than 52,000 rooms. The friendly workers of the hotels love to make their guests and customers feel totally comfortable. The company has always been known and recognized for its friendly service, comfort as well as value. Now that the re-launch of the Holiday Inn across the world has completed, both the business as well as leisure travellers are finding the offers of Holiday Inn even better service and quality. The author has interviewed the HR manager, who has been working in the hotel since 2005 where she had held different positions. She began in the restaurant and advanced to become the kitchen manager. There she notified that how much interest she had in providing education to the workers, an interest that she wanted to extend and thus applied for the role of HR manager. With some education being offered by the company and her experience she managed to get the role. She holds the responsibility of hiring the individuals for various positions and is active when the job interviews are conducted. Overlooking Table of Examined Hotels ETAP Hotel Number of stars 4/5 Number of rooms 194 Turnover () 63 Millions* * Approximated numbers being told by the respondents 4.2 Incentive Compensation Systems Days Inn Hotel 4/5 deluxe 349 112 Millions*

4.2.1 Days Inn Hotel There are many different ways of describing the incentive compensation systems and there are no established guidelines that must be followed by every organization. The manager of Days Inn Hotel i.e. Martina Garrod describes it as an organization with a strong working culture where tokens of appreciation are handled between the workers. She stated that service as well as attitude towards the customers are very crucial for success and for doing that, they must assure that their workers are encouraged to delight the customers and provide them with quality services. Also the workers should take into consideration that only one bad experience to turn a customer off, but many good and effective ones to make them happy and satisfy their expectations. Indeed, a customer who is not satisfied will tell ten people, as compared to a happy customer who will be telling only three. What they want to achieve with their incentive compensation systems is thus to encourage the employees to behave in these enviable ways.

To provide strength to the incentive compensation system of Days Inn hotel, it depends on non-financial performance measures and is described in monetary rewards. The monetary rewards include two different systems; the Yes I can- rose, that is provided to the worker who has performed more than well towards the customers and is thus, handed out some bonus in their next pay. The second, larger compensation is the Worker of the year, which mainly depends on the attitude towards the colleagues so as to stimulate the right kind of attitude among the employees, but also on the behaviour towards the customers. The worker receiving this reward will be provided a huge sum such as 1500-2000 in his or her next wages. Martina Garrod stated that the workers felt being an integral part of the company and that they enjoy in performing their roles. The motivation of the workers is measured through an annual survey, designed and developed by an external organization. Days Inn used to follow a piecework system, where the employees were paid additional as a result of the extra services offered. The company decided to remove this system because of decrease in quality in the services. A good example of this was the section of house-keeping, where the payments of the cleaners were based on the number of rooms being cleaned by them. The results from these incentive systems were that the cleaners became burnt out, the sick listings went up and the quality of the cleanings fell. The workers were thinking more regarding their self and also regarding the potential bonus and the competition among them were reducing their level of cooperation. Consequently, the quality of the services provided to the customers was in this way reduced. 4.2.2 ETAP Hotel ETAP hotel is a lot different in regard with the incentive compensation systems from Days Inn hotel. Days Inn majorly emphasizes on the smaller monetary rewards, depending on the non-financial measures, adjusted for the hotel industry. The most common were; small bonuses being paid to the workers every time they managed to make a booking and some kind of competition among the kitchen staff who managed to sell more items. When measured through the surveys, the others mentioned measurements were satisfaction of the customers as stated by the manager of ETAP i.e. Linda Bruce. Whereas Days Inn gets rid of their piecework system, Days Inn makes use of a system that resembles that kind of incentive compensation system, but instead of measuring exactly the number of rooms cleaned or the number of customer being served, they make use more of a guess to decide which employees will be receiving the extra salaries. This extra salary is derived from the collective pay agreements raises, HRF, where some percentage is the raise that is received by everyone and the rest of it works as a built up pot, where the ones who performed extraordinary receive those additional percentages. (Linda Bruce)

The factors that are utilised for distributing the money in a fair manner are: attitude towards the customers, capability of cooperating and willingness to educate them. The manner in which manager assess the achievements of the workers are subjective, which Bruce mentioned as made it difficult to divide the money objectively and in fair way. Linda Bruce told the author that the crucial success factor is to provide the customers with the high quality services; otherwise they would lose both the customers as well as sales. To be able to offer this quality it is significant that the workers feel that it is fun to work with. If it is noticed by Linda that someone in the staff is not being encouraged, she tries to speak with the person and solve the situation as soon as possible. The reason behind someone being not encouraged is almost always the same ad because the individual has been performing the same task for a long time. Then, it is significant to give them with the new opportunities in the hotel through new roles. Bar Chart.1
16 14 12 10 8 6 4 2 0 Highly Motivated Motivated Neither not Not very motivated Not motivated at all Series 1

Levels of Motivation

As it can be viewed from the survey, with a mean of 1.89, where 1 is the highest value, the workers seem to be highly motivated, which was also described by the management. Both the hotels have a strong organizational culture and soft values have become a lot more significant. Linda Bruce described that the workers at ETAP hotel felt like being a part of the company; and they enjoy performing different activities. The same results are observed in Days Inn, where they carry out annual surveys of the workers through an external firm as stated by Martina Garrod. 4.3 Internal Recruitment in the hotels Examined

Internal recruitment in the hotel industry is often used where the supply of the workforce is large and majority of the positions are rather standardized. In Days Inn, internal recruitment comprises of more than 90 percent of all the recruitments, which forms the major part of their strategy. When a position becomes vacant, Days Inn

announces the applicants eligible via internal webpage. It is worth mentioning that at the same time the external recruitment is also followed but nearly 90 percent of the positions. ETAP hotel resembles the Days Inn in regard with the internal recruitment, where most of the vacant positions are filled through internal applicants as described by Linda Bruce. Majority of the job advertisements go through internal as well as external portal, where both the internal as well as external applicants have a shot at gaining the job. Even though they also post external advertisements, most of the vacant positions are being filled with internal applicants, which can be explained by the companys size and the high supply of candidates. Martina Garrod also mentioned that the key advantage with internal recruitment as being a cost as well as time saver. The workers who are recruited internally already understand the company, its culture and philosophy, have been via internal educations and grab a career opportunity. Linda Bruce mentions that is also a time as well as cost saving, because of the fact that they will save time as well as money to skip most of the introduction and learning phase. It was also mentioned by her that they already understand the culture and the concepts that characterize ETAP and offering the workers with a career opportunity. Related with the disadvantages, both the respondents gave quite the same answer. They mentioned that the major disadvantage as insufficient new blood, where majority of the candidates hired share the same values and have the same internal education and have insufficient new manners of thinking and experience from the different hotels, where they were expert in some activities and could bring knowledge and experience from those areas and execute them in ETAP hotel. Martina Garrod told the author that recruiting the workers internally is not enough, as the company is expanding and requires more workers. Linda Bruce told the author that the best way is to combine both the internal as well as external recruitment. She explained that she tries to be open-minded when it comes to an open position that must be filled and stated that it is based on the position attained. For an instance, she told the author about when they required a receptionist for the bight and over 300 applications were obtained. It took a lot of time for sorting these applications out. So it can be better sometimes to recruit an individual internally. Whereas on the other hand, when coming to recruiting a person as barkeeper and someone in the crew heard rumours regarding a good fellow working in another bar then maybe the best solution would be recruiting and employing him. 4.3.1 Internal Recruitment as an Incentive Compensation System Days Inn Annual Report (2009) cited that in the large hotel chains, the career opportunities are large and even global. With over 400 hotels located around Europe and the Middle East, Days Inn tells that the company can offer a diverse range of job possibilities. And considering that majority of the vacant positions are being filled

internally, the opportunity to a carrier within the organization exists for sure. But for internal recruitment to act as an incentive compensation system in Days Inn, the workers must be prepared to move. Martina Garrod differentiated among two sets of workers, those who are driven and really need to climb the career ladder and those more concerned regarding their family as well as routine life. Martina Garrod described that internal recruitment acts as a key factor for encouraging the workers to work and remain in the hotel. ETAP hotel is in similar kind of situation, being a larger hotel group with over 150 hotels in many different nations. The career opportunities as well as most of the hotels are located in the Europe especially in the UK. Linda Bruce separated the employees into two categories as done by Martina Garrod i.e. the youth and career oriented and the ones who are mostly concerned regarding the safety of a stable income and job security. For the ones in the first category, internal recruitment is considered as the key incentive to encourage the workers, under the circumstance that they are willing to rearrange. She stated that for the second category, small tokens of gratitude and the knowledge of stability have to be adequate. ETAP hotel also differentiate a bit from Days Inn regarding employees, in that they are a concept hotel, with a build up story regarding the hotel. The hotel workers wear uniforms with small strains of red, not to precise, to raise the mysticism. This has had effected in a way that they were trying to employ younger workers and thus raising the worker turnover. So as to drive the workers, ETAP hotel tries to shift their roles, and make them relocate their positions, so as to get a better overall picture. This lies in accordance with the internal recruitment strategy, where the driven ones will be given the opportunity to advance in the job roles. 4.4 Employee Assessment of the Adopted Incentive Compensation System

This section of the report depends on the survey that was designed and performed. It was carried out at the two different hotels considered and the author did not differentiate among the two hotels. For further information regarding the way in which the survey was carried out, see Appendix for a detailed explanation. The survey was carried out based on the employee assessment and the sample is relatively small and that there are two different hotels, even though they have quite likewise reward systems. Some of the different aspects of motivation are:4.4.1 Factors for Motivation When answered about the most significant factor for motivation, the participants were given three different options i.e. promotion, raise or increased responsibility and independency. Observing the overall sample, it can be seen that half of the respondents answered that independency and increase in responsibility was the most significant factor. Related with the raise, most of the workers did not consider it being among the key factors behind motivation.

Pie Chart. 1

Most significant factor for motivation

Independency and Increased responsibility Raise

Promotion

4.4.2 The Incentive Compensation System While looking at the bar chart 2, it can be seen that majority of the respondents either did not consider the way they were rewarded, or thought it was quite poor. While looking at this bar chart, it can be considered that there were two distinguished hotels and that the incentive compensation systems were not same exactly, even though they were similar to each other to a high degree, since both the hotels premiered good behaviour towards customers as the key factor. Bar chart 2

What do you think of the company's way of rewarding good accomplishments

12 10 8 6 4 2 0 Very good Good Neither good or bad Bad Very bad Series 1

Even though the applicants were very few to make a right stratified sample, one can still observe from the survey that the ones with then most unskilled roles seemed to be less satisfied with the incentive compensation system. Most of the respondents answering good on this question work in a level able those with the most untalented activities. 4.4.3 Promotion as an Incentive Compensation System This question that forms the second question in formulating the problem was not answered to a huge extent with either yes or no, but more as the workers simply did not know. Related with the appendix, one can clearly view that most of the ones who answered with probably and definitely did not understand the answer in the correct manner, or simply were not aware that there existed an incentive compensation system. If promotion was the only reward in the company, would it motivate you?
16 14 12 10 8 6 4 2 0 Definitely Probably Do not know Probably not Not at all

Series 1

The question that follows would help in enabling the logical chain among the two questions. So as to make internal recruitment system work effectively, there should be a probability that the employees will get promotion and they also need to think that this probability is present; otherwise it could not simply work as a key factor of motivation. By reading the below mentioned bar chart, it can be clearly seen that most of the workers simply do not believe in the fact that they will get a promotion. With a standard deviation of nearly 1.2 and mean of 3.5, this clearly represents that majority of the workers believe in that they will not get any promotion.

How high probability do you think it is that you will get promoted?
9 8 7 6 5 4 3 2 1 0 veryhigh high neither/nor low Very low

Series 1

4.5

5.