Diversity in the German Hospitality Industry and how it affects Human Resources Management concerning women friendly working policies

Table of Contents

Abstract

Acknowledgments

Table of Contents

List of Tables

List of Figures

List of Appendices

Abbreviations

1.0 Introduction
1.1 Rationale
1.2 The Aims and Objectives of the Dissertation
1.2.1 The Aim
1.2.2 The Objectives
1.3 Research Methods
1.4 Summary of Chapters

2.0 Literature Review
2.1 Introduction
2.2 Diversity
2.2.1 General Information
2.2.2 Importance of Managing diversity
2.2.3 Benefits of Managing Diversity
2.2.4 Origin, Legal and Historical Aspects of Diversity
2.2.5 Conclusion
2.3 Gender and the aspect of Women Friendly Working Policies
2.3.1 Introduction
2.3.2 Definition of Women Friendly Working Policies
2.3.3 Facts about women in the labour market
2.3.4 Problems which women face
2.3.6 Legal Aspects
2.3.7 Benefits of women friendly working policies
2.3.8 Conclusion
2.4 Human Resources Management in the Hospitality Industry
2.4.1 Introduction
2.4.2 From Personnel Management to Human Resource Management
2.4.3 Human Resource Management
2.4.4 Human Resource Management and the Aspect of Diversity
2.4.5 Conclusion
2.5 Conclusion

3.0 Methodology
3.1 Introduction
3.2 Secondary Research
3.2.1 General Information
3.2.2 Analysis of Secondary Data
3.2.3 Limitations of Secondary Research
3.3 Primary Research
3.3.1 General Information
3.3.2 Qualitative and Quantitative Research
3.3.3 Analysis of Primary Research
3.4 The Interview
3.4.1 The Research Project
3.4.2 Limitations and Bias of the Interview
3.4.3 Evaluation of Research Method
4.0 Findings and Analysis
4.1 Introduction
4.2 Overview of interviewed hotels
4.2.1 Marriott International, Inc
4.2.2 InterContinental Hotels Group PLC
4.2.3 Hilton International
4.2.4 Arabella Sheraton Hotelmanagement GmbH
4.3 Diversity Practices in the Hotel Industry in General (Objective 1)
4.3.1 Internet based findings
4.3.2 Primary research findings
4.3.3 Analysis
4.4 Change of the German labour market with respect to women participation (Objective 2)
4.4.1 Findings
4.4.2 Analysis
4.5 Implementation of Women Friendly Working Policies in General (Objective 3)
4.5.1 Findings
4.5.2 Analysis
4.6 Women Friendly Working Policies in the Frankfurt Hotels (Objective 4)
4.6.1 Findings
4.6.2 Analysis
4.7 Future Procedures and Conclusion (Objective 5)
4.7.1 Findings
4.7.2 Analysis

5.0 Conclusion and Recommendations
5.1 Conclusion
5.2 Recommendations

Bibliography

Appendix 1: Dissertation Proposal

Appendix 2: The transcribed Interview

Abstract

Due to changes in the society and globalisation, the workforce got more diverse. Especially the female labour market participation increased, due to lower fertility rates, better education and new expectations and possibilities for women.

Particularly the hospitality industry is a very multicultural and female dominated industry. Hence managing diversity should be a current topic for hotel companies to use the full potential of their human resources.

The aim of this dissertation is to identify how the German hospitality industry deals with the topic diversity, considering women friendly working policies and how it affects the human resource management.

The meaning, importance and benefits of diversity and women friendly working policies are evaluated and the link of the topic to human resources management is shown.

Research, based on interviews with Human Resources Managers of chain hotels in Frankfurt, Germany, show their opinions and perceptions about the topic managing diversity and women friendly policies. It was revealed that diversity procedures and policies hardly exist or are at a developing stage. More over they are often not considered as being crucial to think about since lack of demand is suppose to exist.

Recommendations for future improvements are made.

Acknowledgments

I would like to thank the following people for their help, without which, I would not have been able to complete my dissertation:

All the Human Resource Managers for their time, help and contribution to my primary research.

To Cornelia Jost, the Human Resource Manager of the Hilton Frankfurt, for all her effort and for providing the contacts to other Human Resource Managers.

My dissertation tutor, Steven Goss-Turner, for all the hints and tips.

My father, who offered me much appreciated and helpful advice.

To my wonderful boyfriend, Matthias, for the encouragement, motivation and for always being there.

I confirm that this dissertation is my own work and no part of it has been previously published elsewhere or submitted as part of any other module assessment.

11,705 words

List of Tables

Table 1.1 Identifies the research methods used to investigate each objective

Table 3.1 Distinctions between quantitative and qualitative data

Table 3.2 List of interviewed Human Resource Managers

Table 3.3 Questions asked in the qualitative research and their link to the dissertation objectives

List of Figures

Figure 3.1 Types of Secondary Data

List of Appendices

Appendix 1 Dissertation Proposal

Appendix 2 The transcribed interview

Abbreviations

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1.0 Introduction

1.1 Rationale

Over the last years globalisation and demographic changes lead to changes in the population as well as changes in the workforce. Different nationalities come together to work together. More women than ever before enter or re-enter the labour market. This labour market situation can be of advantage for companies if they manage their diverse workforce effectively by implementing diversity policies.

The idea for the topic of this dissertation developed after fulfilling an internship in the Human Resource Department of the Hilton Frankfurt, Germany. The author worked on a project researching diversity and its implementation in German companies outside and inside the hospitality industry. It showed that the German hospitality industry is behind on implementing diversity practices even though it is one of the most multicultural industries and therewith a sector where managing diversity seems very important.

Particularly the diversity aspect of working women was of great interest since more and more companies specifically offer certain women friendly policies to let women combine family and working life. Again almost no information or actions are found in the German hospitality industry.

Even though the German labour law and constitution implements certain codes on equal opportunities and equal pay, there are still signs of discrimination present in workplaces. There are current debates on how to improve this situation and help women or minorities groups. A new antidiscrimination law, based on EU regulations, is in progress.

How does the topic of diversity and women friendly working policies affect the German hospitality industry? Is it really a current topic and how does Human Resources Management deal with it? What is done for women and what further improvements can be made?

This it what the author wanted to find out and hence fill the gaps of research.

1.2 The Aims and Objectives of the Dissertation

Refer to appendix 1 for the original dissertation proposal.

1.2.1 The Aim

The overall aim of the dissertation is to identify how the German hospitality industry deals with the topic of diversity with respect to women friendly working policies.

1.2.2 The Objectives

The objectives of this dissertation are:

1. To analyze existing literature on diversity and human resource management in the hospitality industry in general.
2. To assess how the labour market has changed with respect to women in the workforce in Germany.
3. To identify how chain hotels in general implement or not women friendly working policies.
4. To evaluate whether these chain hotels have or do not have women friendly working policies in their hotels in Frankfurt.
5. To conclude what modifications can be made in order to better deal with women in the hospitality workforce and why it can be of benefit for the hotels.

1.3 Research Methods

In order to complete the aim and objectives of this dissertation a combination of both primary and secondary data were researched.

The following table will show which research methods were chosen to achieve each objective:

Table 1.1: Identifies the research methods used to investigate each objective

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The secondary data were mainly accessed through the library and consisted of books, articles from journals and electronic journals, newspapers and articles from the internet.

The primary research was based on face to face interviews with four Human Resource Managers of chain hotels in Frankfurt.

1.4 Summary of Chapters

Chapter 2

This chapter reviews all the available literature on the subject. It analyses the topic diversity in general and shows the importance and advantages for companies. Furthermore the diversity aspect of women concerning women friendly working policies is emphasized and evaluated. Moreover the influence of diversity and women working policies on Human Resource Management is shown.

Chapter 3

This chapter discusses the different research methods available and those used in order to fulfil the aims and objectives of the dissertation. It highlights the advantages and limitation encountered from the chosen methods. Moreover it reflects on the chosen method.

Chapter 4

This chapter presents the findings of the primary research and analyses the results. It compares the primary research findings with the secondary research findings.

Chapter 5

This chapter summarizes the main conclusions of the dissertation based on the previous chapters. It recommends action to be taken by Human Resource Management to improve diversity policies in general and for women.

2.0 Literature Review

2.1 Introduction

Globalization and changes in the population happen worldwide. Faster and more sophisticated communication as well as other new technologies improve mobility among customers and employees. For this reason hotel organizations must make sure that their employees get aware of cultural differences and get trained in how to deal with them (Doherty and Groeschl, 1999).

Additionally demographic changes and a lower fertility rate have lead to a labour force that has a higher female share than ever before. According to Mok (2002) the workforce has changed considerably in terms of age, gender, culture, education, disabilities and values.

Already recognized by Goldsmith et al. (1997), the hospitality industry is probably the most international business of all. Furthermore it is an industry with a high female attendance. To deal with an increasing diverse workforce, companies realized that to be effective and get the most out of their human resources new policies had to be applied. “As a result, interest and concern in managing diversity has grown steadily over the past decade” (Mok, 2002: 213). Managing diversity is an effective human resource strategy (Doherty and Groeschl, 1992), and is considered as very important for ensuring a company’s future success and competitiveness (Thornburg, 1995).

One has to realize the connection between human resource management and diversity. The human resource management of a company should guarantee keeping and recruiting the best workforce to achieve the best results for the business. The workforce of today does not hold the same values, nor does it pursue the same needs and wants (Mok, 2002). If human resource management does not react to these changes, potential employees will prefer competitors which have adopted new policies. Hence good and qualified human resources are lost. This means a monetary loss for the company and an increased labour turnover.

Diversity in respect of women friendly working policies in the German hospitality industry seems to be an area not much explored, which is the reason for writing this dissertation.

Diversity and its meaning will be explained more thoroughly in this chapter. Since diversity consists of many areas the author will only concentrate on the topic gender, or better say women. It will be shown how diversity in respect of women friendly policies affects human resources. The author concentrates on the German hospitality market.

During the secondary research the author realized that it was very hard to get information about diversity and the aspect of female friendly working policies only based on the hospitality industry. Reasons for this lack of information may be that diversity raises sensitive issues and is therefore very hard to study. Furthermore companies might be afraid of legal consequences when handing out information about their experience or data (Kochan et al., 2003).

For this reason explanations and analyses sometimes might be more general than only based on the hospitality industry.

2.2 Diversity

2.2.1 General Information

In a very broad way diversity means ‘otherness’. More detailed it is explained by Kandola and Fullerton (1994) who say that managing diversity means accepting that the workforce is made up by a diverse population of people. They explain that diversity is divided into visible and non visible factors, such as sex, age, background, race, disability, personality and work style. Tayeb (1996) additionally states that colour, education, social class, mental and physical capabilities as well as sexual orientation belong to the field of diversity.

To say it differently and in the words of Thomas (1991) as cited in Miller and Rowney (1999: 307) “the term diversity refers to efforts by organizations to actively recruit, retain, and facilitate working relationships among individuals from a variety of backgrounds”.

Tanke (2001: 353) sees it from another point of view. Diversity is said to be about “empowering people to understand, value and use the differences in every person in the hospitality industry.”

2.2.2 Importance of Managing diversity

The hospitality industry is very multicultural and international, meaning many people of different origin, different culture and different beliefs come together to work in the same workplace (Goldsmith et al., 1997). Valuing people’s individuality for business, moral and social reasons means people get more creative and increase the productivity with fresh ideas (Institute of Personnel and Development, 1996).

The international nature of the labour market, though, causes problems in the sense of effective management of workers with many different cultural backgrounds (Goldsmith et al., 1997). Diversity should be a very important topic if the company wants to be successful creating the best communication between employees in an organisation (Albrecht, 2001), achieve the employees maximum potential and at the same time be able to “service a culturally pluralistic industry and consumer marketplace” (Tanke, 2001: 352).

In fact reports on what companies have to do to stay competitive in the 21st century reveals that diversity is seen as a strategic and business imperative (Albrecht, 2001).

The Institute of Personnel and Development (IPD) (1996:5) gives five major reasons why diversity matters in businesses:

First of all it is a way of improving customer care and increasing market share, which then will increase the profitability of a company.

Secondly managing diversity means developing organisational ethics and values. Basic assumptions and beliefs are created that are shared by all employees (Tayeb, 1996).

Thirdly, diversity management is good for enhancing people management practices. Making sure, people feel comfortable in their working environment, knowing their needs are taken serious and that they are all valued in the same way will increase their working efficiency. Concerning the demanding hospitality industry, additionally stress caused by operational problems in the human resource management would have a very bad influence on the employees work style and therewith on the service quality and customer satisfaction.

Fourthly, implementing diversity in business or human resources policies also reflects that companies react to the changes in society and personnel expectations.

Lastly diversity must be put into consideration to comply with legislation. It can evade the cost of discrimination cases (IPD Guide, 1999). It though has to be said that diversity efforts are mainly done out of economic rather than legal reasons (Kersten, 2000).

2.2.3 Benefits of Managing Diversity

Managing diversity can increase productivity, since creativity and group synergy are promoted (Kersten, 2000). Ultimately highly motivated personnel will lead to a higher customer satisfaction (IPD Guide, 1999). Customer satisfaction and retaining customers is probably the main goal of every hospitality institution. A diverse workforce brings a range of skills and ideas which can be implemented in the overall business procedures and become of benefit for the company in the sense of competitiveness (IPD Guide, 1999).

The more employees have the opportunity for personal development and the permission for independent working, the better they will represent the hotel. Customers sense a good work climate and will feel more comfortable. In addition international customers feel more respected being served by an international staff, which is aware of the needs and wishes of all kinds of cultures.

When deciding to put diversity into action it is very important to include it in all human resources procedures (IPD Guide, 1999). The concept of managing diversity will not be successful if it is not implemented in all areas of organisations. That means that the CEO of a company, the line managers, as well as the ‘simple’ employees needs to live and understand diversity. This shows that leadership from the top is essential (IPD, 1996, IDP Guide 1999).

2.2.4 Origin, Legal and Historical Aspects of Diversity

The concept of managing diversity emerged from earlier concepts such as equal opportunity (EO) and affirmative action (AA) (Thomas, 1990). As Kandola and Fullerton (1994) say, EO and AA are more legally driven, than driven by the business case which applies to managing diversity. EO and AA concentrate more on disadvantaged groups, whereas managing diversity is based on the assumption that all individuals are unique and different (Doherty and Groeschel, 1999).

Historically the aspect of diversity caused much activity not only in businesses but also in legal actions and civil society, over the last years (Kochan et al., 2003).

Before talking about legal aspects it should be mentioned that the legal system of Germany is different to that of Anglo-American countries.

Germany, unlike the USA or the UK, has a written law. This means that all the laws are put down in codes of law. The most important of all is the constitution, called ‘Grundgesetz” (GG).

Concerning diversity one important aspect of the German law is the 1945 passed article saying that everyone is equal before the law (Schoenfelder, GG, Art. 3).

In 1994, Germany amended article three for ensuring that no one is allowed to be disadvantaged or preferred on the basis of his or her gender, origin, race, language, background, beliefs, religion (Schoenfelder, GG, Art. 3, Abs. 2, S. 1).

Currently the German parliament is discussing a new law concerning diversity called the ‘antidiscrimination law’ which is based on a passed guideline of the European Union. This law prohibits any unjustified discrimination based on race, ethnic origin, gender, religion or philosophy of life. Even though this law more or less already exists in article three of the constitution, it is found important to implement in the codes of law. With this law affected persons can fight for their rights having the legislator and justice on their side (SPD, 2005).

But why did the workforce get so diverse?

First of all, after World War II West Germany developed a great lack of workforce, even though they already absorbed millions of refugees in their economy. For this reason they imported labour mainly from the Mediterranean regions and later Turkey. Of course these workers stayed in Germany and founded their own families.

Secondly, in 1989 the revolution in eastern and central Europe additionally caused a large flow of immigrants. Germany has taken more than 400,000 refugees from the Balkan regions and the ex socialist nations (Tayeb, 1996).

Thirdly, there is the European Union which increased to 25 members in 2004. This facilitates and promotes the possibilities to work in the member state countries.

All these aspects lead to a mixture of the workforce; companies have to deal with.

2.2.5 Conclusion

The key aspect of diversity management is the nurturing and rewarding of differences rather than suppressing them (Kirton and Greene, 2000). It should encourage personal development and the individual contribution to an organisation. Managing diversity is seen as a management procedure which makes sure that every employee is valued applying the same standards, but also to increase efficiency, productivity and with that profit. Furthermore managing diversity means reacting on the changed needs, wants and expectations of the workforce.

2.3 Gender and the aspect of Women Friendly Working Policies

2.3.1 Introduction

Diversity has many dimensions. The author decided to only concentrate on the aspect of gender with respect of women friendly working policies. This is a really interesting area, since in the recent years more and more women decided to enter or re-enter the labour market. Still this area is relatively under researched (Bardoel et al., 1999).

Changing economic, social and demographic trends across Europe had a major influence on the traditional roles of women (Drew et al., 1998). The traditional nuclear family type, two adults with dependent children and one sole breadwinner hardly exist anymore. Instead dual-income or/and one parent families became quite normal (Drew et al., 1998).

In the last quarter of 2003 there were about 38.6 million employed persons in Germany, including 18.1 million or 46.9 percent women. Compared with the last quarter of 2002, the female participation in the labour market increased by 0.4 percent points. Compared with 1998 it increased by 1.9 percent points (Destatis, 2004).

One of the areas where women are employed in substantial numbers is the hospitality industry (Purcell, 1996).

In fact, according to the European Commission (1995), 76 percent of all employed women and ‘only’ 52 percent of the total working men are employed in the service sector within the European Union. The German hospitality market is made up out of 3.4 million female employees and 2.8 million male employees (Destatis, 2004).

Even though the hospitality industry is female dominated, there is still a concentration of women in areas of work of less influence and lower positions. Managers, supervisors and chefs are most often men, whereas room cleaning staff are almost always women. “It is unclear whether such gender segregation is maintained because women do not apply for traditionally male occupations and vice versa, or whether it is a result of direct sex discrimination” (Goldsmith et al., 1997: 55). Even though there are so many women working, nowhere women establish close to half of the corporate managers (Worldbusiness, 1996).

Since women make up a significant proportion of the labour force, managers must be aware of the particular factors which have influenced the female participation, like family duties, and of the constraints they may be facing, including lack of childcare (Burell et al., 1997).

Reacting to those constraints organizations have introduced women friendly or family friendly working policies.

2.3.2 Definition of Women Friendly Working Policies

Some literature sees women working policies as the same as family friendly working policies, which means that organizations have programs or benefits which help employees to balance their work and family life (Bardoel et al., 1999). These policies mainly concentrate on working hours, meaning offering flexible working arrangements, like part-time work, flexi-time, term-time only contracts and working from home (Bryson et al., 1998). It additionally considers leave entitlements, extra-statutory maternity benefits, paternity leave and sometimes even responsibilities like offering assistance with childcare or providing own childcare options (Scheibl and Dex, 1998, Bryson et al., 1998). Other literature includes all this in women friendly working policies but includes helping women with their career path and offering programs which support especially women to achieve management positions. The author considers women friendly working policies as a mixture of both policies.

2.3.3 Facts about women in the labour market

How and why did the labour market change in respect of women?

During the Second World War the male workforce declined dramatically due to death, illness or captivity. Women had to take over the ‘male jobs’ to guarantee income, productivity and to keep the economy alive.

As Germany and its economy slowly recovered from the war, the women participation in the labour market in the 1950 decreased (Maier et al., 1999). Their concentration was now focused on the family and household responsibilities again. Even in the 1960s when there was far too little workforce, women were more or less excluded from the labour market (Maier et al., 1999). They were not expected to work but to care about the wellbeing of their families.

From 1980 to 1987, there was a decline of manufacturing jobs and an increase in service positions in the European Community. Therefore women gained almost three million jobs in exchange to other jobs formally held by men. The rise in the number of jobs for women, however, has not meant equality in wages and benefits (Guffey and Helms, 1997).

It is sad to say but

‘women work in such jobs as a result of employers’ pursuit of economic advantage rather than gendered preferences; they want cheap workers, and women – particularly, married women seeking part-time work – have historically been available for employment for lower average rates of pay than men; partly reflecting their status as “component” rather than “breadwinner”’(Purcell, 1996: 19).

Today, more women are working, than ever before (Ruhm and Teague, 1997). This also has something to do with the achievement of a far better education of women. There is a higher percentage of women emerging as graduates, even in traditionally male dominated subjects (European Commission, 1995).

Research has shown that women consider family and work life of equal importance (Schiersmann, 1992, Becker-Schmidt, 1987).

2.3.4 Problems which women face

If women decide to start working there may be some problems. A major one seems to be ‘time’.

Since most women also have responsibilities, like childcare, outside their work life, part-time work is a common way for women to combine paid work with family responsibilities. In fact, in 2001 the European Labour Force Survey revealed that 32.5 percent part-time workers worked part-time due to the reason of also having to look after children or an incapacitated adult (Women and Equality Unit, 2003). In the hospitality sector three quarters of all women work part-time (Purcell, 1996). One can say that part-time working arrangements are a women domain (Purcell, 1996).

The problem of part-time can be decreased career chances (Weiss, 1998).

Women are often employed in jobs with little or no qualifications or have part-time jobs and are rarely found in leadership and top management positions, since these positions require total commitment and the cultivation of workplace responsibilities and relationships (Siegers et al., 1991, Schwartz, 1996). Women with family responsibilities usually do not have the time to do that. In Germany most childcare facilities, from which by the way there are far too little, only are open till midday as well as schools which usually end at one o’clock (Guffey and Helms, 1997).

Bryson et al. (1998: 54) considered the following problems in combining parenting and paid work:

- Finding a job which is structured in a way that would facilitate combining work and parenting
- School holidays
- Dealing with ad hoc situations when childcare arrangements brake down or when children are ill, since this is unforeseeable
- Pressure to work additional hours above contractual hours (women described feeling under pressure from employers to work overtime, which they could not do unless childcare arrangements were very flexible)

Even though the employment of women has become more and more self-evident the Women and Equality Unit (2003) says that there is a significant gap between women’s and men’s payment.

2.3.6 Legal Aspects

Several countries in the European Union introduced equal employment legislations. The Treaty of Rome for example ensures that men and women will receive equal pay for equal work (Guffey and Helms, 1997, Weiss, 1998). Still there seems to be room for improvement, knowing that there is still a large gap between women’s and men’s payment. In fact, women earn 12 percent less than men, working in the same company with the same age and education (Hinz and Gartner, 2005). On average the wage of women in West Germany in 2001 was 24 percent less than that of men (Hinz and Gartner, 2005).

The German basic law states that men and women have equal rights and, since 1994, that the state promotes the equal rights for men and women and makes sure that existing disadvantage gets removed (Schoenfelder, GG, Art. 3, para. 2, S. 1 and 2).

Additionally the law protects the expectant mother from dismissal (Anon, 2001, MuSchG, §9, S. 1). The European Community’s Social Charter established a minimum standard of fourteen weeks of maternity leave (Addison and Siebert, 1993 as cited in Ruhm, Teague, 1997).

2.3.7 Benefits of women friendly working policies

Even though women friendly working policies seem to be a good investment in human resources, Blau et al. (2002) state that there are still reasons why these policies are, nonetheless, being introduced only at a rather slow pace. Often firms are concerned that with more flexible policies it may be harder to monitor employees. Work has to be reorganized often meaning spending more money on human resources which firms rather like to prevent.

The literature though shows that in the long run an investment in women friendly policies is really profitable for the company.

One advantage is the aspect of cost reduction. Replacing an employee due to family reasons is quite costly. Abbot et al. (1998) estimated that turnover costs associated with work-family conflict can be as high as $75, 000 per employee. More over such aid reduces the cost of absenteeism because research has shown that women friendly policies causes a 20 percent drop of absence caused by stress related sickness or unauthorised time off for childcare (Freundlich, 2004, Equal Opportunities Commission, 2004).

Women friendly policies are a good tool for employee retention, for preventing skill shortages, as well as attracting new and well qualified work force (Women and Equality Unit, 2003, Equal Opportunities Commission, 2004). Women friendly working policies could also increase the employee’s morale, commitment and loyalty (Women and Equality Unit, 2003).

With women friendly working policies more women could be employed. This is good since a research done for the fourth World Women Work Congress in Berlin, Germany, revealed that many managers find that employing more women is an economic necessity. It was stated that women bring special qualifications into the company, including emotional intelligence and good team work and communication skills (Kuepper, 2005).

2.3.8 Conclusion

Over the last decade the influence of women on the workforce increased more and more. This is due to the fact that women have more possibilities than before and that society accepted that there are other duties for women than only family and housework. Still it is often very hard for women to find good jobs matching their qualifications that give them enough time to combine family and work, due to high time demands of such jobs.

Therefore companies should offer policies and working arrangements which meet the needs and wants of women, like company own childcare facilities or the possibility of working from home.

2.4 Human Resources Management in the Hospitality Industry

2.4.1 Introduction

The human resources of a company are often the most important and productive resources of all. Especially for the hospitality industry this is the case, because it is a very labour intense, service centred and people industry (Tanke, 2001).

Tayeb (1996) states that to ensure the success of a business in a competitive and international market it is important that the human resources are managed in the right way.

Human Resources Management (HRM) gained much importance over the years and its policies are nowadays often implemented in the business strategy of an organisation (Tayeb, 1996).

The following will show how HRM changed, what it is, why it is important and what connections it has with diversity.

2.4.2 From Personnel Management to Human Resource Management

According to Tanke (2001: 6) “Human Resources Management is a term for what historically was referred to as personnel and administration or personnel management”.

Mullins (1992) says that reasons for the change of the term from ‘personnel’ to ‘human resources’ is the increasing emphasis on effective employee relations and the securing of staff involvement which increases their commitment to the aims of the organisations.

HRM aims an integration of department heads into one management body rather than their focussing on their professional roles as specialists. This also means that all frontline managers have to have human resource responsibilities (Tanke, 2001).

Looking at Goldsmith et al. (1997) HRM is conceived as having a much wider scope than personnel management. In fact personnel management is seen to be only one element of HRM.

Singh (1992) identifies three component elements to HRM, which are:

- The activities of traditional personnel management (e.g. recruitment, training, remuneration, discipline);
- A specific managerial and organisational ‘philosophy’ that views people as the major organisational asset; and regards workers as instinctively willing and able to be developed; and
- Integration of the personnel management functions into the strategic management of the organization.

Nowadays it is recognised that HRM is an important part of an organization’s working procedures. HR managers became aware that their workforce has certain needs and that the satisfaction of those needs was a decisive function of their jobs (Tanke, 2001).

2.4.3 Human Resource Management

Human Resource Management as a concept is actually as old as the phenomenon of human organisations itself. To make a social group perform a task and achieve common objectives in the most proficient way, the management of its people is of great importance.

According to Williams (1989) and Tanke (2001) HRM is concerned with the following areas.

It is first of all there to attract and select new employees. Additionally it makes sure that these new employees are introduced to the organisation’s structure and culture and motivate them to perform a given set of tasks and then pays them for this.

González (2004) and Mullins (1992) add some more duties to HRM. Employment security is one very important one, and one which prevents forcing employees to look for another saver job and as a result leave the old company. More over HRM should offer extensive training to give employees the opportunity to develop but also to refresh already learned skills. By offering training, employees get the feeling that their skills are considered important and that they are taken care of as a bearer of such skills.

The human resource element is especially important in the service industry because members of this workforce are in direct contact with the customers and are seen as being actively involved in achieving the objectives of the hotel (Mullins, 1992).

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