Last Updated 27 Jul 2020

HRM theoretical knowledge

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Armstrong (2003) denotes that one of the strengths of the Harvard model is its recognition of trade-offs, wherein the presence conflicting interests between stakeholders (ie. Management-union, employee-employer) necessitates the adoption of HR policy choices that may be beneficial for one but detrimental to others. For instance, employee incentives (a form of reward for good performance) may be foregone when the company is in need of savings or cost-cutting mechanism. In such a situation, the employer is able to fulfill the need to save but a key HR activity is sacrificed.

The third model, proposed by Guest et. al (2000), outlines the “strategic and coherent approach to the management of an organization’s valued assets (Armstrong 2003),” who are the employees. Unlike the Harvard model which takes the viewpoint that HRM involves the balancing or mediation of different—and sometimes conflicting—stakeholder interests and situational factors, the Guest model starts from a unitarist position that employees and employers share the same interests which is excellent financial performance of the company (Armstrong 2003). Thus, the shared interest of the employee and employer is concretized in the business strategy, which defines the company HR strategy.

Both business and HR strategies influence the manner and characteristics of HR practice and activities. HR activities may or may not be effective and this is reflected in the outcomes such as employee competence, commitment, and flexibility. Outcomes can therefore be measured by the extent of employee productivity and the quality of goods and service delivery. Both productivity of the employees and product quality then determine the financial performance of the organization or company. Application of the Three HRM Theories in the Hospitality Industry

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The interest of finding best practices in human resource management makes it necessary to identify how theories are applied in respective industries and the gaps that exist vis-a-vis existing theoretical knowledge and actual practice. With regard to the hospitality industry, the emergent concerns on high labor turnover, increased occupational hazards, and low wage that characterize the service industry have caught the attention of HRM practices in an attempt to underline the difference between regarding employees as costs, on one hand, and considering them as important capital that contribute to the growth and performance of the organization.

Many scholars have examined the prevailing human resource management conditions in the hospitality industry and have found it to be among those with the poorest performance in terms of HRM practice (Sisson, 1993; Guest and Conway 1999; Wilton 2006). Guest and Conway (1999), for instance, described the hospitality industry as an HRM ‘black hole’ which meant that the industry practice of employee practice was almost zero.

Wilton (2006) also observes that the “high-volume, low-cost product market” and the profit-driven characteristic of the hospitality environment entailed the need for “cost-reduction business strategy” which is usually through use of “non-standard employment, subcontracting and Taylorised working practices such as job prescription, a high degree of specialisation, minimal training and a high level of monitoring.

” Employment policies in most hotels were thus influenced mostly by the need to minimize wages in the face of fluctuating product demand and as such were more likely to implement short term wage minimization and labor-saving policies rather than long-term strategies which focus on building employee commitment and competence.

As such, the practice in most hotels and related industries have been to employ contractual employees rather than regular employees since contractual work may be hired during peak season and later fired when demand subsides. Based on the three HRM theories discussed therefore, there is a glaring lack of employment practice that would contribute to good financial performance in the hospitality industry.

This is rooted in the fact that it views its employees mainly as additional costs rather than important contributors to the organizational goals and objectives as proposed by the Guest model. Hales and Tamangani (1996) drives a scathing criticism of the HR practice when they remarked that ‘the pressing needs of the immediate and recurrent often drive out longer-term consideration’ in the hospitality industry and that hotel managers have been lacking in strategic planning and managing capabilities.

Unfortunately, if one is to consider the “trade-off” idea proposed by the Harvard model, it could be the human resource practice which could bring together the employee and employer interest which would make the friction created between the need for profit and the need to cut costs more manageable. Likewise, as assumed under the Gates model, the quality of goods and service delivery in the hospitality setting may be enhanced by a competent, committed, and flexible employee base that results from excellent training, development, and competitive remuneration and reward systems.

Therefore, the ultimate goal of profit generation may be achieved by a concrete HR structure and policy in the hospitality industry. In the end, the inherent business interest, which is to be a financially-sound organization, in the hospitality industry, will be met after the industry solves the recurring employee problems such as high turn-over and job dissatisfaction which leads to more costs through customers lost from poor service quality.

This entails a sound HR policy based on the ever-growing, and basic, HRM theoretical knowledge and best practices that would hopefully usher in better employment practices in the hospitality industry.

References Cited:

Bratton, J. and Gold, J. (2001). Human Resource Management: Theory and Practice, 2nd Edition. USA: Lawrence Erlbaum Associates Beaumont, P. (1993). Human Resource Management: Key Concepts and Skills. Sage Publications. Armstrong, M. (2003). A Handbook of Human Resource management Practice, 9th Edition. Kogan Page.

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HRM theoretical knowledge. (2018, May 04). Retrieved from

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