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Human resource management practices in hospitality industry in
uzbekistan: what are the HR issues, functions and roles?
Sitora Inoyatova Amonovna
Lecturer – Westminster International University in Tashkent (WIUT)
Uzbekistan, 100047, Tashkent, Istiqbol street, 12
E-mail:
Abstract:
A well-developed HRM system is a key to success in any organisation. Especially,
in the hospitality industry, it is the key component in achieving sustained competitive advantage.
This article is intended to identify the HRM practices’ related issues along with the HR roles &
functions practiced in local hotels of Uzbekistan. Focus group discussion has been applied as a
research methodology. Theoretical framework of human resource management (HRM) practices
shall be discussed as a basis for establishment of the effective HR system in the hotel, followed by
conclusion and recommendations.
Keywords:
Human Resource Management (HRM), HR, Human Capital, Hospitality Industry,
Tourism, Hotels, Uzbekistan.
Introduction
Hospitality industry is seen as being one of the competitive industries all over the
world with the high employee turnover, which highlights the importance of implementing
good HRM practices and creation of solid system for maintaining organisations’ human
capital. Human resource management Is one of the most important aspects in any
organisation.
In hospitality industry, if we talk about hotels within the same categories of stars,
nowadays, they would be adhering to more or less similar standards i.e. room and bed
size, interior design, bathroom, lighting and breakfast and have almost similar facilities
which they offer. Cline ((1997) cited in Uysal & Williams, 2003)), predicted accurately that
most successful organisations shall be distinguished through the effective people
management, information and customer relations. The one and only difference which
makes one hotel stand out from the other is the level of service, which is only determined
by how hotel employees are well trained, treated and happy. An unhappy and untrained
employee can inadvertently treat customers poorly. There are, unfortunately, various
examples of bad guest treatment such as staff rude manners, unprofessionalism, and
overall ability to handle complaints in some of the hotels of Uzbekistan (Inoyatova &
Khamidov, 2018).
That is why this article shall provide an overview and analysis of the theoretical
framework within the area of human resource management and basic worldwide practices
that must be implemented within every hotel in Uzbekistan.
Literature Review
What is human resource management (HRM)? HRM is defined to be as “a strategic
and coherent approach to the management of an ogranisation’s most valued assets – the
people working there who individually and collectively contribute to the achievement of its
objectives” (Armstrong, 2008, pg.3). It is the management of staff and work to achieve the
desired results (Boxall et al., 2007).
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HRM also, is defined as ‘the policies, practices and systems that influence employees’
behavior, attitudes, and performance’ (Koustrup and Simmons cited in Noe et al., 2016).
Variety of organisations refer to human resource management as “involving people
practices” (Noe et al., 2016). HRM deals with the HRM planning, recruitment, selection,
training and development, performance appraisal and promotion (Stoner et al., 1995).
Why do we want hotels to focus on implementation of the HRM practices? They say,
that HRM practices help to achieve sustained competitive advantage. There is a research
evidence, that well implemented HRM practices can lead to the sustained competitive
advantage by the organisations (Lado & Wilson, 1994; Wright et al., 2001). The dilemma
for the hotels can be that in the privately-owned hotels, there may not be a separate HRM
department, which means that HR function is combined with other job title, for example,
Director or Owner (who is not trained in the HR) who can partially perform the HR
function. Kok et. al., (2003) argues that organisations which implement HRM practices,
tend to create an HRM department or open a position of HR Manager. HRM practices have
a positive effect on the performance of the company which includes increase of quality,
reduction in costs, and commitment (Ahmad & Schroeder, 2003). Among the well-known
human resource management practices which impact overall organisation performance
are: Analysis and design of work; HR planning; Recruitment & Selection; Training &
Development; Performance management; Compensation; and Employee relations (
Noe et.
al., 2016
).
Analysis and Design of Work (Job Design)
In local hotels, it is very important to understand the nature of each job and its
requirements in order to match suitable employees to respective job position. The process
where HR Manager understands the nature of specific job position is known as job
analysis. Eventually, the result of job analysis are a) Job Description (which lists tasks,
duties and responsibilities (TDRs)); and b) Job Specification (which lists knowledge, skills,
abilities, and other characteristics (KSAOs). Job analysis is very important for HR Manager
because this information is then used in work redesign, planning, employee selection,
training, appraisal, job evaluation and career planning; it is also important from legal
perspective to ensure that fair employment practices are adhered to and comply with
Labour Code regulations.
Job Design is another important concept which is important for an HR Manager,
especially when hotel is looking into opening of new branches, when trying to improve the
overall quality of the services. Once there are well developed Job Descriptions and Job
specifications available, it is time to design the job using several approaches which include
i) Design for Efficiency (also referred to as industrial engineering); ii) Design for Motivation
(comprised of job enlargement, job enrichment, flexibility); iii) Design for Safety & Health
(also referred to as Ergonomics) and iv) Design for Mental Capacity (which includes
information processing, clear instructions, monitors, displays, and memory aids) (Dessler,
2014).
How can this be implemented in local hotel in Uzbekistan? To start with, for all the job
positions available at the respective hotel there should be an up to date, accurate and not
‘copied’ from internet Job Description and Job Specification. Afterwards, job enlargement,
job enrichment and flexibility elements should be implemented in the local hotels in order
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to design jobs using motivational approach which is used to increase overall employee
motivation.
HR Planning
When referring to the HR planning, HR manager should start with forecasting in order
to be able to predict potential future shortages or surpluses in labour (a) through trend
analysis which will allow the application of the statistical models with the aim of predicting
future labour demand; and b) through transitional matrix which will allow to identify the
internal labour supply within an organisation); then set the goals and strategic planning,
and then implement the programme and evaluate the results (Dessler, 2014).
How does this work in practice? If we take any hotel in Uzbekistan, and look at their HR
data, we can hypothetically (it is interesting to note the frequent job ads online for Cleaner
positions locally) identify that there will be a
shortage
in a specific job category e.g.
Cleaner, hotel would need to consider applying an intervention strategy in order to avoid
labour shortage through the following:
a)
hiring temporary/contract Cleaners;
b)
outsource cleaning services to a local company;
c)
retrain other non-cleaning staff with the possibility of transferring them to Cleaner
position;
d)
reduce the turnover rate among Cleaners;
e)
hire new Cleaners; and/or
f)
let existing Cleaners to work overtime and be paid extra (Dessler, 2014).
It can also be identified, that there will be a labour
surplus
for certain positions, e.g.
Waiter which may be common in Uzbekistan as of today. In this case, retraining and
transfers to other departments could be a good option, also hiring freeze would be
considered among the appropriate strategies for reducing surplus in waiters (Dessler,
2014).
In Uzbekistan, HR managers in hotels, should focus on strategies avoiding labour
shortage so as to maintain high level of hotel service.
Recruitment & Selection
After HR Manager has developed Job Descriptions and Job Specifications; has designed
the jobs through implementation of the job enlargement, job enrichment and flexibility;
and has developed strategy based on HR planning aspects, it is right time to start the
recruitment and selection process.
Through recruitment, HR Manager’s goal is to attract and identify potential candidates
to fill in job vacancies. It is common practice that HR Manager can recruit internally from
the hotel, and/or externally; for local hotels in Uzbekistan, it is suggested to focus on
external hires and more importantly on analysis of the recruitment sources, because once
HR Manager is able to understand the various sources of recruitment and identify the
most effective ones, then it would be possible to be able to become better at recruiting
candidates that are suitable for specific jobs who are less likely to leave in a short run.
Among various sources of external recruitment are employee referrals, corporate
website (hotel website), universities & colleges, social media, print ads, third-party
recruiters & headhunters, and online job ad platforms (e,g, hh.uz, rabota.uz, olx.uz,
uzzobs.uz, hh.uz etc.). The most important element in analysis of recruitment sources is to
compare them through calculation of the cumulative yield ratio, ad cost, and cost per
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hired employee. The Table 1 below, shows hypothetical example of analysis of the two
recruitment sources such as university and online job ad. Comparison of the sources
allows for evaluation of the best sources of the recruitment for the future planning as well
as the costs of recruitment, because for an HR Manager recruitment costs also must be
considered.
In the hypothetical example showed in Table 1, if a hotel needs fresh graduates in short
amount of time, then attending a university & college fairs would be appropriate at a cost
of UZS 10 000 per each hired employee. However, with careful planning there may always
be time available for a ‘healthy’ recruitment process without rush, which would allow HR
Manager to post a job ad, reach greater pool of various candidates, and less in terms of
costs. All in all, challenge for an HR Manager would be to select the recruitment source
which yields best results in terms of efficiency.
LOCAL
UNIVERSITY
ONLINE JOB
AD
Resumes (CVs)
received
100
500
Successful
Candidates
10
50
Cumulative yield
ratio
10.0%
10.0%
Ad Cost
UZS100,000
For 2 days
UZS450,000
For 3
months
Cost per hired
employee
UZS10 000
UZS9 000
Table 1. Source: Hypothetical example of analysis of the two recruitment sources. Self-
prepared by author.
Selection process is the continuation of the recruitment process, that is once the
candidates have been identified through recruitment, HR Manager’s task is then to reduce
the number to the individuаls best qualified to perfоrm the available jobs. The selection
process consists of the following steps: screening & shortlisting applications and CVs,
testing, interview, background and reference check, and selecting suitable candidate. For
local hotels, it is suggested to implement online applications for managerial positions and
have an interview panel conducting the interview comprised of at least three staff
members.
Training
and
Development
HR mangers, who have ever conducted employee surveys, talked to them, and/or
obtained their feedback through other means, will hear quite often that employees
highlight about lack of skills required to perform the job. For the hotel management and
operations; training and development is one of the vital elements and key success factors
(Jones, 2008). Customers shall be returning and referring to a hotel where they
experienced best service, that is, usually, where staff is responsive, caring, and attentive.
Glad to note the observations, that in several hotels of Uzbekistan, there is a
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comprehensive induction programme which is offered at the first three months for the
newly hired employee, which is definitely a plus. However, only few, focus on the training
and development of their existing staff. Thus, training programme must start from training
needs analysis, where each staff’s training needs have been identified, then training
programme is to be developed along with the appropriate method for delivering the
training, objectives and trainers who would be responsible for conducting the training. HR
Manager may not have sufficient skills to conduct the training to staff across various areas,
thus it is common to ensure the selection of appropriate trainer responsible for conducting
of the training and afterwards, HR manager shall be able to evaluate results of the training
after three and six months upon completion of the training.
In terms of employee development, formal education, i.e. in the way of sponsoring
Master’s degree tuition fees could be used as a safety cushion for keeping best employees
in the hotel.
Performance management
Evaluation of employee performance and identifying and rewarding the top
performers is very important in any organisation, especially in the hotel, because it is
service based industry and success of the hotel evolves around how customers are treated
by hotel employees. Therefore, there are key ingredients to creation of the effective
performance management system which consists of several steps: step 1 is to have hotel
goals which are to be set together and preferably by the senior management; step 2 is to
develop department and individual employee goals that are linked to the hotel goals; step
3 is to provide support and ongoing performance discussions; step 4 is to evaluate the
performance; step 5 is to identify improvements needed; step 6 is to provide action for
achieving (or not achieving) performance outcomes (which include bonuses, pay increase,
etc.) (Dessler, 2014).
Traditionally, there are several reasons for implementing and maintaining performance
management (PM) system in hotels, namely, PM is used for pay, promotion and retention
decisions; good PM system is linked to hotel goals, PM is used as a basis for reviewing the
career plans; and through PM, training needs can be identified. There are various methods
for evaluating the performance of employees such as graphic rating scale, alternation
ranking, paired comparison, forced distribution, critical incident methods, narrative forms,
behaviorally anchored rating scale, mixed standards scale, and management by objective
(Dessler, 2014). This paper is not going to discuss these methods in-depth.
Compensation
Compensation is a powerful tool to retain best employees. One and most important
factor, for all companies is to create a market competitive pay plan. The secret ingredient
which is practiced in international organisations and should be implemented in local hotels
is job evaluation which entails to pay more for the jobs that require greater qualifications,
skills, more responsibilities and involve complex duties and decision making. There are
several methods of job evaluation such as ranking, grading and point method; out of
which, point method is highly suggested to be implemented in the local hotels (Milkovich
& Newman (2007). Point method is very popular in the U.S.A. where generic compensable
factors such as skill, effort, responsibility and working conditions are used (refer to Table
2).
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In a hotel, Front Office Manager’s Job Description and Job specification can be taken
as an example, and evaluated against the compensable factors, with the points allocated
from the degree definitions table (which must be defined separately by HR); after which,
total points can be allocated for the position of Front Office Manager, and converted into
the salary. Last step, is to compare the salary with what market pays for similar positions
in the country by using salary survey (formal and informal); where the salary can be
adjusted in accordance with what market pays (higher or lower pay).
Generic Factor:
Skill
Generic Factor:
Effort
Generic Factor:
Responsibility
Generic Factor:
Working
Conditions
-
Technical know-
how
-
Specialized
knowledge
-
Organisational
awareness
-
Educational levels
-
Specialized
training
-
Years
of
experience
-
Diversity of tasks
-
Complexity
of
tasks
-
Creativity
of
thinking
-
Analytical
problem-solving
-
Decision-making
authority
-
Scope
of
organisation
under control
-
Degree
of
integration
of
work with others
-
Ability to perform
tasks
without
supervision
-
Degree of danger
which
can
be
exposed to others
-
Degree
of
discomfort,
exposure,
or
dirtiness in doing
job
-
Unpleasant
(psychological)
conditions
Table 2. Source: Milkovich & Newman (2007)
Employee Relations
Employee relations focus on development and maintaining the positive relations
between an organisation and employees. Local hotels must develop positive employee
relations which will result in increased productivity, discipline, motivation and create
pleasant work environment. HR Manager is responsible for a) creating better
communication channels with and between employees by using the open-door policy,
have the handbook including the necessary information for employees, offering suggestion
boxes, also exit interviews can be used to improve employee relations; b) implementing
involvement strategies such as when employees are participating in the process of
resolving problems which make them feel that they are important and needed which is a
right approach as it will have a positive impact on their performance and increase their
responsibility; and c) creating employee recognition programmes such as ‘employee of the
month/year’.
What are the roles and functions of HR?
One may ask, so what do HR managers do? What are their roles and functions? Field of
HR have been evolving since 1930s where there were managers who would be responsible
for administrative role and day-to-day operations of an organisation. Later on, it began to
shift to a set of HR practices that focused on staffing, training, compensation and how
these practices are done in an effective way; for the past fifteen years those practices have
been linked to strategy which assists to create a good HR system.
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So, what are the current expectations from HR managers? Firstly, when developing HR
policies and practices, HR managers are expected to develop employee skills and
competencies required by an organisation in order to be able to achieve overall
organisational strategic goals. Secondly, part of the HR activities can be automated
through the use of technology, for example, applicants can apply through corporate
website, and undergo online testing: certain companies even offer option of self-
administering their benefits plans which frees time for HR managers to spent on strategic
matters. Thirdly, global competition forced HR managers to work with numbers and
related metrics to measure employee performance. Fourthly, HR managers are expected
to ‘add value’, by helping their organisations and employees to continuously improve and
develop in a ‘measurable way’ (Ulrich & Brockbank, 2005). Fifthly, HR managers must be
competent to manage employee engagement. At last, HR managers are expected to
understand several disciplines such as strategic planning, marketing, production, and
finance and be able to ‘speak the Chief Financial Officer’s (CFO) language’ because hiring
and training is not enough nowadays to survive the competitions (Dessler, 2014).
According to Dave Ulrich, HR manager can be referred to as being professional if
he/she possesses knowledge, skills and competencies to have the following roles and
become:
-
Employee advocate
who will ensure and maintain good relationship between
employees and organisation;
-
Human capital developer
who will be able to build future talent within
organisation;
-
Functional expert
– be able to anticipate, draft, and implement human resource
practices to achieve overall organisational goals;
-
Strategic partner
who will be able to assist functional managers to achieve their
department goals;
-
Leader
who is able to exhibit leadership skills and other competencies which will
make him/her credible (respected, admired and followed by others) (Ulrich &
Brockbank, 2005).
Thus, the discussion in the literature lead to the following question: What are the HR
roles and functions of the HR in local hotels of Uzbekistan? and What are the HR issues in
the local hotels of Uzbekistan?
Methodology
Sources of data are collected through the help of focus group discussions with three
HR managers who have provided consulting services previously, in several of the hotels
located in Tashkent. Names of the HR mangers who provided consulting services along
with the hotels they provided consulting services for shall remain confidential due to
ethics considerations and concluded agreement.
Analysis
and
Findings
Based on the focus group discussion, the following issues have been highlighted in the
local hotels, namely; conformance to the service quality standards/ overall service level;
employee compensation, working environment, employee overtime, and work safety.
Also, it has been highlighted that management lacks professional skills and may behave as
if they are ‘royalty’ where they command what their employee should do, with leaving
minimum space for independent decision making.
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In addition, it has been highlighted about the high turnover rates in few of the hotels
which mainly was due to the change of the senior management; reduction in the
employee compensation; and inefficient organisational restructuring. When asked about
the existing HR roles and practices in the consulted hotels, it was highlighted that the main
role of HR was fast recruitment after massive employee downsizing/resignation, as well as
induction training for the new employees.
According to the finding from focus group discussion, there are serious problems with
the existing HR system within many local hotels of the country which need to be addressed
and resolved.
Conclusion
and
recommendations
The aim of this article was to identify the HR related issues as well as to identify the
main HR roles and functions practiced in the local hotels of Uzbekistan. Factors such as
level of service, employee compensation, overtime, working environment and work safety
have been reported among the most common. These factors, are mostly related to HR
function of a hotel which is not working properly, and as it has been revealed during the
focus group discussion, this could be caused by the management’s attitude towards
employee and overall hotel management, therefore, it is important to have qualified HR
Manager who can convince senior management in the importance of implementing the
HRM practices.
Although, considering that there is a relatively high turnover rate not only in hotels of
Uzbekistan but worldwide in the hospitality industry as a whole, HR Managers in local
hotels have to consider focusing on strategies avoiding labour shortage through reduction
of turnover rates by building solid HR system, and expanding HR function from
‘recruitment quickly’ to HR practices, discussed in this article such as planning, selection,
job analysis and job evaluation, performance management, compensation, employee
development, training and development, employee relations and retention.
It is also important to implement HR practices effectively, so that benefits of it are
visible to hotel’s senior management in a short run. Factors, such as, improved quality
services, happy, independent and committed employees, positive customer feedback,
increased hotel booking capacity can be seen right after the successful implementation of
the HRM practices within the hotel, thus, possibly, affecting the change of the senior
management towards employees and their wellbeing.
Once local hotels start to compensate their employees based on employee
qualification, tasks, duties, responsibilities and degree of decision making, they would be
able to increase overall hotel service quality which in long run will lead to higher profits
and improved reputation in the market.
Recommendations for the improvement of the HRM system in the hotels of Uzbekistan
or the initial / basic steps for starting to improve the HRM system include:
To ensure Job Descriptions and Job Specifications are developed and not simply
copied from the internet.
To apply motivational approach to Job Design with the elements of job
enlargement, job enrichment, and flexibility.
To focus on strategies avoiding labour shortage discussed above so as to maintain
high level of hotel quality services.
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To evaluate the different sources of recruitment through calculation of yield ratios.
To implement online applications for managerial positions and have an interview
panel conducting the interview comprised of at least three staff members, to start
with.
To implement policy on employee formal education such as sponsoring Master’s
degree tuition fee for talented employees.
To implement system of the training needs analysis and provide consistent
development training to employees with the aim of improvement of the service
quality in hotels (do not stop at conducting induction only for new employees).
To develop and implement performance management system for evaluation of
employee performance and linking performance to hotel’s strategy.
To ensure the development of market competitive pay plan which is based on
compensating employees based on their qualification, experience, degree of
decision making, empowerment, complexity of tasks and duties and working
conditions so that employee with better qualification and more duties, for example,
received a higher compensation.
To develop positive employee relations which will results in increased productivity,
discipline, motivation and create pleasant working environment through creation of
the better communication channels (e.g. open-door policy); creation of employee
recognition programmes; involvement of employees in the key decision-making and
problem-resolution processes and etc.
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