MANAGING HUMAN CAPITAL IN 5-STAR HOTELS IN HONG KONG

Document Type:Research Paper

Subject Area:Tourism

Document 1

The responses were transcribed in preparation for analysis. Conclusions reveal lack of social capital and employee retention as the issues found in human capital management. Moreover, a positive association between higher human capital management and improved performance was also found. Although limited by a small sample size, the study findings contributed to understanding the effects of human capital management on organizational performance. Table of Contents Abstract 2 Table of Contents 3 List of Tables 4 List of Figures 4 List of Appendices 4 Introduction 5 Literature Review 8 Methodology 13 Findings 15 Discussion 19 Conclusion 25 Tables and Figures 27 References 29 Appendices 33 List of Tables Table 3. ” He also acknowledges that employees cannot be separated from their innate and acquired skills, knowledge, values and health (Teixeira, 2014). These, therefore, should inform every organization’s current and future investments in their human capital.

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Modern researchers refer to human capital as the collective value of capabilities, skills, knowledge, life experiences and motivation of the employees (Mathis, et al. It is also defined as the “set of production skills, talent and knowledge of the individual acquired through education, scientific research, job training, and experience” (Bardarova, et al. p. The next sections consist of literature review, methodology, findings, discussion, and conclusion. The literature review section reviews previous and current literature and research evidence related to the management of human capital in the hospitality industry. This is followed by a methodology section providing the methods and details of how this study is going to be conducted to achieve its’ aim and objectives. Findings section provide an analysis of secondary and primary data in a precise format.

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Lastly, this is followed by a critical reflection of the findings packed up in the discussion and conclusion sections. The concept of human as capital can be dated back proponents in economic developments, public policy, productivity and education alike around the 1960s. Prominent economists such as Herbert, Smith, Senior, Rosen, Marshall and Petty argued that the employee, him/herself, is the capital while educationalists such as Mill, Goncalves and Smith argued that it is the skills and knowledge gained by employees that define capital (Becker, 1964; Herbert & Scott, 1966; Rosen, 1987; Becker, 1993; Tan, 2014). The view of human beings as capital has been prominently adopted in relation to production and income distribution. In its basic concept, Flamhotlz (1981) asserts that investments made directly or indirectly towards human capital are measurable based on its economic value and productivity to the organization.

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Consequently, this paper will look at implications of managing human capital in relation to economic and productivity performance of 5-star hotels in Hong Kong. Human Capital Management Issues in Hotels The hospitality industry is a major contributor to the global GDP and the economy at large. In order to sustain this trend, human capital management strategy should thus be designed to solve the challenges or issues experienced in the hotels. Scholars and industry professionals continually comb various factors that can boost the human capital of hotel employees and their consequent applications (Crocker & Eckardt, 2014). Interestingly, hotels that successfully improve their human capital are more than often faced with new challenges and issues. For example, as employees who have undertaken specialized training performance increases, they develop a desire to request for increased earnings.

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As a leader, the HR manager must, therefore, look out for potential pitfalls that might cause tension, division or hatred among hotel employees. A well-intended diversity program if not well designed could backfire and cause tension within an organization. In managing diversity, the similarities and differences of hotel employees must be valued in order to create and foster positive working conditions. As such, researchers have categorized total human capital to include social capital. Bardarova et al. Performance improvement was particularly experienced in the financial and innovation domains. Similarly to human capital management strategies, organizations take in every opportunity to develop their existing employees with new skills, knowledge, and abilities with the hope that this will translate to the maximization of the organization’s performance.

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The implication is that the management of human capital is critical in improving the performance of hotels and thus provides it with a competitive edge. High organizational management has been found by scholars to have a positive association with the performance of an organization (Hamid, et al. The field of human capital is increasingly becoming an area of interest among researchers and hospitality industry practitioners alike. Grimes & Schulz (2002) note that this technique - descriptive design – of study not only allows for data to be its natural environment without any altercations but also allows for the researcher to build specific, measurable descriptions of the phenomenon. Interviewing and observing respondents in their natural environment also ensured that less time was taken to collect required data thus making this study less costly.

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Sampling Due to time and monetary constraints involved with choosing a representative sample for all 5-star rated Hong Kong hotels, the researcher opted for a non-probability sampling technique. The target population for this research study were the Human Resource Managers in the 5-star hotels in Hong Kong. Purposive sampling was then used to select final 6 respondents in this study. This ensured that the interviewees were fully prepped for the interviews and allocated time slots in their calendars hence making the process fast and effective. Ethical Deliberations The researcher sought prior approvals from the university department and also made appointments with prospective respondents before embarking on the study. The research overall purpose, objectives and possible implications were also explained to prospective respondents, and any arising questions from the respondents comprehensively addressed before data collection.

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Respondents were also informed that their participation was entirely voluntary and given an option of withdrawing from this research study at will. The researcher also finally assured the respondents that data collected for this study will only be used for the intended purposes. All the six respondents noted that they were using customized information systems to manage their human resources, and consequently its human capital. Issues in Managing Human Capital Several respondents in this study took issue with the lack of human touch in their human resource management systems. All the hotels were using different customized information systems to manage their human resource and inherently human capital. Even though they appreciated the different options that were provided by the system, they all seemed to value physical engagement and social interactions as critical in the management of human capital.

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“Well, one drawback of this system I think is that it minimizes physical interaction between employees and us. ” “Yes, of course. If you take care of your employees and treat them as an asset, they feel motivated and always put in their best7. ” However, going through their responses, it was obvious that most of the human resource managers understood that there was some sort of relationship between human capital management and performance. In describing the relationship, they acknowledged that there was some sort of positive influence to be achieved as a result of good capital management. This positive influence implied better productivity and performance. Four out of the six respondents felt that the hotel top management should follow their word by increasing re-training and educational budgets.

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For instance, one of the respondents suggested the following: “Sometimes it becomes rather difficult to explain to the management why we need to take people for training, pay fees for some employees or even bring in a psychological expert to support our team. The hotel board always ask how this will bring in money…what is the value? I am certain if we intend to improve in the future we must develop our employees so that we can keep such talent with us for long. We can only do this if we have a good budget10. ” Discussion Overview of Human Capital Management The findings of this research were based on the assertions of top human resource personnel from six 5-star hotels based in various territories in Hong Kong.

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Human capital is associated with an organization’s ability to generate economic value (Ployhart, et al. All the 5-star hotels in this study were also using customized human resource information systems in wonderment are given a seven And when the firm and if half the fifth to manage their human capital. Most of the respondents cited these systems as having key modules for compensation, career planning and management, performance management, workforce planning, and time management among many others. This is in line with the global technological advancements in fields such as accounting, manufacturing, and marketing. Even though effectively justifying human resource software investments is still a challenge, as seen in succeeding parts of this discussion, this precedence is highly welcome in the Hong Kong hotel sector.

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social capital is applied by modern managers to support competitive advantages. Human resource managers, as compounded by these study findings, are interested in understanding how top employees progress in their careers, why some employees or departments perform better compared to their counterpart, how information is exchanged within the organization and which employees influence or block this information. The other major concern of the respondents sampled was managing human capital with respect to employee retention. Employee turnover is not a new phenomenon in the hotel industry and continues to be a focus among hotel practitioners. Literature evidence relate hotel employee turnover and attrition to factors such as the relationship with superiors, salary and benefits, work conditions, shifts, size of restaurants, and job contentment (Narkhede, 2014).

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Similarly, the findings in this study show the respondents alluding to the same relationship “if you take care of your employees… they put in their best11”. It is this motivation and loyalty to work that translates to improved performance. High organizational management including human capital management is positively associated with organizational performance (Hamid, et al. Hamid et al. results in their study of the impact of human resource management on organizational performance showed a significant relationship between employee development and organizational performance. As noted in the findings, improving a hotel’s human capital is not a one-time venture. Hotel board management are increasingly shunning the role of solely allocating monetary resources and sitting back. Board members are now working hand in hand with the general manager and departmental heads to ensure human resource and human capital strategies are steered in the right paths (Backman, 2013).

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As evident in these study findings, lack of social capital posed as a major concern to the majority of the human resource managers with one respondent suggesting the adoption of leadership development and succession plan to improve management of human capital. Biron & Boon (2012) note that managers who understand and relate well to their employees are better placed at coming up with effective retention strategies. According to Hamid et al. mentorship forms an important part in an individual’s psychosocial development. For example, new employees in the hotel can be mentored to work in multiple departments to orient them into different positions and thus can be easily rotated to fill for others. This will create an organization of confidence employees capable of working independently and doing work that interest them.

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Mentorship can, therefore, be seen to positively influence employees’ organizational commitment allowing them to boost their self-image and integrate their professional and personal lives. Key triggers of employee turnover included employee relations with managers and/or supervisors, remunerations and benefits, job satisfaction and contentment, and working conditions in the hotel. Interviewed human resource personnel acknowledge the important relationship between human capital management and performance. This relationship is seen as having a positive correlation, that is, better human capital management translates to improved hotel performance both in terms of employee productivity and financial performance. However, measuring specific human capital returns on investments was perceived as a complex process. Improving human capital management is a continuous process and thus requires strategic planning over the long-term.

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Kowloon 5 27. Hong Kong Island 4 22. Total 18 100. Table 4. Respondents' Gender Gender Male Male 4 Female 2 Total 6 Figures Figure 1: Market Size of the Global Hotel Industry 2014-2016 Figure 2: Map of Hong Kong Territories References Al-Rafaei, A. The proximity hotel: a case study on guest satisfaction of sustainable luxury environments, Greensboro, NC: University of North Carolina. Becker, G. S. Human capital: a theoretical and empirical analysis. st ed. Boon, C. Eckardt, R. Lepak, D. P. Boselle, P. D. Human resources management and performance in the hotel industry: the role of the commitment and satisfaction of managers versus supervisors. International Journal of Contemporary Hospitality Management, 28(3), pp. Dorel, D. Bradic-Martinovic, A. Garcia, D. Tugores, M. Human capital and firm performance: an analysis of hotel sector in Majorca. In: A.

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Matias, P. Cheem, A. Yaseen, R. Impact of human resource management on organizational performance. Journal of Accounting & Marketing, 6(213). Herbert, B. Lo, A. Chan, J. New employees' turnover intentions and organizational commitment in the Hong Kong hotel industry. Journal of Hospitality & Tourism Research, 26(3), pp. Lavrakas, P. L. Jackson, J. H. Valentine, S. R. Tourism and hotel industry in Hong Kong: analysis of growth, trends,and progress 2016-2021, Hyderabad: Mordor. Narkhede, P. A. Employee turnover in hospitality industries: a study of service staff. Journal of International Management Studies, 19(1), pp. Patrick, H. A. Kumar, V. Managing workplace diversity: issues and challenges. Journal of International Sociological Association, 2(2), pp. Human capital. The New Palgrave: A Dictionary of Economics, Volume 2, pp. Statista, 2017. Statista: Global hotel industry market size 2014-2016.

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Online] Available at: https://www. Measuring employment in the tourism industries - guide with best practices, Madrid: UNWTO & ILO. Xue, W. Li, T. Rishe, N. Aspect identification and hotel ratings inference for hotel reviews. We are located along the Cotton Tree Drive and the Green Oasis of Hong Kong Park. It is just about a 30-minute drive from the airport, and we also have the MTR subway close by at a walking distance. We are on a building with 25 storeys, have about 350 spacious suites, rooftop restaurant & bar, event spaces, spas, gymnasiums and naturally lighted boardrooms. Interviewer: Would you please comment on the number of employees, skills, and may be qualifications? Interviewee: We have about 600-800 employees with most employed on a permanent contract.

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Our employees have come from various parts of the world, therefore, ensuring our guests get that homely feeling. If I were to keep all that information in my head…it would be impossible. Interviewer: Do you think there is a relationship between human capital management and hotel performance, in terms of may be employee productivity and business economics? Interviewee: Most definitely, any hotel like The Murray only employs the best of the best. We source for talent and experience to ensure that our clients are always receiving the best. We also encourage employees to walk up to us with new ideas, in this way we are able to deliver only the best to our client. Experience is everything… it is what best service is.

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Our guests also get to experience the urban beauty. We also have a dining option for our guests, free Wi-Fi, gym, sauna, spa, swimming pool and spacious conference rooms, and facilities. Interviewer: What of the number of employees, their skills, qualifications? Interviewee: We employ close to 1000 employees. Our employees are talented and knowledgeable with several years of experience in the hotel industry. Majority of our employees have advanced diplomas in courses such as hospitality management, hotel, and catering, food production, food & beverage, tourism and hospitality management among many others. If you take care of your employees and treat them as an asset, they feel motivated and always put in their best. This becomes very good for business, very good. Interviewer: What would you do differently to address challenges you mentioned and of course improve the management of human capital at Harbour Grand? Interviewee: I know that managing 1000 employees can always be a challenge especially if you intend to get the opinion and view of every employee.

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It is impossible, very difficult. So far, I think the HRMS system we have here works great, and our business is making a profit. This, therefore, means that if we cannot manage our human capital well, employees will always be looking for a better option elsewhere. This is dangerous because it means that we will have to spend more hiring and training people to fill in the new positions. I, therefore, think that we must try not only to hire right talented individuals but we must also strategize ahead on how we are going to retain them. Interviewer: Would you say there is a relationship between human capital management and hotel performance, in terms of may be employee productivity and business economics? Interviewee: Yes, there is.

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The Peninsula endeavors to have the best employees in every department, this way we are guaranteed of offering unrivaled services to our guests. The system is very effective and can be accessed from any location. Interviewer: What of aspects such as employee continuous development? Interviewee: Oh! We do training and send some of our employees for special courses… we also keep employee data inside. Interviewer: Would you comment on the successes and drawbacks of this current human capital management system at Ritz-Carlton? Interviewee: Our system is serving us well. I can say that. Most of our employees can access our department {Human Resource} services at any time. Only this way we will have people with specialized skills to keep us profitable.

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Interviewer: Do you have any additional comment or information you would like to add regarding management of human capital in 5-star hotels in Hong Kong as we close this interview? Interviewee: Human capital management is becoming a common interest among many practitioners. This is because it is very important, it determines if the hotel will have guests or not. All the best Respondent 5 Hyatt Regency New territories 5+ years 20+ years of experience Interviewer: Thank you for your time, would you please start by describing the human capital scenario at Hyatt? Interviewee: Our guests can find us next to the Chinese University of Hong Kong. Hyatt Regency is a new establishment with over 700 square meters for meeting and events. So there is a positive relationship, human resource is very important we have to keep them happy so that they can give their best at work.

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At Hyatt Regency, we listen to all employees and of course, give them any time there is something to talk about. This way we see our employees happy and ready to serve the guest each and every day. This is good for the hotel business Interviewer: In what way or ways could you improve the strategies used to manage human capital at Hyatt, if any? Interviewee: The hospitality industry is now global; everywhere people can understand how you talk to your employees. I am saying this because when someone who works with you is happy, they say good things about you. For sure, they are qualified with training and knowledge in varying fields. Interviewer: How do you manage these employees? Interviewee: Yes, to manage the talent we have at Mandarin Oriental we use the HR Soft program that is installed on the cloud.

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It is where we keep track of employee details like name, designation, skills, knowledge. We are also able to use it to do HR activities like process payrolls, calculate work timings and to sometimes to also dish out a memo to the rest of the team. Interviewer: Would you briefly comment on the successes and limitations you associate with this system for human capital management? Interviewee: The Human Resource Management System is good in all aspects & serves its primary purpose. Interviewer: So, how do you exactly take care of this relationship? Interviewee: Yes, we have to know what is working and what is not. We try keep data to see which departments attended what type of training and then we measure this against their yearly to see if they have achieved targets or not.

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Most of the time, the teams seem to be motivated when they come from the training…this attitude is good for our team as our guests enjoy the best services. Interviewer: Is there anything you think can be done to improve the strategy and system used to manage human capital at Mandarin Oriental? Interviewee: I know that the Mandarin Oriental human resource management system, the processes, and procedures, is very good… but we can always encourage the hotel board to do more in terms of ensuring that we have a sufficient budget every year to help develop our employees. Sometimes it becomes rather difficult to explain to the management why we need to take people for training, pay fees for some employees or even bring in notable industry experts to support our team.

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