South Korea Strategic Human Resource Management in the Hotel Industry

Abstract

This research was set up to discover which HRM practice would suit the strategy of the service or hotel industry. A comparison between a selected manufacturing and service firms was made during this research.

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From the research, it was discovered that the practice of HRM in organizations can be categorized into three philosophies, viz: Accumulation, Utilisation, and Facilitation.

The Accumulation philosophy places more emphasis on training, paying egalitarianism, and lifetime employment. This is because of the high cost of training their staff, which they do to have their workers spend most of their working years in the organization.

The Utilisation philosophy entails the organizations practicing it selecting individuals mainly based on technical ability. They place little emphasis on training and seek to utilize employees quickly. They take a short-term view of HRM and emphasize cost minimization. There tends to be high staff turnover since, for any new skill, they look for recruits.

The third philosophy, Facilitation engages HRM that emphasizes the ability of their employees to work together in a reciprocal relationship. They require a high level of creativity, cross-functional and cross-departmental work situations, job rotation, collaborative work climate, and the development of multiple skills among their employees.

From the above discoveries, it is believed that employee behaviors are shaped by the HRM practice of an organization.

Schuler [1989] proposes that firms following a focused strategy will require an accumulation HRM philosophy. Firms following a cost-reduction strategy will require a utilization strategy while firms following a differentiation strategy will require a facilitation HRM philosophy. This is because each strategy is distinct and requires a different type of employee behavior.

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I conclude by proposing that the service sector will most likely succeed by adopting the focus strategy which is compatible with utilization HRM philosophy.

Introduction

Given the high investment that the service sector organizations are expected to spend in training their human resource, it is proposed in this write-up that the HRM practice to adopt and which will suit their strategy is the Accumulation philosophy. This HRM practice emphasizes a careful selection of good candidates based on personality, rather than technical fit. [Rozhan Othman & Zakaria Ismail, 1989].

This means that the service sector is expected to recruit employees who are flexible and who are highly trainable. According to Rozhan Othman and Zakaria Ismail and Schuler [1989], “Organisations practicing this HRM philosophy place a lot of emphasis on training, pay egalitarianism and lifetime employment.

Such organizations would like their trained employees to spend longer time in their employment. The longevity of service “…can be achieved by adopting practices such as promotion from within and offering [the employee] job security.

The other school of thought which places little emphasis on training, but seeks to utilize new employees quickly will not suit the strategy of the service sector.

In the Facilitation school of thought, their employees are expected to exhibit a high level of creativity and collaborative work situations. According to Schuler’s [1989] and Porter’s [1980] model of competitive strategy, “..the organizations merely facilitate the development of their employees.”

They achieve this through job enrichment and stimulation. According to Schuler [1989], “…each competitive strategy requires employee role behavior.” Jackson and Schuler [1992] argue that service organizations tend to have more specific role behavior requirements.

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Again, Marginson [1988:88] Hiltrop, Despres, and Sparrow [1995] also argue that service organizations require HRM practices that are different from manufacturing organizations.

To further prove the above assertion, Berry [1984:30] explains that “One characteristic which differentiates the service sector from manufacturing is that services are consumed. The purchaser of a service does not take possession of a tangible product, [most of the time]. In sales of service, the production and consumption of service take place simultaneously.”

Lovelock, [1984:5] also agrees that consumption of service takes place in the presence of the provider.

The hotel industry, therefore, requires a different type of HRM strategy from those being practiced by other industries and that strategy is the Accumulation school of thought.

Aim and Objective

The aim and objective are to ensure that the service sector, i.e. the hotel industry takes its rightful position in the business world, rendering high-quality services and products to its customers.

It is the objective of this research to discover and equip the industry with the needed and appropriate resources, to be competitive, flexible, and able to face both present and future challenges. It is to find a way to successfully implement the strategy through the use of an appropriate human resource system. It is set out to identify a specific HRM philosophy that can be applied to excel in the industry.

To come up with the right solution to the challenges, investigations were conducted both within and local industry and those obtained elsewhere, and suggestions and recommendations made as follows.

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Internal Investigation

 An internal investigation into the operations and trends within the local service sector revealed the following: The investigation tries to look at some of the challenges that can face the hotel industry in some geographical settings. This time, it is believed that the South Korean service sector could be faced with similar challenges. I also try to list some commensurate remedies in the event of such occurring in the future.

Location of Hotels, Motels, Restaurants other Catering Services

The location of any business, to a large extent, determines its success. The locations or sighting of the hospitality industry in the local setting is not strategic enough. That is to say that most of the service organizations are off and not easily and readily accessible to clients.

Communication Facilities

Technology has made the world a small village where connections from place to place and person to person have become easy. But in many of the hotels, such communication facilities as the internet, and phone-call services are not in use. It, therefore, means that clients most of the time have to go out to Internet Service Providers to make their connections, send and receive urgent messages and information.

Flight Schedules, Bookings, and Ticketing

These are not easily done within many hotel environments. Such simple services are not available and where they are available, local languages are used to communicate; were they available, they are either written in Chinese or other local languages and dialects. This makes it impossible for foreign visitors and tourists to communicate and carry out their transactions.

Hotel Directories

Just as other literature, these are written in local languages and writings. Literature, brochures, notices, instruction materials, and hotel manuals are mostly in the local writing and languages. This makes a first-time visitor a complete illiterate and novice.

Bureau de Change Services

There are Bureau de Change services in most hotels, but the problem is that the workers in most locations do not speak any other language except their local ones. Languages like English and French are simply only passable. The only savior for visitors is the symbols used to identify the currencies they want because the locals hardly pronounce “Dollars”, “Pounds Sterling”, “Euro”, and other foreign currencies. To carry out any transaction that involves money still requires a guide. It exposes the visitor to the danger of being either duped or swindled. There is little or no confidentiality in issues like this.

Security Measures

Fire fighting tools are strategically located where they can be reached easily in the event of a fire outbreak. Other security measures such as anti-burglary devices and so on are in place with security personnel manning entrances and exits

External Investigation

In other environments and geographical locations, the situation is quite different, in that the opposite is almost the case. Most hotels are strategically located. Some are located very close to the airports, seaports, and industrial areas, depending on the type of services they provide.

It is more advantageous for such hotels to have a good number of patrons, visitors, and tourists. It is easy for a visitor to catch a flight without worrying about traffic jams and other inconveniences bound to be encountered by those who have to travel from the cities or interior areas to the airports.

Some hotels have conference rooms or halls where business meetings can be held among business partners from other parts of the world. Most literature is written in both the local and foreign languages and strategically placed for anyone to use the one he wants. There are French, English, German, Arabic, and Chinese literature. This makes communication, and other business transactions stress-free. There is hardly any need for hiring an interpreter or a guide.

Communication is superb. There is almost always an internet service facility. Every hotel room has a functional laptop for the use of any lodger who needs it.

Flight schedules, boarding times, booking, and ticketing transactions can be done right within any hotel room via the internet, without the involvement of a third party or any fee.

Additional incentives for their customers is that most of the hotels run airport shuttle to pick up and drop off their clients. There are in most of them, in-house car hire services with VIP chauffeur-driven fully air-conditioned cars and buses to take their lodgers to their destinations and business places.

Facsimile, photocopying, typing, phone-calls and document binding, and other such facilities are readily available within the hotel environment. Some of the hotels have courier services within the environment to provide urgent courier services for their customers.

This makes it easy for things such as urgent machines, equipment, and accessories or hard copy documents to be freighted to and fro for visitors by the in-house courier service providers.

Some hotels visited have as many as fifty thousand direct and indirect employees, who work to provide efficient and high-quality services to the customers. Some hotels have facilities to receive and accommodate up to two thousand visitors, including lodgers at a time.

Adding pep to the high-quality services provided by competitors elsewhere in the provision of recreational facilities where their visitors and lodgers can relax and rewind. There are snooker boards, table tennis, lawn tennis, chess, scrabble, and nice bars provided for the enjoyment of the customers.

Need for Change

From investigation, they have personnel who are ready to work and satisfy their customers, but for language and cultural barriers. This calls for the provision of the right caliber of staff.

Provisions of hotel directories, manuals, bureau de change form part of their strengths, but their construction and presentation have to be re-designed and repackaged to allow for easy use by their visitors.

A big weakness is the lack of personnel to give easy service to customers who do not speak the local languages. It is a big flaw and should be tackled immediately. One of the most important aspects of business is communication, where this is lacking, all parties get frustrated.

Another weakness is the issue of confidentiality in matters involving money. Where there is no confidentiality and huge money is involved, it exposes the customer to the danger of being robbed or attacked.

There are series of opportunities that they can exploit to make their service industry grow. That part of the world is highly populated and rapidly growing in the area of industrialization. Electronic and Communication facilities are manufactured in most Asian countries. There is equally technological advancement in that part of the world. These are opportunities for their hospitality industry to exploit.

Their pricing policy is a big threat to their continued success. Where services of higher quality elsewhere are obtained at lower costs, the South Korean service industry provides their services at higher costs thereby putting their business at the risk of losing the customers.

Wrong location or sighting of hotels is also a threat. It will be easier and more convenient for a visitor to pick up accommodation within or near the airport environment than to embark on a long journey into the city in search of accommodation. A jet-lagged visitor would be happy to have quick access to a resting place after a long flight within a short distance from the airport.

Hotels near the airports have double-glazed windows to ward off noise coming from aircraft and vehicles. This eliminates the fear of noise. Hotels here need to be strategically located and make more visible and easily accessible by customers.

Hotel brochures and directories should contain information about local tourism attractions, places of interest, historical and important monuments where visitors and foreign nationals would love to visit.

Added to this should be markets where memorable souvenirs can be obtained or purchased – things like artifacts, hand-crafts, and local traditional clothing and material. A first-time visitor will always love to have some souvenirs to take home.

If the service business sector does not throw in the towel in the face of these daunting challenges and allow their minds to begin working on possible solutions to them, then they will soon join the league of great performers in the hotel industry.

SWOT Analysis

Strengths:
  • Availability of technology to install world-class facilities abound in the region
  • Good food. They have world-class chefs and caterers who prepare good foods.
  • Good laundry and sanitation
  • Good convenience
Opportunities:
  • Good business opportunities the world over. The world is now a small global village. The service industry has the potential to excel in it.
  • Influx of foreign visitors into the Asian business world.
  • Good tourism attraction, cultural heritage and monuments to attract visitors to Korea.
  • Technology advancement and rapid industrialisation of many Asian countries opening up the Asian business world for business people.
Weaknesses:
  • Staff that do not speak any foreign languages.
  • Poor communication and information.
  • Costly services.
  • Inadequate electronic communication facilities
Threats:
  • Wrong location of business and poor patronage by visitors.
  • Dissatisfied customers likely to seek services elsewhere.
  • Loss of turnover and little or no profit in the business.
  • Tendency to go under, bankruptcy
  • Loss of customers and staff to competition

Conclusion and Recommendation

The following are some of the areas they need to look into critically and make decisions:

  • The Korean hotel industry can form alliances or partnerships with some of these world-class hotels in other parts of the world, to send a select group of their human resources to understudy how modern hospitality services are run effectively and profitably. The visit of Toyota’s Executives to Ford Motors Company’s factory, without mincing words, birthed great ideas that skyrocketed Toyota’s business fortunes.
  • Human Resource Managers should source for and engage good personnel capable of providing innovative and skillful services in their various areas of specialization.
  • Human resources should be trained in the area of communication, particularly those holding front-desk positions, and those operating other support services within the industry.
  • Internet services, telephone-call facilities, fax and courier facilities can be provided and made functional 24/7 all year round/
  • Remaining abreast with trends in the industry is a smart way to be at the top of that industry. This has become important because of the rapid technological innovations of our time. Anything other than getting a fresh insight into the industry always will spell something near doom.
  • To remain relevant, or move to the top of the industry, the hotel business should constantly develop new products or services which consumers will gladly accept. They should study the market and product offering regularly. This calls for the R & D department to be solely focused on innovations and creative researches and development operations.

References

  • Berry, [1984 : 30].
  • Brian Tracy, [Turbo Strategy].
  • Despres & Sparrow, [1995].
  • Jackson and Schuler [1992].
  • Lovelock, [1984 : 5].
  • Marginson [1988 : 88].
  • Othman, R. & Ismail, Z. [1996].
  • Poter [1980].
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