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Managing Leisure
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To cite this Article Maroudas, Leonidas, Kyriakidou, Olivia and Vacharis, Artemis(2008) 'Employees' motivation in the
luxury hotel industry: the perceived effectiveness of human-resource practices', Managing Leisure, 13: 3, 258 271
To link to this Article: DOI: 10.1080/13606710802200969
URL: http://dx.doi.org/10.1080/13606710802200969
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Managing Leisure 13, 258 271 (July October 2008)
This paper reports on empirical work conducted about the use and effectiveness of human-resource
practices in six luxury hotels of multinational chains in Greece. The paper also explores the
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perceived significance of a number of job-related motivators in the luxury hotel sector and investi-
gates the relationship between individual variables and the incentives offered to hotel employees.
Strategies are suggested for developing suitable motivational programs for employees of different
individual characteristics and backgrounds.
results. More recently, attention has been high morale and high performance (Enz and
drawn to the diffusion of new approaches Siguaw, 2000). If hotel managers can satisfy
to HRM within the hospitality industry their employees, by understanding their
which has historically been dominated by underlying motivations, it will help them to
images of poor working conditions and improve customer satisfaction in the long
underdeveloped HR practices (Lucas, 2002; run and retain them (Morrison, 1996; Tsaur
Worsfold, 1999). and Lin 2004).
Prescriptive accounts of best-practice Performance management includes activi-
HRM in these service organizations are rep- ties which ensure that goals are consistently
resented by Korczynski in terms of the new being met in an effective and efficient
service management school (Korczynski, manner. A lack of necessary skills, knowl-
2002). Here, a critical source of competitive edge, management, support and personal
advantage is perceived to lie on the pursuit priorities and the discomfort most employ-
of high-quality service, which in turn is ees experience when giving and receiving
reliant on a sophisticated approach to feedback are the forces inhibiting the posi-
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performance independent of other internal luxury hotel chains are not considerably
or external organizational factors. That is, differentiated by their national implemen-
practices that seek high commitment and tation context. The six luxury hotels, used in
flexibility are always beneficial for organiz- this study, belong to multinational companies
ational success, regardless of organizational which, through their HR policies, try to find
and environmental influences (Huselid the best practices in order for the employees
et al., 1997). to achieve their best performance.
The contingency perspective posits an
interactive relationship among organiz-
TECHNIQUES AND AREAS OF
ational parts (Delery and Doty, 1996). In
BEST-PRACTICE HRM
this sense, there cannot be one common
ideal type of HRM system against which to The literature recognizes that HR strategies
evaluate practice. There are instead a range may affect organizational performance
of choices which are appropriate in different either directly or indirectly through HRM
circumstances. An example would be the results. However, the question that arises is
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evaluation of HRM performance in the which HR practices are the best and most
context of small- and medium-sized firms important to be included in a model that
rather than in large organizations. links HRM with organizational performance.
Finally, the configurational perspective Unfortunately, there has been no authorita-
holds that increased effectiveness is attribu- tive definition of best practice that has
ted to the consistency among patterns of rel- been agreed upon by academics or prac-
evant contextual and organizational factors. titioners. This leads to a lack of conceptual
The basic assumption of the configurational clarity of the HRM best-practice definition.
perspective is that in order to be effective, Several definitions have emerged that
an organizations HR policies must be con- encompass many of the underlying factors
sistent with other aspects of the organization of HRM best practice, allowing us to gain a
and the competitive environment (Doty and better understanding of the topic. Johnson
Glick, 1994). (2000) notes, best practice or high perform-
Due to the reason that the whole debate, ance work practice are described as HR
concerning the three perspectives, is still in methods and systems that have universal,
its early development, there is no consensus additive and positive effects on organiz-
among researchers regarding which is the ational performance (p. 69). This definition
predominant one. This is because any such is related to the fact that each of the best
conclusion would be premature because of practices employed by the organization will
conflicting research results, but more impor- add to the previous, compounding in this
tantly, because the debate is still in its way the resulting performance of the
infancy (Wood, 1999). organization.
Although it is well accepted that good The universalistic model of HRM
HRM policies are positively related with suggests that a specified set of HR best
organizational performance, there is a great practices will always produce superior
need for additional research and quantitat- results whatever the accompanying cir-
ive evidence to support the link between cumstances might be. Huselid (1995)
HRM policies and performance (Gerhart, emphasizes that internal fit helps to sig-
2005). The universalistic perspective pro- nificantly improve an organizations per-
vides the appropriate theoretical framework formance. Terpstra and Rozell (1993) and
for the conduct of our survey, since the HRM Huselid et al. (1997) highlight a number of
practices implemented by international lists of best practices that seek high
Employees motivation in the luxury hotel industry 261
and internal development systems influ- with the resulting intention to improve
ence the quality of this base. (2) Motiv- the organizational performance, and ulti-
ation, which is affected by the HR policy, mately create a sustainable competitive
including recognition and rewards. (3) advantage.
Opportunity to contribute, which is influ- Following, we briefly present the 15 best-
enced by the organizations involvement practice techniques that have been outlined
and empowerment strategy. The best-prac- by prominent authors (Delery and Doty,
tices approach, generally, refers to the 1996; Huselid, 1995; Pfeffer, 1994) on the
resource-based theory of competitive subject of HRM best practice: employee or
advantage, which focuses on the role that employment security, selective hiring, effec-
internal resources (employees) play in tive use of teams, effective compensation
developing and maintaining an organiz- strategies, performance appraisal, training
ations competitive capabilities. Specifi- and development opportunities, status
cally, Pfeffer (1994) highlights the case differences with clear job descriptions,
that organizations wishing to succeed in flatter organizational structures that
todays global business environment must enhance information sharing and communi-
take appropriate HR investment to cation, grievance procedures, promotional
acquire and build employees who possess criteria, employee ownership, empowerment
better skills and capabilities than their of employee in the form of decision-making
competitors. This investment will be their abilities, taking into consideration employee
competitive advantage. Therefore, only suggestions, job rotation and possibilities of
HR practices can lead to competitive progression.
advantage through the creation and the However, it is widely accepted (Enz and
development of a unique and valuable Siguaw, 2000; Haynes and Fryer, 2000;
human source. Luthans and Peterson, 2003; Pfeffer, 1994)
Before we proceed with our analysis, that among the 15 above-mentioned areas
it is important to note the purpose and the five are the techniques that need to be
benefits of the best practices that could be further developed in order to enhance the
implemented within an organization. Delaney contribution of HRM on organizational
and Huselid (1996) outline that HRM best performance: training and development,
practices are designed to enhance the teamwork, performance appraisals, effective
overall performance of employees within the compensation strategies and communication.
262 Maroudas et al.
. Training and development. The aim is to are used within organizations today,
provide staff with the necessary skills such as operational performance and
and knowledge to fulfill the organiz- productivity benchmarking, perform-
ations corporate and business plans ance appraisals with management,
(Johnson, 2000). Training should not average sales figures, organizational per-
simply occur with specific reference to formance and others. Performance
an operational task. The development appraisals allow for the measurement
of employees in multiple ways is a of the individual performance of
method for instilling commitment, as employee and/or the team. It can be
reciprocation of this commitment can considered an HRM best practice, as it
been seen through the employees provides an outline for employees
improved performance. Enz and Siguaw within the organization to improve
(2000) offer some practical insight into their performance regarding not only
the operation of training and develop- organizational objectives and oper-
ment within the workplace. In one ational processes but personal goals as
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have two major types of needs: hygiene with a fair degree of consensus and is
needs, which relate to the context in which argued that has great relevance in the hospi-
work is performed. These include work tality industry. It is argued therefore, that in
relationships, working conditions, supervi- hospitality organizations, one way to
sion, salary, company policies and adminis- develop high performance is to understand,
trative conditions, status and security. take care of and meet employees individual
When these factors are unfavorable, then needs, such as financial incentives, recog-
according to the theory, job dissatisfaction nition and skill development (Riley, 1996).
results. However, the fulfilment of hygiene According to Simons and Enz (1995),
needs cannot in itself result in job satisfac- employees from different departments
tion, but only in the reduction or elimination responded in a different way to the job
of dissatisfaction. On the other hand, people rewards offered by the organization,
have motivator needs which are related to suggesting that individual differences and
things involved in actually doing the job. individual-level variables should be con-
These include achievement, recognition, sidered when designing incentive programs.
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high-quality services, and the development exchange, 6 expenses cover for seminars,
of a strong customer orientation through 7 bonus, 8 honorary leave, 9 extra
their HRM strategy. The existence of a per- finance allowance); how important each of
sonal relations network with the managers these motivators is to the employee (1 very
of the luxury hotels in Athens permitted the important, 2 important, 3 indifferent).
conduct of a number of preliminary inter- Additional questions: Does the company
views with the HR managers of these reward good performance? (1 always, 2
hotels, which helped the development of sometimes, 3 never); Does the hotel policy
the goals and the research design of our promote employees who perform at their
study. best? (1 always, 2 sometimes, 3 never).
A questionnaire was developed which con- In order to increase the response rate, the
sisted of three parts. Hotel identity: In the first number of questions was kept minimum
part, basic information was asked about the 13. The questions were simple, clear,
hotels identity (1 name, 2 chain, 3 without special terminology, without
capacity). Biographical data: In the second requesting personal information and they
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part, a number of questions were used to were as comprehensive as possible for all
gather information about employees educational levels of employees.
gender, hierarchical level in the organization The survey population was 2,000 employ-
(1 employee, 2 manager), age, education ees coming from six luxury hotels. The repre-
(1 secondary education, 2 vocational sentative sample quota, which was randomly
education, 3 BSc, 4 MSc) and organiz- selected, consisted of 6% of the above
ational tenure (1 up to 2 years, 2 25 number. To ensure that our sample was
years, 3 more than 5 years). Motivators reliable and accurate, we chose the following
offered: In the third part, a number of closed quota controls: (a) the number of employees
questions were used to measure the regular in each hotel and (b) the proportion of
motivators offered (1 meals, 2 transfer, managers and employees in each hotel.
3 insurance, 4 brand card, 5 gifts on Importance was given to the distribution of
feast days, 6 events) or ad hoc motivators the questionnaires to different departments.
offered (1 excursions, 2 seminars in Table 1 depicts the total number of staff
hotel, 3 best employee of the month, and the sample selected from each group.
4 best appearance of the month, 5 staff For example, in Sofitel Athens three
Total sample
Total number of
Hotel Managers Employees staffs
questionnaires were distributed to the man- years and 15.3% had more than 5 years of
agers (6% of total number of the managers), tenure.
and eight to the employees of the hotel (6%
of total number of the employees). In both
cases the questionnaires were distributed RESULTS AND DISCUSSION
to different departments. Figure 1 depicts a comparison of the most and
least important motivators in order to indi-
cate how employees perceive the motives
Profile of Respondents offered by their respective companies and
Of the 124 questionnaires, 85 useful how they understand the importance attribu-
responses were returned, representing a ted to them. The majority of the employees
68.5% response rate. Of the 85 respondents, agreed that the provision of financial incen-
50.6% were male and 49.4% were female. tives as well as the provision of support for
General staff accounted for 69.4% of respon- personal development constitute very
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dents, with managers accounting for 30.6%. important incentives for the reinforcement
Further, 25.9% of respondents were aged of their performance and job satisfaction.
below 25 years of age, 48.2% between 26 Overall, 61% agreed on the importance of
and 35, 22.4% between 36 and 45 and seminars, 60.6% on the importance of
finally 3.5% of respondents were aged bonuses, 59.5% on the importance of brand-
above 45. 17.6% of the respondents had carte and 58.5% on the importance of gifts
completed secondary education, with offering to employees. The above-mentioned
57.6% of them finishing vocational training job-related motivators concern distinct best
(technical institute), 18.8% university edu- practices, since the aim of the financial
cation and 5.9% postgraduate education. benefits is the reinforcement of performance
Of them 45.9% had up to 2 years of tenure appraisal and effective compensation, while
in the current company, 38.8% had 2 5 the perceived importance of the organization
of seminars indicate the new form of psycho- In terms of gender, males appear to place
logical contract development between the much more emphasis than females on the
organization and the employees, which is participation in events organized by their
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has been supported by a number of similar companies as well as for recognition appreci-
studies in different industries. On all the ation and praise for work done in terms of
other dimensions, there are no significant the best employee of the month, than their
differences between the sexes. In terms of male counterparts. Hotel employees aged
age, people belonging in the age range 25 between 25 and 35 considered the need for
35 perceived the need for insurance insurance and development to be more
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(x2 18.943, p , 0.05) and development important than did other age groups indicat-
through seminars (x2 8.264, p , 0.05) as ing the significance of development and
much more important than any other group learning opportunities are still valid.
of employees. This is not at all surprising Finally, employees with medium work experi-
since this age group is the most vulnerable ence attributed much more importance to
under the present economic and social the need for further financial incentives.
climate characterized by employment inse- These results indicate that gender, age and
curity and flexible employment relations. work experience play a significant role in
The age group of 36 45 perceived the need influencing employees perceptions of the
for the receipt of bonuses (x2 6.197, p , motivational factors. Hotel companies can
0.05) as much more important than any utilize these findings to tailor-make more
other age group. Finally, in terms of work appropriate motivational programmes for
experience, people who had between 2 and their employees.
5 years of work experience perceived the Furthermore, in view of the findings of the
need for extra financial allowance present study, two initial recommendations
(x2 9.483, p , 0.05) as much more import- are made: (a) provide quality training and
ant than any other group of employees. development programmes; (b) consider the
provision of financial benefits that make
sense to the employees.
CONCLUSIONS
As hotel employees in luxury hotels in
Overall, the results from the present survey Greece considered opportunities for deve-
indicate that most of the employees in our lopment to be important, hotel employers
sample had a strong concern for financial should consider the use of training and
incentives as well as for opportunities of per- development programmes to motivate good
sonal development especially through the performance. It is suggested that hoteliers
provision of seminars organized by their should place more emphasis on both
respective employers. Moreover, this internal and external training opportunities
survey showed that gender, age and work for their staff. For example, arranging on-
experience had an interaction effect. Male going quality in-house training programmes,
employees had a high preference for the soliciting external training opportunities for
organization and participation in events employees and providing more generous
and excursions organized by their respective education subsidies or allowances could
Employees motivation in the luxury hotel industry 269
work to satisfy this need. Eventually, hotel when appropriate. With the help of the HR
employers should place more emphasis on department, a series of planned job redesign
career planning for hotel employees. This efforts can be put into place, including
has traditionally been a weak area of HRM job enlargement, job enrichment and job
in the hotel industry. The literature consist- rotation (Haynes and Fryer, 2000).
ently shows that for many employees, the Clearly it is not possible to generalize from
new investment criterion (on which their the research we conducted in six luxury
contribution to an organization is predi- hotels in Athens, about the relationship
cated) is opportunities for development between HRM policies and practices and
(Cavanaugh and Noe, 1999). This could be organizational performance in luxury hotel
said to hold a key to maintaining and/or industry, which is an important limitation
forging relational relationships in contem- of our study. However, our research contrib-
porary organizations (Millward and Herriot, utes on the one hand to the understanding of
2001). As long as employees feel that they employees preferences regarding the
are developing (e.g., learning new transfer- supplied job-related incentives, and on
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able skills, acquiring important knowledge, the other, to the measurement of the
gaining personal credibility and confidence) effects of specific independent variables
and thereby increasing their employability, on employees perceptions regarding
organizations can, to some extent, overcome the implemented HRM practices. Further
employee concerns about future job insecur- research is necessary in order to determine
ity by facilitating subjective security by fur- more precisely the effects of the
nishing maximum personal potential. In implemented HRM practices on employees
doing so, the organization can secure the service behavior and consequently on organ-
human investment it needs to succeed in izational performance.
financial terms.
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