Activity 10.

3 (page 189): Human resources crisis at the hotel

1

Outline four human resource problems identified in this case study. [8]

The hotel was short-staffed, e.g. no porters were available for a whole week due
to illness. This will lead to customer dissatisfaction.
Skills and experience of employees were not matched to the responsibilities
being given to them. This will lead to poor decision making and failure to
complete tasks to the required standard.
There was insufficient training for the recruits. Hotel rooms were overbooked.
Hot food was served cold. A large number of computer errors were made in
reception.
Poor management of employees, which will have an effect on the motivation of
employees and the quality of customer service they give.
There was high labour turnover. This will increase recruitment costs for the hotel.

Analyse how each of these four problems might be tackled by a professional HR

manager. [12]
Problem

Solution

Short-staffed

Workforce planning is required. HR must conduct an

audit of current staff and identify future labour needs.

Use of more flexible employment contracts is needed to

ensure that cover is available for illness.
Employees given too
much responsibility

Recruitment procedures should analyse jobs and draw

Training

Each department needs effective induction training to

up suitable job descriptions and person specifications

to ensure that recruits are capable of performing their
roles. Training may also be required to develop skills of
employees to meet the responsibilities they are given.
familiarise staff with, for example, booking systems.

Poor management of
employees

Training courses should be run for department heads to

High labour turnover

Better recruitment and selection techniques are needed

improve their people-management skills.

to ensure that job applicants understand the pressure
they will have to work under.

To what extent would the profitability of this hotel business be improved by more
effective management of its human resources? [12]
There are many ways in which effective management of human resources can
help improve the profitability of this hotel. Answers might outline some of the
following:
Effective workforce planning will ensure that the business has the necessary
human resources to achieve its goals. Customer service is important in the hotel
industry and management needs to ensure that, for example, there are always
porters available.
Workforce planning will also ensure that there are appropriate contracts of
employment. A hotel will save money by using the right balance of temporary,

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Cambridge University Press 2010

part-time and full-time contracts. For example, the judicious use of temporary
contracts will help reduce overhead costs when there is a lack of demand; this
will be important to a hotel as it faces seasonal demand.
Recruitment and selection of staff must ensure that the business has the right
workers. For example, the hotel needs to recruit suitably qualified chefs for the
restaurant. This will enhance the hotels reputation and help increase revenue
as more guests will choose to eat at the hotel. Effective recruitment also reduces
labour turnover high labour turnover adds to the costs of a hotel.
The correct training is important in improving the skills of the workforce.
Training brings a range of benefits such as:
Employees will be able to carry out their jobs more effectively with the right
training. Thus, the value of work completed by employees will be greater.
Employees feel valued and, therefore, labour turnover will be reduced.
Staff who feel valued stay longer in a company. This means that costs
of recruitment can be reduced, resulting in cost savings across the
organisation.
Effective induction training will help avoid costly mistakes, such as overbooking rooms. The hotels reputation will be tarnished if it over-books rooms
and there may be a direct cost as compensation has to be paid to customers or
upgraded rooms provided.

However, the profitability of the hotel is not solely a function of the quality of
human resource management. Human resources is just one of the functional
areas of the business and must work in association with finance, operations and
marketing to create a successful hotel business. Other factors, such as the quality of
the rooms, competition from other hotels and the economic environment, will also
affect profitability.

Activity 10.4 research activity.

Activity 10.5 (page 191): British Airways (BA) has outsourcing
gone too far?
1

Explain two benefits to BA from outsourcing many of its operations. [8]

Benefits include:
Reduction in overhead costs by outsourcing operations, BA will no longer
have to pay staff salaries and will thus reduce its overheads.
Increased flexibility BA will be able to adjust provision of services to match
passenger demand without incurring some of the costs.
Using specialist firms to provide services for example, the use of Indian IT
companies for ticketing and internet operations may be more efficient than
employing staff directly. As the firms specialise in these services, they should be
more efficient and, therefore, be able to offer cost savings to BA. Gate Gourmet
will benefit from economies of scale because it provides airline meals on such a
large scale.
Reduces responsibilities as an employer if BA employs its own staff to fulfil
operational services, then it would have to fulfil all of its legal responsibilities to

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Cambridge University Press 2010