Rahul Khanna Burj Al Arab, Dubai, United Arab Emirates

Transcription

1 The current issue and full text archive of this journal is available at The different roles of corporate and unit level human resources in the hospitality industry Steffen Raub and Lorena Alvarez EHL, Lausanne, Switzerland, and Rahul Khanna Burj Al Arab, Dubai, United Arab Emirates Roles of corporate HR 135 Abstract Purpose The purpose of this research is to analyze differences between the roles of HR at the corporate and unit level in the specific context of the hospitality industry. Design/methodology/approach Semi-structured interviews with 12 HR in three countries, complemented by a short questionnaire, yielded quantitative data on Ulrich s HR roles, work time spent in various roles and various degrees of involvement in decision making. Respondents also provided qualitative accounts of their roles. Findings Distinct differences exist between HR work at the corporate and unit level. Whereas unit level tend to focus on their role as administrative experts and employee champions, corporate level stressed their role as strategic partners and change agents. Corporate level benefit from earlier involvement in organizational decisions than those at unit level. Research limitations/implications A comparatively small convenience sample of 12 HR was used. This limitation is mitigated, however, by the inclusion of from three different countries and a good balance of corporate and unit level in the sample. Practical implications The research provides clear evidence of a lack of strategic HR orientation at both the unit and the corporate levels. These results should help corporate decision-makers rethink and reorient the activities of HRM in their organizations and strengthen its role in organizational decision making. Originality/value Despite the popularity of the Ulrich model, there is hardly any empirical research on differences in HR management across organizational levels. The present study explores this topic with a particular focus on the hospitality industry. Keywords Human resource management, Job specification, Hospitality management Paper type Research paper Introduction While the role of human resources management has been under constant scrutiny in recent years, practitioners and academics alike agree that effective HRM has never been more important than at the present time. Research has provided convincing support for the link between HR practices and the profitability and economic value of an organization (e.g. Huselid, 1995). As a result, there is now increasingly widespread acceptance of the fact that HR professionals play a key role in making a business successful (Ulrich, 1998). In the context of the hospitality industry, the importance of HRM is even more noticeable. The industry is labour intensive, working conditions are far from ideal, and International Journal of Contemporary Hospitality Management Vol. 18 No. 2, 2006 pp q Emerald Group Publishing Limited DOI /

2 IJCHM 18,2 136 the workforce is often characterized by substantial diversity in levels of education, qualifications and cultural backgrounds. Moreover, employees are at the core of the hospitality operation and form a key source of differentiation, determining as they do, to a large extent, the guests service experience. Unsurprisingly, issues related to the use of human capital, such as attracting workers in tight labour markets, recruiting, selecting and retaining staff, and providing career opportunities (Enz, 2001), come at the top of the list of problems which worry hospitality executives. Some observers deplore the paradox that, despite its widely recognized importance, the HR function in the hospitality industry is oddly disconnected from the line function (Tracey and Nathan, 2002, p. 17). The gap between HR and the rest of the organization seems to exist mainly for two reasons. First, many organizations still fail to include HR in strategic decision-making processes and reduce the role of the HR manager to mere implementation. Second, HR functions do not always interact productively with line management and often get caught up in administrative routines with little impact on organizational effectiveness. The objective of this study is to gain a better understanding of how HR in the hospitality industry see their current role. The authors wanted to find out what HR activities are perceived as most important, how HR distribute their work time and how they see their involvement in organizational decision-making processes. In addition, the authors wanted to know about view of an ideal split of HR roles at their respective level. Throughout the analysis, the focus was on the similarities and differences in HR work between unit-level and corporate-level HR. Human resource roles Our study had to rely on a commonly accepted terminology for different types of HRM roles. The most widely accepted framework of HR roles has been proposed by Ulrich (1997). He suggests that the HR function in an organization consists of four distinct but related roles which differ in terms of their time frame (long term/strategic vs. short term/operational) and their focus (managing processes vs. managing people). The four roles are defined as follows: (1) Administrative expert. This role concerns management of the firm s infrastructure: HR design and deliver efficient HR processes for staffing, training, appraising, rewarding, promoting and managing the flow of employees through the organization. The deliverable is administrative efficiency. (2) Employee champion. This role focuses on managing employee contributions. HR address day-to-day problems, concerns and needs of employees. They understand employees needs and ensure that those needs are met. The deliverable is increased employee commitment. (3) Change agent. In this role, the focus is on managing transformation and change. HR help identify and implement transformation processes. The deliverable is the organization s capacity for change. (4) Strategic partner. In this role, HR contribute to the management of strategic human resources. They help the organization by aligning HR practices with business strategy. The deliverable is strategy execution. Ulrich points out that while HR are ultimately accountable for the deliverables, the actual execution of the various roles is a shared responsibility. Line

3 , external service providers, consultants and even technology play a key role in complementing the work of the HR manager. HR involvement in decision making A second framework that is relevant to this study is the work by Buyens and De Vos (1999, 2001) on HR involvement in decision-making processes. The authors state that the strategic contribution of HR to an organization takes different forms, ranging from involvement in strategy formulation to pure strategy execution. Early involvement in strategy formulation increases the chances of including HR concerns in the creation of the business strategy (Dyer, 1983; Bennet et al., 1998). Buyens and De Vos (2001, p. 76) claim that the earlier HR professionals are involved in the process of strategy formulation, the greater their impact on the business will be. They conclude that the stage of involvement can be considered as a relevant indicator of the integration and the appreciation of the HR function within the organization. Buyens and De Vos identify four different types of HRM involvement: (1) Value-driven HRM. Involvement occurs when HR professionals are included in the decision- making process from the very early stages of identifying problems and gaps as a consequence of playing an anticipatory role. (2) Timely involvement of HRM. This occurs when HR professionals are included in the process of developing solutions and therefore creating tools for subsequent implementation. (3) Executive HRM. This type of involvement occurs when HR professionals are included in the process of implementing the solution identified and selected by other members of the organization. (4) Reactive HRM. With this minimal degree of involvement HR professionals are only included in the decision-making process in the monitoring stages or in case of problems during implementation. Roles of corporate HR 137 Buyens and De Vos argue that their framework can be applied to each of the four domains in which HRM can deliver value. The authors claim that there are different levels and stages for HR involvement and that therefore HR involvement can vary depending on the nature of specific decisions under analysis. The combined conceptual suggestions by Ulrich (1997) and Buyens and De Vos (2001) provided the content of the research instrument in the present study. Methodology We contacted a large convenience sample of Human Resources in four-star and five-star hotel companies in France, Switzerland and the UK by telephone and/or and asked about their willingness to participate in the study. A total of twelve individuals in these three countries agreed to participate and we achieved a balance of six respondents with HR responsibilities at the unit level and six respondents at the corporate level. Typical job titles for respondents at the unit level were Human Resources Manager or Director of Human Resources. Respondents at the corporate level were Group Directors or Area Directors of Human Resources. Seven participants were female and five were male.

4 IJCHM 18,2 138 Semi-structured interviews with all respondents were carried out during a four-month period in Spring/Summer Interviews lasted between 30 and 90 minutes and were fully transcribed in order to facilitate data analysis. At the beginning of the interview, our template provided a list of fundamental HR activities (including recruitment, compensation, labour relations, training etc.) and asked participants to indicate in which area they felt they added most value to the organization. The goal of this question was to have participants reflect for some time on their day-to-day professional activities before answering the more abstract questions in the second part of the template. During the second part of the interview, respondents were asked to evaluate their activities in three distinct steps. First, they were presented with a list of eight items representative of the four quadrants of the Ulrich model. These items were adapted from Buyens and De Vos (2001). Each quadrant was represented by two items. A sample item was As an HR professional I believe it is HR s primary responsibility to promote and foster a positive work climate. Respondents were asked to indicate their agreement/disagreement with each item on a five-point Likert scale ranging from strongly disagree to strongly agree. In the next step, the interviewer presented the Ulrich model and its four quadrants and asked respondents to indicate what percentage of their work time they spend on each quadrant. The interviewer ascertained that responses added up to 100 per cent. Immediately afterwards respondents were asked to indicate what percentage of their work time they would ideally like to spend on each quadrant. In the final part of the interview, the interviewer presented the model of HR involvement in decision-making developed by Buyens and De Vos (1999, 2001) and asked participants to indicate what percentage of the decisions by which they were affected belonged to each of the four types of involvement specified in the model. Human resources primary responsibilities The initial part of our research focused on HR perceptions of the importance of different HRM responsibilities. The results highlight a substantial difference between perceptions of HR at the unit level and those of their colleagues at the corporate level. The three items that received the highest average scores in our sample of unit level include promoting and fostering a positive work climate, delivering functional HR services and acting as a bridge between the employee and the organization (see Table I). The four items focusing on strategic partner and change agent roles received substantially lower scores. Thus, unit level HR professionals clearly identify the more operational elements linked to the employee champion and administrative expert roles as their primary responsibilities. Respondents provided various explanations for their assessment of different roles. The following quotes illustrate the importance attached to the employee champion role. Says one unit level manager: HR must create an environment that is conducive to the satisfaction of both the employee and the company and the outcome of this is that while people are employed within a particular place they are happy there. Another unit manager adds her point of view: Employee relations is an area that keeps me fairly busy [...] We have all kinds of situations with new and old staff: conflicting views or styles of management, so I happen to be very often a kind of referee.

5 Unit-level HR Average score As an HR professional I believe it is HR s primary responsibility to promote and foster a positive work climate. (employee champion) 5.33 As an HR professional I believe it is HR s primary responsibility to deliver functional HR services. (administrative experts) 4.33 As an HR professional I believe it is HR s primary responsibility to act as a bridge between the employee and the organization. (employee champion) 4.00 As an HR professional I believe it is HR s primary responsibility to overcome any organizational barriers to change. (change agent) 3.83 As an HR professional I believe it is HR s primary responsibility to translate business strategies into HR policies and practices. (strategic partner) 3.83 As an HR professional I believe it is HR s primary responsibility to coach employees at cultural changes. (change agent) 3.33 As an HR professional I believe it is HR s primary responsibility to manage administrative costs. (administrative experts) 3.26 As an HR professional I believe it is HR s primary responsibility to coach line management. (strategic partner) 2.66 Roles of corporate HR 139 Table I. HR responsibilities as seen by unit level HR The results provided by corporate level HR show a markedly different picture. The three items that received the highest average scores in this sample include coaching employees at cultural changes, overcoming organizational barriers to change and translating business strategies into HR policies and practices. The relatively low score for coaching line management may be interpreted as indicating that in the hospitality industry tend to be aware of turf issues. They may have misread this item as meaning interference with the formal responsibilities of colleagues in other functional departments. This result indicates that corporate level HR see the more strategic roles of change agent and strategic partner as their primary responsibilities (see Table II). From the list of HR activities presented at the outset of the interview, corporate level HR did not select any of the administrative or employee relations issues. Conversely, they tended to focus most often on career development. The important thing is that people develop within the company, says one of our respondents. Another respondent adds to this: Career development is important because it is easier to develop the people we have rather than bringing someone in. These quotes provide additional support for the strategic view corporate level HR prefer to take. Time spent on different HR roles In a second step we intended to compare our initial findings with data provided by our respondents on the percentage of work time spent in the different HR roles as defined in the Ulrich model. A comparison between unit and corporate level of actual time spent in different roles illustrates again a clear difference (see Figure 1). On average, HR in our unit level sample indicate that they spend almost half of their time on administrative expert work. Less than one third of their working time is spent on strategic roles and more than two thirds on more operational activities. Conversely, HR

6 IJCHM 18,2 140 Table II. HR responsibilities as seen by corporate level HR Corporate-level HR Average score As an HR professional I believe it is HR s primary responsibility to coach employees at cultural changes. (change agent) 4.50 As an HR professional I believe it is HR s primary responsibility to overcome any organizational barriers to change. (change agent) 4.16 As an HR professional I believe it is HR s primary responsibility to translate business strategies into HR policies and practices. (strategic partner) 4.00 As an HR professional I believe it is HR s primary responsibility to deliver functional HR services. (administrative expert) 3.83 As an HR professional I believe it is HR s primary responsibility to promote and foster a positive work climate. (employee champion) 3.66 As an HR professional I believe it is HR s primary responsibility to coach line management. (strategic partner) 3.16 As an HR professional I believe it is HR s primary responsibility to manage administrative costs. (administrative expert) 3.00 As an HR professional I believe it is HR s primary responsibility to act as a bridge between the employee and the organization. (employee champion) 2.83 in the corporate level sample report a relatively even distribution of their work time on the four roles. Surprisingly, operational roles still account for slightly more than half of their work time, with the remaining time being spent on strategic activities. Most unit level respondents are adamant about the need to reduce administrative workload. Some of them blame their superiors: My GM in particular is not completely aware of the role we play. He probably thinks that our role is more of an administrative one. He is from the old school. And most of them deplore the negative effects on the effectiveness of the HR department: I believe that the skills of some of our HR team members are wasted because they are spending so much time on administration. And, as the next quote illustrates, many believe that delegating some of their administrative duties to line should be part of the solution: It is important that they (line ) are able to carry out their own disciplinary issues: absences, pay issues, etc. My vision is for our department heads to be competent in these areas of HR so that really less of it gets thrown back at me. It is obvious that HR across the board are unhappy with the excessive focus on administrative issues. In order to find out more about precisely which roles they would like to focus on more we asked respondents to indicate the ideal proportions of time spent in different roles (see Figure 2). Again some differences between unit level and corporate level became visible. As far as unit level are concerned, a drastic reduction of the administrative expert role would be expected. Our respondents would like to cut time spent in this role by half. While they seem to be happy with the amount of time spent in the employee champion role, unit level would like to get substantially more involved in the change agent role and to a somewhat lesser extent in the strategic partner role. The main focus for unit level HR seems to be on strategy implementation aspects. Says one of our respondents: Here it is different from the parent company. For

7 Roles of corporate HR 141 Figure 1. Actual split of HR roles at corporate and unit levels example at corporate level everything is about strategy; here it is much more about making things happen. We are much closer to the grassroots. Some respondents also mention more involvement in strategic decision-making processes at the unit level, as exemplified by the following quote: In my new role I am working with the company at a senior level and being more involved in devising the strategy for the business, putting together a clear HR strategy to deliver those business needs. Our data indicate that corporate level HR would also like to see a substantial reduction in operational tasks, above all in the administrative expert role but also in the employee champion role. According to them, two thirds of their time should be devoted to strategic activities. Unlike their counterparts at the unit level, however, they would mainly use this time to strengthen their contributions as strategic partners, where they would like to make their biggest contribution. One of the respondents expresses a widely shared view: In the future, I would like to be much

8 IJCHM 18,2 142 Figure 2. Ideal split of HR roles at corporate and unit levels more a strategic partner. The degree of influence that HR can gain on strategic decisions is an important aspect for corporate level HR, as illustrated by this last quote: Our corporate HR director has recently joined the management committee - so that is positive for HR in the long term. Involvement in the decision-making process A different way of analyzing the importance HRM takes in an organization is to look at the degree of involvement in organizational decision-making. Based on the Buyens and De Vos model of decision-making, we asked our respondents to indicate the proportions of decisions in their organizational context which affect them directly, according to the different types of involvement. For the purpose of simplicity of presentation we combined what Buyens and De Vos call value-driven and timely involvement under the category early involvement. In a similar vein, their

9 categories executive and reactive were combined under the category late involvement. Results again show a marked difference between the corporate and unit levels (see Table III). Our data seem to indicate that HR at the corporate level tend to be more often involved in the early stages of decisions than their unit level counterparts. This means that unit level HR are more likely to be involved in implementing decisions made by others or even reacting to implementation problems. Conversely, HR at the corporate level have a greater chance of influencing decisions in early stages, even though the percentage of late involvement is still surprisingly high. Quotes from two of our unit level respondents explain this difference in terms of a planning/execution hierarchy that exists between corporate and unit levels. The nature of hotels is such that the more proactive things do come from the corporate level; being in the unit you are being more reactive. Given the way hotels are, there are issues that we need to deal with as and when they arrive. And: A lot of what we have been doing is maintaining and reacting, rather than forward thinking and planning and linking with business needs right from the start. Roles of corporate HR 143 Discussion The results of this exploratory study suggest substantial differences between HR work at corporate and unit levels in the hospitality industry. HR in our unit level sample spend on average a substantially larger amount of their time on operational activities than HR in our corporate level sample. The results on involvement in decision-making point in the same direction. HR at the corporate level are more likely to be involved in early stages of decision-making processes whereas their counterparts at the unit level tend to be seen more as implementers. Both groups of HR express the same desire to reduce operational work load and get more strongly involved in strategic HR roles. The desired reallocation of work time, however, reveals important differences. At the corporate level, HR would like above all to increase their weight as strategic partners. For them, getting a seat at the table is still the dominant motive when asked about required changes. This strong focus on the strategic partner role can be better understood in conjunction with our results on involvement in decision-making. These results do indeed constitute a reason for concern. Assuming that HR ability to influence strategy is determined by their involvement in early stages of the decision-making process, HR professionals even at the corporate level are still being kept out of the loop more often than one would have hoped. As far as their counterparts at the unit level are concerned, their main desire is for a stronger involvement in the change agent role. This may be an indicator of the fact that unit level HR perceive the need to interact more productively with line. This desire is in line with Tracey and Nathan s (2002) plea for a Unit level Corporate level Early involvement Late involvement Early involvement Late involvement % % % % Table III. Involvement in decision making at unit and corporate levels

10 IJCHM 18,2 144 decentralized HRM model. Their approach is based on the premise that all decision-making authority, responsibility, and accountability should be vested in the person who supervises the employee. All HRM operational decisions like hiring, training, promotions should be performed by the direct supervisors, while HR practitioners should act as consultants who create and design tools that facilitate line and supervisors operational HRM responsibilities. A reinterpretation of the unit HR manager s role as a change agent may be perfectly in line with this decentralized model. Rather than attempting to protect their turf, HR may channel their energy into coaching line and accompanying organizational change processes. The findings of this exploratory study are revealing, though simply indicative as they arise from a small convenience sample of twelve HR. As such, they reflect the issues we discussed with the participants and their own observations rather than empirically established facts. Further exploration is certainly needed to determine the extent to which these outcomes might reflect the respective job roles of HR in different countries and different segments of the industry. References Bennett, N., Ketchen, D.J.J. and Blanton Schultz, E. (1998), An examination of factors associated with the integration of human resource management and strategic decision making, Human Resource Management, Vol. 37 No. 1, pp Buyens, D. and De Vos, A. (1999), The added value of the HR function, in Brewster, C. and Harris, H. (Eds), International HRM, Contemporary Issues in Europe, Routledge, London. Buyens, D. and De Vos, A. (2001), Perceptions of the value of the HR function, Human Resource Management Journal, Vol. 11 No. 3, pp Dyer, L. (1983), Bringing human resources into the strategy formulation process, Human Resource Management, Vol. 22 No. 3, pp Enz, C.A. (2001), What keeps you up at night?, Cornell Hotel and Restaurant Administration Quarterly, Vol. 42 No. 2, pp Huselid, M.A. (1995), The impact of human resource management practices on turnover productivity, and corporate financial performance, Academy of Management Journal, Vol. 38 No. 3, pp Tracey, B.J. and Nathan, A.E. (2002), The strategic and operational roles of human resources: an emerging model, Cornell Hotel and Restaurant Administration Quarterly, Vol. 43 No. 4, pp Ulrich, D. (1997), Human Resource Champions: The Next Agenda for Adding Value and Delivering Results, Harvard Business School Press, Boston, MA. Ulrich, D. (1998), A new mandate for human resources, Harvard Business Review, Vol. 76 No. 1, pp To purchase reprints of this article please reprints@emeraldinsight.com Or visit our web site for further details: