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Cornell Hospitality Quarterlyhttp://cqx.sagepub.comThe Human Dimension: A Review of Human Resources Management Issues in the Tourism and HospitalityIndustrySalih Kusluvan, Zeynep Kusluvan, Ibrahim Ilhan and Lutfi BuyrukCornell Hospitality Quarterly 2010; 51; 171DOI: 10.1177/1938965510362871The online version of this article can be found 2/171Published by:http://www.sagepublications.comOn behalf of:The Center for Hospitality Research of Cornell UniversityAdditional services and information for Cornell Hospitality Quarterly can be found at:Email Alerts: http://cqx.sagepub.com/cgi/alertsSubscriptions: http://cqx.sagepub.com/subscriptionsReprints: ions: tions wnloaded from http://cqx.sagepub.com at UNIV OF CENTRAL FLORIDA on May 12, 2010

2010 CORNELL UNIVERSITYDOI: 10.1177/1938965510362871Volume 51, Issue 2   171-214The HumanDimensionA Review of Human ResourcesManagement Issues in the Tourismand Hospitality Industryby SALIH KUSLUVAN, ZEYNEP KUSLUVAN, IBRAHIM ILHAN, and LUTFI BUYRUKHuman resources are often seen as one of the mostimportant assets of tourism and hospitality organizations. Numerous studies have examined howemployee performance can be managed to contribute to the organizational bottom line. This article is astructured review of the literature regarding keyhuman resources management (HRM) issues in thetourism and hospitality industry. Based on thisreview, the authors offer an assessment of emerging trends in HRM and a summary of what has beenadvocated in the literature for managing employeeperformance.Keywords:MAY 2010human resources management; organizational culture; internal marketingThe Critical Role of the HumanResources for Tourism and HospitalityBusinessesFew people would reject the proposition that thehuman element in tourism and hospitality organizations is critical for service quality, customer satisfaction and loyalty, competitive advantage, andorganizational performance. This belief is supportedby many theories, models, and empirical studies inthe strategy, service, and tourism managementliteratures that stress the critical role of humanresources for organizations. On the theoretical front,resource based theory (Barney 1991; Grant 1991;Cornell Hospitality Quarterly   171

HUMAN RESOURCESTHE HUMAN DIMENSIONWernerfelt 1984) and its variants—dynamic capability theory (Eisenhardtand Martin 2000; Teece, Pisano, andShuen 1997), competency-based theory(Prahalad and Hamel 1990), knowledgebased theory (Grant 1996), organizationalsocial capital theory (Leana and VanBuren 1999; Nahapiet and Ghoshal 1998),and intellectual capital theory (Edwinssonand Malone 1997; T. A. Stewart 1997)—posit that firm-specific resources, assets,and capabilities that are valuable, rare,nonsubstitutable, or imperfectly imitablecan be an important source of sustainablecompetitive advantage and performancedifferential among firms. In this context,it is argued that human capital or assets,including employee knowledge, skills,experience, ability, personality, internaland external relationships, attitudes, andbehaviors are essential for creating the firmspecific advantages. Employee attributesare directly influenced by human resourcesmanagement (HRM) policies, practices,and capabilities of the organization, aswell as organizational culture and climate(Barney and Wright 1998; Coff 1997;Lado and Wilson 1994; Mueller 1996;Wright, McMahan, and McWilliams 1994;Wright, Dunford, and Snell 2001). Similarly, models developed in the servicemanagement literature, such as the gapmodel of service quality (Parasuraman,Zeithaml, and Berry 1985), the serviceprofit chain model (Heskett et al. 1994),and many others (see Ghobdian, Speller,and Jones 1994), acknowledge the roleemployees may play in service quality,customer satisfaction, and organizationalperformance.Many authors have convincinglyexplained how and why employees affectcompetitive advantage and firm performance. The essence of the argument isthat human capital or assets, which aredirectly influenced by managementpolicies, practices, systems, capabilities,and organizational culture and climate,“contribute to sustained competitiveadvantage through facilitating the development of competencies that are firm specific, produce complex relationships, areembedded in a firm’s history and culture,and generate tacit organizational knowledge” (Lado and Wilson 1994, 699). Thesearguments can be summarized in a basicmodel where the human capital stocks ofthe organization, HRM practices, internalmarketing, organizational culture andclimate, and business and HRM strategyencourage and reinforce employees’ workrelated behavior, thereby driving customervalue, product-service quality, and customer satisfaction and loyalty—which are,in turn, the basis of organizational performance (Exhibit 1).Because the chief output of tourism andhospitality organizations is services,researchers have investigated the featuresof services that are most critically drivenby human resources. The result is a familiar litany: services are intangible; they areproduced and consumed simultaneously,usually at the service providers’ location;and customers are present or participatingin the service, usually with interpersonalinteraction between customers and serviceproviders. Owing to these features, services are made tangible in the personality,appearance, attitudes, and behavior of theservice provider; thus, employees becomepart of the product, represent the organization, and help to form the image of theorganization (Bitner, Booms, and Tetreault1990; Hartline and Jones 1996). For thesereasons, employees and how they aremanaged are key determinants of servicequality, customer satisfaction and loyalty,competitive advantage, organizationalperformance, and business success (Bitner,Booms, and Tetrault 1990; Nickson et al.2002; Schneider 2003).172   Cornell Hospitality QuarterlyMAY 2010Downloaded from http://cqx.sagepub.com at UNIV OF CENTRAL FLORIDA on May 12, 2010

THE HUMAN DIMENSIONHUMAN RESOURCESExhibit 1:A Basic Model of the Strategic Role of Human Resources for Organizational PerformanceANTECEDENTSHUMAN CAPITALSTOCK(Knowledge, Skill, Ability,Personality, EmotionalLabor, EmotionalIntelligence, AestheticLabor, Experience,Relationships, Education,etc.)HUMAN RESOURCEMANAGEMENTSYSTEMS ANDPRACTICESINTERNALMARKETINGORGANIZATIONALCULTURE ANDCLIMATEPROCESSESOUTCOMESWORK RELATEDEMPLOYEEATTITUDES ANDBEHAVIORSTask Performance,Work Effort, JobSatisfaction, Job Stress,Job Involvement,Employee Turnover,Empoyee Absentism,Motivation, nalCommitment, Discipline,Trust in Management,OrganizationalIdentification,Commitment toCustomer Service, SelfEfficacy, Role Clarity,Service Orientation,Counterproductive WorkBehaviors, EthicalBehavior, RelationshipsCUSTOMERRELATEDOUTCOMES(Customer CustomerLoyalty, ,Profitability,Productivity, MarketShare, Increased Salesand Revenues,Growth, Return onInvestment, PositiveWord of Mouth, e.t.c.)BUSINESS AND HRMSTRATAGYSource: Based on Kusluvan (2003b, 39); Wright, Dunford, and Snell (2001, 705).Empirical studies also indicate that theservice providers’ personality, knowledge,skills, attitudes and behaviors, HRMpractices, organizational culture andclimate, and business and HRM strategycan be linked to essential customer andorganizational outcomes. These arguments point to the fact that the treatmentand management of the employees shouldbe a crucial concern for managers in thetourism and hospitality industry.Management of EmployeePerformance in the Tourismand Hospitality IndustryWe now review studies on major trendsthat have helped shape current modes ofthinking on people management in thetourism and hospitality industry. As wediscuss below, most of the contemporaryliterature that has relevance for the management of people seems to fall in one ofthe following categories (although thereare other issues): (1) employee personalityand emotional intelligence, (2) emotionaland aesthetic labor, (3) HRM practices,(4) internal marketing, (5) organizationalculture and climate, (6) business and HRMstrategy, and (7) employee job attitudesand behaviors.Employee Personality, EmotionalIntelligence, and OutcomesPersonality is defined as “those characteristics of the person that account forMAY 2010Cornell Hospitality Quarterly   173Downloaded from http://cqx.sagepub.com at UNIV OF CENTRAL FLORIDA on May 12, 2010

HUMAN RESOURCESTHE HUMAN DIMENSIONconsistent patterns of feeling, thinking,and behaving” (Pervin and John 1997, 4).Employee personality seems to be gainingimportance as a selection criterion fortourism and hospitality organizations dueto its role in employee performance.Employers often use terms such as “goodattitudes,” “social skills,” and “personalcharacteristics” to define the skillsrequirements for tourism and hospitalityemployees. Many researchers and industry practitioners argue that employeepersonality influences customer serviceattitudes and behavior, customer serviceskills, and overall performance of service providers, which may be critical forservice quality, customer satisfaction,loyalty, and organizational success.Employee personality is assumed to influence organizational performance throughits effects on employees’ attitudes, behavior, and service performance (Kusluvan2003b). Accordingly, much empiricalresearch has been carried out on the connection between employee personalityand employee performance. In the contextof the tourism and hospitality industry,G. L. Stewart, Carson, and Cardy (1996)researched the relationship betweenpersonality and employee self-directedbehavior (desirable internalized behaviorthat occurs in the absence of formal control) among hotel employees in the southwestern United States and found asignificant correlation between personality dimensions of conscientiousness,agreeableness, emotional stability, openness to experience, and supervisor evaluation of employee performance. Anotherstudy in the food service industry foundsignificant relationships between personality characteristics (especially extroversion and agreeableness) and propercustomer service behaviors and managerrated employee performance (Hurley1998). A similar study carried out in thefood-service industry indicated significantcorrelations between basic personalitytraits (i.e., emotional stability, conscientiousness, agreeability, and the need foractivity) and self-rated and supervisorrated performance ratings of serviceemployees, mediated by customer orientation of employees (Brown et al. 2002).Yet another study of restaurant employeesin the United States showed that regardless of the level of service climate andthe existence of service-supporting HRMpractices, conscientiousness and extroversion had significantly positive relationships with employee service performance,whereas neuroticism and agreeablenesswere not significantly related to employeeservice performance (Liao and Chuang2004). Another study interestingly foundthat sociability, flexibility, result orientation, and innovativeness were negatively related to employee performanceand serving, whereas conscientiousnesswas positively related to performance(Papadopoulou-Bayliss, Ineson, andWilkie 2001). That same study found thatambitious (results-oriented, flexible, andinnovative) employees were found to notperform well. In addition, as a personalitytrait, self-efficacy was found to have astrong effect on employee performanceand service quality (Hartline and Ferrell1996). Similarly, personality traits ofcompetitiveness, self-efficacy, and effortare significant predictors of frontlineemployee performance in the hotel industry (Karatepe et al. 2006). Self-efficacyand effort depict significant positiverelationships with frontline employees’job satisfaction (Karatepe et al. 2006).The displayed authenticity of the serviceprovider also enhances friendliness andcustomer satisfaction in the hotel industry(Grandey et al. 2005).174   Cornell Hospitality QuarterlyMAY 2010Downloaded from http://cqx.sagepub.com at UNIV OF CENTRAL FLORIDA on May 12, 2010

THE HUMAN DIMENSIONAt the personal level, personalitycharacteristics that are congruent withproviding good service are variouslycalled “service orientation” (Hogan,Hogan, and Busch 1984), “service predisposition” (Lee-Ross 2000), or “customer (service) orientation” (Brown et al.2002; Saxe and Weitz 1982). Hogan,Hogan, and Busch (1984, 167) definedservice orientation as “the disposition tobe helpful, thoughtful, considerate, andcooperative.” They suggested that serviceoriented people are also self-controlled,dependable, well-adjusted, and likeable,and they have considerable social skilland a willingness to follow rules. Alternatively, Lee-Ross (2000, 149) definedservice predisposition as “personal satisfaction with service provided.” Customerorientation is defined as “employees’tendency or predisposition to meet customer needs in an on-the-job context”(Brown et al. 2002, 111). Service providers’ customer orientation was found tobe strongly related to customers’ satisfaction with service (Susskind, Kacmar, andBorchgrevink 2003). It was also foundthat customer orientation promotes jobsatisfaction, commitment, and organizational citizenship behavior in the foodindustry (Donavan, Brown, and Mowen2004). In the restaurant industry, customeroriented behaviors were positively relatedto customer satisfaction and customercommitment (Donavan and Hocutt 2001).Although service orientation or predisposition is thought of as a personalitycharacteristic, it is argued that culturalvalues can improve or diminish servicepredisposition through specific job attitudes (Johns, Chan, and Yeung 2003). Insummary, these studies suggest thatemployee personality, coupled with cultural values, can be an important determinant of employee performance, jobHUMAN RESOURCESsatisfaction, employee commitment, andorganizational citizenship behaviors, aswell as service quality, customer satisfaction, and customer commitment.Another concept that is closely relatedto personality characteristics is emotionalintelligence. Emotional intelligence “consists of the ability to: perceive one’s ownand others’ emotions and accurately toexpress one’s own emotions; facilitatethought and problem solving through theuse of emotion; understand the causes ofemotion and relationships between emotional experiences; and manage one’s ownand others’ emotions” (Salovey, Mayer, andCaruso 2002, as quoted in Kernbach andSchutte 2005, 438). Higher emotional intelligence of the service provider is associatedwith greater reported satisfaction with theservice transaction in general (Kernbachand Schutte 2005). Furthermore, emotionalintelligence is also associated with jobsatisfaction and job performance (Bachmanet al. 2000; Goleman, Boyatzis, and McKee2002; Prati et al. 2003; Wong and Law2002). However, the empirical evidencefor this is scant in the tourism and hospitality industry (Zeidner, Matthews, andRoberts 2004). One exception is a studyby Sy, Tram, and O’Hara (2006), whohave examined the relationships betweenemployees’ emotional intelligence, theirmanager’s emotional intelligence, employees’ job satisfaction, and performance for187 food-service employees from ninedifferent locations of the same restaurantfranchise. They found that employees’emotional intelligence was positivelyassociated with job satisfaction and performance. In addition, managers’ emotionalintelligence had a more positive correlation with job satisfaction for employeeswith low emotional intelligence than forthose with high emotional intelligence(Sy, Tram, and O’Hara 2006).MAY 2010Cornell Hospitality Quarterly   175Downloaded from http://cqx.sagepub.com at UNIV OF CENTRAL FLORIDA on May 12, 2010

HUMAN RESOURCESTHE HUMAN DIMENSIONEmotional and Aesthetic Laborand OutcomesIt is argued that emotional and aesthetic labors have increasingly gainedcurrency as required skills for serviceemployees. In the context of work, emotional labor (a term coined by Hochshild1983) has been defined as “the effort,planning, and control needed to expressorganizationally desired emotions duringinterpersonal transactions” (Morris andFeldman 1996, 987) or “the act of displaying appropriate emotion (i.e., conforming to a display rule)” (Ashforth andHumphrey 1993, 90). Studies carried outin the tourism industry showed that working in tourism-related industries requiresconsiderable emotional labor (Constantiand Gibbs 2005; Seymour 2000), anddisplaying this may result in employeeburnout (characterized by emotionalexhaustion and cynicism) (Anderson,Provis, and Chappel 2001). On the otherhand, aesthetic labor is the employee’scapacities and attributes for “lookinggood” or “sounding right” at the point ofentry into employment (Nickson, Warhurst,and Dutton 2005; Warhurst et al. 2000).Employers in the hospitality industryconsider aesthetic labor important, andthey seek employees who will look goodand sound right (Nickson, Warhurst, andDutton 2004, 2005). Aesthetic labor wasfound to create a distinct image and provide competitive advantage in the hospitality industry (Nickson, Warhurst, andDutton 2005). Yet there is little empiricalevidence of the relationship betweenemploying aesthetic labor and tourismcompanies’ business performance.Besides, one must consider the ethics ofemploying people based on their appearance, which is the essence of an aestheticlabor approach.HRM Practices and OutcomesHRM is concerned with the “designof formal systems in an organization toensure the effective and efficient use ofhuman talent to accomplish organizationalgoals” (Mathis and Jackson 2000, 4).HRM involves a series of activities anddecisions relating to manpower planning,job design and analysis, recruitment andselection, orientation, training and development, team building, compensation andbenefits, promotion, motivation, employeeinvolvement and participation, empowerment, performance appraisals, health andsafety, job security, employee and laborrelations, and terminations (Biswas andCassell 1996; Boella 2000; Dessler 2000;Jerris 1999; Mathis and Jackson 2000;Tanke 2001). In recent years, a morestrategic approach to HRM has beenapplied, in which employees are viewedas strategic and valuable assets to beinvested in and developed, rather thancosts to be controlled. In that regard, ahighly committed, capable, empowered,involved, and motivated workforce wasseen as the way to competitive advantageand sustained business success (Storey1995). The alignment of HRM with business strategy is also advocated within thisperspective. For developing committed,capable, satisfied, and motivated employees, authors have alluded to appropriatebundles of HRM practices by variousnames, including high-involvement practices, flexible production systems, highcommitment systems, high-performancework systems (HPWS), and best HRMpractices (Wood 1999a, 1999b). HPWSis defined as “a set of distinct but interrelated HRM practices that together select,develop, retain, and motivate a workforce:(1) that possesses superior abilities; (2) thatapplies their abilities in their work-related176   Cornell Hospitality QuarterlyMAY 2010Downloaded from http://cqx.sagepub.com at UNIV OF CENTRAL FLORIDA on May 12, 2010

THE HUMAN DIMENSIONactivities; and (3) whose work-relatedactivities result in these firms achievingsuperior intermediate indicators of firmperformance and sustainable competitiveadvantage” (Way 2002, 765-66). Highperformance work organizations arecharacterized by HRM practices such asselective hiring, extensive training, selfmanaged teams, decentralized decisionmaking, reduced status distinction, information sharing, performance-based compensation,

MAY. 2010 Cornell Hospitality Quarterly711. The Human . Dimension. A Review of Human Resources. Management Issues in the Tourism and Hospitality Industry

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