The hotel industry in Pakistan is growing rapidly, but it still confronts various challenges. A significant problem is the absence of effective human resource management strategies, which obstructs employee development and the delivery of high-quality service. This study examined two well-known chain hotels (Serena Hotel and Pearl Continental Hotel) in Faisalabad city to evaluate their implementation of human resource practices for promoting employee development and ensuring quality service.
The focus of this study was to compare the service delivery for customers, employee contributions to delivering quality service, training’s impact on improving employee abilities, and the major human resource management strategies of Serena and Pearl Continental hotels. Questionnaires and telephonic interviews with managers were used to collect and analyze data from customers and employees of both hotels.
Through researching customer delivery service standards, it is evident that there are gaps in the overall quality of service. Additionally, it is apparent that human resource strategies play a vital role in improving employee performance and delivering quality service. Upon analyzing the data, it was found that all respondents acknowledged the importance of utilizing HRM practices in various aspects of hotel employee management, such as recruitment, training, retention, development, and service delivery. There was a unanimous agreement that skilled employees contribute to customer satisfaction and subsequently improve business prospects.
This section will discuss the background of two hotels in Pakistan, specifically Serena Hotel and Pearl Continent (PC) Hotel, both located in Faisalabad. The chapter will also address the problem and raise research questions pertaining to the project. Furthermore, the objective of the study and limitations of the research will be discussed within this chapter.
Background
The hotel industry is one of the top three constituents of the world economy, following autos and oil. It is growing rapidly compared to the arms and petroleum industries. In fact, it is bigger than agriculture in the U.S.A., automobile manufacturing in Japan, and the banking sector of Switzerland. South Asian emerging economies are quickly transitioning into service economies, which is causing the competitiveness of the hospitality industry to become a significant factor in the overall effectiveness and attraction of a country. Pakistan is also experiencing this trend, with the share of services increasing.
Despite rapidly changing market conditions worldwide, the hotel business is steadily advancing but encountering intense competition. To effectively compete with rivals, the hotel requires dedicated management and a willingness to compete. Enhancing the competitive spirit can lead to continual growth in profits and production, ultimately resulting in outstanding organizational performance. According to Hofer and Schendel (1978), performance serves as a measure of a strategy’s effectiveness, and improved performance is seen as a crucial outcome of an organization’s strategy, as stated by Chakravarthy (1986).
The adoption of human resource management (HRM) practices in the hospitality industry is widespread globally (Hoque, 1999; Chand and Katou, 2007, Khan, 2010). However, it remains uncertain whether Pakistani hotels have fully embraced HRM (Khan, et al., 2011). In comparison to neighboring countries, Pakistani hotels are facing challenges in generating revenue despite efforts to align with international trends. This slow progress can be attributed to the concentration of hotels, restaurants, and motels in heavily populated cities or scenic hilly areas that aim to attract both domestic and international tourists.
Both local and international tourists, including business travelers, are mesmerized by some historic sites primarily found in major cities like Lahore, Karachi, Faisalabad, and Islamabad. In Pakistan, prominent hotel chains such as Marriott, Holiday Inn, Hilton, Serena, PC, and Sheraton (Malik, 2012) cater to these visitors. The flourishing hotel industry in the country has attracted foreign and local investors alike while creating numerous employment prospects.
Due to the Gulf War in 1991 and the events of 9/11, terrorist activities have increased globally. As a result, certain areas of Pakistan, particularly hilly resorts, have become highly threatened environments. The hospitality and tourism industry has suffered greatly as a consequence. Nevertheless, it is imperative for the industry to counteract these negative effects by accurately portraying the situation. It is crucial to emphasize that this unfavorable environment does not encompass the entire country and has been significantly exaggerated by international media.
In order to enhance the hospitality industry in Pakistan, it is crucial to address both internal strengths and weaknesses in various areas. It is vital to acknowledge the importance of HR management in enhancing service quality, customer relations, and team collaboration (Haynes and Fryer, 2000). Additionally, establishing a strong connection between HR management and industry objectives and strategies is essential for improved performance and gaining sustainable competitive advantage.
By implementing HRM practices such as proper recruitment (Wu and Chen, 2002), training (Yang, 2010), and empowerment in decision making (Meyer and Allen, 1991), the Pakistani hospitality industry can expect favorable outcomes. One of the industry’s key assets lies in its skilled and empowered employees, as well as the strategic utilization of HR management practices.
The emergence of HRM can lead to both motivated employees and significant improvements in the field (Batt and Moynihan, 2002). To enhance the hospitality industry’s performance, managers should focus on employee training, development, participation, and the improvement of quality service through HRM (Buick and Muthu, 1997).
Hotel operators nowadays prioritize the quality standards to meet customer expectations and needs. The application of HRM practices by hotel employees plays a significant role in fulfilling these requirements (Grizinic, 2007). Hotel operators strive to understand and identify customer needs, and make efforts to meet them effectively. This results in customer satisfaction and the possibility of their continued stay or return (Jeong and Oh, 1998).
Service quality is the assessment that customers seek in relation to their expectations and the actual delivery of service. According to Parasuraman et al. (1985), service quality involves ten key dimensions that differentiate between anticipation and presentation. However, Parasuraman et al. (1988) later reduced these dimensions to five: reliability (the ability to consistently and accurately perform the promised service), tangibility (the appearance and presentation of hotel staff), assurance (the employees’ knowledge, courtesy, and ability to convey trust and confidence), empathy (the provision of caring and individualized attention to customers), and responsiveness (the willingness to help and provide prompt service).
Min and Min (1997) suggest that enhancing the quality of service in different hotel chains involves considering several attributes. These include the decoration of the front office, responsiveness in terms of reservations and check-in/check-out processes, providing information about the hotel or offering tour guides, reliability in resolving customer issues, politeness and individual attention towards guests, as well as ensuring guest safety and security.
Customer
Customer satisfaction is essential for the success of the hospitality industry and increasing profitability (Hernon and Whitwan, 2009). The level of service quality directly impacts customer satisfaction. Thus, organizations in the hospitality industry prioritize service quality to flourish. Consequently, the global service industry is confronted with the task of delivering exceptional service quality to achieve maximum customer satisfaction (Hung, et al., 2003).
According to Fitzsimmons and Fitzsimmons (1994), improved service quality can be essential for an organization seeking competitive advantage. Kandampully et al. (2001) suggest that efficient service quality management is the key to achieving superior customer satisfaction. Pariseau and McDaniel (1997) further emphasize that meeting customer expectations is crucial for attracting more customers.
The absence of good service can lead to a decrease in customer retention, loss of customer loyalty, and an uptick in complaints. Moreover, inadequate service poses a difficulty for the hotel sector and can diminish its appeal to customers. Consequently, the ability to surpass competitors by delivering quality service is typically crucial for a company’s survival in the market (Hamel and Prahalad, 1994).
The research thesis centers around Serena Hotel and PC Hotel in Faisalabad, Pakistan, renowned as the city’s leading establishments. Its objective is to collect HRM practice data and analyze their effects on service quality and customer satisfaction. The outcomes from these hotels can be advantageous for other hotels across Pakistan.
Problem Statement
Since achieving independence in 1947, Pakistan’s hotel industry has flourished and been a vital contributor to the national economy. Throughout the years, both domestic and international hotel chains have emerged in key cities and picturesque areas across the country. The sector witnessed its most significant expansion during the late 80s and early 90s but subsequently encountered setbacks due to multiple constraints.
- unstable political conditions,
- Lack of proper infrastructure,
- terroristic activities,
- Incapability to cope with natural disaster without international aid
- High inflation rate.
Pakistan, a developing country, is striving to catch up with developed nations in its hotel industry. Despite making efforts, it has not fully established itself. Additionally, the failure to adopt new ventures like HRM practices for employee updates and quality customer service contributes to the economic crisis in the Pakistani hotel industry. To achieve international standards, embracing HRM practices is essential.
Research Objectives
- To analyze the impact of HRM activities to provide quality service in hotel industry of Pakistan.
- To evaluate the level that Pakistan hotel industry has responded to the applications of HRM in boosting the standard of service.
- To assess the role of HRM strategies which are required to increase the standard of quality service in Hotel Industry of Pakistan.
- To know that what more is required in hotel industry of Pakistan by taking the case of Pearl Continental and Serena hotel to boost the standard of services in hotel industry by implementing the HRM strategies.
Research questions:
- What is the importance of service quality in hotels?
- How does HRM operate in hotels? What are the strategic objectives of branded chain hotels related to service quality?
- To what level, Pakistan hotel industry has applied the HRM role in boosting the standard of service?
- How Serena and Pearl Continental hotel have used HRM policies to meet the quality service standard?
Research contribution
This study highlights the importance of HRM practices and their potential impact on enhancing service quality in two hotels in Pakistan, namely Serena and PC. The findings obtained from this study will also offer guidance to other hotels.
Chains operating their business in Pakistan are enhancing the abilities of their employees to provide improved services that cater to the specific requirements of customers.
Methodology
This study utilized both quantitative and qualitative methods to gather information. The customers and employees of two Pakistani hotels participated by completing thoughtfully designed written questionnaires, while HR managers were interviewed over the phone to obtain their perspectives. The questionnaires were created with the study’s objectives in mind, which focused on the implementation of HRM practices and their impact on the hotel’s service quality.
Limitations
- It was restricted to only two hotels located in Faisalabad. Therefore a very small sample of respondents especially for hotel management could be included in the study. It is therefore difficult to generalize these results for the entire hotel industry of Pakistan.
- The hotel employees may not provide true picture of the situation prevailing in the hotel. This is because the employees understand that the hotel management would never like to make all the information public. It creates a possibility of biased opinion by employees deliberately converting their replies in favor of the organization.
- It was not possible for the author to visit Pakistan due to time factor. If face to face interviews of managerial staff and other respondents had been conducted some more authenticated results might have been achieved
Structure of thesis
Chapter one comprises the general introduction, research background, motivation, objectives, and questions. The second chapter focuses on the literature review. Chapter three elucidates the research methodology, encompassing quantitative and qualitative research approaches, data collection procedures, and validity and reliability considerations. Chapter four presents the empirical findings and their analysis, utilizing charts and tables. The fifth chapter encompasses the research conclusion, while chapter six provides recommendations and suggestions.
Conclusion
The advancement in communication and transportation has transformed the world into a global village, leading to an increase in tourism and hospitality. As a result, it is imperative for the hotel industry to progress and meet international standards. In order to cater to customers from various cultures, it is crucial for the hospitality sector to comprehend their needs, customs, and beliefs. To fulfill customer expectations, hotel managers and employees must possess proficiency in dealing with international clients. However, developing these attributes and skills requires HRM training for hotel management and staff. Although this aspect is recognized by the global hotel industry, its implementation varies among different hotel chains in Pakistan. Therefore, this study aims to assess the adoption of HRM practices by two Pakistani hotels.
