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HUMAN RESOURCES
TABLE OF CONTENTS                                

CHAPTER 1
Recruitment and Selection....................................................... 1

CHAPTER 2
Orientation, Socialization, and Culture................................ 15

CHAPTER 3
Training and Development..................................................... 25

CHAPTER 4
Supervisory and Management Development....................... 45

CHAPTER 5
Evaluating Employee Performance....................................... 57

CHAPTER 6
Turnover, Discipline, and Exits.............................................. 75

CHAPTER 7
Compensation Administration............................................... 95
REVENUE MANAGEMENT 1

CHAPTER 1
RECRUITMENT AND
SELECTION
CONTENTS & COMPETENCIES                                

1
Internal Recruiting...................................................................................2
Discuss recruitment,
External Recruiting..................................................................................3 including internal and
external recruiting
Selection Techniques.................................................................................4 issues, and describe
recruitment sources.
Application Blanks.........................................................................4

2
Pre-Employment Tests..................................................................5 Explain selection
techniques common to
Reference Checks & Recommendations.................................................9 the recruiting and
Preparing for Interviews........................................................................10 interview process.

3
Types of Interviews......................................................................10 Identify what is needed
Making the Right Impression.......................................................12 to follow up on
references and
Wrap Up..................................................................................................14 recommendations.

Review Questions........................................................................14

4
Describe the various
types of interview
styles, how to prepare
for the interview, and
the role of the
interviewer.

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CHAPTER 1 HUMAN RESOURCES 2
As part of the pre-recruitment process, managers should consider whether
their personnel needs will be best met by internal or external sources
of employees. The ultimate goal for a human resources practitioner is
to balance internal promotions and external hires. To do so, managers
need to understand the advantages and disadvantages of the sources
derived from internal and external recruiting.

internal recruiting—Process of seeking applicants from inside the property

to fill open positions.

external recruiting—Process of seeking applicants from outside the property

to fill open positions.

INTERNAL RECRUITING
Many hotel and restaurant companies recruit only entry-level employees
from external sources; all supervisory and management positions are
recruited internally—or, as some say, are “hired from within.” This type
of internal recruiting policy can be beneficial in many ways. Internal
recruiting:

•• Improves the morale of the promoted employee.

•• Improves the morale of other staff members who see opportunities
for themselves.
•• Gives managers a better assessment of the abilities of internal
recruits, since their performance has been observed over time.
•• Results in a succession of promotions for supervisory and
management positions—meaning that one promotion is necessary
to fill each job vacated by a promotion. These successions help
reinforce the company’s internal career ladder.
•• Costs less than external recruiting.
•• Reduces training costs, since training for entry-level positions is
generally less expensive than training for management positions.
Internal recruiting also has its disadvantages. For instance, this method
may:

•• Promote inbreeding; after time, the flow of new ideas into the
company diminishes.
•• Cause morale problems among those employees skipped over for
promotion.
•• Have political overtones; some employees attribute promotions to
friendships with managers and supervisors.
•• Create a critical gap in one department when personnel are used
to fill a gap in another.

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CHAPTER 1 HUMAN RESOURCES 3
•• Avoids many of the political problems
associated with internal recruiting.
•• Serves as a form of advertising for the company.
Newspaper ads, posters, bulletin board notices,
presentations, and so on remind the public of
your products and services.
Like internal recruiting, external recruiting has its
disadvantages. Hospitality managers should be aware
that sometimes:

•• It is more difficult to find a good “fit” with the

company’s culture and management philosophy
through external recruiting.

EXTERNAL RECRUITING •• Morale problems can develop if current

employees feel they have no opportunity to
External recruiting—or hiring from outside sources—is advance in the organization.
usually easiest at the entry level because managers
can readily evaluate the skills and abilities required •• Job orientation for external recruits takes longer
for such jobs. The factors that influence external than it does for internal recruits who already
recruitment strategies are all focused on the labor know the goals of the company, how the payroll
market, which consists of individual candidates system works, and so on.
who possess the knowledge, skills, attitudes, and •• External recruiting can lower productivity
abilities that meet the standards for employment over the short run, since, in some cases, new
within the organization. External sources also employees cannot produce as quickly or as
include competitors. Experienced human resources effectively as internal recruits.
practitioners are always looking for talented individuals
employed at other companies. •• Political problems and personality conflicts can
result when employees believe they could do
Although it costs more than internal recruiting, external the job as well as the external recruit.
recruiting has some distinct advantages. Among its
major benefits, external recruiting: •• External candidates may not prove to be as
they first appear. Any external candidate is still
•• Brings “new blood” and new ideas into the an unknown quantity. Managers will invariably
company. know more about an internal applicant.

•• Gives recruiters an opportunity to see how

things are on the outside by talking with
applicants from both direct and indirect
competitors.
•• Provides a fresh look at the organization, which
sometimes reinforces the reasons current
employees work in the company. Consider, for
instance, the value of a recruit saying something
like: “You keep your kitchen much cleaner than
they do where I currently work,” or “The light
from the atrium certainly makes this a more
pleasant place to work.”
•• Is sometimes cheaper than training current
employees.

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CHAPTER 1 HUMAN RESOURCES 4
Throughout the selection process, companies
should limit questions to what are known as bona
fide occupational qualifications. At issue is limiting
questions to areas that are job related. Generally
speaking, questions about marital or family status,
age, sex, sexual preferences, race, birthplace,
religion, military records, convictions or arrests not
related directly to the job, specific types of references
(religious or military, for example), and requests for
photographs are potentially illegal.

The issue of bona fide occupational qualifications

SELECTION became particularly important after July 26, 1992, when
the Americans with Disabilities Act (ADA) became
TECHNIQUES law. In the past, many application blanks included
questions such as: “Do you have any handicaps?” “Do
After determining a selection philosophy, a company you suffer from any permanent ailment or disease?” or
can begin to apply selection techniques. While “Have you ever suffered a serious accident while on
the exact methods and applications of selection the job?” Some application blanks included sections
techniques vary from organization to organization, that asked applicants to identify any disabilities (loss
most effective selection processes include several of hearing, sight, and so on). These types of questions
techniques. These techniques or stages involve are not allowed under the ADA. You may, however,
application blanks, pre-employment tests, reference ask about a person’s ability to perform the essential
checks and recommendations, and employment functions of the job.
interviews.
Many hospitality organizations rely on managers to
Application Blanks subjectively evaluate the information contained on
The purpose of an application blank is to learn what the application blank; this is unnecessary. Two types
applicants have done in the past. Application blanks of application blanks—weighted application blanks
typically ask a person to report on previous work and biographical information blanks—help make
experience, educational background, employment evaluation more objective.
history, work references, personal references, and
other personal data. By collecting information on Weighted Application Blanks. Weighted application
an applicant’s past, an organization assumes it can blanks (WAB) attempt to identify issues that are
predict what an applicant will do in the future. important to actual performance on the job. In that
sense, weighted application blanks are predictors
of job performance. Creating a WAB begins with a
application blank—A form used by companies to thorough analysis of each job. The purpose of this
solicit information from prospective employees about analysis is to determine which characteristics are
their previous work experience, educational background, required to effectively perform each job. Normally,
references, and other information. this process is confirmed by what amounts to trial
and error. After completing a job analysis to determine
Two important points stand out in a discussion of the characteristics and aptitudes an employee needs,
application blanks. The first concerns the issue of a WAB is created that reflects the most desirable
needed versus desirable information. Application qualifications. After using the form for some time, a
blanks can be too long or too short. Excessively long company tracks the work history of each new hire to
or complex applications can discourage potential determine the relationship between actual performance
applicants; they also raise concern over whether on the job and the performance predicted by the
the issues on the form are truly job related. On the weighted application. In this way, the weighting on
other hand, application blanks that are too short can the application blank can be validated, and changes
fail to collect the information needed to assess an can be made on subsequent forms if necessary.
applicant’s qualifications to do the job.

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CHAPTER 1 HUMAN RESOURCES 5
to Fiedler, these managers are most likely to have
weighted application blank (WAB)—An application
strong, positive, supportive, and caring emotional
form in which points are accumulated for different types
bonds with their employees. On the other hand, those
of work experience. Typically, weighted application
managers who describe least preferred coworkers
blanks emphasize the most desirable qualifications of
in unfavorable terms are most likely to display weak
applicants.
human relations skills, to adopt more authoritative
or autocratic managerial roles, and to place task
Biographical Information Blanks. While weighted
demands over employee needs or preferences.
application blanks emphasize work experience,
biographical information blanks (BIB) identify factual
Both weighted application blanks and biographical
material, attitudes, life experiences, and social values
information blanks must conform to guidelines of the
that may make an applicant more desirable. Typical
Equal Employment Opportunity Commission (EEOC).
biographical information blanks—also known as
The key “test” of these guidelines is how accurately
biodata blanks—include a series of multiple-choice
the application blank predicts performance on the job.
questions designed to elicit such information. Because
The company or organization must also ensure that
the courts consider hiring decisions based on attitudes,
applications do not cover issues that can be construed
life experiences, and social values to be subjective,
as illegally discriminatory.
BIBs should be used with caution and only with the
advice of competent legal counsel.

biographical information blank (BIB)—A pre-

employment form that collects information about an
applicant’s attitudes, life experiences, and social values.

While general and weighted application blanks produce

verifiable information, biographical information blanks
produce unverifiable responses. Nonetheless, many
biodata approaches have been very successful
predictors of performance on the job. For instance, the
single question, “Did you ever build model airplanes
that flew?” was nearly as good a predictor of success
in flight training during World War II as was the entire
battery of psychological and other selection tests
used. And, while unproven to date, a question such Pre-Employment Tests
as: “Did you enjoy cooking with your mother or father Tests are an attractive selection method because
as a child?” could be a strong predictor of success in they allow candidates to be compared easily. For
a cook’s position. instance, a candidate who scores ninety on a paper-
and-pencil test designed to evaluate applicants
Another example of biodata that appears to work is would appear more attractive than a candidate who
high school grade point average (GPA) as a predictor scores eighty. Tests were used widely in the 1950s
of grade success in college; those with high GPAs and 1960s as selection devices. General intelligence
in high school are more likely to earn high GPAs in and mechanical comprehension tests were especially
college. Fiedler’s Least Preferred CoWorker (LPC) popular during this period. However, using tests to
test provides us with a third example. This approach evaluate job applicants can often lead to serious
tests situational leadership styles and can work as a charges of discrimination.
predictor in certain situations.
Tests became the focus of many discrimination suits
In Fiedler’s LPC test, managers describe their “least after the passage of the Civil Rights Act of 1964.
preferred coworker”—or the employee they would least Specific guidelines for testing were established
like to work with. Fiedler’s theory is that managers who through the Uniform Guidelines on Employee Testing,
describe least preferred coworkers in favorable terms set forth as part of Title VII of the act. One of the
have great concern for human relations. According more important guidelines pertains to test validity.

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CHAPTER 1 HUMAN RESOURCES 6
All selection procedures must demonstrate a strong 4. Are the tests easy to administer?
relatedness to the actual work done. Tests are no
exception. Companies must be able to show that the 5. What is the past success of the test (especially
tests they use are valid for the application. In many regarding EEOC proceedings)?
court cases, firms using tests as selection devices
could not prove that the results were valid predictors Honesty Tests. Because workplace theft amounts to
of job success. tens of billions of dollars per year, many employers
are interested in testing the honesty of each job
Discrimination is the second overriding issue in candidate. This is especially true in industries where
testing. Tests can inadvertently discriminate against ample opportunity exists for employee theft. Many
certain protected groups. Hospitality employers should consider hospitality a theft-prone industry, since
be particularly careful to avoid discrimination, since employees have chances to steal both products and
women and minorities constitute a large percentage money almost every day.
of hospitality job applicants.

Regardless of past problems, tests can sometimes be honesty test—A type of test that measures attitudes
a practical way to legally determine the best applicant. toward honesty by posing hypothetical situations about
The following sections describe several tests that may which a potential employee makes a value judgment.
apply in different hospitality settings.
Some honesty tests measure attitudes about honesty
by posing a hypothetical situation in which the potential
paper-and-pencil tests—A selection device that employee makes a value judgment. For instance, a
requires written responses to either written or oral common follow-up question to a situation involving
questions posed to applicants. money that is lost by a guest and then found by an
employee might be: “Do you think it is wrong to keep
Paper-and-Pencil Tests. Paper-and-pencil tests require the money?” Another form of honesty testing evaluates
written responses to either written or oral questions a candidate’s candor—or, more appropriately, lack
posed to a job candidate. Both multiple choice and of candor—and propensity to lie. In some of these
essay formats have been used successfully. While tests, the principal method involves posing either
some companies still hire psychologists to develop negative statements that are true about most people
and validate tests specifically designed for their own or positive statements that are false about most
work environments, many companies simply purchase people; then the candidates are asked to identify
standardized paper-and-pencil tests. The most how often their behavior mirrors that described. For
popular tests of this type today measure cognitive instance, a question might be: “Do you ever have bad
abilities: general intelligence, abstract reasoning, thoughts that you would not want to tell others about?”
numerical ability, verbal ability, clerical ability, and Statistically speaking, most people do. The theory is
mechanical aptitude. Because courts have focused that a candidate who responds “no” is probably lying
on such selection devices in the past, hospitality and has a low propensity toward candor. However, an
companies should pay careful attention to the tests honesty test means little if it is not job related.
they use and how they use them. Also, some states
prohibit or regulate the use of these tests. Companies Some researchers, educators, and managers feel that
can evaluate the characteristics of a published test by honesty tests are effective. Believe it or not, these
answering five questions: sources say, many people will admit to theft or other
dishonesty when asked about it directly. These tests
1. Does the test measure aptitudes and abilities are relatively easy to interpret, which makes them
needed for the job? attractive to some companies. However, like paper-
and-pencil tests, some states prohibit or regulate the
2. Are the tests reliable? use of honesty tests.

3. Are proper test development procedures used Another common form of honesty testing is the
in the design? polygraph exam, also known as the lie detector
test. This exam is reliable in 60 to 70 percent of its

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CHAPTER 1 HUMAN RESOURCES 7
applications. Polygraph tests were popular in the
hospitality industry in the mid-1980s. Their popularity
has since waned due to unreliability and possible legal
ramifications.

Much of the debate surrounding polygraphs was

muted on December 27, 1988, when the U.S.
Congress passed the Employee Polygraph Protection
Act. This act prohibits polygraphs in about 85 percent
of employment situations. Generally speaking,
polygraph tests are now allowed only when applicants
are applying for state, local, or federal government
positions or for positions with companies under
contract with the Department of Defense, the FBI, or
the CIA. Employers may still request polygraph tests A recent study found that 63 percent of employees
under a very narrow exception that permits employers reported current use of alcohol, almost 8 percent
to investigate economic loss or injury in cases when reported current heavy use of alcohol (five or more
reasonable suspicion of an employee is involved and instances of heavy drinking each month), and almost 8
the employee is afforded other protections. Even under percent reported use of illicit drugs. Drug testing rarely
these conditions, examinees have the right to refuse includes alcohol tests or prescription drug use tests.
tests and to discontinue a test after it has begun; they One study reported that approximately 16 percent of
also have the right to prohibit the disclosure of test hospitality employees admitted that they used illicit
results to unauthorized persons. drugs, the highest rate of any industry studied (the
next highest drug use was reported among furniture
Physical and Motor Ability Tests. In the past, and retail employees at about 14 percent; all other
employers could subject applicants to physical industries reported use below 10 percent). This
exams as a part of the selection process. However, study related drug use to higher levels of employee
due to potential discrimination against people with absenteeism, dishonesty, and theft.
disabilities, the ADA eliminates most of the conditions
in which exams are allowed. Some physical and Many people believe that the government requires
motor ability tests that are specifically job related (for companies to test for drug use. This is not true.
instance, the ability to lift objects for bell staff) may According to the U.S. Department of Labor, the Drug-
still be admissible. Free Workplace Act of 1988 requires some federal
contractors and all federal grantees to agree to provide
drug-free workplaces as a condition of receiving a
physical and motor ability tests—Selection tests that contract or grant from a federal agency. The act does
subject applicants to physical exams. Only those physical not apply to those who do not have, nor intend to apply
and motor tests that measure specific job-related skills for, contracts or grants from the federal government,
or abilities are acceptable under the Americans with including subcontractors.
Disabilities Act.
The main impetus behind drug testing may be the
Drug Tests. Drug testing began in earnest under money involved in the process rather than any genuine
President Ronald Reagan in the 1980s. President effort to reduce the impact of drugs on organizations
Reagan’s drug czar, Dr. Carlton Turner, recommended or their patrons. Both drug testing and the sale of
to the president that the United States develop a drug- products designed to help employees fool drug tests
testing policy. Reagan then issued Executive Order are big business today. Federal agencies spend
12564, which required the institution of mandatory approximately $16 billion per year on drug testing;
drug testing for all safety-sensitive, executive-level, private businesses spend billions more.
and civil service federal employees. These decisions
were later incorporated into the White House Drug Are all of these drug tests making a difference in the
Control Strategy directive issued by President George workplace or saving companies any money? One
H. W. Bush in 1989. This strategy resulted in huge study suggests that “the evidence linking drug use
increases in drug testing. and workplace difficulties is much weaker than initial
2016 American Hotel & Lodging Educational Institute
CHAPTER 1 HUMAN RESOURCES 8
estimates” and that “testing does not necessarily or continue with their existing drug testing programs.
measure impairment, abuse, or intoxication.” The However, the downside to such programs should be
authors of this study went on to say that if organizations considered. First, drug testing that is not necessary
are using employment drug tests to “save money by or of obvious value to employees may reduce their
reducing accidents, turnover, absenteeism, and the loyalty and sense of commitment to the organization.
hiring of impaired employees, then each institution Second, drug testing may not save money and, in
would have to perform its own cost-effectiveness fact, may cost the organization more than it saves.
analysis.” And third, a policy that employees perceive as abusive
will likely have the effect of reducing the number of
If a company is going to ask its employees to submit qualified applicants for positions, thereby leaving
to drug testing, it must take pains to make sure the companies with fewer and less qualified choices.
program is as well-run and fair as possible. A drug-
testing program that employees perceive to be unfair Work Samples. By definition, work sample tests
or unjust may result in attitudes of resentment and measure a candidate’s ability to perform the skills
anger, behaviors to deal with the perceived injustice, and tasks associated with a specific job. Work sample
or efforts to change or beat the system. These tests are one of the most reliable predictors of success
behaviors may include noncompliance, complaints, on the job, because applicants are asked to perform
sabotage, negative remarks about the company to or simulate specific tasks they would do on the job.
people outside of the organization, and other activities
that indicate a lack of organizational citizenship. If
the program is perceived to be unfair by employees, work sample test—A selection test that measures
the result may be highly cohesive work groups that a candidate’s ability to perform the skills and tasks
exhibit antagonistic behavior toward management, as associated with a specific job.
well as reduced work performance. Many employees
Such tests can be extremely useful in many areas
believe drug testing to be unfair because there is no
of the hospitality industry. Consider the case of a
such testing for alcohol abuse, which is a much bigger
Southeastern college that manages a lodging facility.
problem in the workplace. According to the National
In its advertisement for a chef, the college specified
Institute for Alcohol Abuse and Alcoholism, alcohol
that the applicant would need to demonstrate cooking
abuse costs the United States $79 billion per year,
skills. Later, each applicant was actually asked to
while the highest estimates for drug abuse put its
prepare a meal for the search committee.
costs much lower at $29 billion. This is still a very
large number, but illegal drug use is not as likely to
Companies must consider two issues when using
be engaged in at work, and drug abuse is not nearly
work sample tests. First, the test must have content
as pervasive as alcohol abuse.
validity. This means that the test must measure job
performance skills that are actually useful on the job.
Conversely, a drug testing program perceived by
Second, it can be difficult to establish acceptable
employees as being fair will invoke a number of
standards for work sample tests. Companies should
desirable reactions by employees. A fair program is
conduct a thorough job analysis to determine the level
more likely to be accepted and may cause an increase
of competence required on the job before subjecting
in the employees’ organizational commitment and trust
any applicants to a test.
in management, a decrease in turnover intention, and
increased employee compliance with and support of
While work sample tests are often predictive of
the organization and its policies.
success, they can be misused. As a result, such
tests can come under close scrutiny by the EEOC.
Reducing insurance costs is often cited as a
Employers who choose this method of selection
justification for businesses to engage in drug testing.
should give all applicants the same tests, under the
Under deals made with state governments anxious
same conditions, and should not discriminate against
to appear focused on anti-drug policies, most states
any protected group. Employers must also review
offer discounts on workers’ compensation and liability
their legal liability before administering such tests.
insurance of up to 7.5 percent for companies that
Work sample tests can sometimes place applicants
test for drug use. Such cost savings may be ample
at risk of physical injury—for example, an applicant
justification for hospitality companies to implement

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CHAPTER 1 HUMAN RESOURCES 9
for a cook’s position is at risk when the participants finish, the observers meet and compare their notes.
demonstrating chopping skills with Many times, observers work as a group to rank attributes they observe
a knife. in each candidate.

Assessment Centers. Assessment Each term, the School of Hotel Administration at Cornell University puts a
centers were originally designed by group of graduate students through the assessment center approach to
the U.S. Office of Strategic Services identify both good and bad qualities in these future managers. Students
and the British War Office during find the method effective—even if they do not perform well—since they
World War II to assess candidates each receive individualized feedback. Even if a student is not chosen
for high-stress assignments. for a particular management assignment, the evaluation process itself
Because of their cost, assessment provides helpful goals to work toward. Once again, job-relatedness and
centers are typically used to predict validity are important issues to consider when using assessment centers
managerial performance rather to evaluate applicants.
than line-level employee success.

The idea behind assessment centers

is to place applicants in a series
of real-life situations in which they
make decisions and take action.
Typically, observers watch the
performance of each candidate
and make subjective evaluations of
their performance. In most cases,
the assessment center approach
takes from one to two-and-a-half
days to conduct. This is part of the
reason for the high cost. Applicants
complete in-basket exercises
(exercises that ask applicants
to rank, order, and respond to
REFERENCE CHECKS &
items in a “to-do” file), work in
leaderless groups, complete
RECOMMENDATIONS
Checking references and recommendations is an integral part of the
computer simulations, role play,
selection process. There are numerous reasons for collecting and
attend problem-solving meetings
verifying information. For instance, some sources claim that as many
that emphasize creativity and other
as 30 percent of the résumés in the United States include at least one
leadership traits, and so on—much
major fabrication. Many of these fabrications involve education, work
as they would do at work.
experience, or equipment use. One retired FBI DipScam (diploma scam)
task force expert estimated that diploma mills generate more than $500
assessment center—A selection million dollars per year in revenues. Further, it is likely that more than one
tool that places applicants in million Americans have purchased, and probably use, fake credentials.
simulated real-life situations where Those numbers have increased with the growth of the Internet and
observers watch their performance globalization. It is now about as easy to set up a fake university as it is
to determine the extent to which the to set up a website.
applicants would fit the company’s
needs. References can be personal or professional. While many companies
still collect personal references, some see it as a waste of time. These
Three to five observers are companies feel that since little is known about the references, information
usually required to implement from them would likely be of minimal value. However, professional and
an effective assessment center. educational references are a different story. Professional references
These observers take notes on the relate directly to the work history of an applicant. While most of these
performance of each person. After references will report only employment dates and position responsibilities,

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CHAPTER 1 HUMAN RESOURCES 10
this information is often valuable in creating a profile The first rule is to always do your homework before
of the applicant. meeting with an applicant. Nothing is more distracting
than reading from a candidate’s résumé during an
Common background checks include: interview. Lack of knowledge about the candidate
sends signals that you either did not care enough
1. Verification of academic credentials to prepare in advance or that you are unorganized.
Generally, interviewers should block out whatever
2. Verification of prior employment, including time is needed to conduct the interview and create
position, longevity, salary, and job performance, an environment in which the focus is solely on the
sometimes tracing back ten years or to the three candidate and the interview. Interruptions (phone calls,
prior positions walk-ins) are extremely distracting and inappropriate
during an interview. The third rule—establish a
3. Discussions with business, professional, and rapport—is necessary to get the applicant talking.
personal references and verification of letters of By putting the candidate at ease, the interviewer
recommendation will learn more during the process. The fourth rule—
know the job—calls for a thorough review of the job
4. Drug screens and, occasionally, physical exams analysis before an interview. Many might argue that
this fourth rule is the most important; they might add
5. Testing to confirm skills and knowledge
that it is impossible to find the right candidate unless
the interviewer fully understands the job requirements
6. An Internet search on the candidate’s name to
in advance.
confirm an individual’s claims about jobs held,
awards, and more

7. Criminal background checks

8. Credit checks

Types of Interviews
Interviews fall into three categories, depending on the
PREPARING FOR interviewer’s latitude in the process. The three types
INTERVIEWS are commonly known as unstructured interviews,
semi-structured interviews, and structured interviews.
Collection of information during an interview can be These types are also known as non-directive, mixed,
enhanced substantially by following a few simple and patterned interviews, respectively.
rules. The four basic rules are:
Unstructured Interviews. In unstructured interviews,
1. Do your homework before the interview. questions are not planned in advance. Instead, the
interviewer directs the interview down whatever
2. Establish the appropriate setting. path seems appropriate at the time. By doing so,
the interviewer achieves very little similarity between
3. Establish a rapport. interviews. This means that interviews with different
candidates will likely cover entirely different subjects.
4. Know the job.

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CHAPTER 1 HUMAN RESOURCES 11
“Did you enjoy your previous job?” requires only a
unstructured interview—An interview style in which
“Yes” or “No” response. The open-ended question,
no questions are planned in advance. Instead, an
“What aspects of your previous job did you like
interviewer directs the interview down whatever path
best?” engages the interviewee and promotes a more
seems appropriate at the time.
comprehensive response.
Opinions vary on the value of unstructured interviews.
Some experts believe that these interviews have little closed-ended questions—A type of question that
merit because of the low inter-rater reliability they requires only a “Yes” or “No” response.
achieve. Additionally, those same experts believe
that the unstructured method is most likely to skip open-ended questions—A type of question that requires
over important job-related issues and to result in a respondent to elaborate on an issue.
illegal questions. Other experts believe that skilled
interviewers can use this method to achieve a Structured Interviews. In structured interviews,
better understanding of the candidate, since areas questions are prepared in advance and are asked
can be explored that both structured and semi- in the same way and at the same time during the
structured approaches would miss. Proponents of interview. Very little flexibility is allowed. Flexibility is
both perspectives agree that training is essential for reserved for a period of follow-up questions that an
interviewers who use a non-directive approach. interviewer can ask if a candidate fails to fully address
patterned questions.
Even though there is some question about the
validity of the unstructured interview, it is likely the
most common method used. Sometimes, interviews structured interview—An interview style in which
are unstructured for the wrong reasons; managers questions are totally prepared in advance and are asked
who are poorly prepared often take an unstructured of each applicant in the same order.
approach to interviewing.
The structured interview results in answers that are
Semi-Structured Interviews. Another type of comparable between candidates. As a result, some
interview involves preparing or planning the issues experts believe that structured interviews provide
to be explored but allowing for flexibility during the more reliable and valid information. On the other hand,
process. This structure has been called a “cone” this approach tends to produce information that is
approach—meaning that the interviewer prepares arguably narrower or shallower. Some experts believe
very broad questions that relate to specific important that this type of interview is less worthwhile because
issues. For example, interviewers might explore a an interviewer can fail to learn important strengths
candidate’s beliefs about the team approach to work and weaknesses about a candidate.
performance versus the individual approach, or about
performance on a recent job. Once these “cones” are Three variations of the structured interview exist.
introduced, the interviewer encourages the candidate The first is the traditional patterned interview. This
to speak more freely about each topic. In this way, the type tends to focus on past work experiences, goals,
semi-structured interview allows for elaboration as well education, and so on. Typically, questions asked
as structured responses. during a patterned interview would be: “What are
your long-term plans?” “What are your strengths and
weaknesses?” or “What do you hope to be doing five
semi-structured interviews—An interview style that years from now?”
allows both planned and unplanned questions. Typically,
the unplanned questions allow interviewers to ask The situational interview is a variation of the structured
more specific questions about broad issues raised by interview that uses three types of questions. The first
structured questions. type is situational (“What would you do if your cook
failed to show up on a Friday night?” or “What would
A critical feature of both unstructured and semi- you do if a guest complained that his or her room was
structured interviews is the use of open-ended not acceptable?”). The second type of question relates
questions to elicit additional responses from the to job knowledge. For instance, a candidate might
candidate. For instance, the closed-ended question, be asked to define certain terms (“What does ‘rack

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rate’ mean?”) or to explain a procedure. The third type of
question relates to a candidate’s willingness to perform
the work that is necessary on the job (“Are you willing to
move to another city?” “Can you work weekends?” “Can
you stay on your feet for hours at a time?” and so on).

Another type of patterned interview is called the behavioral

description interview. In this method, an interviewer begins
by establishing an area of discussion. For instance, he
or she might ask an applicant for a front desk position
to respond to a question or statement such as: “Tell me
about the most difficult shift you worked in your last job.”
This question would be followed by another that elicits
more information on the types of behaviors a candidate
is likely to exhibit on the job. Common questions might
be: “Why was this shift so difficult?” or “How did you
handle the problems that you faced?” The objective of the
behavioral description approach is to link past behavior
with likely behavior.

Other types of interviews used in certain circumstances

include panel or board interviews (also known as group
interviews) and stress interviews. The first type requires
a candidate to be interviewed by a panel or group of Making the Right Impression
interviewers. Group members later compare their notes Interviewers represent their companies. An
to arrive at a group decision about the applicant. Stress interviewer is frequently an applicant’s sole
interviews create a highly charged emotional setting contact with a company. In this case, the
in which a candidate is literally challenged by the interviewer represents the type of people who
interviewer. When using this approach, an interviewer work for a company, their behavior, actions that
might challenge an applicant’s response to a seemingly are acceptable and not acceptable, and so on. As
standard question. Chastisement, belittlement, and even a result, a company should be particularly careful
contradiction on the part of the interviewer are common in choosing an interviewer.
in stress interviews. This approach is useful only for
simulating the type of stress applicants might face on the There are two schools of thought on this subject.
job, for it provides an example of how they may respond The first—and most obvious—claims that since
under pressure. an interviewer sets the image of success for a
candidate, only the best representatives should
stress interview—An interview style that creates an be interviewers. This sounds logical. However,
emotionally charged setting in which the applicant is a second school of thought suggests that
challenged by the interviewer to see how the applicant interviewing can also encourage personnel to
performs under stress. improve their performance. This theory suggests
that, since interviewers are required to project a
Regardless of the interview method, interviewers positive impression of the company, the interview
must know what topics and questions to avoid. The process can prompt an employee to rethink why
chapter appendix lists sample lawful and unlawful pre- he or she joined the company. Since interviewers
employment inquiries. Since laws and their interpretation often learn as much about the “outside” from the
vary from state to state, an attorney should review a applicant as they provide to the applicant about
property’s application and interview procedures to ensure the “inside,” the comparison can sometimes help
that discriminatory practices do not occur. current employees whose performance is mediocre
to recognize the value of their jobs and promote
improved performance.

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Establishing a realistic impression is a second crucial factor during an
interview. Since interviews are actually the initial stage of orientation
for an applicant who comes on staff, it is critical to communicate what
the job really entails. For instance, telling an applicant that a front desk The structured
agent’s position can lead to exciting opportunities to travel and see the interview results in
world obviously does not establish a realistic perspective of the job. Nor
would telling an applicant for a management trainee position that he or answers that are
she would make important decisions about room rates, property locations, comparable between
or other higher management issues. candidates.
We’ve examined several different approaches to selection and
interviewing in this chapter. Some companies may find that they can
best identify successful employees by using a combination of skills tests
and direct interviews. Others may find that combining paper-and-pencil
tests with non-direct interviews works best. Regardless of which methods
are used, managers must take care to ensure that the methods they
choose accurately predict which applicants will perform best on the job.

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WRAP UP
CONCLUSION
Businessdictionary.com defines recruitment as “the process of identifying
and hiring the best qualified candidate (from within or outside the
organization) for a job vacancy in the most timely and cost-effective
manner.” Guests demand good service more now than ever before.
Despite this, the hospitality industry still puts too little emphasis on
recruiting and selecting the right service-oriented people and too little
emphasis on training. If the industry hires employees who are likely to
provide poor service, guests probably will receive poor service.

Progressive properties recognize recruitment as a process that involves

identifying qualified employees and encouraging them to apply for open
positions. The process begins by reconciling the demand for labor with
the supply.

Review Questions

1
What are the advantages and disadvantages
of internal recruiting?

2
What are the advantages and disadvantages of
external recruiting?

3
What are some common types of
pre-employment tests?

4
What are the purpose of application blanks? What are
some common types?

5
What are the three types of interview styles described
in this chapter?

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CHAPTER 2
ORIENTATION,
SOCIALIZATION, AND
CULTURE
CONTENTS & COMPETENCIES                                
Orientation Planning and Goals............................................................15

1
Explain the purpose of
Orientation Programs.............................................................................16 an orientation program.

General Property Orientation.......................................................17

2
Distinguish between a
Specific Job Orientation...............................................................18 general property
orientation and a
Socialization and Culture.......................................................................19 specific job orientation.
Wrap Up..................................................................................................21

3
Explain the purpose of a
Review Questions........................................................................21 socialization and
culture program, and
identify specific
socialization strategies
and approaches.

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ORIENTATION PLANNING
AND GOALS
Orientation programs are designed to reduce the stress that employees
feel when beginning a new job. However, many orientation programs
compress huge amounts of information about managerial philosophies,
company history, policies, and procedures into a very brief period and the
new employee is overwhelmed. Key considerations in effective orientation
planning are included in Exhibit 2.1.

orientation—The process of introducing new employees to their work and

the environment in which their work is completed.

Exhibit 2.1 Key Considerations in Orientation Planning

•• Program goals
•• Range of topics to be considered
•• Timing and duration of orientation sessions
•• Company topics vs. departmental and job topics
•• Identification of specific training to be conducted by the human
resources department
•• Identification of specific training to be conducted by managers
and supervisors
•• Technical vs. social aspects of orientation
•• Methods for encouraging employee discussion sessions and
feedback
•• Training required for human resources representatives before
the orientation program
•• Training required for managers and supervisors before the
orientation program
•• Checklist of topics to ensure follow-up by the human resources
department and managers
•• Review and update of the employee handbook
•• Program flexibility to accommodate differences in employee
education, intelligence, and work experience

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Proper planning of an orientation Exhibit 2.2 Question New Employees Might Ask
program ensures that all the
pertinent topics are covered
without duplication. The information 1. What exactly is the organization’s mission?
included in these programs falls
2. Why does the organization exist?
into three general categories:
3. What are the exact duties of my job?
•• Information about job-related
issues such as company
4. What are my rights as an employee?
standards, management
expectations of employees, 5. What are the limits to what I can and cannot do without getting
and policies and procedures. permission?
•• Information about cultural
issues such as acceptable 6. What positions can I advance to within the organization?
norms of conduct,
definitions of acceptable 7. How do I fit in the organization?
and unacceptable behavior,
8. What performance standards must I meet to succeed in the job
management philosophies,
and the organization?
traditions, and strategic
beliefs.
9. What general and specific benefits am I eligible for?
•• Information about specific
job responsibilities and 10. Who will I work for?
technical aspects of the job,
such as what is contained 11. How will I “fit in” with co-workers?
in the job description, what
kind of equipment is required 12. What can I do to establish a good relationship with the people I
to perform the job, and how will work and interact with?
performance is evaluated.
13. What type of training will I receive, both immediately and later on,
Research has found that it is to help me prepare for this and future jobs within the organization?
natural for new employees to want
to engage in orientation activities
such as information and feedback
seeking, relationship building,
and positive framing of new
surroundings and circumstances.
New employees naturally have
many questions about their jobs
and their new organization. It is
up to hospitality companies to
develop well-designed orientation
programs that address the
questions employees have about
their roles. These questions must ORIENTATION PROGRAMS
be answered quickly and effectively Well-organized managers should prepare what are known as orientation
to get employees off on the right kits that new employees can take home after program attendance.
foot. Exhibit 2.2 provides some Orientation kits enable employees to review material discussed during
questions new employees might the day and share information with their families or friends. Further,
ask. they enable the new employee to reflect on the information and think
about questions to ask the human resources department or manager the

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following day. Exhibit 2.3 provides a list of some sample items to put in an orientation kit. Hospitality companies
should consider including the following items in their orientation kits in addition to those listed in Exhibit 2.3:

•• Copies of regulatory notices and company policies regarding compliance

•• Recent company newsletters
•• Names and telephone numbers of other employees in the department
•• Schedule for the remaining portions of orientation and training

orientation kit—The package of information provided by employers to new employees during orientation to help
the new employees understand and get acquainted with the organization’s policies, procedures, and facilities.

Exhibit 2.3 Items Commonly Found in Orientation Kits

Remaining employment and benefit enrollment forms to be completed.

Explanations of:

•• Hours of work, meal and break periods •• Group health insurance policy
•• Attendance policy •• Pension/savings plan
•• Safety procedures •• Important telephone numbers and when
to use them
•• Sanitation procedures
•• Available or required training programs
•• Uniform or dress code requirements and personal
appearance and grooming standards •• Employee assistance programs (if
applicable)
•• Emergency procedures
•• Union policies (if applicable)
•• Performance evaluations
•• Information regarding social activities of
•• Disciplinary rules and actions the department and/or company
•• Promotion policy •• Current organization chart
•• Harassment policy •• Projected organization chart (illustrating
•• Payroll proced ures succession)

•• Vacation, sick, and other leave policies •• Map of the facility

•• Holiday schedule •• Key terms unique to the industry,

company, and the job
•• Copy of specific job goals and
descriptions

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Some properties divide orientation Orientation plays a valuable role in reducing turnover, which can be
into two programs. The first focuses expensive. One study states that turnover costs in the leisure and
on general property orientation, the hospitality industry averages $7,000 per employee; some estimates
second on specific job orientation. place these costs even higher. In addition to cost savings, other benefits
that employees and the organization can derive from general property
orientation are listed in Exhibit 2.4.
general property orientation—A
formal program presented by
an employer to introduce the turnover—The rate at which employees leave a company or work unit.
organization’s mission and values
to employees; usually conducted Exhibit 2.4 Benefits of General Property Orientation
shortly after hiring.
BENEFITS TO THE BENEFITS TO THE
specific job orientation— COMPANY: EMPLOYEE:
The process of introducing new
employees to the specific tasks and •• Provides a consistent •• Provides an understanding
behaviors of their job. message to all new of the company’s
employees expectations about
employee performance
•• Helps employees know that
they are working for a great •• Helps employees
company understand the value of their
positions
•• Introduces management
•• Builds self-esteem
•• Provides a memorable first
impression of the company •• Helps employees realize
that they are important to
•• Builds a strong foundation
General Property of company values and
the operation

Orientation philosophy •• Provides structured learning

One of the first steps a property about the company and the
•• Presents business goals job
takes to orient a new employee and priorities
is to acquaint that employee with •• Establishes early
the organization and with the •• Provides an opportunity to commitment to being a
property as a whole. This stage succeed member of the team
of orientation covers such topics
•• Introduces the team •• Builds a foundation for
as the organization’s mission
approach at all levels in the employee motivation
statement and management
organization
philosophy, general policies
and procedures, insurance and •• Lowers turnover
benefits, personnel forms, guest
and employee relations, and the One researcher who has studied orientation measured the extent to which
role of employees in meeting those employees who attended voluntary programs were actually more
organizational goals. or less acculturated to the company. What he learned was that, even
though the program was voluntary, employees attending the orientation
At large properties, general property were significantly more socialized on the goals/values, history, and
orientation is typically conducted by people of the company. The people attending orientation programs
a representative from the human also showed significantly higher levels of organizational commitment
resources department. At smaller than non-attendees. This was very desirable, of course. The results of
properties, the general manager such research have been reviewed and tested over the years and these
usually presents the information. findings have continually been supported.

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Specific job orientation programs are designed to familiarize employees
with their job responsibilities and work environment. Exhibit 2.5 outlines
some additional benefits of this method of orientation.

Exhibit 2.5 Benefits of Specific Job Orientation

BENEFITS TO THE BENEFITS TO THE

COMPANY: EMPLOYEE:

•• Provides consistency in •• Instructs the employee how

employee training and to do the job correctly
development
•• Builds self-esteem due to
•• Maintains currency of feeling of accomplishment
resources
•• Builds high morale
•• Helps employees ensure
quality service and meet •• Creates team fellowship and
guest expectations cooperation

•• Ensures that required •• Helps employee become

standards will be maintained productive more quickly
Specific Job
Orientation •• Provides consistency in staff
performance
During specific job orientation, the
focus shifts from organizational •• Ensures staff capability
and departmental topics to those
directly related to job performance. •• Helps the department run
Employees are introduced to the more smoothly
responsibilities outlined in their
job description, portions of the
handbook relating to their job, the
work environment and location of
equipment, and their department’s
relationship to other departments.
New employees are taken on a tour
of the property and their department
and are introduced to people with
whom they will work and interact.
The department’s policies and
procedures are discussed, including
those related to work hours, time
clock operation and payroll, breaks,
smoking, employee dining, and so
on. Managers and supervisors
involved in a specific orientation
program identify potential career
tracks so that new employees
understand their promotional
opportunities and limits.

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S O C I A L I Z AT I O N A N D With these issues in mind, Texas Instruments

conducted a classic experiment in which one group
CULTURE of new workers (control group) were given the
normal first-day orientation, consisting of a two-hour
Orientation is introductory instruction concerning a new briefing by the personnel department on hours of
environment or organization. The orientation period work, insurance, parking, and the like. Then, as was
is especially important since it can help relieve the customary, the new employees met a friendly but
anxiety many new employees experience. However, very busy supervisor, who provided further orientation
simply orienting employees to their new environment is and job instruction. A second (experimental) group
not enough. New employees also must be introduced received the same two-hour personnel department
to the values, norms, and behaviors consistent with orientation followed by a six-hour anxiety reduction
success in the organization. This process is known as session. There individuals were told that there would
socialization or cultural orientation. Socialization is an be no work the first day, that they should relax, sit
ongoing process of learning the social culture of the back, and use this time to get acquainted with the
organization and how to get along with others in the organization and each other and ask questions. The
organization. While orientation typically occurs in a new following points were emphasized during this phase:
employee’s first week to month on the job, socialization
takes much longer. Rushing new employees into their 1. the high probability of success on the job, as
work without attending to the socialization process evidenced by statistics disclosing that 99.6
is not effective. Moreover, it makes employees feel percent of all new employees are successful
unprepared, unsupported, overwhelmed, and less on the job
than appreciated. Organizations can use several
ways to ensure that new employees are appropriately 2. what new employees should expect in the
socialized into their new positions. way of hazing and unfounded rumors from
older employees designed to intimidate them
values—A set of beliefs, often socially and culturally about their chances of success
defined, which attempt to guide the behavior of an
individual or group. 3. encouragement of new employees to take the
initiative in asking their supervisors questions
about their jobs
norm—A pattern or trait that is considered typical
behavior of an individual or group. 4. information about the specific personality
of the supervisor to whom they would be
behavior—The manner in which a person conducts assigned. This innovative orientation program
himself or herself; the response of an individual or group had a remarkable impact: The experimental
to an action, stimulus, or environment. group exceeded the control group in terms
of learning rate, units produced per hour,
socialization—The process in which employees learn absentee rate, and tardiness. Although this
what is expected of them at work; includes both written research was conducted years ago, it clearly
and unwritten rules of behavior. shows the beneficial effects of reducing the
anxiety of new workers.

The socialization of new employees can be difficult Certainly, this research suggests that socialization
because of their anxiety. activity to reduce anxiety should be included in all
employee orientation programs.
•• “Will I be able to handle it?”
Organizational socialization has been described as
•• “How will I get along with my boss?” the process by which newcomers come to understand
and appreciate the values, abilities, expected
•• “Where do I start?”
behaviors, norms, and social knowledge essential for

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assuming an organizational role and for participating In short, proper orientation and socialization can
as an organizational member. While socialization to help reduce unwanted turnover—especially turnover
the entire culture of a company may take months, that occurs within an employee’s first thirty days.
newcomers tend to experience and incorporate the Effective orientation and socialization programs
more perceptible and concrete parts of the culture, like can help organizations in other ways. For instance,
acceptable behavior or norms, immediately. Research effective cultural socialization can contribute to
indicates that new employees who are effectively reduced absenteeism and higher productivity. Finally,
socialized to the organization are more productive researchers have linked effective cultural socialization
more quickly than those who are not. Researchers to other benefits, including profitability, employee
contend that socialized employees quickly learn the performance, and loyalty. Further, failing to develop
values that are critical to the organization and can and deliver good orientation and socialization programs
integrate those values into their jobs. For example, can have an opposite effect. In a study conducted on
new employees who learn that service is a key value socialization, for instance, newcomers reported on
of their hotel are more likely to reflect that value in how many negative versus positive impressions they
their work. In addition, employees who are effectively received. During the first day, the negative impressions
socialized are more productive for longer periods than outweighed the positive by 71 percent to 29 percent.
employees who are not. Over the first week, 59 percent of the impressions the
newcomer received were negative, and over the first
The effects of socialization were first noted in a study month, 54 percent were negative. After six months,
of civilian and military prisoners of the North Korean the newcomers reported that, overall, 56 percent of
Communists during the Korean War. Researchers the impressions they received about the company and
noted that, through intensive indoctrination, Americans their coworkers were negative. When newcomers took
could be “converted” very quickly to partially reflect orientation and socialization programs, on the other
the values of their Communist captors. Researchers hand, the figures were reversed; nearly 70 percent
noted that the “occupational indoctrination” that reported positive impressions about the first month,
students received upon entering the work world had for example. These positive impressions still held true
a similar effect; in a relatively short time, many of the six months later.
values students held were easily converted by the
companies they worked for. Gradually, this process
of socialization became known as “organizational
socialization” or, in some circles, simply “learning the
ropes.”

The faster employees “learn the ropes,” the faster

they will become effective, productive members of
an organization. With some employees, exposure
alone enables them to learn specific values, norms,
and behaviors. Some employees, however, will never
learn the ropes unless they receive assistance and
guidance.

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WRAP UP
CONCLUSION
In theory, orientation provides new employees the information they need
to succeed in a company. But in practice, unless orientation is carefully
managed, too much new information at one time just increases the anxiety
new employees experience. We know that new employees who receive
orientation training tend to stay longer. This is especially true when an
orientation stresses what is important to the newcomer, not what is important
to the company. Inadequate orientation programs can be financially damaging
to a company because they may reduce new employees’ effectiveness for
the first few weeks on the job and may contribute to job dissatisfaction and
turnover.

Review Questions

1
What are the broad goals of an orientation program?

2
What are the three general categories of information
provided in orientation?

3
How does general property orientation differ from
specific job orientation?

4
What items should be included in an orientation kit?

5
What is the purpose and some of the
benefits of socialization?

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HUMAN RESOURCES 25

CHAPTER 3
TRAINING AND
DEVELOPMENT
CONTENTS & COMPETENCIES                                
The Training Cycle.................................................... 26 Choosing Training Methods...................................... 34

Developing Needs Assessments ................................ 27 Training for Managers....................................... 34

Organizational Analysis..................................... 27 Training for Non-Managers................................ 36

Task and Behavior Analysis............................... 28 Training for All Employee Levels....................... 38

Individual Analysis............................................. 28 Anticipate Resistance to Change.............................. 41

Conducting Needs Assessments................................ 29 Measuring Change............................................ 41

Advisory Committee.......................................... 29 Wrap Up..................................................................... 44

Job Descriptions and Job Specifications........... 30 Review Questions.............................................. 44

1
Work Sampling.................................................. 30 Identify and explain the stages of the
Job Performance Measurements...................... 32 training cycle.

2
Attitude Surveys................................................ 32
Explain how a training needs
Performance Appraisals.................................... 32 assessment is developed and
conducted, and discuss the first
Skills Tests......................................................... 32 steps in designing a training program.
Performance Documents................................... 32

3
Describe various training methods
Guest Feedback................................................ 33 and how to select one.
Questionnaires.................................................. 33

4
Explain how to implement and
Exit Interviews................................................... 33
evaluate training programs and
Critical Incidents................................................ 33 activities.

5
Discuss career development for
managers.

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THE TRAINING CYCLE

Most experts agree that training should be viewed as a continuous cycle
rather than as a single event. As Exhibit 3.1 shows, the training cycle
begins with a needs assessment, or identification of a problem. This
problem usually results from a discrepancy between a desired outcome
and what really happens.

Exhibit 3.1 The Training Cycle

Develop
and conduct
needs
Evaluate assessment
Identify
training training
program objectives

Implement Establish
training training
criteria

Choose
training Select
methods trainees

Pretest
trainees

In a hospitality company, this discrepancy can take many forms. Guest

complaints about service, room cleanliness, or the amount of time it
takes to check in are all examples of a discrepancy between the desired
outcome and reality. Unfortunately, few guests tell us when a problem
exists. Most training programs do not result from guest complaints, but
from discrepancies identified by managers or employees.

training cycle—A continuous series of steps involved in the training process.

The second stage in the training cycle is the identification of training

objectives. In this step, managers establish the goals of a training
program. Objectives vary with the circumstances. Some objectives aim
to improve the service delivered to customers; others may aim to improve
productivity or reduce costs.

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CHAPTER 3 HUMAN RESOURCES 27
training needs, selecting the proper approach to
training objective—A measurable end result of a
training, and conducting training—fail to effectively
training program. Training objectives are typically
evaluate whether or not training goals have been
classified as reaction-based, learning-acquired, on-the-
achieved.
job behaviors, and results-oriented.

The third stage in the training cycle process is the training evaluation—A step in the training cycle
establishment of training criteria. Training criteria that determines whether or not the training program is
are the benchmarks hospitality managers set to working.
measure effectiveness. In effect, these benchmarks
become the standards that participants should reach
in their training. Once achieved, these benchmarks
tell managers that the learning of a particular training
Most experts agree that training
topic is complete.
should be viewed as a continuous
cycle rather than as a single event.
training criteria—Benchmarks for training success.

The fourth stage is the selection of trainees. Trainees

can be new or potential employees or current
employees. In both cases, managers should be
careful to select employees who will benefit from the
training. Too often, training programs are too simple
or too complex for the trainees. Both extremes result
in ineffective training.

The fifth stage is pretesting employees to establish

the baseline of knowledge, skills, or abilities for the
training. By testing the employees’ current knowledge,
skills, and abilities before beginning a training program,
managers have a base for evaluating the program’s
effectiveness later on.
DEVELOPING NEEDS
pretesting—A testing process that establishes what
employees currently know and what they need to be ASSESSMENTS
trained for; conducted before training implementation. The first step in any training program is to assess
the need for training. In human resources circles,
The sixth stage is choosing the proper training this first stage is known as a needs assessment. When
methods and techniques. As we show later in the developing needs assessments, experts typically
chapter, methods and techniques vary substantially, identify three factors to analyze: the organization,
depending on the objectives of the training program, tasks and behaviors, and individuals.
the criteria developed for evaluating learning, and the
current level of employee performance.
needs assessment—The first stage in the training
The seventh stage is implementation of the training program, in which an organization assesses the need
program itself. The key to this stage is following the for training.
format derived through planning. Managers should
be sure to follow the methods identified in previous Organizational Analysis
stages of the training cycle. Every training program affects the specific unit
receiving training and the organization as a whole. An
The eighth, and final, stage in the training cycle is example often used to explain organizational analysis
training evaluation. Unfortunately, many hospitality is drawn from the manufacturing industry. Consider
managers—even those who are good at identifying

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what might happen when one team on an assembly Task and Behavior Analysis
line is trained to perform its task at a 25 percent faster
Every job consists of several different tasks and
pace. While this change might improve the productivity
behaviors. The objective in task and behavior analysis
of this single unit, it does not help the organization as
is to determine which tasks and behaviors are required
a whole because the rest of the assembly line is not
for each specific job. The first step in this process
prepared to meet the increased production pace.
is to conduct a thorough job analysis. The second
step is to prepare complete job descriptions and job
organizational analysis—The process in which the specifications.
entire organization’s need for training is assessed;
generally includes an assessment of the effect that
task and behavior analysis—A process that determines
training will have on the organization.
which tasks and behaviors are needed for each job.
The same holds true for hospitality. Consider what
Job analyses, descriptions, and specifications
might happen when servers are trained to write guest
identify three critical elements for managers to
checks in a new way. While training might teach
consider before beginning any training program.
servers a more effective way to write guest checks,
These elements encompass the knowledge, skills,
it could be detrimental instead of helpful unless the
and abilities necessary to complete the various tasks
cooks who read the checks are also trained in this new
and behaviors associated with a job. These three—
method. The same would be true if front desk agents
often called KSAs (knowledge, skills, and abilities)—
were trained to prepare guest folios in a new way.
provide the information managers need to determine
Unless the night auditor received the same training,
which duties and responsibilities to feature in training
the program would not be effective.
programs.
These examples illustrate task-oriented training
approaches. However, organizational analysis also KSA—Acronym for knowledge, skills, and abilities.
exists on another important level. Consider issues
such as management philosophy and organizational
culture. To be effective, each company must
incorporate its own management philosophy into its
training programs. Consider the suitability of a training
program that teaches employees to make decisions for
themselves in a company that encourages employees
to turn problems over to managers. For the most part,
training programs are unsuccessful when they conflict
with the management philosophy and organizational
culture of a company. For example, assume that an
important ingredient in your organizational culture is
“teamwork.” A training program that teaches employees
to work better individually would be incompatible.

These examples illustrate the need for consistency

among training objectives and organizational goals.
Historically, many organizations experimented
with sensitivity training to help employees grow as Individual Analysis
individuals and become better listeners and to teach An individual analysis identifies the strengths and
them to generate new ideas. Unfortunately, many of the weaknesses of the employee performing the job.
organizations that these employees returned to after The purpose of individual analysis is to specifically
training did not embrace these goals. Reward systems determine which employees require what types of
did not support these goals and management styles training. Sometimes, training programs are designed
at the time promoted a more dictatorial approach. for entire departments. Other times, only individual
Consequently, the training was wasted. employees receive training.

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CHAPTER 3 HUMAN RESOURCES 29
and disadvantages of each method (these methods are listed in Exhibit
individual analysis—A process
3.2). Unfortunately, no single method can be recommended for all
that helps managers identify
circumstances or environments. Instead, each method may be effective in
specific training needs for the
different situations. When choosing a method or combination of methods,
person performing a particular job.
it can be helpful to review the skill levels of job applicants and employees
(see Exhibit 3.3).
For example, a restaurant manager
may conduct a thorough needs
analysis and find that his or her Exhibit 3.2 Needs Assessment Methods
employees need training in wine
sales and service. The manager 1. Advisory committee
should then assess whether all
restaurant employees should 2. Job descriptions and job specifications
receive the same training. Some
3. Work sampling
employees will know nothing about
wine, while others will know quite 4. Job performance measurements
a lot. Under such circumstances,
a training program on the basics 5. Attitude surveys
of wine identification and service
6. Performance appraisals
would be useful to some employees,
but unnecessary for others. From 7. Skills tests
a managerial perspective, training
employees who already have this 8. Performance documents
knowledge represents a waste of
training dollars. To prevent such 9. Guest feedback
waste, managers should assess 10. Questionnaires
the individual KSAs of each
employee before beginning any 11. Exit interviews
training program.
12. Critical incidents

Advisory Committee
Typically, an advisory committee consists of managers who review job
skill and behavior demands and compare these to the current level of
employee performance. This method of needs assessment often benefits
from employee representation on the committee. An effective advisory
committee in a housekeeping department may include the assistant
housekeeping manager, a manager from the front desk, a manager from
reservations, and employees from each department. One advantage of
advisory committees is that, often, they can establish desired outcomes
CONDUCTING that are well suited to organizational needs. A disadvantage is that
NEEDS employee participation is sometimes limited by a reluctance to disagree
with their managers. This obstacle can be overcome by establishing an
ASSESSMENTS open-meeting, full-participation policy from the outset.

Now that we’ve identified some

reasons for performing needs advisory committee—A committee composed of managers who review the
assessments, we can examine job skills and behavior demands of the organization and compare these skills
methods for conducting them. and behaviors with current levels of employee performance.
This section will examine twelve
methods of conducting needs
assessments and the advantages

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CHAPTER 3 HUMAN RESOURCES 30

Job Descriptions and

Job Specifications
A second method of conducting an effective training
needs assessment is to compare the KSAs identified
in current job descriptions and specifications to current
job performance. The effectiveness of this type of
needs assessment, typically conducted by managers
in charge of a given unit, can be enhanced by an
advisory committee.

Work Sampling
Work sampling is conducted by a trained analyst who
systematically observes and reviews actual work
performance. The analyst only observes the work;
he or she does not participate. The advantage of work
sampling is that the analyst sees the work actually
being done instead of just seeing the results or
hearing recollections of each person doing the work.
Disadvantages include the cost of hiring an analyst
and the time involved. To accurately assess current
performance, the analyst must watch a relatively large
number of employees at work. Unless all employees
are observed, work sampling is ineffective for
identifying individual employee needs.

work sampling—A needs assessment method of

individual analysis in which a trained analyst observes
and reviews an employee’s work to determine training
needs.

Exhibit 3.3 Nation’s Business Poll of

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Readers: Skill Levels of Job Applicants and Workers

What level of skills are workers bringing to jobs in your business?

Very good 5% Adequate 37%
Good 16% Deficient 42%
How has the skill level of job applicants you see changed over the past three years?
Improved 7% Declined 46%
About the same 47%
What is the most common shortcoming of job applicants you see?
Lack of specific technical skills 17%
Lack of basic reading and math skills 16%
Inability to communicate well, orally and/or in writing 19%
Poor attitude and work habits 43%
Lack of previous work experience 5%
How much negative financial impact has there been on your business because of inadequately trained
workers?
Little or no impact 21% Heavy impact 17%
Moderate impact 62%

How much retraining/education do you offer your current employees each year?
None 17% Six to 10 days 15%
Less than a day 9% More than 10 days 26%
Two to five days 33%
Who should have the primary responsibility for educating and training workers?
Businesses 26%
Public and private schools (including community colleges) 67%
Government agencies 1%
Outside suppliers and consultants 1%
Industry/trade associations or local chambers of commerce 5%
Who should pay for training workers?
Businesses seeking the skilled workers 37%
State or local government 13%
Federal government 3%
Workers themselves 47%
Which of these would best improve education/training programs at the local level?
Publicly funded vouchers for government or private-sector training 23%
One-stop education/training and referral centers 27%
Increased flexibility of state/local use of federal funds 37%
No changes needed 13%

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These surveys can be useful in developing training
programs that increase employee satisfaction and
thereby can help reduce unwanted employee turnover.
The principal disadvantage of attitude surveys is their
relative inability to determine the need for either skills
or task-related training.

attitude survey—A needs assessment method designed

to determine when behavioral training is required; also
a questionnaire or other information-gathering tool
Job Performance Measurements designed to determine how employees feel about work
issues.
Job performance measurements are much like work
sampling because both involve an analyst. The major
difference is that, for job performance measurements, Performance Appraisals
the analyst actually performs each job in addition When used properly, regular performance appraisals
to observing employee performance. This direct help identify individual employees in need of training.
involvement can result in identification of KSAs that Consistent task- or behavior-related problems
other methods do not. However, when assessing indicate the need for additional training. However,
jobs that require special skills (many cooking jobs, because many managers do not know how to conduct
for instance), it is often difficult to find an analyst who performance appraisals effectively, this method often
can perform all the necessary tasks without advanced identifies training needs incorrectly.
training.
Skills Tests
job performance measurements—A needs assessment The use of skills tests is one of the most common
method in which a trained analyst performs each job to methods of assessing training needs. These tests
get a personal feel for the knowledge, skills, and abilities measure an employee’s ability to perform a certain
needed. task in a certain way. For example, a manager might
ask an employee to demonstrate the proper method
Job performance measurements can require a of opening and serving wine to determine whether that
substantial time commitment, especially in cases employee needs training. While this method is useful
that involve unusual or infrequent job responsibilities. in determining the need for skills-related training, it
Many experts view this method as one of the least is not useful for identifying training needs for certain
cost-effective because of the time it takes an behaviors or more complex tasks.
analyst to observe and participate in each job. In
addition, extensive training, which increases costs,
is sometimes required to prepare the analyst for each
Performance Documents
position. Although costly, this method is one of the Reports pertaining to absenteeism, sales, guest
most thorough. complaints, commendations, and productivity are
some of the performance documents useful for
pinpointing individual training needs. Documents such
Attitude Surveys as turnover or waste reports are useful in determining
Not all training focuses on improving task completion. department training needs. Since such data is often
Many hospitality companies recognize the importance collected during the normal course of business, the
of employee attitudes and behavior toward guests. use of performance documents represents a low-cost
Attitude surveys can provide an effective means of approach to assessing training needs. However, this
determining when training is required to improve the method is not useful for identifying behavioral training
behavioral side of service. Attitude surveys are also needs because the focus is on data or statistics rather
useful in pinpointing what employees like and dislike than on behavior.
about their jobs, fellow employees, and managers.

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CHAPTER 3 HUMAN RESOURCES 33
properly collected, this information can give managers
performance document—A document relating
useful insight into issues that they sometimes cannot
to absenteeism, sales, guest complaints, or guest
see, particularly into those issues that relate to
compliments that identifies a need for training.
turnover. Some companies even require employees
leaving the organization to participate in exit interviews
Guest Feedback before receiving their final paycheck.
When asked, owners and managers of small
hospitality businesses might say they know that their
exit interview—A meeting conducted between an
employees need training when guests complain.
employer and an employee leaving the organization
However, research shows that guests rarely complain.
that attempts to identify specific training needs or other
Instead, guests simply do not return. Worse yet, they
work-related problems.
may tell others about their disappointing experience.
As a result, guest feedback is not useful for assessing
However, research indicates that employees rarely
training needs unless the hospitality organization
give accurate information in exit interviews unless
actively collects information from a large number
anonymity and confidentiality are ensured. Few
of guests. Active guest feedback collection does
employees want to “burn their bridges” since they may
have one advantage: it demonstrates a property’s
someday need a recommendation from the company
commitment to service.
they are leaving. Employees are also likely to have
friends still on the job who might be hurt by their
Questionnaires comments. And, frequently, an employee’s reason
Questionnaires are useful for gathering training needs for leaving may relate to disagreements with the very
information because of the large amount of data that managers who conduct the interviews.
can be collected easily and cheaply. For example,
a company might ask employees and managers Exit interviews generally provide a useful method of
throughout a hotel to complete a special questionnaire needs assessment when interviews are conducted
to determine the training needs of housekeeping staff. either by a third party (someone not associated with
Questionnaires can also provide an effective means the hospitality company) or by computerized surveys
of identifying managerial training needs; experts that collect data while providing employee anonymity.
might collect information from several companies
to determine the training needs for managers in a Critical Incidents
specific hotel. The critical incidents method requires observers
(managers or outsiders) to notice and record specific
incidents that are examples of either good or poor
employee performance. This method is particularly
useful when the intended training technique involves
case studies, since the incidents themselves provide
the cases to use in training.

critical incident—A job analysis technique based on

capturing and recording actual events that occur at work
which, when combined, form an accurate picture of
a job’s actual requirements. Useful in describing how
services should be performed. Also used in training
and as a measurement in certain performance appraisal
systems.

Exit Interviews case study—A training method in which employees

Employees or managers leaving an organization are are confronted by a series of events—hypothetical or
often willing to share information and experiences that real—and asked to solve the problems presented in each
can help managers determine training needs. When scenario.

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When collected over a period of time, critical incident reports in its “State of Training and Development in
observations identify training needs. There is a the Hospitality Industry Report” that 11 percent of
drawback, however: such incidents rarely occur when ongoing hourly employee training and 10 percent of
you want them to. As a result, managers can spend managerial training involves some sort of e-learning.
considerable time waiting for critical incidents to Through simulations, web-based training modules,
happen. and interactive games and tutorials, technology has
made its impact on hospitality industry training and
While each of these methods is useful and necessary, will likely continue to drive the way training programs
management should not overlook the basic training and methods are developed.
needs of its employees. A Harvard Business Review
article illustrates how basic skills training—focusing While many of these new techniques apply to the
on reading, writing, and arithmetic—produces some hospitality industry, just as many older methods remain
of the greatest productivity gains. useful. Deciding among methods usually depends on
the type of training intended, the trainees selected,
the objectives of the training program, and the training
environment. Experts say that no single training
method is right for every situation. Instead, training is
situational; some objectives are more easily achieved
with another method. Some general guidelines should
be followed in choosing appropriate training methods.
For example, adults learn in different ways. Exhibit 3.4
presents some general concepts about adult learning
that are useful to remember.

This section discusses most of the popular training

methods used today. These methods are grouped in
CHOOSING TRAINING three categories: training for managers, training for
non-managers, and training for all employee levels.
METHODS
Because of rapid advances in technology, new Training for Managers
training systems are created almost every year.
The methods appropriate for training managers
Just a few years ago, only the most sophisticated
include:
training programs used computers. Today, e-learning
is used in many training programs, both alone and in •• Case study training
conjunction with various other methods. Organizations
have discovered in recent years that e-learning is •• In-basket training
flexible, can be accessed on demand, and can be
tailored to business and industry needs at low costs. •• Conference training
One successful example of implementing e-learning •• Behavioral modeling
as a training tool is The Home Depot, Inc.’s web-
based training program. The program allows the •• Training the trainer
retailer to deliver an array of product-specific, low-
Case Study Training. Case studies typically detail
cost e-learning experiences to store associates
a series of events—either real or hypothetical—that
that are timely, consistent, engaging, and help the
take place in a business environment. This method
organization’s learning team to better align its training
challenges participants to sort through provided data
with organizational needs. The program was further
to identify problems and then propose solutions to
found to boost store sales. Regardless of the product
these problems. Researchers have referred to this
it covers, each web-based training module lasts
type of training as “Aha! Learning” because, at some
no longer than fifteen minutes and includes digital
point during case analysis or discussion, participants
video accompanied by synchronized text, as well
often suddenly realize—“Aha!”—what is and what is
as an end-of-course assessment. Maritz Research
not important.

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Experts often cite one disadvantage of this approach: cases take place in a vacuum, while decisions are
made in “real time.” In other words, managers in “real life” don’t face just a single issue as they do in case
studies. Instead, “real life” managers face that issue plus many others at the same time. Participants may
tend to approach case studies too analytically. In a real hospitality environment, problems generally come in
all shapes and sizes, not in neatly packaged case studies.

Exhibit 3.4 General Adult Learning Concepts

•• Behavior that is rewarded (reinforced) is more •• Many people experience so much criticism,
likely to recur. failure, and discouragement that their self-
confidence, level of aspiration, and sense of
•• This reinforcement, to be most effective, must worth are damaged.
immediately follow the desired behavior and
be clearly connected with that behavior. •• When people experience too much frustration,
their behavior ceases to be integrated,
•• Mere repetition, without reinforcement, is an purposeful, and rational.
ineffective approach to learning.
•• People who have met with little success and
•• Threats and punishment have variable and continual failure are not apt to be in the mood
uncertain effects on learning. Punishment may to learn.
disturb the learning process.
•• Individuals tend to think best whenever they
•• The sense of satisfaction that stems from encounter an obstacle or intellectual challenge
achievement is the type of reward that has the that is of interest to them.
greatest transfer value to other situations.
•• The best way to help people form a general
•• The value of an external reward depends on concept is to present an idea in numerous and
who dispenses the reward. If the reward giver varied situations.
is highly respected, the extrinsic reward may
be of great value; if not, it may be without •• Learning from reading is aided more by time
value. spent recalling what has been read than by
rereading.
•• Learners progress in an area of learning only
as far as they need to in order to achieve their •• Individuals remember new information that
purposes. confirms their previous attitudes better than
they remember new information that does not
•• Individuals are more likely to be enthusiastic confirm their previous attitudes.
about a learning situation if they themselves
have participated in the planning of the project. •• What is learned is more likely to be available
for use if it is learned in a situation much like
•• Autocratic leadership has been found to make that in which it is to be used, and immediately
members more dependent on the leader and preceding the time when it is needed.
to generate resentment in the group.
•• The best time to learn is when the learning can
•• Overstrict discipline tends to be associated be useful. Motivation is then at its strongest
with greater conformity, anxiety, shyness, peak.
and acquiescence; greater permissiveness is
associated with more initiative and creativity.

In-Basket Training. In-basket training generally presents participants with a wide array of problems similar
to those found in their in-basket at work. As a training tool, in-basket training has three objectives: (1) to train
participants to identify which issues require the most immediate response; (2) to teach participants how to
delegate those problems that do not require their personal attention; and (3) to instruct employees how to
work on several problems simultaneously.

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and sex as the participant is likely to have more
in-basket training—A training method in which
credibility than a model with different traits and views.
employees confront a wide array of problems similar
The advantage of modeling is its emphasis on “doing”
to what they might find in their in-basket when they
rather than on “telling.” Managers can be shown how to
come to work.
delegate, communicate, conduct a meeting, interview
an applicant, or discipline an employee. The role of
In-basket training is sometimes used as a selection
the facilitator in this process is to coach participants
process for identifying potential managers. When
to follow the modeled behaviors more closely. Most
used as a selection tool, in-basket training may test
research shows that this form of training is a good way
how applicants prioritize problems and how well they
to teach effective interpersonal skills to supervisors
delegate authority. Research has shown that this
and others.
method effectively predicts future job behavior.
The disadvantages of this approach are that the
Conference Training. This form of training is
training method is limited to behavioral issues and
essentially one-on-one discussion between the
that the training facilitator must be adept at conducting
trainer and trainee. Conference training permits
sessions. However, since hospitality management
virtually any issue to be explored in-depth. For
involves behavioral and interpersonal skill issues, this
instance, a non-commercial food service manager
method often represents an excellent form of training,
might use this type of training to explain to a cashier
especially for managers and supervisors.
why it is necessary to maintain accurate records
of each transaction. The obvious advantage is the
Training the Trainer. Training the trainer entails
reinforcement provided by close contact between
teaching managers or other employees who have
trainer and trainee. Disadvantages include the time
knowledge and expertise how to train other members
and cost of individualized training.
of an organization. It is important to teach the trainer
how to teach other people so that information can
modeling—A training method designed to encourage be spread effectively. Developing an internal training
employees to behave as role models behave. program can be empowering and allow organizations
to be more self-sufficient. By training managers and
Behavioral Modeling. Social learning theory claims employees to train members of their own organization,
that people learn most behavior by observing others, knowledge is distributed within the organization so no
meaning that most people model their behaviors after one person carries all of the organization’s expertise.
others’ behaviors. Modeling takes advantage of that One notable drawback to this method is the cost
theory by giving participants the chance to actually of training a new trainer when a trainer leaves an
see how a model acts in a certain situation, rather organization. Therefore, it is recommended that
than by simply instructing participants how to act. several members of an organization be trained to train
A sequence of steps must take place to implement in a given knowledge area.
modeling:
Training for Non-Managers
•• A specific interpersonal skill is introduced,
usually through lecture. Training methods suitable for non-management
•• A model acts out the skill either on video or in employees include the following:
person.
•• On-the-job training
•• The trainer highlights key points in the model’s
portrayal. •• Job instruction training

•• Trainees practice the skill through role-playing. •• Lectures

•• The trainer and other participants provide •• Coaching/mentoring

feedback on the role-playing. •• Programmed instruction
For modeling to work, the trainee must be able to
relate to the model. A model who is the same age

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On-the-Job Training. On-the- This type of training is good for task-oriented jobs, such as operating
job training (OJT) can be a very equipment and preparing foods.
effective method of learning;
unfortunately, it is often conducted
incorrectly. Typically, one employee job instruction training (JIT)—A structured approach to training that
is simply asked to teach another requires trainees to proceed through a series of sequential steps.
some desired skill. In far too many
cases, trainers are assigned not Exhibit 3.5 Steps in Job Instruction Training
because they can teach, but
because they can perform tasks Step 1: Prepare the Employee
or behaviors well. Being good at • Put employee at ease
a job does not necessarily make
someone an effective trainer. • Arouse interest in training
Step 2: Present the Task or Skill
on-the-job training (OJT)— • Tell
Training in which trainees learn job • Show
procedures while watching, talking
with, and helping an experienced
• Explain
employee. • Demonstrate
• Allow time for questions and repeat steps if necessary
When supervisors or trained
trainers are involved, OJT can be Step 3: Try Out the Performance
very effective and cost-efficient • Allow employee to try on his or her own
because training can be conducted • Have employee explain key points
during business operations in
actual work settings. To a degree, • Correct errors
OJT resembles modeling, a fairly • Re-instruct if necessary
good method for hospitality training. Step 4: Follow-Up
Like most methods, OJT has its • Allow employee to perform on his or her own
disadvantages. As noted earlier, • Check on employee frequently
training assignments can be
• Gradually reduce assistance
inappropriate or ineffective. In
addition, training can interfere Lectures. Perhaps the most common form of off-the-job training is
with normal business. Because the oral presentation of information to an audience. The advantage of a
the training is fast-paced, trainers lecture is that large amounts of information can be delivered in a relatively
generally have little or no time to short period of time to a large number of people. As a result, the lecture
provide feedback or to reiterate method is very cost-effective.
important steps. Finally, this type of
training perpetuates the status quo, One disadvantage of the lecture method, however, is the lack of two-way
because trainees are very likely to communication. In addition, no allowance is made during lectures for the
perform in the same way as their varying levels of understanding among participants. Some participants
trainers, right or wrong. may find lectures boring and slow while others in the same audience
may have trouble keeping up.
Job Instruction Training. Job
instruction training (JIT) is a
structured approach to training off-the-job training—Training in which trainees learn job procedures in an
that requires trainees to proceed environment other than the actual work environment.
through a series of steps in a
sequential pattern (see Exhibit 3.5).

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CHAPTER 3 HUMAN RESOURCES 38
Coaching/Mentoring. Both
programmed instruction—A training method in which employees learn
coaching and mentoring have gained
at their own pace. Originally a paper-and-pencil method; now mostly
favor in recent years because these
computer-oriented.
methods often produce desirable
behavioral results. By using a
Managers using programmed instruction for training should realize that
form of conference training and/or
different trainees in the same room may be working at different levels
modeling, coaches and mentors
and in different ways. One study investigated the growing trend toward
often concentrate on improving
self-directed instruction by examining the processes that employees use
the skills of subordinates. Many
in a web-based training environment and found that individuals learn
managers are better described
in different ways. The researchers noted that e-learning in any context
as coaches or mentors because
requires individuals to apply self-regulated strategies to achieve their
they play a greater role than just
training objectives. It was suggested that self-directed learning leads to
that of manager. Coaches and
more positive outcomes.
mentors are concerned with the
overall professional development
of their protégés. As a result, they Training for All Employee Levels
encourage their protégés’ skill and Methods of training suitable for all employee levels include the following:
leadership development rather than
take the narrow-minded approach
of just making sure employees Methods of Training

1 2 3 4
know how to do their immediate job
tasks. Mentors encourage protégés
to work toward greater aspirations.
Job Role-playing Vestibule Business
Rotation Training Games
conference training—A training
method that consists of one-on-one

5 6 7 8
discussions between a trainer and
a trainee.

Programmed Instruction. Sensitivity Basic skills Team Diversity

Programmed instruction enables Training Training Training Training
trainees to learn at their own pace.
Originally, programmed instruction
was accomplished through paper- Job Rotation. Job rotation involves moving trainees from one job
and-pencil tests that evaluated to another. This training method is widely used in training hospitality
whether trainees had learned managers, many of whom spend a certain number of weeks in each job
enough to proceed to the next before assuming their managerial duties. An advantage of job rotation
stage. Today, computers have is that trainees can see how work is performed in many different jobs.
generally replaced papers and Trainees also get to know the employees in each position.
pencils. Self-programmed and self-
directed instruction is becoming
more popular, partially due to the job rotation—A process of moving employees from one job to another, or
Internet and e-learning programs. of changing employee responsibilities, in order to enhance job interest or
Research on the effectiveness of to cross-train.
such programs has generally been
very positive. It appears that many When used to train line-level employees, job rotation actually becomes a
employees prefer to learn at their method of cross-training that affords employees the knowledge and skills
own pace, and when allowed to do to do different jobs. However, the success of this type of training depends
so they actually learn and retain on how information is presented at each step of the process. If on-the-
more. job training is used in each assignment—often the case in hospitality—
very little learning takes place.

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Role-Playing. Role-playing enables participants to vestibule training usually results in a fairly high level
experience real or exaggerated work situations. For of learning, it is also regarded as an expensive way
instance, consider the use of role-playing in a training to accomplish some training objectives, primarily
session designed to help participants improve their because of the cost of duplicating the workplace
interpersonal skills. A trainer might ask one participant environment. Some hospitality training is well suited
to role-play a hospitality manager and another to for this method. For instance, training employees
role-play an employee. The purpose is to allow each to use electronic equipment such as cash registers
participant to experience what it “feels like” to be in or check-in systems can be accomplished through
that role. vestibule training by simply setting up the necessary
equipment in an empty room.
role-playing—A training method that allows trainees
to assume roles and act out parts in a realistic situation vestibule training—An off-the-job training method that
or setting. simulates the workplace and asks employees to perform
or display knowledge, skills, or abilities similar to those
Hospitality trainers often ask participants to play the required at work.
roles of guests and servers to experience what guests
see and feel. Other common role-plays include role Vestibule or simulation training is also useful in training
reversal for a man and woman, assuming the role of a managers and employees how to make decisions in
person with a disability, and so on. The intent in each specific environments. The theory is that if managers or
case is to give trainees the opportunity to see what it’s employees have faced similar situations—even if they
like to face the barriers or obstacles others may face. were simulated—they will be more likely to make the
right decisions. Many business games on the market
Gaining the opportunity to step into another person’s allow participants to simulate workplace environments.
shoes is a principal advantage of role-playing, a In some of the more complex simulations, participants
method of training that generally evokes emotions create and operate simulated organizations for brief
and frustrations. And because four principles of periods. Other simulations allow participants to
learning are involved—active participation, modeling, experience what it feels like to be placed in a specific
feedback, and practice—role-playing often results in situation. Intercultural simulations are instructional
a high level of learning when used properly. Trainers activities that engage and challenge participants with
should encourage involvement, since learning experiences integral to encounters between people
depends on each participant’s involvement in his of different cultural groups. Two simulations that can
or her roles. According to the Center for Workforce work in classes and in seminars are Bafá Bafá and
Development, employees learn only about 30 percent StarPower. The objective of Bafá Bafá is to create an
of the information and skills needed for their jobs environment in which participants learn what it feels
through formal training, and the other 70 percent on like to visit another culture; in StarPower, participants
the job and from watching coworkers. learn how to manage power.

Role-playing has a theoretical basis in behavior Business Games. Organizations employ business
modeling that entails observation, practice, and games to make learning more engaging and effective
feedback. Emerging simulation-based technologies for employees, particularly for those who were raised
offer enhancements to behavior modeling that are on high-action video games. Business games can be
absent in traditional role-play training. Results of a an expensive yet effective way to introduce dry material
recent study show that simulation role-play training such as company history or orientation philosophies
outperforms traditional role-play training in terms of and can make training more exciting. Commercial
both accuracy and speed. forms of this training approach are available from
many sources. The advantages of business games
Vestibule Training. Vestibule training—or are threefold: games are fun, they can provide a
simulation—involves the virtual duplication of the work setting that simulates reality, and many issues can
environment in an off-site setting. The advantage of be introduced using a single game. A disadvantage
using a duplicated environment rather than the actual is that participants sometimes become engrossed in
workplace is that training can take place without winning and forget that the goal is to learn.
interrupting the normal flow of business. While
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principal disadvantage is that, unless expertly facilitated, the process
can become dangerously personal.

sensitivity training—A training method designed to make employees more

aware of behavioral or interpersonal training needs.

Basic Skills Training. Nearly 90 million adults in the United States are
considered functionally illiterate. Employees’ lack of basic skills results
in an estimated $60 billion loss in productivity for American companies
each year. Considering this statistic, investing in employees’ basic skills
such as reading, writing, computing, and English as a second language is
potentially very worthwhile. It was reported in 2009 that nearly 40 percent
of all hourly employee training is devoted to basic job skill development. At
the MGM Grand in Las Vegas, more than 85 percent of all housekeepers
do not speak English as their native language. In an effort to make
their jobs easier and their interactions with guests more smooth, all
new housekeepers go through six weeks of training. During each day
of training, they attend English classes in the morning, and then learn
housekeeping policies and procedures in the afternoon.

Team Training. In the hospitality industry, working together is an

business game—A training method
everyday occurrence; however, team training is virtually nonexistent.
in which trainees learn how to
Instead, the us-versus-them mentality has a tendency to serve as an
deal with a variety of issues in a
easy defense mechanism. Some companies have enlisted the expertise
simulated business environment.
of professional team-building programs such as Outward Bound to instill
Sensitivity Training. A training a sense of cooperation and team spirit through adventurous challenges.
method often used to enhance Companies can choose from a variety of other team-building techniques.
interpersonal skills is sensitivity For instance, one global public relations firm sent eight public relations
training. Also called T-Group or executives to a restaurant for a team-building exercise called “recipes for
laboratory training, this method success.” The participants worked in teams on specific tasks to help them
helps participants become more increase their conflict-resolution skills and become more comfortable
aware of their own behaviors and giving orders.
of their behaviors toward others.
Managers can develop their own successful team training programs if
First developed by Kurt Lewin and they keep the following points in mind:
other scholars, sensitivity training is
usually conducted in small groups •• Team building is a complex and challenging process. Expecting
of four to ten participants. Typically, a quick team mentality is unrealistic. The most successful teams
each participant is confronted are ones that developed over time.
about his or her behaviors by other
group members. Each participant •• Team development does not always fit nicely into the “forming,
then has the opportunity to express storming, norming, and performing” model. Training can help
his or her feelings about the group work through each stage, but lapses may occur; team members
process. The training facilitator’s and managers must be aware of this.
role is critical because of the
•• New members must be quickly brought up to speed. Throwing
deep emotional reaction some
a new team member in with the group without giving him or her
participants may experience during
comprehensive training would be detrimental all around.
the process. The advantage of
sensitivity training is that it enables •• Active, hands-on experience yields the best results. Teaching
participants, in a constructive way, conflict resolution via lecture robs team members of the
to see how others see them. The opportunity to reflect and exchange ideas.

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Diversity Training. Diversity training’s general
goal is to educate employees to be more
ANTICIPATE RESISTANCE
sensitive and respectful toward coworkers,
guests, and suppliers. Diversity training in the
TO CHANGE
Both employees and managers may be resistant to
hospitality industry is no longer about general
change. Such resistance may be linked to negative
diversity understanding. Traditional diversity
experiences or to a fear of lost employment. So many U.S.
programs addressed race, gender, disabilities,
companies have been downsizing, rightsizing, outsourcing,
and perhaps age and sexual orientation. Today,
and re-engineering that even if you have not personally
hospitality organizations also address cultural
experienced job loss, you may have friends who have.
competency with regard to generational diversity,
Many individuals now consider jobs more temporary than
ethnicity, and what it means for people to work
in the past. Some even believe that the “job” is a social
together effectively. Programs are also changing
artifact and that the future of work may be more like a
to take into account languages and accents
concert tour than a permanent position. For instance, the
in the workplace. Trust Hospitality is a great
Rolling Stones’ “Voodoo Lounge” tour earned $300 million,
example of one organization that successfully
but it carried only six full-time employees. A majority of the
implemented new training programs that reflect
tour’s workers were temporary and went on to something
the changing workforce in the United States. Raul
else after the tour.
Leal, former president of Trust and a member
of the board of directors for the Hispanic Hotel This threat of change often disrupts social groups and
Owners Association, has implemented a multi- leads to different social relationships. Before implementing
generational workforce training program that any training programs, managers should build the trust
includes a broad range of diversity topics. and confidence of their employees, open communication
lines to dispel rumors, and, whenever possible, allow
employees to participate in change-making decisions.

Measuring Change
The principal goal of any training program is change.
Managers should ask two questions during an evaluation:
Did change occur? Did this change result from the
training? Managers need to know if the training caused
the change. Even if managers can answer both questions
positively, they still may want to ask several more: Do the
changes benefit the entire organization? Will the same
program work again in the future? Should it be altered? It
is important to remember that responses to change can
be varied. Therefore, it is preferable to measure training
outcomes in terms of change from pretest to posttest,
rather than merely through attainment (posttest only)
scores.

Earlier in the chapter we referred to four categories of

training objectives: reaction-based, learning-acquired,
on-the-job-behaviors, and results-oriented. One more
objective should be added to training today. This is the
increase in the amount of training designed to improve
optimism among employees. Sometimes it is not enough
for employees to simply be motivated to want to learn.
They also need to have optimistic expectations of the
learning itself. Too many employees have been caught
up in what psychologists call “learned helplessness,” a
condition in which people simply give up on controlling

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their own lives and let others control them. This is particularly acute in the workplace, where many workers
have never had the right to make decisions for themselves. All of that is changing now, and businesses want
employees who are self-starters and who can make decisions.

Creating optimistic expectations among trainees is one way to help bridge the gap between learned helplessness
and effective training. Without this, researchers believe that trainees might enter a training program with the
expectation to fail. Since expectations sometimes control outcomes, this may become a self-fulfilling prophecy.
Setting both quantitative and qualitative expectations for trainees, with their participation, is also useful in
overcoming this problem.

These five types of objectives form the basis for evaluating training programs. A good evaluation should
measure all five. The following table presents questions related to the first four objectives and common
methods of ascertaining the answers.

REACTION Reaction refers primarily to the views of trainees regarding the training program.
Did they like the program? Did they like the methods used? Can they recommend
other methods to address the same issues? Can they recommend changes that
would improve the program? What did they think of the trainers and the facilities
used in the training process? Finally, would the trainees recommend that the
program be implemented again? Typically, managers can learn the answers
to all these questions through questionnaires, post-training interviews, or a
combination of both.

While reaction is important, sometimes it only provides ratings of the trainer or

the course design. More important to the trainee and the organization is whether
trainees learned from the process, whether their on-the-job behaviors display
this learning, and whether the training produced desirable productivity results.

LEARNING Managers should ascertain whether trainees learned anything from the training
program. A variety of methods are available for evaluating acquired learning.
These include tests (oral, written, or performance) and observation of work
progress and simulations.

Let’s refer to our earlier example that involved training servers about wine. This
example can be used to illustrate how observing a simulation is a useful method
for evaluating learning. For instance, after the wine training, servers could be
asked to show what they learned. By grading these simulations, managers have
an effective method of evaluating how much the servers learned.

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ON-THE-JOB Evaluating on-the-job behaviors in connection with a training program is not

the same as evaluating on-the-job behaviors through performance appraisals
BEHAVIORS or employee evaluations. For instance, companies that conduct performance
appraisals on a regular basis evaluate an employee’s behaviors as part of that
employee’s progress and professional development.

Evaluating an employee’s behavior immediately after a training program is

an effective method of evaluating the program. These appraisals might be
conducted by an employee’s supervisor, peers, any staff he or she supervises,
guests, or a combination of any of these four groups. This type of evaluation
gauges behaviors the employee learned during training. Employee attitude
surveys are also a good method of measuring the effectiveness of programs
designed to improve on-the-job behaviors.

RESULTS The ultimate test of a training program is its effect on an organization or department.
Good programs have a positive effect. To determine a program’s effect, managers
should evaluate any measurable criteria. For instance, managers can look at
turnover rate to measure the effectiveness of training designed to encourage
employee satisfaction. Productivity would provide a measurable criterion for
evaluating training programs designed to reduce the time it takes to perform
a given task, such as checking in a guest or preparing a meal. Quality can be
measured using guest evaluations of goods and services. For instance, directly
after room attendants complete a training program on improving guestroom
cleaning, guests can be asked to evaluate the cleanliness of their rooms. Cost
is also an obvious measurable criterion. Are costs lower than they were before
the training program? Has waste been reduced or eliminated? Are employees
working fewer hours to complete tasks now than before training? And, finally,
are profits higher as a result of the training program?

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WRAP UP
CONCLUSION                               
Jobs are evolving at an increasingly rapid pace. Estimates are that more
than 50 percent of the jobs currently being performed in the United States
did not even exist a half-century ago. Hospitality is not exempt from this
evolution. If anything, the rate of job growth and job change in hospitality
is among the most rapid of any field. Think of how much guest registration
has changed. Many hotels and motels used manual check-in and check-
out systems well into the 1980s. Today, many hotels offer some form of
automated check-in and check-out. The work of hospitality employees will
continue to change as new technology develops.

While employee recruitment and selection are crucial to an organization’s

success, they do not guarantee that employees will perform well.
Organizations must provide training to new employees to transform their
high potential into high performance. In the hospitality industry, service and
quality determine the success or failure of a property. Not surprisingly, the
employees determine the level of service provided, and, thus, the overall
quality of the guest experience. Therefore, well-considered, adequate
training should be provided to ensure guest satisfaction and, ultimately,
increased profits. Teaching managers and employees how to adjust to the
new jobs they do is the primary focus of this chapter.

Review Questions

1
What are the stages of the training cycle?

2
Describe the three factors that need to be analyzed in a
needs assessment.

3
How many of the 12 needs assessment methods can you
list and describe?

4
What are the appropriate methods for selecting training
for managers? For non-managers?

5
What are the four types of objectives identified for
evaluating training programs?

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CHAPTER 4
SUPERVISORY AND
MANAGEMENT
DEVELOPMENT
CONTENTS & COMPETENCIES                                

Professional Development......................................................................46

1
Identify the benefits of
Lifelong Learning.........................................................................47 professional development
for the employee.
Certifications...........................................................................................50

2
History of Professional Certification Programs............................50 Describe industry−
based professional
Competency-Based Curriculum...................................................51 certification programs.
Supervisory Development......................................................................51

3
Describe the process of
Needs Assessment......................................................................52 supervisory development.
Management Development....................................................................53

4
Describe the process of
Gaining Commitment ..................................................................54 managementdevelopment.
Measuring Effectiveness.............................................................55

Wrap Up..................................................................................................56

Review Questions........................................................................56

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PROFESSIONAL DEVELOPMENT
Professional development is often considered a subcategory of continuing
education. It is the process by which employees become proficient at
the job they are doing. When they identify their skills, interests, and
values, they can also identify those areas in which they can become even
better. Professional development ensures that they continue to have the
knowledge and skills necessary for success.

professional development—Courses and other learning opportunities by

which staff members become more proficient at the job they are doing.

Professional development is also a never-ending process. There will

never be a point at which supervisors and managers will be able to
say that they have learned all there is to learn and are as skilled as it is
possible to be. What does professional development allow employees
to do?

•• Maintain their current position. Employees in a changing world

must constantly update their skills set. Even if they want to do just
what they are currently doing for the rest of their career, what they
are doing will evolve and change. Hospitality professionals create
work through other people and their skill sets have to shift.
•• Provide mobility. If employees desire mobility, doing well in their
current position provides that impetus. Even if they are not formally
promoted, professional development gives them enrichment, a
higher degree of professionalism, and can help keep interest in
their job high. It also makes them more productive workers who
are better able to fulfill the mission of the organization.
•• Make promotion a possibility. If they want to be promoted, it is
important that they start developing the skill sets they will need for
the position they want. Employees who are high performers in one
job sometimes find themselves promoted to a job for which they
have no skills.
In 1950, the Association of University Evening Colleges (known today as
the Association of Continuing Higher Education) formed a “Committee
on Cooperation with Business” to exchange ideas between business,
government, and education. This group solicited businesses and
foundations to gain funds to develop new courses and programs, and
communicated their availability back to industries.

Professional development is the major segment of continuing education

(though it is important to note that professional development is not limited
to continuing or higher education and often takes place at a worksite or
on an individual level). Professional development is commonly defined
as education and training beyond the basic degree, or professional
licensure. The role of professional development is usually to maintain
or update knowledge, skills, or attitudes in a profession. Professional
development is also used to teach new skills and knowledge, or assist
in the application of such, in the job environment.

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Growth in professional development is attributed to
There are several basic reasons for participation
several factors:
in professional development continuing education:
•• Increase in occupations that require degrees or
•• Professional improvement
certificates
•• Professional service
•• Use of continuing education to train employees
•• Professional growth by businesses

•• Professional learning •• Use of continuing education to certify employees

in specific areas
•• Interaction with others in same profession
•• Need to maintain knowledge in changing
•• Professional commitment environments
•• Enhanced personal benefits •• Need to maintain knowledge of new developments
•• Increased job security in business
•• Increased accountability of businesses to society
In a survey conducted by Michael Lombardo and
Robert Eichinger in 1999, managers identified that •• Increased accountability of employees to their
the development of their employees is one of their employer
biggest weaknesses. So while managers often are
very supportive of professional development, they
lack the skills or time to ensure that all of their
subordinates have access to the activities that would
make them better employees. Rather, each employee
will have to be responsible for his or her professional
development. However, there is much that you and
your organization can do to support each employee’s
professional development plan. One of the most
important things that you and the managers in your
organization can do is to provide honest and regular
feedback to employees about their performance and
about the skills that you see as being useful to develop.
Letting employees know what skills the organization is
Lifelong Learning
likely to need in the future can help them focus their Throughout history, continuing education and
professional development activities. professional development has had a constant
theme of lifelong learning. As people mature, they
Some organizations take a more active role in need education to augment each stage of life. With
the development of their employees, especially career paths and organizations changing rapidly, the
supervisors and managers. There are several supervisors and managers of hospitality organizations
hospitality organizations that provide in-house training must maintain their education to survive and to help
libraries that include videos, books, handbooks, and their organizations thrive.
skills-building software. Many organizations also
encourage mentoring relationships. Role of Higher Education Institutions. There is great
variation between institutions of higher education and
in the level of certificate offerings they provide. Many
schools have recognized the growing trend toward
lifelong learning and have added numerous certificate
programs. Other schools choose to add “non-degree”
certificate programs, while a few choose to not engage
in continuing education at all.

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There are two primary types of certificate programs: those offered solely specifically for individuals in that
at and by one institution, and those offered by higher education institutions field. Business and industry can
in conjunction with a professional association. address their employee training
and development needs through
There are hundreds of hospitality programs in institutions of higher partnering with a professional
education throughout the United States. Associates, bachelors, masters, association offering education
and doctorate degrees can be attained in hospitality management. specific to that field.
Many of these programs also offer certificate programs, and work with
their institution’s continuing education departments to offer specialized Associations can develop, maintain,
training and development. In addition, several have chosen to partner monitor, and evaluate a certification
with professional associations by teaching components of certifications. program more cost effectively than
if such programs were duplicated
in each business in the specific
trade. It also allows for unbiased
professional development to occur
without being altered by the political
environment of an individual
business. With societal demands
ever increasing for accountability,
professional certification programs
provide a benchmark of standards
and quality.

The role that professional

associations play in professional
development extends beyond
Role of Professional Associations. Professional associations are certification, though. Most
becoming more involved in continuing education as their members seek professional associations provide a
to enhance pertinent skills and knowledge. Educational opportunities also wide range of educational services,
increase if their particular profession becomes scrutinized by legislation. including seminars, conferences,
Most mandatory continuing education is dictated at the state level, with publications (including newsletters
little consistency between states. Mandatory continuing education is and magazines), and Web sites.
increasing in fields of food preparation and those people dealing directly Some associations, such as
with the public. the American Hotel & Lodging
Association and the National
Though it is unlikely the certification of hospitality managers will become Restaurant Association, have
mandatory, there are components of the hospitality business that are separate organizations devoted
under state regulations. All food and beverage operations are licensed entirely to education.
and inspected regularly by the Department of Health and Environmental
Control. All pool facilities are regulated by the state, and most states now Role of the Organization. The
require a licensed pool operator—which is often a supervisor or manager most crucial link in the professional
of the operation. The Environmental Protection Agency regulates the development chain remains the
chemicals that are used in the upkeep of golf courses at clubs, resorts, and organization itself. Most supervisors
public facilities. Certain localities require security officers to be certified. In and managers, especially in
order to work on certain types of equipment, most hospitality maintenance hospitality organizations, rely
employees need certifications or licenses from the appropriate authority. on their property to provide
them with the development and
Another primary source of certification programs stems from business and training opportunities they need.
industry. Professional associations’ certification programs have grown as Lombardo and Eichinger pointed
the need for highly specific training has emerged. Through the growth and out that, traditionally, professional
development of professional associations, many specific skill areas have development plans have had 70
been identified that are taught through educational opportunities developed percent of the learning take place

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from outside courses, 20 percent from other people, and 10 percent through on-the-job activities. Experts
suggest that for professional development to be truly effective, these ratios need to be flipped. On-the-job
activities can provide professional development that is most targeted to the needs of the organization and
the mission and goals it is trying to achieve. Exhibit 4.1 gives examples of the types of activities that can be
associated with each type of learning.

Exhibit 4.1 Professional Development Activities

On-the-job learning activities include:

• Improving a process or procedure

• Starting something new
• Representing your manager at meetings or functions
• Coaching someone who is weak in an area in which you excel
• Managing new projects
• Making presentations
• Taking on special assignments that challenge you
• Offering to follow up on certain items generated in meetings
• Volunteering to lead a task force or committee
• Transferring to a different job, function, or business to gain experience
• Interviewing your counterparts in other organizations about their “best practices,” and summarizing
what you’ve learned at a staff meeting
• Practicing a skill or behavior in the actual work situation
• Seeking assignments that use and stretch your strengths
Learning from other people by:

• Joining or leading community groups

• Volunteering with a community organization to practice a new skill
• Making presentations to civic organizations
• Modeling the behavior of others and asking them how to handle certain situations

Off-the-job learning experiences include:

• Attending workshops and training courses

• Attending seminars
• Taking adult education or distance education classes
• Reading books, articles, and manuals
• Conducting research
• Taking certification review courses and exams

The organization can supply development opportunities in many different fashions. It can encourage mentoring
relationships, it can include supervisors on project teams, it can work with supervisors and managers to develop
professional development plans, it can offer seminars or have resource libraries, and it can ensure there is a
wealth of learning activities which all supervisors and managers have access to.

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CERTIFICATIONS
The demand for professional certifications has grown; practitioners are
expected to exhibit a high degree of competency in their fields. This
competency can be publicly gauged though certification credentials.

Certifications offer recognition to the industry professional for mastery

of a certain body of knowledge. They are voluntary processes where a
professional association or organization measures the knowledge and
skills of its practitioners. Certifications are also an effective means of
formally recognizing individuals for their achievement and competence.
Certifications are not licenses, and yet are occasionally confused with
such. Furthermore, the parameters of certification are always clearly
defined and focus on measurable outcomes. Certifications are usually
attained upon successfully passing an examination, after the completion
of specified courses or equivalent training and job experience. Exhibit
4.2 explains the difference between certificates, certificate programs,
and certification programs.

certification—A means for formally recognizing an individual’s achievement and competence in a particular body
of knowledge.

Exhibit 4.2 Certificates vs. Certificate Programs vs. Certification Programs

Three similar sounding but distinct terms apply to training and development in business and industry:
certificates, certificate programs, and certification programs.

Certificates are documents Certificate programs are a Certification programs

with a diploma-like format that sequence, pattern, or group of focus on specific, measurable
may be given to trainees at the courses developed, administered, outcomes where individuals must
conclusion of a training experience and evaluated by existing faculty demonstrate mastery of a body
to acknowledge their attendance. or faculty-approved professionals. of knowledge. The individual
acquires the knowledge through
courses and job experience
and is usually tested with an
examination.

History of Professional Certification Programs

The first known professional certification in the United States was affiliated with churches. Churches certified
schoolmasters to ensure they maintained, and would teach, orthodox religious beliefs. Certifications grew
significantly after World War II when the National Education Association encouraged a professional standards
movement. Teacher certifications are the most common, though many believe they are truly a form of licensure.

Research on professional certification programs revealed several common characteristics in certification

programs professional associations offer:

•• All seek to enhance professions by developing the competence of practitioners

•• None provide basic entry into the profession

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•• All capitalize on the employees’ internal motivation Developers of a competency-based curriculum must
to achieve technical competence and recognition identify the tasks performed by practitioners, and
by professional peers develop competencies for each task. Competencies
should measure the performance level an experienced
•• All require education and work experience in professional should attain, not an entry-level
the chosen field in addition to competence in a individual. The competencies need to measure skills
body of knowledge, as demonstrated through an and knowledge and not be tied to academic degree,
examination title, or rank.
The American Society of Association Executives
reported that 290 of their member associations offered The development of competency-based curricula
some type of certification in their fields. More than 50 creates the need of practitioners in the field to work
percent of these programs are involved in cooperative closely with academicians in the development of high-
programs with traditional colleges and universities. quality programs. To be most beneficial to the adult
student, there must be strong workplace relevance in
Professional certification programs offered by the curriculum. The planner must work with experts who
associations provide a cost-effective training and hold superb credentials when defining the intellectual
development alternative to those offered by businesses. parameters of the program. This concept strengthens
These programs enhance their employees’ knowledge the likelihood of high marketplace endorsement.
base through structured learning and the attainment
of measurable outcomes. The programs are usually The process of developing a competency-based
developed by experts in the particular area, and focus curriculum is well defined by numerous studies in the
on specific issues of that profession. Often professional hospitality industry. All studies attempt to define the
educators and testing experts are involved in the curriculum topic content by assessing industry needs.
construction and administration of exams. Through surveys, these researchers have asked
educators, industry experts, and, in some cases,
Many hospitality organizations also offer their own students, for their perception of what skills are needed
internal certifications. These certification programs for competency in the chosen profession. These
help large chains or franchise corporations provide people are typically asked to rate tasks or behavior
consistency in their training and skill standards on their degree of importance to the successful
throughout the organization. While the certification fulfillment of the position or trade and how frequently
may not carry weight outside the organization, it does the task or behavior must be performed or exhibited.
help an employee advance within his or her company. The competency questions are typically developed
through numerous channels. Experts in the field, focus
groups, observation, and interviews are all used to
Competency-Based Curriculum determine the most appropriate tasks and behaviors
Competency-based curriculum development is the to include on the survey. Once the competencies are
framework for the content of professional certification known, learning objectives, as well as measurement
programs. Identified competencies provide the ability criteria, are developed. Typically, educators are
to measure outcomes or effectiveness. Research then contracted to develop the specific content and
has shown that almost all professional certification assignments to be used to deliver the knowledge
programs (97 percent of those studied) cited needed.
“identified competencies” as the foundation or core
of the professional certification program.
SUPERVISORY
competency-based curriculum—A set of courses
founded on demonstrable job skills or knowledge.
DEVELOPMENT
The role of student or trainee is a secondary one in
A competency-based curriculum is often used in
the life of supervisors, as being supervisors, spouses,
professional certification programs.
or parents are likely their primary roles. Planning
continuing education for supervisors is especially
challenging. These individuals are already busy and
have overly full schedules occupied with day-to-day

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Supervisors come to training with a wide range of
knowledge and past experiences. They also have
varying degrees of interest. Some supervisors come
to training only because they have been told to do so
by their managers. You have to gauge their level of
interest and their needs for learning. Ideally, you will
be able to work with managers to identify training that
is specific to the needs of the supervisors and include
the supervisors in decisions about the training that
is being offered. Your training can then incorporate
their previous knowledge, interests, and needs into
a creative session that is useful to the supervisors.
responsibilities. You as a trainer need to: Conduct training in a common language, without a
lot of industry jargon. There will be plenty of time for
•• Create continuing education opportunities supervisors to learn jargon on the job. Learning through
that meet their needs and the needs of the activities will increase retention, and supervisors will
organization appreciate effective training as a valuable resource.

•• Convey the benefits to supervisors of Needs assessment for supervisors is very similar to the
participating in their own development needs assessment you conduct at every other level of
the organization. An important element of supervisory
Supervisors need training and development in
needs assessment is the asking for information from
numerous skills and attitudes that cannot be taught
people one level up from the supervisor and one level
in a traditional classroom environment. The skills
down in the organization. Often groups do not easily
needed evolve over a lifetime, as the professional
identify their own learning needs. For example, before
advances in his or her career path, and determines
you create training for supervisors, you should not
what additional skills are needed to reach personal
only survey the supervisors, but also their managers
and professional goals.
and their employees. By going one level up to their
managers, you will identify some of the areas that
Many hospitality supervisors were promoted into
the managers feel the supervisors need to know or
their positions because they were high performers
improve on to meet departmental or organizational
in line-level positions. They often are promoted to
goals. By surveying one level down in the hierarchy
supervisor with little previous preparation in such
of the organization, the employees being supervised
supervisory skills as people management, scheduling,
can share valuable input about their supervisors’
time management, communications, motivating
managerial skills. These individuals work most closely
employees, coaching, and other similar skills. They
with the supervisors. By assessing or surveying one
may also have little previous formal business or
level up and one level down, you as the trainer are
other higher education. Therefore, supervisors are
conducting a more complete needs assessment and
frequently in need of training attention.
have a better understanding of what the supervisors
need to learn. This is a three-way needs assessment.
Needs Assessment You have sought information from (1) the supervisors,
Helping supervisors become better at their jobs can (2) their managers, and (3) their employees.
have a domino effect throughout the organization. As
supervisors receive training, they are likely to become There are several topics that are particular learning
more effective in the way they manage people. In needs for most supervisors. Frequently, supervisors
turn, the people they manage may become more have been promoted from line-level positions without
productive and contribute more to the organization. formal education and limited managerial training.
Organizational training compensates for that lack by
You need to be able to facilitate learning at all levels of providing skills and knowledge training specific to
the organization. Supervisors have multi-faceted jobs. the work environment. Generally, supervisors will be
You need to be able to determine what supervisors more successful in their jobs once they have been
know and what they don’t know, but need to know. well trained.

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A word of caution when conducting needs assessments for supervisors: important. The employees, in turn,
Be very tactful when addressing the perceived deficiencies of individuals. place a higher level of importance
It is highly likely the supervisory status is a new status for these individuals. on the job. This helps them
Most will be eager to learn new knowledge and skills if the environment is arrive on time, in proper uniform,
“safe” and free of put-downs. Exhibit 4.3 describes an idea for supervisory dressed appropriately, and ready
needs assessment. to work hard for the organization.
This behavior, coupled with the
skills learned through training,
helps employees attain a level
of professionalism that positively
affects guests. Satisfied guests
promote the establishment through
word of mouth. Ultimately this cycle
continues and the organization
becomes a very successful and
profitable operation.

Needs Assessment
You as the trainer have a two-fold
MANAGEMENT DEVELOPMENT challenge when assessing the
training needs of the managers in
Management development in the hospitality industry must pay attention to your organization. First, the rapid
factors that drive profitability. Managers understand the two components rate of change in the external
needed for front-line service are the front-line worker and the guest. To environment forces managers
stay in business, that guest must be satisfied. to keep constant pace with the
marketplace. The many factors
Exhibit 4.3 Bright Ideas affecting these changing issues in
the environment will affect training
One supervisory training idea is to conduct a short course for the topics. Second, the high degree of
managers of the supervisors to be trained. Frequently, managers offer challenges and operational threats
input about areas in which they believe their supervisors need training, facing today’s managers increases
without knowing what the training will cover or how the training will be the potential need for training in
conducted. By conducting a short course for man-agers before the each of these areas.
actual training, you can accomplish several things:
As you did with supervisors,
•• It keeps managers informed you should survey not only the
managers to determine their training
•• You increase the buy-in from staff or supervisors who will attend needs, but also one level down in
the training the organizational structure. Direct
reports of these managers can
•• It allows you to learn more from managers about their
provide useful information as you
expectations of the training
create training activities. These
•• It increases your visibility individuals work most directly
with the managers and know best
•• It increases your value to the organization their strengths, weaknesses, and
•• It gives the manager a “brush-up” on the subject challenges.

The theme of management training and development is that if strong There are three primary methods
leaders recognize the potential in their staff, they can promote and for developing managers of
expand on it. With guidance and training, employees feel needed and organizations. First is participation
in formal training programs.

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Second, managers use developmental activities often Research has shown that there are several
found in the workplace to enhance their managerial effective types of training and development used for
skills. Third, managers are typically highly motivated management. These are:
individuals and seek self-developmental activities
outside of the workplace. •• On-the-job training

The formal training programs that are most effective •• External short courses
for managers have several characteristics in common: •• Special projects
•• They last for a defined period of time •• Task forces
•• They are conducted away from the manager’s •• Mentoring
immediate workplace
•• Job rotation
•• Training professionals who are used to working
with management and executives conduct the •• Residential programs at universities
training •• Executive MBA programs
Examples of these training programs are management These types of training and development opportunities
courses at universities, executive MBA programs, and can be very effective—especially to the lower-level
programs at established corporate universities. manager, or the manager who has not been in his or
her position very long. Training typically has higher
Management development activities—coaching, returns when you focus on the current needs of the
mentoring, and handling special projects, for manager in relation to his or her current position rather
example—are usually found within the job scope of than trying to prepare that person for promotion.
the position. Training can be offered to enhance these
activities and make the manager more comfortable in
handling them. Professional development also occurs
when managers take on extra responsibility, organize
focus groups, or establish inter-departmental strategic
teams. All of these activities can help managers learn
new skills through actual performance on the job. You
can facilitate these activities by helping managers
identify learning opportunities and encouraging them
to reflect upon the skills they are acquiring.

Self-development opportunities which managers can

seek to enhance their skills vary widely. Examples
of these include reading, videos, using interactive
computer training, shadowing, and networking.

Managerial development training programs should be

designed to improve skills and behaviors. Managers
in the hospitality industry work directly with people. To
increase their managerial effectiveness, managers’ Gaining Commitment
people skills must be fine-tuned. These programs will Management’s support is crucial to creating a learning
attempt to increase the self-awareness of managers, climate within the organization concerning training and
but rarely will they try to change their underlying development opportunities. You can make managers
traits or values. Since these individuals are already aware of how important their behavior is in creating
in managerial positions, the objective is to make them a learning organization. Gaining commitment from
more effective. managers for their own training will largely depend on

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the climate of the organization. If the board of directors Another means of measuring management
or corporate leaders emphasize the value of training effectiveness is the use of assessment centers.
and certifications, these tools are more likely to be Assessment centers are an effective means of
sought out. Corporate reward systems that encourage evaluating multiple managerial competencies. In
learning will also enhance managerial interest. As the addition to evaluating managers, assessment centers
trainer, you can encourage managerial interest in and frequently evaluate the management potential of
commitment to their own training by offering highly employees and supervisors. Assessment centers
professional training that meets the organization’s usually take two to three days for evaluations. Several
needs. styles of evaluations are used: interviews, personality
tests, speaking exercises, situational tests, aptitude
Measuring Effectiveness tests, and writing exercises.
The effectiveness of training and development for These tools help identify the strengths and weaknesses
managers will largely be measured by the success of of managers. Independent assessment centers can be
the organization or the department that they manage. more cost-effective for the organization. Assessment
Depending on the organization, different variables centers provide a highly skilled, highly specific method
will be used to measure success. For example, some of evaluation that has been proven to be valid and
organizations will measure only profitability. Other reliable
organizations will measure numerous factors such
as: employee turnover, repeat guest rates, food costs,
beverage costs, waste reports, rooms cleaned per
hour, and on-the-job accidents.

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WRAP UP
CONCLUSION                               
A continuous state of change is what maintains a competitive advantage
for most businesses. Frequently, the change agents in a hospitality
organization are the supervisors and managers. This makes their training
and development of utmost importance. When they seek out development
opportunities and work at staying current in their field, they help create a
positive future for their organizations.

For many years, there were few formal training programs for supervisors;
most development dollars were spent on hourly employees and managers
at the department level or above. The hourly employees often represented
the most urgent needs and the higher-level managers and executives were
the ones facing increasingly complex challenges. More emphasis began to
be placed on developing supervisors and middle managers as the quality
movement revealed how important these roles were to the success of an
operation.

The development opportunities for supervisors and managers range from

self-study programs and property-level seminars to continuing education
and certification. Training and development help supervisors and managers
enhance their careers and achieve change throughout the organization.

Review Questions

1
What does professional development
help employees to do?

2
What are the roles of higher education institutions,
professional institutions, and individual properties in
lifelong learning?

3
What value do certifications have
in the hospitality industry?

4
How can an organization determine the training needs of
its supervisors?

5
How can an organization determine the training needs of
its managers?

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CHAPTER 5
EVALUATING EMPLOYEE
PERFORMANCE
CONTENTS & COMPETENCIES                                

Functions of Performance Appraisals...................... 58 Who Should Evaluate Performance?....................... 69

Performance Feedback..................................... 59 Peer Evaluations............................................... 70

Employee Training and Development................ 60 Staff Evaluations of Managers........................... 70

Decision-Making Tool........................................ 61 Self-Appraisal.................................................... 70

Evaluation of Training, Policies, or Programs.... 61 Guest Appraisals............................................... 70

Validation of the Selection Process................... 61 Multiple Rater Evaluation Systems.................... 70

Principal Appraisal Rating Systems......................... 61 Appraisals and the Law............................................. 72

Trait-Based Ratings........................................... 61 Wrap Up..................................................................... 74

Behavior-Based Ratings.................................... 62

1
Summarize the functions of
Results-Based Ratings...................................... 62 performance appraisals.
Methods of Appraising Performance....................... 62

2
Describe the principal types of rating
Ranking Methods............................................... 63 systems used in appraising employee
performance.
Forced Distribution............................................ 64

3
Graphic Rating Scale......................................... 64 Describe commonly used methods of
appraising performance.
Behaviorally Anchored Rating Scales (BARS).. 65

4
Behavioral Observation Scales (BOS).............. 66 Identify who should evaluate
performance.
Narrative Essays............................................... 67

6
Critical Incidents................................................ 67 Identify legal issues relating to
performance appraisals.
Management by Objectives (MBO) .................. 67

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FUNCTIONS OF PERFORMANCE
APPRAISALS
If you were to ask managers why their companies use a certain
performance appraisal system, you would probably get a lot of different
answers. Performance appraisals fill many different needs in organizations.
Most of these needs fall into one of two categories: improving work
performance or making work-related decisions.

performance appraisal—A meeting held between a manager and an employee

for the purpose of evaluating the performance, behaviors, knowledge, and
skills of that employee.

Managers may use performance appraisals to provide feedback to

employees. The primary purpose of an appraisal in this case is to
reinforce or encourage performance, or to help employees develop in
their careers. Appraisals help to support human resources decisions by
separating poor performers from good ones. Performance appraisals can
aid promotion, discipline, training, or merit-increase decisions. Appraisals
can also help establish goals or objectives for training programs, assess
training needs, validate selection (and other processes), or diagnose
organizational or departmental problems.

In most industries, these uses are somewhat evenly applied. For instance,
about 28 percent of managers in all industries combined use performance
appraisals for compensation decisions, while another 28 percent use
them to establish employee objectives. Another 24 percent of managers
use appraisals for establishing training needs, while 17 percent use them
for promotions.

However, the hospitality industry does not follow suit with these other
industries. Instead, hospitality managers use performance appraisals for
a variety of purposes, often at the same time. For instance, Exhibit 5.1
illustrates how appraisals are used in three different hospitality industry
segments.

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Exhibit 5.1 Uses of Performance Appraisals well they are doing; if they don’t
receive regular feedback, they may
not have a realistic grasp of their
USE LODGING RESTAURANTS CLUBS performance. For instance, when
Compensation 86.4% 60.7% 72.2% managers don’t speak directly to
Decisions employees about performance,
employees may think their work is
Employee 78.1% 82.6% 77.6% just fine or they may worry that their
Objectives work is poor. Regularly scheduled
performance appraisals enable
Establish Training 73.3% 80.2% 65.0%
managers to keep employees
Needs
informed about their performance.
Promotions 65.0% 77.9% 47.8%
performance feedback—
As we can see from the exhibit, different segments of hospitality use Feedback provided by the
performance appraisals for different purposes. What is interesting about manager to an employee during a
this exhibit is that there is such variation among managers in these three performance appraisal.
segments.
Clearly, most supervisors can do
better in the area of performance
feedback. According to one survey,
57 percent of employees reported
either never having had a review
or rated their review as neutral to
not useful. One international study,
surveying over 10,000 individuals,
found that more than 50 percent
of respondents felt that their
supervisor was “not clear, frank, or
complete” in discussing employee
work performance, 17 percent did
not know or were unsure of what
the manager thought of their work,
and 22 percent were unsure of or
did not know the objectives they
were expected to achieve; 33
Since performance appraisals can be used for so many purposes, it is percent reported that their manager
probably impossible for one appraisal system to fill all the needs of an supplied little or no assistance
organization. Appraisals should be designed with a specific purpose in improving their performance,
in mind. For instance, a hotel company may wish to determine which and had failed to initiate any
employees need training. Could a performance appraisal system designed type of formal discussion of their
for this use also serve as a tool to determine which employees to promote performance. Perhaps most
or to terminate? Probably not. A company will very likely have several interesting of all, 90 percent
different performance appraisal systems in use at the same time, each of respondents claimed to be
serving a different purpose. Consider the uses outlined in the following enthusiastic about an opportunity
sections. for “real dialogue” about their
performance.
Performance Feedback
One of the most common uses of a performance appraisal is to provide
performance feedback. Typically, feedback is intended to reinforce or
help improve performance. Employees normally want to know how

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Todd Haushaulter, casino administrator at Wynn Las Vegas, is a vocal advocate for keeping employees “in
the loop” about their performance:

I have found that the formal evaluation is a great way to force supervisors to tell their employees what
is good and what needs fixing. But for any of those comments to resonate with the employee, the
once- or twice-a-year formal sit-down session cannot represent the first time she has heard about her
performance. I try to give useful feedback on a regular basis throughout the year. Sometimes I correct
mistakes and explain the standards for behavior. Other times, I just give someone a compliment on a
great job in order to keep them motivated. If I am concerned about a pattern of unacceptable behavior,
I keep formal documentation and discuss it with the individual so he has a chance to make corrections
and improve. But the key point is this: when someone sits down with me for a formal performance
appraisal, there is absolutely no chance that anything he hears will be new information. I have kept that
person “in the loop” and they know where they stand before they come to that meeting. The nice thing
about the formal process is that it reinforces the standards and gives me another chance to say either
“fix this now” or “great work, your contribution really means something.” Luckily, at Wynn Las Vegas our
selection process is usually validated by our performance evaluations. Most of my subordinates leave
their feedback sessions with smiles and just a little extra internal motivation to make sure they give their
next customer one-hundred-and-ten percent.

In addition to Haushaulter’s insights, comments from various hospitality professionals suggest that performance
feedback sessions should include:

employees should already have a good idea

NO SURPRISES of how they are doing.

encourage employees to express ideas and

EMPLOYEE INVOLVEMENT feelings.

measurable factors are more useful and

PRIMARILY OBJECTIVE DATA effective than subjective opinions.

Employee Training and Development

Appraisals can help identify the employees or managers who need additional training or those who don’t and
are ready to move on. Appraisals can also be used to determine training needs on a department basis. For
instance, front desk agents may need additional training after a new, computerized folio system has been
installed and in place for a while. Managers can determine the need for training by conducting training-oriented
performance appraisals with the front desk agents in the department.

In addition, appraisals can be useful aids in establishing career goals or long-term employee development
plans. Armed with an employee’s record of previous performance appraisals, managers can provide effective
employee guidance and career counseling. An internal study by Marriott determined that its employees were
very concerned about the development of career paths. In fact, one survey reported that only 12 percent of
employees had any idea of their own career paths. Effective employee appraisals may help an organization
in the career development of individuals, and this may create greater employee satisfaction.

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Decision-Making Tool appraisals provide an excellent opportunity to do

just this. For instance, when performance appraisals
When used as a decision-making tool, performance
identify recently hired employees who are not
appraisals provide an effective way to link rewards
performing well, managers may have evidence of a
and discipline to performance. Employees who are
selection system that does not work correctly.
performing well may receive favorable evaluations that
can lead to merit pay, promotions, career development On the other hand, appraisals may indicate that the
assignments, or transfers. Those who consistently selection system works by showing that many recently
receive poor evaluations can be legitimately identified hired employees are meeting the organization’s
for discipline, demotion, or discharge from the standards. Performance appraisals can also justify
company. selection decisions. When used in conjunction with
selection, performance appraisals may help establish
Performance appraisals provide a basis for
the predictive validity of selection methods.
compensation, promotion, transfer, grievance, or
discipline decisions. Merit pay, for instance, should
relate directly to an employee’s performance on the predictive validity—The extent to which a measurement
job. Performance appraisals help managers decide predicts future behavior.
who should receive merit pay increases and who
should not. Some performance appraisals give
managers the opportunity to evaluate how employees
perform when they are given more authority. Such
assessments provide guidelines for promotion
decisions. Many of the same performance appraisals
used in promotion decisions are useful when making
decisions about transfers. In discipline, discharge,
and grievance cases, performance appraisals can
provide useful background information. Effective
employee performance documentation can protect
an organization involved in a grievance, lawsuit, or
equal-employment-opportunity discrimination charge.
PRINCIPAL APPRAISAL
Evaluation of Training, RATING SYSTEMS
Policies, or Programs When developing a performance appraisal system,
Performance appraisals can be used to measure managers must first determine the type of behavior
the effectiveness of training. Evaluating personnel they will rate. The three principal types of ratings used
before and after training measures the effectiveness are trait-based, behavior-based, and results-based
of a training program. The close contact during an ratings.
appraisal provides an opportunity for managers
and employees to discuss the goals and problems Trait-Based Ratings
associated with specific policies or programs. During
an appraisal, managers may learn from employees Trait-based ratings are used primarily to assess
that certain policies or programs do not work as the personal characteristics of employees. These
designed. In that sense, appraisals can serve as an ratings rely on factors such as company loyalty,
evaluation for new policies. communication skills, attitude toward supervisors,
ability to work as part of a team, and decision-making
ability. Trait-based performance appraisals seldom
Validation of the stand up in court because they often base ratings on
Selection Process characteristics instead of on job performance.
The goal of selection is to predict which job candidates
will perform best and fit best in the organization. trait-based rating—Rating system based on an
Predictions should be tested to determine whether employee’s personal characteristics.
the selection system works effectively. Performance
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Behavior-Based Ratings results-based rating—Rating system based on

Behavior-based ratings assess employees on their measuring the extent to which employees accomplish
behaviors, rather than on personal characteristics. results.
For instance, such appraisals may rate employees
on their friendliness toward guests, helpfulness, how Some managers may focus too much on results at
often they thank guests for their patronage, and so on. the cost of behaviors or characteristics. Consider
Hospitality operations often emphasize an employee’s how an appraisal system for front desk agents might
behavior toward guests and other employees as much evaluate the number of guests an agent checks in
as that employee’s actual ability to perform specific during a specific time period. If the system evaluates
tasks. As a result, behavior-based ratings are fairly only results, a front desk agent who checks in many
common in hospitality companies. guests during this period would be rated higher than
one who checks in fewer. However, working under
pressure to check in a great number of guests, an
behavior-based rating—Rating system based on the agent may fail to make a good impression, alienate
behaviors of employees. guests, and lose future business for the hotel.
Behavior-based performance appraisals are more Restaurant managers will also find a common problem
defensible in court than trait-based appraisals with results-oriented evaluation. Is a server who serves
because they rate behaviors that directly relate to the most people during a given shift necessarily better
acceptable job performance. However, these rating than other servers? How do you compare the server
systems do have problems. Managers often find that a to others? If the results-oriented rating is based simply
behavior-based system accepts many behaviors that on total sales, the server who serves the most guests
are each very different from one another. Managers will likely be rated the highest.
may also discover that the system allows for little
variation of those behaviors. For example, a company Deciding which type of rating system to use is a
appraisal system may define some behaviors as complex decision. In some cases, managers will find
more acceptable than others—in other words, define that the job dictates the type of system. For instance,
behaviors that employees must display in order to some properties may determine that cooks should
succeed at that company. Consider a manager’s be evaluated with a results-oriented system. In other
dilemma when rating a food server who displays many cases, a combination of trait-based, behavior-based,
behaviors that are not consistent with the rating scale, and results-oriented approaches works best.
yet is regularly requested by a large number of guests.
Although the server’s behavior does not exactly meet
company standards, guests seem to like the server. METHODS OF
If the manager follows the rating system exactly, this
employee would receive a low rating even though APPRAISING
guests appreciate the server’s work.
PERFORMANCE
Results-Based Ratings Several methods of performance appraisal are in use
today. Exhibit 5.2 compares the hospitality industry’s
The employee we just described would receive a use of selected appraisal systems with the rate of
very different performance appraisal in a results- use across all industries. Each method has different
based rating system. Even though this server doesn’t advantages and disadvantages. This section presents
display desired behaviors, he or she does receive a the most commonly used methods and the strengths
lot of compliments from guests. Consequently, since and weaknesses of each.
the server’s results are good, a high ranking would be
in order under a results-oriented system. While this
seems to makes sense, results-oriented appraisals
are not problem-free.

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Exhibit 5.2 Types of Appraisal Systems Used

TYPE LODGING RESTAURANTS CLUBS ALL INDUSTRIES

Graphics Rating Scale 28% 35.1% 52.5% 24%

Management by 49% 37% 21.4% 31.8%

Objectives (MBO)

Narrative Essay 37% 24.7% 12.1% 33.9%

Behaviorally Anchored 41% 19.4% 3.9% NA

Rating Scales (BARS)

360-Degree Feedback 0 26.4% 8.2% NA

Other 9% 4.6% 1.9% 10.3%

Ranking Methods Alternative ranking closely resembles straight ranking

in terms of its advantages and disadvantages. The
Three ranking methods are commonly used. Each
difference between the two methods lies in how the
method eventually results in ranking employees from
ranking is determined. When using alternative ranking,
best to worst, or from first to last. The three methods
the appraiser lists each employee on a separate sheet
are (1) simple or straight ranking, (2) alternative
of paper and then chooses the best first, the worst
ranking, and (3) paired comparisons.
second, the second-best third, the second-worst
fourth, and so on until the list is exhausted.
Simple ranking requires an appraiser to rank
all employees from best to worst. This method
has the advantage of providing a simple order alternative ranking—Rating system in which an
for consideration. However, simple ranking has appraiser lists all employees and then chooses the best,
considerable disadvantages, not the least of which worst, second-best, second-worst, and so on.
is the choice of criteria against which to rank
employees. Simple ranking does not distinguish paired comparison—A method of evaluating
between different aspects of job responsibilities. performance that involves comparing the performance,
As a result, appraisers typically consider only one behaviors, skills, or knowledge of each employee with
responsibility, or perhaps a few. Appraisers can each other employee.
improve the simple ranking method by identifying job
responsibility criteria and ranking each employee on The paired comparison method involves directly
this separate scale. Unfortunately, though, there is no comparing employees to each other on each job
standard method of measurement, so different raters criterion. Exhibit 5.3 shows an example of this method.
may have different perceptions of the span between The simplest way to compute final rankings using the
consecutive numbers such as 3 and 4. Some may paired comparison method is to count the number of
think there is a great deal of difference, while others times an employee’s name appears on the left side of
view consecutive numbers as very close together. the ranking chart. The employee whose name appears
most often is ranked highest; the one whose name
simple ranking—Method of ranking all employees in appears the least is ranked lowest.
a single list. Also called straight ranking.

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Exhibit 5.3 Example of Paired Comparisons Ranking A famous anecdote pertaining to

forced distribution involves Jack
Welch’s aggressive leadership
Employees to be ranked: Macaulay, Simpson, Taylor, Nathan style as the new CEO of General
Macaulay is better than Macaulay is ranked Electric in 1981. Welch wanted
Simpson #1 to disrupt the entrenched
establishment, so he demanded
Simpson is better than Taylor Nathan is ranked #2
that his executives identify the top
Nathan is better than Simpson Simpson is ranked #3 20 percent of managers and the
Macaulay is better than Taylor Taylor is ranked #4 bottom 10 percent. The top group
was positioned for promotion,
Macaulay is better than Nathan
the other for termination. The
Nathan is better than Taylor subsequent success of GE,
eventually becoming the highest
market-capitalization firm in the
United States, encouraged many
From an appraiser’s point of view, simple ranking, alternative ranking, and
executives to embrace a forced
paired comparisons clearly identify the most valuable and least valuable
distribution concept. A recent
employees on staff. However, these methods cannot determine why one
study, however, found that many
employee is more valuable than another, or how much more valuable
managers employing a forced
one employee is than another to an organization.
distribution system thought it was
more difficult and less fair than
forced distribution—Evaluation method in which a manager ranks some other systems.
employees on an exact bell-shaped curve.
Graphic Rating Scale
Forced Distribution The graphic rating scale is used
Forced distribution relies on the assumption that, under normal most widely for hourly employees.
circumstances, the final rankings of all employees would conform Using the graphic rating scale,
statistically to a bell-shaped curve. This method assumes that roughly appraisers typically rank employees
5 percent of employees are exceptional, 10 percent are outstanding, on 10 to 15 criteria using a scale
15 percent are above average, 40 percent are average, 15 percent that ranges from 1 to 5. The criteria
are below average, 10 percent are poor, and 5 percent are very poor. used generally cover such items as
Forced distribution eliminates some leniency and severity problems by work characteristics, quality of work,
creating a central tendency. It can, however, result in dissatisfaction quantity of work, dependability,
among employees who resent being categorized at the low end of the attendance, interaction with people,
curve. Exhibit 5.4 shows a sample forced distribution scale. job knowledge, and attention to
detail. Ratings on each criterion
Exhibit 5.4 Forced Distribution Scale are then added together to arrive
at a composite score for each
employee. A sample section of a
5% exceptional performance appraisal using a
5% very poor graphic rating scale is shown in
10% outstanding Exhibit 5.5.
10% poor
15% above average
15% below average graphic rating scale—Rating
40% average system in which appraisers rate
employees on specific measurable
criteria.

5% 10% 15% 40% 15% 10% 5%

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This appraisal method is simple to use and provides scores that are readily understandable. However, this
method is the most susceptible to rating pattern errors such as leniency, severity, and the halo effect because
appraisers may find it difficult to determine the exact meaning of many criteria. For instance, what does
“dependability” mean? Does it mean the same thing to all appraisers?

An additional problem with a graphic rating scale is the variability in importance of the different criteria.
Appraisers typically apply different levels of importance to different criteria. For example, one appraiser
may view attendance as extremely important and rank employees differently on this factor than on a factor
considered less important. The level of importance that appraisers assign to each criterion can make a
substantial difference in final composite scores. Management can overcome this problem partly by pre-
weighting scales based on the importance assigned to each criterion. As a result, final scores can be influenced
by multiplying each item by a different weight before the total is calculated.

Exhibit 5.5 Example of a Graphic Rating Scale

Exhibit 5.5 Example of a Graphic Rating Scale

1 2 3 4 5
Quality of skills performance
Exceptional Above Average Below Poor
average average

1 2 3 4 5
Quality of behavioral performance
Exceptional Above Average Below Poor
average average

1 2 3 4 5
Attendance

Exceptional Above Average Below Poor

average average

1 2 3 4 5
Ability to work with others

Exceptional Above Average Below Poor

average average

Behaviorally Anchored Rating Scales (BARS)

Like the graphic rating scale, behaviorally anchored rating scales (BARS) require appraisers to rate employees
on a scaled continuum. In this case, appraisers rate the specific actions or dimensions of an employee’s work
based on critical incidents. This method relies less on an appraiser’s opinion of what is good and what is bad
than other methods do. The critical incidents provided on a BARS appraisal form provide specific examples
of what are considered to be good and bad behaviors.

behaviorally anchored rating scale (BARS)—Rating system in which appraisers rate employees on specific
behaviors displayed.

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Critical incidents are work-related not provide a fair assessment of employees who sometimes performed
events that managers observe well and sometimes performed poorly. Instead of using critical incidents
and record to form an accurate as the measurements, the BOS method establishes critical incidents as
picture of a job’s requirements. the behavior to be observed and asks appraisers to evaluate how often
Normally, the critical incidents used employees behave in this way. For example, a rater could be asked
on BARS scales are developed to rate an employee from “always” to “never” based on the number of
by a committee of employees times he or she “works well with other employees as a team.” Exhibit 5.7
and managers. Since employees provides an example of a behavioral observation scale.
participate in determining the
criteria for ranking, the BARS
method is often more acceptable to behavioral observation scale (BOS)—Rating system in which appraisers
employees than other methods of identify how often an employee displays desired behaviors.
performance appraisal. In addition,
the BARS method often provides Exhibit 5.6 Example of a Behaviorally Anchored Rating Scale
more accurate ratings of overall
performance. RATING SCALE SAMPLE ACTIONS
7.00
critical incident—Job analysis Communicates 6.00 This manager calls a meeting
technique based on capturing and effectively with to explain why the hotel will be
recording actual events that occur staff members and cutting back on staff. Employees
at work which, when combined, attends meetings are permitted to ask questions
form an accurate picture of a job’s frequently and discuss why certain positions
actual requirements. Useful in in the hotel are being eliminated.
describing how services should be 5.00 During a busy expansion
performed. Also used in training program, this manager increases
and as a measurement in certain the frequency of policy-
performance appraisal systems. committee meetings to improve
communication about and
The major weakness of the BARS coordination of the project.
method is the amount of time and Communicates 4.00 About once a week this
the expense required to develop satisfactorily with manager invites several line
the system. Each job requires a staff members employees into his or her office
totally different appraisal system, and attends some for an informal talk about hotel
since critical incidents are different meetings activities.
for each. As a result, development
3.00 This manager neglects to discuss
can be a very time-consuming and with his front-office manager the
costly process. Exhibit 5.6 provides problem of overstaffing among
an example of a behaviorally the bell staff during certain
anchored rating scale. periods of the day, but expresses
concern to the resident manager.
Behavioral Experiences 2.00 This manager misses department
Observation difficulty
communicating
meetings and fails to visit with
subordinates individually, but
Scales (BOS) with staff leaves memos around the hotel
Behavioral observation scales (BOS) members and with instructions on what should
were developed in response to attends meetings be done.
criticism about the BARS method. infrequently.
Because the BARS method 1.00 During executive-committee
allows only one measure of each meetings this manager dismisses
employee on a specific scale, some subordinates’ comments as
researchers thought that it could stupid.

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Narrative Essays Critical Incidents

Raters using narrative essays simply write essays that Managers who conduct appraisals using critical
describe the employees they are rating. Ideally, raters incidents as performance criteria keep individual
should take the time to write essays that present a logs on employees that focus on an employee’s
good picture of employee performance. When carefully behavior in specific situations. This method may be
written, these essays are very useful in filling gaps left particularly applicable in many hospitality companies,
by more quantitative methods. Also, narrative essays since the behaviors managers usually focus on are
should provide written suggestions on how employees exceptionally desirable or undesirable.
can improve. However, essays rarely turn out this
way. Managers typically do not take the time to write For instance, consider a parking attendant who lends
careful essays that fully describe the performance of his umbrella to a guest during a rainstorm. Such a
their employees. critical incident provides an excellent example of how
that company feels employees should behave. The
advantage of this method is that it provides information
narrative essay—Rating system in which appraisers that is readily useful in performance appraisals. For
write a narrative essay that describes the strengths and example, a manager could recall a specific incident
weaknesses of each employee. involving an employee and either commend or
reprimand that employee based on what happened.
Exhibit 5.7 Example of Behavioral The critical incident method also creates symbolic
Observation Scale (BOS) goals or stories that depict behaviors to emulate. A
training video, for instance, might show a bellperson
Consistently friendly with guests making a special trip to a guestroom to deliver a teddy
bear that he saw a guest’s child drop in the lobby.
1 2 3 4 5
1. almost never almost always
This type of critical incident portrays the behavior—
attention to guest service—that the property desires.

Consistently helps other servers A disadvantage of this method is that managers

must keep careful logs of each critical incident they
1 2 3 4 5
2. almost never almost always
observe. Even when accurate logs are kept, it is
unlikely that managers will capture enough incidents
to fairly assess the unexceptional or normal behaviors
of each employee.
Consistently sells extras

3. 1 2 3 4 5 Management by
almost never almost always
Objectives (MBO)
Unlike other methods, management by objectives
Consistently easy to work with (MBO) involves meetings between employees
and managers in which joint goals are established.
4. 1 2 3 4 5 Specific plans for achieving each goal are also
almost never almost always established, as are the means for measuring progress
toward goal achievement. Typically, an MBO system
requires regular meetings to assess progress toward
established goals; ultimately, employees are rated on
their achievement of the goals. Exhibit 5.8 outlines
the steps involved in establishing an MBO program;
Exhibit 5.9 presents a sample MBO appraisal form.

management by objectives (MBO)—Performance appraisal system in which a manager meets with each employee
and sets specific goals to attain; both the manager and employee meet later to assess the extent to which these specific
goals were reached.

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Exhibit 5.8 Steps in Establishing an MBO Program

1. Employee proposes goals for upcoming evaluation period.

2. Employee and manager discuss goals, modify as necessary, and reach an agreement on specific
goals—which are established and agreed to in writing.

3. Employee and manager agree on specific action plan to attain goals.

4. Manager encourages goal attainment informally during evaluation period.

5. At the end of the period, employee and manager meet again to discuss accomplishments and agree
on extent to which goals were attained.

6. Process is repeated.

Exhibit 5.9 Sample MBO Appraisal Form

Hotel Name of Manager

Review Period Reviewer

PERFORMANCE GOALS MEASURES OF RESULTS RESULTS

Market share Room-nights Increase by 3 percent

Guest service guest Ratio of positive to 94 percent Increase from 90

comments

Room-department profit Room-department income Increase by 1 percent

percentage

Employee morale Grievance rate Decrease by 5 percent

Employee development Number of completions Increase by 10 percent

training completions

Health and safety conditions Number of accidents Decrease by 10 percent

Hotel external relations Number of leadership positions No change

Some managers and scholars believe very strongly in the MBO approach; they see it as a viable means of
performance appraisal as well as a good management philosophy. New software has been developed that
allows managers to set and review objectives as well as analyze staff efforts and reward goal achievement
in order to maximize employee performance.

However, others see some shortcomings with the MBO strategy; they see the emphasis that many managers
place on setting easy-to-achieve goals in order to build a good record and, subsequently, positive performance
appraisals. This approach creates a culture of “yes-men” who damage organizations because they fail
to examine tough-to-achieve alternatives carefully. Critics also suggest that it is difficult to evaluate the
accomplishment of different goals by different employees under the MBO system. Some employees set more
difficult goals than others. This provides appraisers with yet another challenge when ranking employees by
comparison.

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In the hospitality industry, an MBO system is often tied
to the process of customer-based goal setting. For
example, if a hotel restaurant wants to improve the
speed of delivering service, it might tie the restaurant
manager’s performance appraisal to some form of
speed goal. If the desired speed goal is achieved,
that manager’s performance appraisal would reflect
that positive result. Specific goals aside, it is important
that MBO standards be challenging but realistic. The
supervisor and the employee must work together
to establish solid objectives. If that process is given
a half effort, the MBO appraisal will have minimal
utility. Harold Johnson, general manager of the
Mt. Charleston Hotel in Nevada, is adamant about
spending the necessary time to establish specific
objectives:

The MBO process is daunting to a lot of

WHO SHOULD
managers and employees because it requires EVALUATE
a certain level of trust. I like to sit down with a
new employee and make it clear to him that I PERFORMANCE?
am on his side. I want him to succeed, and I am Most managers will find it simple to determine the line
going to help him succeed. The MBO process of responsibility for performance appraisals. While
is not just an empty exercise. It is a fantastic the immediate supervisor is typically responsible for
tool to help set clear objectives that everyone performance appraisals, this person may have little
can understand and attain. It is also important actual contact with the employees he or she evaluates.
that the objectives have some “stretch” aspect In these cases, a manager must ask whether the
that forces the individual to really put forth time spent with employees is enough to adequately
more than just a token effort. When you find evaluate their performance. On the other hand, an
the right balance, it can be very empowering employee’s immediate supervisor may be the person
for the employee. He knows what needs to be best suited to evaluate that employee’s performance in
done and he has the freedom to make it happen relation to departmental or organizational goals. One
as he sees fit. But unless you take the time at issue is fairly certain: immediate supervisors make
the outset to really sweat out the specifics with vastly superior assessments when compared with
fairness and balance, you can get yourself into those of a second-level supervisor. The “boss’s boss”
a disappointing exercise in just paperwork. is normally unaware of a given employee’s abilities
and/or performance, and tends to give ratings that are
Peer-reviewed research suggests that the MBO highly inflated and less accurate.
process increases the performance level of
employees and overall firm productivity. When upper Raters can be influenced by such outside factors
management was truly committed to the process and as mood and stereotypes. It is therefore critical that
directly participated in key details, productivity gains raters are trained prior to evaluating others, in order to
were even greater. improve their ability to be more accurate and objective
and less biased. Research recommends that raters
be trained first on the appraisal process, policies, and
forms. That should be followed by training that focuses
on familiarizing raters with common errors. Finally, it
is critical to educate raters on common sets of norms
for good and poor performance. What follows is a
discussion of the advantages and disadvantages of
using different types of raters in the appraisal process.

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Peer Evaluations The notion that we are always harder on ourselves

than on others may not be true when it comes to
Peer evaluations can be constructive and contribute
performance appraisals. Research indicates that self-
positively to employee development. Some
appraisals tend to be less critical than appraisals by
researchers contend that peer evaluation is the best
others. Self-appraisals can be inflated by self-serving
appraisal method, due to regular peer contact and the
bias. Individuals tend to give themselves extra credit
importance of teamwork in the hospitality industry. In
for successes, and they tend to blame others for
fact, research shows that managers often interact with
failures. Another problem with this form of assessment
some of their employees only to resolve problems,
involves inflation due to “blind spots.” Individuals have
while employees constantly interact with their peers.
a tendency to guess high when they lack reliable
Although this makes a strong case for peer evaluation,
insight or facts about themselves.
such appraisals are best used as part of a system that
involves appraisals by managers.
Guest Appraisals
Staff Evaluations of Managers At first, hospitality managers may think that guest
appraisals are the best method of employee evaluation,
A restaurant company in Seattle has established a
since the ultimate goal of any service organization is
policy of allowing employees to evaluate each new
guest satisfaction. They can certainly help determine
manager after the manager’s first six months on the
training needs. Unfortunately, collecting accurate
job. This idea is often referred to as a 180-degree
information from guests is difficult. Many guests do not
appraisal, since the traditional direction of evaluation
fill out items such as guest comment cards unless they
has been reversed. These appraisals are taken so
are extremely pleased or passionately dissatisfied. As
seriously that a poor rating can lead to a manager’s
a result, guest appraisals tend to stress the extremes
dismissal. While few companies have gone so far
rather than the average. Also, it can be difficult to
as to link employee-driven appraisals directly to
correlate guest appraisals to exact job responsibilities,
manager job retention, there is good reason to use this
which means these evaluations may not stand up
method of appraisal for management development.
in court. When used with another system, however,
Employees typically know the extent of a manager’s
guest appraisals provide a good means of assessing
interpersonal skills. They also know how well that
performance.
manager delegates authority and leads others. A
recent study evaluating 150 managers and more than
500 employees found that when managers received Multiple Rater Evaluation
feedback from their staff, they were more likely to Systems
change their management style and subsequently be Using more than one rater can increase the accuracy
seen as more effective managers. and perceived fairness of a performance appraisal.
Hilton Grand Vacations Club on the Las Vegas Strip
Staff appraisals depend on the level of trust among
uses a multiple rater evaluation system to motivate
employees, managers, and the organization. Unless
its sales staff and create sales superstars. Managers
the appraisal is strictly quantitative, it may be
see their multiple rater system as a big reason for the
impossible to do, since managers will know exactly
company’s success. Julie Benson, director of sales
who said what. And in some—if not most—situations,
in-house, explains:
managers hold reward and punishment power over
employees. Each sales professional sets monthly personal and
professional goals as part of their overall plan to
Self-Appraisal achieve their annual sales targets. At these monthly
Research suggests that appraisals can be more performance reviews, each salesperson receives
productive if workers are given the chance to self- feedback from every one of the nine sales managers.
evaluate. When used with other appraisal methods, The benefits of the team approach are two-fold:
self-evaluations provide a good basis for establishing it creates a winning atmosphere where sales
goals and objectives, especially for training and management is held accountable for the overall
development. success of the sales team, and each manager can

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fine-tune employee sales performance based on the company (i.e., coworker, supervisor, subordinate,
his or her unique area of expertise. From these etc.). Many who use 360-degree feedback believe
monthly review sessions, the managers identify the system makes a difference and is useful. While
training issues, which are then incorporated in our slanted scores can still occur, the wider range of
weekly sales meetings. raters reduces the chance that discrimination or bias
will significantly affect the overall appraisal results.
Multiple rater evaluation systems also provide Such appraisals may therefore be more defensible
higher-quality management information for selection in lawsuits.
decisions and better equal employment opportunity
documentation, and may reduce overall costs by The following are some recommendations for
consuming less management time. One multiple rater implementing a 360-degree appraisal system:
method that has gained popularity is called the 360-
degree appraisal. •• Feedback must be anonymous and confidential,
although it is acceptable to identify the
360-Degree Appraisals. The 360-degree appraisal appraisers’ levels in the company.
approach refers to performance ratings of an
employee made by multiple individuals with varying •• Consider how long the ratee has held the
relationships to the employee, including supervisors, position; some “history” among appraisers and
peers, subordinates, and the employee him- or herself. ratee is necessary.
A fundamental assumption underlying the collection •• A feedback expert should interpret the data for
of ratings from multiple sources is that each rating accuracy.
source has a unique, yet potentially valid, perspective
on the employee’s performance. This may result in a •• Follow-up is essential; developing a plan of
more accurate evaluation of true performance than action after receiving feedback makes it all
any single rating source. work.
•• Be sure to combine narrative ratings with
Much research has been done on 360-degree
numerical ratings. Numbers alone don’t say
feedback in recent years, particularly related to
much.
whether this form of assessment should be used
for appraisal or strictly for development. While it is •• To avoid fatigue and overwork, don’t evaluate
reported that 90 percent of Fortune 500 companies everyone all at once when you implement the
use 360-degree appraisals, one international study new 360-degree appraisal system.
reported a drawback to the system because peer
ratings were more lenient, less reliable, and less
valid when used for appraisal purposes rather than
development. Still, the 360-degree appraisal approach
is growing in popularity in part because it is highly
valued in team environments. Many industries have
moved toward self-managed teams, also known
as self-directed workforces. As these teams grow
in importance, the 360-degree appraisal is likely to
develop even greater popularity in the United States.

In a 360-degree appraisal system, between four and ten

raters provide feedback to each ratee. Generally, both
objective and narrative/essay comments are included.
Often, ratees are required to rate themselves, and then
a copy of their self-evaluation is included in a packet
other raters use. Unlike other rating systems, 360-
degree feedback is anonymous. While you don’t know
who your raters are, you may know their positions in

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individuals to form “rating alliances”
Seven Guidelines for Improving the
that disrupt the integrity of the
Performance Appraisal Process
system. According to Dr. John
The following seven guidelines can help managers improve the Sullivan at San Francisco State
performance appraisal process where they work: University, “there is no data showing
that [360-degree feedback] actually
1. Involve both managers and employees in the design of the improves productivity, increases
performance appraisal process. Involvement in the design retention, decreases grievances or
of the performance appraisal process helps participants take is superior to forced ranking and
ownership of the process and increases their satisfaction standard performance appraisal
with it. systems. It sounds good, but there
is no proof it works.”
2. Clearly establish performance appraisal objectives in advance,
and place proper emphasis on each objective. Managers and A word of caution relates to
employees must agree—in advance—on exactly what is being the implementation of anything
appraised, to ensure that employees know exactly what is new. Any new approach is likely
expected of them. to create a “Hawthorne Effect”
(i.e., temporary improvement in
3. Focus feedback during the appraisal on observable, job-related productivity that results from the
results and performance. Managers often get in big trouble, both change itself). Therefore, to see
legally and otherwise, by commenting on non-job-related issues how a new system really works, be
during a performance appraisal. sure to use it for a while. Despite
the fact that some researchers
4. Avoid personal feedback. A formal performance appraisal is are questioning the utility of 360-
neither the time nor the place for this. degree feedback, many firms that
are using this system believe it
5. Listen first; talk later. Let employees begin, and encourage them to be a superior system overall
to talk as long as they wish. This often sets the stage for better that provides incomparable data
communication and understanding. for determining merit raises,
promotions, and terminations.
6. Be positive first. Focus on good things first, then discuss negative
issues in a constructive manner.
APPRAISALS
7. Probe first and describe later. Give employees a chance to
criticize their own performance before offering your input. As a AND THE LAW
general rule, follow the initiate-listen-focus-probe-plan pattern Because performance appraisals
during the appraisal process. directly influence employment
decisions, they come under close
Although it is growing in popularity, the 360-degree appraisal approach scrutiny to ensure that they are
has some disadvantages. The use of multiple raters can lead to conflicting not discriminatory. Typically, the
opinions, the process is time-consuming and administratively complex, key issues in investigations are
and it requires managers and employees to learn a new system, which job relatedness and objectivity.
raises training costs. Performance appraisals must relate
directly to the responsibilities of the
A study by Watson Wyatt Consulting, the Human Capital Index, found job. Objectivity has been found to
that companies using 360-degree appraisals were associated with a 10.6 be a problem in some companies.
percent decrease in shareholder value (on average) when contrasted
with similarly situated companies using more traditional reviews. Although
Watson Wyatt viewed the 360-degree system as a useful tool, they noted job relatedness—The extent to
flaws that included excessive time and training issues and a tendency for which a rating system actually
relates to the work done.

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According to noted researchers, a valid performance
appraisal system demonstrates a high correlation
between the system and the company’s established,
objective measures of performance and accurately
predicts future job success. These authors suggest
that managers should submit their performance
appraisal system to ten tests to determine whether
it meets the minimum legal requirements for any
appraisal system. Five of these tests relate to content
(job-related) issues while the other five relate to
process requirements (due process issues). The five
content issues are:

•• Performance standards must be based on an

analysis of job requirements.
•• Evaluation should be based on specific dimensions
of job performance rather than on a single broad
measure.
•• Performance standards should be objective and
observable.
•• Ratings should be documented.
•• The validity of the appraiser’s ratings should be
assessed.
•• The five process issues are:
•• Performance standards must be communicated Two more items should be added to this list: periodic
to and understood by employees. system evaluation and ample documentation
of all issues related to performance appraisals.
•• Specific instructions for appraisals should be put Documentation should include appraiser findings,
in writing. interview notes, and employee-signed results.
•• More than one appraiser should be used whenever The system should be periodically evaluated and
possible (to create inter-rater reliability). overhauled, if necessary, to meet the job-relatedness
requirement. Job responsibilities change, which means
•• Appraisers should carefully review results with performance appraisals must change. Documentation
employees. provides the paper trail required to argue a company’s
case successfully in court, if that becomes necessary.
•• Each company should establish legitimate, formal
Above all, managers must be sure that appraisals are
appeal procedures and inform employees of such
consistent. Too often, employees are fired in spite
procedures.
of good appraisals. This is called “pretext” (as when
a false reason conceals the truth) and can supply
grounds for losing many wrongful discharge lawsuits.

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WRAP UP
CONCLUSION                               
While there is no single performance appraisal Review Questions
system that works best in all circumstances, it is
possible to develop a good system that meets an

1
individual company’s or manager’s needs. The keys Performance appraisals fill most
to developing a successful employee evaluation needs in which two categories?
system can be derived from the main topic headings
in this chapter:

2
•• Identify the functions the performance appraisal What are the main uses of
will serve (reinforce or improve performance, performance appraisals?
motivate, determine career progress and set
goals, validate the selection process, and so
on).

3
What are the three principle types of
•• Develop sound criteria for the system (make ratings in a performance appraisal?
sure it is valid, reliable, and job-related) to avoid
potential problems with inaccuracy.

4
What types of appraisal systems are
•• Identify the types of performance to measure in use today?
(traits, behaviors, results).
•• Choose the method of appraisal (graphic rating

5
scales, narrative essays, critical incidents, and What are the three ranking methods
so on) that will work best for the situation. most commonly used?
•• Determine who will conduct appraisals and train

6
those appraisers. What are their strengths and
•• Determine the frequency of performance weaknesses?
appraisals.
•• Make sure the system meets all legal

7
requirements. What are all the possible groups of
people that may evaluate
•• Periodically evaluate the appraisal process performance?
to ensure that each function still meets the
intended purpose.
While it is difficult to design and implement
an appraisal system to evaluate employee
performance, it is far better to make the effort than
to have no system at all.

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CHAPTER 6
TURNOVER, DISCIPLINE,
AND EXITS
CONTENTS & COMPETENCIES                                

1
The Turnover Problem...........................................................................76
Describe the hospitality
Determining Turnover Rates........................................................76 industry’s turnover
problem and
Major Findings of the AHLEF Study on Turnover........................78 demonstrate how to
calculate turnover rates.
Causes of Turnover.....................................................................79

2
Retention Programs: Turnover Remedies...................................81 List causes of turnover
and summarize several
Approaches to Administering Discipline......................................86 methods for reducing
Appeals Mechanisms..................................................................88 turnover.

3
Discharge: A Last Resort........................................................................89 Explain the proper use
Discharge Interviews...................................................................89 of discipline in a
hospitality organization
Exit Interviews........................................................................................90 and describe
approaches to
Guidelines for Conducting Exit Interviews...................................91 employee discipline.
Wrap Up..................................................................................................93

4
Describe possible
Review Questions........................................................................93 appeals processes in an
employee discipline
program.

5
Describe the
appropriate use of
discharge in an
employee discipline
program.

6
Outline an effective exit
interview system.

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THE TURNOVER PROBLEM

Each time a position is vacated, either voluntarily or involuntarily, a new
employee must be hired and trained. This replacement cycle is known
as turnover. Even during the recent Great Recession and the ensuing
years of economic doldrums, turnover has remained a problem in the
hospitality industry. Although the plentiful supply of people looking for
work has made replacement of turned-over employees relatively easy
to do, turnover is still not desirable and the hospitality industry continues
to battle high turnover rates and the resulting costs.

turnover—The rate at which employees leave a company or work unit.

Determining Turnover Rates

The rate of turnover can be calculated for any time period or any group
of workers. Unfortunately, not all hospitality organizations use the same
methods for calculating turnover. Some include seasonal and part-time
employees in their turnover statistics while others do not. One method
of calculating turnover rates is to divide the number of terminations for a
time period by the average number of employees for the same period.
The easiest way to determine the average number of employees is
to add the number of employees at the beginning of the period to the
number of employees at the end of the period and divide by two. To
express the rate as a percentage, multiply the result by 100. This formula
is presented below. The example uses the turnover rate for a mid-size
restaurant staffed with twenty-five servers (average); terminations for
the year totaled seventy-five:

Annual = Number of terminations x 100

Turnover Rate Average number of employees
= 75 x 100
25
= 300%

Companies use this method simply to determine their total annual

(or monthly) turnover rates. This method includes both desirable and
undesirable turnover. (Desirable turnover is the loss of undesirable
employees; undesirable turnover is the loss of desirable employees.)

A second method adjusts the turnover rate by the loss of undesirable

employees (desired turnover). This method first subtracts the desirable
terminations (undesirable employees), so that the resulting rate represents
only the desirable employees lost (unwanted turnover) during the year
or month. To see how this works, we can use the preceding example
of seventy-five terminations for a staff of twenty-five servers, with the
following additional information: ten of the seventy-five terminations were
desirable terminations—that is, undesirable employees:

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Unwanted = Number of terminations – desired terminations x 100

Turnover Rate Average number of employees
= 75 – 10 x 100
25
= 260%

Many managers prefer the second method because they can justify turnover associated with discharges
of undesirable employees. In some cases, however, this method provides managers with an opportunity to
disguise (or discount the significance of) high turnover rates. These managers might say, “We simply lost
employees we didn’t want.” By including desirable turnover, the first formula may seem to overstate the degree
to which turnover is a problem. Nonetheless, its adherents see it as a more accurate figure, in part because
there are costs associated even with desired turnover.

The American Hotel & Lodging Educational Foundation (AHLEF)

survey on turnover, the largest study of its kind ever conducted,
found that employee turnover in the lodging industry was about 50.4
percent annually overall. Turnover varies by region, by segment, and
by company, but the lodging industry turnover rate is about five times
the average of all industries in the United States. Hospitality turnover
remains high, but it is not because the problem has been ignored. In
fact, a search of relevant databases produced approximately 1,250
citations relating to employee and managerial turnover. While much
of this research has led to an increased understanding of many facets
of the turnover problem, we have yet to resolve the issue. Turnover
continues to be one of the most vexing and disturbing problems
lodging managers face.

Much is already known about turnover. For instance, we know that turnover is costly. One study projects that
the cost of replacing an employee, whether manager, supervisor, or line-level, can be as high as 100 percent
of the annual pay for that employee. Turnover has a significant negative impact on those employees who
remain behind after friends and associates leave, and we know that there is a significant positive relationship
between high turnover and both low customer retention and investor disinterest. We have also learned from
research that there is a positive relationship between organizational stability and turnover, and that high
turnover rates therefore create unwanted instability in organizations. Other research has shown us that there
is a positive relationship between high turnover and organizational inefficiency. We also know that unwanted
turnover can contribute to an organization’s inability to build an effective team of employees.

The research literature has also provided us with some valuable information on factors that cause turnover.
For instance, we know that there is a positive relationship between turnover reduction and employee training,
that individual and group incentives reduce turnover, that salaries paid primarily in commissions and/or bonus
compensation programs often lead to higher turnover, that encouraging employees to take part in making
decisions (even those with negative impacts) reduces employee turnover, that there is a relationship between
organizational size and turnover rates, that self-directed work teams sometimes reduce turnover, and that
organizations with high levels of effective communication systems have lower levels of dysfunctional turnover.

Unfortunately, all that we have learned so far has not led to curing the turnover problem in the lodging industry.
Whether because practitioners have not yet accepted that they need to reduce turnover, or whether scholars
have not yet discovered and adequately presented the reasons lodging has high turnover and proposed
effective methods to reduce it, research continues to indicate that the lodging industry is still in the dark about
many issues relating to turnover. While the hospitality industry is not the only one interested in stemming the

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turnover tide, the situation has not been nearly so grim turnover in the lodging generally have run from
in other industries. For instance, in the electronics 50 to 100 percent. The AHLEF study revealed
industry, well-known for its high turnover, the rate that national annual turnover of managers in
of turnover is about 27 percent. Even in nursing, an three consecutive years was 20 percent, 23
occupation known for very high turnover, the rate is percent, and 15 percent, respectively.
“only” 40 percent per year—high, but still less than the
hospitality industry’s yearly average of 50.4 percent. In •• Supervisory turnover in the lodging industry
the retail grocery industry the turnover rate averages in those same three years was 19 percent,
about 35 percent annually. The yearly average for the 22 percent, and 13.5 percent. While previous
public sector ranges from 5 to 10 percent. studies have not collected data on supervisory
turnover levels, it was generally assumed
that turnover among this group was above
Major Findings of the AHLEF that of managers and below that of line-level
Study on Turnover employees (therefore between 50 to 200
For many years, the general impression was that percent, roughly).
turnover in the hospitality industry was as high as •• It was assumed that very few lodging properties
100 to 300 percent. This would mean that hospitality kept information on turnover that occurs within
employees keep their jobs, on average, no more than the first thirty days of hire (research has shown
about twelve months, and perhaps no more than three this to be the highest turnover period). The study
months, while government statistics show the tenure of confirmed this assumption: 92 percent of the
employees in other industries is about three and a half properties that participated in the study reported
years. Some analysts believe flawed prior research that they do not collect information on their
led to hospitality turnover estimates that were much thirty-day turnover rates. On the other hand, the
higher than the figures in the AHLEF study. eight percent that do collect such data reported
that the rate was much lower than anticipated,
Data for the AHLEF study was collected from a total of 24.7 percent. The fact that these properties
4,869 lodging properties in the United States. However, value and collect such information likely means
because of the method of participation, some data is that they also take steps to reduce turnover
based on sample sizes ranging from 2,150 properties during this period. Therefore, we cannot say that
to 2,719 properties. In all cases, we believe that this turnover in all properties averages 24.7 percent
is the largest sample ever drawn from the American for the first thirty days.
lodging industry for a study of any kind. The study
participants from the four main lodging segments— •• We also learned that very few properties (5.1
Luxury, First-Class, Mid-Market, and Economy—are percent) calculate separate turnover rates
representative of the total number of properties in for part-time and full-time employees. This is
these classes in the United States. This study resulted significant, because it means that the 50.4
in several significant findings: percent turnover rate includes both part-time
and full-time turnover. Since part-time turnover
•• Perhaps the most important finding is that is both higher and more costly than full-time
turnover is simply not as high in the lodging employee turnover, this indicates that the cost of
industry as it was previously believed to be. turnover may even be lower than this study can
As just noted, prior research led to estimates report.
of hospitality employee turnover as high as
100 to 300 percent annually. The AHLEF •• More than two-thirds (68.3 percent) of the
project revealed that turnover nationally among participating properties maintain separate
hospitality employees was 50.4 percent. While turnover records on a departmental basis. Many
still higher than in other industries, and still too of these properties also calculate turnover on
high, this turnover was, nevertheless, much a positional basis. As a result, we have a pretty
lower than anticipated. clear picture of which departments and positions
have the highest turnover rates. On the other
•• Managerial turnover was also much lower than hand, 31.7 percent of participating properties do
anticipated. Previous estimates of managerial not maintain departmental or positional turnover

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CHAPTER 6 HUMAN RESOURCES 79
rates, suggesting that not all hotel companies or Causes of Turnover
properties take turnover seriously (or they would
collect this information).
•• We also learned that different companies
and properties calculate turnover differently.
While we were able to determine the method
that is most popularly used (by 40 percent of
the participating properties), this means that 1 2
60 percent of the properties use some other
method: 31.8 percent of participants reported Low Faulty or inadequate
using a second method, and 11.6 percent Compensation hiring practices
reported a third method; the remaining 16.6
percent reported various methods. These
findings indicate the need for a standardized
method of reporting and calculating turnover in
the lodging industry. 3
The results of the landmark AHLEF study on Poor management that
weakens morale
turnover have more recently been confirmed by other
researchers as still accurate. A separate study of
employee retention programs, for example, confirmed
turnover rates of approximately the same percentages
as those reported in the AHLEF study. The effects of
high turnover are listed in Exhibit 6.1.
Most researchers agree that turnover is more related
Exhibit 6.1 Effects of High Turnover to internal causes (conditions within a company) than
to external causes (the economy, new competition,
1. Monetary costs and so on). Overall, researchers have found three
main causes of turnover: (1) low compensation, (2)
2. Potential for poor service faulty or inadequate hiring practices, and (3) poor
management that weakens morale. Industries or
3. No uniformity of service
companies with high turnover rates usually exhibit
4. Low perceptions of managerial effectiveness one or more of these conditions. Within the hospitality
industry specifically, a recent study has pointed to
5. Revolving door syndrome the impact of three factors—culture, hiring practices,
6. Lower sales and promotion practices—as being responsible
for most hospitality turnover. The high use of part-
7. Inability to expand time employees might also greatly affect hospitality
turnover.
8. Loss in quality of staff
9. Wages kept down Other researchers believe that the key to solving
turnover problems lies in curing the problem of
10. Wasted management time unmet employee expectations. Employees join an
organization with expectations about what the work
and the organization will be like. If these expectations
are not met, employees often leave. This is the reason
realistic job previews are so important.

More than 2,500 studies of turnover have been

conducted to date, but not all of the causes of turnover
identified pertain to hospitality. Studies of other

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CHAPTER 6 HUMAN RESOURCES 80
businesses point to unfavorable the lives of millions of Americans and is affecting virtually every aspect of
work shifts (such as night shifts their being, including their work lives, of course. Some business leaders
and irregular hours) as a principal have pointed to this epidemic as a major cause of employee turnover,
cause of turnover. In contrast, absenteeism, and other problems.
some hospitality employees identify
irregular hours as an attractive Exhibit 6.2 Major Causes of Hospitality Turnover
feature of their employment.
While external influences such
1. Quality of supervision
as unemployment and new job
opportunities seem to have little 2. Ineffective communication
effect on turnover rates in other
industries, the reverse seems to 3. Working conditions
be true for hospitality. As most 4. Quality of co-workers
managers know, new hospitality
competitors often attract employees 5. Inappropriate “fit” with company culture
from existing operations.
6. Low pay and few benefits
Both managers and employees 7. Lack of clear definition of responsibilities
cite the quality of supervision as
the number one cause of turnover 8. No direction on what to do
in the hospitality industry. More
9. Commercialized expectations
employees leave because they
are unhappy with the quality of 10. No career ladder
supervision than for any other
reason. Ineffective communication 11. Changes in leadership
is the second most often cited cause 12. Limited career opportunities
of turnover. Some communication
problems are associated with the 13. Change in philosophy or practices
quality of supervision; ineffective
communication among supervisors 14. Lack of clear direction on a company-wide basis
and employees is often cited as a 15. Job transferability
major cause of turnover. However,
communication among employees At least ten of the fifteen causes cited in Exhibit 6.2 are within a unit-level
is also a major turnover factor. manager’s power to correct. The ninth cause on the list—commercialized
expectations—may be more difficult, but should be possible to control.
Exhibit 6.2 lists the top fifteen causes “Commercialized expectations” refers to the effect of advertising on the
of turnover in hotel and restaurant performance of service personnel. Briefly, the term implies that guests
companies. Some suggest that this expect real employees to act the way employees are usually portrayed
list should be updated to include in advertisements—always smiling, always serving, always at their best.
drug abuse. The case is strong for To meet these expectations, hospitality employees must try to display
including drug abuse as a major these advertised characteristics. This “acting out” is called “emotional
cause of hospitality turnover. labor.” Over time, this type of labor can take a significant emotional toll on
Methamphetamines, to name just employees, because they are often called upon to act in a manner that
one drug, are causing significant is inconsistent with how they really feel in a given moment. Behaviorists
problems in the hospitality and would call this cognitive dissonance.
other industries. The United States
is currently in what some experts Most researchers have found that turnover is a gradual thing. Employees
have called a “meth madness” decide to leave over a period of time and because of accumulated
phase because the number of reasons. However, this is not always the case, of course. Recent research
people using methamphetamines points to the importance of what are called “shocks” as causes of turnover.
is so great. Easy to make and to Shocks are events, either within or outside the organization, that cause
use, “meth” has made its way into employees to immediately determine to leave an organization. The

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hurricanes that ravaged the Gulf Coast of the United States in 2005 and All organizations have a
the BP oil spill of 2010 are examples of such shocks, but so, too, are “personality” or a unique character
management decisions to dramatically change how things are done in that reflects the values, beliefs, and
an operation. For example, a turnover in top managers accompanied by assumptions that are important
massive changes in workplace rules can lead to immediate employee in the organization. In one
turnover. One study on the impact of shocks on employee turnover organization, for instance, a key
prescribed a series of potential remedies that organizations can take value may be, “Managers should
before, during, or after a shock to reduce turnover, including paying work alongside their employees.”
attention to past rules, honoring the organization’s culture, anticipating In such operations, managers
the impact of changes on employees, and creating contingency plans typically roll up their sleeves to
for external shocks. wash dishes, check guests in, or
do whatever else it takes to get the
Recent studies have also indicated that such issues as sexual harassment job done. In other companies, a key
contribute to higher turnover. Even employee health has been identified value might be, “Managers should
as a cause of turnover. For example, one study on nutrition recently merely supervise employees’
reported that employees with healthier diets are less likely to leave their work.” These companies respect
jobs. Companies that encourage their employees to eat healthier might managers who can delegate
reduce unwanted turnover. authority effectively and get the
job done without having to do it
Retention Programs: Turnover Remedies themselves. It would be disastrous
for an organization to implement
Despite the attention turnover commands, many hospitality companies
a retention program based on
have no specific plans for addressing it. There are, however, some
hands-off supervision when the
companies that have developed programs specifically designed to
organization favors managers who
minimize turnover. Most companies that successfully minimize unwanted
work alongside employees. This is
turnover begin by referring to the problem in positive terms. For this
why the first step in initiating an
reason, programs designed to reduce turnover are called employee
effective retention program is to
retention programs.
better understand the company’s
culture, so that programs designed
retention program—A program designed to reduce turnover. to address turnover problems can
be culture-specific.
Turnover cannot be eliminated completely. In fact, few operators would
want such an outcome. New hires can bring in new ideas and fresh
energy, so some turnover is desirable. But turnover can be like a disease;
if left unattended, it gets worse. The most effective turnover cures are
custom-tailored to a particular company. However, general short- and
long-term remedies are often helpful.

Short-Term Remedies. Many retention programs can yield immediate

results. In some cases, applying the following short-term remedies may
be the only action needed (these remedies are listed in Exhibit 6.3).

Surface the organization’s culture. Every organization has a unique

culture. Finding people who fit this culture will reduce turnover, because
the people hired share the values of that organization and they will feel
at home in it. “Culture surfacing” refers to the process of bringing deeply
held but often unspoken or unrecognized cultural values, beliefs, and
assumptions to the surface, so that what is considered important in an
organization’s culture can be identified. The best way to do this is to enlist
the assistance of a qualified cultural assessor or consultant.

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Exhibit 6.3 Short-Term Remedies for Turnover attitude survey—A needs

assessment method designed to
1. Surface the organization’s culture. determine when behavioral training
is required; also a questionnaire
2. Find out why employees leave. or other information-gathering
3. Find out why employees stay. tool designed to determine how
employees feel about work issues.
4. Ask employees what they want.
5. Give employees a voice. Ask employees what they want.
Marriott Hot-Shoppes used an
6. Make managers aware of their biases. employee-opinion survey to ask
7. Develop recruiting programs that meet the company’s needs. both managers and employees
what they wanted from their jobs.
8. Develop orientation programs that reflect the organization’s Marriott then used information
culture. from these surveys to reduce
9. Take interviewing seriously. company turnover to less than
half the industry averages for both
10. Take managing turnover seriously. managers and employees.

Businesses that have surfaced their cultures and created culture- While opinion surveys are used
specific retention programs have found that their programs are much extensively in many industries,
more effective as a result. One such business is Restaurants Unlimited, they are not used widely in the
a Seattle-based chain restaurant company and parent company of hospitality industry. Apparently,
Cinnabon, which was able to reduce unwanted turnover to almost zero. many hospitality managers fear
that such surveys create unrealistic
Find out why employees leave. Most hospitality companies do not know expectations for employees. Such
why their employees leave. Too few companies correctly collect or use an attitude may be an indication
turnover data to identify and cure organizational problems. Exit interviews of management’s unwillingness to
should be conducted for two reasons: (1) to learn why employees leave, take employee turnover problems
and (2) to learn what can be changed to ensure that more employees do seriously.
not leave. Managers should develop a profile of employees who leave
and document the reasons. This information can be useful during the Give employees a voice.
selection process for new employees. (Exit interviews are discussed in Employees can voice opinions
greater detail at the end of the chapter.) through grievance procedures,
suggestion systems, formal and
Research suggests that employees’ intent to leave or stay is based largely informal employee-management
on organizational support and commitment to them, as perceived by the meetings, counseling services,
employees; in other words, if an organization is supportive and committed ombudsmen, attitude surveys,
to its employees, its employees are more likely to stay. employee-controlled newsletters,
hotlines, and many other methods.
Find out why employees stay. Employees stay for specific reasons. The more a manager can learn
Finding out why they stay is even more important than finding out why regarding employee feelings about
they leave, because an employee’s reasons for staying can be used to work-related issues, the better. A
influence other employees to stay. Attitude surveys are the simplest and recent study of “employee voice”
perhaps most effective method of identifying why employees stay. These in the U.S. hotel industry noted its
surveys identify how employees feel about their work and about their work direct relationship with turnover;
environments. These surveys present a problem, however. Employee organizations that gave employees
responses to attitude surveys may not be totally honest, because some greater latitude in voice fared better.
may fear management retaliation for negative feedback. This problem can
be overcome by using third-party consultants to collect and analyze the
data, since they usually are perceived as more likely to protect employee
anonymity.

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Make managers aware of their biases. Managers Interviewing potential employees is serious
seldom know what employees really want. Typically, business. How well interviews are conducted can
managers think the number-one concern of employees determine the amount of turnover a property will
is money. This is generally not true, although there have in a given year. Too many managers take
are exceptions. Employees without enough money this process casually, or even turn it over to less
to adequately house their families or feed and clothe experienced supervisors or employees to conduct;
themselves and their children certainly will put no bigger mistake can be made. Interviews
money at the top of their lists. However, once these represent the opportunity to determine if an
basic needs are met, employee desires change. A applicant fits the character of the organization and
highly standardized test that determines job attribute possesses the skills for the job. Many companies
preferences indicates that managers and employees reduce their turnover simply by teaching managers
want almost the same things: recognition for a job to be better interviewers.
well done, a chance to develop skills and abilities,
and participation in decision-making about issues Take managing turnover seriously. This directive
that affect them. Making managers aware of what encompasses all the others. Too often, managers
employees want can help them develop retention simply do not take turnover seriously enough. Many
programs that work. feel that turnover is not a real problem, or that it is
the result of a poor work ethic, or that it is just a fact
Develop recruiting programs that meet the of life and nothing can be done about it. Managers
company’s needs. Many employers are guilty of must realize that turnover is a problem and that
hiring “warm bodies” to fill immediate job needs. It’s something can be done about it. Also, managers
hard to fault these labor-poor companies, because must realize that they themselves are often the
they have such pressing needs. These employers cause of unwanted turnover.
know that such employees will not last, but feel they
have little choice in the matter; it’s either a warm body Long-Term Remedies. As noted, short-term
or no employee. To cure this “warm body” syndrome, remedies focus on collecting and using information
managers can develop profiles of the characteristics to address immediate concerns. Long-term
successful employees should possess and hold out for remedies focus on making organizational changes
such job candidates whenever possible. Companies to create a company in which employees want to
can also develop more creative recruiting methods in work. These remedies take time and often cost
order to attract more job candidates. money. The cost is determined by the degree of
current turnover in a company and by the need
Develop orientation programs that reflect the for change. The following long-term remedies are
organization’s culture. Orientation programs should listed in Exhibit 6.4.
teach the culture of the company. Instead, many
companies simply tell new recruits to “follow Jim or Develop socialization programs. Socialization is
Mary Sue around.” In many cases, neither Jim nor the ongoing process people experience when they
Mary Sue really knows what it is that management start a new job, join a new club, or start anything
wants new employees to learn. As a result, companies new. As people become accustomed to their
create more turnover by perpetuating bad habits that surroundings, they learn the rules and how to get
do not fit in with their culture. A study of quick-service things done. Many successful companies do a good
restaurant employees in the United Kingdom found job of socializing their new employees. Disney,
that a primary factor in their deciding to leave their jobs for example, goes to great lengths to teach its
was that their introductory training was not complete. “Dream, Believe, Dare, Do” credo and other Disney
cultural norms to new employees during their initial
Take interviewing seriously. There is a maxim in socialization period. Many companies, however,
the computer industry that cautions, “Garbage in, neglect to establish formal socialization programs
garbage out.” The same goes for interviewing. If poor and leave employees to fend for themselves. This
applicants are hired in the first place, a manager can rarely gets employees off to a good start.
expect turnover to be high.

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Training programs emphasize task completion or Some hospitality companies have overcome this
development of desired behaviors. Socialization problem. For instance, T.G.I. Friday’s developed
programs, on the other hand, concentrate on teaching several supervisory levels within its restaurants. By
employees how to interpret the company’s culture doing so, the company established more rungs on the
and rules (both written and unwritten) so that they career ladder for employees interested in moving up.
can perform their jobs effectively. A study on the Several companies have developed “hire from within”
socialization programs of Silicon Valley electronics programs that seek to fill management positions with
companies showed that employees who received people from their employee ranks first.
company-sponsored socialization training adapted
much more quickly to the values and beliefs of their Implement partner/profit-sharing programs. Au Bon
companies. Hospitality companies should take note, Pain, Harman Management Company, Golden Corral,
especially since most turnover in the hospitality Cheesecake Factory, and Chick-fil-A are restaurant
industry occurs within the first thirty to sixty days of companies that have used profit-sharing programs
work. A recent study of the impact of socialization effectively to reduce turnover. At Harman Management
on turnover clearly shows a link between effective and Chick-fil-A, managers can own up to 40 percent of
socialization programs and reduced turnover. their operations. At Harman, this program has reduced
management turnover to below the national average
Exhibit 6.4 Long-Term Remedies for Turnover for all industries.

Implement incentive programs. Several hospitality

1. Develop socialization programs. companies have used incentive programs to reduce
turnover. South Seas Plantation in Florida, for
2. Develop training programs in additional example, has a program that effectively encourages
languages. employees to stay with the company. This program is
stair-stepped in the sense that the longer employees
3. Establish career paths.
stay, the more incentives they are offered. Many
companies have developed scholarship programs for
4. Implement partner/profit-sharing programs.
employees and their relatives, and have used these
5. Implement incentive programs. programs as incentives to reduce turnover. Other
hospitality companies have developed programs in
6. Provide child care and family counseling. which employees earn points that translate to year-
end bonuses.
7. Identify alternative sources for employee
recruitment.
Attract
8. Reconsider pay scales.

Develop training programs in additional

languages. A large number of hourly employees Educate Train
in the United States speak Spanish as their first
language. In the hospitality industry, there are many
other languages represented in the workforce as well. Incentive
Despite this reality, few hospitality companies offer Programs
training in foreign languages. Instead, most hospitality
employers rely on bilingual employees to explain
company rules, policies, and work responsibilities.
This is an abdication of management’s responsibility. Empower Motivate

Establish career paths. Too many employees see

hospitality jobs as only temporary employment on the
way to their “real” jobs. This attitude has been fostered Reward
by the lack of career ladders for hospitality employees.

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CHAPTER 6 HUMAN RESOURCES 85
There are two keys to developing successful incentive programs. First, Keys to Successful Retention
employees need to be in on the ground floor of program development so Programs. Regardless of the
that meaningful incentives are chosen. Second, time frames should not turnover remedies managers
be so unreasonable that few employees ever have a chance of collecting choose, three key elements are
on bonuses, scholarship programs, or other incentives. Employee required for success:
groups involved in developing incentive programs should help managers
determine what time frames are reasonable. 1. Executive-level support

Provide child care and family counseling. Many U.S. companies offer 2. Managerial follow-through
child care and family counseling. The hospitality industry, however, has on program implementation,
been slow to jump on this bandwagon, even though a high percentage maintenance, and support
of its employees are women with children or women of child-bearing
age. Mechanisms that help employees deal with arranging and paying 3. Expenditures of time and
for child care can be valuable features in retention programs. Family money
counseling and other employee assistance programs are also effective
in retaining employees. Unfortunately, the hospitality industry lags behind Failure to recognize and provide
other industries in these categories as well. any one of these key elements
can doom a retention program.
Identify alternative sources for employee recruitment. Historically, the The place to start when planning
hospitality industry has employed young employees, the age group with a retention program is to compute
the highest turnover levels. Attracting older managers and employees current turnover costs and then
to hospitality companies is not as easy as hanging out a “now hiring determine the costs and benefits
senior citizens” sign. Any employee group has specific requirements; of retention efforts.
seniors are no different. Hospitality companies often must make long-term
commitments to providing the type of medical and dental benefits, leave
programs, and shortened work shifts that are attractive to senior citizens.

Other non-traditional employee groups include minorities, immigrants,

and people with disabilities—all viable recruiting sources. In each case,
the rule is the same: identify the needs of the group and offer programs
that are specifically attractive to that group.

However, managers must remember that while it is a perfectly legal and

laudable goal to seek to hire persons in protected age, race, and national
origin groups, there are very strict laws against discriminating against or
preferring individuals on the basis of their age, race, or national origins.
True “affirmative action programs” must be very carefully crafted and
implemented to avoid ruinous litigation later over alleged or perceived
illegal discrimination or preference.

Reconsider pay scales. Pay scales in hospitality have been inching

upward for the last few years, but the industry’s overall rate of pay is still
far below the national average. While money alone cannot stop turnover,
the lack of it does provide a good reason for employees to consider
leaving. For example, on average, gas station attendants are paid more
than hourly restaurant and hotel employees. Many hospitality businesses
could correct this problem by raising pay to more competitive levels.
Employers must simply ask themselves whether they would rather pay
their employees more money to ensure a longer stay with the company or
spend the money on replacing employees who leave. Paying employees
more is an investment; turnover costs cannot be recouped.

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A study by the Hay Group of more than 500,000 This report also listed seven steps that managers
employees in 300 companies found fifty retention should take in developing a retention program that
factors. Of these, pay was the least important. works:
Research published in Training and Development,
based on 2,000 respondents, confirmed this finding,
and cited ten factors that lead to retention: 1. Collect and analyze all turnover and exit
interview information.

1. Career growth, learning, and development 2. Conduct a survey to learn company beliefs
and attitudes about retention (i.e., what would
2. Exciting and challenging work work).

3. Meaningful work (making a difference and a 3. Organize and conduct a “future pull” session.
contribution) Leap ahead one year and imagine what you
are celebrating regarding retention. Set goals
4. Great people to work with this way. For example, one “future pull” might
be: “Retained 95 percent of our management
5. Being part of a team team.”

6. Having a good boss 4. Gather input and insight from focus groups
and interviews of managers and employees.
7. Recognition of work well done
5. Compile and distribute data. Be sure to use
8. Autonomy—a sense of control over one’s the data you have gathered to plan.
work
6. Tag a retention champion. You need someone
9. Flexible work hours in charge of retention who is empowered to
act.
10. Fair pay and benefits
7. Appoint a task force to support the champion.

THE USE OF DISCIPLINE

Discipline is an indispensable management tool, but
it is also one of the most difficult for managers to use.
Too many managers use discipline inconsistently and
unfairly. Some regard discipline strictly as punishment
for past behavior rather than as a means of ensuring
proper conduct in the future. In fact, some managers
are unaware that discipline can be used to encourage
desired behaviors.

Approaches to
Administering Discipline
There are at least three basic approaches to discipline.
In practice, these approaches may overlap; some
managers may use elements of any or all of the
three. Two of the three—the hot stove approach and
progressive discipline—are traditional approaches;
they emphasize the administration of discipline after
an employee fails to follow organizational norms and

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standards. The traditional approaches
hot stove approach—An approach to discipline based on immediate
are reactive in nature, since the
punishment for each offense.
behavior precedes disciplinary action.
The third approach, normally referred
This system seems to make sense because it appears to be fair to
to as preventive discipline, is proactive,
all employees, and because it correctly establishes which rules result
in that it attempts to establish a means
in which disciplinary measures. However, this system has problems.
of directing employee behavior.
Oddly, the fact that the hot stove does not discriminate is the biggest
problem. All employees receive the same punishment for similar
p ro g re s s i v e d i s c i p l i n e — A infractions; there is no allowance for different situations or individual
discipline process in which differences. A new hire who does not fully understand all the rules will
employees are given increasingly be “burned” as badly as the employee who has been with the company
stiffer penalties for infractions; for years and has a clear grasp of the rules and what they mean.
usually progresses from an oral
warning, to a written warning, to a Progressive Discipline. Like the hot stove approach, progressive
suspension, and finally to discharge. discipline relies on a clear and complete definition of behaviors that will
be penalized and the type of disciplinary action that will be meted out
for each infraction. A progressive discipline program might dictate that
preventive discipline—A type of
an employee who is tardy for work once will receive an oral warning,
discipline emphasizing recognition
an employee who is tardy twice will receive a written warning, and an
of good behavior instead of bad
employee who is tardy three times will be suspended. This step-by-
behavior.
step punitive approach to discipline is very popular. Most progressive
The Hot Stove Approach. With the hot discipline programs include four steps:
stove approach, if employees touch a
hot stove, they get burned; that is, if
they break a rule, they are subjected
1 2 3 4
to disciplinary action. This approach Oral Warning Written Warning Suspension Discharge
has several foundations:
An informal A formal warning Time off, Termination of
warning with no in which a copy of usually without employment
•• Immediacy: Corrective action
documentation the documentation pay
must be taken immediately is placed in the
after an infraction occurs. This employee’s file
links discipline with undesirable
performance.
Managers appear to like the hot stove and progressive discipline
•• Warning: Managers must approaches because of the orderliness they give an operation.
provide clear ground rules for Both clearly establish ground rules and emphasize consistent and
behaviors and adequately warn non-discriminatory treatment of rule-breakers. Any discrimination
employees that “hot stoves will under either of these systems more or less ensures that grievances,
burn.” discrimination charges, and lawsuits will be filed. As managers know,
however, it is a lot easier to describe these systems on paper than it
•• Consistency: Corrective action is to carry them out. In addition, even under the best circumstances,
must be consistent; i.e., a hot these types of discipline result in short-term solutions. Both traditional
stove will burn everyone to the approaches focus on the symptoms rather than on the causes of poor
same degree. performance. Rule-breaking is a symptom, not a cause.
•• Impersonality: Discipline must
be linked with the behavior, not Preventive (Positive) Discipline. Proponents of preventive or
the person. positive discipline point out that the difference between this approach
and traditional approaches is that the focus is on the cause rather
•• Appropriateness: The degree than on the symptoms of dysfunctional behavior. Communication
of discipline must equal the between supervisor and employee takes place on a “horizontal”
extent of the infraction. level, between adults, with the emphasis on problem-solving

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rather than on punishment. The the largest and most successful companies in the United States use the
underlying assumption is that each positive discipline approach.
employee should have the time and
opportunity to correct workplace The principal difference between traditional disciplinary approaches
problems once they are brought to and positive discipline lies in their reactive or proactive natures. Those
his or her attention. managers who believe that today’s employee is more likely to respond
to positive encouragement than to negative punishment are more likely
Positive discipline places to choose the positive discipline approach over traditional approaches.
disciplinary emphasis on Many managers have found that positive discipline also encourages a
recognizing and reinforcing good team approach to problem-solving, whereas traditional methods often
performance rather than punishing foster adversarial conditions. Another advantage of positive discipline
bad performance. Critical stages is that it places a great deal of the burden for improvement upon the
in this type of disciplinary system individual. Therefore, it improves accountability within the organization
include: and also sometimes helps prevent lawsuits. The non-adversarial positive
discipline model encourages managers to address performance problems
•• Oral reminders early, when it is easier to bring about a correction in behavior. For many
organizations, the benefit of early correction is the most significant
•• Written reminders
advantage of all.
•• Paid decision-making leave
•• Discharge
Appeals Mechanisms
Any effective discipline program has an appeals system for employees.
At each stage of this process Appeals mechanisms serve two major functions. A systematized appeals
(except discharge), the emphasis is process that is widely understood by employees allows each party to
on encouraging good behavior. Oral present its side of an issue, giving employees a voice in how an issue
and written reminders emphasize is settled. In fact, in some cases that are litigated, the mere existence of
what should be done, not what was appeals mechanisms provides evidence of managerial efforts to ensure
done wrong. Critics of this type of due process for employees. There are four basic types of appeals
system contend that paid decision- processes:
making leave, the third stage of
the system, is counter-productive,
because it provides employees with
an incentive to perform or behave
1 2 3 4
poorly in order to get a day off with Hierarchical Open-door Peer Review Ombudsman
pay. However, research indicates
that employees view a day off, even
with pay, as a severe punishment,
and their behavior often improves Hierarchical Appeals Process. The hierarchical appeals process is
as a result of this form of discipline. based on an organization’s chain of command. In this system, employees
Some companies call the paid who believe that they have been disciplined unfairly appeal first to
decision-making leave “Decision their immediate supervisor. If unsatisfied with the results at this level,
Day” because the objective is employees appeal at the next level of supervision in the organization. If
for employees to use the time still unsatisfied, employees can appeal at each succeeding management
to decide whether they want to level until all levels of appeal are exhausted. Appeals generally are made
correct the problem and become a in writing.
productive worker. Some managers
may require an employee to reflect
on the problem that led to the day hierarchical appeals process—A process that employees who feel they have
off and write an essay outlining been treated unfairly can use to take their concerns to succeeding levels of
a solution to the problem, to be the chain of command.
turned in to management when the
employee returns to work. Some of

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Open-Door Appeals Process. Unlike the
hierarchical system, an open-door appeals process
DISCHARGE: A
allows employees to appeal to any manager in the
organization, regardless of his or her position. While
LAST RESORT
The same managers who use discipline strictly as
this program works in many cases, it fails in others
punishment often view discharge as the ultimate
because managers are reluctant to overrule fellow
punishment. Most human resources experts are critical
managers in other departments. Because of this,
of such a view. They question who is punished the
appeals are often referred back to the immediate
most, the employee who must find a new job, or the
supervisor. Another disadvantage of this system is
manager who must replace a discharged employee?
that treatment is sometimes inconsistent—that is,
For that matter, who is really at fault when a discharge
one manager may work diligently to ensure that the
is required, the employee being discharged, or the
appeals process is fair and that employees have a
manager who failed to train, motivate, or otherwise
chance for their voice to be heard, while others may
help that employee to perform successfully? In Japan,
take this responsibility lightly.
managers who discharge employees are viewed as
failures themselves because they were unable to turn
open-door appeals process—A process used by the employees into productive staff members. Many
employees who feel they have been treated unfairly, companies in the United States are adopting the same
in which they are free to take their concerns to any view, largely because it is becoming more difficult and
manager. costly to replace lost employees.

Peer Review Appeals Process. The peer review Discharging an employee should be a last resort
appeals process typically requires that committees for managers. It should be approached with great
of employees and managers hear appeals and issue caution and extreme seriousness. If a discharge is not
final rulings. Employees usually are elected to such properly handled, the employer can end up in court.
committees, while managers are appointed. An
advantage of this system is that it allows employees Discharge Interviews
to participate directly in the appeals process. As a
Discharge is the maximum penalty an employer can
result, employees often believe that their appeals
levy on an employee. As we have noted repeatedly, this
were conducted fairly, regardless of the outcomes.
step should be taken only as a last resort. Discharge
When adopting this type of procedure with unionized
interviews are usually the last step in progressive
employees, managers should make sure the process
discipline. The purpose of a discharge interview is
doesn’t violate the terms of collective bargaining
to: (1) relate the history that has led to the interview,
agreements.
(2) explain why the manager must take such severe
disciplinary action, and (3) complete the discharge.
Ombudsman Appeals Process. The ombudsman
There are lots of risks associated with discharging
appeals process is widely used in government and in
an employee, but managers who follow the rules of
colleges and universities, but is not widely accepted
discharge should find the task less difficult than they
in industry. This system involves the use of an
might assume. This does not mean that discharging
ombudsman who investigates complaints or a mediator
an employee is an easy or pleasant task, nor should
who listens to both sides of a case and attempts to
it be.
mediate an acceptable solution. Ombudsmen have
no authority to issue judgments in the event that the
two sides cannot agree. discharge interview—A meeting between an employee
and employer in which the purpose is to terminate the
employee’s employment.
peer review appeals process—A process used by
employees who feel they have been treated unfairly,
in which they take their concerns to boards made up of
other employees and managers.

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Managers should observe the following guidelines
during discharge interviews:

•• Use the meeting to find out what went wrong

during employment.
•• Read all of the supporting evidence for the
discharge and make sure it is available
during the interview. Documentation should
include records of all disciplinary action
against the employee, and past conditions
and terms of the disciplinary action. EXIT INTERVIEWS
•• Explain specific reasons for the discharge. Exit interviews are interviews conducted with
Managers cannot get by with simply telling an employees who leave an organization for any reason,
employee, “It didn’t work out.” not just because they’ve been discharged. Employees
who leave voluntarily usually do so for good reasons.
•• Respect the dignity of the employee during Managers should be extremely concerned about
the interview. The fact that the employee learning why employees leave. Finding out why they
did not work out in this case does not mean leave can improve the organization in many ways. The
that he or she will not find other suitable purpose of exit interviews is to collect information on
employment and excel. why employees leave and learn what can be changed
to ensure that more employees are not lost. These
•• Avoid anger or personal confrontation with
interviews have been described as an absolutely
the employee.
essential tool for collecting useful information about
•• Tell the employee that reasons for the performance. From an employee’s perspective, the
discharge should remain confidential at all exit interview provides an opportunity to vent some
times. frustrations and to achieve closure about leaving the
job.
•• As a general rule, have a witness present
during the interview. The witness may be
needed later to substantiate issues discussed exit interview—A meeting conducted between an
during the interview. employer and an employee leaving the organization
that attempts to identify specific training needs or other
•• Most states require that discharged work-related problems.
employees be paid in full at the time of
discharge. This and other required paperwork Exit interviews are valuable only if they are done
should be completed well in advance of the well, however. Poorly or improperly conducted exit
interview. interviews yield very little usable data. A study of New
Zealand hotels using exit interviews learned that in
•• Make the employee aware of the appeals
many cases hotel personnel were not asking the right
process available within the company.
questions and therefore were generating very little
•• Suggest other avenues for employment, if useful information. Even when useful information was
appropriate. Also advise the employee that, learned, it was seldom used to improve the hotel.
if contacted for a reference, management
will be honest regarding the fact that the Few hospitality companies use exit interviews to
employee was discharged. learn why their employees are leaving or what
the organization can change for the better. Many
Most discharge interviews are emotionally charged hospitality managers use exit interviews only to
and can result in unwanted confrontations. By find out if a departing employee is likely to sue the
following these guidelines, however, it is more likely company. While this is another reason to conduct exit
that managers will be able to complete them without interviews, it is far less important than finding out why
extreme difficulty. good employees leave. As we noted in the section

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on turnover, losing an employee is very expensive confidentiality. Explain that the information will be
for employers. If information collected during exit used solely for improvements within the company,
interviews enables managers to prevent a single not for retribution against the departing employee
unwanted turnover, the entire process is worth the or friends remaining on the job. Ask open-ended
cost. questions as much as possible to ensure that the
employee has an opportunity to talk about what really
Information is not easy to collect from departing caused the turnover. The degree to which questions
employees. Most employers have immediate can be open-ended is determined by the extent to
supervisors conduct exit interviews, but this is the which the employer intends to statistically correlate
least effective method. Employees often leave the information. Conduct the meeting in absolute
because of their supervisor and, as a result, are not privacy, with no interruptions, and pay full attention
likely to be open and honest in an interview with them. to the departing employee. The following guidelines
In addition, employees often have friends among their are helpful:
coworkers whose jobs they do not want to jeopardize.
Many departing employees fear that if they tell the •• Conduct interviews in the final week of employment,
truth during an exit interview, they will not receive a but not on the last day if at all possible. Departing
favorable recommendation. Research also shows that employees are too busy with other issues to give
many employees don’t think that what they say in exit exit interviews their full attention on their final day.
interviews will be taken seriously by the company,
because their managers seem to view the process •• Make every effort to ensure either anonymity
so irreverently. (using computers) or confidentiality.
•• Probe for the real reasons employees are leaving.
Exit interviews are most effective when conducted Few employees who are comfortable in their jobs
by a third party. A study at Marriott Foodservice, for will leave on their own. However, the reasons for
instance, revealed that departing employees did not leaving are sometimes difficult to learn.
give their supervisors the same reasons for leaving
as they gave third-party interviewers. •• Schedule a follow-up interview one to three
months after the employee leaves. Employees
Typically, employees tell their employers that they are often relate much different (and more accurate)
leaving because they have found a better job, one reasons for leaving after they are secure in their
that either pays more or provides them with a better new jobs. Having a third party conduct the follow-up
opportunity for advancement. This is usually not the works extremely well. Follow-up interviews also
case. Most employees leave because they do not like represent a good opportunity for employers to
their boss, their work, or their coworkers, not because find out if departed employees are interested in
they are going to make more money or have a better returning to work.
opportunity for advancement.
•• Close the interview with guarantees of
confidentiality and warm thanks. Remember that
Guidelines for Conducting departing employees are people whom you may
Exit Interviews want to hire again someday.
Exit interviews should be conducted by someone
other than the employee’s immediate supervisor.
As just mentioned, the best choice is a third-party
external source—a consultant who simply collects the
information—or a computer system. Consultants can
be hired at relatively inexpensive rates. The cost of
losing a single employee through unwanted turnover
is much higher than a consultant’s fee.

Persons conducting exit interviews should try to

learn as much as possible from an employee who is
leaving. First, put the employee at ease by ensuring

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Some organizations that conduct exit interviews do so only to fill their employee files for legal reasons. In
these organizations, the questions asked do not provide much useful information. Exit interviewers should
ask questions that cover such areas as:

is your company paying enough, for

MARKET INFORMATION example?

WORKLOADS AND SCHEDULES are they reasonable?

PROCESSES AND SYSTEMS can they be improved?

do we have the types of leaders we

SUPERVISION AND MANAGEMENT need?

are our training programs adequate for

TRAINING our employees?

—are there morale issues? Is there too

WORK ENVIRONMENT much stress?

are employees challenged but not

WORK RESPONSIBILITIES overworked?

what can we do to keep valued

EMPLOYEE RETENTION employees?

As noted earlier, information obtained in exit interviews should be analyzed and used to help correct conditions
that cause employees to leave. Interviews should be conducted with all departing employees, whether
the company terminates the relationship or the employee does. Useful information can be gained from all
employees.

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WRAP UP
CONCLUSION                               
Most employees want to work. They want to keep their jobs. Most managers
strive to avoid high turnover rates. Why, then, is turnover such a problem
in the hospitality industry? And why, even when unemployment rates
are alarmingly high, does the hospitality industry usually still face labor
shortages?

This chapter examined the turnover problem within the hospitality industry. In
that context, it describes the importance of retention programs, the judicious
use of discipline, and such organizational exit concerns as discharging
employees and exit interviews.

Review Questions

1
Why should employee discharge be viewed as a last-
resort disciplinary step?

2
What are three organizational causes
of turnover problems?

3
What are three individual causes of turnover problems?

4
How does the “hot stove approach” compare with
progressive discipline?

5
How does positive discipline differ
from progressive discipline?

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HUMAN RESOURCES 95

CHAPTER 7
COMPENSATION
ADMINISTRATION
CONTENTS & COMPETENCIES                                

Major Influences on Compensation Plans............................................96

1
Outline the major
Cost of Living...............................................................................96 influences on
compensation plans.
Labor Market Influences..............................................................97

2
Union Influences..........................................................................97 Describe major content
and process theories of
Government Influences...............................................................98 motivation.
Motivating Employees............................................................................98

3
Outline methods of
Content Theories.........................................................................99 determining job worth.
Process Theories.......................................................................102

4
Describe the steps and
Determining Job Worth........................................................................105 identify options for
establishing pay
External and Internal Equity......................................................106
structures.
Establishing Pay Structures.................................................................107

5
Describe the issue of
Competitive Pay Policies...........................................................107
wage compression and
Pay Grades................................................................................107 expansion.

Determining Pay Within Grades................................................108

Two-Tier Wage System.............................................................108

Skill-Based Pay.........................................................................109

On-Call Pay...............................................................................110

Team-Based Pay.......................................................................110

Wage Compression and Expansion.....................................................110

Wrap Up................................................................................................112

Review Questions......................................................................112

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MAJOR INFLUENCES ON
COMPENSATION PLANS
While many people think that compensation programs relate directly to
the amount or type of work done, this is rarely the case. Instead, the
rate of compensation is affected by many factors in most hospitality
companies. Some influences relate to economic conditions in the
company or the community, while others relate to internal or external
labor market conditions. Other factors that affect compensation include
employee perceptions of pay, and union and government influences.
Even employee satisfaction and motivation can influence a company’s
compensation practices. This section discusses some of the various
influences on compensation.

Cost of Living
Cost of living refers to the real dollar value of a worker’s purchasing
power for ordinary necessities such as food and clothing. The consumer
price index is generally the best overall indicator of the real value—
or purchasing power—of wages or salaries. Basically, the consumer
price index is a measurement of changes in the retail prices of goods
and services. It is computed by comparing the cost of these goods and
services at a fixed time with the cost at subsequent or prior times. The
U.S. Consumer Price Index is issued monthly by the Bureau of Labor
Statistics, an agency of the Department of Labor.

The consumer price index varies according to many different environmental

and economic factors. As the consumer price index goes up, the value
of money goes down. For instance, a consumer price index of five
percent means that an item that used to cost $1.00 now costs $1.05.
The consumer price index is often referred to as inflation. In times of high
inflation, the value of a dollar goes down rapidly. As a result, increases
in compensation rates must be larger. In low inflationary times, the value
of a dollar goes down more slowly. As the value or purchasing price of
the dollar changes, companies must adjust their compensation rates to
remain competitive.

Compensation is also influenced by the cost of living in different regions.

For instance, a $25,000 salary in Muskogee, Oklahoma, would command
much more real income (or purchasing power) than the same salary in
Minneapolis, Minnesota. By the same token, a job that paid $30,000
in India, would provide much more real income than a job paying the
same amount in Switzerland. Job location can greatly influence the rate
of compensation.

cost of living—A term used to refer to the real dollar value of a worker’s
purchasing power.

consumer price index—A measurement of changes in the retail prices of

goods and services.

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companies in New England had a very difficult time finding interested
workers. In fact, Four Seasons Hotels had such a difficult time finding
room attendants for its Boston location that they imported workers from
Texas and converted hotel rooms into employee dormitories.

Compensation rates vary according to the availability of workers. In the

case of low unemployment, hospitality companies are forced to increase
both immediate and deferred compensation to attract employees. At
the same time, high unemployment rates allow hospitality managers to
maintain or, in some cases, reduce former rates of compensation.

The internal conditions of a company also influence compensation rates.

The most obvious example is company profitability. A company making
high profits can compensate its employees better than one that is not
Labor Market very profitable. Companies that can respond quickly to changes in the
Influences consumer price index should also be able to react rapidly to labor market
The number of workers available changes. For instance, research indicates that hotel companies can react
in the labor market varies on both to inflation more quickly than companies in other fields because of their
national and local or regional ability to raise room rates on a daily basis. Companies that can react
scales. For instance, when the quickly should also be able to raise compensation rates for employees.
unemployment rate is high on Doing so keeps the company in a competitive position for attracting and
a national level, the number of retaining employees.
workers available and willing to
work is greater. Conversely, when
the unemployment rate is low,
the number of available workers
declines. The number of available
workers also varies by occupation.
The hospitality industry may face
a shortage of potential workers
at the same time other industries
experience an overabundance of
potential employees.

Availability of workers also

depends on local or regional
economic conditions. During much
of the 1980s, the unemployment
rate in the oil-producing states of
Louisiana, Texas, and Oklahoma Union Influences
was quite high because of low Unions influence compensation rates through their emphasis on seniority.
prices for oil and the subsequent While non-union companies typically reward individual employees for
lower demand for employees in that their performance, skills, knowledge, or abilities, union contracts generally
industry. As a result, there was an call for the same pay for all employees who perform the same job. For
abundant supply of workers in this instance, a room attendant in a hotel in New York City (where most hotels
region. However, during this same are unionized) is compensated on the basis of his or her rank, not on his
period, unemployment in New or her contribution to the organization. In contrast, a room attendant in a
England was quite low, primarily non-union hotel would likely be rewarded based on his or her contribution.
due to the region’s increasing
number of technology-related In the short run, unions typically raise overall compensation rates.
jobs. Because of the increases in However, it is unclear whether compensation rates are always higher
high-tech employment, hospitality in union hotels over the long run. Compensation in union properties

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depends as much on the skills of the union negotiation
exempt employees—Executives, administrators,
team as it does the performance of the employees
professionals, and outside salespeople who are exempt
themselves. A strong negotiation team can provide its
from overtime pay.
union members with compensation rates that exceed
their actual worth in the marketplace. In contrast, a
weak team can bring about just the opposite. non-exempt employees—All employees who are due
overtime pay when they work more than forty hours in
One aspect of union contracts that typically results a week.
in higher compensation rates over the long term is
the cost-of-living adjustment clause. This adjustment
became standard in most union properties during the
1970s and 1980s. Under this provision, employees
receive increases in their compensation rates
according to increases in the consumer price index.
In other words, increases in the consumer price index
produce consistent increases of union wages, which
enable employees to maintain their living standards
despite increases in inflation. Whether unionized or
not, hotels in markets in which unions are present
generally have higher compensation costs.

Government Influences
Since the early 1930s, the U.S. government has played
a big role in how private enterprise compensates its
employees. Laws that mandate minimum wage, wage
rates, overtime pay, child-labor restrictions, retirement
benefits, equal employment opportunity, comparable MOTIVATING
worth, and other issues all greatly affect the rate at
which companies compensate their employees.
EMPLOYEES
Motivating is stimulating employees to work as the
Not all employees in an organization are protected company desires. Compensation programs must
by these laws. For instance, employees who work motivate individual employees to work. Unfortunately,
for companies that are not involved in interstate not all employees have the same wants and needs.
commerce, who are engaged in seasonal industries As a result, not all compensation programs work for
(twenty consecutive weeks or less), or who are all employees. While it is easy to assume that money
classified as executives, administrators, professionals, is the principal motivator for employees, this is rarely
or outside salespeople are exempt from minimum wage the case. Only some employees are motivated by
and overtime provisions. This group of employees is money; others are motivated by other needs. As a
known as exempt employees. Non-exempt employees result, compensation programs rarely succeed when
are protected by minimum wage and overtime laws. they base motivation solely on monetary rewards.

Motivation theories fall into two principal types:

content theories and process theories. Content
Whether unionized or not, hotels in theories propose that all people are motivated by
certain common needs. The various content theories
markets in which unions are present identify and categorize these needs in different ways.
generally have higher compensation In contrast, process theories identify the factors in any
costs. given situation that determine whether an individual
will become motivated or not.

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Content Theories 4. Esteem needs—After fulfilling the lower

needs, individuals turn to their personal ego
The best-known content theories are Maslow’s
needs. Self-esteem—or satisfaction with
Hierarchy of Needs Theory, Alderfer’s ERG Theory,
oneself—involves one’s sense of worth,
Herzberg’s Two-Factor Theory, and McClelland’s
accomplishment, achievement, competence,
N-Achievement Theory. A fifth theory, Economic Man
maturity, independence, and self-respect. In
Theory, emphasizes money as the reason people
organizations, esteem needs might involve
work for paychecks.
personal reputation, recognition, titles, praise,
status symbols, responsibility, promotions, and
Maslow’s Hierarchy of Needs Theory. Maslow’s
appreciation.
Hierarchy of Needs Theory contends that individuals
have five basic needs (see Exhibit 7.1). This theory
5. Self-actualization needs—After the first four
states that all people experience these five needs
levels of need are satisfied, Maslow contends,
at different times, depending on individual priorities.
individuals have a need to focus on self-fulfillment.
Maslow’s theory assigns an order of priority—or
Seeking to realize one’s full potential, increase
hierarchy—to these five needs. The theory further
knowledge or skills, be creative, or simply “be
states that an individual will be motivated to fulfill a
the best I can” are manifestations of this need
higher-level need only when a lower-level need is
in both personal and professional life.
satisfied or nearly satisfied. According to this theory,
if a manager can identify the stage an employee is at, According to Maslow, an individual at the safety
the manager can effectively motivate the employee. and security level might be motivated the most by
Maslow’s theory identifies the following five categories pay. But once that person meets his or her safety
of needs: and security needs, the amount of pay becomes
less important than opportunities for self-esteem or
1. Physiological needs—This group includes
self-achievement. Maslow’s theory is supported by
basic and essential needs, sometimes called
numerous studies that show that employees and
biological needs. Examples of these needs
managers want incentives other than pay. The theory
include heat, light, food, and comfort.
does have application problems, however. Managers
may have a difficult time assessing where employees
2. Safety and security needs—Once the
are in terms of needs, then anticipating changes in their
physiological needs are met, Maslow contends,
needs. Another problem is that not all employees feel
individuals are most influenced by safety and
the same needs at the same times. Managers make a
security needs, such as the need to protect
grave mistake when they assume that all employees
oneself from danger, harm, threat, injury, loss,
in a restaurant, for instance, are at the safety and
or deprivation. In organizations, this level of
security level. Some may be at this level while others
need might include an employee’s need for
may be at much higher levels. While Maslow’s theory
job security, seniority, safe working conditions,
does not provide a solution for creating compensation
benefits, insurance and retirement plans, and
plans, it does provide some insight into employee
severance pay.
motivation.
3. Social needs—After satisfying physiological
and safety and security needs, individuals seek Maslow’s Hierarchy of Needs Theory—A motivation
to fulfill their social needs. These include the theory contending that individuals have five basic needs:
need for companionship, love, and belonging. physiological, safety and security, social, esteem, and
In organizations, such needs may be met through self-actualization.
formal and informal work groups, teams, and
company-sponsored activities.

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Exhibit 7.1 Maslow’s Hierarchy of Needs The biggest difference between Maslow’s theory
and Alderfer’s theory is that the ERG theory adds a
frustration-regression model (see Exhibit 7.2). That
is, like Maslow’s theory, the ERG theory states that
an individual will be motivated to fulfill a higher-level
need when a lower-level need is satisfied. However,
unlike Maslow’s theory, the ERG theory also states
that an individual will be motivated to fulfill a lower-
level need when he or she has continuously failed to
satisfy a higher need.

Exhibit 7.2 Alderfer’s ERG Theory

Alderfer’s ERG Theory. Alderfer agrees with

Maslow that individuals have basic needs that could
be arranged in order of priority, that there are basic
distinctions among those needs, and thus those needs
need to be classified. However, whereas Maslow’s
theory divides the needs into five categories, Alderfer’s
ERG theory divides them into only three:

1. Existence—These needs are satisfied by such Herzberg’s Two-Factor Theory. According to

factors as food, air, water, pay, and working Herzberg’s Two-Factor Theory, employees have
conditions. These needs are similar to Maslow’s two distinct types of needs: hygiene factors and
physiological and safety needs. motivators. This first set of needs has also been called
maintenance factors or dissatisfiers, while the second
2. Relatedness—Relatedness needs are set has been called satisfiers.
satisfied by meaningful social and interpersonal
relationships. These needs are similar to
Maslow’s social needs. Herzberg’s Two-Factor Theory—A theory that
contends that some work factors influence satisfaction
3. Growth—These needs are satisfied when while others are expected by employees.
an individual makes creative or productive
contributions. Growth needs are similar to hygiene factors—In Herzberg’s Two-Factor Theory,
Maslow’s esteem and self-actualization needs. those factors that are expected by employees and
therefore cannot lead to satisfaction. Also known as
extrinsic rewards.
Alderfer’s ERG Theory—A theory that divides an
individual’s basic needs into three categories: existence,
motivators—In Herzberg’s Two-Factor Theory, those
relatedness, and growth needs.
factors that can lead to satisfaction. Also known as
intrinsic rewards.

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Herzberg’s theory contends that hygiene factors alone employees, companies must create opportunities for
cannot lead employees to feel satisfied with the work them to initiate, conduct, and complete jobs.
environment; employees expect such factors to be
present. On the other hand, if hygiene factors are
lacking, employees may feel dissatisfied. Hygiene McClelland’s N-Achievement Theory—A motivation
factors include company policies on pay, relationships theory contending that people have three needs: power,
with peers and other employees, personal life, status, affiliation, and achievement. This theory also contends
and security. that companies can predict employee performance by
determining the concentration of each need in individual
In contrast, motivators can make employees employees. See also need for achievement, need for
feel satisfied and motivated to work. Examples affiliation, and need for power.
are achievement, recognition, responsibility, and
the opportunity to advance. Herzberg’s theory need for achievement—According to McClelland’s
states that the presence of motivators can lead to N-Achievement Theory, people with a high need for
employee satisfaction, while their absence leads achievement are usually good managers.
to either dissatisfaction or to no satisfaction at all.
Some authors call motivators that lead to satisfaction The McClelland theory portrays the need for power as
intrinsic rewards. Hygiene factors can also be called a desire to assume leadership. For many companies,
extrinsic rewards. such a need is perceived as a positive attribute (see
Exhibit 7.3). The need for affiliation reflects a desire for
close, cooperative, and friendly relations with others.
intrinsic rewards—In Herzberg’s Two-Factor Theory, According to the theory, people with a high need for
those factors that can lead to satisfaction. affiliation tend to succeed in jobs that require strong
social interaction skills, or in which interpersonal skills
extrinsic rewards—In Herzberg’s Two-Factor Theory, are highly valued. It should be no surprise, then, that
those factors that are expected by employees and a recent study found that front-of-the-house hospitality
therefore do not lead to satisfaction. employees are primarily motivated by a need for
achievement and a need for affiliation, but not a need
According to the Herzberg theory, money is not a for power.
motivator. Instead, employees expect pay for the work
they do. While some research has failed to prove the
Herzberg theory, many companies have successfully need for power—According to McClelland’s
applied it through job enrichment programs. Because N-Achievement Theory, people with a high need for
they are basically motivators or satisfiers that help power are usually seen as good leaders.
employees feel satisfied and motivated to work, job
enrichment programs should be considered part of need for affiliation—According to McClelland’s
the compensation package. N-Achievement Theory, people with a high need for
affiliation generally tend to do well in jobs that require
McClelland’s N-Achievement Theory. McClelland’s high levels of social interaction or where interpersonal
N-Achievement Theory contends that people have three skills are highly valued.
needs: achievement, power, and affiliation. According
to this theory, all employees have some combination McClelland identifies three types of managers:
of these three needs. The theory also contends that institutional managers, personal-power managers,
companies can predict employee performance by and affiliation managers. Institutional managers have
identifying each employee’s needs. In addition, the greater needs for power than for affiliation and tend
McClelland theory contends that people with a high to exhibit high levels of self-control. Personal-power
need for achievement make good managers. These managers have a greater need for power than for
individuals tend to exhibit moderate levels of risk- affiliation, but are open to social interaction. Affiliation
taking, a desire for concrete performance feedback, managers tend to have a greater need for affiliation
problem-solving responsibility, and a tendency to than for power and are open to social interaction.
set moderate goals. They may also possess strong Research by McClelland and others has shown that
organizational and planning skills. To motivate these personal-power managers and institutional managers

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typically are more productive Process Theories
because of their greater need for
Process theories of motivation are used to explain how employees can
power.
be motivated to work. In a sense, these theories help teach managers
how to manage motivation. The following process motivation theories are
Exhibit 7.3 McClelland’s
widely acknowledged: expectancy theory (Victor Vroom), equity theory (J.
N-Achievement Theory
Stacey Adams), goal setting theory (Edwin A. Locke), and reinforcement
theory (B. F. Skinner).

Need for Expectancy Theory. According to expectancy theory, motivation is

Affiliation related to an individual’s perception of three factors:

•• Expectancy—The probability that effort will lead to performance.

•• Instrumentality—The probability that performance will lead to
Need for
Need for certain outcomes (positive and negative). A single “performance”
Achievement can lead to several outcomes.
Power

•• Valence—The value attached to each outcome.

Economic Man Theory. The idea expectancy theory—A motivation theory that explains motivation as a
that money is the only important goal process involving an individual’s perception of three variables (expectancy,
that people work for is embedded instrumentality, and valence).
in the Economic Man Theory. This
theory simply states that people From an employee’s perspective, this can be restated as three questions:
work for paychecks to buy food and “If I try to perform a certain task or at a specified level, am I likely to
clothing, the basic necessities of succeed? If I succeed, what are the likely results? Do I like or dislike
life, and that there are employees those results?” If an employee believes that working harder will lead to
whose primary motivator for doing higher performance, the expectancy is strong. If an employee sees no
the job is the money it pays. While connection between effort and performance, the expectancy is weak.
not often discussed in Western For example, if an employee lacks the knowledge, training, or equipment
management theory, the Economic needed to perform a task, simply working harder is not likely to lead to
Man Theory is widely embraced in the desired performance, and therefore the motivation to work harder
Asian cultures; companies doing will be low.
business there must understand
and practice it. The Economic The next element is the individual’s perception of whether performance
Man Theory corresponds to the will lead to certain outcomes. An employee might believe that performing
first stage of Maslow’s Hierarchy at a specified level will lead to praise, higher pay, promotions, and/or
of Needs Theory. Critics of the job security. On the other hand, this performance level may also cause
Economic Man Theory say that resentment among coworkers who see the employee as a “rate buster.”
money as a motivator would not If an employee believes that a given outcome or result is likely, the
affect the productivity of employees instrumentality is strong. For example, if an employee works in an
in the long run. organization that clearly ties pay to performance, the employee will
perceive that higher performance is likely to lead to higher pay. If there
is no clear relationship between performance and certain outcomes, the
Economic Man Theory—A theory low instrumentality will weaken motivation.
that states that money is the main
reason employees perform an The third element necessary for motivation is valence, which is the
assigned job. individual’s opinion of or desire for the likely outcomes. A desired outcome
has motivational force, while an undesired outcome weakens or destroys
motivation.

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factors. Therefore, hotel managers should note that
valence—In expectancy theory, the strength of an
intrinsic factors such as employee recognition and
individual’s preference for a particular outcome.
promotion are more effective motivators for employees.
The strongest motivation occurs when an employee
believes that he or she can perform at a specified level, equity theory—A theory that relates to whether
that doing so will clearly lead to specific outcomes (or employees feel like they are being treated fairly or
rewards), and that those likely outcomes (rewards) are unfairly compared to others.
desirable. Motivation will be low if an employee sees
no relationship between effort and performance, or Equity Theory. The equity theory relates to whether
between performance and rewards, or if the reward an employee believes he or she is being fairly treated
is not considered valuable or desirable. in comparison to another person perceived as being
in a similar position. This theory is based on the
Managers and organizations can address motivation assumption that all employees ask two questions
problems related to each of these three elements. about their work:
For employees to be motivated to perform at a given
level, they must believe that they can in fact perform •• “What do I receive in return for what I give?”
at that level if they try. Organizations that select and
train employees effectively and give employees the •• “What do others receive in return for what they
tools and equipment needed to perform their jobs give?”
strengthen their employees’ belief that effort will lead The equity theory contends that employees create
to performance. To further strengthen motivation, mental ratios about their work situations in order to
organizations should clearly tie their reward systems answer these two questions. Exhibit 7.4 depicts these
to desired performance. Finally, organizations should ratios. Note that it is the employee’s perception of
ensure that the rewards they offer are in fact valued whether equity exists that affects motivation. Perceived
by employees. Many organizations simply assume inequities in the workplace are just as damaging as
that the rewards they offer are valued. When they are real inequities. Employees often do not know how
wrong, the effect on motivation is unfortunate. much their coworkers make but often assume that
there is inequity.
A recent study of the application of expectancy theory
in the hotel industry showed that five components
(expectancy, extrinsic and intrinsic instrumentality, perceived inequities—Unfairnesses that employees
extrinsic and intrinsic valence) can be used to explain believe are present in the workplace that may or may not
employee motivation. The study showed that intrinsic be based on reality; or the sense among employees that
motivation factors are more important than extrinsic others are unfairly being rewarded more than they are.

Exhibit 7.4 Equity Theory

Personal Outcomes (pay, benefits, job satisfaction) Other’s Outcomes EQUITY

Personal Inputs (education, knowledge, Other’s Inputs
experience, effort)

Personal Outcomes Other’s Outcomes INEQUITY

<
Personal Inputs Other’s Inputs (UNDER-REWARDED)

Personal Outcomes Other’s Outcomes INEQUITY

>
Personal Inputs Other’s Inputs (OVER-REWARDED)

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As the exhibit shows, equity occurs only when
internal equity—Equity that exists with other
employees believe that the ratio of their outcomes
employees within an organization.
received (pay, benefits, job satisfaction) to their input
given (education, knowledge, experience, effort) is
equal to the same ratio of a “comparison other” (who external equity—Equity that exists with employees
may in reality be like or unlike the employee). On the outside an organization.
other hand, inequity occurs either when employees
believe they are receiving less (under-reward) or more goal setting theory—A theory that contends that
(over-reward) for their efforts than the comparison specific and challenging goals will result in higher levels
other. According to this theory, balance is important of performance if the employee accepts the goals.
to people; most workers are uncomfortable with either
of these two imbalances. According to the theory, the following factors are
needed to bring higher levels of performance from
When imbalance is perceived, employees might: specific and challenging goals:

•• Ability—Although a difficult goal could result in

•• Work less hard because they believe others better performance, a manager should consider
are overcompensated the ability of the individual employee who will
•• Work harder because they believe they are aim for the goal before setting the goal. If a
overcompensated in relation to others manager sets a difficult goal and an employee
lacks the ability to achieve it, there will be no
•• Convince others to work less hard in order goal achievement.
to restore equity
•• Goal commitment—Employees commit to
•• Convince others to work harder to restore a goal when they accept it. That is, the more
equity accurately a person understands a goal, the
easier it is to achieve it.
•• Reassess their perception of equity
•• Feedback—To promote performance,
•• Change their comparison other
managers should provide feedback, which will
help employees to understand whether they can
This sense of equity relates to fellow employees in the
achieve the goal.
company (internal equity) and to workers in similar
positions in other companies (external equity). For After goals are achieved and employee performance
instance, an employee will feel a sense of imbalance is evaluated, outcomes (rewards) are allocated. In the
if he or she believes that employees in other hotel same manner as in the expectancy theory, employee
companies are rewarded more for similar work. As a motivation will be high if rewards are valuable or
result, that employee may ask for more money or may desirable.
go to work for another hotel company.
Reinforcement Theory. B. F. Skinner’s reinforcement
Goal Setting Theory. Goal setting theory, proposed by theory is based upon the assumption that people are
E. A. Locke, states that setting specific goals motivates conditioned to respond to stimuli. In the work world,
better performance. It explains that ambiguous goals reinforcement theory suggests that an employee’s
like “do our best” cannot motivate individuals to behavior can be shaped by past experience. The
produce more output. Specific and challenging goals simple four-step model in Exhibit 7.5 illustrates the
will result in higher levels of performance if individual theory.
employees accept the goals.
reinforcement theory—A theory proposed by B. F.
Skinner which states that people are conditioned to
respond to stimuli and that behavior can be guided
through the use of various types of reinforcement.

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Exhibit 7.5 Skinner’s Reinforcement Theory

Future
Stimulus Behavior Consequences
Behavior

Skinner’s reinforcement theory suggests that, if a The reinforcement theory has been successfully
manager wants to elicit a desired behavior or response adapted by other behavioral scientists and consultants
from an employee, the manager must reinforce that to comply more fully with workplace needs. For
behavior. The type of reinforcement used can elicit instance, Ken Blanchard espouses most of this theory
different responses. This theory leads to four possible in his best-seller, The One Minute Manager. In the book,
managerial actions in response to employee behavior: Blanchard emphasizes positive rewards as the best
method of eliciting desired performance in employees.
•• Positive reinforcement—A manager can Managers who want to try this method should make it
encourage desired behavior by rewarding that a practice to “catch someone doing something ‘good’”
behavior. and then praise that employee. Blanchard encourages
public praise to make employees feel good about their
•• Negative reinforcement (also called
behavior and to set examples for others.
avoidance)—A manager can encourage
desired behavior by removing a punishment
or unpleasant stimulus (such as criticism of an
employee’s performance) when the desired
behavior finally occurs.
•• Extinction—A manager can ignore a behavior
to discourage it.
•• Punishment—A manager can punish an
employee’s undesired behavior to discourage
the employee from performing that way again.
Managers who want to apply Skinner’s theory should
consider the following:

•• Be certain that only the desired behavior is

reinforced (reward for performance). A company
DETERMINING
will get the behaviors it rewards. If a poorly
designed compensation or reward system does
JOB WORTH
Every organization must develop some method of
not in fact reward the behaviors a company wants,
determining job worth. Some companies rely on
the reward system will undermine rather than
comparisons with other organizations in the same
support company goals.
marketplace, while others use internally focused
•• Extinction, which does not necessarily indicate methods. This section presents the various methods
what a desired response should be, can affect both of evaluating job worth as well as the advantages and
desired and undesired behaviors. If a manager disadvantages of each method.
fails to reinforce a desired behavior, an employee
may not exhibit that behavior again because it was
not reinforced.

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External and Internal Equity instance, the Bureau of Labor Statistics of the U.S.
Department of Labor provides statistics on employment
Managers can apply the concepts of external and
fields and occupations that can be helpful to an
internal equity when evaluating and determining job
external equity analysis. Private organizations such
worth. External equity relates to pay variations among
as the Society for Human Resource Management
similar properties in a particular market, while internal
can also provide useful information. However, in
equity relates to pay variations within a particular
many cases, this information is either too generic
company. External equity is also referred to as “market
or not industry-specific enough to base an entire
pay.” The advantage of the external equity method
compensation program on its merits.
is that the market determines pay; hence, the job
holder is paid as much as the market is willing to A thorough external equity analysis depends on direct
pay for that job. Disadvantages include the fact that collection of information from competing organizations
different organizational cultures might react to pay in the market. Meaningful results are also dependent
needs differently and that it is sometimes difficult to on a skilled analysis of the collected data. For
find out how much competitors pay. Some scholars instance, most survey results include mean salaries
contend that paying slightly higher-than-market pay and wages, median salaries and wages, modal (most
produces the best overall results. common) salaries and wages, pay percentiles and
pay distributions, or the pay range for various jobs.
To determine appropriate pay levels, some
After a properly conducted survey, the information is
organizations conduct formal or informal surveys
compared with compensable factors to determine a
of their competitors. Organizations that do not have
true picture of the external equity of job pay.
personnel with the expertise to conduct or analyze such
surveys often hire college professors or consultants
who specialize in these areas. pay range—The range between the highest and lowest
pay for each job in an organization.
Conducting pay surveys is complex. A thorough
analysis of external equity conditions must consider As pointed out earlier, internal equity relates to pay
many factors, including overall compensation levels variations within a single organization. Job survey
in other organizations, union influences, demographic results on external equity typically include an analysis
information on the workers employed, labor market of pay ranges within job descriptions. The same is true
and economic conditions, and financial conditions of for internal analyses. In addition, an internal analysis
the external organizations surveyed and the company answers the question of how much variation should
conducting the analysis. exist between the pay for one job and that of another.

It is also important to examine the manner in which In the hotel industry, internal equity is considered
jobs are designed in surveyed organizations. In when determining pay differences between room
most cases, compensation and salary consultants attendants and bell captains, daytime room attendants
compare what are known as compensable factors, or and night-shift room attendants, or lunch cooks and
the common elements of jobs. Doing so eliminates dinner cooks. Careful analysis of different positions
any bias when comparing—across companies—jobs enables employees to realize a sense of equity when
that have dissimilar or unusual tasks and behaviors. comparing the work they do with the work of others.
Compensable factors that are acceptable to an
organization’s management and employees raise Internal equity analysis depends on establishing
satisfaction levels. In addition, wage and salary meaningful compensable factors and developing and
surveys must be carefully constructed and pretested implementing a thorough job evaluation system. The
to establish their accuracy as predictors. next section discusses different approaches to the
development and implementation of job evaluations.
compensable factors—Elements common to each job
on which compensation is based. job evaluation—A method of determining what jobs
are worth.
Government agencies can provide some useful
information for establishing external equity. For

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philosophy of paying its employees while the other uses another. This
clash of cultures makes it mandatory for managers to collect competitive
data on salaries and wages. If they do not, the company will likely run the
risk of losing many valuable employees. Generally speaking, a company
can position itself in one of three ways:

•• Pay leaders—pay more than the market average on the theory

that better pay will attract better employees.
•• Pay followers—pay below market average on the theory that less
pay will equal greater profits.
•• Meet the competitors—pay the prevailing wage in the market.
ESTABLISHING A study of food service and hotel chains found that compensation policies
that reflect the organizational values best—and pay for performance—
PAY produce the best results.
STRUCTURES Pay Grades
Determining how to identify the
value of different jobs is only Each hospitality company must also determine the number of pay grades
part of the pay structure puzzle. it will use. Typically, a company finds that whatever job evaluation method
Organizations must also determine it uses will create information that can be easily converted to a chart. For
the number of pay grades offered, instance, assume that a company uses the point method to evaluate pay
how company pay will compare for each job. This evaluation results in assigning a point value to each
to that of competition in the job on the basis of compensable factors. A completed chart might look
market, and how compensation like the one depicted in Exhibit 7.6.
is determined within specific pay
grades. The following section Exhibit 7.6 Determining How Jobs Fall into Pay Grades
summarizes pay structure options.
I II III IV V VI

pay grades—Rates of pay for

particular jobs in an organization.
Wage/
Salary
Competitive
Pay Policies
Each hospitality organization must
decide how to position its pay
policies in comparison to other 100 200 300 400 500 600 700 800 900 1000
companies in the market. Collecting
information on pay and benefit Assume that each dot in Exhibit 8 represents a job. This exhibit clearly
packages offered by competitors shows where each job falls on the wage continuum. For instance, the
and others in the hotel, restaurant, job immediately above 110 points on the graph should command less
and tourism industries is critical pay than the one above 250 on the graph. However, the question is:
to successful recruitment and How much less? By answering this question, a company can ascertain
retention. This becomes particularly its appropriate number of pay grades and establish the range between
significant when companies merge. each grade.
When two companies merge, they
likely are merging not only assets In Exhibit 7.6, the vertical lines depict pay grades. In this case, the sample
but compensation philosophies as company has six pay grades. If we assume that the lowest pay grade
well. One company may use one begins at minimum wage, what will be the highest pay for this grade?
For instance, given a minimum wage of $7.25 per hour, does the pay

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for this grade range from $7.25 per hour to $8.00, or
seniority-based pay—A pay system based on
from $7.25 to $7.75, and so on? Normally, jobs on the
employees’ experience and seniority.
lower end of the pay scale have narrower pay ranges
than those at the top of the scale.
merit pay—Pay based on an employee’s performance
It is important to establish ranges of pay within each over a predetermined period of time.
grade. This allows employees to receive raises without
changing pay grades. For example, a range of pay Two methods of determining pay scales are
for dishwashers allows a more experienced or senior “broadbanding” and “careerbanding.“ Broadbanding
employee in this category to make more money than is the elimination of all but a few, say three to ten,
a less experienced or junior employee. comprehensive salary and job classifications. The
bands usually have minimum and maximum dollar
The conventional wisdom is that performance amounts of pay that overlap and average no more than
pay must be high enough to effectively reward 130 percent from top to bottom. In broadbanding, for
performance and that there must be observed example, all managers might be grouped into one band,
differences in pay between people who make higher all clerical employees into another band, and all part-
and lower contributions to the organization. As noted time employees into still another band. Broadbanding
previously, pay that reflects the organization’s values emphasizes titles, grades, and job descriptions.
will likely work best. But managers should keep in Careerbanding is similar to broadbanding, but it is
mind that large pay differentials can create feelings more closely tied to career development. Instead
of injustice, and this can reduce cooperation, quality, of using minimums and maximums to establish pay
and commitment to long-term success. scales, as in broadbanding, scales are determined by
market surveys. For instance, a company might take
a market survey to determine how competitors pay,
Determining Pay Within Grades and establish its rates based on what it learns.
In the previous example of two dishwashers, one had
more experience and seniority than the other. Seniority
provides a good reason for establishing a range of pay
Two-Tier Wage System
within job grades or classifications, particularly in union Two-tier wage systems establish two distinct pay
environments. Most union contracts establish seniority structures for employees. Two-tier systems are most
as an important factor in determining employee pay. common in union environments in which a union
Seniority-based pay is also useful in non-union working grants pay concessions to management in the form
environments, especially for employees at the low end of future pay. These systems provide a higher pay
of the pay scale. structure for existing employees while a lower one
is created for employees hired after a specific date.
Merit is typically the second determinant of pay within For instance, a union might agree to wage cutbacks
grades. Unions generally support increases in base that create a base minimum rate of $10.00 per hour
pay over merit pay, a policy that has been long- for existing room attendants while the minimum rate
standing. Many hospitality organizations link pay to paid to new hires might be $7.50. This policy must be
performance. Merit pay policies are intended to create explained to applicants during the selection process.
effective reward systems that motivate employees
to try their best at all times. Some experts note
two-tier wage system—A pay system that establishes
that pay-for-performance systems are particularly
two distinct pay structures for employees; most common
effective in environments in which a high level of
in union environments. These systems typically establish
trust exists between management and employees,
one system for employees with seniority and another for
and in which management establishes a fair and
new employees.
ongoing evaluation of performance (such as regular
performance appraisals).

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A two-tier wage system offers advantages to both evaluations, and they perceive these systems to have
current employees and management. The advantage more justice. Another advantage of a skill-based pay
for current employees is that they will be on the higher program is that employees typically learn skills that
scale for as long as they work for the company. are transferable to other jobs within the company. As a
Management has the advantage of being able to cut result, these employees can fill in when temporary labor
back on wage expenses by paying new employees shortages develop in different areas. In addition, skill-
less. Eventually, employees on the old system will based pay provides an extra motivation for employees
retire and the company will be left with only lower- to learn. Such pay systems can be particularly useful
wage employees. when technological advancements create the need
for new skills or knowledge. Skill- or knowledge-based
Theoretically, this system offers an effective way for pay systems also support the use of career ladders for
management to reduce labor costs. However, the certain jobs. Skill-based pay plans have the advantage
two-tier system also creates equity problems among of improving staff performance, reducing unwanted
employees. As we discussed earlier in the chapter, turnover, and improving a company’s recruitment
when one employee perceives that he or she is of new employees. In effect, such systems create
working as hard as another employee but is receiving additional rungs on the career ladder for employees
lower pay, a sense of inequity is likely to develop. As to climb.
a result, productivity among those earning the lower
rate is likely to decline. Skill- and knowledge-based pay programs have been
effectively employed in several service industries for
Skill-Based Pay employees with “short” career ladders. For instance,
in the late 1980s, such pay programs were introduced
Another method of determining employee pay is to
to nurses in hospitals. Nurses had only two options
institute a skill-based pay system. Skill-based pay
before the introduction of such programs: move into
systems assume that a company can afford to pay
management (and out of the hands-on, service-
more to people who do more. Determining pay by the
oriented or “caring” end of the profession), or remain
number of skills an employee has is one way to do this.
in a nursing position. Skill- and knowledge-based pay
Seniority does not play a role. According to this method,
programs provide a third option for nurses, enabling
companies base pay on the knowledge or skills each
them to seek title changes or pay raises within the
employee acquires rather than the job to which the
customer-service end of their profession.
employee is assigned. Hypothetically, all employees
start at the same level of pay. As an employee adds
skills or knowledge, the company increases his or Some hospitality companies have had similar
her rate of pay. The result is a compensation plan success with skill- or knowledge-based pay
that is related directly to the number of different jobs programs. For instance, T.G.I. Friday’s developed
an employee can perform. Research has shown that both skill- and knowledge-based programs during
employees do tend to acquire more and stronger skills the late 1970s. According to T.G.I. Friday’s plan,
under such a system. employees who learned additional skills received
both symbolic acknowledgments of their progress
Knowledge-based pay is a variation of a skill-based pay (uniform pins that denoted expertise in certain
system in which pay is tied to knowledge rather than skills, much like merit badges do for Boy Scouts)
to skills. In such systems, employees can increase and pay increases. In addition, employees who
their pay by becoming experts at their current jobs. acquired additional skills under this system moved
closer to being promoted to management if that
was their goal.
knowledge-based pay—A pay system based on the
amount of knowledge each employee has.
Like most other systems, skill- and knowledge-based
programs have some disadvantages. One problem
One of the major attributes of a skill-based pay program
with skill-based pay systems is that they take some
is that employees often believe it is fairer than other
time to establish. If, for instance, a company decided
systems. In a study of 600 organizations, researchers
to implement a skill-based pay system one year,
found that employees strongly agreed that skill-based
evaluations related to pay probably could not be used
pay programs take much of the subjectivity out of pay

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CHAPTER 7 HUMAN RESOURCES 110
until the following year, after employees have had an
team-based pay—A pay system based on the outcome
opportunity to develop or refine the skills included in
produced by a team.
the compensation program. Another disadvantage
is the increase in labor costs as employees learn
additional skills. Another is that some employees
learn all the skills assigned to their jobs, then “top
WAGE COMPRESSION
out” with no place else to go within the organization. AND EXPANSION
Also, such programs can create false expectations Wage compression results primarily from competition
for employees who hope to use their new skills in with other companies for new hires. Faced with a
permanent new jobs within the company, only to be shortage of qualified applicants, many companies
disappointed with temporary assignments. Companies may increase the starting wages of new employees
that use such programs also face the problem of in order to compete. However, since competition for
how to categorize and/or utilize skills that become current employees is not as great as it is for new
outdated by technological or organizational change. hires, current employees may not receive the same
Even considering these drawbacks, the advantages salary increases. Employers have several reasons
of such programs can far outweigh the disadvantages. for not increasing the wages of current employees at
the same rates as for new hires. Generally, employers
On-Call Pay reason that current employees are less likely to leave
A study of the use of “on-call pay,” sometimes called a company once they begin gaining seniority and once
“sleeper pay,” showed that approximately 65 percent their benefit packages start to accumulate.
of the responding companies provided pay premiums
to their on-call employees. These premiums usually wage compression—Pay inequities based on levels of
amounted to extra hourly pay if an employee was demand that result in higher pay for new employees than
called in to work. for current employees.

Team-Based Pay wage expansion—A condition that occurs when

Organizations are increasingly depending on teams employers try to raise the pay rates of current employees
for their producing activities and processes that to keep salaries in line with the higher wages of new
improve organizational performance. A team is made hires caused by wage compression.
up of a small number of people with complementary
skills who are committed to a common purpose, a As a result of wage compression, a company may
set of performance goals, and an approach for which find that employees with less seniority (sometimes
they hold themselves mutually accountable. Team even new employees) often earn as much as those
members can interact with and be interdependent on who have been on staff for a significant period of
each other. Teams are different from groups because time. The salaries of university professors provide
group members are more likely to be working toward a good example: starting salaries of university
individual performance goals, whereas team members professors today are often much higher than were
work toward a common goal. Also, groups have less the starting salaries of current faculty members. This
autonomy and are more closely supervised than is due primarily to competition among universities for
teams. Thus, pay systems that pay individuals may a smaller pool of qualified personnel. Even though
not properly fit organizations designed around teams. current faculty members receive merit and cost-of-
living pay increases, their salaries typically do not
Team-based pay rewards employees according to equal those of new hires. In effect, university faculty
the outcome produced by the team. It has a greater can command higher salaries by changing employers
emphasis on goal accomplishment of teams. An than by remaining in long-term positions.
example of team-based pay is a commission shared
among several members of a sales force that worked
together to sell a real estate property.

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CHAPTER 7 HUMAN RESOURCES 111

In the long run, wage compression could lead to hospitality companies cannot afford. For instance, a
dissatisfaction among senior employees who see a hospitality company may have to increase the pay
shrinking gap between their salaries and those of new offered to new room attendants in order to attract new
hires. Some would argue that current employees are hires. But if the company increases the wages of all
worth more to a company because of their experience room attendants to maintain equity, the next higher
and expertise. However, competition for a limited group of employees will also want pay increases
number of new hires drives salaries and wages up to maintain what they feel is the appropriate range
faster than merit pay and cost-of-living increases do between salaries. As a result, employers can be forced
for current employees. Companies are caught in a to successively increase the wages of all employees.
trap of potentially losing senior employees because
of the inequity these employees feel when comparing The best way to approach the problems created by
their salaries with those of new hires. While many wage compression and expansion is to analyze the
employees cannot leave because they are tied to a total cost of each employee. It is interesting to note
benefit system, their productivity may decline as a that employees with longer tenure typically cost more
result of wage compression. in benefits than do new employees. While replacing
current employees with new hires at higher wages
Wage expansion occurs when companies raise the may appear to increase the overall compensation
wages of current employees to keep their salaries in program, in reality it may not, primarily because the
line with the higher wages of new hires. Theoretically, company pays less in overall compensation to new
such programs can result in substantial increases in hires. Some companies may justify wage compression
the overall wages of all employees, a result that many by a complete analysis of all compensation programs.

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CHAPTER 7 HUMAN RESOURCES 112

WRAP UP
CONCLUSION                               
When most people hear the word “compensation,” they think about the
wages or salaries that people earn in return for work. However, wages and
salaries represent only part of the total compensation employees receive.
An effective compensation program consists of both cash and non-cash
rewards—salaries and wages as well as other benefits. None of these
rewards are randomly chosen. Instead, they are intended to support the
company’s compensation philosophy, to motivate and reward performances
that are in line with company objectives, and to provide a positive rate of
return on investments.

A company’s compensation philosophy articulates where the company

wants its pay policies to be in the marketplace. It also articulates how
the company will reward and motivate employees. All of the methods—
including cash, equity, and benefits—that employers use to pay for the
work of employees are called the total reward program. The elements of
the total reward program are monetary compensation and nonmonetary
compensation. Nonmonetary compensation is basically the cultural aspect
of the organization. This chapter concentrated on monetary compensation.

Review Questions

1
What are the definitions of cost of living and the
consumer price index?

2
What are the major influences on compensation plans
described in this chapter? Explain each one.

3
What are the theories of Maslow, Alderfer,
Herzberg, and McClelland?

4
What are the process theories defined in this chapter?

5
What are the methods of determining job worth? What
are compensable factors?

2016 American Hotel & Lodging Educational Institute

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