Abstract

Human resources work not only deals with the old traditional recruitment and selection, training
and development activities, but its activities extend to the farthest corners of many new and
prominent areas. Organizations with a skilled and experienced workforce create competitive
advantage and are considered the most sustainable source of competitive advantage. The result of
this study can provide HR professionals with useful and valuable information to help determine
which HR practices should be implemented effectively in their organizations. The study will
further testify to the relationship between them, and provide valuable information for future hotel
management needs. For the managerial level, it helps formulate strategies and identify the factors
that guide managers in formulating policies, and provides employees with a path that maximizes
their service. Therefore, it is very important to work in more detail on the relationship between
the human resource management practices of the hotel industry and the performance of its
employees. This study examined the impact of human resource management practices, namely
compensation, performance appraisal, evaluation , training and development, and promotion
practices, on employee performance in selected hotel organizations.

Keywords: Human resource management (HRM), Employee performance, hotel industry,

compensation, performance evaluation, appraisal, training and development and promotion.

Introduction
The hotel industry has shown its importance in the world market with a huge
contribution to the Indian economy. The entry of global players into the hotel industry has
created enormous challenges for Indian companies. For this reason, Indian hotel companies have
been forced to adopt and implement innovative changes in their HR practices. They realized that
in today's competitive business environment, human resource practices are what constitutes the
framework of culture in business management; raise employee awareness of the need to achieve
business objectives in the best and ethical way possible. It is widely recognized that employees
are a vital part of the organization's resources, with the potential to increase the organization's
modest viable advantage. Consequently, the HR manager in the hotel industries would focus on
the potential workforce and emphasize skills development, technical development and actual

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performance at work by adopting effective resource practices. We will examine the relationship
between high-performance HR practices such as job design, training and development,
motivation, supervisory support, work environment and compensation in executing the work of
employees in the hotel organization in Calcutta. It also examines the impact of high-performance
.
HR practices on employee job performance.
The nature and mechanism of the various operations have changed rapidly.
World is now a global village where globalization is an important entity. Countries with
proactive approaches have identified globalization as an important element in the business world,
and the business world is now more dynamic. Previously, allocating resources to HR
activities such as HR training and development, organizational development and relocation was
considered a major expense, but now people call it an investment. One of the common emerging
beliefs is that "employees are capital" and are considered the most valuable assets.
In particular, human resource practices such as job design, training and development, motivation,
supervisory support, work environment, and compensation are believed to improve the
performance of employees and organizations. This study focuses on the impact that high-
performance HR practices have on improving employee job performance.
The nature of human resource management practices and their implementation and use in
organizations in our country have not yet been standardized. I propose to identify the problem of
human resource management practices and its impact on the performance of
employees in selected hospitality organizations.

Rewards can be direct and indirect. Providing respectable compensation to persons working in
organization have soothing effect on both employee and organizational performance. People get
paid but living from hand to mouth. How anyone can expect that such an employee will give
his/her hundred percent, how can government or private sector will promote the idea of
organizational citizenship behavior, how you can believe there will be presence of organizational
or employee commitment? Performance evaluation and promotion practices are normally based
on standard criteria, procedures, and policies and performance by qualified and experienced
persons of organization. Employee belief and perception about the fairness of such practices
matters a lot. For conducting performance evaluation employees must know what is expected

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from them and what they can do. Promotion is the recognition of employee efforts and his
commitment to work. Getting higher and higher promotion is the ultimate desire of each person
working in any sort of organization. The theoretical literature suggests that HMR practices
increase productivity by increasing employees‟ skills and motivation. Moreover, HRM practices
contribute to business objectives through strategic innovation or technical competence. Recent
empirical studies on larger companies supported the basic assumptions of HRM theory
However, does this theory apply to small-scale enterprises as well?
HRM also carries costs and they might neutralize the positive effects of HRM in small-scale
enterprises. HRM is an investment, and thus, it costs time and/or money. The current
performance of employees may even be decreasing because of the time spent on training.
Moreover, HRM can only have effects when employees stay in the company for a certain period
of time. Otherwise the company suffers a loss because of the investments in HRM. Thus, the
benefits of HRM must exceed costs invested in HRM. Since small-scale enterprises have limited
financial resources it is very well possible that large investments in HRM do not pay off. During
the last decade, the personnel/HRM field has shifted from a micro focus on individual HRM
practices to a debate on how HRM as a more holistic management approach may contribute to
the competitive advantage of the organizations.
Three different perspectives have been used in recent researches on the relationship between
HRM practices and employee‟s performance.

Literature review

It is a recognized fact that the greatest asset of any institution is its human resources (HR).
These resources play a central role in achieving institutional goals. The
administration of the institution cannot achieve the desired objectives without the proper use of
human resources. To do this, the administration must manage these resources effectively and
efficiently.
The activities carried out by the administration to manage (recruit, select, train, motivate and
retain) its employees are known as Human Resource Management Practices (HRMP's).
Those who study strategic human resource management have come to believe that the way a
company manages its people affects its performance.

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This idea is strongly reflected in the debate on high performance human resource management
(HPHR), in which the effect of HR is assumed to have a positive effect on the employee level .

We live in an era where the corporate world has become a village and the companies of the
companies face cutthroat competition from around the world. A source of
competitive advantages for any company is its human resources
Based on this empirical evidence, it is also becoming increasingly clear that human resources
are an important element that can help an organization be more effective and gain a competitive
advantage. Using a resource-based organizational perspective, Barney (1995)
[6] suggests that organizations can easily develop a sustainable competitive advantage by
generating unique values from employees that is difficult for competitors to replicate.
More organizations now see their people as an asset to gain a competitive advantage
since other organizational resources, such as technology, new products, natural resources and
economies of scale are easier to replicate .

The impact of human resource management on the work performance of employees depends on
the employee's reaction to human resource management practices
, so the effects move in the direction of the employee's perception
on the human resource management practices
The adoption of best practices in the selection induces the flow of the set of qualifications of
better quality , adding value to the inventory of qualifications of the organization The use of best
HR practices shows a stronger correlation with business productivity in a high-growth industry
Extensive of the available research on the relationship between HR practices and employee
performance and suggested that there is a positive relationship between HR practices at
employees' work
  Performance and also revealed that in the competitive environment of the modern era
organizations are constantly improving the performance of their employees by improving their
HR practices
Parallel to the understanding that these human resources are vital to an organization; HRM
is also moving up the organizational hierarchy.
Human Resource Management aims to ensure that the organization obtains and retains the

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skilled, engaged and well-motivated
workforce it needs. This means taking steps to assess and meet people's future needs and to
improve and develop people's intrinsic capacities - their contributions, potential and
employability - by providing them with continuous learning and development opportunities.
Provides for the carrying out of recruitment and selection procedures, managerial development
and training activities linked to company needs.
Cooke (2000) included efficiency and effectiveness as ingredients of performance, as well as
competitiveness and productivity. S (he) further argued that training is the tool for developing
knowledge and skills as a means of increasing the individual's performance (efficiency and
effectiveness).
According to various researchers, monetary compensation and job satisfaction are
positively associated with each other. Compensation is a systematic approach to providing
monetary value to employees in exchange for the work performed. It can help you achieve a
range of goals, such as hiring, job performance, and job satisfaction.
Remuneration affects moral and job satisfaction. Often there is a balance to be struck between
the monetary value the employer is willing to pay and the feelings of value that employees
experience. In the hospitality sector it is one of the strongest problems, so the hospitality sector
cannot ignore it.
The job definition is a combination of job description and job specification. It clearly describes
the duties, responsibilities, working conditions and skills expected of a person doing that job
Ichniowski (1995) examining the productivity of steel workers, found that
the complementary system of HR practices affects workers' performance.
Most previous research has verified a significant relationship between HR practices and
Employee Outcomes Training programs help meet employees with the latest technology
and achieve strong competencies and skills to manage functions and the bases of introduced
technical equipment The training not only develops the employee mentally, but also repare them
to make better their health in order to be with active mind and more productive
thought for the organization Improving employee‟s selfefficacy at work will also assist in
pushing their performance to an improved and effective level and increasing their momentum on
their own behalf. This one also is achievable through adding it into the contents of training
program is of the opinion that for every employee to perform well there is the need for

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constant training and development. The right employee training, development and education
provide big payoffs for the employer in increased productivity, knowledge, loyalty, and
contribution to general growth of the firm .
Motivation plays an important role in performance and other activities and as such the manager
should know what motivation is and how subordinates can are motivated towards performance.
When employees have high autonomy, receive feedback about their performance, and have an
important, identifiable piece of work to do which requires skill variety, they may experience
feelings of happiness and therefore intrinsic motivation to keep performing well
A motivated employee is more likely to output more to the benefit of the organization They
continue to argue that most of the successful people are around, have been proved to be very
efficient time managers. A reward strategy can develop teamwork. Lawler states, “Reward
systems can support change and motivate people to accept change and gain the skills that fit the
changing nature of the business
It is the duty of supervisors to ensure that employee job performance is at maximum potential, it
would be advantageous for managers in all trades and industry sectors worldwide to understand
what types of employee supervisor interactions are associated with employee job performance. If

more work is delegated and responsibility is increased, employees are likely to see it as a sign of
appreciation and trust in their performance, which translates to a boost in selfesteem and
motivation to perform

Perception of supervisors has an impact on many employee outcomes related to production. They
went on to explain that perception of a supervisor has a positive correlation with motivation and
a negative correlation with stress in employees Work environment is considered to be an
important factor affected by transformational leadership and affecting performance. It is
composed of all factors related to job and organization, which influence the relationship between
employees, their job and the organization . Organizations in order to boost productivity design
work environment in a way that satisfies employees . Social, organizational and physical context
serve as the impetus for tasks and activities, and considerably influence workers‟ performance
and work output . Singh (2004), whose observations are more relevant in our cultural context,
argues that compensation is a behavior aligning mechanism of employees with business strategy
of the firm. Wright et al (2003) have argued that an employee will exert discretionary effort if

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proper performance management system is in place and is supported by compensation system
linked with the performance management system. The general purposes of the compensation
policy covers respecting employees‟ performance, maintaining a competitive labor market
conditions, maintain justice employee salaries, motivating employee performance and reduce
employee turnover [30]. Compensation performance is the result work of employee because it is
the strongest link for the planned goal and economy

Providing respectful compensation to the employees of an organization has soothing effect of

both organization and employees‟ performance. This study is very prolific for HR managers in
Hospitality organization as they would get a clear idea about the relationship of HR practices and
employees‟ job performance; as a result they can have more productive employees and can
retain efficient employees in their organization. Only the high performance HR practices such as
job design, training and development, motivation, supervisory support, working environment and
compensation influencing employees‟ job performance was considered for the study. It has both
practical and theoretical significance.

It advances knowledge and understanding of how HR practices affect employees‟ job

performance in Hospitality organization in Kolkata; and it may also be used to assist other
service organizations in formulating effective HR practices to increase performance of the
employees.

Objectives of the Study

Today HR department is going through tremendous pressure to get and retain skilled man power
for organization especially in hotel industry. To motivate, retain and satisfy the employee for
getting maximum effort, HR policies are really going through acid test. Employee‟s performance
is depending on various factors. Often there is a balance that must be reached between the
monetary value the employer is willing to pay and the sentiments of worth felt by the employees.
In hospitality industry it is one of the very strong issues, so that hotel industry must address it
SIT Journal of Management Vol. 3. No. 2: December 2013, Pp.654-674 Hazra, Sengupta, &

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Ghosh ISSN: 2278-9111 with right sprite and should think / take appropriate action. Here main
objectives of the study given below: 1. To evaluate the impact of HR policies on employee‟s
performance at 3 stars and above stars category hotels in Kolkata, West Bengal (WB). 2. To
recognize the deficient areas in HR policies which are needed to improve to satisfy the
employees for their better performance in hospitality sector in Kolkata, WB. Methodology of the
Study The study required to identify the employee performance on the basis of HR Policies
impact in three starts and above hotels at Kolkata in West Bengal. The data of this study have
collected through questionnaire designed on a 5-point Likert-type scale ranging from 1 to 5
where 1 means very dissatisfied and 5 means very satisfied. The respondents were asked to
evaluate the HR policies impact on employee performance at various hotels, where they are
working. The sample population for this study was composed of employee of various
departments of three stars and above hotels in WB between October 2012 and July 2013. In this
study we have 120 observations and are statistical analyzed such as factor analysis and multiple
regression analysis according to the respective objectives of the study with using the Statistical
Package for Social Sciences (SPSS) version 16. Hypotheses are utilized to fulfill the objectives
of the study. These hypotheses are expressed as follows: H₀: The HR policies have no impact on
employee‟s performance in three stars and above hotels in Kolkata, WB. H₁: The HR policies
have strong impact on employee‟s performance in three stars and above hotels in Kolkata, WB.
Factor analysis is variable redundancy technique and this analysis was conducted to create
correlated variable composites from the original 23 attributes and to identify a smaller set of
dimensions or factors. In this study, factors were retained only if they had values greater than or
equal to 1.0 of Eigen value and a factor loading greater than 0.6.5.

After the derived factor scores, we have applied in subsequent regression analysis where the
dependent variable was regressed against each of the factor scores derived from the factor
analysis and independent variables are the variables of each factors. The linear equation
commonly used for a regression analysis is Y= a + bx₁ +cx₂ + dx₃…… Where, Y is the
dependent variable and x₁, x₂, x₃… are the independent variables, and b, c, d are the coefficients
of the respective independent variables. In this study, multiple regression analysis was used to

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examine employees‟ levels of job satisfaction at their working place like three stars and above
hotels in Kolkata, WB. Findings of the Study This chapter is divided into two major sections.
The first section provides the demographic characteristics of the respondents. The second section
presents results on the respondents‟ on 23 attributes of the impact of HR policies at three stars
and above hotels in Kolkata, WB and also concentrates on the results of testing the proposed
research hypotheses in terms of factor analysis, multiple regression analysis. Demographic
Characteristics of the Respondents (N=120) The demographic characteristics of the respondents
are shown in Table 1 (in annexure I). The gender distribution of the respondents was not equal,
with 28.33% female respondents and 71.67% male respondents. The result shows age group of
the respondents was below 20 years (5%), followed by 21 to 30 years (68.33%), 31 to 40 years
(25%), 41 & above (1.67%) was very less. In terms of level of education, almost 59.16% of the
respondents had a university education level (graduate); 11.68% of the respondents had a post
graduate & above education, 20% of the respondents are belonging under graduate and other
9.16%. The result shows the educational attainment of the respondents is quite good and we can
say better than average. With regard to respondents' monthly salary of the job at three stars and
above hotel in WB, the largest group included those with a monthly salary of INR 11000 to
20000 (47.5%), INR 10,000 or less than 10,000 (14.16%), INR 21000 – 30000 (28.34%), and
INR 31000 & above (10%). We can conclude from the above income status that salary, which
they are getting, is better than the average and quite good also.

Result on the observation and their satisfaction with 120variables Initially we had 120 variables
and we have done reliability test of our questionnaire and result shows value of Cronbach‟s
Alpha 0.941 which is quite good but further we have done more study to get Cronbach‟s Alpha
based on standardized items 0.944. After that we canceled nine variables because their value was
not matched. Than we have done multicolinearity test to examine the correlation with each and
every variable and found correlation of the variables. Finally, we got fourteen variables
[Satisfactory compensation & Benefit Package, Good appraisal system, Secured Job, Total health
care system satisfactory, Organize various training regularly, Sufficient Retirement benefit
facilities, Reflect your performance Appraisal on performance, Flexible & satisfactory Working
Time, Fair & respectful treatment from Supervisor, Reasonable Workload, Salary &
Responsibilities are equal, Fair amount of Team spirit, Leave policy satisfactory, Satisfied with

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Vacation] which are depicted three factors. Then we run factor analysis and formal test like
KMO and Bartlett‟s test of sampling adequacy also are used to ensure that there are some
significant correlations among the variables in the input data. Here, KMO and Bartlett‟s test
result is 0.853 and cumulative variance explained 74.104%. It ensures the significant correlations
among the variables. The output of factor analysis is obtained through Principal Components
Analysis and specifying a rotation.

Conclusion
Employee‟s performance is crucial for the organization as it is closely linked to guest
satisfaction. It is therefore in the best interest of an organization to devote a substantial amount
of effort examining ways to improve as well as to maximize the employee‟s performance in their
workplace. The majority of the studies agreed that HR policies are vital for better performance
and also to solve an organization‟s turnover problem. Many of the studies recommended that
when creating a HR policies, hospitality organizations must make sure their total HR policies are
competitive not only within the industry. Results of this study indicated that many employees
satisfied on HR Policies at three star hotels in Kolkata, West Bengal (WB) only on few
attributes; but there is need to improve the rest attributes related with financial and non financial
HR Policies (e.g. Good physical working condition, Balance between work and person life,
Satisfactory working enthusiasm, Company valued their employee etc.) of three stars and above
employees of the
hotels in WB. Study also indicate that after certain years of experience employee quit from the
hotel sector as because of compensation are not equal to job responsibilities. Here we have found
very a few respondent aged above 40 years. That means to some extant employees are satisfied
at hotel sector in WB but experienced people are not satisfied with the total HR Policies at the
same sector. That is why they switch over other sector or industry for their betterments. To retain
the best manpower for the betterment of organization, the management should think or take some
measure, so that retention rate will become high. Though in correlation there are 14 variables and
we found correlation between them but when we have done regression then we found that
Reflect your performance Appraisal on performance is not at all significant. It proves that
industry should take necessary steps and think seriously. Not only that we found a few other

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variables are also not significant (e.g. Sufficient Retirement benefit facilities, Total health care
system satisfactory, Fair amount of Team spirit) means the employees are not happy also. It may
not reflect your performance Appraisal on performance but it is also a very serious point. Study
also indicates that after certain years of experience employees quit from the hotel sector as
because of those previous points and satisfactory level of the employees are not equal to job.
Here we have found only a very few persons out of total respondents aged above 40 years. Not
only that, if we go through the point reason to continue, we find that most of the respondents
prefer first point i.e. salary. So except salary, other areas require proper care or some more
attention. That means to some extant HR policies have really good impact on employee‟s
performance at hospitality sector in WB but experienced people do not perform well at the same
sector. That is why they switch over other sector or industry for their betterments. To retain the
best manpower for the betterment of organization which is the great challenge for HRM, they
should think or take some necessary measures to keep retention rate high .

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