Reward strategies in the tourism and hospitality industry
Employee and employer views of pay
Employee objectives for the contract for payment
Purchasing power
determine the standard of living of individual employees
employees will rarely be truly satisfied about their purchasing power
has become ever more resonant in an era of conspicuous consumption in which marketing and advertizing portray a wide array of goods or services
Felt to be fair
captured in the idiom of ‘a fair’s day pay for a fair day’s work’
employees tend to have a strong sense of what they feel is an appropriate level of payment which is fair to the job they are doing
employees who feel underpaid are likely to withdraw from the job and are more likely to be absent or late
Rights
the manner in which wealth is currently shared out is one which engenders much debate and many employees might feel that they are not getting a reasonable or fair share of the wealth that is created
often be expressed by trade unions in particular, who will seek to create a more fair division of wealth
based often on notions of social and economic justice.
Relativities
similar to the issues considered in the discussion of felt to be fair
Comparison may take place at a number of levels from the immediacy of the person sitting at the next desk to other companies or other professional or occupational groups
rights and relativities are particularly important and will often lie at the heart of much of the debate and controversy which is generated about pay and especially whether people are being ‘fairly’ paid
Recognition
most employees want to see their personal contribution recognized either to be reassured of their worth or to facilitate career progression
may well be financial recognition, though in reality there may be other aspects as well as the financial in recognizing and improving performance.
Composition
refers to the issue of how a pay package is made up and how this may vary between individual employees, depending on things like age or sex
issues include aspects such as overtime and incentive or performance-related pay
Employer objectives for the contract of payment
Prestige
there is a comfortable and understandable conviction among managers that it is “a good thing” to be a good payer
attract the best labour which is available to an organization
Competition
key issue is the need to pay rates that are sufficiently competitive to sustain the employment of the right number of appropriately qualified and skilled employees for the organization’s needs
key aspect is the need for a good fit to ensure
the manner in which the organization is interacting with the external labour market and ensuring that they are getting the right kind of labour at the right kind of price
Control
organizations have to consider controlling pay and particularly the extent to which money may be saved
changes with regard to legislation in areas such as redundancy mean that such measures are less apparent in organizations.
Motivation and performance
At one level there is a simple issue facing organizations in terms of their ability to use payment to motivate employees to perform well
Cost
employees are concerned with their purchasing power, so employers are interested in the absolute cost of payment
organizations will be concerned of the impact on labour costs on profitability or cost effectiveness
This issue has a particular resonance in tourism and hospitality
due to its labour intensive nature
Change management
principal objectives
Maintain or improve levels of employee performance
Comply with employment legislation
Attract and retain suitable employees
other influences
Individual characteristics
Labour market –
Beliefs about the worth of the job
Strength of bargaining groups
Government intervention and regulatory pressures
Remuneration in tourism and hospitality
Basic or base pay
there are a number of approaches to the setting of base pay rates
the organization’s wage budget is divided among employees on the basis of assessing the nature and size of the job they do
collective bargaining, where pay rates are determined through collective negotiations with trade unions or other employee representatives
g pay in tourism and hospitality the first point which is worth noting is the enduring and prevailing existence of low pay in the sector.
Whilst the hotel and catering sub-sector is clearly low paid, the picture in other areas of the tourism sector may be more mixed
Wage regulation in tourism and hospitality
The NMW marks a significant change in the British employment landscape and will be discussed in due course
The NMW now seems a well established aspect of the employment landscape but prior to its introduction there was vociferous debate about whether it should even be introduced
The practice of tipping
The notion of tipping is important in a number of ways, not least in its economic importance
Tipping may allow some tourism and hospitality workers to significantly augment their income
the possibility of tipping being used as a managerial mechanism to encourage individualization and subjugation of employees
‘although tipping is an internationally recognizable behaviour, the actual practice is heavily influenced by societal cultural considerations’
Tipping is then largely driven by socio-cultural norms and/or individual conscience
The point is often made as well that tipping means losing sight of the fact that the vast majority of people in tipping positions are generally in low-wage, lowstatus occupations
Lynn et al. (1993) suggest the following
Desire for social approval.
To compensate servers equitably for their work (i.e. reward their effort).
Desire for good service in the future.
Desire for status and power.
a number of ways in which servers’ are likely to increase their tips
Credit card insignia on tip trays.
Writing ‘Thank You’ on checks.
Touching customers.
Drawing a ‘happy face’ on checks
Smiling at customers.
Wearing a flower in hair and other means of personalizing the server’s appearance.
Entertaining customers by for example telling a joke.
Forecasting good weather.
Squatting next to table, though this is more likely to work in a casual dining environment, compared to fine-dining where it may be considered inappropriate.
Calling customer by name.
Server introduction in a genuine and professional manner.
Fiddles and knock-offs
accommodation and tipping represent the more formalized aspects of the reward package in tourism and hospitality it is also briefly worth considering
fiddles and knock-offs
Fiddles generally involve pilferage from organizations, usually in a monetary sense
Knock-offs can also be considered a form of fiddle involving
the purloining of (usually) small items such as soap, linen and towels
the notion of individualism and the extent to which this is exacerbated by these practices
Other benefits
survey of 20 hotel companies IDS (2005b)
three quarters provided free meals and staff discounts on rooms, restaurants and shops within the hotel
Twenty per cent offered free use
of leisure facilities, including spas, beauty therapists, chiropodists and gyms.
Around a sixth of hotels offered a pension scheme
Only one hotel provided life
assurance, dental, optical and private medical care
in reality research suggests that most tourism and hospitality workers are less likely to enjoy such benefits