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Reward strategies in the tourism and hospitality industry - Coggle Diagram
Reward strategies in the tourism and hospitality industry
Employee and employer views of pay
the contract for payment will be satisfactory in so far as it meets the objectives of the parties
Employee objectives for the contract for payment
Purchasing power:
In simple terms, employees will ask themselves how much they can buy
with their earnings
employees will rarely be truly
satisfied about their purchasing power
marketing and advertizing portray a wide array of goods or services
Felt to be fair
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
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
who will seek to create a more fair division of wealth
based often on notions of social and economic justice
Relativities
whether it is reasonable compared to jobs done by other people
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
Recognition: most employees want to see their personal contribution recognized either to be reassured of their worth or to facilitate career progression.
Composition: 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
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
being seen as a low-paying employer will mean an organization has a reputation as being a poor employer
Competition
the need to pay rates that are sufficiently competitive to sustain he employment of the right number of appropriately qualified and skilled employees for the organization’s needs
competition is the need for a good fit to ensure for example that employers are
not over paying employees
Control: the manner in which organizations have to consider controlling pay and particularly the extent to which money may be saved, though changes with regard to legislation in areas
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
In reality though there may be
a number of means to achieve this
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, meaning that the proportion of labour costs is
higher than most other industries.
Change management
Pay may be used as part of a broader change management process
employers will be seeking an approach to reward management which is likely to have several principal objectives
Attract and retain suitable employees.
Maintain or improve levels of employee performance.
Comply with employment legislation
there will be a number of other influences on pay
determination that will affect such considerations
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
the importance of external market comparisons
There are also internal labour market mechanisms in which the skills and experience of employees will
have a bearing on their pay
collective bargaining, where pay rates are determined through collective negotiations with trade
unions or other employee representatives.
determination of pay in tourism and hospitality has traditionally been a matter of managerial prerogative
‘the majority of academic evidence concurs in suggesting both that basic rates of pay in hotels and catering are inadequate and
employers are frequently ruthless in pursuing low-pay strategies
Wage regulation in tourism and hospitality
to place the emergence of the NMW in context though it is worth briefly mentioning wages
councils, which had previously played a role in setting a de-facto minimum wage
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
Low Pay Commission (LPC), which was established in July 1997 as
a statutory body and has continued to play a key role even after the enactment of the minimum wage legislation.
The reaction to the NMW was mixed. On the one hand employers views were
generally favourable about what they felt was an acceptable rate
On the other hand, trade unions and the LPU were less sanguine at what they
felt to be an overly prudent and overcautious rate
In addition to basic pay there are a number of other aspects which can be considered in reviewing payment issues in tourism and hospitality
annual review of hotels, pubs and restaurants note a number of additional
areas where employees could enhance basic pay
Alternatively some of the surveyed hotels paid a premium for those hours worked
at night with IDS citing
In over half of the schemes payments are
related to sales, with profit- and performance-related payments
The practice of tipping
Tipping may allow some tourism and hospitality workers to significantly augment their income, though the potential impact with regards to issues
Tipping in this latter view becomes an important managerial tool for
the indirect control of employees in the employee–customer interaction , as well as
potentially suppressing interest in more collective power,
although tipping is an internationally recognizable behaviour, the actual practice is heavily influenced by societal cultural consideration
motives underlying tipping
Desire for social approval.
To compensate servers equitably for their work
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
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
Smiling at customers.
Server introduction in a genuine and professional manner
Touching customers.
Credit card insignia on tip trays.
Writing ‘Thank You’ on checks.
Drawing a ‘happy face’ on checks.
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.
Calling customer by name.
Fiddles and knock-offs
‘they are acts of dishonesty which the people involved do not consider dishonest
Knock-offs can also be considered a form of fiddle involving
the purloining of (usually) small items such as soap, linen and towels
Whatever arrangements exist for the allocation of fiddles and knock-offs
there are some grounds for believing that, as with tipping, these aspects of informal rewards militate against the development of a collective workplace or occupational
ethic, fostering individualism and competitiveness
Other benefits
many critiques have suggested that the use of total in this instance is
clearly a misnomer, and neglects a variety of other rewards
research suggests that
most tourism and hospitality workers are less likely to enjoy such benefit