Strategies For Human Capital Management In Hospitality Industry

Overview of the Business

Managing Human Capital

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Management of Human capital can be understood as a complete set of activities that includes recruitment, management, development and optimization of human resources. This is also known as Human Resources management (Greer et al. 2017). Here Human Capital or Human Resource refers to the collective knowledge, skills and creative possessed by individuals within an organization (Allen et al. 2015; Ketchen et al. 2017)

Aim of the report:

The aim of this report is to assess the strategies of human capital management and its related practices and policies within a particular organization. The purpose is to understand the importance of such strategies, policies and practices and develop effective strategies, policies and practices for the organization that can be used to manage the human capital.

The business:

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The chosen business for this report is in the hotel and hospitality industry. The organization is based in Malaysia, and plans to extend into the Indo-China region. The organization plans to open several hotels across the Indo-Chinese regions of Cambodia in the next three years.

Size of operations:

The organization plans to invest about USD 6 million over the next 3 years on this project, setting up resorts on  Bokor Hill Station, Kratie, Koh Ker and Angkor Wat. The resorts would employ about  360 employees, including 30 in managerial and senior managerial positions.


Competition within these regions are not very high, with only a few high ranking (5 star and above) hospitality industries having their businesses in Cambodia such a Marriot, Sofitel, Rosewod, Belmond, Raffles, J7 and Borei. Most of these resorts provide luxury accommodations which cannot be afforded by majority of the public (Koens and Wood 2017).

Home Country:

The organization is based out of Malaysia, with its headquarters in Kuala Lumpur. The organization runs its main operations from Malaysia.

Organizational Expansion:

The organization plans to expand its business into Cambodia, by setting up resorts in three tourist attractions in Cambodia, namely: Bokor Hill Station, Kratie, Koh Ker and Angkor Wat. Each of the resort would employ 300 employees and 70 people in management position. Each of the resorts would cover an estimated 20 acre land, and include amenities such as Banquet halls, swimming pools, bars and mini-bars, restaurant, spa and fitness centers.

Structure of the report:

In the given analysis, the strategies, policies and practices for human capital management used by the organization would be analyzed and outlined, such as the number of middle and senior management that needs to be hired for the project, and how they would be recruited; the need for senior or junior managers; optimal mix of managers; need for qualifications and experience by the managers; the compensation and benefit package that would be offered; acclimatization and training program that can be utilized and how the managers can be retained in the organization (Collings et al. 2018).

Strategies, Policies and Practices of Human Capital Management in the Hospitality Industry

The number of middle to senior managers to recruit and where would they be recruited from. 

The number of management positions that would be needed for the expansion of the organization in Cambodia includes 4 people in senior management positions, 12 people in middle management positions and 54 people in the position of lower management. The hierarchy of the management would start from the CEO (Chairman Ex Officio) to whom the CFO (Chief Finance Officer), COO (Chief Operations Officer) and Business Manager Head would report to. The CEO, CFO, COO and Business Managers would represent the upper or senior management of the organization. The Middle management would include the managers reporting to the CFO, COO and Business managers. This could include Logistics and Supply Chain Finance Manager, Marketing and Sales Finance Manager, Accounting Manager and Productions Manager who would report to the CFO; Operations Managers to the COO; Human Resources Manager, Sales manager, IT manager, Security manager, Housekeeping Managers, Quality manager, Food and Beverages managers and Regional managers who would report to the Business managers (Heyden et al. 2018). The lower management would include people who would be reporting to the middle management positions and would include supervisors, front office managers, accountants, business development managers, customer relationships managers, sales managers, housekeeping executives, purchase officers, inventory controllers, Food and Beverage controllers, training managers, chief engineers, Safety officers, security officers, quality analysts and inspection officers (Evans 2017; Ladkin and Kichuk 2017).

The lower management would be mainly selected from Cambodia, because this level of the management would be at the maximum point of contact with the workers. Since the workers would also be selected from Cambodia, it selecting lower management from the same country would help in better communication between them. Also, selecting workers and lower management from the country of operation can reduce the costs since employing foreign nationals or expatriates can increase the recruitment expenses at that level. The middle management can include nationals from Cambodia, as well as expatriates from other countries, with relevant experience in the specific line of work. This can ensure that the organization hires individuals with the right amount of experience, qualification and expertise to help the functioning of the organization at the optimal levels, thereby supporting further growth. The upper management would be hired from Malaysia, and can include Malaysian Nationals, Foreign Nationals or Expatriates (Boon et al. 2018). This strategy would ensure proper collaboration with the upper management of the headquarters of the organization that is based in Malaysia. Since the upper management would have the maximum responsibilities, it is important to keep a wide option in the selection of the right individuals for upper management based on their skills, experiences and qualifications that can allow them to take care of their responsibilities (Lasserre 2017).

Middle and Senior Management Hiring Process

Need to hire senior and junior managers and the optimal mix for both. 

Both senior and junior management levels are vital for the smooth running of an organization. The multi tier system of management helps in a more organized way of handling and taking care of responsibilities, where the managers higher up in the hierarchy would be responsible for larger amounts of responsibilities and managers lower down would have more specific responsibilities. The lower management would in turn be reporting to the middle or upper management, thereby allowing the upper management to monitor performance of the organization at the ground levels through the lower management (Kermanshachi et al. 2018). The lower management can also ensure a comprehensive focus in each aspect of the organizations process in a better manner, since each manager in the lower level would have specific responsibilities to take care of. Hiring both Senior and junior managers can also help in the incorporation of experience as well as enthusiasm and energy in the organization (Benoliel 2017). Senior managers can help to impart their experiences in the business process which can help them to monitor the performance of the lower management and the organization, while the lower management can incorporate energy and enthusiasm. Many authors have supported that managers who are relatively new and inexperienced tend to have more enthusiasm and energy, as they are eager to prove themselves and their competencies as the managers; they tend to take more risks and chances, while experienced managers tend to be more deliberate and cautious and are in a less hurry to prove their abilities, since their experiences already shows it (Oke et al. 2018; Brandon-Jones et al. 2016). Thus hiring both senior and junior managers’ helps to bring not only experience but also energy and enthusiasm in the organization, and help to motivate people to perform better. Senior and experienced managers also helps to mentor the inexperienced or new managers in their roles and responsibilities, thereby helping them to develop their competencies and take up more responsibilities in the organization. Thus such mentoring roles help in the growth of the managers (Hillson and Murray-Webster 2017).

 It is vital to maintain an optimal ratio between the experienced and inexperienced managers within the organization. According to some studies, a ratio of one senior manager to 2-4 junior managers can be considered as the most optimal ratio. The small number of junior managers can ensure that the senior managers are able to give proper attention to the performance of the junior managers reporting to them, analyze their strengths and limitations. This ratio can be used for Upper and Middle management since only a few managers would be present at the upper management (Csikszentmihalyi 2014; Soltis et al. 2018; Marchington 2015).

Optimal Mix of Managers

Need for the employees to have university and institutional qualification versus relevant work experience.

University and institutional qualifications as well as work experiences are vital to ensure the proper management of the workforce and direct the organization towards growth. It is vital therefore that both these ‘human capitals’ be focused on by the Human Resources Management, ensuring that individuals with qualifications and experiences are hired to run the organization. For the junior managers or inexperienced managers, qualifications can help to understand the extent of knowledge and skills possessed by the individuals that can help them to take up their responsibilities. Since the new managers often does not have significant amount of relevant experiences, their qualifications can be an indicator of their knowledge and expertise (Sheehan 2014). Here qualification can imply both the different academic as well as professional degrees held by the person, the specialized knowledge possessed by the person as well as the individual merit and competency that can be attributed by their academic performances. Relevant academic and professional qualifications can help to develop knowledge about the various theories, principles, philosophies and strategies that can be used for planning, organizing, managing and leading people in the organization (Debroux 2017). Individuals with good qualifications can be expected to become efficient managers, thereby supporting that the qualifications can be indicators of their competencies and capacities. Also, it has been suggested that individuals who are highly competent and motivated tend to have more qualifications and degrees to support them (Jackson et al. 2014). At the level of the employees, qualifications are equally important as it can help the managers to assess how competent the employees might be to execute their work, and to identify how best to utilize their talents in the organization. For new employees who lack experience, the qualifications can be a key index for the recruiters for the selection process (Darwish et al. 2016).

Work experience is another important factor that needs to be considered by the recruiters, as it can help to understand the extent of practical and operational capacity of the managers or employees. Individuals who are more experienced have faced more real life scenarios, and know how to utilize their knowledge in professional work (Peltonen and Arenius 2016). Good work experience can support effective team work, problem solving and communication skills in both managers and employees, which can help them to do their work in a better manner and also to help the new employees or managers with their work, thereby improving their employability skills. According to authors, work experiences can help to go beyond the theoretical knowledge gained through the qualifications, helps to implement practical application of the gained knowledge thereby improving competency as well as provide provides an advantage to the organizations through increased competency of the employees or managers (Hsieh 2016; Csikszentmihalyi 2014; Soltis et al. 2018; Marchington 2015)

Compensation and Benefits Packages

Determining an attractive yet competitive compensation and benefit package for the employees

Developing an attractive and competitive compensation and benefit package for the employees is crucial to attract skilled and competent individuals in the work profile and the organization and also ensures that the organization does not exploit the human resources or end up overpaying them thereby causing losses for the organization. A competitive compensation or benefit package takes into account the current industries standards followed in the country or for a particular job post, offering a comparable benefits and packages for the employees (Gupta and Shaw 2014). The organization can also set their standards and reputation among the employees, for example organizations paying the best competitive packages have better reputations and retention of the employees compared to organization not providing similar packages or compensations (Frandsen 2016). A comprehensive employee benefit package can include many components such as health insurance for all employees, options from paid time off or paid leaves from work (which can include paid holidays, paid sick leaves, paid vacation leaves, paid personal leaves and leaves for bereavement), short term and long term disability insurances, dental insurance, life insurance, retirement plans and Flexible Spending Accounts for healthcare (Kristal 2017; Xavier 2014; Yan and Sloan 2016).

For determining compensation for each employee, the industries standards should be analyzed (that is what other companies in the industry pay for similar job roles) to identify the range of salary or compensation (minimum to maximum) that is paid for a particular job role (Kristal 2017). From this range the compensations can be given based on the qualifications and experience of the employees as fixed during the recruitment. For the employees, the compensation can range from 1800 to 3000 Malaysian Ringgit. For management, the package can range from 3000 to 6000 Ringgit per month. The benefits can include health insurance coverage for 12000 Ringgit per annum for employees and 24000 Ringgit per annum for the management. The number of paid leaves for all employees can be calculated at 30 per annum, to include the sick leaves, personal leaves and vacations. Leaves such as Sabbaticals, maternity leaves, leaves for bereavement and funerals can be considered from case to case and provided additionally. Disability insurances are also important as it can help to support employees injured in the line of work, with the organization taking care of all healthcare expense of the employees, therefore having not expense caps. Additional Flexible Spending Accounts can be given to the employees to help their medical expenses. Healthcare coverage of 12,000 Ringgit can be given to the employees to cover the healthcare expenses of their dependant family members also (Xavier 2014; Yan and Sloan 2016).

Acclimatization and Training Programs

Acclimatization and training program that can assist expatriate employees to adapt to new culture and environment:

Cultural Education and Awareness Programs: These programs can help an organization to develop cultural awareness and respect to the cultural diversities in Cambodia. Such knowledge and competencies can help the employees to work in a multicultural environment, where different employees can be from different cultural backgrounds. This can also help expatriates to learn and adapt to the new culture and environment. Learning about the culture of Cambodians, including their beliefs and practices can help the employees to understand the expectation of the Cambodian customers, and thus serve them better. In hospitality, this is one of the most important aspects that can help the employees (Vaiman and Brewster 2015).

Work health and safety programs: These programs can help the employees to understand the safe working practices and maintain a safe and healthy work environment for themselves, other employees as well as the customers. This can help the new employees and expatriates to learn the safety and health regulations, policies and legal obligations of the organization and adapt such practices in real life (Clair and Milliman 2017).

Customer Relations Programs: These programs can help the employees to understand the effective strategies to deal with customers, in a way to maximize or enhance their experience and to foster loyalty and patronage. Additionally, customers or clients different countries and cultures can have different expectations, learning which can help foreign employees to address such needs in a better way (Anselmsson et al. 2016).

Developing Multicultural teams: Multicultural teams that involve employees from diverse cultural and national backgrounds can help in the development of cultural awareness and competency in the workforce. Multicultural teams that include employees from Cambodia can help them to understand the cultural norms and practices thereby supporting their acclimatization and adaptation to the new environment (Hajro et al. 2017).

Mentorship Programs: These programs can be helpful for every employee to learn and develop their skills and competencies, by learning from each other (mutual learning and development). For employees who are from outside the country or community, mentorship can provide the scope for learning from more experienced people through a mentor-mentee relation. A mentor, who has more knowledge and experience, can guide the new employee and thus helping their acclimatization and adaptation to the new job role (Yip and Kram 2016).

On Job Training Programs: This can help the employees to learn from hands on experiences, learning from their observations or challenges faced in day to day work, and then utilizing them in practice. Such knowledge can help employees to adapt to the working requirements of the job (Yip and Kram 2016).

Retention Programs for Managers

How to retain this group of employees

Retention of the managers and employees is as important as recruitment of skilled employees and managers. Organizations often spend a significant amount of time and resource to train, acclimatize and develop employees and managers to develop skills that are needed by their clientele. Employees and managers with the right set of experiences and skills can ensure the retention of such human resources and human capital. Several strategies can be used to retain a group of efficient, skilled and experienced employees (Bansal 2014). These strategies can include:

Providing attractive compensations and benefits: Good compensations and benefits can ensure that employees do not want to leave the organization thereby retaining skilled and experienced workers. Better packages and compensations also can generally imply that the employers are concerned about the employees thereby improving retention (Cloutier et al. 2015).

Strong and effective screening process: Hiring the right people can also ensure that the right talents are being hired who would have higher chances to continue working with the organization and won’t leave in the face of adversities (Lewis and Sequeira 2016).

Reducing employee stress: Activities and programs that can reduce stress among workers and increase a sense of enjoyment and relaxation between work activities can motivate people to continue their association with the organization. Reducing the stress at work can also support better work satisfaction and thereby retain employees (Cloutier et al. 2015).

Developing a positive, healthy and respectful work environment: A good environment can help to ensure that all the employees are respected and follow professional code of conduct in the workplace. A sense of mutual respect between employees and management also can improve job satisfaction and retention (Cloutier et al. 2015).

Focusing on job satisfaction of the employees: Strategies that can improve the job satisfaction can be vital to retain the employees as they enjoy being a part of the organization as well as contribute actively to the growth of the organization. Happier employees are less likely to leave the organization (Lewis and Sequeira 2016).

Supporting employees to balance their work and personal life: Helping employees to balance their work and personal life can foster a sense of care towards the employees and their personal lives and wellbeing by the employers, which can improve their trust on the organization and improve retention (Cloutier et al. 2015).

Training and Development programs: Training and development programs can help the employees to develop their skills and competencies and improve their employability skills, helping them towards professional and personal development. This can foster a sense of trust and respect for the employer and thus helping retention (Lewis and Sequeira 2016).


Rewards and Recognition: Giving rewards and recognitions are also vital as it can imply that the organizations recognize positive contributions by the employees through recognitions and rewards as well as giving them prospects for further growth in the organization (Lewis and Sequeira 2016).


The analysis of the strategies for Human Capital Management provided the following information. The total number of middle and senior management that would be needed to setup and maintain the operations in Cambodia is about 70 people, of which 4 positions would be at the top of the hierarchy (CEO, EFO, COO and Business Head), 12 managers would be reporting to this upper management and 54 supervisors would be reporting to the 12 middle management position. The employees and the lower management would be primarily recruited from Cambodia, while the middle and upper management would be recruited from Expatriates and Malaysian citizens. This combination would allow better communication between the Cambodian workers and the management, and also with the Board of Directors in Malaysia with the operations in Cambodia. The management would have a combination of both senior management staff as well as junior management staff. The senior management can help the junior management to learn their work by imparting their own experiences and guiding the management trainees. An optimal ratio of 2 to 4 junior managers to 1 senior manager would be maintained for best outcomes. Focus would be given to both qualifications as well as experienced employees during the recruitment process, with new (or fresher) recruits hired based on their qualifications and academic merits or achievements and experienced employees hired based on the relevant work experiences as well as qualifications. The benefits and compensations would be based upon the industry’s standards, and providing the best pay within the range for deserving candidates. Furthermore, acclimatizing and training programs would also be utilized to develop the skills and competencies of the workers, and help expatriate employees to adapt to the new working environment and working culture. Strategies to improve retention would also be focused on since it would help the organization to retain skilled and experienced workforce.


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