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An Analysis of The Methodology Adopted by Hotel
An Analysis of The Methodology Adopted by Hotel
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* Assistant Professor, AISSMS’s College of HMCT, Pune, Maharashtra, India. E-mail: peshave.m@gmail.com
** Professor, Sinhgad Institute of Business Management, Mumbai, Maharashtra, India. Email: rajashreegujarathi@gmail.com
36 Atithya: A Journal of Hospitality Volume 1 Issue 1 January 2015
the Productivity Management System adopted and support for the relationship between work–family
implemented by the hospitality industry with an ob- conflict and marital satisfaction.
jective to identify the challenges in measuring pro- 6. Ching-Fu Chen, (2007) analyzed the cost efficien-
ductivity in the Hotels and to identify various meth- cy of Taiwan’s international tourist hotel sector. A
ods adopted by the them to measure the employee stochastic cost frontier function with three inputs
productivity and concluded that, the major reasons (i.e. labor, food and beverage, and materials) and
contributing to the ineffectiveness of the system are one output as the total revenue is specified and used
lack of management will, lack of common param- to estimate hotel efficiency. The results reveal that
eters of productivity measurement and intangible hotels in Taiwan are on average operating at 80%
nature of the product of the industry i.e. “Service”. efficiency.
2. Juan Gabrie, (2010) used time-series techniques 7. Gunjan M. Sanjeev, (2007) provided exploratory
to estimate the long-run relationship between real insights on measurement of efficiency of the hotel
wages and labour productivity in the Mexican tour- and restaurant companies operating in India. The
ism. The finding shows that the average labour pro- study also explores whether there is a relationship
ductivity depends positively on real wage, and are between the efficiency and size of the hotel and res-
weakly exogenous and causes labour productivity. taurant companies. The study identifies the top per-
Moreover, the impulse-response function shows that formers in this sector. Also, managers get important
a positive shock in real wages produces a small neg- insights for their strategic and operational decisions
ative effect in productivity for two years followed to improve performance.
by a large positive one.
8. Carlos Pestana Barros, (2005) discusses, by means
3. Christine A. Witt, (2010) discussed problems of of data envelopment analysis, the efficiency of in-
measuring productivity, together with specific rea- dividual hotels belonging to the Portuguese state-
sons for low productivity in the hotel sector. It is owned chain, Pousadas de Portugal, which is man-
suggested that increased usage of operations man- aged by the enterprise, ENATUR. By identifying the
agement techniques by hotel management is likely efficient hotels in a sample, the slacks in inputs and
to result in improved productivity, and various ex- outputs of the inefficient hotels and the peer group of
amples are presented of situations in which these efficient hotels, the data envelopment analysis stands
techniques can be successfully employed. out as one of the most promising techniques to aid
4. Peter Jones, (2009) examining the level of produc- the improvement of efficiency. Managerial implica-
tivity in the housekeeping departments in a chain tions arising from this study are also considered.
of 45 hotels. The paper reviews the concept of pro- 9. Hasan Kilic, (2005) report on an empirical research
ductivity and the issues relating to its measurement, study which investigated the factors influencing pro-
before reviewing previous studies of productivity ductivity in hotels in Northern Cyprus. According to
in the hotel sector. A number of factors are identi- the research findings staff recruitment, staff training,
fied that appear to affect productivity performance. meeting guest expectations, and service quality are
The paper concludes that there is no significant dif- the main productivity factors in hotels; while crises,
ference in productivity levels according to the size, technology, marketing, and forecasting are ranked
location, demand variability or age of the hotel, relatively low.
thereby refuting evidence from some prior studies.
10. Robert Johnston (2005) provides a structure for
5. Osman M. Karatepe, (2008) examined the effects analyzing productivity in service organizations by
of negative affectivity (NA) and positive affectiv- distinguishing between operational and customer
ity (PA) on work–family conflict and family–work productivity. The authors also identified some of the
conflict and the effects of both directions of conflict problems in measuring productivity, especially in a
on marital satisfaction and turnover intentions. The service setting, and then use a few examples to il-
findings of the study indicated that family–work lustrate the sometimes counterintuitive relationship
conflict has a detrimental impact on marital satis- between operational and customer productivity.
faction. However, this study provided no empirical
An Analysis of the Methodology Adopted by Hotel Industry for Measuring Employee Productivity... 37
measurement of productivity in the hospitality industry vi. Difficulties in measuring customer satisfaction.
possible is to make its output measurable and this is the
major challenge in front of the industry. The most suitable parameter to measure employee
productivity in the hospitality industry revolves around
ii. Lack of Knowledge about Productivity Management: the output of satisfied customers. Thus before calculating
The management of hotel industry basically posses the productivity, one has to measure the satisfaction level
expertise in the technical area of hotel operations. They of the hotel customers. This itself is a very complex task
are the masters in the field of hospitality. However, they since every customer has a different perception of being
lack the scientific and technical knowledge required for satisfied and measuring the comparative satisfaction level
implementation of productivity management system in of all the customers is a very difficult task thereby creating
their hotel. Moreover, due the hectic and busy schedule a challenge in productivity management.
of the managers, they are discouraged to acquire vii. Diverse operations.
any professional training in the area of productivity
management. Even if a person who posses the required The operations of the hospitality industry are diverse in
knowledge is hired, due to his varied duties he is not able nature. Thus every department is operationally different
to devote sufficient attention towards the said issue. from each other. Since the nature of work, skill sets
required, manpower requirement is different for every
iii. Lack of common parameters of measuring department, one cannot have uniform parameters of
productivity. measuring employee productivity thereby making
As mentioned earlier, measurement of productivity in productivity management in hotels more difficult.
the hospitality industry is a challenging task. However, Methodology adopted to measure employee
experts have suggested a few parameters on which the productivity in Hotels.
employee productivity can be measured in hotels. These
parameters differ from each other and different parameters In an effort to track the productivity of its employees, hotels
have to be used for measurement of productivity in have adopted various methods of measuring the employee
different operational areas of hotels depending upon its productivity. However, the suitability and effectiveness of
suitability. Thus to measure the productivity of the entire these methods needs to be tested. The following are the
hotel a combination of all the parameters have to be used widely used methods to measure employee productivity
thereby making the process more complex. Thus lack of by hotels.
common parameters of measurement of productivity is a i. Basis of Revenue generation:
big challenge for the hotel managers.
a. Total revenue generated per employee.
iv. Lack of scientific approach towards labour
b. Total food revenue generated per Food production
management.
staff.
Hotel managers being originated from the operations, c. Total food & beverage revenue generated per Food
tend to be more inclined towards operational issues. Thus & Beverage service staff.
labor management is a lower priority to these operational
d. Total room revenue generated per Front Office /
driven managers. Moreover, their limited knowledge and
Sales & Mktg. staff.
scientific approach towards labor management becomes a
biggest hurdle in productivity management. ii. Basis of Time frame:
v. Lack of management initiative. a. Average number of covers served per worked
hours. (Food Production & F & B Service staff)
Although productivity management is an important
b. Average number of check-ins / check-outs handled
management task, hotel managers are not very keen on the
per worked hours (Front office staff)
same. As discussed earlier, due to the various challenges
in implementing the same, managers tend to tackle the c. Average number of rooms serviced per worked
issue halfheartedly. Thus lack of management initiative is hours (Housekeeping staff)
another challenge of the hospitality industry with regards iii. Basis of guest satisfaction:
to productivity management.
An Analysis of the Methodology Adopted by Hotel Industry for Measuring Employee Productivity... 39
a. Average number of guest satisfaction points gener- a. Percentage of repeat guests generated.
ated per department.
b. Number of guest praises / positive feedbacks re- Findings
ceived per department / person.
c. Number of guest complaints / negative feedbacks Challenges faced by the hotel industry in
received per department / person. measuring employee productivity
iv. Basis of repeat business:
Observation No.1.
(Table No.1)
Points Awarded as per importance (%)
Challenges in measurement of productivity difficult in hotels (Where 1 = Least important & 7 = Most important)
1 2 3 4 5 6 7
Intangible Product (Characteristics of Service Industry) 2.5 1.9 6.9 17.0 35.2 19.5 17.0
Lack of Knowledge about Productivity Management. 2.5 2.5 10.7 23.9 35.8 17.0 7.5
Lack of common parameters of measuring productivity. 3.8 4.4 8.2 16.4 30.8 29.6 6.9
Lack of scientific approach towards labour management. 5.0 4.4 11.9 17.0 34.0 22.6 5.0
Lack of management initiative. 4.4 8.8 7.5 21.4 30.8 21.4 5.7
Difficulties in measuring customer satisfaction. 8.2 7.5 7.5 19.5 21.4 29.6 6.3
Diverse operations. 5.0 5.0 5.7 19.5 30.2 28.3 6.3
On the basis of importance, the highest rated factor for Methodology adopted to measure employee productivity
making measurement of productivity difficult in hotels is in Hotels:
“Intangible Product (Characteristics of Service Industry)”.
(Table No.2)
Whether used in
Points awarded as per the suitability (%)
your hotels
Methodology adopted to measure employee (Where 1 = Least suitable & 7 = Highest suitable)
(%)
productivity in Hotels
Yes No 1 2 3 4 5 6 7
Whether used in
Points awarded as per the suitability (%)
your hotels
Methodology adopted to measure employee (Where 1 = Least suitable & 7 = Highest suitable)
(%)
productivity in Hotels
Yes No 1 2 3 4 5 6 7
(Table No.3)
Pearson Chi-Square
Methodology adopted to measure employee productivity in Hotels
Value df Asymp. Sig. (2-sided)
1. Basis of Revenue generation:
Total revenue generated per employee. 23.990a 2 .000
Total food revenue generated per Food production staff. 36.484a 2 .000
Total food & beverage revenue generated per Food & Beverage service staff. 33.984a 2 .000
Total room revenue generated per Front Office / Sales & Mktg. staff. 8.960a 2 .011
2. Basis of Time frame:
Average number of covers served per worked hours. (Food Production & F & B Service
32.334a 2 .000
staff)
Average number of check-ins / check-outs handled per worked hours (Front office staff) 33.437a 2 .000
Average number of rooms serviced per worked hours (Housekeeping staff) 25.123a 2 .000
3. Basis of guest satisfaction:
Average number of guest satisfaction points generated per department. 2.250a 2 .325
Number of guest praises / positive feedbacks received per department / person. 3.347a 2 .188
Number of guest complaints / negative feedbacks received per department / person. 9.511a 2 .009
4. Basis of repeat business:
Percentage of repeat guests generated. 17.120a 2 .000
An Analysis of the Methodology Adopted by Hotel Industry for Measuring Employee Productivity... 41
(Chart No. 1)
(Chart No. 2)
42 Atithya: A Journal of Hospitality Volume 1 Issue 1 January 2015
(Chart No. 3)
Parameters on which no significant differences were observed between the three cities.
(Table No.4)
Methods of measuring employee productivity in hotels Difference in observations between the location of respondents
Basis of Revenue generation:
Total room revenue generated per Front Office / Sales & Mktg. staff. No significant difference
Parameters on which significant differences were observed between the three cities.
(Table No.5)
Methods of measuring employee productivity in hotels Difference in observations between the location of respondents
Methods of measuring employee productivity in hotels Difference in observations between the location of respondents
Total food revenue generated per Food production staff. Significant difference
Total food & beverage revenue generated per Food & Beverage
Significant difference
service staff.
Basis of Time frame:
Average number of covers served per worked hours. (Food Produc-
Significant difference
tion & F & B Service staff)
Average number of check-ins / check-outs handled per worked
Significant difference
hours (Front office staff)
Average number of rooms serviced per worked hours (Housekeep-
Significant difference
ing staff)
Basis of Guest Satisfaction:
Number of guest complaints / negative feedbacks received per de-
Significant difference
partment / person.
Basis of Repeat Business:
Percentage of repeat guests generated. Significant difference
Comparative study of challenges faced while measure employee productivity between the Hotel
Industry of Pune, Hyderabad & Bangalore cities:
(Chart No. 4)
(Table No.6)
ANOVA Table
Possible reasons for making measurement of productivity difficult in hotels: Sum of Squares df Mean Square F Sig.
Intangible Product (Characteristics of Ser- Between Groups 21.217 2 10.609 5.931 .003
vice Industry) * Respondents location Within Groups 279.022 156 1.789
Total 300.239 158
Lack of Knowledge about Productivity Between Groups 17.338 2 8.669 5.441 .005
Management. * Respondents location Within Groups 248.561 156 1.593
Total 265.899 158
Lack of common parameters of measuring Between Groups 5.317 2 2.659 1.305 .274
productivity. * Respondents location Within Groups 317.752 156 2.037
Total 323.069 158
44 Atithya: A Journal of Hospitality Volume 1 Issue 1 January 2015
ANOVA Table
Possible reasons for making measurement of productivity difficult in hotels: Sum of Squares df Mean Square F Sig.
Lack of scientific approach towards labour Between Groups 40.937 2 20.469 10.873 .000
management. * Respondents location Within Groups 293.666 156 1.882
Total 334.604 158
Lack of management initiative. * Respon- Between Groups 51.490 2 25.745 13.291 .000
dents location Within Groups 302.183 156 1.937
Total 353.673 158
Difficulties in measuring customer satis- Between Groups 34.043 2 17.021 6.451 .002
faction. * Respondents location
Within Groups 411.630 156 2.639
Total 445.673 158
Diverse operations. * Respondents loca- Between Groups 12.462 2 6.231 2.950 .055
tion
Within Groups 329.475 156 2.112
Total 341.937 158
Parameters on which no significant differences were observed between the three cities.
(Table No.7)
Challenges in measuring employee productivity in hotels Difference in observations between the location of respondents
Lack of common parameters of measuring productivity No significant difference
Diverse operations. No significant difference
Parameters on which significant differences were observed between the three cities.
(Table No.7)
Challenges in measuring employee productivity in hotels Difference in observations between the location of respondents
Intangible Product Significant difference
Lack of Knowledge about Productivity Management Significant difference
Lack of scientific approach towards labour management. Significant difference
Lack of management initiative. Significant difference
Difficulties in measuring customer satisfaction. Significant difference
3. It has been observed that productivity management of guest complaints / negative feedbacks received
is a challenging task for the hospitality industry and per department / person’, ‘Percentage of repeat
major reason behind the same is the intangible na- guests generated’ person’ are methods of measur-
ture of the product and lack or management exper- ing employee productivity on which significant dif-
tise. It is thus recommended that the management ference was observed between Pune, Hyderabad &
should introspect on this issue and devise a fool- Bangalore cities.
proof mechanism to measure productivity of its em- 6. ‘Lack of common parameters of measuring pro-
ployees on an ongoing basis. This will not only keep ductivity’ and ‘Diverse operations’ are challenges
the performing employees motivated, but will also of measuring employee productivity on which no
help in correctly identifying the areas that requires significant difference was observed between Pune,
attention and also the correct root cause of low pro- Hyderabad & Bangalore cities.
ductive employees so as to take timely remedial
7. ‘Intangible Product’, ‘Lack of Knowledge about
action.
Productivity Management’, ‘Lack of scientific ap-
proach towards labour management’, ‘Lack of man-
Conclusions agement initiative’ and ‘Difficulties in measuring
customer satisfaction’ are challenges of measuring
The findings of the research can be concluded as under:
employee productivity on which significant differ-
1. On the basis of importance, the highest rated fac- ence was observed between Pune, Hyderabad &
tor for making measurement of productivity difficult Bangalore cities.
in hotels is “Intangible Product (Characteristics of
Service Industry)”. Bibliography & References
2. “Average number of guest satisfaction points gener-
Gujarathi, R. (2013). Employee Productivity management
ated per department” and “Number of guest praises
system adopted by the hospitality industry in India.
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son” are the most widely used methods to measure Application & Management (IJRCM), 3(10), 29-37.
employee productivity in hotels.
Gabrie, J. (2010). Real wages as determinant of la-
3. “Number of guest praises / positive feedbacks re- bour productivity in the Mexican Tourism Sector.
ceived per department / person” and “Percentage of European Journal of Tourism Research, 3(1), 67-76.
repeat guests generated” are the most suitable meth- Witt, C. A. (2010). Why productivity in the hotel sec-
ods to measure employee productivity in hotels. tor is low. International Journal of Contemporary
4. ‘Total room revenue generated per Front Office Hospitality Management, 1(2).
/ Sales & Mktg. staff’, ‘Average number of guest Jones, P. (2009). A re-examination of the factors that in-
satisfaction points generated per department’ and fluence productivity in hotels: A study of the house-
‘Number of guest praises / positive feedbacks re- keeping function. Tourism & Hospitality Research,
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measuring employee productivity on which no Karatepe, O. M. (2008). Affectivity, conflicts in the work–
significant difference was observed between Pune, family interface, and hotel employee outcomes.
Hyderabad & Bangalore cities. International Journal of Hospitality Management,
27(1), 30–41.
5. ‘Total revenue generated per employee’, ‘Total
Chen, C. F. (2007). Applying the stochastic frontier ap-
food revenue generated per Food production staff’, proach to measure hotel managerial efficiency in
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& Beverage service staff’, ‘Average number of cov-
Sanjeev, G. M. (2007). Measuring efficiency of the hotel
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F & B Service staff)’, ‘Average number of check- Journal of Contemporary Hospitality Management,
ins / check-outs handled per worked hours (Front 19(5), 378 – 387.
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46 Atithya: A Journal of Hospitality Volume 1 Issue 1 January 2015
Kilic, H., & Okumus, F. (2005). Factors influenc- Johnston, R., & Jones, P. (2004). Service productivity:
ing productivity in small island hotels: Evidence Towards understanding the relationship between op-
from Northern Cyprus. International Journal of erational and customer productivity. International
Contemporary Hospitality Management, 17(4), 315 Journal of Productivity and Performance
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