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Chennai , Jan. 25
THE National HR Conclave organised by Loyola Institute of Business Administration (LIBA) at Chennai , has offered interesting insights into how organisations coped with the variety of HR problems faced by them.
Speaking at the first session on HR perspective in the engineering sector, Mr G.S. Ramesh, Vice-President, HR, Hyundai Motors, said that the cultural issues faced between the Korean and the Indian workers were fewer than those faced by Indians themselves from different States. Even within Tamil Nadu, there were differences between those hailing from Chennai and other towns.
Answering a question on why there were no unions, he said "Why do we need unions. We have HR counters in each shopfloor for counselling workers and handling disputes and this is working well. Our attrition rate is 1.89per cent."
Talking about cross-cultural issues, Mr Y.V. Varma, Vice-President, HR, L.G. Electronics, mentioned that one issue that he handled was the attitude towards the ringing telephone. Indians generally tended to take it easy and would pick up the phone, sometimes after seven or eight rings, whereas such delay was treated almost as a crime by the Koreans.
Speaking about inter-department dispute resolution methods at LG, he said that the workers were encouraged to settle it amongst themselves rather than take it up to their bosses and bring in egos.
So the disputants would be locked up in the conference room with sufficient supply of pizzas and beverages and the door would be opened only after they had agreed to a solution.
Speaking about the Indian Airlines experience in the session on services sector, Mr Shekhar Ghose, Director-HRD, Indian Airlines, said that they were now empowering the frontline staff at the counters with the help of technology.
Thus, counter staff would now be able to have a database of frequent flyers, the sectors they frequented, their preferences of seats and food.

#180759

For which among these human resource management functions does the behavior of Richard Painter present a problem?
Please help me get this assignment started.
For which among these human resource management functions does the behavior of Richard Painter present a problem? Why?
How would you solve this problem? Suggest remedies for the reward system.
Thank you.

Unilever in India : Managing Human Resources (Page 2)

Abstract
Unilever's Indian subsidiary, Hindustan Lever Limited (HLL), is the country''s largest fast moving consumer goods company. The company touches the lives of two out of three Indians. HLL is known for its ability to attract and develop good people. Several Unilever India managers have gone on to assume senior level responsibilities in Unilever''s worldwide system. In 2003, over 60 HLL managers held top positions in different Unilever companies or corporate functions. The case details the human resources (HR) practices at HLL, with special reference to the problems faced by HLL in the early 2000s. HLL realises it is becoming increasingly difficult to motivate and retain its star performers as new opportunities open up. At the same time, HLL finds itself with more people than necessary in some slots. This case can be used to understand the HR practices followed by HLL and the talent management problems the company is facing in early 2004.


<<Previous Page
BACKGROUND NOTE contd...
After India's economic liberalization started in 1991, alliances, acquisitions and mergers became easier. In one of the most celebrated events in India's corporate history, HLL acquired Tata Oil Mills Company (TOMCO), effective from April 1, 1993.
In 1995, HLL and another Tata Company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to market Lakme's cosmetics and products from the stable of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HLL and divested its 50% stake in the joint venture to the company.

HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994 Kimberly-Clark Lever Ltd, which marketed Huggies Diapers and Kotex Sanitary Pads. Meanwhile, in 1992, another Unilever subsidiary, Brooke Bond had acquired Kothari General Foods, with significant interests in Instant Coffee.
The erstwhile Brooke Bond's presence in India dated back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition.

In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India. Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond in the same year.

In July 1993, Brooke Bond India merged with Lipton India, to form Brooke Bond Lipton India Limited (BBLIL). The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972. In 1977, Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986. In 1994 BBLIL launched the Wall's range of Frozen Desserts....
More...
EXHIBIT: I HLL - KEY FINANCIALS
EXHIBIT: II HLL - TEN-YEAR PERFORMANCE

ORGANIZATIONAL STRUCTURE

EXHIBIT: III HLL - BOARD

EXHIBIT: IV HLL - MANAGEMENT COMMITTEE

HUMAN RESOURCES DEVELOPMENT

EXHIBIT: V HLL - EMPLOYEE DEVELOPMENT PROGRAMS

EXHIBIT: VI A DAY AT HLL

CORPORATE RESTRUCTURING

ROAD AHEAD

EXHIBIT: VI BUSINESS LEADERSHIP PROGRAM IN SALES & MARKETING

BIBLIOGRAPHY
Case Code HROA007
Case Length 15 Pages
Period 1888 - 2004
Organization Unilever
Pub Date 2004
Teaching Note Not Available
Countries India
Industry Packaged Goods
Issues
Human Resource Manageemnt (HRM), Unilever
Keywords Unilever, Hindustan Lever Limited (HLL), India, Human resources (HR), Human resources manager (HRM), Procter & Gamble (P&G), Managing HR, HR practices, Human resources development, Organizational structure, Employee development, Corporate restructuring, Project millennium
Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source

INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications Issues and Constrains in Manpower Supply in Indian Hospitality Industry P. Srinivas Subbarao W.P. February 2008 The main objective of the working paper series of the IIMA is to help faculty members, research staff and doctoral students to speedily share their research findings with professional colleagues and test their research findings at the pre-publication stage. IIMA is committed to maintain academic freedom. The opinion(s), view(s) and conclusion(s) expressed in the working paper are those of the authors and not that of IIMA. INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA IIMA INDIA Research and Publications Issues and Constrains in Manpower Supply in Indian Hospitality Industry P. Srinivas Subbarao1 Abstract By the very nature of tourism as a service industry, its efficient management and successful operation depend largely on the quality of manpower. In India, the shortage of skilled manpower poses a major threat to the overall development of tourism. In particular, the rapid expansion of hotels of an international standard in India is creating a high level of demand for skilled and experienced staff. The nature of the decisions facing hotel management is continually expanding. For their business to remain competitive, managers must be skilful in many diverse areas. Tourism statistics reveal that both domestic and foreign tourism are on a robust growth path. This growth will need to be serviced by a substantial increase in infrastructure, including air-road, rail connectivity as well as hotels and restaurants The availability of skilled and trained manpower is a crucial element in the successful long-term development and sustainability of a tourist destination. Skilled and trained human resources will ensure the delivery of efficient, high-quality service to visitors, which is a direct and visible element of a successful tourism product. High standards of service are particularly important in sustaining long-term growth, since success as a tourist destination is determined not only by price competitiveness or the range of attractions available, but also by the quality of the services provided, there by the qualified human capital. This paper elaborates the issues and constrains relating to demand and supply of manpower in hospitality industry and also suggested the recommendations to fill the gap. 1 Participant of 29th FDP and presently working as Professor & Head of the Department, Department of Management Studies, M.R.P.G. College, Vizianagaram - 535 001 Andhra Pradesh. Email: W.P. No. 2008-02-03 Page No. 2 IIMA INDIA Research and Publications Issues and constrains of manpower supply in Indian Hospitality industry Introduction Tourism has been the fastest growing industry in the world for the past 50 years, and today it is the world’s largest industry relating to employment, foreign exchange earning and overall economic development of several countries. It is India's third largest export industry after Readymade Garments and Gems &Jewelry (Min. of Tourism, GOI). Tourism provides opportunity for economic growth, employment generation and poverty alleviation. Tourism holds the key for creation of rural wealth, opportunity for the hitherto neglected segments of society, artisans and service providers in the backward areas. As per WTTC this sector employs 212 million people world wide, generates $3.4 trillion in gross output and contributes $655 billion towards government tax revenues. Travel and Tourism is the world’s largest industry. By 2008, the industry is grown to $9 trillion. The industry accounts for 10.7% of the global work force and provides 1 in every 9 jobs. Between the years 1995 and 2000, the industry is adding a new job every 2.5 seconds. It will contribute up to 10.3% of the global GDP. According to the same estimate, the global travel and tourism activity is expected to increase by 4.7% between 2007 and 2016. Tourism sector holds immense potential for Indian economy. It can provide impetus to other industries through backward and forward linkages and can generate huge revenue earnings for the country. In the recent 2007-08 budget, the provision for building tourist infrastructure has been increased from US$ 95.6 million in 2006-07 to US$ 117.5 million in 2007-08 (Min. of Tourism). Tourism is no longer looking at it as a leisure activity, but as a major source of employment. The labor capital ratio per million rupee of investment at 1985-86 prices in the tourism sector is 47.5 jobs as against 44.7 jobs in agriculture and 12.6 jobs in case of manufacturing industries. W.P. No. 2008-02-03 Page No. 3 IIMA INDIA Research and Publications Human Resources in Hospitality Industry The success of any industry depends to a great extend up on the quality of human resource and tourism is not an exception. Tourism is labor intensive industry, which provides employment to skilled, semi-skilled and unskilled workers directly and indirectly. The progressive labor force with dynamic management and responsive government and responsible society are the pillars of the tourism industry. Traditionally, the employment has been seen as an area that is reactive to changes in the wide business environment. There is a widely accepted assumption that the role of people within organizations is required to change and develop in response to developments in markets, products and technology. Most of the large tourism companies recognized this assumption and has been started organizing work and support human resource functions such as training and development. This is possible only when the external labour market permits employers to adapt these changing dimensions. Human resource in hospitality industry – Supply side Some of the services required in the tourism and hotel industries are highly personalized, and no amount of automation can substitute for personal service providers. Human resource development in the tourism industry normally includes manpower training in two main areas: (1) the hospitality and catering sector and (2) the travel trade and tourism sector. The hotel and catering sector is now highly personalized. Customer satisfaction is the prerequisite for a smooth and successful operation in the hotel industry, requiring professionally trained and highly skilled personnel. According to estimates of requirements for additional hotel rooms, the number of personnel who will need formal training in the hospitality and catering sector would increase by about 400 a year, from 16,000 to 20,000 people a year by 2010. The existing training facilities currently produce only about 5,000 to 6,000 trained personnel a year. Different types of jobs available in hospitality industry in different levels and are in annexure-I W.P. No. 2008-02-03 Page No. 4 IIMA INDIA Research and Publications The central government and the state governments have collaborated to provide resources in order to train people in the hospitality sector as part of overall development efforts. There are now 20 institutes of hotel management throughout the country which are sponsored by the government and directly affiliated with the National Council for Hotel Management and Catering Technology (NCHMCT). These institutes of NCHMCT are located in Ahmedabad, Bangalore, Bhopal, Bhubaneshwar, Calcutta, Chandigarh, Gurda~pur, Guwahati, Gwalior, Hyderabad, Jaipur, Lucknow, Madras, Mumbai, New Delhi (Pusa), Panjai (Goa), Patna, Shimla, Srinagar and Thiruvananthapuram. These institutes offering several types of courses in hotel management, craftsmanship and food and beverage services, including three year diploma courses, 14-month postgraduate diploma course, one-year post-graduate diploma courses, one and a half year post-graduate diploma courses, six-month courses and certificate courses. There were 1,605 students trained in 1995, 2,250 students in 1996, 2,500 students in 1997, 2,900 students in 1998 and 3,600 students would graduate in 1999 and 4,000 would graduate in 2000, according to data provided by Economic and Social Commission for the Asia and the Pacific (ESCAP). In addition to these 20 institutes, there are also 15 food crafts institutes around the country. The food crafts institutes are located at Ajmer, Aligarh, Alwaye (Kerala), Chandigarh, Darjeeling, Gangtok, Faridabad, Jodhpur, New Delhi, Patna, Pondicherry, Pune, Tiruchirapali, Udaipur and Vishakhapatnam. These institutes offer training courses from six months to one year, training students in food production, bakery, confectionery, front office operations, bookkeeping, restaurant and housekeeping. The institutes of hotel management and food crafts institutes have been set up with assistance from the Ministry of Tourism in collaboration with the state governments. The two agencies of government share financial responsibilities for these institutes. Some states have raised tuition fees so that the institutes can be self-sufficient. All of the institutes in hotel management and food crafts are managed by autonomous societies registered under the Societies Registration Act, 1860, and have Boards of Governors consisting of representatives from the central government, state government and the hotel and trade industries. Each Board of Governors is chaired by the state's secretary of tourism. W.P. No. 2008-02-03 Page No. 5 IIMA INDIA Research and Publications The National Council for Hotel Management and Catering Technology (NCHMCT) is also registered under the Societies Registration Act, 1860, and is managed by a Board of Governors which includes representatives from the central government and the private sector. The NCHMCT regulates all academic activities of the institutes of hotel management. It also oversees all admissions, course design, examinations and certificates. The faculty development programme, research, cooperation and coordination and affiliation with professional organizations at the national and international level also come under NCHMCT. In addition to the central governments support for training tourism industry personnel; there are other training courses and programmes carried out by various agencies, including universities, state governments and private organizations. The Department of Labor has set up a Central Apprenticeship Council (under the Central Apprentice Act) to conduct training courses and short courses lasting three months to one year in cooking, bakery, confectionery, housekeeping and other services. The Central Apprenticeship Council trained about 1,600 people every year at Delhi, Fairdabad and Meerut centers ever in 1998. State governments trained about 250 people at craft institutes. The major hotel chains trained about 250 people, universities trained about 500 people and private institutes trained about 750 people. The total number of trained personnel from these agencies was 3,350 people. Comparing this total with the need for 20,000 additional personnel each year, it is clear that further analysis is required. A survey being conducted to identify the requirements for trained manpower at each level of employment would focus on general management trainees, trainees in kitchen management, housekeeping management, operational trainees, front office and accounting management, chefs, butlers, captains, bakery, confectionery and other specialized cooking. Middle management positions would be filled by people holding three-year diplomas, while other jobs could be filled by craft trainees. Craft institutes could be targeted for expansion in order to meet the needs for lower-level skill areas. W.P. No. 2008-02-03 Page No. 6 IIMA INDIA Research and Publications Human resources in Hospitality Industry – demand side In India there is a tremendous shortage of trained manpower in the hospitality sector. Tourism sector on an average requires manpower about 20,000 per year. Against such a requirement the actual trained output from govt. institution is only 5000 per year. When we consider all other private institutions, the total available trained manpower does not exceed 10,000 in a year. Thus there need to develop required human resource in various segment of the tourism industry, as a consequence of the rapid growth in tourism, changing technology and markets both national and international level. By the very nature of tourism as a service industry, its efficient administration and successful operation depend largely on the quality of manpower. In the Asian and Pacific region, the shortage of skilled manpower poses a major threat to the overall development of tourism. International tourism is a relatively new phenomenon and therefore the lack of managerial capability exists at all levels of the industry. In particular, the rapid expansion of hotels of an international standard in the region is creating a high level of demand for skilled and experienced staff. The nature of the decisions facing hotel management is continually expanding. For their business to remain competitive, managers must be skilful in many diverse areas. For instance, they must possess a good understanding of how current events and the economy affect the market and develop skill in marketing their products. They must also strive to keep up with the technological innovations in the operational side of the industry. As part of the service industry, tourism is labour-intensive and generally requires well-developed social and language skills in a cross-cultural working environment. These demands have placed considerable strain on small, independent operators, who cannot rely on the broad management expertise available to their multinational hotel chain competitors. The availability of skilled and trained manpower is a crucial element in the successful long-term development and sustainability of a tourist destination. In the ultimate analysis, skilled and trained human resources will ensure the delivery of efficient, high-quality service to visitors, which is a direct and visible element of a successful tourism product. High standards of service are particularly important in sustaining long-term growth, since success as a tourist destination is determined not only by price competitiveness or the W.P. No. 2008-02-03 Page No. 7 IIMA INDIA Research and Publications range of attractions available, but also by the quality of the services provided. Repeat visits, a vital factor in maintaining growth, will be deterred if standards of service do not meet expectations. Issues and Constrains facing Human Resources in Tourism Sector as: The major problems and constraints facing human resources development in the tourism sector can be summarized as follows: (a) Shortage of qualified manpower, particularly at the managerial level, which poses a major obstacle to the overall development of the tourism sector, (b) Shortage of qualified and experienced teaching staff in hospitality training institutes (c) Shortage of training materials and facilities according to the present day industry need (d) Lack of strategies and policies for human resources development in the hospitality sector (e) Difficulty in keeping pace with rapidly changing technological innovations and dynamic changes in the global market place; (f) Complexity of the multidisciplinary nature of tourism studies; (g) Huge Gap between the training capacity of training educational institutes and the actual need of the industry; (h) Shortage of higher-level programmes for management development in this sector. The South Asia Integrated Human Resource Development Project, funded by the European Commission, has done much work in developing human resources, such as setting standards, securing industry acceptance of standards, preparing manuals for important trades, training of the trainers, setting up a system for testing standards and certification of trainers and trainees. However, follow up is needed because further funding from the European Commission is not now available. The National Commission set up to oversee the project must be activated and the industry must implement the system so that quality can be ensured to make Indian tourism competitive internationally. W.P. No. 2008-02-03 Page No. 8 IIMA INDIA Research and Publications The apprentice scheme being implemented by the Ministry of Labor is another activity that should be reviewed. The scheme started operating many years ago, and in view of development in the hospitality sector since then, the syllabus requires revision and the infrastructure for training in the council institutes at New Delhi, Faridabad and Meerut requires major upgrading. Trainers also need to upgrade their skills. Currently, they are providing training in cookery, bakery, confectionery, stewardship and housekeeping, with 1,600 trainees graduating annually. If the administration of this scheme and the institutions are handed over to the National Council for Hotel Management and Catering Technology under the Ministry of Tourism, there should be considerable synergy generated among the institutions for training in the hospitality sector. The Universities of Madras and Bangalore have also affiliated several catering institutes and award the Bachelor's Degree in Hotel Management. However, the industry has been reluctant to accept the students, because they lack practical experience. There is need to upgrade the curriculum of these university courses to meet the expectations of industry. Another 35 private institutes affiliated to the All India Council of Technical Training (AICTT) provide training in hospitality and catering to about 500 students. However, they have not been able to meet the expectations of the industry and there have been numerous complaints about the quality of training. As a result, students find it difficult to get good job opportunities. An exception to the teaching shops is some private institutes run by reputable hotel groups like Oberoi, ITDC, Taj and the ITC Mayura Group. Other hotels are also setting up similar training institutes. These institutes award their own degrees and diplomas and some have ties with the American Hotel and Motel Association or the Swiss Hotel School. Some universities in Australia and in the United Kingdom have started offering split campus training in India. A proper system of admissions is required, because there are often allegations that the management of these institutes charge exorbitant entry fees. W.P. No. 2008-02-03 Page No. 9 IIMA INDIA Research and Publications Recommendations to the Government: The Government could constitute a steering committee to review the demand and supply of the human resources in the hospitality industry and prepare plans for developing qualitative human resources which are require for the present day global industry. committee should constitute with the members from all concerned areas like • • • • • • The State and central tourism development commissioners Representatives form all areas of hospitality industry Member’s /president/ secretary of the hotel management associations Member’s /president/ secretary of the Travel and tourism associations Representative from hotel employees associations One member representative from international hotel chain The committee should review the present situation and suggest the steps to be taken to reduce the gap between the demand and supply of human resources in the industry. The committee should concentrate on the following issues mainly: • • • • • • Create a policy on Industry institute interaction Establish an apex body to coordinate all the hospitality management institutes in the country For conducting Common entrance test for all Govt. University/AICTE/Private institutes in the country Curriculum development from time to time as per industry requirement Fees structure for different courses in different institutes Appoint a committee to identify the requirements of qualified manpower for International Hotels and also identify the ways to develop. W.P. No. 2008-02-03 Page No. 10 IIMA INDIA Research and Publications Recommendations to Hospitality industry • Tie-ups with Institutes: It is the duty of the Industry to make necessary tie-up/arrangement for their required human resources with one or two hospitality institutes in the country. • Continuous Training: There is a need of continuous training to all When they have a tie-up categories of employees in the organization. with the institutes, the institutes will offer in –house training to different category of employees from time to time to update their skills. • Sponsoring: It is the duty of the industry to sponsor some amount / equipment to the institute for their betterment. If possible they sponsor a chair for continuous funding and research for that institute. • Research: Every institute should spend some amount for the research which is essential for further development and understand the present situation. The industry should involve in the researchers by providing timely information and data which is ultimately useful for them only. Recommendations to Hospitality institutes (Academic): • Industry institute interface/interaction: Every institute must make necessary tie-ups with hotel/tourism industry for providing employment to their students. • Arranging guest lectures from industry: The management of the institutes must arrange guest lectures/visiting faculty from the industry to give complete industry information to the students about the industry and its developments. • Visits to hotels (students): The institutes should arrange field visits and training in star hotels for their final year students. W.P. No. 2008-02-03 Page No. 11 IIMA INDIA Research and Publications • Nominating the industry people: Every institute must nominate one or two people from industry in their advisory body for the betterment of students. • Revise the curriculum: It is the duty of the institute to revise the curriculum as per the industry needs from time to time. • Pay good salaries to trained staff: Several educational institutions are offering very low salaries to their teaching staff, this influence the quality of teaching and there by it produces inferior quality managers which indirectly created unemployment though there is a demand in the industry. The need to develop the required human resources in various segments of the tourism industry has become imperative as a consequence of the rapid growth in tourism, technology and dynamic changes in the international tourism market. The shortage of quality human resources can be solved when the government and private go together with a standard education & training system and better working conditions. W.P. No. 2008-02-03 Page No. 12 IIMA INDIA Research and Publications Different levels of jobs in hospitality sector: Entry level Front Office Bell-person Telephone operator Porter Skilled level Front Office Bell captain Telephone operator Front desk agent Reservations agent Housekeeping housekeeper Floor supervisor Food Prod. Baker Garde manger Fry cook Roast cook Vegetable cook Breakfast cook Engineering Plumber Electrician Carpenter Painter Marketing Sales rep Annexure - I Managerial Level Front Office Front office manager Housekeeping Maid Assistant Supply person Food Prod. Prep person Kitchen helper Dishwasher Saucier Housekeeping House keeper Food Prod. Executive chef Engineering Maintenance person Painter-helper Electricians-helper Engineering Chief engineer Marketing Clerk Marketing Sales manager Convention manager Clerical Clerical Typist File clerk Food & Beverage Busperson Barback Counter server Runner Clerical Secretary Food & Beverage Food server Beverage server Host/ hostess Captain Bartender Waiter Food Service Office Accountant Accounting Bookkeeper Food & Beverage F & B manager Catering manager Banquet manager Food Service Office File Clerk Accounting File clerk Food Service Office Food production manager Accounting Auditor W.P. No. 2008-02-03 Page No. 13 IIMA INDIA Research and Publications Controller Security Security guard trainee Human Resources Clerk Security Security guard Human Resources Secretary Security Head of security Human Resources Human resources manager Other Resident manager Night manager Credit manager Purchasing director General Manager Regional director Vice president CEO Various Job opportunities in Travel and Tourism Sector • • • • • • • • • • • • • • • • • • • • • Fresher Trainee/ Management Trainee Domestic Travel International Travel Documentation & VISA Travel Agent/ Tour Operator Air Hostess/ Steward/ Cabin Crew Pilot Ground Staff GSA Maintenance Engineer Cashier Office Assistant Branch Head VP - Operations/ COO SBU (Strategic Business Unit) Head /Profit Centre Head CEO/MD/ Country Manager Director on Board GM External Consultant Other Travel/ Airlines W.P. No. 2008-02-03 Page No. 14 IIMA INDIA Research and Publications References: Batra G.S., Tourism in the 21st century, 1996 Anmol publications Pvt. Ltd.,.245 Pgs Federation of Hotels & Restaurants Association of India ltd, <link no longer exists - removed> , Investment opportunities in Tourism Sector, Government of India portal Investment Commission INVEST INDIA : Opportunities in the World's Largest Democracy | Tourism Manpower Recruitment in Hotel industry, A market plus report of Ministry of tourism, Government of India. Swain, Sampad Kumar, 2007, Human Resource Development in Indian Tourism, Abhijit Publications. New Delhi Jithendran K.J & Tom Baum, 2000, Human Resource Development and Sustainability – the case of Indian Tourism, International Journal of Tourism Research, Vol.2, Issue 6, pp 403-421 Khanna, M.K, 1999, Human Resource Development requirements of the tourism sector in India, UNESCAP ref.No.ST/ESCAP/2020. W.P. No. 2008-02-03 Page No. 15
INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Research and Publications Issues and Constrains in Manpower Supply in Indian Hospitality Industry P. Srinivas Subbarao W.P. February 2008 The main objective of the working paper series of the IIMA is to help faculty members, research staff and doctoral students to speedily share their research findings with professional colleagues and test their research findings at the pre-publication stage. IIMA is committed to maintain academic freedom. The opinion(s), view(s) and conclusion(s) expressed in the working paper are those of the authors and not that of IIMA. INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA IIMA INDIA Research and Publications Issues and Constrains in Manpower Supply in Indian Hospitality Industry P. Srinivas Subbarao1 Abstract By the very nature of tourism as a service industry, its efficient management and successful operation depend largely on the quality of manpower. In India, the shortage of skilled manpower poses a major threat to the overall development of tourism. In particular, the rapid expansion of hotels of an international standard in India is creating a high level of demand for skilled and experienced staff. The nature of the decisions facing hotel management is continually expanding. For their business to remain competitive, managers must be skilful in many diverse areas. Tourism statistics reveal that both domestic and foreign tourism are on a robust growth path. This growth will need to be serviced by a substantial increase in infrastructure, including air-road, rail connectivity as well as hotels and restaurants The availability of skilled and trained manpower is a crucial element in the successful long-term development and sustainability of a tourist destination. Skilled and trained human resources will ensure the delivery of efficient, high-quality service to visitors, which is a direct and visible element of a successful tourism product. High standards of service are particularly important in sustaining long-term growth, since success as a tourist destination is determined not only by price competitiveness or the range of attractions available, but also by the quality of the services provided, there by the qualified human capital. This paper elaborates the issues and constrains relating to demand and supply of manpower in hospitality industry and also suggested the recommendations to fill the gap. 1 Participant of 29th FDP and presently working as Professor & Head of the Department, Department of Management Studies, M.R.P.G. College, Vizianagaram - 535 001 Andhra Pradesh. Email: W.P. No. 2008-02-03 Page No. 2 IIMA INDIA Research and Publications Issues and constrains of manpower supply in Indian Hospitality industry Introduction Tourism has been the fastest growing industry in the world for the past 50 years, and today it is the world’s largest industry relating to employment, foreign exchange earning and overall economic development of several countries. It is India's third largest export industry after Readymade Garments and Gems &Jewelry (Min. of Tourism, GOI). Tourism provides opportunity for economic growth, employment generation and poverty alleviation. Tourism holds the key for creation of rural wealth, opportunity for the hitherto neglected segments of society, artisans and service providers in the backward areas. As per WTTC this sector employs 212 million people world wide, generates $3.4 trillion in gross output and contributes $655 billion towards government tax revenues. Travel and Tourism is the world’s largest industry. By 2008, the industry is grown to $9 trillion. The industry accounts for 10.7% of the global work force and provides 1 in every 9 jobs. Between the years 1995 and 2000, the industry is adding a new job every 2.5 seconds. It will contribute up to 10.3% of the global GDP. According to the same estimate, the global travel and tourism activity is expected to increase by 4.7% between 2007 and 2016. Tourism sector holds immense potential for Indian economy. It can provide impetus to other industries through backward and forward linkages and can generate huge revenue earnings for the country. In the recent 2007-08 budget, the provision for building tourist infrastructure has been increased from US$ 95.6 million in 2006-07 to US$ 117.5 million in 2007-08 (Min. of Tourism). Tourism is no longer looking at it as a leisure activity, but as a major source of employment. The labor capital ratio per million rupee of investment at 1985-86 prices in the tourism sector is 47.5 jobs as against 44.7 jobs in agriculture and 12.6 jobs in case of manufacturing industries. W.P. No. 2008-02-03 Page No. 3 IIMA INDIA Research and Publications Human Resources in Hospitality Industry The success of any industry depends to a great extend up on the quality of human resource and tourism is not an exception. Tourism is labor intensive industry, which provides employment to skilled, semi-skilled and unskilled workers directly and indirectly. The progressive labor force with dynamic management and responsive government and responsible society are the pillars of the tourism industry. Traditionally, the employment has been seen as an area that is reactive to changes in the wide business environment. There is a widely accepted assumption that the role of people within organizations is required to change and develop in response to developments in markets, products and technology. Most of the large tourism companies recognized this assumption and has been started organizing work and support human resource functions such as training and development. This is possible only when the external labour market permits employers to adapt these changing dimensions. Human resource in hospitality industry – Supply side Some of the services required in the tourism and hotel industries are highly personalized, and no amount of automation can substitute for personal service providers. Human resource development in the tourism industry normally includes manpower training in two main areas: (1) the hospitality and catering sector and (2) the travel trade and tourism sector. The hotel and catering sector is now highly personalized. Customer satisfaction is the prerequisite for a smooth and successful operation in the hotel industry, requiring professionally trained and highly skilled personnel. According to estimates of requirements for additional hotel rooms, the number of personnel who will need formal training in the hospitality and catering sector would increase by about 400 a year, from 16,000 to 20,000 people a year by 2010. The existing training facilities currently produce only about 5,000 to 6,000 trained personnel a year. Different types of jobs available in hospitality industry in different levels and are in annexure-I W.P. No. 2008-02-03 Page No. 4 IIMA INDIA Research and Publications The central government and the state governments have collaborated to provide resources in order to train people in the hospitality sector as part of overall development efforts. There are now 20 institutes of hotel management throughout the country which are sponsored by the government and directly affiliated with the National Council for Hotel Management and Catering Technology (NCHMCT). These institutes of NCHMCT are located in Ahmedabad, Bangalore, Bhopal, Bhubaneshwar, Calcutta, Chandigarh, Gurda~pur, Guwahati, Gwalior, Hyderabad, Jaipur, Lucknow, Madras, Mumbai, New Delhi (Pusa), Panjai (Goa), Patna, Shimla, Srinagar and Thiruvananthapuram. These institutes offering several types of courses in hotel management, craftsmanship and food and beverage services, including three year diploma courses, 14-month postgraduate diploma course, one-year post-graduate diploma courses, one and a half year post-graduate diploma courses, six-month courses and certificate courses. There were 1,605 students trained in 1995, 2,250 students in 1996, 2,500 students in 1997, 2,900 students in 1998 and 3,600 students would graduate in 1999 and 4,000 would graduate in 2000, according to data provided by Economic and Social Commission for the Asia and the Pacific (ESCAP). In addition to these 20 institutes, there are also 15 food crafts institutes around the country. The food crafts institutes are located at Ajmer, Aligarh, Alwaye (Kerala), Chandigarh, Darjeeling, Gangtok, Faridabad, Jodhpur, New Delhi, Patna, Pondicherry, Pune, Tiruchirapali, Udaipur and Vishakhapatnam. These institutes offer training courses from six months to one year, training students in food production, bakery, confectionery, front office operations, bookkeeping, restaurant and housekeeping. The institutes of hotel management and food crafts institutes have been set up with assistance from the Ministry of Tourism in collaboration with the state governments. The two agencies of government share financial responsibilities for these institutes. Some states have raised tuition fees so that the institutes can be self-sufficient. All of the institutes in hotel management and food crafts are managed by autonomous societies registered under the Societies Registration Act, 1860, and have Boards of Governors consisting of representatives from the central government, state government and the hotel and trade industries. Each Board of Governors is chaired by the state's secretary of tourism. W.P. No. 2008-02-03 Page No. 5 IIMA INDIA Research and Publications The National Council for Hotel Management and Catering Technology (NCHMCT) is also registered under the Societies Registration Act, 1860, and is managed by a Board of Governors which includes representatives from the central government and the private sector. The NCHMCT regulates all academic activities of the institutes of hotel management. It also oversees all admissions, course design, examinations and certificates. The faculty development programme, research, cooperation and coordination and affiliation with professional organizations at the national and international level also come under NCHMCT. In addition to the central governments support for training tourism industry personnel; there are other training courses and programmes carried out by various agencies, including universities, state governments and private organizations. The Department of Labor has set up a Central Apprenticeship Council (under the Central Apprentice Act) to conduct training courses and short courses lasting three months to one year in cooking, bakery, confectionery, housekeeping and other services. The Central Apprenticeship Council trained about 1,600 people every year at Delhi, Fairdabad and Meerut centers ever in 1998. State governments trained about 250 people at craft institutes. The major hotel chains trained about 250 people, universities trained about 500 people and private institutes trained about 750 people. The total number of trained personnel from these agencies was 3,350 people. Comparing this total with the need for 20,000 additional personnel each year, it is clear that further analysis is required. A survey being conducted to identify the requirements for trained manpower at each level of employment would focus on general management trainees, trainees in kitchen management, housekeeping management, operational trainees, front office and accounting management, chefs, butlers, captains, bakery, confectionery and other specialized cooking. Middle management positions would be filled by people holding three-year diplomas, while other jobs could be filled by craft trainees. Craft institutes could be targeted for expansion in order to meet the needs for lower-level skill areas. W.P. No. 2008-02-03 Page No. 6 IIMA INDIA Research and Publications Human resources in Hospitality Industry – demand side In India there is a tremendous shortage of trained manpower in the hospitality sector. Tourism sector on an average requires manpower about 20,000 per year. Against such a requirement the actual trained output from govt. institution is only 5000 per year. When we consider all other private institutions, the total available trained manpower does not exceed 10,000 in a year. Thus there need to develop required human resource in various segment of the tourism industry, as a consequence of the rapid growth in tourism, changing technology and markets both national and international level. By the very nature of tourism as a service industry, its efficient administration and successful operation depend largely on the quality of manpower. In the Asian and Pacific region, the shortage of skilled manpower poses a major threat to the overall development of tourism. International tourism is a relatively new phenomenon and therefore the lack of managerial capability exists at all levels of the industry. In particular, the rapid expansion of hotels of an international standard in the region is creating a high level of demand for skilled and experienced staff. The nature of the decisions facing hotel management is continually expanding. For their business to remain competitive, managers must be skilful in many diverse areas. For instance, they must possess a good understanding of how current events and the economy affect the market and develop skill in marketing their products. They must also strive to keep up with the technological innovations in the operational side of the industry. As part of the service industry, tourism is labour-intensive and generally requires well-developed social and language skills in a cross-cultural working environment. These demands have placed considerable strain on small, independent operators, who cannot rely on the broad management expertise available to their multinational hotel chain competitors. The availability of skilled and trained manpower is a crucial element in the successful long-term development and sustainability of a tourist destination. In the ultimate analysis, skilled and trained human resources will ensure the delivery of efficient, high-quality service to visitors, which is a direct and visible element of a successful tourism product. High standards of service are particularly important in sustaining long-term growth, since success as a tourist destination is determined not only by price competitiveness or the W.P. No. 2008-02-03 Page No. 7 IIMA INDIA Research and Publications range of attractions available, but also by the quality of the services provided. Repeat visits, a vital factor in maintaining growth, will be deterred if standards of service do not meet expectations. Issues and Constrains facing Human Resources in Tourism Sector as: The major problems and constraints facing human resources development in the tourism sector can be summarized as follows: (a) Shortage of qualified manpower, particularly at the managerial level, which poses a major obstacle to the overall development of the tourism sector, (b) Shortage of qualified and experienced teaching staff in hospitality training institutes (c) Shortage of training materials and facilities according to the present day industry need (d) Lack of strategies and policies for human resources development in the hospitality sector (e) Difficulty in keeping pace with rapidly changing technological innovations and dynamic changes in the global market place; (f) Complexity of the multidisciplinary nature of tourism studies; (g) Huge Gap between the training capacity of training educational institutes and the actual need of the industry; (h) Shortage of higher-level programmes for management development in this sector. The South Asia Integrated Human Resource Development Project, funded by the European Commission, has done much work in developing human resources, such as setting standards, securing industry acceptance of standards, preparing manuals for important trades, training of the trainers, setting up a system for testing standards and certification of trainers and trainees. However, follow up is needed because further funding from the European Commission is not now available. The National Commission set up to oversee the project must be activated and the industry must implement the system so that quality can be ensured to make Indian tourism competitive internationally. W.P. No. 2008-02-03 Page No. 8 IIMA INDIA Research and Publications The apprentice scheme being implemented by the Ministry of Labor is another activity that should be reviewed. The scheme started operating many years ago, and in view of development in the hospitality sector since then, the syllabus requires revision and the infrastructure for training in the council institutes at New Delhi, Faridabad and Meerut requires major upgrading. Trainers also need to upgrade their skills. Currently, they are providing training in cookery, bakery, confectionery, stewardship and housekeeping, with 1,600 trainees graduating annually. If the administration of this scheme and the institutions are handed over to the National Council for Hotel Management and Catering Technology under the Ministry of Tourism, there should be considerable synergy generated among the institutions for training in the hospitality sector. The Universities of Madras and Bangalore have also affiliated several catering institutes and award the Bachelor's Degree in Hotel Management. However, the industry has been reluctant to accept the students, because they lack practical experience. There is need to upgrade the curriculum of these university courses to meet the expectations of industry. Another 35 private institutes affiliated to the All India Council of Technical Training (AICTT) provide training in hospitality and catering to about 500 students. However, they have not been able to meet the expectations of the industry and there have been numerous complaints about the quality of training. As a result, students find it difficult to get good job opportunities. An exception to the teaching shops is some private institutes run by reputable hotel groups like Oberoi, ITDC, Taj and the ITC Mayura Group. Other hotels are also setting up similar training institutes. These institutes award their own degrees and diplomas and some have ties with the American Hotel and Motel Association or the Swiss Hotel School. Some universities in Australia and in the United Kingdom have started offering split campus training in India. A proper system of admissions is required, because there are often allegations that the management of these institutes charge exorbitant entry fees. W.P. No. 2008-02-03 Page No. 9 IIMA INDIA Research and Publications Recommendations to the Government: The Government could constitute a steering committee to review the demand and supply of the human resources in the hospitality industry and prepare plans for developing qualitative human resources which are require for the present day global industry. committee should constitute with the members from all concerned areas like • • • • • • The State and central tourism development commissioners Representatives form all areas of hospitality industry Member’s /president/ secretary of the hotel management associations Member’s /president/ secretary of the Travel and tourism associations Representative from hotel employees associations One member representative from international hotel chain The committee should review the present situation and suggest the steps to be taken to reduce the gap between the demand and supply of human resources in the industry. The committee should concentrate on the following issues mainly: • • • • • • Create a policy on Industry institute interaction Establish an apex body to coordinate all the hospitality management institutes in the country For conducting Common entrance test for all Govt. University/AICTE/Private institutes in the country Curriculum development from time to time as per industry requirement Fees structure for different courses in different institutes Appoint a committee to identify the requirements of qualified manpower for International Hotels and also identify the ways to develop. W.P. No. 2008-02-03 Page No. 10 IIMA INDIA Research and Publications Recommendations to Hospitality industry • Tie-ups with Institutes: It is the duty of the Industry to make necessary tie-up/arrangement for their required human resources with one or two hospitality institutes in the country. • Continuous Training: There is a need of continuous training to all When they have a tie-up categories of employees in the organization. with the institutes, the institutes will offer in –house training to different category of employees from time to time to update their skills. • Sponsoring: It is the duty of the industry to sponsor some amount / equipment to the institute for their betterment. If possible they sponsor a chair for continuous funding and research for that institute. • Research: Every institute should spend some amount for the research which is essential for further development and understand the present situation. The industry should involve in the researchers by providing timely information and data which is ultimately useful for them only. Recommendations to Hospitality institutes (Academic): • Industry institute interface/interaction: Every institute must make necessary tie-ups with hotel/tourism industry for providing employment to their students. • Arranging guest lectures from industry: The management of the institutes must arrange guest lectures/visiting faculty from the industry to give complete industry information to the students about the industry and its developments. • Visits to hotels (students): The institutes should arrange field visits and training in star hotels for their final year students. W.P. No. 2008-02-03 Page No. 11 IIMA INDIA Research and Publications • Nominating the industry people: Every institute must nominate one or two people from industry in their advisory body for the betterment of students. • Revise the curriculum: It is the duty of the institute to revise the curriculum as per the industry needs from time to time. • Pay good salaries to trained staff: Several educational institutions are offering very low salaries to their teaching staff, this influence the quality of teaching and there by it produces inferior quality managers which indirectly created unemployment though there is a demand in the industry. The need to develop the required human resources in various segments of the tourism industry has become imperative as a consequence of the rapid growth in tourism, technology and dynamic changes in the international tourism market. The shortage of quality human resources can be solved when the government and private go together with a standard education & training system and better working conditions. W.P. No. 2008-02-03 Page No. 12 IIMA INDIA Research and Publications Different levels of jobs in hospitality sector: Entry level Front Office Bell-person Telephone operator Porter Skilled level Front Office Bell captain Telephone operator Front desk agent Reservations agent Housekeeping housekeeper Floor supervisor Food Prod. Baker Garde manger Fry cook Roast cook Vegetable cook Breakfast cook Engineering Plumber Electrician Carpenter Painter Marketing Sales rep Annexure - I Managerial Level Front Office Front office manager Housekeeping Maid Assistant Supply person Food Prod. Prep person Kitchen helper Dishwasher Saucier Housekeeping House keeper Food Prod. Executive chef Engineering Maintenance person Painter-helper Electricians-helper Engineering Chief engineer Marketing Clerk Marketing Sales manager Convention manager Clerical Clerical Typist File clerk Food & Beverage Busperson Barback Counter server Runner Clerical Secretary Food & Beverage Food server Beverage server Host/ hostess Captain Bartender Waiter Food Service Office Accountant Accounting Bookkeeper Food & Beverage F & B manager Catering manager Banquet manager Food Service Office File Clerk Accounting File clerk Food Service Office Food production manager Accounting Auditor W.P. No. 2008-02-03 Page No. 13 IIMA INDIA Research and Publications Controller Security Security guard trainee Human Resources Clerk Security Security guard Human Resources Secretary Security Head of security Human Resources Human resources manager Other Resident manager Night manager Credit manager Purchasing director General Manager Regional director Vice president CEO Various Job opportunities in Travel and Tourism Sector • • • • • • • • • • • • • • • • • • • • • Fresher Trainee/ Management Trainee Domestic Travel International Travel Documentation & VISA Travel Agent/ Tour Operator Air Hostess/ Steward/ Cabin Crew Pilot Ground Staff GSA Maintenance Engineer Cashier Office Assistant Branch Head VP - Operations/ COO SBU (Strategic Business Unit) Head /Profit Centre Head CEO/MD/ Country Manager Director on Board GM External Consultant Other Travel/ Airlines W.P. No. 2008-02-03 Page No. 14 IIMA INDIA Research and Publications References: Batra G.S., Tourism in the 21st century, 1996 Anmol publications Pvt. Ltd.,.245 Pgs Federation of Hotels & Restaurants Association of India ltd, <link outdated-removed> , Investment opportunities in Tourism Sector, Government of India portal Investment Commission INVEST INDIA : Opportunities in the World's Largest Democracy | Tourism Manpower Recruitment in Hotel industry, A market plus report of Ministry of tourism, Government of India. Swain, Sampad Kumar, 2007, Human Resource Development in Indian Tourism, Abhijit Publications. New Delhi Jithendran K.J & Tom Baum, 2000, Human Resource Development and Sustainability – the case of Indian Tourism, International Journal of Tourism Research, Vol.2, Issue 6, pp 403-421 Khanna, M.K, 1999, Human Resource Development requirements of the tourism sector in India, UNESCAP ref.No.ST/ESCAP/2020. W.P. No. 2008-02-03 Page No. 15
Copyright © 2006, Boyd Associates Page 1
The lack of Accuracy and Credibility of
Self-Reported Pay on the Internet
H. Michael Boyd, Ph.D.
“Well, It’s on the Internet, boss. It must be accurate.” It’s like
the tabloid newspapers that report the birth of the alien child.
People often believe it because it is in print. The Internet is
sometimes like the tabloids. The question is whether the
information found there is true or not. Occasionally, the
employee brings pay data they found on the internet to HR to
support their claims of being underpaid (I haven’t heard of
anyone claiming they are overpaid, yet.). What do HR
professionals think?
.. Overall, HR professionals reject the practice of attaching
credibility to self-reported pay data, or of accepting it as
accurate data.
.. 95% of HR professionals agree that self-reported pay data
found on the internet is not accurate.
.. 79% of HR professionals will not use this information in
determining pay.
Copyright © 2006, Boyd Associates Page 2
Human Resource Management Demands Professional
Compensation Management.
One of the most vexing problems faced by modern human resource
management is how to assure that the employees of the organization are
being compensated appropriately for their contributions. One critical part
of that determination, of course, is whether their “pay” is the correct
amount within the context of affordability, equity, and market conditions.
Affordability and equity are generally (not always, but usually) internal
organizational issues that management can rely on internal data and
information to analyze and manage. Determining market conditions,
however, has always been difficult.
Over the past century the methodologies, practices, and science of arriving
at market pay information and intelligence has evolved from chamber of
commerce and industry and professional association information sharing to
sophisticated survey design, implementation, and analysis. While simple
arithmetic might have been sufficient in 1950, advanced mathematics, and
statistical analyses are required today.
In 1974 I participated in a position comparison project being led by IBM
compensation to establish benchmark positions for pay surveying for
electronics technicians and engineers in the electronics industries. The
effort was all manual and face-to-face. This was before PCs, email, and
the Internet. The process took almost a full year. It was normal in 1974
for published compensation information to be six months to a year old by
the time it was used by an organization as a component of their
compensation and pay range determination. Depending on their salary
planning cycle and timing, it could mean that some individual’s actual pay
rate could end up being effective as much as two years after the point in
time that the original data was collected. Companies adjusted their ranges
and midpoints by factoring in trends and anticipated market changes; but,
at best, it was an educated guess.
Accuracy Requires Science and Rigor.
In the 21st century the compensation profession relies heavily on expert
external compensation professionals who have specialized in producing
market pay data and analyses. Consulting and human resource
management service firms began collecting data continuously and applying
All compensation
considerations are
within the context of
affordability, equity,
and market
conditions.
Copyright © 2006, Boyd Associates Page 3
the most sophisticated mathematics and data processing technologies
available to determine market averages and information. Initially, these
firms relied heavily on their math experts and data processing resources.
The work was primarily data management. As technology improved, the
firms became expert at insuring the quality of the data collected through
survey design and implementation expertise.
Survey methodologies and accuracy are fully dependent on the willingness
of company compensation professionals to share their confidential and
proprietary employee pay data with the people collecting the data and
managing the survey. Participation not only requires willingness, it also
must provide resources. Someone must collect, prepare, and submit (enter)
the data. Generally, the return benefit for participation is access to the
aggregated pay ranges and data.
The new tools of the 21st century compensation profession such as more
sophisticated computers and compensation management application
software packages coupled with advanced communications capabilities
such as the Internet and shared database and application software services
allow market pay averages and ranges to be determined and applied to a
company’s pay programs almost dynamically, if desired. Such a practice is
inadvisable, but technically possible. No company need find their pay
scales and actual pay as much as two years out of date any longer.
Of course, what I have described is costly and resource dependent. Every
compensation function finds itself scrutinized by company management
regarding its budget including how much it spends to obtain market pay
data.
The Question was about self-reported pay information
accuracy and credibility.
The purpose of this paper is to address a question I was asked about the
accuracy and credibility of different survey methodologies, practices, and
data. Specifically, I was asked about the use of self-reported (by
employees) pay information in determining pay averages that could be
used to construct company pay plans.
My quick response was that collecting pay data is much too complex a
process for anyone but a trained compensation specialist to be able to do
I was asked
about the use of
self-reported pay
collected on the
Internet in
determining
company pay
averages.
Copyright © 2006, Boyd Associates Page 4
accurately. Self-reported data does not differentiate based on job content
or performance requirements – only on entered job title. Actually, in many
cases the internet site uses a drop-down selection of job titles to choose
from; so, it depends on what title the person entering the data believes is
closest to their position. We all are aware that an accountant at one
company may do a very different job than an accountant in another
company; but the job titles captured in the internet application are the
same.
The definition of what the employee believes (or reports) constitutes “pay”
can differ from person to person. No matter how you ask the question,
people will often report what they feel should be their pay, or what they
want their pay to be. This is particularly true in the internet applications
because there is autonomy and no probability of challenge. Salary,
overtime, bonuses, incentives, profit sharing, benefits, etc. are components
of compensation that may be included or excluded by the employee
depending on the salary figure they believe is justified. While there are
other reasons why self-reported data, the two just presented ( lack of
comparability and perception of what pay amount should be entered) are
sufficient to make self-reported pay data highly inaccurate and undeserving
of credibility.
The question was asked because of the cost pressures that compensation
departments are always under and because of the proliferation of internetbased
self-reported pay information. There are thousands of internet sites
that collect and report people’s pay as those people enter it (In many cases,
it is a choice among salary ranges that the participant selects from). There
are hundreds of job boards, for example, that collect pay data as a part of
the individual profile for each job seeker. It is reasonable to assume that
the majority of job seekers will enter pay data that they want perspective
employers to accept as their current pay and worth. There are thousands of
business, industry, professional, news, magazine, and periodical web sites
that ask their visitors to enter their pay data. When I was managing a
human resource research practice at a major research firm, survey
participants that I interviewed freely admitted that the personal salary data
they entered in web sites were most often an amount that they felt it
“should be” rather than the actual amount.
There are
thousands of
internet sites
that collect
and report
people’s pay
as those
people enter
it
Copyright © 2006, Boyd Associates Page 5
It was important to ask the human resource
professionals what they think.
While the answer to the question of internet collected self-reported pay
accuracy and credibility seemed obvious, it seemed appropriate to find out
what the human resource profession, particularly the compensation experts,
felt. A very brief and quick survey (A copy is attached at the end of this
paper.) was created and sent to several thousand human resource
professionals, most of whom have some responsibility for compensation.
410 people participated in the survey; and 95% do not accept self-reported
pay data found on the internet as accurate.
We also asked how much credibility they attached to self-reported pay
data. This is different from the question of accuracy because it is an issue
of behavior rather than a technical compensation issue. Only 7% of the
participants attached more than 50% credibility to such data, and 31%
attached 0% credibility to that data. This question really goes to the
behavior of people reporting their own pay data on the internet. 27% of
our survey participants felt that the data collected would be 50% credible
and 35% felt it would be about 25% credible.
Overwhelmingly,
HR professionals
attach little
credibility to selfreported
pay data
It seemed
appropriate to
find out what
the human
resource
profession,
particularly the
compensation
experts, felt.
Just about
everyone
believes that
internetcollected
selfreported
pay
data is not
accurate.
Copyright © 2006, Boyd Associates Page 6
Credibility of the data is based on assumptions about the people selfreporting
their data. Among the assumptions our survey participants had
were:
.. There is a machine distancing effect from the internet that allows a
perception of autonomy and lack of responsibility.
.. Many people intentionally enter false data.
.. The autonomy of the internet creates emotional detachment and
less consideration of personal ethics.
.. People are not able to relate their job title to an industry-standard
job title.
.. There is no ability to compare one person’s pay to another’s.
.. Some also believe that some internet based reporting intentionally
misrepresents the information.
A final question in the survey asked how the survey respondents “would
respond to an employee who brought self-reported pay information that
they found on the Internet and asked you to use it to calculate their salary?”
79% of the participants would either tell the employee that the data isn’t
accurate, or they wouldn’t use the data even though they had told the
employee that they would consider it. 14% would consider the data in
reviewing that particular individual’s pay. There is some logic to that
answer because the employee has an expectation that it will be considered.
It can be considered and rejected as invalid.
The majority of
HR folks would
not use the data in
pay determination
even if they let the
employee believe
they would
consider it.
Copyright © 2006, Boyd Associates Page 7
Overall, the survey participants validated the belief commonly held across
the human resource management profession that self-reported pay data
found on the Internet is both inaccurate and without much credibility.
Most HR professionals would not use the data at all.
The conclusion is simple and straightforward.
So, as I always challenge the students in my human resource management
courses: “So what?” The real learning is that the common sense and
wisdom of the human resource management profession is still intact.
While it would be easy to use cheap and easily accessible internet selfreported
pay data, it is not accurate nor credible, and professional
excellence requires that it be dismissed.
Hundreds of HR professionals offered comments.
Following are some of the comments offered by survey participants:
They answered the question:
“What is your opinion of the practice of collecting self-reported pay data,
and then representing it as accurate pay information?”
.. I think the web can provide valuable data, but self reported pay doesn't include
the list of variables taken into consideration when looking at salary.
.. I think some individuals are very honest when they participate in on-line surveys.
However, I think some may inflate their information or may include other items
included in compensation such as annual bonuses, stock options, spot awards or
target or expected bonuses, stock options etc....
.. There is no system of checks and balances. The pay data may be accurate but is
the actual position benchmarking accurate? In addition, those sites do not provide
participant data. It is, therefore, difficult to be certain that the data is not only
accurate but valid and comparable to your peer group.
.. I think that it may be of some value in situations where market data is otherwise
unavailable. However, I would not present it as the basis for my
recommendation.
.. Because people tend to inflate their earnings, we do not use this when reporting
our data to staff on pay scales, etc. I feel that you get what you pay for...if the
survey is a 'free' online tool, and you don't know who is compiling the data, as
well as what cuts are being used, it is difficult to assess it's validity.
Generally,
participant
comments offer
critical and
informed
explanations of
why the data is
not useful.
Copyright © 2006, Boyd Associates Page 8
.. It's irresponsible since we do not have any backup information on this data -
company names, sizes (employee/revenue) etc. There are more questions than
answers here.
.. It is unreliable at best and flagrantly biased at worst. It can not be trusted and
should not be used by compensation professionals.
.. This practice is understandable, as employees feel that the process used to
determine their pay is shrouded in mystery. Even with rigorous statistical
methodologies, the professional HR survey houses (Towers Perrin, Hewitt,
Watson Wyatt, Mercer, etc.) still exhibit quite a wide variation in market-based
pay levels for a given job; without the independence and rigor of such an
approach, I feel that self-reported pay data is almost guaranteed to be inflated and
misleading.
.. I find it misleading and inaccurate. Most users of such data look for a job title
only, with no additional consideration for factors that are vital for validating pay
levels. This is totally incorrect, as comparisons should be based upon job
content. When you add additional variables such as industry type, geographic
location, public Vs. non-public, and company size, you can understand why most
compensation professionals completely ignore self reported data. Most
companies measure themselves against a specific labor market based upon a
select group of companies and further broken down by location. Furthermore,
where they position themselves against this sub set of the market is a product of
their philosophy. As such, base pay is much more complex, and is the result of a
total compensation strategy that should encompass base, variable, equity and
benefits.
.. I put it slightly above reports of the Loch Ness Monster and other unverified
natural/unnatural phenomena. There could be a grain of truth in it but I have yet
to see it when compared with legally done surveys.
.. First, people typically have an inflated sense of what they're worth. If they only
report what they actually 'make', then that may be all they get offered in a
comparable job. I believe they tend to report what they think they 'should' be
making. Secondly, there are a lot of different factors behind why an individual is
paid what they are paid. There are variations of job responsibilities as well as
how people perform those responsibilities and what other skills sets they may
bring to that particular job. All of those factors are taken into account when
paying a person. Finally, when data is gathered through a survey house (vs. selfreported),
there are statistical tests/analysis to try to weed out some of the
anomalies that will be imbedded in self-reported.
.. I have worked in HR and Compensation for 20 years. Employees can't read their
pay stubs much less accurately record their annual salary on a survey. Plus,
many of these surveys ask for total pay, including overtime.
.. I have a very low opinion of this type of data. My major issue is you have no
assurance that equal or equivalent jobs are being matched. For the most part the
match is based on title alone, and therefore it is highly unreliable.
Copyright © 2006, Boyd Associates Page 9
.. Most of the inaccuracies in self-reported pay is the lack of knowledge in placing
yourself in the correct job. The other issue is the lack of knowledge of the
individual using the pay data in matching themselves with the correct job. Also,
in the collection of data, if it is not organized by type of industry, location of
industry, other inaccuracies are introduced into the picture. In terms of question
2, I usually push back with the surveys we use to benchmark our jobs. Not that I
do not look at other data, but more for a feel in the market, not to benchmark the
job.
.. The problem with self-reported pay is not just inflation of the amounts but that
fact that you have no idea what level in a job group the incumbent comes from.
A branch new accountant might be looking at salaries reported by people with
long-term experience.
.. The accuracy of the data reported is subject to the interpretation and honesty of
the individuals submitting the information. Here are some of the reasons I don't
use self-reported data: * Job matching may not be accurate * Individuals may
not enter their correct salary (for various reasons, including privacy) * Survey
providers go through a rigorous process to analyze data before it is summarized,
validating job matches, removing outliers, etc.
Copyright © 2006, Boyd Associates Page 10
SURVEY INSTRUMENT
SELF REPORTED PAY – REAL or IMAGINED?
Recently, I was asked about the credibility of self-reported employee pay data.
The question was: “Could you take the pay amounts that individuals enter on various internet sites (like
job board sites, for example) and roll them up to determine accurate pay averages?”
I would really like your professional opinion by completing a short online survey titled “Self Reported
Internet Pay - Real of Imagined?”
Thanks for your participation. I will send you a summary of the survey results.
Best regards,
H. Michael Boyd, Ph.D. (mboyd@Bentley.edu)
Professor of Human Resource Management, Bentley College, Waltham, MA. USA
1..Do you accept self-reported pay data found on the Internet as accurate?
2.. As a professional, how would you respond to an employee who brought self-reported pay information
that they found on the Internet and asked you to use it to calculate their salary?
3.. How much credibility do you attach to self-reported pay data?
4.. What is your opinion of the practice of collecting self-reported pay data, and then representing it as
accurate pay information?
Include your email address and I'll send you the summary when it's completed.
Professor H. Michael Boyd, Ph.D.
Bentley College; 175 Forest St., Waltham MA 02452

Note: There was an additional question on the survey that only 2 people answered.
Copyright © 2006, Boyd Associates Page 11
H. Michael Boyd, Ph.D.
Dr. Boyd is a full-time Professor of human and organizational resources at Bentley College and President
of Boyd Associates consulting to enterprises from Fortune 100 companies to startup businesses.
Dr. Boyd is an internationally recognized expert in the field of human resources with over 30 years of
corporate and consulting experience and is professionally active as an educator, consultant, writer, and
speaker. He founded Boyd Associates to focus on human resources strategies critical to organizational
success. As the creator and Practice Manager of the Human Resourcing Strategies program at IDC he
concentrated on critical workforce factors including hiring, retaining, developing, and managing the 21st
century workforce. Prior to becoming a professor, Dr. Boyd was a key contributor at IDC,
Quantum Corporation, Digital Equipment Corp., Honeywell Inc., The Foxboro Company, GTE Sylvania,
Union Carbide Corp., and the U.S. Army (Medical Corps).
Dr. Boyd is professionally active in the HR profession as an instructor, lecturer, consultant, and
contributing author. He is a founder of the Association of Employment Professionals; was President and
founder of the New England Personnel Network (NEPN); served as President of the Norfolk County
Personnel Association; executive committee member of the Electronics Industries Personnel Association;
Vice-President of the Association of Human Resource Systems Professionals; Chairman of the
Massachusetts area public welfare advisory board; and, an arbitrator for the Industry/Agency Arbitration
Committee. In addition, he has been an active member of the Northeast Human Resources Human
Resources Association, Society for Human Resource Management, American Society For Training and
Development, Human Resource Planning Society, Human Resources Council, and American Sociological
Association.
He received a BA in Pre-Law from The Pennsylvania State University, a MS in Management from Lesley
University, and a Ph.D. in Sociology from Northeastern University.
Http://www.BoydAssociates.net ---

Issues & Challenges faced by HR Manager in the field of HRM?

From HUMAN RESOURSE MANAGEMENT BOOK
  • 4 months ago
The major issues & challanges faced by HR Manager are:

Health & Welfare, retirement, change management, compensation, Employee rewards, HR effectiveness measurement, HR technology selection & implementation, industrial relations, Leadership development, Learning and development, Legal/Regulatory compliance, M&A integration/restructuring, Organizational effectiveness, Outsourcing, Staffing: mobility of employees, Recruitment and availability of skilled local labour, retention and succession planning.

Health & Welfare of the employees is a big challenge. If health of the employees of an organization is sound, they are able to perform well.

Change Management represent a particular challenge for personnel management staff, as this expertise has generally not been a consistent area of focus for training and development of HR professionals. An intensified focus on training may be needed to develop added competencies to deal with change management.

Leadership development also proves to be a big challenge HR professionals continue to wrestle with understanding the best ways to keep people in the pipeline and develop leaders for future succession planning. HR professionals are expected to provide the essential frameworks, processes, tools and points of view needed for the selection and development of future leaders. Across the globe leadership development has been identified as a critical strategic initiative in ensuring that the right employees are retained, that the culture of the organization supports performance from within to gain market position, and that managers are equipped to take on leadership roles of the future so that the organization is viable in the long term.

Measuring HR effectiveness is an interesting new top three focus for HR as it highlights the profession's need to meaure results - not only in terms of transaction management but also in terms of driving the business. HR professionals have been questioned in the past regarding their business acumen. Utilizing metrics to determine effectiveness is the beginning of a shift from perceiving HR's role as purely ad administrative function to viewing the HR team as a true strategic partner within the organization.

Compensation has moved down the list of perceived challenges while organizational effectiveness is expected to play a larger role in the years to come. Where HR departments have traditionally focused on measuring their own effectiveness, there is an evolving recognition that they can provide organizational value by measuring the effectiveness of the entire business organization. The shift is significant as it represents movement from simply counting the numbers hired to dertermining the ROI of collective and individual hires on a long-term basis. Going beyond measuring turnover, this new approach considers bad turnover and good turnover along with the overall cost of replacement hires. Compensation is one of the top three issues including mergers & acquisitions, the invention of new systems for human capital management and global competition.

Another important challenge is time allocation. Of the total hours worked by HR Department what percent of the total time would be allocated to each of these roles. Almost one-quarter hours worked in were devoted to a strategic business partner as a partner with senior and line mangers in strategy execution, helping to move planning from the conference room the the market place. Bureaucracy can also be a problem, presenting "the need to consider doing things differently in order to eliminate bottlenecks and red tape." Looking forward, empowerment of local managers is seen as a priority issue.

HR effectiveness present a challenge when, in one representative's words, "line managers think performance management, job evaluation, monitoring and evaluation a waste of time. The attitude bogs down the efforts by the HR team.
  • 4 months ago
Source(s):

Self and net


Asker's Rating:<image no longer exists> Asker's Comment:I need this answer in more detail

Thank to to all the contributers of this article very interesting read Well I am a MBA student Corresponding course.Well we hardly get to know such facts and details.
Thank u guys once again.Keep posting.:idea:

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