SERVICE QUALITY AND HUMAN RESOURCES IN SMALL AND MEDIUM SIZED HOTEL ENTERPRISES IN TURKEY

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SERVICE QUALITY AND HUMAN RESOURCES IN SMALL AND
MEDIUM SIZED HOTEL ENTERPRISES IN TURKEY

• Fatmagul Cetinel
• fatay_at_anadolu.edu.tr
• Medet Yolal
• myolal_at_anadolu.edu.tr
• Murat Emeksiz
• memeksiz_at_anadolu.edu.tr

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Introduction

• One of the greatest challenges facing
  organizations today is the ever-growing
  competition, the continuous increase in customer
  expectations and customers subsequent demands.
• In order to be successful, firms must view
  quality as an essential part of their strategic
  process.

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Service Quality and SMEs

• For small firms, it is difficult to compete with
  large firms on cost. However, the active
  involvement of the owner and employees in small
  firms allows them to tailor the firms offerings
  to the specific needs of their customers without
  going through the bureaucratic layers typical in
  large companies.

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• Furthermore, the managers and employees of these
  firms usually have frequent and face-to-face
  contact with customers some may know them
  personally and it gives the firm a better chance
  to discover what the customer wants.
• Another significant advantage a small company may
  have is the directness and timeliness of the
  information flow from the customer to the firm.

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• The better customer focus reported by small firms
  can be explained by their proximity to and close
  relationships with the customers (Ahire and
  Golhar, 1996).
• But, if the small firm has no system of
  collecting and recording such customer data, most
  of it will be lost.

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• Over-reliance on face-to-face interaction does
  not permit SMHEs to develop a database for the
  purpose of database marketing.
• It is recommended for SMHEs to maintain more
  formal customer evaluation approaches as printed
  surveys and Internet.

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• There is a common perception among small
  businesses that quality and continuous
  improvement programs are only for large
  organizations.
• And they do not have the money to implement a
  quality improvement program.

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• Despite some challenges, it is easier for a small
  business to implement quality because it is
  easier to get everybody to understand what is
  being tried to achieve.
• Whenever the process is implemented, it can be
  easier to keep employees motivated (Struebing and
  Klaus, 1997).

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Service Quality and HRM

• Service quality depends heavily on the
  effectiveness with which front-line employees
  deal with customers and clients.
• The courtesy, empathy, and responsiveness of
  service employees all combine to influence
  quality perceptions of customers (Parasuraman et
  al., 1988).

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• The involvement of the employees into the quality
  process is crucial for the success of quality
  implementation.
• Management should make every effort to ensure
  that each employee knows and understands how the
  organization defines quality.

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• Informed employees understand the importance of
  quality in every aspect of their daily
  activities.
• Service encounters involve interaction between
  customers and employees, so employees will have
  an important role to play in influencing
  customers perceptions of service encounters
  (Farrel et al., 2001).

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• Morrison (1996) suggested that a firms human
  resource management practices can create an
  environment that elicits more customer-oriented
  behaviour from employees.
• Service quality must be promoted through the
  appropriate management of human resources.
• Schneider and Bowen (1985) proposed that when
  employees feel well treated by managements human
  resource practices they can devote their
  energies and resources to effectively treating
  clients.

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• Key dimensions of service quality such as
  empathy, assurance and responsiveness
  (Parasuraman et al., 1988) are resulting in more
  favourable evaluations of overall service
  quality.

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• It has been argued that in service organizations
  quality improvement must be focused on the
  selection, training, and compensation of
  employees.
• Mullins (1998) also maintains that training is
  potentially one of the most important motivators.
  
• It is a key element in the ability, morale, job
  satisfaction and commitment of staff, and in the
  improved delivery of service and customer
  relationships, and economic performance.

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• Both employee motivation/vision and
  organizational learning are thought to positively
  affect perceived service quality.
• Indeed, it has been argued that in service
  organizations quality improvement must be focused
  on the selection, training, compensation, and
  socialization of employees.

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Methodology

• In Turkey, there are 2325 operations certified
  hotels registered to Ministry of Culture and
  Tourism differing in size and service quality and
  constitute the study population.
• The population frame was taken from the ministry
  and 1, 2, and 3 star rated hotels were selected
  as the sample of the study as they have SME
  characteristics.

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• The total number of the sample is 1370. However,
  because of the accessibility and classification
  difficulties observed, municipality certified
  hotels were not included into the survey.
• Mail survey was employed in the research.
  Questionnaire forms were mailed to 1370 hotels in
  July, 2005 and hotel managers were requested to
  reply.
• Total number of responses reached to 313 which
  constitute a response rate of 22.8 percent.

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Findings

• Although, service quality is critical in a
  labour-intensive industry such as hospitality,
  the service quality should also be supported by
  the physical quality of the enterprises for the
  purpose of obtaining customer satisfaction.
• 48.9 percent of the enterprises indicated that
  their physical conditions were in a better
  situation, so they were not in need of renovation.

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• However, it is also found that buildings and
  equipments of 34.2 percent of SMHEs were
  burnt-out but they could not invest in buildings
  and equipments due to lack of financial power.
• One tenth of the firms in the study stated that
  they renovate when required (10.2 percent).

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• Quality assurance is the collection of systematic
  efforts required to produce goods and services
  based on quality standards in order to meet the
  customer needs and expectations (Tekin, 2004).
• The findings reveal that most of the businesses
  (70.3 ) do not have any quality assurance
  documentation.

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• In the same manner no businesses possess SERVQUAL
  which is a scale and gap analysis used for
  measuring service quality in service firms.
• Although these documents are not compulsory
  (Tekin, 2004), in the eyes of customers, they are
  the indicators of service quality delivered in
  the firms, and they create a positive image on
  the perception of the customers.

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• In another question the hotels were asked whether
  they have implemented Total Quality Management
  (TQM). According to the findings, 40 hotels (12.8
  percent) stated that TQM was being employed.
• Although this rate is low, some of the weaknesses
  of SMEs that could create problems in
  implementing TQM include lack of financial and
  human resources, employee resistance, and loss of
  momentum that may occur during the implementation
  process (Struebing and Klaus, 1997).

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• Having skilled personnel is important for the
  service quality in tourism firms.
• For this reason educational levels and foreign
  language skills of the personnel in SMHEs were
  also questioned.
• In 186 hotels, there are 1217 personnel trained
  in tourism schools at any level, and the average
  is 6.5 per hotel.

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• The rate of tourism trained employees in total
  employment is 21.4 percent.
• As in the same manner, only one third of the
  total employment has foreign language skills.
• Findings reveal that tourism trained and foreign
  language skilled employment in SMHEs is
  relatively low.

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• Quality-focused firms should operate in a
  customer-oriented manner while initially
  accepting and satisfying the personnel as
  internal customers.
• Moving from the assertion that satisfied
  employees would deliver more qualified service,
  the firms were also questioned about the HR
  practices.

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• Table 3 shows the frequency of quality and human
  resources strategies used in SMHEs.
• For simplicity, frequencies are summarised in
  group percentages as always/sometimes, when
  needed and rarely/never.

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Table 3 Frequency of Quality and Human Resources
Strategies Used in SMHEs
How often do you use the strategies below about the quality and employees? Always/ sometimes () When needed () Rarely/ never () Mean St. Dv.
Try to maximise collaboration among the departments and the staff. 94.7 4.6 0.6 1.19 0.55
Allow the employees to easily communicate with their managers and supervisors. 91.4 7.3 1.3 1.26 0.66
Hire the applicants having skills in customer relations and services. 92.5 5.3 2.3 1.30 0.74
Follow the industry trends to adapt the changes and remain competitive. 82.7 11.5 5.7 1.64 0.96
Encourage team-work. 78.2 12.3 9.5 1.68 1.07
Train the employees for achieving customer satisfaction. 78.1 17.4 4.4 1.71 0.93
Give all the successful employees to promote to a better position. 76.5 11.7 11.8 1.77 1.13
Inform the employees about the operations and the customers 58.4 37.3 4.3 2.13 0.96
Reward the employees (bonus, wage increase, recognition events) in order to motivate employees and increase productivity. 63.0 18.0 19.0 2.31 1.18
Empower the employees. 46.4 38.0 15.6 2.50 1.13
Involve the employees in decision-making. 45.3 31.9 22.9 2.62 1.22
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• It is found that the firms were trying to create
  a collaborative environment among the departments
  and the employees and it is also expressed that
  employees could reach and conduct to their
  managers and supervisors whenever they needed.
• Though it is known that the limited number of
  employees in small firms result in closer
  relations between the employees and managers, and
  the conflicts among the workers could be resolved
  easily.

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• The respondent firms have, encouragingly,
  indicated that they prefer candidates skilled in
  customer relations and customer services while
  selecting the applicants for a vacancy.
• There are indicators of uncertainty about the
  exact use of formal recruiting procedures, since
• more than half of the respondent firms recruit
  employees by networking,
• 95.8 percent of the firms select employees
  according to results of face-to-face interviews,
• applicants were hired by the final decision of
  the owners in 62.9 percent of the firms, and
• merely one third of the firms employ tests in
  order to find out the skills and qualities of the
  applicants

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• The firms in the study train the employees on
  customer satisfaction, in certain intervals.
• On the other side, when the training frequencies
  of these firms are analyzed, it is seen that 77.4
  percent of the firms conduct training when needed
  and this can be evaluated as the lack of formal
  training programs in these firms.

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• Merely 11.1 percent of the firms in the study
  conduct training on a regular basis.
• Consequently, it may be concluded that SMHEs in
  Turkey are not qualified in terms of employee
  training.

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• However, the emphasis on customer relations (83.3
  percent) and service quality (80.3 percent) in
  training sessions in the firms conducting
  employee training programs can be evaluated as
  the firms concentration on customer oriented
  approaches and service quality.
• The essence of the problem is, as mentioned
  before, the lack of professional HR managers and
  financial weaknesses of these firms.

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• Rewarding the personnel according to performance
  evaluation is not also common among the
  respondents.
• Such rewards or incentives would enhance
  motivation and morale among the personnel and
  promote staff participation in revenue and
  service improvement.

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• The findings also suggest that SMHEs are
  insufficient about the performance evaluation,
  since, although 69.6 percent of the firms
  expressed that they evaluate the performance,
  half of these firms do it when needed.
• Informed employees about the operations and
  customer issues are prerequisite for achieving
  service quality. In the study, the employees in
  SMHEs were rarely informed about the operations
  and customers.

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• In the same manner, involvement of employees in
  decision making process and their empowerment in
  the respondent firms were also conducted when
  needed.
• This can be problematic for staff motivation and,
  consequently for customer satisfaction.

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CONCLUSION

• Quality is one of the greatest challenges facing
  organizations in todays ever-growing
  competition, continuous increase in customer
  expectations and needs.
• Such trends have also forced hotels to seek ways
  to expand their market share, retain current
  clients and create repeat business.
• Achieving such goals requires a comprehensive
  understanding of the ways how customers evaluate
  the quality of service offerings and how they
  choose one hotel to another.

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• Quality assurance seems to be more problematic
  for smaller tourism firms due to some of their
  disadvantages as lack of professionalism in the
  management of operations, human resources and
  financial capabilities.
• The study results reveal SMHEs in Turkey
  experience problems related to physical quality
  of their establishments.

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• National and international quality standards and
  documents provide a useful tool for the firms.
• Although these documents reflect quality of the
  businesses in the eyes of customers, most of the
  hotels in the study ignore such documentation.
• This may be explained by the lack of awareness
  and professionalism among SMHEs.

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• Service quality is greatly depends on the quality
  of service providers.
• In this regard, hotel enterprises should accept
  employees as internal customers.
• In order to develop the skills and the
  qualifications of the employees, a regular
  training program should be designed in the hotels.

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• Similarly, employee involvement into the
  decision-making processes and empowerment would
  create loyalty and motivation among the
  employees.
• However, SMHEs are not capable of directing
  employees towards quality service delivery due to
  lack of professionalism in the management of
  human resources.
• Consequently, SMHEs should be encouraged to
  follow formal HRM practices due to interrelation
  between HRM practices and service quality.

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• As Berry et al. (1988) noted, in many service
  organizations, there is a tendency to think of
  knowledge and skills development in terms of
  events a three-day training session here, a
  special presentation there.
• A similar tendency is apparent in SMHEs in the
  study.

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• Having formal, continuous training for the
  employees based on the performance evaluation and
  the training requirements of the personnel would
  carry the firms to success.
• In order to overcome the problem, tourism related
  associations should take the responsibility for
  creating awareness among the owner/managers about
  the importance of applying formal HRM practices
  such as recruiting, hiring, training and
  motivating the employees.

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• Thanking you for your attention