Impact of Talent Management on Employee Retention and Performance Improvement in the Food and Beverage Department of Hotels
The aim of the project is to investigate the link and effect of talent management to the decision of food and beverage staff to remain in their current employment and to the improvement in the performance of those working in the food and beverage department. To achieve this aim, the objectives are
To uncover the application of talent management in the food and beverage department of hotels
To determine the impact of talent management on employee retention in the food and beverage department of hotels
To determine the impact of talent management on performance improvement in the food and beverage department of hotels
To identify issues in implementing talent management
To draw implications on the optimisation of talent management in the food and beverage department.
The food and beverage department typically handles 15 to 20 percent of the operations or service offerings of hotels (Barrows Powers, 2009). To contribute to efficiency, the food and beverage department needs to simultaneously address cost control and quality. Scheduling to meet deadlines, especially in the three daily peak periods of food and beverage demand, as well as accuracy in forecasting demand strongly contribute to cost control. Creativity in developing the menu to fit changing customer demands and improving service delivery enhances quality. Trained and experienced personnel are valuable in achieving both cost effectiveness and quality in food and beverage services. The selection of qualified personnel and the retention of trained and experienced staff in food and beverage department of hotels is the challenge.
Talent management emerged as a strategy addressing these concerns. The specific role of talent management is to find and attract personnel with potential, develop valuable potential and build skills, and retain talents. Highly skilled and experienced staff in the food and beverage department of hotels can easily find work with other hotels or outside of the industry (Barrows Powers, 2009). There is need to determine talent management as a solution. However, there are limited studies focusing on talent management strategy specifically applied to the food and beverage department.
Literature Review
There is no consistent definition of talent management in literature. There are three directions conceptualising talent management. The first direction considers talent management in general terms as a term akin to human resource management. The scope of talent management encompasses the human resource management activities of hiring, training, and succession (Mercer, 2005 Boudreau Ramstad, 2007). Talent management encompasses the recruitment of the best people for the job (Sullivan, 2005) and training of personnel to enhance skills and develop leadership potential (Cohn et al., 2005). The second direction focuses on developing the talent pool of the organisation. Part of talent management is ensuring that jobs are filled by the best people as positions are vacated due to retirement and promotions (Sparrow, 2007) to reflect the optimisation of human resources (Lewis Heckman, 2006). The third direction stresses on talent. This prioritises the recognition, hiring and rewarding of highly competent people. Performance measurement is the key policy with personnel categorised into levels of performance (Stahl et al., 2007). Those at the top tier receive the greatest rewards. However, this direction also considers the need to develop the competence of all personnel to support organisational goals (Collings Mellahi, 2009).
While there is no commonly accepted definition of talent management, the directional trends over this concept indicate its strategic nature based on the recognition that human resource activities, talent pool, and talent only benefit the organisation when optimally aligned with organisational goals (Boxall Purcell, 2008). Talent management as a strategy commences with the identification of positions considered as key in sustaining competitive advantage (Collings Mellahi, 2009). This is done by differentiating between jobs with strategic impact and those that are not (Becker Huselid, 2006 Boudreau Ramstad, 2007). Many firms often fail in this initial task as shown by investments made on jobs or roles without any strong strategic impact. The next step is to develop people with strong potential for competence to take on jobs with strong strategic impact (Scott Revis, 2008). This is a different perspective from seeking to fill all positions with competent people, which as business firms have experienced is nearly impossible, or in automatically booting out those with average or low performance because competence requires development and job matching (Collings Mellahi, 2009). The last but equally important step is to develop the human resource management mechanism to address the attraction, selection, training, deployment and retention of competent personnel in key jobs (Boudreau Ramstad, 2007).
A wide range of benefits has been attributed to talent management. These benefits are linked. However, two of the most important benefits are employee retention and improved performance. Employee retention is the ability to keep competent personnel hold key positions in the organisation (Alonso ONeill, 2009). This is an important benefit to organisations experiencing high turnover rates such as the hospitality industry (Walsh Taylor, 2007). Improved performance refers to the ability of personnel to meet job expectations, improve output, and even to exceed minimum expectations (Lewis Heckman, 2006). Improvement in performance is explained by factors such as motivation, engagement and commitment (Lewis Heckman, 2006 Collings Mellahi, 2009) influenced by or linked to the talent management strategy, particularly training and development as well as rewards.
Talent management has been adopted by hospitality firms for its benefits. A survey of hospitality firms showed that talent management has become valued as a strategy with hotels showing commitment in implementing this strategy (DAnnunzio-Green, 2008). A study on management development indicated that a strong focus on the management of competencies and skills is observed in hospitality firms (Watson, 2008).
Employee retention is an outcome targeted by hospitality firms struggling with high turnover rates. A study on ways of retaining management talent showed that managers in hospitality firms look for career development and growth opportunities in deciding on whether to stay or leave the hotel (Walsh Taylor, 2007). Skills and training programs are directly linked to the retention of key employees (Maxwell MacLean, 2008). Investing on the development of new graduates with potential for competence serves the need of hotels for talents that remain with the company in the long-term (Scott Revis, 2008).
Performance improvement is another outcome addressed by hospitality firms by applying talent management. The alignment of competent people with the right strategic jobs supports the optimum contribution of personnel to hospitality firms (Baum, 2008). Employing talent management as a strategy fosters employee engagement, which creates motivation to do their best and to fulfil their tasks even beyond minimum expectations (Hughes Rog, 2008).Talent management has a positive impact on factors such as employee attitude, job satisfaction, work and organisational commitment, and personal achievement that in turn contribute to improved performance (Deery, 2008). These factors link talent management with performance improvement as an outcome.
While talent management in the hospitality industry have been widely studied, there are limited studies focusing on the specific application of talent management to the food and beverage department. Investigating talent management in this specific area is important because food and beverage services could become key determinants of the competitive edge of hotels. Problems with cost control and quality in this department together with turnover should be addressed. Talent management is a promising solution.
A study on the shortages of chefs in the United Kingdom showed that the selection of an employer is the reason as influenced by perceptions of opportunities in other firms relative to those in the current work or current offers (Pratten OLeary, 2007). Chefs do specialised work and work opportunities for skilled chefs are many. Retaining top chefs is important and this could be achieved through offers of placement in strategic positions such as team leaders or mentors as well as through opportunities or venues for further skills development (Pratten OLeary, 2007). Another study on attracting and retaining food servers showed that occupational stereotype was a reason in shifting jobs and this is addressed by making the work a venue for talents (Wildes, 2007).
Methodology
The paradigm in developing the methodology of the study is the research onion (Saunders et al., 2007) that provides general to specific methodological choices with those chosen comprising a cohesive and comprehensive support in conducting the study.
The research philosophy is the principle guiding the research. The two major choices are positivism and interpretivism. The key difference between the two is the stand on the development of knowledge. Positivism provides that knowledge is derived from methods similar to those employed in the natural sciences while interpretivism calls for knowledge emerging from subjective meanings and experiential insights (Saunders et al., 2007). Positivism is the selected research philosophy in the study because studying the impact of talent management on retention and performance improvement draws information on the experiences of personnel in the food and beverage department of hotels to inform on the impact in an objective manner.
The research approach refers to the flow of information in the research. The choices are deduction and induction. Deduction commences with generalisation such as theories or hypotheses and focuses on specific data to test these generalisations while induction starts with specific data and ends with generalisations drawn from the analysis of data (Saunders et al., 2007). Deduction is the selected approach because the study involves the testing of the positive impact of talent management on retention and performance improvement derived from the literature through specific data from the food and beverage department of hotels.
The research strategy is the plan in collecting data. The choices include experiment, survey, case study, and archive research (Saunders et al., 2007). The difference depends on whether the data collection is controlled or not and the source of data. Experiment is controlled. Archive research draws data from secondary sources. The selected strategy is survey because the intention of the study is to draw information from the food and beverage department of hotels. The survey method enables the collection of data from many sources to support conclusions on the aim of the study.
The methodological choice refers to the nature of the data collected. The general choices are qualitative and quantitative study. The qualitative study involves the collection of accounts or descriptions of the phenomenon studied while the quantitative study refers to the derivation of numerical data. The purpose of qualitative study is to capture the perspective of actors while the purpose of the quantitative method is to determine causality and causal links. (Saunders et al., 2007) The selected method is quantitative study because investigating the impact of talent management on retention and performance improvement is a study on causality as supported by numerical data. The aim of the study is achieved by using the quantitative method. However, the phenomenon studied does not exclude investigation through qualitative method.
The time horizon refers to the period considered in data collection. The choices are longitudinal and cross-sectional study while longitudinal study collects data in a given period such as in a span of three or five years (Saunders et al., 2007). This is appropriate to studies investigating changes or developments. Cross-sectional study collects data at a single point. Although the data collected may refer to past, present and future events, the data collected pertain to existing information at a given time. Based on this distinction, the selected time horizon for the study on the impact of talent management on retention and performance improvement in the food and beverage department of hotels is the cross-sectional study.
The data collection technique is the specific method of collecting data. The primary data gathering choices include experiment, questionnaire, observation, and interview (Saunders et al., 2007). These cater to different research purposes and types of data. Experiment and structured questionnaires are commonly used in quantitative studies while observation and interview are aligned with qualitative studies. The selected data collection instrument is a structured survey questionnaire. This data collection tool supports the collection of data to inform on the impact of talent management on retention and performance improvement based on the responses to the questionnaire of food and beverage personnel of hotels. Using a structured questionnaire also enables data collection from many employees within the research time frame. Using structured questions leads to data that support comparison of responses.
The structured questionnaire is comprised of closed questions or questions with a given set of answers (Saunders et al., 2007). Respondents can select from these options for the answer that best describe their experience. The questionnaire has four sections. The first section covers the socio-demographic information on the respondents including age, gender, income range, position and job, and years of employment. The second section draws information on the talent management policies and practices of the hotels. The third section covers the impact of talent management policies and practices on retention. The fourth section encompasses the impact of talent management policies and practices on performance improvement.
The method of selecting respondents is random sampling. The researcher coordinated with the HR department of three hotels, which implement talent management policies and practices, for a list of employees in the food and beverage departments. From the list, a representative sample was selected by drawing lots. The sample of respondents participating in the study totalled 30 individuals. The researcher visited the hotels to distribute the questionnaires at the time convenient to the respondents.
The results were analysed using descriptive statistics including frequencies, mean, percentages, and ratios. The numerical results were considered relative to the literature review.
Research Findings Critical Evaluation
The socio-demographic characteristics showed that 6 respondents were managers and the remaining 24 are personnel. Of the 24 personnel, 11 were chefs and kitchen crew while 13 were food and beverage servers. There was variance in the age and gender of managers, chefs and kitchen crew, and servers. These socio-demographic characteristics may not be significant determinants of the responses. There are no significant differences in the salary range of managers, chefs and kitchen crew, and servers in the three hotels. The basic income received by the respondents are assumed to fall within industry standards and influenced by competitive dictates. The hotels can distinguish themselves as employers based on other factors such as benefits and other perks.
The hotels applied talent management policies and practices. While the respondents explicitly recognised talent management as hiring talents or potential talents and training and skills building, the description of the practices of the hotels indicated the selection of key jobs (Becker Huselid, 2006 Boudreau Ramstand, 2007) and training and deployment of talented personnel for these jobs (Scott Revis, 2008). Attraction and selection of talents or potential talents was rated highly, by most of the respondents across the different jobs and positions. This implies that the respondents recognise the hiring qualifications and procedures of the hotels as intended to draw talents and potential talents into the organisation. Training and skills building was also highly rated as a talent management practice but only by managers and chefs. Except for two managers who rated training and skills building as moderate in the hotels, the four managers rated high this talent management practice. This reflects on skills training and building as differently applied to various managers and with different intensities. All the chefs and kitchen crew rated high training and skills development. The chef and kitchen crew positions require talent and involve training and skills building in all hotels. It is apparent that the chefs have undergone training and skills building activities as part of the talent management of the firms. Almost all of the servers rated as moderate training and skills building practices of the hotels as applied to them. None rated high this talent management practice. The job of servers may not be considered as requiring a talent pool or a group requiring greater training and skills building. There was no consensus in the rating of the respondents over changing human resource practice to support strategic talent management. This expresses lack of familiarity of the respondents with these practices andor the limited adoption of the hotels of this practice as issues.
The results show that talent management has a significant positive impact on retention. Prior to the adoption of talent management by the hotels, the average turnover rate in the three hotels is 37 percent. Almost 1 in every three personnel in the food and beverage department leaves the company in a year. With talent management, the average turnover rate dropped to 22 percent or around 1 in 5 people leaving the company. The impact on manager retention is strong since no managers in the food and beverage department left the organisation in the past two years. The impact on chefs and kitchen crew retention was also high. One chef and five kitchen crew members resigned from the hotels in the past year. The impact on retention of servers is weaker since almost half of servers leave the company in a year. The explanation could be the moderate training and skills building for servers in the hotels. Another explanation is the practice of hotels of hiring servers according to need, based on the peak and slack months. Nevertheless, if talent management practices were improved, all the respondents answered that this would affect their attachment to the hotel and the food and beverage department.
The responses indicate a significant positive impact of talent management on performance improvement measured in terms of output and results of regular performance assessments. The managers reported the ability to maintain their performance and make improvements in targeted areas using better skills from formal training and informal training by facing new on-the- job experiences. Chefs and kitchen crew reported the highest impact of talent management with a number of kitchen crew receiving promotions or raises and the others expecting the same results within the next year. The servers reported performance improvement after receiving basic training and after a few weeks on the job but servers employed for more than a year report that they were able to only maintain performance levels. Talent management for servers is an emerging issue.
The methods employed were effective in data collection. All questionnaires were returned fully answered. The results obtained were able to address the research question of determining the impact of talent management on employee retention and performance improvement in the food and beverage department of hotels. However, the quantitative study has limitations. The use of the structured questionnaire was able to determine the impact of talent management on retention and performance improvement based on the answers of the respondents. The impact of talent management was established and the causal relationship was gleaned from the questionnaire responses. Issues in talent implementation management were identified. However, the data collection methods were limited in considering the in-depth causes of these issues for purposes of deriving implications and solutions.
Talent management is a strategy involving the identification of key jobs that contribute to competitive advantage, attraction, selection and training of potential talents, deployment of talents to these key jobs, and improvement of HR policies to support the strategy. Studies identified retention and performance improvement as the common benefits of talent management. Retention addresses turnover. Performance management targets cost control and quality issues. While talent management in the hospitality industry is widely researched, there are limited studies on its specific application to the food and beverage department. The quantitative study using a structure questionnaire was used to collect primary data. Based on the responses, the hotels implemented talent management. The talent management policies and practices of the three hotels had an overall significant positive impact on retaining employees and improving performance. However, there were differences in the impact, with a stronger impact on managers as well as chefs and kitchen crew and weaker impact on servers. This reflects the variance in targeting these different jobs for talent management. The issues on the implementation of talent management are tuning HR practices to support talent management and talent management for servers. The limitations of the quantitative study open these issues for further study.
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