Key Human Resource Issues Affecting Managers

Key Human Resources Issues

Affecting Managers:

Carnival Cruise Case

The role of human resource management in the hospitality industry proves quite unique since the industry has several novel characteristics. The hospitality industry provides intangible ‘products’, is labor-intensive, has an inter-dependent structure and is highly influenced by seasonality and volatility. These factors have sizable implications on HR management; as a result, the industry’s critical issues are primarily employment-related. “Key Issues of Concern in the Lodging Industry” (Enz, 2009) details the results of surveying lodging industry managers and executives as per the most prevalent issues that interfere with their ability to perform their jobs. In both years that the surveys were performed (2001 and 2008), HR management problems were the most commonly cited management issues. Enz subsequently identified nine specific elements of HR management that plague managers and must be addressed by the industry. A list of these nine elements follows, supplemented with supporting examples from the PBS episode on Carnival Cruise Lines from the “Back to the Floor” series.

1. Attraction (of talented employees)

1. Attracting employees for the wrong reasons – Carnival was attracting employees on the basis of financial compensation, specifically attracting individuals in financial hardship that were willing to endure unfavorable working conditions in order to improve their financial situations. This method may attract employees that are willing to work hard, however, it is ill suited to obtaining skilled employees.
2.  No intentions to change attraction methods – Since Carnival is focused on offering budget cruises, they are decisive about keeping all costs, including labor, at a minimum. They show no intentions of changing their tactics and will therefore continue to attract the same candidate pool as they have in the past.

1. Labor shortages

1. No labor shortage issues were addressed at Carnival Cruise Lines. As Carnival recruits employees from many international countries where financial hardship is commonplace, there is a high supply of candidates for positions on the cruise line.

1. Retention (retaining talented people and avoiding high turnover rates)

1. Unfavorable working conditions cause high turnover rates – Carnival Cruise lines likely had high turnover rates as staff illustrated that many of their positions are low-paying, highly labor-intensive and emotionally-taxing. These conditions fuel turnover as employees are not willing to work in unfavorable conditions indefinitely, and will seek out other options.
2. Retaining top performers in the hospitality industry – retention of top talent in low-paying hospitality positions, such as those on Carnival Cruise Lines, is very challenging. The demand for skilled employees is high, so top talent will find and accept opportunities from other companies in order to increase their income.

1. Quality and consistency of training

1. Rapid expansion takes the focus away from proper training – Carnival has a fleet of 15 ships and also has 6 more on order. Getting employees trained properly while attempting to expand quickly is challenging, as the focus is on quantity (increasing market share) and not on quality (talent development to produce better service).
2. Executives’ perceptions of training, versus actual training results may be inconsistent – Bob Dickinson, CEO of Carnival Cruise Lines, claims to train staff to exceed the expectations of their guests and “go the extra mile”. Despite this mantra, even Dickinson, once placed in highly-demanding front-line positions, realized that many employees were too busy or too exhausted from trying to complete their job duties to be able to “go the extra mile”.
3. Employees following different standards leads to an inconsistent guest experience – Dickinson noted that the server training him was adamant that one must always carry a water on their tray, yet he was one of the only employees that adhered to this standard.

1. Employee’s lack of skills

1. Attraction of unskilled workforce – attracting employees primarily seeking financial gains does not result in a skilled workforce.
2. Incentivizing quantity over skill level – pool deck attendants are motivated to serve quickly and in high volumes, as they make 15% of their drink sales. This does not promote improvement by the right metrics; it is only encouraging them to serve quickly.

1. Employees morale

1. Low compensation – employees are paid a bare minimum (ex. pool deck servers are paid $1.50 a day), which does not make them feel valued by the company.
2. Earning potential not reflective of individual result/effort – how much Carnival staff make is highly dependent on customers opting to pay an optional $50 gratuity charge. As this is an umbrella surcharge to be split between employees in different departments, the guest’s choice of whether or not to pay it is not reflective of the level of service received from any individual employee.
3. Unfavorable working conditions decrease employee morale

1. Very hot conditions – pool deck servers were working in over 100° weather. Dickinson was soaked in sweat only part-way through his shift.
2. Impractical uniform – pool deck servers were disgruntled that they were to wear shirts made out of a heavy, unbreathable fabric while working out in the heat.
3. Staff canteen hours not suitable to employee schedules – Carnival employees described how the opening hours of the staff canteen were too limited and didn’t correlate with the time requirements of their positions. The result was that many employees missed meals and were hungry, frustrated, and less productive.

1. Strict rules on the job not reflective of environmental conditions - guests cannot see employees consume anything, even water. Despite working in extremely hot conditions, employees must go to the effort to hide from guests while drinking water.
2. Emotional stress

1. Dealing with unsatisfied customers is emotionally taxing - many guests were upset that the optional gratuity charge was automatically added to their bill without adequate warning or explanation. Front-line Carnival employees had to deal with these issues on a regular basis, even though it was a management decision.
2. Extremely long hours lead to extreme emotional stress – cabin stewards work 12-hour days, 7 days a week, with no days off. One cabin stewards cited losing weight just from crying so much when she began the position.

1. Unrealistic expectations of employees – cabin stewards are expected to clean 19 rooms per day. Their jobs are so demanding that they often pay out-of-pocket to get an off-duty deck hand to help them complete their day’s work. Setting unobtainable expectations for employees decreases morale as it makes them feel inadequate. One cabin steward cited that after her first month working on Carnival she had “left half of my soul and my body here”.
2. Demanding an overly positive demeanor can actually decrease morale – Carnival employees must always be enthusiastic. Many of the staff have to entertain guests as well as complete their normal job duties. Carnival staff were dismayed that they always had to act as if they were putting on a show.
3. Lack of scheduling flexibility unnecessarily cut into employee’s personal time – uniform scheduling throughout the week created lots of idle time on days when guests would not leave their rooms until later (and the cabin stewards therefore could not start cleaning until later). Carnival staff expressed their resentment over losing out on time they could be sleeping on those mornings.
4. Repetitive job duties – staff were performing the same job functions on a continuous basis (ex. cleaning the same style of room all day) and were showing minimal job satisfaction as a result of the lack of stimulation.

1. Career opportunities for managers

1. Lack of career ladder leading to management positions – Carnival did not depict any opportunities for progression from front-line positions into management positions. Front-line employees were recruited for minimum pay from international countries, while management positions were notably filled by more Americans.
2. Limited resources to develop employees – no management training programs were mentioned and Carnival did not express any interest in advancing their employees.

1. Rising costs of compensation

1. Pressure to increase salary or mandate tipping – Carnival management was under pressure to increase employee compensation by changing the tipping policy from optional to mandatory. A subsequent rise in their cruise price could potentially decrease their customer base, which would reflect a rising cost of employee compensation.

1. Rising costs of benefits

1. No benefit programs were mentioned – Carnival likely does not provide any benefits for its front-line employees. These staff are currently more concerned with increasing their base salary and opportunities for gratuity than pressuring management to initiate any benefits packages.