A survey of employee relations practices and demographics of MNC chain and domestic luxury hotels in Australia
| Pages | 175-192 |
| DOI | https://doi.org/10.1108/01425450510572694 |
| Published date | 01 April 2005 |
| Date | 01 April 2005 |
| Author | Nils Timo,Michael Davidson |
| Subject Matter | HR & organizational behaviour |
A survey of employee relations
practices and demographics of
MNC chain and domestic luxury
hotels in Australia
Nils Timo
School of Management, Griffith University, Gold Coast, Australia, and
Michael Davidson
School of Hotel, Restaurant and Tourism Administration,
University of New Orleans, New Orleans, Louisiana, USA
Abstract
Purpose – The paper aims to examine employment relations practices and labour market features of
4-5 star luxury multinational chain (MNC) and domestic hotels operating in the Brisbane-Gold Coast
corridor in Australia and discuss the implications that competing on price and quality has on
employment, wages and training.
Design/methodology/approach – The study used data drawn from a large managerial and
employee relations/demographic survey covering wages, employment status, age, gender, working
conditions and training, including interview data from hotel HRM managers.
Findings – The data showed a persistence of gendered, low waged and segmented labour markets
dominated by flexible labour. Competition between MNC and domestic hotels were not found to be the
conduit of “new” HRM practices as a competitive edge. Both MNC and domestic hotels shape the hotel
labour market in a way which perpetuates cost minimization strategies based on an increasingly
skilled, yet flexible and low cost labour force.
Research limitations/implications – Of the 14 hotels, only three were domestic. MNC luxury
hotels dominate the sample. Rather a straight forward convergence thesis, MNC and domestic hotels
have been compelled to compete on price and standard quality.
Originality/value – While not a deliberate strategy of a “a race to the bottom”, the 4-5 star luxury
MNC and domestic hotels in the study have re-shaped employment relations practices perpetuating a
cost minimization competitive strategy suggesting that a “high road” competitive strategy as
portrayed in HRM literature strategy is not the only way for firms such as hotels achieving a
competitive edge.
Keywords Australia, Hotels,Multinational companies, Humanresource management,
Working practices,Pay
Paper type Technical paper
Introduction
On a global basis, tourism is a large employer. For example, the International Labor
Organisation (ILO) estimates that the global tourism industry is responsible for
approximately 192.2 million jobs (or one in every 12.4 jobs). By 2010, the ILO pre dicts
that this will grow to some 251.6 million jobs (or one in every 11 jobs!). The number of
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The authors are grateful to the hotel managers and employees who participated in the study.
They also acknowledge the insightful and constructive comments of the anonymous reviewers.
All errors and omissions remain the responsibility of the authors.
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Vol. 27 No. 2, 2005
pp. 175-192
qEmerald Group Publishing Limited
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DOI 10.1108/01425450510572694
large firms operating globally is also increasing. For example, multinational
corporations (or MNCs) have grown significantly over the past three decades and by
the early 1990s accounted for almost 22 per cent of world GDP (World Bank, 1997). The
MNC hotel industry is a large employer and a significant part of the global tourism
industry and global brand name hotel chains now dominate the 4-5 star hotel market.
According to the ILO, this global market is becoming increasingly crowded forcing
both MNC and domestic hotels to compete on price and quality (ILO, 2001, p. 48). In
countries like Australia, hotels in the 4-5 star category represent a significant part of
the tourism industry accounting for almost two thirds of all tourist accommodation, or
representing 1,324 establishments providing 305,213 beds (n¼565,992) and
employing 77,816 employees (n¼112,275) suggesting that Australian hotel
accommodation is clustered around the 4-5 star category (ABS, 2004, Table 3).
This article reports on a managerial and employee relations/demographic survey
addressing a number of employment relations and HRM practices of 4-5 star luxury
MNC chain and domestic hotels in Australia. The survey was conducted in the
Brisbane-Gold Coast corridor (in the Australian State of Queensland). Queensland is a
premier tourism destination and hosts a significant number of 4-5 star luxury hotels.
For example, Queensland accounts for 374 or just over 30.9 per cent of all 4 star hotels
(4 star n¼1,208) and 42 or 36.2 per cent of all 5 star hotels (5 star n¼116) operat ing in
Australia (ABS, 2004, Tables 3 and 6). These hotels are concentrated in a small
geographical location known as the Brisbane-Gold Coast corridor which accounts for
40.4 per cent (n¼17) of all 5 star hotels (n¼42) operating in Queensland. These hotels
operate in a crowded market being within a 45-minute drive from one another. There is
substantial competition between the hotels as the share a market based on convention
and leisure sharing access to beaches, retailing, entertainment and recreational
activities in Brisbane and Gold Coast now connected by a four lane highway.
Human resource management, MNCs and domestic firms
The interest in HRM and employee relations practices of MNC and domestic firms can
be traced to the work of Kerr et al. (1964, p. 76), who predicted that “industrialism in the
end may become one, but it certainly will have found its initial beginnings in many ”.
Kerr and colleagues argued that factors, such as technology, efficiency consideration
and industrialization processes, would eventually guide industrialized countries
towards similar HRM/IR systems, practices and outcomes. The ideas embodied in this
early work have underpinned later debates about the extent to which firms, both
domestic and MNCs, are said to adopt “strategic international human resource
management” as a tool for achieving a competitive edge and how this process operates
across national boundaries (Taylor et al., 1996). The term “strategic” is increasingly
used in HRM literature for distilling the characteristics of firms that have successfully
developed human capital and improved their competitive advantage in a global market
place (Lepak and Snell, 1999; Wright and Boswell, 2002). The idea of “universal
employment practices” or a “one best” way for firms to manage their workforce and
linking these practices to broader competitive strategies appeals to those researchers
supporting a “convergence” of HRM developments and practices across national
boundaries (Pfeffer, 1994). However, convergence theory has been criticized for being
technologically deterministic and simplistic in describing the impact of cultural,
economic, political and domestic labour regulatory regimes on firm behaviour
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