The impact of HRM practices on organisational performance in the Indian hotel industry

Purpose – The study has a two‐fold purpose: to investigate whether some specific characteristics of hotels affect organisational performance in the hotel industry in India; and to investigate whether some HRM systems affect organisational performance in the hotel industry in India. Design/methodology/approach – A total of 439 hotels, ranging from three‐star to five‐star deluxe, responded to a self‐administered questionnaire that measured 27 HRM practices, five organisational performance variables, and ten demographic variables. Factor analysis was performed to identify HRM systems, one‐way ANOVA was employed to test the association of the demographic variables with organisational performance, and correlation analysis was used to test the relation between HRM systems and organisational performance. Findings – The results indicate that hotel performance is positively associated with hotel category and type of hotel (chain or individual). Furthermore, hotel performance is positively related to the HRM systems of recruitment and selection, manpower planning, job design, training and development, quality circle, and pay systems. Research limitations/implications – Single respondent bias may have occurred because a single respondent from each organisation provided information on HRM practices and perceived measures of organisational performance. The sample was drawn from the population of best performing hotels in India, so is not representative of the hotel industry in India. Practical implications – If hotels are to achieve higher performance levels, they should preferably belong to a chain and increase their category, and management should focus on “best” HRM practices indicated in the study. Originality/value – The study makes a modest attempt to add information to the very little empirical knowledge available referring to the link between HRM and performance in the hotel industry.