Innovations in Hospitality Human Resources: Cases from the U.S. Lodging Industry

[Excerpt] Today’s hospitality and tourism companies face complex, dramatically shifting challenges, most notably the need to compete for increasingly sophisticated customers in a global, fluid marketplace. To attract and retain the loyal cadre of customers that will ensure the organization’s success, service companies such as hospitality organizations must employ technologically advanced, yet margin sensitive, product and pricing strategies and practices that will differentiate themselves to their intended market. Even more importantly, these service organizations need to devise strategies that will capture and retain the most important yet, from a financial perspective, unrecognized asset on the balance sheet: the employees that design and deliver the service to the customer base. Human resource strategists (i.e. Becker & Gerhart, 1996; Cappelli & Crocker-Hefter, 1996; O’Reilly & Pfeffer, 2000; Pfeffer, 1998; Ulrich, 1997), including those who take a hospitality perspective (i.e. Baumann, 2000; Hume, 2000; Worcester, 1999) advocate a renewed attention to the investment in employees or “human capital” as a source of strategic competitive advantage.

The Business Case for (and Against) Restaurant Tipping

Recent interest in replacing tipping with service charges or higher service-inclusive menu pricing prompted this review of empirical evidence on the advantages and disadvantages to restaurants of these different compensation systems. The evidence indicates that these different pricing systems affect the attraction and retention of service workers, the satisfaction of customers with service, the actual and perceived costs of eating out, and the costs of hiring employees and doing business. However, the author comes away from the data believing that the biggest reason for restaurateurs to replace tipping is that the practice takes revenue away from them in the form of lower prices and gives it to servers in the form of excessively high tip income. The biggest reason for restaurateurs to keep tipping is that it allows them to reduce menu prices, which increases demand. Thus, restaurateurs’ decisions to keep voluntary tipping or not should ultimately depend on the relative strengths of these benefits. The more that a restaurant’s servers are overpaid relative to the back of house and the wealthier and less price-sensitive a restaurant’s customers are, the more the owner of that restaurant should consider abandoning tipping. By this reasoning, many upscale, expensive restaurants (especially those in states with no or small tip credits) probably should replace tipping with one of its alternatives.

An Examination of Customers’ Attitudes about Table Top Technology in Full-Service Restaurants

This paper examines the influence of customer-facing technology in full-service restaurants. As a new addition to the service experience, tabletop devices offer the customer more control over the dining experience, and also increase customer participation in the service process, which has the potential to upset the traditional exchange between service providers and customers in restaurants. To examine how customers react to the use of tabletop devices, this study examines 1,343 point-of-sales transactions from 20 units of a full-service casual dining restaurant chain and matches customer in-restaurant transactions to their reactions to tabletop devices used during their meals. Results show that over 70% of the customers who used tabletop devices reported positive affect toward the device, with approximately 79% of customers reporting that the device improved their experience, citing convenience, ease of use, and credit card security as some benefits of using the technology. Approximately 80% of the customers who used the device reported that they would return to the restaurant because of the positive affect. The results also indicate that likeability of the device and tip percentage were positively and significantly connected to customer reports of the devices having a positive effect on experience and on desire to return. In addition, when customers reported increased return intentions, likeability of the device was higher regardless of reports of the device improving restaurant experience, showing that the introduction of tabletop devices had a positive effect for most—but not all—customers.