Impact of Human Resource Management (HRM) Practices on Hotel Industry’s Performance: The Mediating role of Employee Competencies

Frank Nana Kweku Otoo ., Dr. Mridula Mishra .


The aim of this paper is to examine the impact of human resource management practices on hotel industry performance by means of employee competencies. An integrated research model was developed by combining principal factors from existing literature. Data were collected through questionnaire from 700 employees of the selected hotels. The validity of the model and hypotheses were tested using structural equation modeling (SEM). The reliability and validity of the dimensions are established through confirmatory factor analysis. The results indicate that some human resource management practices influence organizational performance through their impact on employee competencies. Career planning and performance appraisal however, do not impact employee competencies of the firms studied. The research was undertaken in the hotel industry and the analysis based on cross-sectional data which cannot be generalized across a broader range of sectors and international environment. The findings of the study have the potential to help stakeholders and management of hotels in adopting properly and well-articulated HRM practices in building human capital and stimulating the necessary behaviours that create advantage for the organization. This study contributes to the human resource management literature, integrating HRM practices and employee competencies into a comprehensive research model that impacts organizational performance.


HRM practices, Employee competencies, Organizational performance, SEM.

Full Text:



Appiah, C. (2010). Human Resource Strategies for International Growth. Routledge, London

Armstrong, M. (2006). A handbook of human resource management practice, (10th Ed.). Kogan Page. London.

Ardichvili, A., Vaughn, P. and Tim, W. (2003). Motivation and barriers to participation in virtual knowledge-sharing communities of practice. Journal of Knowledge Management, Vol.7, 64-77.

Ashford, S. J. (1988). Individual strategies for coping with stress during organizational transitions. Journal of Applied Behavioral Science, Vol.24,19-36.

Asree, S., Zain, M. and Razalli, M. R. (2010). Influence of leadership competency and organizational culture on responsiveness and performance of firms. International Journal of Contemporary Hospitality Management, Vol.22, 500–516.

Bartlett, K. R. (2001). The relationship between training and organizational commitment: a study in the health care field. Human Resource Development Quarterly, Vol.12, 335-352.

Baron, R. M., and Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, Vol.51, 1173–1182.

Barzegar, N. and Farjad, S. (2011). A study on the impact of on the job training courses on the staff performance (a case study). Procedia – Social and Behavioral Sciences, Vol.29, 1942-1949.

Baum, T., and Szivas, E. (2008). HRD in tourism: A role for government?. Tourism Management, Vol.29, 783–794.

Becker. E. and Huselid, M. A. (2006). Strategic human resources management: Where do we go from here?. Journal of Management, Vol.32, 898-925.

Bentler, P. M. (1990). Comparative fit indexes in structural models. Psychological Bulletin, Vol.107, 238-246.

Bagozzi, R. P., and Yi, Y. (1991). Multitrait-Multimethod Matrices in Consumer Research. Journal of Consumer Research, Vol.17, 426-439.

Boxall, P. and Steenveld, M. (1999). Human resource strategy and competitive advantage: a longitudinal study of engineering consultancies. Journal of Management Studies, Vol.36, 443-463.

Boyatzis, R.E. (1982). The competent manager: A model for effective performance. Canada: John Wiley and Sons.

Brown, M. W., and Cudeck, R. (1993). Alternative ways of assessing model fit, In K. Bollen, and J. S. Long (Eds.), Testing structural equation models (pp. 136–162), Newbury Park, Sage, CA.

Caldwell, D.F., Chatman, J.A. and O'Reilly, C.A. (1990). Building organizational commitment: a multi-firm study. Journal of Occupational Psychology, Vol.63, 245–261.

Cappelli, P., and Neumark, D. (2001). Do high performance work practices improve establishment level outcomes? Industrial and Labor Relations Review, Vol.54, 737–775.

Clardy, A. (2008). The strategic role of human resource development in managing core competencies. Human Resource Development International, Vol.11, 183-197.

Cho, S., Woods, R.H., Jang, S.C., and Erdem, M. (2006). Measuring the impact of human resource management practices on hospitality firms’ performance. Hospitality Management, Vol. 25, 262-277.

Conway, J.M. and Lance, C.E. (2010). What reviewers should expect from authors regarding common method bias in organizational research. Journal of Business and Psychology, Vol.25, 325-334.

Cook, C. and Hunsaker, P.L. (2001). Management and organizational behaviour, (3rd Ed.), Irwin McGraw-Hill, New York, NY.

Delaney, J.T. and Huselid, M.A. (1996). The impact of human resource management practices on perception of organizational performance. Academy of Management Journal, Vol.39, 949-969.

Datta, D. K., Guthrie, J. P. and Wright, P. M. (2005). Human resource management and labor productivity: does industry matter. Academy of Management Journal, Vol.48, 135-145.

Delaney, J.T. and Huselid, M.A. (1996). The impact of human resource management practices on perception of organizational performance. Academy of Management Journal, Vol.39, 949-969.

Delery, J. E., and Doty, D. H. (1996). Modes of theorizing in strategic human resource management: tests of universalistic, contingency, and configurational performance predictions. Academy of Management Journal, Vol.39, 802-835.

Draganidis. F. and Mentzas. G. (2006). Competency based management: a review of systems and approaches. Information Management and Computer Security, Vol14, 51-64.

Duckett, L. J., and Ryden, M. B. (1994). Education for ethical nursing practice. In Rest, J. R. and Narváez, D. (Eds.), Moral development in the professions: Psychology and applied ethics (pp. 51–70), Hillsdale, Lawrence Erlbaum Associates, New Jersey, NJ.

Dryer, L., and Reeves, T. (1995). HR Strategies and firm performance: an approach and an agenda. Industrial Relations, Vol.23, 156-169.

Eby, L. T. and Dobbins, G. H. (1997). Collectivistic orientation in teams: an individual and group-level analysis. Journal of Organizational Behavior, Vol18, 275-295.

Evan, W. R. and Davis, W. D. (2005). High-performance work systems and organizational performance. the mediating role of internal social structure. Journal of Management, Vol.31, 758-775.

Fornell, C. and Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18 (1), 39-50.

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E. and Tatham, R. L. (2006). Multivariate data analysis, (6th Ed.). Prentice-Hall, Upper, Saddle River, New Jersey, NJ.

Harrison R. (2000). Employee Development, (2nd Ed.). Institute of Personnel and Development (IPD), London.

Hellriegel, D. and Slocum, J.W., Jr. (2011). Organizational behavior. Southwest Cengage Learning, Mason, USA.

Hoge, M. A. Tondora, J. and Marrelli, A. F. (2005). The fundamentals of workforce competency: implications for behavioral health. Administration and Policy in Mental Health and Mental Health Services Research,Vol.13, 509–531.

Homer, M. (2001). Skills and Competency management. Industrial and Commercial Training, Vol.33, 59-62,

Hu, L. T., and Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives, Structural equation modeling. A multidisciplinary Journal, Vol.6, 1-55.

Huselid, M.A., (1995). The impact of human resources management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, Vol.38, 635–672.

Huselid, M.A., and Becker, B.E. (1996). Methodological issues in cross-sectional and panel estimates of the human resources-firm performance link. Industrial Relations, Vol.35, 400–422.

Giles, W., Findley, H. and Feild, H. (1997). Procedural fairness in performance appraisal: beyond the review session. Journal of Business and Psychology, Vol.11, 493-506.

Ichniowski, C., Shaw, K., and Prennushi, G. (1995). The effects of human resource management practices on productivity, NBER Working Paper 5333, Columbia University.

Kabanoff, B. and Brown, S. (2008). Knowledge structures of prospector, analyzers, and defenders: content, structure, stability, and performance. Strategic Management Journal, Vol.29,149-171.

Kalargyrou, V., and Woods, R. H. (2011). Wanted: training competencies for the 21st century, International Journal of Contemporary Hospitality Management, Vol.23,361–376.

Kandampully, J., Juwaheer, T. D., and Hu, H. H. (2011). The influence of a hotel firm's quality of service and image and its effect on tourism customer loyalty. International Journal of Hospitality &Tourism Administration, Vol.12, 21-42.

Kline, R. B. (2010). Principles and practice of structural equation modeling (3rd Ed.), Guilford Press, New York, NY.

Levenson, A. R., Van der Stede, W. A. and Cohen, S. G. (2006). Measuring the relationship between managerial competencies and performance. Journal of Management, Vol.32, 360-380.

Lockhart, J. C. (2013). Executive education: can it be too good. Journal of Executive Education, Vol.12,1–12.

Mackelprang, A.W., Jayaram, J. and Xu, K. (2012). The influence of types of training on service system performance in mass service and service shop operations. International Journal of Production Economics, Vol.138, 183-194.

Maxwell, G., McDougall, M., and Clair, S. (2000). Managing diversity in the hotel sector: The emergence of a service quality opportunity. Managing Service Quality, Vol.10, 367–373.

McClelland, D.C. (1973). Testing for competence rather than for intelligence. American Psychologist, Vol.28, 1-14.

Meyer, M. and Kirsten, M. (2005). Introduction to Human Resource Management, New Africa Books (Pvt) Ltd, Claremont, CA.

Milošević, D. M., Martinelli, R. and Waddell, J. M. (2007). Program management for improved business results. Wiley, Hoboken, New Jersey, NJ.

Murphy, P. E., and Price, G. G. (2005). Tourism and sustainable development. In W. F. Theobald (Ed.), Global tourism (3rd ed., pp. 167–192). Burlington: Elsevier

Noe, R., Hollenbeck, J., Gerhart, B., and Wright, P. (2010). Human resource management: gaining a competitive advantage, (7th ed.). McGraw-Hill. New York. NY.

Nunnally, J. C. and Bernstein, I. H. (1994). Psychometric theory (3rd Ed.), McGraw-Hill, New York.

Obisi, C. (2011). Employee performance appraisal and its implication for individual and

organizational growth. Australian Journal of Business and Management Research, Vol.1, 92-97.

Ordanini, A. and Parasuraman, A. (2011). Service innovation viewed through a service- dominant logic lens: a conceptual framework and empirical analysis, Journal of Service Research Vol.14,3-23.

Osman, I., Sidani, Y., Al-Ayoubi, B. and Emrouznejad, A. (2011b). Data envelopment analysis model for the appraisal and relative performance evaluation of nurses at an intensive care unit. Journal of Medical Systems, Vol.35,1039-1062.

Ostroff, C., and Browen, A. E. (2000). Moving HR to a higher level: HR practice and organizational effectiveness. In K.J. Klein and S.W.J Koslowski (Eds), Multilevel theory, research and methods in organizations.

Pfeffer, J. (1994). Competitive advantage through people. Harvard Business School Press, Boston, MA.

Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., and Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, Vol.88, 879-903.

Randeree, K. and Al Youha, H. (2009). Strategic management of performance: an examination of public sector organizations in the United Arab Emirates. International Journal of Knowledge, Culture and Change Management, Vol.9, 123-134.

Rest, J. R. (1994). Background: theory and research. In Rest, J. R. and Narváez, D. (Eds.), Moral development in the professions: Psychology and applied ethics (pp. 1–26), Hillsdale, Lawrence Erlbaum Associates, New Jersey, NJ.

Rowe, W. G., Cannella, A. A., Jr., Harris, I. C., and Francolini, T. (2003). In search of meaning: does the fortune reputation survey alter performance expectations. Canadian Journal of Administrative Sciences, Vol. 20,187–195.

Rowe, W. G. and Morrow, J. L., Jr. (1999). A note on the dimensionality of the firm financial performance construct using accounting, market, and subjective measures. Canadian Journal of Administrative Sciences, Vol. 6, 58-70.

Santos, A. and Stuart, M. (2003). Employee perceptions and their influence on training effectiveness. Human Resource Management Journal, Vol.13, 27-45.

Singh, K. (2004). Impact of HR practices on perceived firm performance in India. Asia Pacific Journal of Human Resources, Vol.42, 301-317.

Schuler, R. S. and Jackson, S. E. (1987). Linking competitive strategy with human resource management practices. The Academy of Management Executive, Vol.1, 207-219.

Schuler, R.S. and MacMillan, I. (1984). Gaining competitive advantage through human resource practices. Human Resource Management, 23, 263-276.

Song, M., Nason, R.W. and Di-Benedetoo, C.A. (2008). Distinctive marketing and information technology capabilities and strategic types: a cross-national investigation. Journal of International Marketing, Vol.16, 4-38.

Tafarodi, R. W. and Swann, W. B. Jr. (1995). Self-liking and self-competence as dimensions of global self-esteem: initial validation of a measure. Journal of Personality Assessment, Vol. 65, 322-342.

Thang, N.N., NV. Thu and D. Buyens (2008). The impact of training on firm performance: Case of Vietnam. Academy of Human Resource Development ,3-6

Thang, N.N. and Buyens, D. (2010). The relationship between training and firm performance: A literature review. Research and Practice in Human Resource Management, 18, 28-45.

Tomal, D.R., and Jones, K.J. (2015). A comparison of core competencies of women and men leaders in the manufacturing industry. The Coastal Business Journal, Vol.14, 13-25

Tracey, J.B. (2014). A review of human resources management research: The past 10 years and implications for moving forward. International Journal of Contemporary Hospitality Management, Vol.26, 679-705.

Verma, A. (1995). Employee involvement in the workplace. In Research in personnel and human resource management, eds M. Gunderson and A. Ponak, CT: JAI Press, New Haven.

Wagner, A.J (1994). Participation’s effects on performance and satisfaction: a reconsideration of research evidence. Academy of Management Review, Vol.19,312–330.

Walker, R.M., Damanpour, F. and Devece, K.C. (2011). Management innovation and organizational performance: the mediating effect of performance management. Journal of Public Administration Research and Theory, Vol.21, 367-386.

Watson, S., Maxwell, G. A., and Farquharson, L. (2007). Line managers’ views on adopting human resources roles: The case of Hilton (UK) hotels. Employee Relations, Vol.29, 30–49.

Wheaton, B., Muthen, B., Alwin, D., F., and Summers, G. (1977). Assessing reliability and stability in panel models. Sociological Methodology, Vol.8, 84-136.

Wiemann, J. M. (1977). Explication and test of a model of communicative competence. Human Communication Research, Vol.3, 195-213.

Wright, P.M., and McMahan G.C. (1992). Theoretical perspective for strategic human resource management. Journal of Management, Vo.18, 295-320.

Wright, P. M. and Snell, S. A. (1991). Toward an integrative view of strategic human resource management. Human Resource Management Review, Vol.1, 203-225.


  • There are currently no refbacks.

Editorial Office:

Educational Research Multimedia & Publications,
S.N. 21, Plot No 24, Mirza Ghalib Road Malegaon Nasik,
Maharashtra India - 423203.
+919764558895 (whatsapp),,

Copyrights © 2010-2020 - ERM Publications, India     

This work is licensed under