How Some HR Management Practices may Hinder Innovation: The Case of the Hotel Industry

Most hotel businesses are under a tremendous pressure to reduce prices, even in the upper-scale segment. Although innovation has been recognized in the literature as a way to support differentiation, or even to boost productivity, being therefore a way out of the margin-crushing spiral, many managers seem to be unaware of how some human resources management practices may have detrimental effects on innovation. An entrepreneurial workforce has long been recognized essential for innovation in services. Because of the characteristics of services, like inseparability of production and consumption, front line employees are often in a unique position to suggest new approaches to service delivery. These employees are also subject to pressure from customers to improve products and processes. Intrapreneurial activities may result from individual creativity or pursuit of self-interest, and share many key behavioural characteristics with the traditional concept of entrepreneurship, such as taking initiative or opportunity pursuit. However, at the same time, intrapreneurship distinctly belongs to the domain of 'employee behaviour' and thus faces the same kind of limitations and opportunities for support from the organizational context. Therefore, one might assume that this would lead hotel managers and business owners to strategically value these employees (intrapreneurs) as they might be a large source of innovation. However, hotel industry is known to be characterized by over-worked, underpaid, and under-qualified workers. In this article, we review the literature to identify the gaps between the human resources management practices needed to foster an innovative workforce, and practices usually found in most hotel companies. These gaps raise questions concerned with the innovation outcomes of the industry, and how the most common human resources practices may be hindering those outcomes. These questions may serve as springboards for future research and raise important issues for hotel managers to consider.