Fatmagul Cetinel fatay@anadolu.tr Medet Yolal myolal@anadolu.tr Murat Emeksiz

1. SERVICE QUALITY AND HUMAN RESOURCES IN SMALL AND MEDIUM SIZED HOTEL ENTERPRISES IN TURKEY Fatmagul Cetinel fatay@anadolu.edu.tr Medet Yolal myolal@anadolu.edu.tr Murat Emeksiz memeksiz@anadolu.edu.tr

2. Introduction • One of the greatest challenges facing organizations today is the ever-growing competition, the continuous increase in customer expectations and customers’ subsequent demands. • In order to be successful, firms must view quality as an essential part of their strategic process.

3. Service Quality and SMEs • For small firms, it is difficult to compete with large firms on cost. However, the active involvement of the owner and employees in small firms allows them to tailor the firms’ offerings to the specific needs of their customers without going through the bureaucratic layers typical in large companies.

4. Furthermore, the managers and employees of these firms usually have frequent and face-to-face contact with customers; some may know them personally and it gives the firm a better chance to discover what the customer wants. • Another significant advantage a small company may have is the directness and timeliness of the information flow from the customer to the firm.

5. The better customer focus reported by small firms can be explained by their proximity to and close relationships with the customers (Ahire and Golhar, 1996). • But, if the small firm has no system of collecting and recording such customer data, most of it will be lost.

6. Over-reliance on face-to-face interaction does not permit SMHEs to develop a database for the purpose of database marketing. • It is recommended for SMHEs to maintain more formal customer evaluation approaches as printed surveys and Internet.

7. There is a common perception among small businesses that quality and continuous improvement programs are only for large organizations. • And they do not have the money to implement a quality improvement program.

8. Despite some challenges, it is easier for a small business to implement quality because it is easier to get everybody to understand what is being tried to achieve. • Whenever the process is implemented, it can be easier to keep employees motivated (Struebing and Klaus, 1997).

9. Service Quality and HRM • Service quality depends heavily on the effectiveness with which front-line employees deal with customers and clients. • The courtesy, empathy, and responsiveness of service employees all combine to influence quality perceptions of customers (Parasuraman et al., 1988).

10. The involvement of the employees into the quality process is crucial for the success of quality implementation. • Management should make every effort to ensure that each employee knows and understands how the organization defines quality.

11. Informed employees understand the importance of quality in every aspect of their daily activities. • Service encounters involve interaction between customers and employees, so employees will have an important role to play in influencing customers’ perceptions of service encounters (Farrel et al., 2001).

12. Morrison (1996) suggested that a firm’s human resource management practices can create an environment that elicits more customer-oriented behaviour from employees. • Service quality must be promoted through the appropriate management of human resources. • Schneider and Bowen (1985) proposed that when employees feel well treated by management’s human resource practices; they can devote their energies and resources to effectively treating clients.

13. Key dimensions of service quality such as empathy, assurance and responsiveness (Parasuraman et al., 1988) are resulting in more favourable evaluations of overall service quality.

14. It has been argued that in service organizations quality improvement must be focused on the selection, training, and compensation of employees. • Mullins (1998) also maintains that training is potentially one of the most important motivators. • It is a key element in the ability, morale, job satisfaction and commitment of staff, and in the improved delivery of service and customer relationships, and economic performance.

15. Both employee motivation/vision and organizational learning are thought to positively affect perceived service quality. • Indeed, it has been argued that in service organizations quality improvement must be focused on the selection, training, compensation, and socialization of employees.

16. Methodology • In Turkey, there are 2325 operations certified hotels registered to Ministry of Culture and Tourism differing in size and service quality and constitute the study population. • The population frame was taken from the ministry and 1, 2, and 3 star rated hotels were selected as the sample of the study as they have SME characteristics.

17. The total number of the sample is 1370. However, because of the accessibility and classification difficulties observed, municipality certified hotels were not included into the survey. • Mail survey was employed in the research. Questionnaire forms were mailed to 1370 hotels in July, 2005 and hotel managers were requested to reply. • Total number of responses reached to 313 which constitute a response rate of 22.8 percent.

18. Findings • Although, service quality is critical in a labour-intensive industry such as hospitality, the service quality should also be supported by the physical quality of the enterprises for the purpose of obtaining customer satisfaction. • 48.9 percent of the enterprises indicated that their physical conditions were in a better situation, so they were not in need of renovation.

19. However, it is also found that buildings and equipments of 34.2 percent of SMHEs were burnt-out but they could not invest in buildings and equipments due to lack of financial power. • One tenth of the firms in the study stated that they renovate when required (10.2 percent).

20. Quality assurance is the collection of systematic efforts required to produce goods and services based on quality standards in order to meet the customer needs and expectations (Tekin, 2004). • The findings reveal that most of the businesses (70.3 %) do not have any quality assurance documentation.

21. In the same manner no businesses possess SERVQUAL which is a scale and gap analysis used for measuring service quality in service firms. • Although these documents are not compulsory (Tekin, 2004), in the eyes of customers, they are the indicators of service quality delivered in the firms, and they create a positive image on the perception of the customers.

22. In another question the hotels were asked whether they have implemented Total Quality Management (TQM). According to the findings, 40 hotels (12.8 percent) stated that TQM was being employed. • Although this rate is low, some of the weaknesses of SMEs that could create problems in implementing TQM include lack of financial and human resources, employee resistance, and loss of momentum that may occur during the implementation process (Struebing and Klaus, 1997).

23. Having skilled personnel is important for the service quality in tourism firms. • For this reason educational levels and foreign language skills of the personnel in SMHEs were also questioned. • In 186 hotels, there are 1217 personnel trained in tourism schools at any level, and the average is 6.5 per hotel.

24. The rate of tourism trained employees in total employment is 21.4 percent. • As in the same manner, only one third of the total employment has foreign language skills. • Findings reveal that tourism trained and foreign language skilled employment in SMHEs is relatively low.

25. Quality-focused firms should operate in a customer-oriented manner while initially accepting and satisfying the personnel as internal customers. • Moving from the assertion that satisfied employees would deliver more qualified service, the firms were also questioned about the HR practices.

26. Table 3 shows the frequency of quality and human resources strategies used in SMHEs. • For simplicity, frequencies are summarised in group percentages as “always/sometimes”, “when needed” and “rarely/never”.

27. Table 3: Frequency of Quality and Human Resources Strategies Used in SMHEs

28. It is found that the firms were trying to create a collaborative environment among the departments and the employees and it is also expressed that employees could reach and conduct to their managers and supervisors whenever they needed. • Though it is known that the limited number of employees in small firms result in closer relations between the employees and managers, and the conflicts among the workers could be resolved easily.

29. The respondent firms have, encouragingly, indicated that they prefer candidates skilled in customer relations and customer services while selecting the applicants for a vacancy. • There are indicators of uncertainty about the exact use of formal recruiting procedures, since: * more than half of the respondent firms recruit employees by networking, * 95.8 percent of the firms select employees according to results of face-to-face interviews, * applicants were hired by the final decision of the owners in 62.9 percent of the firms, and * merely one third of the firms employ tests in order to find out the skills and qualities of the applicants

30. The firms in the study train the employees on customer satisfaction, in certain intervals. • On the other side, when the training frequencies of these firms are analyzed, it is seen that 77.4 percent of the firms conduct training when needed and this can be evaluated as the lack of formal training programs in these firms.

31. Merely 11.1 percent of the firms in the study conduct training on a regular basis. • Consequently, it may be concluded that SMHEs in Turkey are not qualified in terms of employee training.

32. However, the emphasis on customer relations (83.3 percent) and service quality (80.3 percent) in training sessions in the firms conducting employee training programs can be evaluated as the firms’ concentration on customer oriented approaches and service quality. • The essence of the problem is, as mentioned before, the lack of professional HR managers and financial weaknesses of these firms.

33. Rewarding the personnel according to performance evaluation is not also common among the respondents. • Such rewards or incentives would enhance motivation and morale among the personnel and promote staff participation in revenue and service improvement.

34. The findings also suggest that SMHEs are insufficient about the performance evaluation, since, although 69.6 percent of the firms expressed that they evaluate the performance, half of these firms do it when needed. • Informed employees about the operations and customer issues are prerequisite for achieving service quality. In the study, the employees in SMHEs were rarely informed about the operations and customers.

35. In the same manner, involvement of employees in decision making process and their empowerment in the respondent firms were also conducted when needed. • This can be problematic for staff motivation and, consequently for customer satisfaction.

36. CONCLUSION • Quality is one of the greatest challenges facing organizations in today’s ever-growing competition, continuous increase in customer expectations and needs. • Such trends have also forced hotels to seek ways to expand their market share, retain current clients and create repeat business. • Achieving such goals requires a comprehensive understanding of the ways how customers evaluate the quality of service offerings and how they choose one hotel to another.

37. Quality assurance seems to be more problematic for smaller tourism firms due to some of their disadvantages as lack of professionalism in the management of operations, human resources and financial capabilities. • The study results reveal SMHEs in Turkey experience problems related to physical quality of their establishments.

38. National and international quality standards and documents provide a useful tool for the firms. • Although these documents reflect quality of the businesses in the eyes of customers, most of the hotels in the study ignore such documentation. • This may be explained by the lack of awareness and professionalism among SMHEs.

39. Service quality is greatly depends on the quality of service providers. • In this regard, hotel enterprises should accept employees as internal customers. • In order to develop the skills and the qualifications of the employees, a regular training program should be designed in the hotels.

40. Similarly, employee involvement into the decision-making processes and empowerment would create loyalty and motivation among the employees. • However, SMHEs are not capable of directing employees towards quality service delivery due to lack of professionalism in the management of human resources. • Consequently, SMHEs should be encouraged to follow formal HRM practices due to interrelation between HRM practices and service quality.

41. As Berry et al. (1988) noted, in many service organizations, there is a tendency to think of knowledge and skills development in terms of events –a three-day training session here, a special presentation there. • A similar tendency is apparent in SMHEs in the study.

42. Having formal, continuous training for the employees based on the performance evaluation and the training requirements of the personnel would carry the firms to success. • In order to overcome the problem, tourism related associations should take the responsibility for creating awareness among the owner/managers about the importance of applying formal HRM practices such as recruiting, hiring, training and motivating the employees.

43. Thanking you for your attention