Direct and indirect contribution of HRM practice to hotel company performance

Abstract

The research problem is the measurement of direct and indirect HRM contributions to hotel company financial performance. The theoretical multi-level model developed in this paper is based on Resource Based View theory, the Motivation–Ability–Opportunity framework and a universalistic, contingency and configurational approach to measurement relationships. It investigates whether HRM results measured at an individual level (employee engagement, skills, attitudes and behaviour) and at an organisational level (consequences of employee loyalty) mediate in the link between HRM practice (quantitative and perceived data) and hotel company financial performance and whether hotel company ownership and size are moderating the link. Data was obtained from HR managers and employees in hotel companies in all regions of Croatia. The results suggest the key HRM activities which make the largest contribution to employee engagement, skills, attitudes and behaviour, loyalty and hotel company financial performance. Management implications of the results are discussed and avenues for further research are proposed.