The role of human resource management in developing tourism industry in Sri Lanka: a proposed conceptual framework

Aruna S Gamage

doi:10.4038/sljhrm.v6i1.5632

Abstract

Tourism is a fast growing industry in Sri Lanka. Since gaining independence from the British in 1948, Sri Lanka has continued to attract foreign investors and tourists to the island. However it is the post war period that the sector has featured prominently a rapid growth. The arrival of tourists increased rapidly and passed the elusive one million mark in 2012 and increased further in 2014 and 2015. Consequently, the tourist earnings also increased and now the sector occupies the position as the third largest foreign exchange earner to the country after overseas remittances and textiles and apparel exports. It is expected to increase the number of arrivals up to 2.6 million by 2020. However, as a growing sector in the economy this sector faces several challenges and Human Resource Crises have been the top among others. The shortage of well-trained tourism personnel coupled with high rate of turnover continued to be a major issue for the industry with the situation worsening with many new hotels coming up in the country and absorbing the existing experienced personnel. Therefore, the broad objective of this study is to examine the role of Human Resource Management in finding suitable solutions to assist the industry to deal with HR issues successfully. In fact, as the first phase, this study attempts to develop a research model for action. Specifically, this study is designed to examine the role of Human Resource Management (HRM) practices in developing tourism sector in Sri Lanka and to propose a theoretical model that can be used to embark on a study to measure the real impact of HRM on the performance of tourism sector in Sri Lanka. The proposed model suggests a significant correlation that exists between HRM practices and firm performance in tourism sector. Further, the model will help better understand the missing link through which HRM practices will make the impact on firm performance in tourism sector in Sri Lanka.

Highlights

Tourism sector is playing a pivotal role in Sri Lankan economy
The direct contribution of Travel & Tourism to GDP in 2014 was LKR462.1 billion which is 4.8 percent of GDP (WTTC, 2015).This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services
The direct contribution of Travel & Tourism to GDP is expected to grow by 6.1 percent to LKR842.5bn (6.1 percent of GDP) by 2025 (WTTC, 2015)

Summary

Introduction

Tourism sector is playing a pivotal role in Sri Lankan economy. this is the third largest foreign earner to the country (US $ 1.7 billion) after oversees remittance (US $ 6.4 billion) and textile & apparels (US $ 4.5 billion). The direct contribution of Travel & Tourism to GDP in 2014 was LKR462.1 billion which is 4.8 percent of GDP (WTTC, 2015).This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services. It includes, for example, the activities of the restaurant and leisure industries directly supported by tourists. Stone (2005) defined human resource management as productive use of people in achieving the organization’s strategic business objectives and the satisfaction of individual employees. Typical financial outcomes include growth in sales, growth in profits, return on invested capital, and return on assets (Jiang and Lepak, 2012)

Customer satisfaction

Findings

Employee Opportunity to Perform