Unlocking organizational success in the hotel industry: the power of social exchange in HR practices

Abstract

Purpose The purpose of this study is to examine the role of specific human resources (HR) practices (leadership, employee relations, employee safety, rewards and incentives and career opportunities) on organizational performance in the context of the Middle Eastern market, with a specific focus on the United Arab Emirates (UAE) hotel sector. Design/methodology/approach A comprehensive research methodology was used for this study. Two distinct questionnaires were crafted: one targeting 338 hotel employees who completed the HR practices survey, and the other for 109 general hotel managers who completed the organizational performance survey. All respondents were from five-star hotel establishments in the UAE. To validate the hypotheses, a multidimensional approach was adopted. This paper first applied factor analysis to understand correlations and groupings among the factors. This paper then undertook validity assessment by examining factor loadings, average variance extracted and the reliability values for all parameters. Discriminant validity was also carefully evaluated. Findings The results found that there is a direct correlation between leadership, employee relations and career opportunities, with boosted organizational performance. Contrary to prevalent assumptions, the data showed no discernible link between employee safety, rewards and incentives and the actual performance of organizations. The results highlight the crucial role of social exchange in interpreting the indirect relationship between HR practices and organizational performance. This insight offers a fresh perspective on the often-discussed 'black box' in HR research. Originality/value The novelty of this study lies in its intricate exploration of human resource management practices within a region experiencing swift socioeconomic transformations due to factors such as the significant expatriate presence and economic diversification. By underlining the significance of social exchange as a mediating factor, this research significantly contributes to the ongoing dialogue on HR-performance relationships, offering insights for both theoretical and practical applications in HR activities formulation in the context of the UAE.