Compensation Practices for the Employees in the Hotel Business

Human capital – one of the most valuable and fundamental resources of the organization, which is a decisive factor in the efficiency and competitiveness of the company. The availability of a well-developed compensation system ensures the stimulation of productivity, increasing the efficiency of the use of labor resources, increasing satisfaction and, as a result, reducing staff turnover, which makes the study of this issue relevant. The study emphasizes the importance of studying compensation in the hospitality industry, as it has an impact on the performance of the entire hotel, ranging from the degree of guest satisfaction with the services provided to the strategic planning of the company as a whole. The purpose of this study is to identify the compensation practices used and their application in different types of hotels. Research questions are to reveal the existing differences in compensation practices depending on the classification of the hotel by brand, category of "stars", regional characteristics and the category of staff: line staff and managers. The study is conducted using document analysis and qualitative methods of data collection and this paper analyzes 18 interviews with the heads of HR-departments in hotels. The sample was formed by the available method and the method of "snowball". The work is divided into several main parts. First, the main theoretical approaches, a review of existing research and key theories, as well as the analysis of documents and materials from open sources in order to form an expert opinion on the issue of compensation in the hospitality industry. Further there is a study of compensation practices in Russian hotels, describes the methodology and design of this study, and then presents its results, which describe a detailed analysis of existing practices in hotels of different categories, forms of material compensation, social package, forms of intangible compensation, identified typical types of compensation practices and recommendations for practical solutions for each category of hotels. The results of this work can be used by management of chain and independent hotels, as well as employees of management companies to improve the efficiency of corporate governance systems. Thus, the activities of enterprises and the quality of service in the hospitality sector can be improved by revising the remuneration policy and stimulating staff. As a result, staff turnover rates may also be reduced. However, there is a lack of studies devoted to this issue in the hospitality industry, especially related to the Russian market, which is one of the limitations of the study. Moreover, the most part of the hotels do not publish their personnel management policies and are rather reluctant to share information about compensation. This issue is "sensitive" and in some organizations information about policy of compensation is confidential, which significantly affects the study of such practices and access to the necessary information.