Pfeffer (1994) emphasizes that in order to succeed in a global business environment, organizations must make investment in Human Resource Management (HRM) to allow them to acquire employees who possess better skills and capabilities than their competitors. This investment will be to their competitive advantage. Despite this recognition of the importance of employee development, the hospitality industry has historically been dominated by underdeveloped HR practices (Lucas, 2002).

Lucas also points out that ‘the substance of HRM practices does not appear to be designed to foster constructive relations with employees or to represent a managerial approach that enables developing and drawing out the full potential of people, even though employees may be broadly satisfied with many aspects of their work’ (Lucas, 2002). In addition, or maybe as a result, high employee turnover has been a recurring problem throughout the hospitality industry. Among the many cited reasons are low compensation, inadequate benefits, poor working conditions and compromised employee morale and attitudes (Maroudas et al., 2008).

Ng and Sorensen (2008) demonstrated that when managers provide recognition to employees, motivate employees to work together, and remove obstacles preventing effective performance, employees feel more obligated to stay with the company. This was succinctly summarized by Michel et al. (2013): ‘[P]roviding support to employees gives them the confidence to perform their jobs better and the motivation to stay with the organization.’ Hospitality organizations can therefore enhance employee motivation and retention through the development and improvement of their working conditions. These conditions are inherently linked to the working environment.

While it seems likely that employees’ reactions to their job characteristics could be affected by a predisposition to view their work environment negatively, no evidence exists to support this hypothesis (Spector et al., 2000). However, given the opportunity, many people will find something to complain about in relation to their workplace (Poulston, 2009). There is a strong link between the perceptions of employees and particular factors of their work environment that are separate from the work itself, including company policies, salary and vacations.

Such conditions are particularly troubling for the luxury hotel market, where high-quality service, requiring a sophisticated approach to HRM, is recognized as a critical source of competitive advantage (Maroudas et al., 2008). In a real sense, the services of hotel employees represent their industry (Schneider and Bowen, 1993). This representation has commonly been limited to guest experiences. This suggests that there has been a dichotomy between the guest environment provided in luxury hotels and the working conditions of their employees.

It is therefore essential for hotel management to develop HRM practices that enable them to inspire and retain competent employees. This requires an understanding of what motivates employees at different levels of management and different stages of their careers (Enz and Siguaw, 2000). This implies that it is beneficial for hotel managers to understand what practices are most favorable to increase employee satisfaction and retention.