Dissertation by DR Parajuli 'Magnet' for MBA in London

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What performance management strategies
can be implemented by hospitality
management firms to enhance the overall
performance of employees?
The case of Radisson Edwardian Hotels
By
Dola Raj Parajuli
SBL Student ID: B0371BSBS1110
University of Gloucestershire ID: S1113178
Presented as part of the requirement for the award of MBA degree in
title of Course within the Postgraduate Modular Scheme at University
of Gloucestershire
February 2012

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Dissertation Title: What performance management strategies can be implemented by
hospitality management firms to enhance the overall performance of employees?
The case of Radisson Edwardian Hotels
Name: Dola Raj Parajuli
B0371BSBS1110
School of Business and Law, London
Submission date: 17th
February 2012
Supervisor: Dr. Rajendra Kumar
Words count: 17584 word (excluding abstract, bibliography & appendix)
A dissertation submitted in the partial fulfillment of the requirement for masters‟ in Business
Administration (MBA) of School of Business and Law, London

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DECLARATION
I, Dola Raj Parajuli, declare that I am the only one author/researcher of this
dissertation/research project, that I have not been enrolled for other intellectual reward or
qualification, nor has any of the material been submitted wholly or partially for any other
award. I declare that this dissertation is an outcome of my own research work, and where
other academic professional‟s research was used; they have been fully acknowledged and
cited clearly.
Student signature
I agree that this Dissertation may be available for reference and photocopying, at the
discretion of the University.
Student signature
(Dola Raj Parajuli)

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Acknowledgement
I would like to thank those people without whose support I cannot imagine the completion
of this research.
My employer, Radisson Edwardian hotel, for giving permission to write the research and
making all the document easy access
My wife, Devi Sharma, for inspiring me during the period of writing research
My colleagues, for proving me their time and constructive feedback
London School of Commerce library, for making available all the literature for the research
At last but not the least, my supervisor, Dr Rajendra Kumar, for his guidance, encouragement
throughout entire research

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Abstract
Purpose:
Performance management and employee engagement has been popular in academic and
management field. Previous research studies suggest that there are close relationship between
performance management and employee satisfaction/engagement. The main aim of my research
project is to explore what impact does the performance management strategies have on
efficiency and effectiveness of the employees of Radisson Edwardian Heathrow. This research
project exclusively explored the level of employee satisfaction, their views towards the strategies
implemented by Radisson Edwardian Heathrow.
Research design/methodology: This study used simple random probability sampling
method to collect the primary data through self administered questionnaire survey and semi
structured in depth interview with the HR officer, Head of different department and Hotel
Manager. Hence, this research adopted the mixed method and analysis is specifically descriptive
in nature and t-test method used to test the hypothesis.
Findings: Present study observed the level of performance of employees, their devotion and
dedication to enhance their own performance and evaluated the performance management
strategies implemented by Radisson Edwardian. This study surely succeeds to bring out some
empirical evidence to prove the effective performance management strategies are a must to
flourish unlimited potential of employees.
Originality/ significance: Researcher is confirmed on that this research can bring some
significant evidences from the employees of Radisson Edwardian, Heathrow which can be the
raw material for hospitality firms and students who are doing the research in future.
Recommendation: This research project recommends improved total quality management
and leadership through Spiritual Intelligence to eradicate some problems in the employees.
Key words: Motivation, Employee engagement, Spiritual intelligence, improved total quality
management

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Table of Contents
DECLARATION..........................................................................................................................................3
Acknowledgement ........................................................................................................................................4
Abstract.........................................................................................................................................................5
List of Tables and Figures............................................................................................................................11
Figures.....................................................................................................................................................11
Tables......................................................................................................................................................12
Chapter 1....................................................................................................................................................13
Introduction.................................................................................................................................................13
1.1 Introduction.................................................................................................................................13
1.2 Research Background .................................................................................................................14
1.3 Organization Background ...........................................................................................................16
1.3.1 Vision, Mission and Values of Radisson Edwardian.................................................................17
1.4 Statement of problem..................................................................................................................19
1.5 Research questions..........................................................................................................................19
1.6 Research aim and objectives:......................................................................................................20
1.7 Rationale for the chosen topic.....................................................................................................21
1.8 Significance of research.................................................................................................................21
1.9 Hypothesis of the research..............................................................................................................21
1.10 Limitations of research .................................................................................................................21
1.11 Dissertation structure ....................................................................................................................22
Chapter 2.....................................................................................................................................................23
Literature Review........................................................................................................................................23
2.1 Introduction.................................................................................................................................23
2.2 Definition and core concepts.......................................................................................................24
2.3 Need of performance management .............................................................................................25
2.4 Performance management: Key drivers......................................................................................25
2.4.1 Motivation..................................................................................................................................25
2.4.2 Reward and recognition:............................................................................................................28
2.4.3 Employee engagement:..............................................................................................................31
2.4.4 Communication.........................................................................................................................34

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2.4.5 Training and development .........................................................................................................35
2.4.6 Right persons in right job...........................................................................................................36
2.4.7 Employee retention:.................................................................................................................36
2.5 Performance management model......................................................................................................37
2.5.1 Planning .....................................................................................................................................37
2.5.2 Performance Assessment ...........................................................................................................38
2.5.3 Career development .................................................................................................................38
2.6 Approaches of performance management system: .........................................................................39
2.6.1 Balanced scorecard .................................................................................................................39
2.6.2 Key performance Indicators (KPIs) .........................................................................................39
2.6.3 Management by objectives (MBO)..........................................................................................40
2.6.4 Future considerations for the Radisson Edwardian Performance management Strategies: ....41
2.7 Implementation of performance management system ...................................................................44
2.7.1 Alignment ................................................................................................................................44
2.7.2 Credibility: ..............................................................................................................................44
2.7.3 Integration..................................................................................................................................44
2.8 Perspectives of employee performance: .........................................................................................44
2.9 Employee performance appraisal....................................................................................................44
2.11 Hypothesis formulation:...............................................................................................................46
Chapter 3.....................................................................................................................................................47
Research methodology................................................................................................................................47
3.1 Introduction.....................................................................................................................................47
3.2 Research philosophy.......................................................................................................................48
3.3 Research approach ..........................................................................................................................49
3.3.1 Deductive approach.................................................................................................................49
3.4 Research methods .......................................................................................................................51
3.5 Research strategy design................................................................................................................52
3.5.1 Exploratory design.....................................................................................................................53
3.5.2 Descriptive Design...................................................................................................................54
3.6 Sources of data...............................................................................................................................55
3.6.1 Survey: ....................................................................................................................................55
3.6.2 Observation:............................................................................................................................55

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3.6.3 Documentary evidence............................................................................................................56
3.6.4 in depth Interview: .................................................................................................................56
3.6.5 Site selection and reason for selection .......................................................................................57
3.7 Sample selection and reason for selection ..................................................................................57
3.7.1 Sample details ..........................................................................................................................57
3.8 Sampling techniques & reason for selection...............................................................................58
3.8.1 Stratified random sampling method:........................................................................................59
3.8.2 Reason of selection ....................................................................................................................60
3.9 Data collection:.................................................................................................................................60
3.10 Data collection instrument: .........................................................................................................61
3.11 Questionnaires method...............................................................................................................61
3.11.1 Reason of selection ..................................................................................................................62
3.12 Ethical consideration.................................................................................................................63
3.13 Validity and Reliability..............................................................................................................63
3.13.1 Validity .................................................................................................................................63
3.13.2 Reliability:..............................................................................................................................63
Chapter 4.....................................................................................................................................................64
Finding and analysis ...................................................................................................................................64
4.1 Introduction.......................................................................................................................................64
4.1.1 Response Collections.................................................................................................................64
4.2 Presentation of data...........................................................................................................................65
4.4 Ethnicity of respondents ...................................................................................................................66
4.5 Period of employment to date..........................................................................................................67
4.6 Departments of respondents..............................................................................................................68
4.7 Communication and care in the company.........................................................................................68
4.7.1Communication with supervisors and HOD:..............................................................................68
4.7.2Overall Analysis of Communication and care in the company ...................................................71
4.8 Work force environment...................................................................................................................72
4.8.1 Overall analysis of Work force environment.............................................................................73
4.9 Opportunities and growth: ................................................................................................................75
4.9.1 Overall analysis of Opportunities and growth: ..........................................................................76
4.10 Views of employees about HR strategies: ......................................................................................77

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4.10.1 Views about reward and recognition: ......................................................................................78
4.10.2 Views about HR strategies:......................................................................................................78
4.10.3 Overall analysis of HR strategies.............................................................................................78
4.11 Job satisfaction experienced by employees: ..................................................................................80
4.11.1 Overall analysis of job satisfaction:.........................................................................................81
4.12 Interference from secondary data:.................................................................................................82
4.13 Comparison between primary data and secondary data..................................................................85
4.14 Hypothesis testing...........................................................................................................................85
Chapter 5.....................................................................................................................................................87
Conclusion, Summary and Recommendation.............................................................................................87
5.1 Introduction ......................................................................................................................................87
5.2 Conclusion.........................................................................................................................................87
5.2.1 Competitive advantage of the company.....................................................................................87
5.2.2 Effective recruitment and selection............................................................................................87
5.2.3 Effective job design ...................................................................................................................88
5.2.4 Career development ...................................................................................................................88
5.2.5 Provision of reward and recognition..........................................................................................88
5.2.6 Friendly working environment...................................................................................................88
5.2.7 Organizational commitment.......................................................................................................88
5.2.8 Investment for employee progression........................................................................................88
5.3 Summary...........................................................................................................................................89
5.3.1 Criticism:....................................................................................................................................92
5.4 Recommendation to Radisson Edwardian........................................................................................92
5.5 Limitation of research study .............................................................................................................92
5.6 Revisiting Research Aim and Objectives..........................................................................................93
5.6.1 Exploration of job performance:................................................................................................93
5.6.2 Relationship between performance management strategies and performance of employees ....94
5.6.3 Examination of the performance management strategies of Radisson Edwardian: ...................94
5.6.4 Establishing most demanding strategies of this time .................................................................94
Chapter 6.....................................................................................................................................................97
Reflection of the research study..................................................................................................................97
6.1 Introduction ......................................................................................................................................97

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6.2 My professional career .....................................................................................................................97
6.3 Entire thesis process .........................................................................................................................98
6.3.1Strong points of the study ...........................................................................................................98
6.3.2 Problem faced during study .......................................................................................................98
6.3.3 Benefits of the present study......................................................................................................98
6.4 My future plan ..................................................................................................................................99
References ................................................................................................................................................100
Appendix...................................................................................................................................................106

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List of Tables and Figures
Figures
Figure 1.1: Outline of research project......................................................................................22
Figure 2.1: Conceptual model used to study various relationships in Employee Engagement..33
Figure 2.2: Stages of Training process……………………………………………………..... .35
Figure 2.3: Stages of performance management………………………………………………38
Figure 2.4: Balanced Scorecard……………………………………………………………….39
Figure 2.5: Key performance Indicators……………………………………………………...40
Figure 2.6: Theoretical linkage in performance management strategies.................................. 45
Figure 2.7: Hypothesized relationship for performance management strategies …………… 46
Figure 3.1: Research design ………………………………………………………………… 48
Figure 3.2: Deductive and Inductive approach………………………………………………50
Figure 3.3: Classification of Research methods ……………………………………………. 52
Figure 3.4: Classification of exploratory studies……………………………………………..53
Figure 3.5: classification of Descriptive studies………………………………………… …54
Fig 3.6: A classification of research designs …………………………………………………55
Figure 3.7: Steps of Sample selection…………………………………………………………58
Figure 3.8: Types of sampling techniques…………………………………………………….59
Figure 3.9: classification of secondary data………………………………………………….60
Figure 3.10: Steps for collecting secondary data…………………………………………… ..61
Figure 3.11: Steps of questionnaire development……………………………………………..62
Figure 4.1: Frequency of responses…………………………………………………………...64
Figure 4.2: Frequency distribution of gender…………………………………………………65
Figure 4.3: period of employment……………………………………………………………..67
Figure 4.4 frequency distribution of communication………………………………………….70
Figure 4.5: Frequency distribution of workforce environment………………………………..72
Figure 4.6: Frequency distribution of Opportunities and growth …………………………….75
Figure 4.7: Frequency distribution of HR strategies………………………………………….77
Figure 4.8 Frequency distribution of job satisfaction…………………………………………80
Figure 4.9 steps of hypothesis testing ……………………………………………………..…86
Figure 5.1: Conceptual model given by researcher……………………………………………96

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Tables
Table 2.1: Classification of emotional intelligence…………………………………………….43
Table: 4.1: Frequency distribution of gender………………………………………………….65
Table 4.2: Frequency of age of respondents…………………………………………………..66
Table 4.3: Frequency distribution of ethnicity of respondents………………………………..66
Table 4.4: Frequency distribution of employment period of respondents…………………….67
Table 4.5: Period of employment………………………………………………………………68
Table 4.6: Frequency distribution of supervisor care………………………………………….69
Table 4.7: Frequency distribution of communication channel………………………………...69
Table 4.8: Frequency distribution of HOD…………………………………………………….70
Table 4.9: Descriptive statistics of communication and care in the company on the basis of age
group…………………………………………………………………………………………...71
Table 4.10: Descriptive statistics of communication and care in the company on the basis of
ethnicity………………………………………………………………………………………..71
Table 4.11: Descriptive statistics of communication and care in the company on the basis of
department…………………………………………………………………………………….72
Table 4.12: Descriptive statistics of workforce environment on the basis of departments…...74
Table 4.13: Descriptive statistics of workforce environment on the basis of employment period74
Table 4.14: Descriptive statistics of workforce environment on the basis of employment period75
Table 4.15: Descriptive statistics of opportunities and growth on the basis of employment
period…………………………………………………………………………………………76
Table 4.16: Descriptive statistics of opportunities and growth on the basis of departments…77
Table 4.17: Descriptive statistics of HR strategies related to departments…………………..79
Table 4.18: Descriptive statistics of HR strategies related to age group…………………….79.
Table 4.19: Descriptive statistics of HR strategies related to employment period…………..80
Table 4.20: Descriptive statistic of job satisfaction related with employment period……….81
Table 4.21: Descriptive statistic of jab satisfaction related with department………………..82
Table 4.22: Employee engagement in percentage…………………………………………...82
Table: 4.23 Hypothesis testing..............................................................................................85
Table: 4.24 correlations between performance management strategies and reward and
recognition...............................................................................................................................86

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Chapter 1
Introduction
This first chapter introduces general background of the study, aims and objectives of the study,
theoretical unpinning towards the significance of performance management strategies to enhance
overall performance of employees.
1.1 Introduction
The rapid pace of technological and transport development insists to expand the business in this
globalization era. This enables to embrace change by improving their human capital through
effective performance management system. Generally, there are two motives of every business.
They are generating values and creating superior returns for shareholders. The business referred
as charity if it creates only values rather than the profit and the business is like thief if it makes
only a profit and avoiding generation of values. It is true that to create both profit as well as
values is great challenges of the business in this modern world. Effective performance
management strategies are a must for achieving the target. By exploring unlimited potential of
employees, improved form of performance management strategies assist to enhance the entire
performance of employees of the organization. Hence, many researchers have been written about
the importance of performance management to the firms with systematic design and careful
implementation. It is noticed that only few company get succeed because of their better

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performance management strategies although numerous organizations are emerging in the global
market in the high rate
1.2 Research Background
Every organization has some strategies which is the milestone of success in their market. Even
the organization which produce and provide same product and services will be different from
each other in the respect of strategies. Many scholars explained and defined the concept of
strategy
According to Johnson and Scholes in the book Exploring corporate strategy, strategy is defined
as the direction and scope of an organization over long term which attain advantages for the
organization through its configuration of resources within challenging environment, to meet the
need of market and to fulfill stakeholder expectation (Johnson and Scholes, Exploring corporate
strategy, 2009)
Performance management is very popular topic in today‟s workplace. Performance management
is all about human capital. It is not about systems or processes or rules. This helps the people to
do their jobs with great efficiency and effectively. Performance management is the process of
taking action in regard to authentic performance to create outcomes for users and the public
better than they would otherwise be. It is very clear that implementation of the most demanding
performance management strategies helps to improve efficiency and effectiveness of the
organization.
Performance management is an essential tool which is used by all levels of hospitality firms. It
gives the raw material to enhance the performance of entire organization by connecting and
aligning individual, team and organizational objectives and outcomes. It also helps to recognize
and reward the good performance and to deal with under performance.

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Performance management is the implementation of interrelated strategies and activities to
achieve organizational goals. Better performance management needs a skeleton that incorporate
organizational, business and individual planning and performance. The hospitality firms have
major jobs of attaining better outcomes and managing effective performance.
Successful organization put forward performance management strategies to boost the
effectiveness and efficiency of employees that helps them to make great assets of the
organization. To enrich the skills and capabilities of the employees, feedback and reinforcement
is very important which comes through effective performance strategies.
Management can use continuous feedback and reinforcement regarding to their jobs as a tool for
gaining skills and capabilities of employees. The prosperity of the organization ceases when it
avoids the infinite hidden potential of employees. In other words, organizations will be mediocre
or still or standing or failing if they ignore the real potential of the employees,. Properly prepared
and well implemented performance management strategies assist to achieve growth and
development of employees (Gilley and Maycunich, 2000). Robust performance management
strategies create active participation and involvement of employees in development activities of
the firm. Performance of employees will be uplifted by using different tools such as performance
appraisal; quality measurement process etc. Performance management strategies not only find
the strength and weakness of employees but also give the solution of correcting their weak areas.
Effective performance management needs good management processes and systems as well as
better organizational culture that maintains the systems and incorporates them with the regular
day to day work of the employees to encourage and support a culture of continuous service
improvement
Performance management includes

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 Identifying performance objectives and connecting these with the firm‟s business plan
 Continuous performance appraisal of the employees related to the objectives of the firms and
providing feedback by observing the performance appraisal.
 Providing reward such as rising pay, salary to the employees who perform better performance
 Growing the skills and capabilities of employees
 Guiding the employees who perform poor performance.
 Valuing the contribution of employees
Better understanding of the goals and objectives of the firms is only possible when the
firms have effective performance management system. The employees and firms‟ capabilities are
developed by integrating people, planning and performance with firms‟ objectives which
ultimately brings higher performance.
Effective performance management process helps to find the standards of jobs expected
and focus in values and behaviours of employees. It provides the complete picture to the
employees which work they are doing well and in which areas they need to improve.
1.3 Organization Background
Radisson Edwardian group is a brand name of four star and five star hotels of United
Kingdom. Radisson Edwardian group includes fourteen hotels which were founded by Jasminder
Singh in 1977.

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List of hotels of Radisson Edwardian group with their star
Name of hotel Star
Radisson Edwardian, Heathrow 4
Radisson Edwardian, Hampshire 4
Radisson Edwardian, Berkshire 4
Radisson Edwardian, Bloomsbury street 4
Radisson Edwardian, Guildford 5
Radisson Edwardian, Sussex 4
Radisson Edwardian, Mercer Street 4
Radisson Edwardian, Vanderbilt 4
Radisson Edwardian, Manchester 5
Radisson Edwardian, Grafton 4
Radisson Edwardian, Kenilworth 4
Radisson Edwardian, Leicester Square 4
Radisson Edwardian, New Providence
Wharf
5
Mayfair Hotel, Green Park 5
Researcher is focused on the Radisson Edwardian Heathrow.
1.3.1 Vision, Mission and Values of Radisson Edwardian
Researcher observed the vision, mission and values of Radisson Edwardian Hotel group as
follows

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i. Vision
To be the most admired company in the London, UK is only the vision of the Radisson
Edwardian hotels group. For that, Radisson Edwardian has developed unique service culture to
make their stay more comfortable and strive to be the first choice of the guest of all over the
world. The global philosophy of YES I CAN attitude of the employees helps to provide better
service quality
ii. Mission
To provide excellent and exclusive hospitality services to the customers, Radisson Edwardian
have focused on following.
(a) 100% guest engagement
Radisson Edwardian group have the unique promise that guest will get the bed room for the relax
and affectionate, pleasant environment for calm mind.
The management has given the clear instruction to all its employees to make the customer
service not only the word but also the way of being.
They have a simple promise to their guest “if you are not satisfied with something, please let us
know, we will make it right and if we cannot make it right, you need not to pay for that particular
service”.
(b) 100% employee engagement
Radisson Edwardian hotels group has simple belief that employee satisfaction is a must for
providing good and mind blowing service
(c) Positive cash flow

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Positive cash flow is only possible when the guests are fully satisfied and employees are
completely engaged in their work by fostering their capabilities
1.4 Statement of problem
Defining the problem plays significant role in any research. There is a psychological belief that
all the individuals are different so all the employees have the different level of efficiency and
effectiveness.
Researcher identified the following problems in the research
a. What factors affect the performance of employees?
b. What can be done by management to enhance the performance of employees?
c. What are the missing dimensions in the performance management strategies of Radisson
Edwardian Heathrow?
1.5 Research questions
A research question is a formal statement of the goal of the research study. The research question
obviously shapes what the study will examine or effort to demonstrate. It lays down the
limitations on what will be studied. It helps to confine the problem to a feasible size. It is a
reasonable statement that progress from what is known or supposed to be correct as determined
by literature review to that is unknown and needs justification
The question itself is supreme, so much so that one researcher declares “there is no need for
research without question” (Mctavish and Loether, 2005, 51)
Researcher focuses on the following research questions
 What are the three key elements needed to promote performance level of employees?

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 What are the short and long term human resources or performance management strategies
implemented by Radisson Edwardian Heathrow?
 What is the level of satisfaction of employees of Radisson Edwardian Heathrow?
1.6 Research aim and objectives:
Previous studies in the field of performance management provide empirical evidences on
performance management strategies. We cannot avoid the situation that the
view/perception/understanding of people changes with the time. The researcher initiated this
journey into the ocean of performance management by investing and evaluating performance of
employees. This research explores performance management in the hospitality management
firms. According to Marchington and Wilkinson (2007, P122), the various factors such as lack of
reward and recognition, overload of work for managers etc. Therefore, exploration and
evaluation of the effectiveness of performance management strategies implemented by human
resource of Radisson Edwardian Heathrow is the main aim of present research study. Researcher
will provide some guiding principles to formulate the better and effective performance
management strategies to boost overall performance of employees.
The specific objectives of present research are:
i. To investigate level of job performance among the employees of REH
ii. To identify the inter relationship of performance management strategies with overall
performance of employees.
iii. To examine the human resource strategies implemented by Radisson Edwardian Heathrow.
iv. To formulate most demanding performance management strategies of this era

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1.7 Rationale for the chosen topic
Most of large organizations are investigating billions of pound i.e. huge amounts of resources
into performance management system but still unclear on their expectation in return. Hence, this
research project will guide the management team of Radisson Edwardian Heathrow to find the
right way to establish the effective performance management strategies for near future.
1.8 Significance of research
The hospitality firms such as hotels provide the services to the people so the measurement of
performance in terms of conventional financial paperwork is irrelevant in this globalised era.
Present research certainly will bring empirical evidences regarding the performance management
strategies of hospitality firms of United Kingdom and also make aware to reduce the gap
between employer (Radisson Edwardian hotels) and their employees in the future.
1.9 Hypothesis of the research
The proposed hypotheses to be tested in the study are as follows:
 The efficiency and effectiveness of the employees will increase with use of performance
management strategies
 Motivation, reward and recognition etc have great impact in the process of performance
management.
 High employee retention, employee engagement can be achieved on the application of
performance management strategies
1.10 Limitations of research
Although the research has various significances, it has some limitations.
The following limitations can be observed in the research
a. In a single research, every aspect of the organization cannot be included

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b. Sample population is taken especially from Radisson Edwardian Heathrow so it is very difficult
to generalise the result.
c. Research has covered limited area of demography because of limited time scale.
d. Research is concentrated on the specific areas not in all the areas.
1.11 Dissertation structure
Figure1.1: Outline of research project
Chapter 1: INTRODUCTION
Chapter one includes general background of the study, organizational background, statement of
problem, aims and objectives of the research, research questions.
Chapter 2: LITERATURE REVIEW
Chapter 2 will provide theoretical clarity on performance management under literature
headings.
Chapter 3: RESEARCH METHODOLOGY
Chapter three includes research methodology in which researcher investigates nature of data,
data and information collection techniques and its measurement tools and methods.
Chapter 4: FINDING AND ANALYSIS
Chapter four emphasizes on analysis of the data gathered
.
Chapter 6: REFLECTION OF THE STUDY
Chapter six comprises the personal experiences of researcher, activities occurred
during the entire research process
.
Chapter 5: CONCLUSION, SUMMARY AND RECOMMENDATION
Chapter five comprises conclusions, summary and recommendations
.

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Chapter 2
Literature Review
2.1 Introduction
Literature review provides the appropriate knowledge required to renovate the tentative research
problem into comprehensive, organised and concise plan o action. It gives the clear
understanding of the topic (Saunders et al 2009). A fundamental and basic attempt of any
academic research is to review precedent literature practically and thoroughly (Webster and
Watson, 2002, page 48-49). The existing knowledge about a topic cannot be undervalued which
will be the raw material to initiating any research study. Mediocre researchers have the
perception that the literature review is nothing more than a collection of summaries of papers or
an elaborated annotated bibliography of multiple research manuscripts (Webster and Watson,
2002) but evocative literature review is much more than that. Literature review is “the use of
ideas in the literature to justify the particular approach to a topic, the selection of methods and
demonstration that this research contributes something new” (Hart, 1999, page1). It generates a
concrete basis for advancing knowledge. The comparing of the result of the research study as
well as knowing the significance of the topic is only possible with the support of the systematic
literature review (Mcmillan and Schurnancher, 2001).
It is the simple recapitulation of the vital information of the sources. The complete understanding
of the literature of the relevant field is must for every research study as the main focus of the
every research project is to develop a new argument. Hence, the literature review is the major
part of any research project.

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2.2 Definition and core concepts
Performance management is a holistic approach that contains various elements that helps to
achieve the success of entire organization such as human resource policies, culture, style and
communication system that may affect on employees motivation and job performance. It is an
incorporated approach that helps to identify and accomplish their strategies and constantly drive
performance improvements and competitive advantages. The effective management of
individuals and team needs performance management strategies in order to achieve high levels of
organization performance (Armstrong and Baron). According to Improvement development
agency (IDeA, glossary of performance terms) states that performance management is the
process of managing people and the way within an organization function and work together. It
has emerged from different origin as it is a multi disciplinary activity. The human resource is
about the managing and controlling the performance of employees whereas operation
management is concerned with the improvement of efficiency and effectiveness of the services.
The financial management system measures and controls the financial performance of the
organization.
Armstrong and Baron emphasized the importance of performance management being strategic
and integrated (vertical, functional, human resource integration and individual needs integration
(Armstrong, M and Baron A, 2000, performance management: new reality, chartered institute of
personnel and development. Performance management is the process of measuring the efficiency
and effectiveness of the performance of employees. Because of broader subject area and lack of
concise definition, it is very difficult to set up the boundaries of performance management.
Performance management system made up of three inters related elements described by Neely in
his book, measuring business performance: why, what and how

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 Individual to quantify the efficiency and effectiveness of actions
 A supporting infrastructure to enable the data to be acquired, collated, sorted, interpreted and
disseminated
 A set of measures that combine to assess the performance of an organization as a whole.
2.3 Need of performance management
To gain competitive advantages over the competitors, every organization has to develop strategic
human resource practice. For example emergence of strategic human resource practice was
realised by Arvind Mills of Lalbhai group due to intense threat of their competitors.
2.4 Performance management: Key drivers
2.4.1 Motivation
Motivation is a valuable and precious resource which can improve the activities of employees.
The employees of successful organization can operate their action towards achieving the
organization goals and will have keen desire to be in organization. Motivation plays important
role in establishing company royalty. Highly motivated employees are inclined to perform their
work harder and smarter. That means motivation can boost the activities of employees that
ultimately helps to enhance work productiveness/effectiveness and job satisfaction. Every
employee has some expectations from the organization they serve so the performance of
employees is directly proportional to the extent to which their need and expectation are met.
Motivation of employees is not constant it varies with age, education level, knowledge and
experience, ambition and locale as well as level of organization. Motivation is the readiness to

26
apply high level of efforts to attain organizational goals, accustomed by the effort‟s ability to
meet the employees‟ expectations.
Motivation is a form of internal drive which pushes someone to do things better in order to
achieve something (Harmer, 2001:51). Motivation is an indispensable part of stimulating or
initiating the performance of employees in any firm. Randhawa (2004) recommended that
satisfied employees tend to be better performer in organizations.
Yaping and Song (2008) have reported that there is no significant relationship of employee
security with job performance and employee organizational commitment rather than provision of
career development opportunities
Furnham warns that money cannot be the main motivator for employee. Autonomy,
opportunities for development, contentment from work and appreciation from others are equally
important. The motivation of employees is very low if they are not aware on the rewards they
received are not according to their performance.
Sharma and Khandekar (2006) state that empowerment is the process of sharing power or
responsibility by employees and managers for achieving results, maximizing employee
contribution to organization‟s success, involvement in decision making process and pursuit of a
shared vision and purpose. Mathew (2007) focused that empowerment of employees especially
directed towards the additional role actions for increasing productivity.
Motivation can be categorized into two types: extrinsic and intrinsic. Extrinsic motivation
includes the external factors that can be measured in terms of money such as salary, bonus etc.
(Aronson, Wilson Egories and Akert, 2002) whereas intrinsic motivation refers to internal factors
such as interest, enjoyment, choice, perceived competence etc. Various empirical researches
have been carried out to examine the motivational patterns of employees (Frank and Lewis,

27
2004, Wright, 2007). Thorpe and Honen (2000), the key factors such as pay, compensation,
remuneration and rewards are also important for the motivation.
SDT proposed by Deci and Ryan (2000) explained two types of motivation: Autonomous and
Controlled. Intrinsic motivation is an example of autonomous motivation whereas controlled
motivation is an extrinsic motivation which involves under pressure controlled motivation
involves acting under pressure. It is an example of extrinsic motivation.
It suggests that individuals have three core psychological needs described below
 Competence:
It is the belief and promise that individual has the capability to influence essential outcomes.
 Autonomy:
It is related with experiencing choice and feeling like initiator of one‟s own actions.
 Relatedness:
It concerns developing a sense of mutual respect and reliance with others
Fulfillment of these needs will improve intrinsic motivation which is long lasting and does not
require any external stimulus.
In Baard, Deci and Ryan report,the managers‟ autonomous support assists to achieve the greater
satisfaction of the need for competence, relatedness and autonomy that leads to job satisfaction,
high performance, and greater chance of acceptance of organizational change.
Gagne and Deci (2005) found that autonomous motivation is fruitful if employees are to
recognize the goals of organizations and to be dedicated to working towards them.
Baard, Deci and Ryan (2004) focused that the supervisors understanding and autonomy helps a
lot to bring intrinsic motivation to the employees in a workplace. Intrinsic motivation comes
from within which is dependent upon personal interests, desires and thirst for fulfillment. It does

28
not mean to avoid external or extrinsic factors such as rewards, appreciation, promotions etc.
Motivation refers to the thrust either within or external to a person that provoke passion and
perseverance to chase a definite course of action.
The key function of a manager is to acquire things done through employees for which motivation
is a must. People should be motivated if we expect to do what we want. Ryan and Deci
(2000a:54) state that “to be motivated means to be moved to do something”
Performance management is a process of managing and developing the ability and skills of
employees with good motivation.
Motivation is affected by following factors
 Positive reinforcement and empowerment
 Dealing the people without biased
 Accomplishing the needs and expectation of employees
 Restructuring and reformatting the jobs on the basis of their capabilities, skills, experiences etc
2.4.2 Reward and recognition:
Rewards are very popular and universally used technique to influence behavior and performance
of employees (Jon P. Howell and Dan L.Costley, 2006). Reward and recognition brings both
intrinsic and extrinsic motivation that in turns helps to improve job satisfaction and performance.
Rewards will be given to the best performing employees in the form of bonuses or rise in salary
or wages. The rewards should be given immediately if possible when the expected behavior
occurred (Andrew J. DuBrin, 2011). Performance of employees will be improved not only by
monetary form of rewards but also by non form of rewards. Research performed by Gorden et al
(2005) shows that employees are not only motivated by economic rewards such as employee‟s
wages, bonuses, benefit etc but also by non economic reward. Majority of employees say that the

29
extent to which employees are appreciated for the specific work they do is much more important
than what they earn .Staff recognition is a significant aspect of the efficient and well managed
workforce. The contentment with reward is greatly affected not by the quantity (lawler, 2000,
Syedain, 1995, Gorden et al., 1995). The report of Dash et al (2005) reveals that compensation
and incentive schemes, possibility of promotion, reward and presents are some motivating factor
for the employees.
According to Weiss (1997), development of reward and recognition is regarded as most critical
tasks and more effective „management levers‟ of the organization. Lack of recognition is the core
causes of turnover of voluntary employee (Leigh, 2005). The establishment of world class
working environment is possible by recognizing the contributions of the employees that results
employee retention (Ramakrishna, 2002, Joshi, 2007). Bhawal (2005) recommends the use of
golden banana concept i.e. immediate reward schemes is a must for reducing employee attrition
(Also, Reynolds, 2008; Sharma, 2010a).
The main principle of successful business is to make all the employees cheerful and devoted to
their jobs. Managers use the Hertzherg theory of hygiene factors and motivators recognizing
their staffs. According to this theory, managers should identify and concentrate to both hygiene
and motivation factors to enhance the job attitudes and productivity. Hygiene factors comprise
pay, company rule, regulation and policies and interpersonal relationships. Motivation factors
comprise recognition, responsibilities and opportunity. When employees cover an extra shift,
managers can send the any you card to the family member on their birthday or after the birth of a
child.
Following points should be considered while providing the reward:

30
 Reward should be provided on the basis of the level of their performance and rating should not
have the smell of the biasness
 Reward and recognition should focus on the real achievement, completion of responsibilities
 Clarity about the criteria of achieving reward is a must as every employee may have different
perspectives.
 Reward and recognition should help to enhance the employee engagement that creates the
positive working culture in the organization.
Adapted from: Melanie Scarborough, 2009 (Rewards for recognition: Six strategies for
successful Employee programmes)
The organization should be cautious on that employees have to receive rewards as valuable for
them. A recent research survey by Maritz found that the rate of the employees to stay in their
organization is doubled when they receive the recognition from the management what they
desire. Employees prefer the manager oriented recognition. Employees should know in what
specific tasks, recognition is given and managers should be very positive while delivering the
praise. Managers should be cautious not to impose their own personality on employees. They
need to recognise the overall goals and objectives of the organization, find the level of need of
the employees, find out right rewards and recognition.
Most of the managers do not have positive reinforcement skills required to magnetize, retain, and
encourage their people. Few managers think that delivering reward and recognition is not their
job as they don‟t think that reward and recognition does have value to employees. That is why,
recognition training should be given to the managers to empower them that assist them to
discover employee‟s motivation profiles, evaluate the strength and weaknesses of employees and

31
know how reward and recognition helps to enhance the overall performance of employees (Mel
Van Dyke and Rick Garlick: Recognition and reward, what are the top tenets and practices?)
Everybody aware all the individuals are not motivated equally by same rewards as all the
individuals are different so manager‟s show knows what type of reward and recognition suits
them.
Every organization introduce some rules and regulation and expect some standard from all the
employees and employees also anticipate friendly working conditions, handsome salary, fair
treatment, career security and participation of decisions.
2.4.3 Employee engagement:
Employee engagement has become one of the most significant topics in the world of human
resource management. It is the total sum of motivation, effectiveness and job satisfaction. It is a
very significant topic as the value of the organization is transferred from physical asset to
effective work force. It is an important discipline that an organization should focus to be more
productive, effective, loyal and dedicated work force.
Motivation + satisfaction + effectiveness = Employee engagement
Or, Think + Feel + Act = Employee Engagement (Swaminathan J and Rajasekaran D, 2010,
Essential components of employee engagement)
Employee engagement is a milestone to retention of the key workers (Glen 2006). It is that
discipline where precise academic research is needed (Macey and Schneider 2008, IOP special
issue 2008). Cartwright and Holmes, 2006 states that employee engagement is a very important
mediator which is in turn the participation and dedication of the employees towards their jobs.
Engaged employees give their hand, heart and mind to the company and feel pride to work there.
(Perryman Robinson and Hayday, the Drivers of Employee Engagement, IES Report 408 (2004)

32
The intention to quit from the company is lowered by the employees who can feel the sense of
well being in the company because of high employee engagement. The goals and objectives of
the organization is easily achieved when the employees are well satisfied. This implies that
employee engagement creates the high levels of organizational commitment and firm
performance as the outcomes. Harter et. al. (2002a) used meta-analysis to observe the correlation
between employee satisfaction and business- unit outcomes of customer satisfaction,
productivity, income, employee drop out etc.
When the employees are fully engaged, they are psychologically and physically present while
occupying and performing organizational role. In this modern world, employee engagement is
very crucial for any organization. It is noted that there is close relationship among employee
engagement, performance management and business outcomes. Employees will be fully engaged
in the organization when there are better opportunities to communicate and put forward the
views of employees to their management. The organization cannot provide the better service or
product unless their employees are not engaged and the employees think their job as dead end
job. It is important to note that employee‟s engagement is affected by individual perceptions and
personality of employees. every organization need to formulate either short or long term
performance management strategies in which every employees can flourish their unlimited
potential with their fully engagement. Nobody can avoid the true fact that employee engagement
is rare in existence.
The advantages of employee engagement are as follows
 Engaged employees will be the good advocate of the company with better emotional connection
and are highly motivated towards their work
 Employee engagement improves employees‟ trust in the organization.

33
 It helps to develop the sense of brand loyalty in the competitive era. That means the engaged
employees are brand ambassadors for the organization.
 It helps to create enthusiasm, devotion and association with the organization's plans and goals.
 Fully engaged employees create the climate of win- win approach in the organization which in
turn helps to build the healthy organization irrespective their size, location and economic
background. (Adapted from: Swaminathan J and Rajasekaran D, 2010)
 There is a correlation among employee engagement ,profitability and business growth (Briggs
Leynelle, Australian Government Public Service Commissioner (2005)
Figure 2.1: Conceptual model used to study various relationships in Employee Engagement
(Source: Sharma Baldev R and Raina Anupama, 2010, Determinant of employee engagement in
a private sector organization)
organisational performance
employee engagement
Personal Attributes + Situational factors

34
2.4.4 Communication
It has very significant role for establishing and retaining better performance. It is
multidirectional-running top-down, bottom-up and horizontally within and across the
organization. Various researches imply that about 75% of the people‟s total time is used up in
inter-personal affair. This implies that poor communication is the root cause of
underperformance. Therefore, effective communication is raw material for organizational
success. Effective communication includes many barriers such as language differences,
perceptual bias, inter personal relationship, cultural differences so management need to put some
efforts to minimize these barriers (Edward G Wertheim, PhD, 2008, the importance of effective
communication). The effective and efficient approach of management is ultimately depends upon
the way of communication as the effective communication with employees creates the better
understanding of what is expected from employees and what should be done to achieve that. The
employers value their employee‟s contribution and efforts and employees feel valued by their
employers because effective two way communication enhances the psychological contract. It is
noted that effective communication has a significant role in managing the expectations (Porter et
al, 1987)
Researcher found the following points to be considered to enhance the communication and
performance process.
 The organizations need to build up sound recruitment and selection process in hiring the people
with appropriate knowledge, skills, attitude and aptitude.
 Newly recruited employees need complete and proper in- service or out service training for
better understanding of the company profile and its strategies before joining to it.

35
2.4.5 Training and development
Training and development is especially for the change that can resolve various organizational
problems that uplift the employee‟s capabilities and competencies or build new skills or
competencies. Self confidence and commitment of employees can be achieved through training
and development program which in turn helps to grasp better opportunities to face tougher
challenges. Employees need specific skills, knowledge and experience to achieve the
organizational goals and vision which can be accomplished by training and development
program. Generally, every organization provide training and development program to get
customer service better which in turn leads to customer satisfaction and developing employees
creativity as well. It is the raw component for establishing high skilled work force to increase
competitive advantages to reach high productivity and quality performance. Highly qualified and
trained employees will minimize the supervisory cost as they are efficient to diagnose faults of
machine and repair it without sending to mechanics so it also reduces the downtime of
machinery. Training and development helps to achieve organizational functional flexibility as
they will have deeper knowledge of multi skills. There are four stages of training process which
are equally important to achieve the organizational success
Figure 2.2: Stages of Training process
(Source: Sheila W.Furjanic, Laurie A. Trotman, 2000, Turning Training into Learning)
Evaluate
Deliver
Design
Assess

36
2.4.6 Right person in right job:
Human resource has a great challenge to select and recruit the right people in right job at the
right time. According to Dr Pierre Mornell, the cost of replacing the employees of same skills
and knowledge will be two and half times the person‟s annual salary if management made the
mistake in recruiting and recognise that mistake and rectified within six months. For instance, if
the wrong person is selected in a particular job with his annual salary of £18000 then the
company has to face the loss of £45000 if the management could able to rectify that mistake
within six months. A person will be the right person for a job if his skills, cognitive abilities,
interest, qualification and personality exactly fit on the job requirement (Chuck Russell- Right
Person Right Job, guess or know). An employee will be the prey of job satisfaction, acute stress
and intention to leave job if he is not fit in the job (Lovelace and Rosen, 1996). According to
John F. Binning and Anthony J. Adorno of HR group (2005), selection of right person in right
job can reduce employee turnover by 50% to 60%. Researcher has seen that a person who is
expert in one subject or field is working in totally different field in Radisson Edwardian
Heathrow. For example, MBA graduates in marketing are working in finance department. It is
obvious that right person in right job helps to reduce brain drain and attract exceptional talent
person in the job which ultimately improves the job performance.
2.4.7 Employee retention:
Human capital is considered as the prime assets in any organization in this competitive age.
There is inter- relationship between employee retention and performance management. Retention
of employees in the organization increases employees‟ performance and retention occurs when
there is good performance management system in the organization. Performance of employees

37
can be elucidated in terms of skills, quality, efficiency, effectiveness that are linked to a
particular work. Every organization has a challenge to hold the key employees for long period of
times. Various factors such as job satisfaction, good relationship with the managers, good salary
and friendly environment play significant role in employee retention process. “The reason for
people leaving an organization is rarely down to them finding better jobs or bigger salaries”-
Jonathan Evans, HRM consultant and former HRM consultant. Evans believes that employees
actually leave the managers not the company. Hence, the most significant cause of the employee
turnover is the bad management (Andrews, 2007). Most of the company have the tendency to
hire the best operator and worst managers and peoples are recruited in the position they are not
good enough. The effectiveness and profitability of the organization will be increased if the
organizations retain the employees. Hence employee retention is the major issues of every
organization. High employee turnover spoil the reputation and good will of the organization as it
results poor performance in their work.
2.5 Performance management model
The performance management system model proposed by Cornell University includes the
following factors
2.5.1 Planning
Proper planning helps any organization to achieve its goals. The process includes the review of
the current performance of the organization and its employees and also identifies area of
improvement in the upcoming years. It helps to establish the efficient strategies, proper use of
resources, promote team building and spirit of cooperation and determine the competitive
advantages of the organization.

38
2.5.2 Performance Assessment
Performance assessment is the process of measuring; summarizing and documenting the job
performance of the employees. It enhances the employee engagement, facilitates growth and
development of employees which in turn helps to increase efficiency and effectiveness of
employees. It gives an authentic mechanism for the employees to get performance related
feedback. In this process, all the employees get an opportunity to discuss, review and comment
on their actual performance.
2.5.3 Career development
Source: Marry George Opperman, Cornell University, 2010
Figure2.3: Stages of performance management
Planning
Assessment
Recognition
Career
Development

39
2.6 Approaches of performance management system:
2.6.1 Balanced scorecard
The balanced scorecard provides the comprehensive framework that changes an organization
vision and strategy into the reality (Kaplan and Norton, 1996) and focus to those areas of the
organization‟s performance that needs commitment for long term progress of the organization.
The balanced scorecard (Kaplan and Norton, 1996) is one of the commonly used framework for
performance management that almost all the organization use it. The organization provide every
employees a scorecard and communicate a shared values, expand aspirations and risk taking with
creating the environment of commitment and excitement (Robert Fulton of the chatfield group
consulting firm, cited in IOMA, 2004:4)
Figure 2.4: balanced scorecard
2.6.2 Key performance Indicators (KPIs)
KPIs are the quantifiable measurement that has significant role in the success of the organization
which is different for different organization. It is noted that the KPI should originate from the
vision level and need to focus completely in order to achieve success through employees (Baeur,
2004: 64). Effective KPIs can be used as a reward indicator and motivator. It is very important to

40
note that counterproductive behaviors‟ and unexpected outcome may come by selecting wrong
KPIs (Bauer, 2004:63). The KPIs defines the tasks the employees need to do, that in fact help in
the performance measurement of employees.
Source: Baeur, 2004:63
Figure 2.5: Key performance Indicators
2.6.3 Management by objectives (MBO)
Drucker founded this theory in 1961 in which the realistic goals are set and lay out the plans to
achieve the goals where employees take part in both goal setting and action planning stages. This
means it focuses on employee participation in planning. Regular and continuous review of the
employee progress towards targeted goals will be carried out in it. Motivation towards the goals
and objectives will be vanished if the clear linkage between the organization objectives and
individual objectives is not accepted in the process (Prince, 2000).
vision
strategy
objectives
critical success factors
key performance indicators
key action initiatives

41
2.6.4 Future considerations for the Radisson Edwardian Performance management Strategies:
2.6.4.1 Spiritual intelligence
Look deeply at almost any factor that influences organizational effectiveness, and you will find
that emotional intelligence (or spiritual intelligence) plays a role (Cherniss, 2001, p4)
It is very important to review and evaluate performance management strategies in the regular
intervals (Price, 2000). The present era demands the theory of emotional intelligence (Goleman,
1996) and spiritual intelligence. The impact of spiritual intelligence is very significant in the
work place. One point to note that there is not vast differences between the emotional
intelligence and spiritual intelligence. The emotional intelligence focuses the emotions whereas
spiritual intelligence focuses the spirit which is deeper than emotions. Spirit is subtle part of our
soul. Generally emotional intelligence and spiritual intelligence come together in the discussion.
Every organization sets up the performance objectives, the time frame for outcome to be
achieved and the major performance areas that will result in the objective being achieved etc.
Although pay, promotion, reward and recognition etc play important role in performance
management system, emotional and spiritual competencies also need to be developed to achieve
the goals in easier way (Jacobs, 2001). The Radisson Edwardian has not included emotional and
spiritual competencies in their performance management strategies (Sanders Gavin, Hotel
manager of REH, 2012). This shows that there is the room for improvement in the effectiveness
of the performance management system (Claire, HR officer, REH, 2012).
Every organization focuses on the good service, better quality. For that, the employees should
have good emotional impression that gives the positive, colorful, memorable feeling in the mind
of customers (Barlow and Maul, 2000). It is seen that managers especially focus on the
importance of speech and behaviors in front of other individual (Hochschild, 1983) that brings

42
better service. Hence, the emotional and spiritual performance is the key for measuring employee
work performance (Morris and Feldman, 1996). Many research studies reveal that employees
work performance is directly proportional to emotional and spiritual intelligence (Morris and
Feldman, 1997). It is believed that an employee with good EI and SI can face crisis easily by
maintaining the body, mind and soul (Lazarus, 1991). Emotional intelligence means the process
of understanding the situation and handling of it more effectively (Weisinger, 1998). It is
obvious that employees can demonstrate calmness for effective service if he is efficient in
detecting other people‟s feelings (Goleman, 1998; Kenneth and wong, 2000).
Most of the people have wrong and negative perception about spirituality. They think that
spirituality and religion are same but religion is a narrow concept and the spirituality is broad
concept in which belief, values etc are included (Chandler, Holder and Kolander, 1992, Zellars
and Perrewe, 2003). Spirituality is the process of recognizing the quality of spirit which is the
raw material for happiness to oneself and to others (Dalai Lama, XIV,1999) Spirituality is a part
of the personality of people in workforce (Wisnieski, Askar and Syed, 2004) which has
significant role to enhance the effectiveness of leadership (Peters and Waterman, 1984). It acts as
a ladder to attain the organization goal.
Spiritual intelligence is a significant element in a broad spectrum of skills or behaviors which is
needed to all the managers to achieve organizational success and individual effectiveness.
Emotional intelligence is two times important than the IQ plus technical skills where the
performance of employees increases by 85 percent while introducing emotional intelligence in
the organization (Haygroup, 2005). The spiritual intelligence is much more than emotional
intelligence. The spiritual intelligence is the sum of Intelligent Quotient (IQ), emotional quotient
(EQ) and moral quotient (MQ)

43
SQ = IQ + EQ + MQ (Adapted from: Spiritual discourse by BK Usha, Brahma Kumari Divine
University)
Mayer and Salovey (2004) categorized EI into two separate headings
Personal competence (Intrapersonal skills)
Sub-Headings Traits
Self awareness Emotional awareness
Accurate self assessment
Self confidence
 Self management Self control
Trustworthiness
Conscientiousness
Adaptability
Innovation
Achievement drive
Commitment
Initiative
Social competence (Interpersonal skills)
Sub heading Traits
Social awareness Optimism
Empathy
Service orientation
 Social skills Developing others
Accepting diversity
Political awareness
Influence
Clear communication
Leadership
Change catalyst
Conflict management
Building bonds
Collaboration and co-operation
Team capabilities
Table 2.1: Classification of emotional intelligence

44
2.7 Implementation of performance management system
The designing and implementation of effective performance management system in hospitality
firms depends upon the following factors
2.7.1 Alignment
Better understanding of the outcomes, the nature of the business, its mission, vision are some
factors which should be considered in designing performance management.
2.7.2 Credibility:
The firms can increase the confidence of employees through transparency, fairness,
simplicity, management commitment and minimising the gap between rhetoric and reality. It
should be noted that there is great challenge in handling poor performance which is the key for
the overall credibility of performance management.
2.7.3 Integration
Performance management is a major part of the overall corporate management structure of
the firms. It helps to know the responsibilities of employees and objectives of firms and
implement effectively in the progress of firms by providing relevant training and development
2.8 Perspectives of employee performance:
There are three perspective of employee performance. They are Results, Activities and
Behaviours. Result perspective is the quantitative indicators of the firm‟s financial and
operational performance. Activities perspective focuses on the roles and responsibilities of the
employees. It describes effectiveness of designing of rotas of staffs and ensuring staffs are
arranged appropriately
2.9 Employee performance appraisal
Employee performance appraisal is one of the widely used methods of management practices
used by the organization all over the world. Over 90 percent of giant organizations use some

45
performance appraisal system and more than 75 percent of state employment system requare
annual performance appraisal (Locker and Teel, 1988, Murphy and Cleveland, 1991, Seldon,
Ingraham and Jacobson, 2001). It is believed that performance appraisal system is an essential
instrument for the effective performance management in the field of human resource
management (Longenecker and Goff, 1992) and research area in individual and organizational
psychology (Murphy and Cleveland, 1991). An effectively designed, implemented and
administered performance appraisal is the source of the excess of benefits (Cascio,1987, Coens
and Jenkins, 2000).
There are many factors that affect the performance appraisal system. Som of the research on the
topic reveal that the performance appraisal process is neither accurate nor fair for the employees.
If the employees believed that the performance appraisal system is biased or irrelevant for them,
performance appraisal process will be the souce of the employee dissatisfaction (Slearlicki and
Folger, 1997)
2.10 Theoretical framework and Hypothesis formulation
Figure 2.6: Theoretical linkage in performance management strategies
Reward and
Recognition
Right person in right
job
Motivation, Training
and development
Employeeengagement
Improved total quality
management
Spiritual intelligence
leadership
Performancemanagementstrategies

46
2.11 Hypothesis formulation:
Present study discovers whether there are inter relationship between performance management
strategies and effectiveness of employees. Study purposes following null hypothesis (H01);
H01: Implementation of performance management strategies does not increase the efficiency and
effectiveness of the employees.
Literatures imply that there are close relationship between performance management strategies
and efficiency and effectiveness of employees. Alternate hypothesis is proposed following;
H11: Implementation of performance management strategies increases the efficiency and
effectiveness of the employees.
H02: Motivation, reward and recognition etc do not have great impact in the process of
performance management
If the null hypothesis is rejected, following alternative hypothesis is proposed
H12 : Motivation, reward and recognition etc have great impact in the process of performance
management.
H03: High employee retention, employee engagement cannot be achieved on the application of
Following hypothesis is anticipated if null hypothesis is rejected.
H13: High employee retention, employee engagement can be achieved on the application of
Figure 2.7: Hypothesized relationship for performance management strategies
H02
H03
Efficiency and
effectiveness
Reward, motivation
etc
Employee engagement
Performance management
strategies
H01

47
Chapter 3
Research methodology
3.1 Introduction
The previous chapter investigated the theoretical base of the research by exploring related
literature and other appropriate resources. Research methodology is the heart and soul of the
entire research that shapes the research by providing various techniques to collect the data and
information to reach up to the result. It helps to develop final report from the raw data and
information.
This chapter describes the methods used to explore the concerns related to performance
management in hospitality firms.
Purpose
Hypothesis
testing
Study details Measurement
method
Data analysis
Type of
investigation
To explore the
effectiveness of
performance
management
strategy
Measure
statistical
significance
Strategy
survey
Descriptive
analysis
-Corelation
Whatperformancemanagementstrategiescanbeimplementedby
hospitalityfirmstoenhacetheoverallperformanceofemployees
Sampling
Simple random
Sampling Methods
Method of data
collection
-Self
administered
questionairre
method using
drop and pick-up
methods
-Interview
Analysis Unit
employee of
Radisson
Edwardian
(Heathrow
London)

48
Figure 3.1 Figure 4.1: Research Design (adapted from Sekaran and Bougie, 2010)
(Source: Sekaran and Bougie, 2010)
Figure 3.1: Research design
3.2 Research philosophy
According to Saunders et al.(2009), research methodology is based on the main assumptions of
how the researcher views the world and greatly influenced by the realistic thought of the
researcher. Kent (2007) states that research philosophy focus in the development and the process
of knowledge. There are mainly three kinds of research philosophy such as positivism,
interpretivism and realism research philosophy. The selection of research philosophies is based
on the way in which knowledge is developed and judge (Saunders et al., 2009)
Positivism is the scientific approach that believes on that everything can be known and proved
(Fisher, 2007). It is based on the testing of hypothesis and needs large sample size to collect
data( Saunders et al, 2007) whereas interpretivism believes that this world is complicated that
cannot be totally understood and rationalized into general rules and theories. Interpretative
philosophy does not support hard facts and theories (Fisher, 2007) and based on qualitative
rather than quantitative data (Saunders et al, 2007).
Researcher will adopt positivism philosophy in this research as this research focuses on detailed
study of the performance management strategies implemented by Radisson Edwardian hotels and
its effectiveness. Researcher is also aware in that every philosophy is precious depending on the
nature of the research.
This is done by collecting data through observation, semi structured interview with head of
department and general manager of the hotels. It also examines the existing performance

49
management strategies. Finding will be supported mostly by analysis of qualitative and
quantitative data from employee observation forms. This shows that the present research study is
based on the elucidation of the people with different roles within an organization in which there
will be different views on the same topic. This is due to difference in perception and expectation
of employees from the organization.
3.3 Research approach
The research approach as explained by Saunders et al.(2009) is the systematic process of the
selection of the techniques to deal with research process. Researcher gets a general plan how the
research will be carried out from the research approach
It is a set of ideas that are simplified on the basis of the precedent understanding (Saunders et al,
2007). Research approach is categorized into two types: deductive and inductive approach.
3.3.1 Deductive approach
A deductive approach has well known role for existing theory, it notifies the formulation and
development of hypotheses, selection of variables and the resultant meaures.It is refered as top
down approach (Ali, H and Birley, S, “Integrating deductive and inductive approaches in a study
of new ventures and customer perceived risk”, Qualitative Market research: An International
Journal 2/2, 1999, 103-10. It is also called testing theory(Saunders et al, 2009) as it is used to test
the developed theories and hypotheses. According to Saunders et al (2009, p590 and 593),
deductive approach is defined as the linking the testing of the testing of theoretical proposition
by the employment of the research strategy specifically designed for the purpose of its testing
whereas inductive method is defined as the involving the development of a theory as a result of
the observation of empirical data as researcher would face some difficulty while employing a
purely inductive approach to establish a theory by avoiding the prior knowledge and observation.

50
Figure 3.2: Deductive and Inductive approach
Adapted from: Nadeem Mahmood, “A brief history of mathematical logic and applications of
logic in CS/IT”, Karachi University journal of science Vol, 34 (1), July 2006.
Confirmation
Observation
Hypotheses
Theory
Theory
Tentative Hypotheses
Pattern
Observation

51
Deductive methods have five sequential stages as follows
 Assuming hypotheses
 Expressing these hypotheses into functional terms
 Testing the hypotheses
 Studying the outcomes of the research whether outcomes are in the line with existing developed
theory or not.
 If necessary, modifying the hypotheses and repeating the process
Reason for selection
Researcher has chosen the deductive methods as it moves from theory to data, more scientific
approach and it is easier to collect data in comparison with inductive methods. This facilitates the
researcher to finish the entire research project in limited time period.
3.4 Research methods
There are two commonly used methods to study the research: qualitative and quantitative
Quantitative method is quite organized and hypothesis oriented that greatly depends upon
numerical data and statistical testing.
Qualitative research will include vast research question, with a less systematic organization and
data may need the description (Wolfer, 2007, 465). In qualitative method, variables cannot be
controlled and experimentally manipulated (Grinnell, 1997, 107)
Reason of selection
As deductive method is used in this research, quantitative method is appropriate for the research
for demonstrating and standardizing each variable used in hypothesis

52
This practical analysis into the topic surrounding the performance management is based on a
simple embedded case study approach of performance management of Radisson Edwardian
hotels. The researcher used the quantitative data and analysis which was the best method in this
particular research based on survey, structured interviews, observation, questionnaires, focus
group (Saunders et al., 2009, p246, Silverman, 1993 cited in Fisher, 2007, p 62)
(Source: Saunders et al., 2009)
Figure 3.3: Classification of Research methods
3.5 Research strategy design
Research Design is a blueprint or comprehensive plan for how a research study is to be
conducted. Research design summarizes the approach that can be used to collect data used for

53
testing hypotheses and analyzing the result and illustrates conditions under which data will be
collected, how respondent will be selected, what directions will be used and generally provide
information about who, what, when, where, and how of the research projects.
Research designs are classified into two categories: exploratory and conclusive. The conclusive
research design is further divided into descriptive and causal research as shown in the figure.
3.5.1 Exploratory design
Exploratory research design is adequate when the problems are unclear and needs to develop
realistic theoretical framework and is used to classify and clarify the nature of problems precisely
(Sekaran and Bougie, 2010). Zikmund (2003) explains exploratory research focuses on following
 Analysing unclear problem
 Screening the option available
 Identifying new concepts
Source: Churchill and Iacobucci, 2002, Marketing Research, 8th
edition, p95
Figure 3.4: Classification of exploratory studies
Exploratory
studies
Literature
search
Experience
survey
Focus
groups
Analysis of
selected
cases

54
3.5.2 Descriptive Design
The problem is clear, structured and better understood in descriptive approach. Saunders et al
(2003) states that researcher can acquire correct information on people, actions or circumstances
through use of descriptive study which is very significant for the researcher (Sekaran and
Bougie, 2010). This specifies the techniques for selection of the sources of information and also
the collection of data from those sources (Malhotra and Birks, 2003).
edition, p110
Figure 3.5: classification of Descriptive studies
Rationale for selection:
The key objective of this research is to describe various factors involved in enhancing the
performance of employees. Hence, the descriptive type of study is the appropriate method for
this research.
Descriptive
studies
Longitudinal
True panel
Omnibus
panel
Cross
sectional
Sample
survey

55
(Source: Malhotra and Birk, 2008, page 72)
Fig 3.6: A classification of research designs
3.6 Sources of data
There are many sources of gathering data and information. As researcher is an employee of
Radisson Edwardian hotel, there was no problem in collecting data from the company.
Specifically, the researcher used the following methods of data collection
3.6.1 Survey:
This is commonly used method of collecting primary data. When performing surveys to help
answer a research problem, appropriateness, correctness, timeliness and cost should be taken into
account. Survey method is effective when the researcher collects the data on phenomena that
cannot be observed directly. Survey is a speedy and one of the most economical method of
collecting data, views from people (Zikmund, 2003). That is why; researcher chooses this
method as the most excellent method for present research study.
3.6.2 Observation:
One major disadvantage of the survey method is that a large amount of information is based on
interviewees‟ views and opinions explaining what they have performed or expect to do in the

56
future. The interviewees can do the mistakes in reminding the past actions so researcher used
observation method to eradicate that shortcomings of survey method as observation method
records the events what actually happened in the company.
The researcher is able to observe performance management strategies that take place at Radisson
Edwardian during his working period and in research period too.
3.6.3 Documentary evidence
There was easy access to collect the data and information and documents that support the finding
from observation and interviews. During the research, researcher observed a number of records
such as retention of employee, employee survey, employee annual appraisal survey etc to
determine the performance of company.
3.6.4 In depth Interview:
Semi structured interview were carried out with the number of member of executive
management and employees on December 30, 2011 to examine the researcher‟s theoretical
propositions and performance management theories as reviewed from the literature. The
interviews also facilitated triangulation with other data collected through observation and
documentary evidence.
The questions were set according to the interview group that helps to test the perception of the
stakeholders towards performance management at Radisson Edwardian. Researcher avoids the
specific terms and vocabulary related to performance management theory and practice for the
clarity.
The purposes of interview were informed to all the interviewees to improve the validity of
collected data. The researcher was very alert on the necessities to stay on the main objective
during the period of interview despite his in depth knowledge of company practice.

57
3.6.5 Site selection and reason for selection
The prime aim and objective of this research is to determine the relationship of performance
management strategies with the overall performance of the employees of Radisson Edwardian,
Heathrow. As the researcher is an employee of Radisson Edwardian, Heathrow, he has easy
access to collect the primary data from the employees of Radisson Edwardian. Wolff and Pant
(2002), states that the achievement of the research is mainly based on the quality of the
participants. The level of accessibility and cost effectiveness should be considered during
research (Saunders et al, 2009)
3.7 Sample selection and reason for selection
Ideally every researcher wants to investigate the whole population but it is inappropriate as the
research is doing in the large population and the sample population has different working days
and times. So researcher needs to take sample which represent whole population. This allows the
researcher to gather data in limited time with low cost.
Black and Champion (1976) define a sample as a portion of element taken from the entire
population that can represent the whole population. Researcher believed that the ideal size of the
research is between 30 and 500 for the better result. Because of time limit and cost, researcher
has chosen the samples of 100 elements for the survey and 10 elements for the in depth
interview.
3.7.1 Sample details
 2 chief directors and 3 directors of Radisson Edwardian Hotels
 5 Head of department
 96 employees of Radisson Edwardian Heathrow

58
edition, p449
Figure 3.7: Steps of Sample selection
3.8 Sampling techniques & reason for selection
The researcher has to follow appropriate sampling techniques to collect data from the selected
samples. Otherwise the research can be biased and cannot generalize the outcome of the analysis,
due to which entire dissertation can be spoiled (Burns, 2000)
Basically, sampling techniques are of two types: probability sampling and non- probability
sampling as mentioned by Zikmund (2003) and Saunders et al (2009)
Researcher used probability sampling method as chance of knowing the number of total
population is certain. If not, non probability sampling technique is preferable.
Gathering data from selected elements
Selecting sample elements
Determining the sample size
Choosing an appropriate sampling procedure
Indentifying the sample frame
Defining the target population

59
edition
Figure 3.8: Types of sampling techniques
3.8.1 Stratified random sampling method:
The population is divided into two or more relevant and significant groups or strata in stratified
random sampling and random sampling is done from each group or strata (Saunders et al, 2007)
that makes the samples more representatives as researcher is aware of the samples. It is the
modified form of random sampling.
Researcher follows the following steps to create the simple random samples
 Defining the population
 Choosing the stratification variables
 Dividing sampling frame into distinct groups
 Choosing the sample unit by using simple random sampling
Sample design
probability
samples
Simple random
Stratified
Cluster
Non probability
samples
Convenience
Judgement
Quota

60
3.8.2 Reason of selection
Probability sampling method is commonly used technique to measure the accuracy of samples
(Flower, 1993) as the researcher is aware of the target population.
3.9 Data collection:
There are mainly two types of data, primary data and secondary data. Primary data is collected
through directly from the respondents. The survey, interview, focus group etc are the sources of
primary data (Saunders et al, 2009). Secondary data is collected from published sources such as
journals, annual reports, books, reliable websites, electronic media etc. Researcher is very
cautious about the validity and reliability of such kind of data.
To achieve the objectives of research project, researcher has collected both primary and
secondary data by following ways
 By conducting the questionnaire survey with employees of Radisson Edwardian, Heathrow.
 By carrying out in depth interview with HR officer, hotel manager, and head of department.
Source: Malhotra and Birks, Marketing Research, European Edition, 2000, p104
Figure 3.9: classification of secondary data
Sometimes the secondary data cannot fit perfectly what research problem expects as it had been
collected by someone else for different purposes. It also lacks the accuracy. Despite of the
problems of secondary data, collecting secondary data is very advantageous too in cost and time
Secondary
data
External
Published
Commercial
Internal

61
point of view. It contains the views and data already collected by some experts which will be the
milestone for present research.
Researcher found the following steps for gathering secondary data which are as follows
edition, p210
Figure 3.10: Steps for collecting secondary data
3.10 Data collection instrument:
Researcher has to use particular technique to gather the primary data for analysis and
interpretation. It is very important in performing any research project as wrong analysis will
happen if researcher fails to do appropriately. Saunders et al (2009) states that researcher can
choose any of the techniques such as survey, questionnaires, observation, in depth interview etc
which would be best fit for the research. The researcher uses in depth interview and
questionnaires method because of following reasons
3.11 Questionnaires method
Cohen (1989) explains questionnaire as a self report tool used for collecting data and information
about variables to an investigation
Identifying the authorities to consult
consulting various directory guides
Consulting reference librarians
Compiling the obtained literature
Searching different related sources
Listing the key terms and concepts
Identification of existing knowledge of researcher

Dissertation by DR Parajuli 'Magnet' for MBA in London

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