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HUMAN RESOURCE MANAGEMENT ANALYSIS
AT ROYAL RAINBOW TOURS
BY: RINA KURNIAWATI
Abstract
Human Resource management is an important aspect for any organization in pursuing its goal. Without a careful knowledge and management efforts, inefficiency will likely to be faced. Theory presents an ideal approach how Human Resource Planning should be conducted. However, the writer is intrigued to discover how Human Resource Management is applied in real situation, since the real world is dynamic and always change.This paper is a case study on how Human Resource Planning is applied in Royal Rainbow Tours, one of travel agency in Jakarta. The result shows that the best practice does not always in accordance with the theory. Human Resource Management, in this case of Human Resource planning, is regarded as flexible approach suited the needs of the organization.
Keywords: Human Resource management, Planning, Royal Rainbow, Travel Agency
1.0.INTRODUCTION
1.1.Background of the Study
People have very complex needs. One of them is the need for traveling either for leisure or business purposes. Seeing that a person has traveling needs whether for leisure or business, it creates business opportunity in this sector, such as transportation, accommodation, travel agents, tour operator, food and beverage service, etc.
Travel agent as one of the businesses involved has a considerable role in fulfilling a person needs for travel. Travel agent provides services in which make it easier for the person fulfill his travel needs. By using its service, people do not need to waste their time or energy to make travel arrangement. Just by picking up the phone then the travel agent will take care the rests.
In Indonesia, travel agent has become partner of the society where it is there to assist them in making necessary travel arrangement they need. In Jakarta itself the number has reached more than five hundreds (according to the list taken from ASITA). With the numerous presence of travel agent, it makes this business extremely competitive. Certain strategy is implemented by each travel agent in order to survive in the wave of competition.
Human resource management is one factor that is significantly important for a company to achieve its goal. It is the tool which makes a company be more competitive and will able to produce highly qualified services and products.
Royal Rainbow Tours is one of the travel agents in Indonesia. It has been in the business for sixteen years. With long its history, experience, as well as its ups and downs, there must be something that can be learned from the company.
As it is important to study about human resource management in Travel Company, therefore, this paper is titled “HUMAN RESOURCE MANAGEMENT ANALYSIS IN ROYAL RAINBOW TOURS.”
1.2.Purpose of the Study
This paper will discuss the theory of human resource management process, how the human resources management process applied by Royal Rainbow tours in order to survive in the industry.
1.3.Limitation of the Study
The study will be limited on the process of Acquiring Human Resources which involve Human Resource Planning and Staffing at Royal Rainbow Tours. This is in accordance with the limitation of time and knowledge the writer has and focusing on the main issue of the findings at Royal Rainbow Tours.
1.4.Methodology of the Study
The study is qualitative descriptive analysis using two instruments: observation and interview.
1.5.Goal of the Study
By analyzing the theory and the application, the gap between the theory and the application can be identified and reasons can be discussed. The result of the study can generally be used as an input for those who are interested in managing a travel agent and specifically be an input for Royal Rainbow Tours to optimize their human resources process.
2.0.THEORITICAL FRAMEWORK
2.1.Definition of Travel Agent
In tourism industry, there are several terminologies commonly used such as travel bureau, tour operator and travel agent or travel service. The three terminologies seem to have significant differences. However, basically they all are the same in practice although from the activities involved are different.
The terminology for travel bureau which is commonly used in Indonesia is equal to tour operator which is commonly used internationally. According to A.J. Burkat (54-56;1971) “tour operator is a distribution company in tourism industry which activities involves service provision based on demand, transport arrangement, accommodation arrangement, and other necessary services needed by tourists in particular tourist destination, as well as package tour selling through its agent or through its office to individual or group with certain prices.
According to the Law of Tourism No.9, 1990, point 11 states “Usaha Jasa Perjalanan Wisata merupakan usaha penyediaan jasa perencanaan dan atau jasa pelayanan dan penyelenggaraan wisata.” (Travel bureau is bureau which provides travel planning and organizing services).
From the definition it can inferred that travel bureau or tour operator is a business which serves tourists or traveler in planning, arranging, and organizing their trip starting from preparing the necessary documents, amenities, and facilities needed during the trip, either partly or entirely.
The activities of travel bureau, according to the Ministry of Tourism, Post and Telecommunication above involve:
a)Create, sell and organize package tour
b)Provide transportation service to individual or group
c)Reserve accommodation, restaurant, and other facilities
d)Administer travel documents
e)Organize tour program
f)Provide service for convention
According to Ministry of Tourism, Post and Telecommunication Decree Travel agent is a business which organizes travel and it functions as the mediator in selling or serving for travel. The activities involve:
a)Selling ticket of transportation and others
b)Provide Reservation services
c)Administer travel documents according to the implemented law and procedure
2.2.Human Resource Management
According to John M. Ivancevich and Lee Soo Hoon (2002) Human Resource management is the function performed in organizations that facilitates the most effective use of people (the employees) to achieve organizational and individual goals. The functions can be group into the following categories:
2.2.1.HR Planning
Human resource planning involves determining future human resource needs and job requirement. HR plans are derived from the organization goals, the organization’s strategy, conditions faced by the firm in the external environment and the nature of its current employee’s knowledge, skills, and abilities. With HR planning, the firm ensures that sufficient numbers of properly trained staff are available at all times to carry out the firm’s operations efficiently and sufficiently. However, HR planning must include the following to ensure well defined strategic of the company can be carried out.
- Situation analysis and environmental scanning
- Forecasting demand for human resources
- Analysis of the supply of human resources
- Development of plans for action
Situation analysis and environmental scanning involves a strategic plan to adapt with the environmental circumstances. Yet, currently changing environment requires the ability of being global scanner in order to say competitive.
Forecasting demand for employee requires a strong sense of the future conditions although quantitative tools are available in the market to measure the demand. It is quite difficult to do if related to the question of how many employee the company needs within 2 years for example. However, there are approaches helpful for HR practitioners to cope with the unstable condition. The approaches are: expert estimates, trend projections, statistical modeling, and unit demand forecasting.
Analyzing the current supply of employees does not merely mean counting the number of the employees available. Yet, it is such a complex inventory of human resources skills in terms of career planning, management development
The last stage of HR planning is the action taken to identify any gap existing among those aspects—situation analysis, forecasting demand, analyzing supply—and overcome both in shortage and surplus condition of workforce.
2.2.2.Staffing
Once the critical job competencies are identified from the HR Planning process, the firm can carry out its staffing process. Staffing is the process of hiring people to perform work for the organization. It comprises two major activities: recruitment and selection.
Recruitment involves obtaining a large number of applicants, thereby giving human resources professionals and managers more choices to select from among the competent candidates. Two sources of recruits could be used to fill needs for additional employees: present employees (internal) or those not presently affiliated with the organization (external).
- Internal sources can be tapped through the use of job posting and bidding, and seeking recommendations from present employees regarding friends who might fill vacancies.
- External sources include media advertisement, the internet, employment agencies, and special events recruiting such as job fair, and referrals from schools
Selection process is employed to hire employees who are most likely to meet the organization’s standards of performance and who will be satisfied and developed on the job. The typical selection process can include up to five steps:
- preliminary screening with an application blank and a brief interview
- Employment interviews
- Employment tests
- Reference checks and letters of recommendations
- Physical examination as a part of a conditional job offer.
- Orientation, Training and Development
Orientation gives new employee the opportunity to adapt with the new surrounding of the organization that he or she enters in. The focus of orientation is to socialize with to the rules, regulations, and goals of the organization, department, and work unit.
Training and development activities teach employees new skills and refine their existing skills. Training is the organization’s efforts to increase the capabilities of individuals to achieve organizational objectives. The goal of training and development is to have competent, adapted employees who possess up-to-date skills, knowledge, and abilities to perform their current jobs successfully as well as to prepare them for future job changes.
2.2.4.Compensation
Compensation is the human resource management function that deals with every type of reward that individuals receive in exchange for performing organizational tasks – wages, salaries, bonuses, commissions, benefits, and non financial rewards like praise. The objective of the compensation function is to create a system of rewards that is equitable to the employer and employee alike.
2.2.5.Performance Management
Performance management is the process of communicating the organization’s performance expectations to employees, assessing the performance of employees’ work quality and outcomes as well as assessing employees’ future work potential. The organization evaluates their employees for several reasons. This includes determining pay raises, giving feedback, and assessing training needs. Without evaluations, employees will not know how they are performing based on company expectations or where they can make improvement.
2.2.6.Employee Relations
A labor relation is the formal structure that governs the interaction between an organization’s management and its unionized employees, for some managers it means reducing hostilities or employee dissatisfaction. For others they seek to ensure fair and equitable treatment for all employees.
3.0 RESULT OF THE STUDY
3.1. An overview of the Company
Royal Rainbow Tours was established in 1989. It was first located on JL. Cikini Raya No.88 Central Jakarta and named as PT. Griya Dharma Wisata. Since the name of PT. Griya Dharma Wisata is not very easy to remember, the company uses Royal Rainbow Tours as its company name. In the beginning, the company only had four staffs.
In 1990, it received Operational Approval Letter from Directorate General of Tourism no. 079/IU.BPW/KW.BSP/1990. On the first year of its establishment, the company was focusing on its in-bound tour program in which it covers Java-Bali Tour program. And the target market of the company was international tourist and domestic tourist.
In 1992, the company invested on Travel Bus. In the same year the company had 22 employees. The company continuously focusing on its in-bound tour program and airlines ticket sales was just a supplement.
In 1998, the national economics and political situation was unstable and it had a great impact on the company. The company had to make necessary adjustment with the not very conducive external situation. The company has managed to survive, and now it is still exist with 7 employees.
Royal Rainbow Tours has got two outlets. One is the head office and the other one is the branch office.
Head office:
Jl. Dr. Muwardi III No.40 Jakarta 11450
Telp.021-530311, Fax.021-56964833
Branch office:
Jl. Kompleks Pertokoan Cempaka Mas
Telp.021-42880509, Fax.021-42880508
The company has a motto “We are tour-packaged specialist.” It implies that the company is specializing in tour with the fact that the economics return from tour program sales is higher than air transport ticket sales. However, the company start focusing on its air transport sales as well as the airlines industry is booming in 2002.
Royal Rainbow Tours Organizational Structure from 1992-1999
Royal Rainbow Tours Organizational Structure After 1999
1)Director
To oversee, direct all aspects of Royal Rainbow Tours operation and receive reports from department manager on the on-going activities of the company.
2)Manager of Finance and Accounting
To make strategic financial plan and budgeting, record out flow and in flow cash, control all form of collection in terms of finance and banking, and write financial report to the director.
3)Cashier
To receive payment from sales and make invoices, distribute salaries to all staffs, and report to Manager of Finance and Accounting
4)Manager of Tour Department
To plan, create and organize tour package, supervise ticketing staffs work, assist ticketing staffs when needed, and write reports to the director.
5)Ticketing Staff
To make reservation whether by phone or face to face, make bookings of airlines seats, provide sufficient information on flight and airlines seats prices.
6)Tour Staff
To assist Manager of Tour Department in planning, creating and organizing tour package, and sell and promote tour program made by Tour Department.
7)Manager of Transportation
To ensure that all vehicles owned by the company are under good condition, to coordinate, direct, and supervise drivers and co-drivers based on the program scheduled by tour department or based on request.
8)Driver
To operate the vehicles owned by the company safely, fetch and drop off vehicles right on schedule, and wisely use the fuel in line with tour program.
9)Co-driver
To assist driver in fulfilling his duties
3.2. HR Planning
1)From 1992 to 1999
Whenever there was a very high demand for tour in 1992, the company had to ensure that it had sufficient number of staffs to carry out the organizational projectswhich were quite high in demand.Therefore, it hired up to 22employees divided into three departments. There was a career planning stated implicitly that an employee had the opportunity to move up into a higher position particularly in the tour department where the staffs, through experience and practices during the work, was expected to able to handle projects initially given to his/her manager. Therefore, it stimulated the employees to improve their performance. Yet, the director, as he explained, faced a dilemma where his best personnel then was hijacked by other companies, contrasted to the development process that had been given to the employees since they were new comers in the industry.
2)From 1999 to present
Major changes occurred in 1999 following the post culmination of monetary crisis. Demand fell down to its lowest point that reached 0 (zero demand) and called for dramatic efficiency for the sake of the company’s survival. As a result, 80% of its total workforce needed to cut off. Once again, the company suffered from poor cash flow and forced to sell its assets consisting of 3 (three) buses and 2 (two) micro buses. The money gained was used to pay the fee for the employees. Those who worked less than 3 years received (one) month salary and who worked for more than 3 years or less than 10 years received 3 (three) months salary. The fee, however, was paid in 3-month installment to avoid the company from running out of cash.
The remaining 5 employees are now working on 2 departments both in the head office and the branch office with direct supervision from the Director.
Yet, since 2004 there has been a positive trend in tour packages demand, so the company is able to keep in business while restoring its financial condition. According to the director, the average value of the projects received is IDR 400,000,000 per year since 2004 up to present and it is enough to sustain the operation cost of the company.
Since then, the company is applying 100% outsourcing employees for carrying up all of the projects. Due to the strong relationships and connections among the tour and travel industry, the company is able to provide tour packages demanded with satisfying service. Permanent employees work only on administrative tasks at the offices while field projects are handled by the outsourcing with direct supervision form the director. There is no specific system of merit at the company because of its short and thin company structure. However, to ensure the employees work comfortably, the director has the initiative to involve the employees in the projects in order to develop the quality of the employees, in terms of the knowledge in the tour and travel industry.
3.3. Staffing
In 1996, the director of the company had once advertised job vacancy on local newspaper. He also said that this method was impractical, as too many applicants applied for the job. He found a lot of qualified and unqualified candidates applied for the post. It took him some time to screen the candidates, so it would be impractical to use this method for recruitment. For recruitment process, he would prefer referral from school or friend. As the director himself was a teacher in Travel Department of a Vocational School in Jakarta, he would recruit his student who had just graduated (fresh-graduate) to work for his travel. Otherwise, he would ask his friend a favor to find him the suitable candidates to work for his company.