Tourism and hospitality organisations need many different things for them to function, the most important of these things being their employees. However to ensure that they can keep and retain their employees there are many things that an organisation needs to employ; this includes the concepts of remuneration and working conditions. It is for this reason that this essay will examine the concept of remuneration and the different forms it can take. Leading on from this it will examine the different factors that can influence the remuneration that one receives in the employee-employer relationship; and why remuneration is so important. Upon establishing this, this essay will turn its focus onto working conditions and what can influence it, along with this it will establish why good working conditions are so important in the tourism and hospitality industry. The second half of this essay will look at some of these concepts in relation to the airline industry. It will examine the factors which influence remuneration in this sector along with the different forms of remuneration that is present within airlines. Furthermore this essay will look at the working conditions within the airline industry; by doing so it will emphasise why there is such a need for good working conditions within the hospitality and tourism industries.
The concept of remuneration refers to “all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship” Milkovich and Newman (2005). In other words remuneration is both the monetary benefits that one receives as part of an employment agreement, together with the tangible products employees can be offered. By looking at this definition one can see that the concept of remuneration is extremely important to a company and its employees, this is due to many factors. Firstly, good remuneration packages make it easier for an organisation to retain employees; not only can it help retain them but remuneration can also help to attract the best staff as well. Milkovich and Newman (2005) also suggest that remuneration can motivate employees, if they feel valued they may be more contempt and happy within their jobs, thus motivating them to perform better. Remuneration is also said to be important by Milkovich and Newman (2005) for employees as it is seen as being fair, they receive something for the work that they provide their employer. Furthermore, remuneration such as bonuses or performance pay shows recognition of that employee; quite often this recognition of a job well done is an important aspect for workers, thus the importance of remuneration to the organisation as well.
Types of Remuneration/Rewards
Remuneration and rewards can take many different forms, this can be examined through three different categories, direct, indirect and intrinsic. Direct rewards as stated by Milkovich and Newman (2005) consist directly of cash payments; they are the monetary rewards with the most obvious example being the wage or salary (base pay) one receives in return for their work. Much of the literature available within the hospitality and tourism sectors suggests that this base pay within the industry (particularly in hospitality jobs such as house keeping) is extremely low, with Williams, Adam-Smith and Norris (2004) stating that the hospitality industry has the reputation of being a low paying sector. The direct rewards can also include the incentive of bonuses, commission and performance pay; as Harrison (1993) suggest there has been some growth in bonuses being used as a reward in recent years. Direct rewards can furthermore also come in the form of company shares and stock ownership; although these are not strictly cash rewards they represent a cash value (Milkovich and Newman, 2005). Indirect rewards on the other hand refer to those rewards which...