Performance Management in the Leisure Industry, Focusing Mainly on Human Resources Performance

SEA - Practical Application of Science Volume V, Issue 14 (2 / 2017)

Roxana CIOCLOV, Ioan LALA-POPA West University of Timișoara

Review PERFORMANCE MANAGEMENT IN Article THE LEISURE INDUSTRY

Keywords Performance management, Organization, Leisure industry

JEL Classification L25

Abstract

The current paper aims to present the topic of performance management in the leisure industry, focusing mainly on human resources performance. Considering the particularities that differentiate the leisure industry from any other, it is of great importance to understand how and when does performance appear, what are its preconditions and consequences, and in addition how can performance be managed given the environment. All of these are essential for a good management of the leisure business overall, but also for a good people management, acknowledging the strong correlation between motivated employees, higher individual performance and consequently higher organizational performance. Considering the above mentioned scope, the article is structured as a theoretical study, providing a literature analysis and introducing certain hypotheses that could afterwards be developed into a further qualitative and quantitative research, in order to deepen the research.

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(1) Management of strategy – refers to the need of aligning all the performance efforts in order to accomplish a certain organizational strategy. (2) PERFORMANCE MANAGEMENT Management of planning – according to a certain strategy that was previously created, all the Given the very dynamic market environment that activities and specific steps need now to be impacts the organizations, companies can only cautiously planned in order to ensure the focus on increasing their performance to ensure, or achievement of the objectives. (3) Management of at least maximize their advantage on the market. change – performance evaluation refers to Therefore, the performance becomes significantly comparing actual performance to predicted or important in order to survive on the market. desired performance, being followed by a certain of In this context, the specialized literature has action plans that need to be undertaken in order to underlined the evolution of performance, in terms implement certain changes. Management of change of how was initially the term defined, its can prove hard to be controlled, especially because importance, instruments, metrics etc. The evolution of certain reluctance to the unknown, but it is shows (Pintea, 2011, p. 5) that in the ‘50s essential in order to effectively manage performance was mainly related to financial results, performance. (4) Management of people – it is well performance evaluation being analyzed through known that people are the most valuable assets of benefit/cost ratio, proving the overall value for the an organization, and therefore they need to be investments. Later on, until the ‘90s, the concept carefully managed, motivated and empowered in has evolved incorporating the consideration of order to value their capabilities in the efforts of product/service quality delivered as part of the implementing a well-defined organizational performance, in addition to the financial strategy. Nevertheless, it is of great importance to component. Nowadays, the term implies a much understand also the need of self-fulfillment of the wider scope, being referred to as global employees, so that organizations can support the performance of an organization. In this view, employees in their own effort of achieving their performance has three main components: economic own individual goals, while contributing to the performance, social performance and organizational strategy achievement. (5) environmental performance, focusing equally on Management of execution – refers to the efforts of financial and non-financial performance. tracking the progress and coordinating the needed In order to sustain such a complex performance actions in order to make sure the strategy will be system, Armstrong (2006, p. 1) defines achieved by following a certain sequence of steps. performance management, as being a “systematic Considering the fact that the process for improving organizational performance implementation/execution of the strategic activities by developing the performance of individuals and is the most precise and explicit way of achieving teams”. Interpreting this from a personal the desired results, this becomes also the activity perspective, we consider performance management that has the potential of bringing the most added can be perceived as being the instrument, and at the value, due to its proximity to the hands-on same time the process, through which the resources activities that will have a direct impact on the of the organization are aligned with the business outcome. (6) Management of time – is the goals, while every resource accomplishes its own managerial process that ensures the activities are reason of existence as well. In the specialized being implemented in a timely manner, and the literature, however (Cappelli & Tavis, 2016), correct prioritization is considered anytime needed performance management is often identified with to do so. (7) Management of risk – during the human resources annual performance appraisal, implementation of the strategy, there can appear whereas we consider performance management various risks that could jeopardize the success of does not only refer to assessing the performance of the changes and of the performance improvement the employees, but starts from the organization’s measures. This is why it is of great importance to capacity of aligning all its resources and carefully handle the risks and any residual risks, to capabilities (human, technological, material, consider the criticality, urgency, proximity and knowledge etc.) to the organizational strategy, consequences of the risks, in order to take well while allowing every component, or resource, to documented decisions and to have mitigation plans accomplish its own objectives, or reason of prepared. (8) Management of evaluation – existence (personal or professional goals of the evaluation of performance is done both during the employees, full and optimum utility of the implementation time, as a monitoring activity, and technologies and raw materials used). as a follow-up, at the end of the execution. No Considering the managerial approach to matter the time when this is being developed, performance, it is nevertheless important to evaluation is done in order to compare the progress underline the management components that are obtained to the progress desired, and to be able to involved in the performance management overall. interfere and implement corrective actions where

254 SEA - Practical Application of Science Volume V, Issue 14 (2 / 2017) and when this is needed. (9) Management of PARTICULARITIES OF THE LEISURE development – the development itself can be part of INDUSTRY the strategy of the organization, but this needs specific attention to the levels at which Introduction to leisure industry development is needed. Whether it is expected to Leisure time is “often referred to as discretionary achieve an overall development, this will always time” (Mikalauskas & Kaspariene, 2016, p. 2), imply also a development of its capabilities: people considering the fact that one can have various and resources overall. In order to make sure this responsibilities and roles he/she needs to fulfill, will happen, development needs to be tracked and whereas the spare time is when no role needs to be managed, so that people are trained enough, played and no activities need to be performed, machines are productive enough, resources are in becoming the time when the individual can decide the optimum quantity and quality etc. (10) how he/she prefers to spend it. Financial management – is one of the most Simply being said, “leisure time is time available common associations with performance after obligations”, after-work, after-school, a time management, considering the fact that any non- of personal choices (Mikalauskas & Kaspariene, financial performance would anyhow have a 2016), its meaning depending on the culture, financial impact in the end. Therefore, performance personal believes, age, gender, interests etc. management tries to financially quantify the value Apart from the leisure time, leisure industry also for money, considering the balance between costs depends on the existence of leisure facilities and benefits obtained. (11) Management of quality (Leisure and Tourism (L&T), n.d.), being the – in assessing the performance of an individual or environment, the specific place where leisure of an organization, one of the most important activities happen. It is considered the leisure components of the analysis would be the quality of facilities can be grouped in three main categories the work delivered and of the results obtained. (Leisure and Tourism (L&T), n.d.): Therefore, performance management needs to • Purpose-built – these facilities were built with focus on the quality management of the work, the specific intention of hosting one specific resources, results, efforts, investments etc. (12) type of leisure activities (e.g. cinemas) Stakeholders management – any strategy will need • Multi-purpose – facilities having the scope of to ensure that every stakeholder is correctly hosting more than one type of leisure activity, involved in the strategic activities, according to or even hosting leisure activities as a their interest and level of participation. The secondary scope, complementary to their initial stakeholders will need to be analyzed from the purpose (e.g. hotels – hosting various leisure beginning, to understand how are they positioning activities for tourists – sports, games, themselves towards the organization and its recreation, but representing as well the “office” recently created strategy, so that the management of the hotel’s employees) can at any time know how every stakeholder needs • Natural landscapes – are natural facilities that or expects to be approached. (13) Management of have been valued by the leisure industry as a communication – in the end, effectively managing “facility”, nature being one the most important the communication concerning the scope of the environments where leisure activities are overall performance management process will hosted actually connect all the previous types of Yardy (2015), created a mind map of the five key managerial activities, making sure the strategy is components of the Leisure Industry, being: clearly defined and shared accordingly with the • Countryside recreation – outside the city, organization’s community. Also, the progress and nature related activities the results obtained will also need to be • Home-based leisure – leisure activities communicated further, communication being used happening in the comfort of one’s home as an instrument of keeping the organization • Arts & entertainments – refers to socio-cultural engaged from the beginning until the end of the activities, happening outside home strategic activities. • Play & activity-based leisure – include Considering all of the above, performance entertaining activities based on playing, management proves its complexity and gamification, could involve children demonstrates the importance of being carefully • Sport & physical recreation – leisure activities handled from a variety of managerial perspectives, that involve physical, active activities, like being the only method to ensure the correct sports implementation and the achievement of the desired The specialized literature also talks about “The results. The model of this performance serious leisure perspective - SLP” (Stebbins & management structure is presented in Figure 1. Hartel, n.d.), being a framework that differentiates

between three main forms of leisure: serious

leisure, casual leisure and project-based leisure. The serious leisure distinguishes from the casual

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leisure through the perseverance and effort needed, understand the relationships that fundament the considering that serious leisure can even evolve leisure sector. According to the model created by into a leisure career, requesting hard work and Grönroos (Guzzoni, 2005, p. 20), between the concentration on the final outcome desired. The company and the customers the external marketing casual leisure, on the other hand, is immediately is being practiced in order to “set the promise”. The rewarding, leisure and entertainment being “delivery of the promise” is being handled by the obtained without specific training or effort needed, employees in their direct interaction with the having the only purpose of enjoyment. The project- customers (managed in marketing through based literature can be considered as being situated interactive marketing). But from setting the in the middle, between serious and casual leisure, promise, to delivering it, companies are using being “short-term, moderately complicated”, internal marketing in their relationship with the requiring a limited amount of effort, or even employees, in order to “enable the promise”, occasional effort, not aiming to develop into a creating the context for the good delivery of serious leisure. The diagram showing the serious services. In this model, internal marketing is a leisure framework will be presented in Figure 2. prerequisite for the external marketing, while Based on all the above presented information, we interactive marketing is the solid process that can understand the complexity of the leisure underlies the whole structure. domain, the industry being one governed by high The leisure industry is the instrument for creating demand, and a need of adaptive availability, the “optimum environment for the successful flexibility and capacity. moral, psychological and physical development of In 2016, a Deloitte report (Parrett, 2016) showed an individual” (Mikalauskas & Kaspariene, 2016). how the leisure sector grew significantly in the Of course, in this context the scope is to offer United Kingdom (with 5% annually since 2010), enjoyment, pleasure, relaxation to the end user of due to the consumers’ preference to spend more on the leisure services. As long at the consumer is pleasure (part of leisure industry) than on shopping pleased with the experience delivered, the leisure (part of retail industry). Identifying the most activities provider will have performed at the popular leisure industry, eating out is considered to expected quality levels. be the most popular, followed by in-home leisure. But the customer’s perception will be highly Among the most common leisure activities UK influenced by his/her expectations, as that will be consumers are spending more, the Deloitte press the starting point and the reference upon which the release mentions holidays, theatre, bowling, as well actual performance will be compared. Customer as frequent, habitual activities like gym expectations are influenced by several major memberships, music and video streaming. As stated factors (Howat et al., 1995, p.4), like: “word of by Simon Oaten (Parrett, 2016), such increase in mouth communications from other customers”, spending on leisure activities, which are non- reviews, personal needs or wishes, past essential activities, “consumers need sufficient experiences, external communications from the disposable income”, the consumer behavior in the service provider or from its competition, the price- leisure industry becoming an important indicator of quality relationship etc. the country’s overall economy. This can be Performance management in the leisure industry is explained through a “confluence of factors, therefore highly dependent on the perception of the including low inflation and high employment consumer, on the quality and the value this levels”. perceives. Due to the preference of the UK consumers to As Howat et al. mention (1995, pg. 4-5), by spend more on leisure than on retail, the Deloitte analyzing the dimensions that drive customer analysis seems to be a proof that there is an service quality, developed initially by Berry and “evolution in the mind-set of the leisure consumer: Parasuraman (1991), we can also understand how a behavioral shift from product-consumption to leisure industry can ensure the customer positive experience-consumption” (Parrett, 2016). perception of the service. The dimensions are: (1) reliability – the trust in the service during and after The service marketing triangle in the leisure it is being delivered, being delivered right from the industry beginning, without any concern, worry, or In the leisure industry, there are some unpleasant surprises, (2) empathy – “understanding particularities that define the triangle consisting of and consideration shown towards the customer”, the relationship established between the company (3) responsiveness – refers to the service provider (leisure provider), its employees (leisure enablers, as being willing to support the customer, to as we may call them) and the customers (users of promptly respond to his demands or needs, (4) the leisure services). As the company-employees- assurance – the confidence and credibility in the customers triangle is recognized in the marketing expertise and knowledge of the service provider, specialized literature as being the service marketing (5) tangibles – quality of the tangible products, triangle (Figure 3), we consider it is important to

256 SEA - Practical Application of Science Volume V, Issue 14 (2 / 2017) equipment, materials the customer is interacting employees very flexible and adaptive, (7) easy to with. get started – the entry-level positions in tourism are It is easy to conclude how much impact all the easy to find, and once being there anything is above dimensions have in the leisure sector, possible, without requiring initial training or considering the high expectations of the customers experience as a prerequisite, (8) training towards the results that are to be obtained. opportunities – the tourism industry is very well When assessing the performance of a service, and developed and needs constant trainings to make even of a leisure provider overall, a very important sure the employees are according to the standards factor is the individual performance of the of the industry, (9) creativity – the variety of the employees delivering the leisure services. Their tourism jobs allows the employees to develop their performance, attitude and behavior is crucial to the creativity, to find solutions, to switch places, to be value that will be perceived by the consumers. The always ready for changes, to be creative. role of the frontline employees in ensuring All of the above are of course applicable to customer engagement has been deeply analyzed tourism, but could as well be considered as and discussed in the specialized literature. characteristics of leisure industry overall. It aims to Employees are presented, from this perspective, as offer enjoyment to the consumers, while it can also the “spokespeople of the company and take an motivate the employees. active role in delivering the service, providing In addition to that, the leisure providers usually information”, supporting customers in correctly make use of the services they provide to external using the service acquired, “process complaints or customers, in order to offer special discounts or claims, apologize, propose solutions […] generate specific leisure benefits to their own employees as feedback” (Cambra-Fierro et al., 2014, p.68). well. This way, the employees could again be The importance of frontline employees has perceived as beneficiaries of their employer increased significantly, fact also proven by the services. attention of the companies when hiring them. Being of such a great importance for the service, the satisfaction of the client, and even customer PERFORMANCE MANAGEMENT IN THE engagement and organizational performance on the LEISURE INDUSTRY long term, companies are paying specific attention to the recruitment of the frontline employees. Considering all of the above mentioned aspects, we On the other hand, in the leisure industry, not only consider performance management in the leisure that many of the employees are participating in the industry as being a structure where every direct delivery of the leisure service, but they could component influences all the others. The suggested also be seen as collateral beneficiaries of the leisure structure (Figure 4) is created on three layers, out sector. of which the first two are input layers (external and One category of benefits they are receiving would internal layers), and the third one is the output actually be coming from their intrinsic motivation layer. due to actually working in the leisure industry, In the first two layers, we are considering the two liking their job bringing higher motivation. In the levels which feed the organization with specific tourism sector in Canada, for example, there are given contexts, upon which the organization can considered to be various aspects that make tourism afterwards create a strategy (seen also as an input employees like their jobs (Discover tourism, n.d.): for the whole performance management process), (1) the variety of activities they are performing, in order to reach a final outcome in the end. The tourism work not having the routine of any other results of the process will be found in the third predictable job, (2) dealing with people – the layer, where the organization can evaluate and enjoyment of meeting new people every day, assess its progress in comparison to what has been creating a network, feeling they are helping others initially desired. and making them enjoy their holidays, (3) working Therefore, the first layer presents the external with other tourism employees – the specific of the input, the factors that come from the outside world tourism employees is different, they are highly of the organization and can influence its dynamic with very interesting personalities and performance: (1) dynamic environment & stories to share, being a motivation itself to be part workforce. This sets the ground, the context for any of such a team, (4) opportunities – the sector is development of the leisure provider. Any defined by the large opportunities of development, organization depends on its context and it is highly and various career paths that can be followed, (5) influenced by the workforce, as well as it advancement potential – the possibilities to grow influences the workforce. Depending on the social and go higher are bringing extra motivation to the and economic context in which the organization tourism employees, (6) developing global skills – exists, the leisure provider can perform different, all the skills developed in tourism are universal, are while the skill level, engagement, involvement, applicable to any other country, which makes the

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motivation and performance of its workforce is as _ten_things_tourism_employees_like_about_t well influenced. heir_jobs The second layer refers to the internal input, what [5] Guzzoni, M.-L. (2005). Models of Service the organization has to bring in the performance Marketing. Lund, Sweeden. Retrieved from management process: (2) business & individual http://lup.lub.lu.se/luur/download?func=downl opportunities (enabling opportunities for both the oadFile&recordOId=1351925&fileOId=24341 organization overall and its employees, creating the 03 needed internal environment in order to further [6] Hartel, J., & Stebbins, R. A. (2013). The grow and develop), and (3) business strategy Serious Leisure Perspective (SLP). Retrieved (considering that the right business strategy would July 2017, from The Serious Leisure coordinate all the efforts of the organization and its Perspective (SLP): employees into a clear, well defined direction, that http://www.seriousleisure.net/slp- supports the opportunities from the external diagrams.html environment based on the internal capabilities). [7] Howat, G., Absher, J. D., Crilley, G., & Milne, At the third level, the output layer underlies, I. (1995). Measuring Customer Service Quality including: (4) increased motivation, (5) individual in Sports & Leisure Centres. Managing performance and (6) organizational performance – Leisure, 1(2), 77-89. a direct result of an environment where employees [8] Leisure and Tourism (L&T). (n.d.). Leisure feel they have opportunities, and individual and and Tourism Facilities. Retrieved July 2017, organizational performances are enabled through from Leisure and Tourism (L&T): the implementation of a previously well created http://www.leisureandtourism.net/?page_id=26 business strategy. 1 The structure will be further analyzed and validated [9] Mikalauskas, R., & Kaspariene, J. (2016, in future research. January). Holistic Approach about Leisure Industry. Lithuania. Retrieved July 2017, from https://www.researchgate.net/publication/3116 REFERENCES 70264_Holistic_approach_about_leisure_indus try [1] Armstrong, M. (2006). Performance [10] Parrett, G. (2016, July 4). Leisure sector grows Management: Key strategies and practical to £117 billion as UK consumers prefer guidelines, 3rd edition. London and pleasure to shopping. Retrieved from Deloitte.: Philadelphia: Kogan Page. Retrieved from https://www2.deloitte.com/uk/en/pages/press- http://tsharto.staff.gunadarma.ac.id/Downloads releases/articles/leisure-sector-grows-to-117- /files/29787/Armstrong_2006_Performance+M billion.html anagement.pdf [11] Pintea, M.-O. (2011). Teză de doctorat: [2] Cambra-Fierro, J., Melero-Polo, I., & Abordări financiare și non-financiare privind Vazquez-Carrasco, R. (2014). The role of creșterea performanțelor entităților economice. frontline employees in customer engagement. Cluj-Napoca: Universitatea Babeș-Bolyai Cluj- Revista Española de Investigación de Napoca. Marketing ESIC, 18, 67-77. [12] Stebbins, R., & Hartel, J. (n.d.). The Serious [3] Cappelli, P., & Tavis, A. (2016). The Leisure Perspective (SLP). Retrieved July Performance Management Revolution. 2017, from The Serious Leisure Perspective Retrieved from Harvard Business Review: (SLP): https://hbr.org/2016/10/the-performance- http://www.seriousleisure.net/concepts.html management-revolution [13] Yardy, C. (2015). Five Key Components of the [4] Discover tourism. (n.d.). Top Ten Things Leisure Industry. Retrieved July 2017, from Tourism Employees Like About Their Jobs. Goconqr: Retrieved July 2017, from Discover tourism: https://www.goconqr.com/en/p/2630045-five- http://discovertourism.ca/en/about_tourism/top key-components-of-the-leisure-industry- mind_maps

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FIGURES

Figure 1. The performance management model Source: author’s view

Figure 2. The serious leisure perspective Source: Hartel & Stebbins, 2013

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Company

Internal marketing External marketing enabling promises setting promises

Interactive marketing delivering promises

Employees Customers

Figure 3. The service marketing triangle Source: adapted after (Guzzoni, 2005, p. 20)

Input layer (external)

Input layer (interrnal)

Output layer

Figure 4. Performance management structure Source: author’s view

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