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HUMAN RESOURCE MANAGEMENT ANALYSISAT 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,
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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.
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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
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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.”
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(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
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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.
1. Situation analysis and environmental scanning
2. Forecasting demand for human resources
3. Analysis of the supply of human resources
4. Development of plans for action
Situation analysis and environmental scanning involves a
strategic plan to adapt with the environmental circumstances. Yet,
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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.
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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).
1. 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.
2. 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:
1. preliminary screening with an application blank and a brief
interview
2. Employment interviews
3. Employment tests
4. Reference checks and letters of recommendations
5. Physical examination as a part of a conditional job offer.
2.2.3. Orientation, Training and Development
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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
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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-
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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
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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
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Manager of Tour Department
Shareholder
Director
Manager ofTransport Department
Manager of Finance andAccounting Department1 Ticketing staff
2 Tour staff
10 Drivers
5 Co-Driver
1 Cashier
Shareholder
Director
Tour Department(Head Office)
Tour Department (Branch)
1 Ticketing/Cashier Staff
1 Tour/ Transport Staff
1 Ticketing/ Cashier Staff
1 Tour/ Transport Staff
3 Drivers
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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
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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 projects which were quite high in demand.
Therefore, it hired up to 22 employees 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
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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.
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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
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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.
For the selection process, once the director has got several
candidates to fill in certain post, he would do selection process by
interviewing them. The interview process is conducted twice, one is
with the department manager or the senior staff and the other is with
the director himself. There are two basic qualifications in order to
pass the selection process. The first one is intelligence and the
second one is attitude. For staff level, at least the person has to be
tourism vocational school graduates and for managerial level; the
person must minimally have diploma certificates. For tour
department, the person must be able to make tour program and can
speak English, while for ticketing department, the person must be
computer literate and able to use Abacus Reservation System.
3.4. Orientation, Training and Development
Once the employee is hired, he would undergo a three-month-
probation period, including one month training period. Training is
given by the senior employee; the schedule is from 9 to 12 a.m. every
day during the training period. And after the probation period is over,
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the employee will be evaluated whether he will be hired or not. On
special event basis, the company would send its employee to join a
training program, for example: when the company received an order
to cater French tourists, the company enrolled his staff to a French
course, and when there is an invitation for seminar, the company will
send its staff to participate in it.
3.5. Compensation
In the probation period, a staff would receive Rp.15, 000/day for
eight working hour, six days work and one day off, for three months.
After that, once the staff could pass the probation period, then he
would receive a salary which is in accordance with the minimum
payment set by the government. The salary already includes meals
and transport. When the company serves a large group, then the staff
would get an incentive for every field work he does. The incentive
excludes accommodation and meals. Besides that, The Company
gives THR (the 13th salary) for every staff employed.
The company gives its staff health allowance of Rp.10, 000/
month or Rp.120, 000/year. This allowance is given to the staff
whether they are sick or not. However, when the staff has got an
accident or severe sickness which requires more money than the
given health allowance, the company would give more. In addition, all
staffs receive uniform annually, 3 shirt and 2 trousers per year. T-
shirts made for group are given to the employees.
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3.6. Performance Management
There is not strict performance evaluation on the work done by
the staffs in the company. The company evaluates probation staffs
when they have completed the probation period and after that
decides whether to hire or not. This evaluation is based on the
employee’s attendance and comments from the co-worker and the
department manager.
While for the old staffs, the evaluation is based on the judgment
of the director himself. The judgment is based on attendance,
punctuality, honesty, and work done.
3.7. Employee Relation
To promote good relationship with the employees, the company
organized annual outing program for the employees. However since
1999 the outing program is never held, because the staffs refuse it
and prefer to have incentive bonus instead.
4.0 DISCUSSION
As noted earlier in the first chapter, the writer has limited the
area of discussion in acquiring human resource process which
involves human resources planning and staffing of Royal Rainbow
Tours. It is quite interesting for the writer to focus on this area
because of the extreme shift how the company managed its
employees to remain in the business through the hard times during
the economic crisis. The findings have also visualized that the
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modified human resources planning in the company helped its
operational activities in the early years of the crisis and redefined the
way how the company retained profit.
The following are the findings that are of our interests.
1. Shift from manager-centered to director-centered project work.
The writer has found that since 1999 until present, the director
has been the ultimate planner and executioner of the projects
received. His task involves from designing the tour packages until
supervising the ongoing tour packages to ensure that everything is
on the right track. The implication of this activity is that the
director must have a strong sense when he has to hire a new
employee or he will handle the project himself. This is difficult to
measure the degree of the accuracy of the new recruitment based
merely on his feelings, however, experience and wide relationships
have proven that the company rarely suffers from shortage.
2. Modified company’s staffing strategy for cost effectiveness
It is interesting to find that economics is the key factor that
determines the decision made by the director in planning and
managing his staff. The decision made by the director to cut off
80% of his workforce, either for the mid-management level or craft
level as well as the decision to recruit fresh graduates of tourism
vocational schools and reward them with the minimum salary set
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by the government is the strategy implemented by the director to
reduce cost, so that the business can run well.
Thus, it needs kind consideration and tolerance from the staffs
to see that the small-organization where they work in is unstable,
dependent to economic change, full of uncertainty, and do not
offer a very great salary. And also due the nature of the salary
they receives which is project-based, the level of uncertainty is
quite high.
5.0. CONCLUSION AND SUGGESTION
5.1. Conclusion
It seems that there are two opposing arguments on the best ideal
model and best practice of human resource management practice. On
one side, there is an argument that best ideal model of human
resource management should go in line with the theory, and another
argument that the reality says the best practice of human resource
management does not have to go in line with the theory, that the
implementation of human resource management is flexible and based
on circumstances and conditions.
Royal Rainbow Tours principally has followed the theory of
Human Resource Management system, starting from HR planning,
Recruitment and Selection, Training & Development, Compensation,
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etc. However, technically it does not apply one hundred percent what
is mentioned in the theory. It happens because of several factors.
The company applies the human resources management
system simply based on the needs of the company and from the
judgment that the applied system has already fulfilled the company
needs to achieve its goal. External factor, such as national economics
and political situation which influence tourism sector also has affected
the internal economics of the company. It gives an impact on how the
company manages its human resources.
5.2. Suggestion
1. It is suggested for the sake of human resources effectiveness, job
distribution and description among employees are well defined.
Particularly, in the department of tour with above average
workload compared to its counterpart ticketing department. There
should be a redefinition of the director’s task because it is quite
risky to be dependent fully to the director’s decision. This dynamic
industry requires a fast decision maker in order to stay competitive
which can be achieved in the company by optimizing the potential
of the employees. New hires should also be considered for
succession planning.
2. Seeing that the organization is engaged in the industry which is
very competitive, unstable and full of uncertainty, the organization
will need to set strong driving force within the employees while
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fulfilling and maintaining their satisfaction in order to enhance the
quality of the services and productivity of the organization. The
issue does not focus merely on financial matters but also
promoting the employees’ motivation. This can be achieved by
giving more chances to the employees to directly handle the
projects received, with the supervision of the director, to show the
company’s commitment to human resources development.
REFERENCES
Burkat. A.J. and Medlik S. Tourism. Past. Present, and Future. Heinemann. London, 1981
Chalik, E.A. Dasar-Dasar Pengetahuan Pariwisata. Yayasan Bhakti Membangun. Jakarta. 1992
Ivancevich, J.M. and Lee Soo Hoon. Human Resource Management in Asia. Mc Graw Hill Education. 2002
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LAMPIRAN
DAFTAR PENGHASILAN PERUSAHAAN
ROYAL RAINBOW TOURS (PER-TAHUN)
TAHUN JUMLAH (Rp.)
1992 – 1999
1999 - Now
1,200,000,000
400,000,000
DAFTAR PENGHASILAN KARYAWAN
PT. ROYAL RAINBOW TOURS (PER-BULAN)
1999-NOW
POSISI JUMLAH (Rp) BONUS/INSENTIF (Rp)
Ticketing and Tour Staff
Driver
UMR
UMR
500,000-2,000,000/
proyek
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