Investigating Idiosyncratic Deals in the Indian Hospitality Industry

Investigating Idiosyncratic Deals in the Indian Hospitality Industry

Mohinder Chand Dhiman (Kurukshetra University, India), Pawan S. Budhwar (Aston University, UK) and Anastasia A. Katou (University of Macedonia, Greece)
DOI: 10.4018/978-1-5225-0708-6.ch014
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Abstract

This paper, utilising the social exchange theory, examines the relationship between before hiring negotiation (ex-ante) and after hiring negotiation (ex-post), idiosyncratic deals (i-deals) and employee reactions (i.e., motivation, commitment, work engagement and organisational citizenship behaviour). I-deals refer to voluntary, personalized agreements of a nonstandard nature negotiated between individual employees and their employers regarding terms that benefit each party. The hypotheses of the study were tested applying structural equation modelling on data collected from 275 employees working in 39 companies operating in the Indian hospitality industry. The findings show that although ex-ante and ex-post negotiations are interrelated, the negotiating special terms and conditions at the time of hire are less common than negotiating these terms and conditions while on job. Additionally, the findings indicate that ex-ante negotiation relates positively and more strongly to flexibility i-deals than to task and career i-deals, whilst ex-post negotiation relates positively but more strongly to career i-deals that to task and flexibility i-deals. The analysis also confirms the positive but differential effects of task, career and flexibility i-deals on employee reactions. Implications of the findings for both research and practice are discussed.
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Introduction

Travel and Tourism is one of the world’s largest sectors. It directly employs over 100 million individuals and supports 1 in 11 of all jobs in the world. The continued growth of this sector depends on the right people with the right skills being available to meet the demand for additional human capital. Several studies predict that the current status of employment in Travel and Tourism is expected to grow into the future (WTTC, 2015a).

Tourism in India is economically important and is growing rapidly. The World Travel & Tourism Council calculated that tourism generated 6.7% of the nation's GDP in 2014 and predicted to grow at an average annual rate of 7.6% till 2025. Additionally, it forecasted that tourism, being a labour-intensive industry (Chand & Katou, 2007), supported 8.7% of India’s total employment and predicted to grow at an average annual rate of 2.0% till 2025. These trends will make India to be the third fastest growing tourism destination over the next decade (WTTC, 2015b).

Irrespectively of sectors of production, employee attitudes and behaviour are considered to be important in improving organisational performance. It is supported that employee attitudes and behaviour are positively influenced by many factors, such as human resource management (HRM) practices (Katou, Budhwar, & Patel, 2014) and idiosyncratic deals (i-deals) (Katou, Budhwar, Patel, & Theodorakopoulos, 2015). ‘I-deals refer to voluntary, personalized agreements of a nonstandard nature negotiated between individual employees and their employers regarding terms that benefit each party’ (Rousseau, 2005, p. 8). The following constitute some of the major characteristics of i-deals (Rousseau, Ho, & Greenberg, 2006):

  • 1.

    I-deals are individually negotiated between the employer and an employee.

  • 2.

    I-deals are heterogeneous in the sense that they include features that differ from what workers in similar roles receive.

  • 3.

    I-deals benefit both employer and employee.

  • 4.

    I-deals are varied in scope from a single element of a general employment package to a completely idiosyncratic employment agreement.

However, employment terms and conditions can be negotiated prior to employment or after hire, or both, depending on the fundamental labour differences that exist among countries. According to Rousseau (2001), in the United States, United Kingdom and New Zealand, there are very few labour statutes that specify the terms and conditions of employment, implying that there is a wide space up to individual employees and employers to determine i-deals. In contrast, in France and Belgium there are many labour statutes that specify the terms and conditions of employment, implying that there is a narrow space up to individual employees and employers to determine i-deals. In other countries such as India, Australia, Israel, Netherlands, Mexico and Singapore there are some labour statutes that specify the terms and conditions of employment, implying that there is some space up to individual employees and employers to determine i-deals. The extent to which terms and conditions are negotiable has been labelled “zone of negotiability”.

Specifically, the ‘zone of negotiability refers to the conditions of employment available for negotiation by workers and their employer’ (Rousseau, 2001, p. 264). The zone of negotiability is shaped by a number of economic and societal factors. For example, an organisation operating in the hospitality industry might be more inclined to be flexible for setting its zone of negotiability (e.g., wage rates, career options, work schedule) than an organisation operating in a heavy manufacturing industry (Katou, Budhwar, & Chand, 2015). Considering that India belongs into the “middle” zone of negotiability, it may be important to investigate how i-deals influence employee reactions (i.e., employee attitudes and behaviours) in the rapidly expanding hospitality industry of India, which has emerged to be one of the key industries driving growth of the service sector in India.

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