Is the grass is always greener on the other side of the fence?

Indonesia is wellnoted has a great potential porch in the hospitality industry as the contribution of the world`s travel and tourism economy, an international observer said and this makes many Investors and hotelier professionals Internationally or Locally would love to take part in each real contribution and participation. But as time passes there are some things that seem to be clumsy and somewhat taboo to talk to when it comes to the Expatriate remuneration & compensation system where every Indonesian hotelier professionals eager to discuss as a common interests where the remuneration & compensation system that is felt far differently compare to Expatriate workers. One hand, this particular topic was appointed as one of internal reflections and references to us as Indonesian hotelier professionals in order to see clearly the tight competion pictures ahead in the increasingly of open maket era with the various nations and on the other hand, this article hopefully also could give a new discourse to the Indonesian Government and the business owners in Indonesia to understand more its uniqueness of the qualified locals resources as well as provide a fair “sweet candy” package treatment for them.

Currently, Expatriate GM salaries and perks in this waterland called “Indonesia” have been more interesting to be a hot issue ever to talk amongst us who are “unluckily” considered as local hotelier professionals who have the eagerness to be the next natural successor of current Expatriate GM and those locals who are in the GM role already. Danchi Tan and Joseph T. Mahoney at their research in Canada 2003 said that the use of managerial expatriates can improve contractual efficiencies in at least four ways. First, the use of expatriates helps align the economic incentives between the headquarters and the foreign subsidiaries. Second, the headquarters knows better the charac??)teristics of expatriates relative to local hires. The use of expatriates reduces the uncertainty of the headquarters in recruiting managers and mitigates the incomplete contracting problem. Third, expatriates are better equipped with firm-specific capabilities than local hires, reducing contractual (smallnumbers) problems. Fourth, expatriates have committed greater sunk cost investments in the multinational firm than local hires. These investments support their cooperative relationships with the firm and mitigate potential bargaining problems in employment contracting. However, although managerial expatriates can potentially improve contractual efficiency and may relieve a firm’s concern over its limited control on managers, expatriates may not have adequate abilities in managing local idiosyncrasy.

One thing we have to keep in mind when we blow this issue up to the sky that we must be aware of the global era trend as the consequences of being part of the globalization nation. As an International Hotel Chain which is sometime part of a multinational company thinks that human resources are important strategic assets within a multinational firm. Hence, the effectiveness of human resource deployment influences the likelihood of generating and sustaining competitive advantages of a multinational firm and is therefore a fundamental issue for international business. As multinational firm, they have two options to deploy two types of human resources to top managerial positions in its foreign operations – expatriates and local hires, where those consideration will have its advantages and disadvantages based on the company value where we could not interfere the dicison made by them whether to recruit expatriates or local hotelier. To make it understand analogicaly about hotel GM role (Expatriate or Local) that commonly hotels offer two major types of services: (a) accommodation and (b) dining services. Based on the quality and extent of services provided, location, bedroom, front office/reception, food and bever??)age, general facilities (service and staff), and special facilities (i.e., business center, limousine services and airport transfers), and hotels (independent, international or local hotel chain) themselves are further classified as Deluxe, First Class, standard, and economy.

Likewise, GM itself (Expatriate or Local) will bear different things to be carried out in her/is job which depends on the what sort of star rated hotel s/he works to; Five, Four, three, and two star rated hotel (independent, international or local hotel chain) therefore from that stand points or clusterx we could understand more about its role. Providing a comparison figure; a review of the previous literature and study about hotel GMs characteristics had been done in Korea 2009 (regardless of each study has some shortcomings) reveal three main empirical research directions: GMs’ demographic characteristics, their career histories and their perceptions of managerial success factors where those could lead the local hotelier in understanding their personal and professional qualifications compare to an expatriate GM or even they will find the same good things in common and vice versa.

The role of a GM is significantly different from that of a hotel owner. A GM oversees and directs all operations of a hotel which includes guest services, financial management and employees, as well as policies. The overall function of this occupation is to ensure operations run efficiently and meet profitability expectations. A GM could be compared to the conductor of an orchestra who co-ordinates all the musicians and ensures that they work in harmony. The post of GM has top management status and carries substantial operational responsibility for all divisions of the company and for strategic decision-making, for sure it will be based on what sort of star rated hotel s/he works to, while the property owner decides on the financial investments for a hotel, organises board meetings and analyses the return on investment. But one thing I would ??)like to take it as a red about GM itself which could be highlighted, where it has been happening rampantly that most literature related to hotel human resources has focused on hotel employees’ motivation, job satisfaction, compensation, empowerment, turnover rate and performance ONLY, then, efforts to examine a hotel GM’s career have been relatively limited even though the GM is an integral part of a hotel’s vertical human resources pyramid, where these projects should be carried out by the corporate human resources or higher level position.

Having this issues brought up, it will make hotelier people around us who want to be a real and successful GM will understand more since the beginning for the importance of their qualifications for the job and furthemore HR Department should be clear enough to the essence of the career promotion system where should be developed and taken care very much, not just heavenly things are written in papers every month to satisfy the Regional/Corporate HR or the worst is only; a perpetual lips-service ads boasting during the selection processes. It is worthwhile to investigate the career paths of GMs and their attitudinal features such as their managerial philosophies, the required skills and other factors leading to their success for the sake of their own personal development and its company. But now we could not talk about Expatriate has been entertained differently alone compare to local staff in here, but, we need a government body also to be our counterpart, It has been true all along that "seemingly" without any ceremony; the Indonesian Government does not really take care of tourism sectors and all elements relate on it (Such as; Expatriat Utilization), whereas, Indonesian tourism is one of the major industries that noted as positioned at the epicenter of global travel and tourism growth and development.

As tourism serves as the main market for Indonesian hotel and restaurant services, increase in visitor traffic over the decade resulted in a corresponding b??)oom in the hotel and restaurant industry. Just look at during the last decade, the independent; international; or local hotel chain and restaurant industry has flourished even as it struggled to cope with difficult challenges. New hotels mushroomed in the capital and other city as well while older hotels have done their best to spruce-up both their interiors and upgrade services. Invariably linked, increasing world tourism is expected to offer both opportunities and trials for the world’s hotel and restaurant industry to spread their wings which gradually could lead the demand to the qualified hospitality professionals either expatraite or local but if the Indonesian Government does not really re-structure its current system and its existing rules connect to tourism sector for the good sake of Indonesian nation shortly, I am afraid that it will make this tourism sector and other related things go downfall into pieces.

Just take a look at Singapore that they do not need any series of years of promoting to the world tourism industry like what the Indonesian Government does (Visit Indonesia Year - It is considered as part of the Visit Indonesia Decade), do you know why? because in Singapore everyday is a holiday especially for tourists from around the world hence no wonder they are more advanced than us today on that sector where I am sure it exercises them in adjusting the employment process to be a better one like now, unluckily, we are still sitting in the armchair backward without any hesitation. One hand, due to “invisible” an ignorance on that point by the authority, some of Indonesian hoteliers complain and incriminate that they are treated awkwardly in terms of salary & perks, but, on the other hand, as an HR & Learning Development observer I feel burnt inside after reading some notes about what they grumble; its remuneration. To my point of view "Expatriate Compensation" and "Expatriate Localisation" discussion are quite sensitive trend of topics in every field and country, which is not only happ??)ening in Indonesia. As far as I am concerned, some countries have done in-depth study about this matter and come up with the alternatives into company practices properly to respond this issue (i.e. China, US, Singapore, etc), but, unluckily, the rest of countries; are too busy to do it (i.e. Indonesia-probably), then this issue creates an undisturbed vicious circle; a problem and a bad image are blended amongst they themselves in the waterland and finally they tend to translate and interpret everything freely based on what they want to believe about that issue.

I would say agree with the comments from some of Indonesian hotelier professionals that these are both responsibilities between Indonesian hotelier professionals (perhaps include the association of Indonesian hotel owner & Indonesian hotel operator) and Indonesian Government to avoid any dispute in the coming years. The Indonesian Government should take an active role in facilitating as well as monitoring an environment that would allow an equal employment opportunity/equity and a proper compensation package between Expatriates and Indonesian hotelier professionals, The Indonesian Government should stand upright based on the blue print which must be agreed by both side on hands. But, Honestly, I have to make a confession of "faith" that I my self do not have any clue at all whether the Indonesian Government is cognizant of this phenomenon or not unless they must be tickled at first by this invisible time-bomb dynamite wich invites to a massive devastation.

It is for sure that the globalization of our world economy has evolved significantly over recent decades at every sector where could not be blocked or even be avoided at all to have an Expatriate near us to work with, but, if we just let this "chalk and cheese" situation always clouds the Indonesian hotelier professionals without any clear direction or consesus from the authority then it will gradually evoke a permanent "dejavu" and an unforgettable "friday the 13th" nightmare in terms of "??)Expatriate Compensation" in every Indonesian hotelier professionals mind where none of any experienced hypnotherapist on earth who can help them to eradicate its "phobia" or its "sickness" from their “cornored by nature” mind. Because this is a right moment to endorse ourselves; Indonesian Hotelier Professionals and Indonesian Government to make a proper policy design of "Expatriate Compensation" which could be implemented soon in the future and all of them will based on flexibility due to complexity element drivers, either using home based balance sheet approach to host plus approach or localisation to local plus condition where those could be obtained through hands-on hospitality consultants or other market mechanisms. Finally, once again, I would like to end with a statement which is to have you believe that every Indonesian hotelier professionals could exhibit and prove on how to work professionally and be the best at her/is respective field as well as could be a wise hotel GM or executive to both give and receive credible commitments from the Owners wherever they are as well as (at least) to answer the challenge of Bali Governor, Made Mangku Pastika on last May 05th, 2011 mentioned that in general the quality of tourism human resources sector in Bali was still unable to compete in the areas of character and ability to lead (beritabali.com).

Message of the month; “Compensation for individuals is not linked to performance against budget. It is linked primarily to performance against the prior year and against the competition, and takes real strategic opportunities and obstacles into account” - Jack Welch –

Sincerely yours B.V Putra Yudhana, PHR Competitive & Strategic Indonesian Hotelier Generation Y Upscale HR & Learning Development Hospitality Careerpreneur & Practiobserver

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