Hrm: the Importance of Grey Benefits

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The concept of compensation refers to the various forms of financial and tangible benefits given to employees in return for their work. Usually, compensation is part of any employment relationship and is important to both the employer and employees. In the hospitality and tourism industries, most jobs are poorly remunerated in relation to other industries. The poor remuneration often gives rise to the low status ascribed to these industries. Despite the poor remuneration offered in the hospitality and tourism industries, employees working in these industries enjoy lots of ‘grey economy’ benefits such as subsidized or free food, accommodation, clothing and travel (Allan, Bamber and Timo, 2006). Obviously, there is an endless debate about the morality and efficacy of this culture of ‘grey economy’ benefits that is inherent in the hospitality and tourism industries. Generally, the notion of ‘grey’ benefits is important in the hospitality and tourism industries in a number of ways. ‘Grey’ benefits allow poorly remunerated workers to augment their salaries and hence these benefits contribute positively to employee job satisfaction and emotional wellbeing. In addition, tipping can be used as an indirect management tool for controlling employees in employee-customer interactions. Tipping can also be used to suppress employee interests and participation in more collective powers such as trade unions (IDS, 2006). According to De Cieri and Kramar (2003), most customers use tips as a means of enticing employees to give them the best treatment. In this case, the company might not be concerned with the practice of tipping. The Labour Research Department (2007) has hailed free meals, clothing and accommodation as an indirect form of flexible work arrangements, which entice employees to increase their productivity. As such, ‘grey economy’ benefits contribute to employee

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