Cornell Research: Key HR practices benefit franchisees, performance

In the new Center for Hospitality Research and Cornell Center for Innovative Hospitality Labor and Employment Relations brief, “Understanding Human Resource Practices and Outcomes in Franchise Businesses,” Professor Tashlin Lakhani finds that increased collaboration between hotel franchisees and franchisors on human resources best practices can lead to higher organizational performance.

The study uses a unique survey of human resources practices and outcomes in a U.S.-based limited-service hotel chain. “This study illustrates a compelling argument for franchisors to provide franchisees with more guidance on how to structure their human resource systems to achieve optimal performance,” she said.

The analysis suggests that inexperience and strong profit motives of franchisees lead them to underinvest in human resource practices compared to company-owned operations. “Recognizing the constraints imposed by joint-employer status, franchisors may be able to provide optional human resources tools and best practices for franchisees that draw from their knowledge and experience in the operations they directly own and manage,” said Lakhani.

“By working together and providing franchisees with guidance on human resources practices, franchisees can be—as the famous saying goes—‘in business for themselves, but not by themselves.’ Companies that do so are likely to find that this guidance pays off by creating a more stable workforce that is motivated to provide superior customer service and maintain brand standards.”