Human Resource Management Assignment

HUMAN RESOURCE MANAGEMENT ANALYSIS
AT 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, accommodation, travel agents, tour operator,
food and beverage service, etc.
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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.
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.”
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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 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
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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.” (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
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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
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
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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, 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,
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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.
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
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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
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
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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 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
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establishment, the company was focusing on its in-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 economics return from tour
program sales is higher than air transport ticket sales. However, the company

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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 of
Transport Department
Manager of Finance
and
Accounting Department
1 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
To assist Manager of Tour Department in planning, creating and
organizing tour package, and sell and promote tour program made by
Tour Department.
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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 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
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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.
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
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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 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
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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, 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,
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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 13
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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.
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.
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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
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
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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 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.
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Royal Rainbow Tours principally has followed the theory of Human
Resource Management system, starting from HR planning, Recruitment and
Selection, Training & Development, Compensation, 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
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strong driving force within the employees while 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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