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Employee turnover in hospitality industries A study of service staff

Abstract

Employee turnover has been and continues to be a particularly prolific area of research, with many publications on the topic. Evidence suggests that turnover in hotel industry is triggered by dissatisfaction with such factors as relationships with supervisors, job content, working conditions, work timings, size of restaurants, salary and other benefits etc. In this paper the author intends to find out the causes of turnover in hotels serving food to customers, and discover suitable measures to overcome the problems. For this the data has been collected from selected hotels in Jalgaon City through schedules particularly from member of staff serving at table. The results provided significant evidence to justify increased emphasis on staff retention strategies and the creation of healthy work environments for serving staff.
4 JIMS 8M, July-September, 2014
EMPLOYEE TURNOVER IN HOSPITALITY INDUSTRIES
A STUDY OF SERVICE STAFF
Parag Arun Narkhedeêêê
êêê Assistant Professor, KCES’s Institute of
Management & Research, NH - 06 Jalgaon,
Maharashtra, India.
Employee turnover has been and continues to be a particularly prolific area of research, with many publications on the
topic. Evidence suggests that turnover in hotel industry is triggered by dissatisfaction with such factors as relationships
with supervisors, job content, working conditions, work timings, size of restaurants, salary and other benefits etc. In
this paper the author intends to find out the causes of turnover in hotels serving food to customers, and discover
suitable measures to overcome the problems. For this the data has been collected from selected hotels in Jalgaon City
through schedules particularly from member of staff serving at table. The results provided significant evidence to
justify increased emphasis on staff retention strategies and the creation of healthy work environments for serving staff.
Research
Employee turnover has long been a major concern of the
service industry especially Hotel industry and of academics
who investigate human resources issues. High employee
turnover affects the quality of products and services. Mok
& Luk,(1995) discovered that high employee turnover rates
are a fundamental labor problem in the hotel sector, and
the impact of job attitudes such as organizational
commitment on employee turnover has been found to be
significant(Griffeth & Hom, 1995). Because most
turnovers among new employees of the hotel industry
occurs during the early stages of employment and the
impacts on organizational commitment are tremendous on
subsequent successful delivery of services to customers,
investigation of the factors that may exhibit significant
influence on intent to quit continues to be of considerable
interest to researchers and hotel practitioners. Therefore,
the primary objectives of this study are to (a) find out
causes of staff turnover (b) assess the impact of supervisor
recognition and opening in other reputed hotels
onemployees’ turnover intentions and (c) propose
recommendations for hotel managers to reduce employee
turnover.
I. Review of Literature
Turnover remains one of the most troubling issues for
hotel businesses. While the turnover rates of hourly
workers are legendary, even more challenging are the
turnover rates among waiters especially because of the
disruption caused by their departures (Ghiselli, Joseph, &
Billy, 2001). In a limited study of hotel managers, annual
turnover was found to be as high as 80 percent (Woods &
McCauley, 1989). Lam, Lo, & Chan, (2002) found that
the impossible people in newcomers’ lives influence the
latter’s turnover and commitment, which are rarely
discussed in the literature.
Labour turnover is defined as ‘the movement of people
into and out of employment within an organization’(Denvir
& McMahon, 1992). It can be voluntary or involuntary.
Correspondingly, on the basis that people leave an
organization for a multitude of reasons that may not be
management-related, further turnover can be categorized
into controllable and unavoidable turnover. Turnover in the
hospitality industry has been shown to be unacceptably
high(Kennedy & Berger, 1994), averaging up to 200 or
300 per cent per annum (Wood, 1992), although substantial
variations exist between different establishments.The
literature has so far identified factors that impact on
turnover rates as orientation and socialization
processes(Wood, 1992); ad hoc recruitment and selection
procedures(Wheelhouse, 1989); discrimination at the
workplace(Antolik, 1993); training and development
opportunities(Hiemestra, 1990); management styles (Boella,
1988); organizational commitment (Denvir & McMahon,
1992); competition and organizational culture (Woods &
McCauley, 1989); labour shortage (Wood, 1992); stress
and burnout(Hom & Griffith, 1995); the seasonal nature
of the industry (Boella, 1988); and job dissatisfaction (Hom
& Griffith, 1995).
There has long been concern about excessive employee
turnover and its associated costs (Jesitus, 1992). High
turnover incurs significant replacement and recruitment
costs and thus is likely to affect profitability.
Correspondingly, Denvir and McMahon, (1992) suggested
that labour turnover is not ‘an isolated occurrence’, where
‘multi-dimensional’ aspects include low staff morale,
substandard work performance and absenteeism. Each
DOI No. 10.5958/0973-9343.2014.01230.7
JIMS 8M, July-September, 2014 5
incident of employee turnover is estimated to cost up to
$2500 in direct costs and $1600 in indirect costs(Hogan,
1992). However, the pervasive impacts of labour turnover
on a hotel’s bottom line can be classified into two
categories: (1) direct expenditure and (2) intangible
costs.Direct impacts are essentially financial consequences
that include administrative costs as a result of increased
recruitment and training expenditure of new employees
(Woods & McCauley, 1989; Boella, 1988; Wood, 1992).
The indirect consequences of turnover include productivity
losses due to unfamiliarity of the workplace, poor service
quality as a result of insufficient manpower (Denvir &
McMahon, 1992), compromised standards and low morale
due to the constant departures of workmates; which are
in turn integrally damaging to the hotel’s reputation(Woods
& McCauley, 1989) because dissatisfaction in the employee
will ultimately lead to the dissatisfaction of the
customer(Wood, 1992). It involves heavy administration
costs and a substantial loss of productivity through the
breaking up of teams who are used to working together.
However, high labour turnover cannot be excused as an
inherent characteristic feature of the hotel industry (Mullins,
1995). Mullins suggested that ‘an organization can
theoretically influence turnover by various intervention
processes’ that include placement and orientation, job
performance and training and development. Denvir and
McMahon (1992) further argued that individual hotels
experience different levels of labour turnover, thereby
confirming the view that ‘turnover is partly within the
control of management, and conflicts with the widespread
impression that turnover is high and uniform throughout
the industry’, and hence an uncontrollable characteristic
of the trade.
There have been numerous studies conducted on labour
turnover that have focused on other industries. These may
not be applicable due to the unique features of the hotel
industry, as discussed earlier. For example, the
organizational structure of the hotel may be a major
determinant in influencing labour turnover, as compared
to other industries. It was observed that in addition to salary
there are other factors such as working conditions,
sufficient lunch breaks, suggestion box, uniform, safety
arrangements and relationship with other members
(Narkhede, 2012). Riley (1991)estimates that operative and
unskilled staff comprise up to 64 per cent of the entire
staff population. This might therefore indicate limited
promotional and developmental opportunities for lower-
level employees, resulting in a movement of staff out of
that organization to one that provides better career options.
II. Research Design & Methods
To achieve the objectives data has been collected from
selected hotels in Jalgaon City.For the purpose of the study
research instrument schedule has been designed with 35
parameters comprising questions and other related
information. The data has been collected from 100 member
of staff serving at table. Initially around 26 hotels are
selected by judgement sampling & further data was
collected from staff by simple random sampling. Apart
from this data was collected by informal discussion with
the staff and managers to get more insight in the study and
to find out the solutions for the problem undertaken.
III. Results & Discussion
All the respondents are male employees since there are no
female employees in the hotels. 80% of the respondents
were younger than 30 years of age. 77% of the respondents
have experience up to 2 years. About 83% had education
backgrounds of till Higher Secondary level. Around 41%
of the respondents have single children. Respondents taking
salary less than Rs.5000 per month, are around 78%; 20%
respondents are having salary of 5 to 10 thousand. 68% of
the workforce has worked in the same hotel less than a
year this shows the instability of the workforce in the sector.
The result shows that around 70% of the workforce in the
hotel industry is new entrant, inexperienced and immatured
& are mainly responsible for the turnover; similar results
are obtained in the Hong Kong Hotel Industry (Lam, Lo, &
Chan, 2002).
Regarding change of Job only 21% respondents reported
that the current job is their first job; this may be the new
entrant in the sector, 45% of respondents have changed
their job around 2-3 times in last 10 years; this might be
the Hard-core labour as suggested by Johnson.
Table 1 shows responses from the hotel staff, 60% of the
respondents are getting flexibility in their shift change. 69%
of the respondents are not getting any allowances for
overtime/night shift. Around 60% of the employees are
satisfied with their work load. 80% responded that they
are not getting any extra benefits / facilities from
employer.51% of employees are dissatisfied with attitude
of employer. 94% of employees are not allowed to take
part in decision making process. 88% responded that there
is no freedom to utilise their skills. Only 40% of the
employees get recognition of work from their owners and
managers. 53% of employees are satisfied with their work
accomplishment. 64% responded that he work they are
doing is not in tune with their salary. 65% of the respondents
www.IndianJournals.com
6 JIMS 8M, July-September, 2014
fulfil their family needs by current salary. 69% of employees
are dissatisfied with their salary. 88% respondents are not
covered by Insurance/mediclaim by hotel. Most of the
employees 56% got uniform from hotel.
76% of employees plan to leave the current job in recent
future. Only 22% employees were willing to spend their
entire life in the same organisation, these are the hardcore
employees as suggested by. 55% of the employees were
satisfied with the work culture of the hotel. 60% responded
reported that their stay decision was affected by openings
in reputed hotel in nearby area. 72% of the respondents
are frequently thinking of quitting their current job. Most
importantly 96% of the employees are aware & assured
that if they leave current job, they have a good chance of
getting better job in other organization.
Hypothesis: 1 There is positive relationship between
Recognition from superior and Intention to quit
To test the hypothesis, cross tabulation is done with the
help of SPSS, the results are shown in table 1.
Table 1 shows Chi-square test statistics, the ‘p’ value here
is 0.026 which is less than 0.05, hence chi-square test
rejects the null hypothesis. Hence, it is concluded that
positive relationship exists between Recognition from
superior and Intention to quit
Hypothesis: 2 Frequency of thinking of quitting job depends
on openings in other reputed hotel.
Table 2 shows Chi-square test statistics, the ‘p’ value is
0.00 which is less than 0.05, hence chi-square test rejects
the null hypothesis. Hence, it is inferred that Frequency of
intention to quitting job depends on openings in other
reputed hotel nearby area.
IV. Conclusion
Both the theoretical and empirical findings of study
emphasize the link between staff turnover and supervisors
recognition, rejected, This directly signals that there is lack
of motivation in the sector, it is recommended that owners
& managers should recognise & appreciate the work done
by the staff in certain situations. Similarly, the second
hypothesis related to openings in other reputed hotels and
intention to quit; the hypothesis is rejected, the reasons
may be dissatisfaction with salary; additional allowance
for overtime; insufficient salary w.r.to family needs; No
insurance/mediclaim; participation in decision makingetc.
It is recommended that the hotel owners should revise
salary by considering trend in the sector; hotel owner can
come together and introduce group insurance scheme since
the switching is within the sector. It is predicted that
around 72% employee will leave their current job very
shortly. The owners need to take care of these leavers to
avoid loss of goodwill due to service problems in future.
References
Antolik, C. (1993). Increasing Discrimination increasing
Turnover. Hotel & Motel Management, 208, 15-20.
Boella, M. J. (1988). Human Resource Management in the
Hotel and Catering Industry. London: Hutchinson.
Denvir, F., & McMahon, A. (1992). Labour Turnover in
London Hotels and the cost effectiveness of
preventive measures. International Journal of
Hospitality Management, 11 (2), 143-54.
Ghiselli, R. F., Joseph, M. L., & Billy, B. (2001). Job
Satisfaction, Life Satisfaction, and Turnover Intent:
Among Food-service Managers. Cornell Hotel and
Restaurant Administration Quarterly , 28-42.
Griffeth, R., & Hom, P. (1995). The employee turnover
process. Research in Personnel and Human
Resources Management, 13, 245-293.
Hiemestra, S. (1990). Employment policies in the lodging
industry. International Journal of Hospitality
Management, 9 (3), 207-221.
Hogan, J. J. (1992). Turnover and what to do about it.
Cornell Restaurant and Hotel Administration
Quarterly, 33 (1), 40-45.
Hom, P. W., & Griffith, R. W. (1995). Employee Turnover.
Cincinnati: OH South-Western.
Jesitus, J. (1992). Hotels hunger for stable work force.
Hotel and Motel Management, 207 (10), 48-50.
Johnson, K. (1981). Towards an understanding of labor
turnover? The Service Industries Review, 1, 4-17.
Kennedy, D., & Berger, F. (1994). Newcomer socialization:
Oriented to facts or feelings? The Cornell HRA
Quarterly, 36 (6), 58-71.
Lam, T., Lo, A., & Chan, J. (2002). New Employees’
Turnover Intentions and Organizational Commitment
in the Hong Kong Hotel Industry. Journal of
Hospitality & Tourism Research, 26 (3), 217-
234.
Mok, C., & Luk, Y. (1995). Exit interviews in hotels: Making
them a more powerful management. International
Journal ofHospitality Management, 14, 187-194.
JIMS 8M, July-September, 2014 7
Mullins, L. (1995). Management and Organizational
Behavior. London: Financial Times, Pitman
Publishing.
Narkhede, P. (2012). Labour Turnover in Plastic Industries
. Germany: Saarbrucken: LAP LAMBERT Academic
Publishers GmbH & Co. KG.
Riley, M. (1991). Human resource management: A guide
to personnel practice in the hotel and catering
industries. Oxford: UK: Butterworth-Heinemann.
Param eters Resp onse Frequency Perce nt
Flexibility in shifts? Y e s 60 60.0
No 40 40.0
Allowances for overtime/night shift Y e s 31 31.0
No 69 69.0
Satisfaction with your current work load? Y e s 60 60.0
No 40 40.0
Extra benefits / facilities from your employer? Y e s 20 20.0
No 80 80.0
Satisfaction with attitude of your employer? Y e s 51 51.0
No 49 49.0
Freedom to utilize your skills? Y e s 12 12.0
No 88 88.0
Participate in decision making? Y e s 66.0
No 94 94.0
Recognition of work from owner/Manager Y e s 40 40.0
No 60 60.0
Satisfaction on work accomplishment? Y e s 53 53.0
No 47 47.0
Work done tune with the salary Y e s 36 36.0
No 64 64.0
Salary fulfills all your family needs Y e s 35 35.0
No 65 65.0
Salary/wages are according to the legislations applicable Y e s 32 32.0
No 68 68.0
Satisfaction with current wage / salary Y e s 31 31.0
No 69 69.0
Covered by insurance/mediclaim by Hotel Y e s 12 12.0
No 88 88.0
Uniform provided by Hotel Y e s 56 56.0
No 44 44.0
Plan to leave this job in recent future? Y e s 76 76.0
No 24 24.0
Like to spend your whole working life with this organization? Y e s 22 22.0
No 78 78.0
Satisfaction with the work culture Y e s 55 55.0
No 45 45.0
Stay decision being affected by openings in reputed Hotel in nearby area? Y e s 60 60.0
No 40 40.0
Frequently think of quitting your current job? Y e s 72 72.0
No 28 28.0
If you leave current job, do you have a good chance of getting better job in
other organization?
Y e s 96 96.0
No 44.0
Wheelhouse, D. (1989). Managing Human Resource in the
Hospitality Industry. Michigan: Educational Institute
of the American Hotel & Motel Association.
Wood, R. (1992). Managing Hospitality Human Resource
(Vol. 21). Michigan: Educational Institute of the
American Hotel & Motel Association.
Woods, R. H., & McCauley, J. F. (1989). Rx for Turnover:
Retention Programs that Work. Cornell Hotel and
Restaurant Administration Quarterly, 30 (1), 79-90.
Table 1: Responses
8 JIMS 8M, July-September, 2014
Table 2: Chi-Square Test
Table 3: Chi-Square Tests
Val ue df Asymp. Sig.
(2-sided)
Exact Sig.
(2-sided)
Exact Sig.
(1-sided)
Pearson Chi-Square 4.762 1.029
Continuity Correction 3.822 1.051
Likelihood Ratio 4.701 1.030
Fisher's Exact Test .041 .026
Linear-by-Linear Association 4.714 1.030
N of Valid Cases 100
Value Df Asymp. Sig.
(2-sided)
Exact Sig.
(2-sided)
Exact Sig.
(1-sided)
Pearson Chi-Square 12.574 1.000
Continuity Correction 11.014 1.001
Likelihood Ratio 12.514 1.000
Fisher's Exact Test .001 .000
Linear-by-Linear Association 12.449 1.000
N of Valid Cases 100
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... There are also other factors which make employees to quit from organisations and these are managerial style, poor hiring practices, lack of appreciation, lack of competitive compensation system in the organisation and toxic workplace environment ( Abbasi & Hollman, 2000). The reasons for turnover in hospitality industry is dissatisfaction with salary; additional allowance for overtime; insufficient salary w.r.to family needs; No insurance/Mediclaim; participation in decision making ( Narkhede, 2014). A study on labour turnover in New Zealand confirmed the view that motivation for job change is multidimensional and that no one factor will explain it ( Boxall, Macky, & Rasmussen, 2003). ...
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