Employee Turnover in the Hotel Industry

The hotel industry has long struggled to establish what truly makes hotel employees motivated and satisfied with their jobs. High employee turnover in the hotel industry is believed to be due to the nature of the work, its low pay, and its long working hours. Thus, to effectively address this turnover problem, employee motivation could be an on-going and critical issue for managers in hotel operations. (Chiang and Jang 2008)

Chitiris (1990, 293) strongly emphasized the importance of motivation by stating that “Motivation is the prime determinant of behaviour at work and that high ability and high levels of job training will not result in high performance if the individual is completely de-motivated or under-motivated at work.”

A review of the literature indicates that there are problems in the hotel industry such as inadequate pay, low job security, limited training and development opportunities, and excessive turnover. (Cheng and Brown 1998; Deery and Shaw 1999; Pizam and Thornburg 2000; Karatepe and Uludag 2007). There are also problems pertaining to unsocial work hours and workloads in the hotel industry. (Karatepe and Sokmen 2006; Rowley and Purcell 2001; Karatepe and Uludag 2007)

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The biggest challenge of employee motivation is that employees often motivate themselves, based on their perception of what they want to achieve and how they can achieve it. However, managers who are aware of what their employees want from work can design a work environment that is able to accommodate employees’ needs and desires. At the same time, well-informed managers may be able to avoid common pitfalls that tend to reduce employee motivation. (Simons and Enz 1995)

Riley, Ladkin, and Szivas (2002) cited in Taylor and Davies (2004) that according to the World Tourism Organisation, the world’s largest industry sector is the tourism and hospitality industry. Despite the concern about quantifying the definition of tourism as an industry, for the purpose of estimating employment it is considered to be one and a half times larger than the next industry. The accommodation sector has continued to exhibit growth over the last few decades, although at various rates, and is forecasted to continue this growth both in development and employment numbers.

Weaver (1988) argued that hotel managers have experimented with various motivational theories and methods to address the problem of declining productivity among their hourly workers. Most of these experiments have had minimal success, because they are based on reward systems that have little meaning for hourly workers.

“If a company knows why its employees come to work on time, stay with the company for their full working lives, and are productive, then it might be able to ensure that all of its employees behave in that way” (Kovach 1987, 58). Such a company would have a competitive advantage over competitors that may be suffering from high absenteeism and turnover, costly re-training programs, and production slowdowns.

Wiley (1997) emphasized that in the case of a lack of ability, appropriate training can be employed. Altering the environment to promote higher performance is the key in the event of environmental problems. However, if motivation is the problem, the solution is more complicated and testing.

For motivational problems, the best source of information would be the employee. Responses by employees regarding what ignites and sustains their desire to work may lead the employer to redesign jobs, increase pay, change the working environment, or give more credit for work done. The key is that managers avoid the assumption that what motivates them, motivates their employees as well.

If hotel managers are able to satisfy their employees by understanding their underlying motivations better, it will play a part in retaining and motivating hotel employees and thus improve customer satisfaction in the long run. (Wong, Siu, and Tsang 1999)

According to Robbins et al. (2008, 180), motivation can be defined as “The processes that account for an individual’s intensity, direction and persistence of effort towards attaining a goal.” Intensity is concerned with how hard a person tries, and is generally the focus of motivation.

However, high intensity is unlikely to lead to favourable job-performance outcomes unless the effort is channelled in a direction that benefits the organization. Effort should directed towards, and is consistent with, the organization’s goals. Finally, the persistence dimension of motivation is a measure of how long a person can maintain effort. Motivated individuals stay with a task long enough to achieve their goal.

Lee-Ross (2005, 255) elaborates on the significant link between motivation in the workplace and practical organizational-based outcomes such as productivity, commitment, job satisfaction, intent to stay and burnout.

Fundamentally, Hackman and Oldham’s (1976) theory of motivation is concerned with “internal work motivation” whereby a continuous cycle of motivation happens within the employee. In other words, the more effort expended on a job, the more motivated they would become.(Chiang and Jang 2008; Lee-Ross 2005)

While on the job, motivation is important for individuals, and in some theories (e.g. expectancy or equity), researchers predict variations in the evaluations of such outcomes as pay. But the evaluation of pay usually is just one of many outcomes and is frequently measured with little accuracy. (Mitchell and Mickel 1999)

Besides its high labour turnover and labour-intensive nature, the hotel industry is often characterised by low job security, low pay, shift duties and limited opportunities for promotion. The studies of Lee-Ross (1993) added that these characteristics seemed to be more extreme in the seasonal sector. Understanding hotel employees’ attitudes and motivations has therefore become a useful area of research in the industry. (Wong, Siu, and Tsang 1999)

Iverson and Deery (1997, 71) noted that “Turnover culture is best characterised as the acceptance of turnover as part of the workgroup norm.” Alternatively, it is a belief held by employees that turnover behaviour is quite appropriate especially in the hotel industry.

In the hotel industry, employees strongly require intelligence, job knowledge and skills, and time management ability. However, without motivation, an employee will not advance in his or her career. (Wong, Siu, and Tsang 1999)

The amount of effort an employee spends toward accomplishing the hotel’s goals depends on whether the employee believes that this effort will lead to the satisfaction of his or her own needs and desires. When a need or desire is unsatisfied, a person experiences tension that drives him or her to satisfy the need.

People work hard to satisfy their needs and desires, and in this way they reduce their tension. From this straightforward approach to motivating employees, the key to facilitating motivation lies with managers’ accurately understanding what their employees want from their work. Using that knowledge, managers can more effectively channel employee effort toward organizational goals.” (Simons and Enz 1995)

A category of motivational models is based on the assumption that personal growth and achievement is a primary motivating force among employees. These models emphasize on giving one’s best efforts to grow and develop as an individual or to advance within the organization. (Weaver 1988)

This category of motivational theories includes Maslow’s theory of self-actualization and Herzberg’s theory of maintenance factors and motivational factors. Maslow’s theory of self-actualisation has no relevance in the work environment of hourly employees. On the other hand, career-oriented and salaried employees are more likely to be motivated by assurances that the organization will provide opportunities to actualize their full potential. (Weaver 1988)

Herzberg divided working conditions into two sets of factors: maintenance factors and motivational factors. According to Herzberg, company policies, technical supervision, interpersonal relationships, salary and status, job security, working conditions, and personal life are maintenance factors; while advancement, recognition, achievement, possibility for personal growth, responsibility, and the work itself are motivational factors.

Herzberg believes that maintenance factors have no power to motivate workers. Many hotel managers might agree with this argument, since their early years in the industry were probably characterised by unfavourable maintenance factors, yet they continued their career due to the presence of Herzberg’s motivational factors. (Weaver 1988)

Another argument of Herzberg’s two-factor theory, also known as the motivation-hygiene theory, divides need satisfactions into extrinsic and intrinsic factors. The extrinsic factors (e.g. salary, working conditions, and job security) lead to job dissatisfaction if not met, but will not necessarily contribute to job satisfaction when they are met. The intrinsic factors (e.g. work itself, achievement, and recognition) are the actual motivators; they fulfil an individual’s need for psychological growth. The extrinsic factors, on the other hand, merely prevent dissatisfaction. (Kovach 1987)

However, the conditions of employment Herzberg views as motivational factors do not apply to the work of hourly employees. (Weaver 1988)

Weaver (1988, 41) stated that “Other models attempt to motivate employees by using psychological rewards or punishment or try to increase employees’ commitment and productivity by generating a sense of team or family spirit within the organization.”

These models may backfire instead since the overuse of threats or reprimands may serve as a strong force against motivation. “Hostile and distrusting supervisors can dramatically shape employees’ working conditions, and, for many employees, can diminish motivation levels,” argued Simons and Enz (1995, 23).

McGregor’s Theory X and Theory Y and Ouchi’s Theory Z describe motivational approaches managers have employed specifically to motivate hourly employees. (Weaver 1988)

Theory X operates in the assumption that employees are lazy and have a strong dislike for work. Managers who subscribe to this view believe that employees will not be productive unless they are continually prodded and are punished by disciplinary action or the threat of dismissal for low productivity.

Theory Y is based on the assumption that an employee’s presence at the workplace indicates that he or she is willing to work. Proponents of Theory Y believe that guidance and positive feedback are sufficient to motivate hourly workers to work well. In recent years, many hotel chains have made a conscious change from Theory X to Theory Y management. A change from Theory X management to Theory Y management will generally show positive results, since people respond better to encouragement and compliments than to prodding and punishment. However, workers will not always be willing to put out 100 percent effort just because their supervisor is nice to them.

In addition to that, Theory Z is based on the Japanese management model, which focuses on a strong company philosophy and a distinct corporate culture. Companies that develop a motivational model based on Theory Z try to convince employees that they are part of a team or family. Some hotels are instituting such motivational programs.

Interestingly, Weaver (1988) found that hotel employees are often more cynical than employees in most other industries, perhaps because they work in an environment where they see how people really behave when they are away from home. Hourly employees in the hotel industry are fully aware of what their interest are and are not easily motivated by programs that they perceive as being nothing but hot air.

Lee-Ross (2005, 256-7) stated that “As long as an individual’s job contains sufficient “content” variables such as skill variety and challenge, an outcome of high motivation and subsequent job satisfaction will result. He also argued that “the other “process” school contends that these outcomes depend not only on content variables, but also on how workers evaluate the pros and cons of undertaking a job.”

Motivation factors including pay, monetary rewards, opportunity for advancement and promotion have been examined in the hotel industry. Also, other motivation factors such as job responsibility, recognition from people, job challenge, feelings of accomplishment, and development of self-esteem have been identified important for hotel employees.(Chiang and Jang 2008; Wong, Siu, and Tsang 1999)

The importance of intrinsic and extrinsic work motivation for hotel employees also varies due to their intensive labour work, low pay, image of low status and few opportunities for advancement (Chiang and Jang 2008). In moving across cultures, motivational preferences become even more interesting. The preferences of employees are expected to differ across nations and cultures. (Fisher and Yuan 1998)

It is valuable to know exactly what employees value, and whether subgroups of employees have differing preferences, so that reward systems can be appropriately targeted. Often, superiors misperceive the relative importance of various job characteristics for their employees. “To the extent that they do (misperceive), they may adopt less than optimal motivation strategies because they misunderstand employees’ needs and wants.” (Fisher and Yuan 1998, 517)

The lack of attachment or loyalty plays a large part in the high rate of turnover among hourly employees. It also accounts for the lack of success of motivational efforts based on company loyalty or the promise of career advancement and personal growth within a company. (Weaver 1988)

In 1946, industrial employees were asked to rank ten “job reward” factors in terms of personal preference. The results were as follows: (Kovach 1987, 59)

• Full appreciation of work done;

• Feelings of being in on things;

• Sympathetic help with personal problems;

• Job security;

• Good wages;

• Interesting work;

• Promotion and growth in the organization;

• Personal loyalty to employees;

• Good working conditions; and

• Tactful discipline.

By 1986, the list looked like this:

• Interesting work;

• Full appreciation of work done;

• Feeling of being in on things;

• Job security;

• Good wages;

• Promotion and growth in the organization;

• Good working conditions;

• Personal loyalty to employees;

• Tactful discipline; and

• Sympathetic help with personal problems.

In addition to comparing the employees’ factor rankings, the survey done in 1986 analysed the employees’ responses by subgroups (e.g. age and income). The underlying assumption was that the motivational effectiveness of the factors might vary according to gender, age, income level, job type and/or organizational level. (Kovach 1987)

The 40 years of studies done by Kovach shaped the belief held by many motivational programs that money does not matter. (Simons and Enz 1995)

In addition to that, in 1946 and 1986, supervisors were asked to rank job rewards as they believed employees would rank them. Their rankings remained almost the same for each year: (Kovach 1987, 59)

• Good wages;

• Job security;

• Promotion and growth in the organization;

• Good working conditions;

• Interesting work;

• Personal loyalty to employees;

• Tactful discipline;

• Full appreciation of work done;

• Sympathetic help with personal problems; and

• Feeling of being in on things.

The rankings show that supervisors have a very inaccurate perception of what motivates employees.

However, in 1992, the replication done by Wiley (1997, 268) in hotel employees showed a completely different set of rankings:

• Good wages;

• Full appreciation of work done;

• Job security;

• Promotion and growth in the organization;

• Interesting work;

• Personal loyalty to employees;

• Good working conditions;

• Tactful discipline;

• Feeling of being in on things; and

• Sympathetic help with personal problems.

This could be due to the fact that hotel workers differed substantially from industrial workers. This difference in rankings indicates the need for different managerial strategies for motivating hotel workers, relative to those used for industrial workers. Hotel employees ranked good wages first, which may be a result of the relatively low wages of service-sector jobs. (Simons and Enz 1995)

A research done by Charles and Marshall (1992) showed that Caribbean hotel workers may not have the same motivational preferences as workers in developed countries. Whereas wages have not been found to be an important motivator in similar research conducted in developed countries, they were ranked highest among this group of Caribbean workers.

Proper motivation of employees is vital as it is directly related with productivity and retention. Employees who are content with their jobs, who feel challenged, and who have the opportunity to fulfil their goals will exhibit less destructive behaviour on the job. They will be absent less frequently, they will be less inclined to change jobs, and, most importantly, they will produce at a higher level. (Kovach 1987)

Considering the evident relationship between employee and customer satisfaction, different approaches were experimented in the attempt to improve employee satisfaction. “Predictably, the list was led by compensation, although most anticipate this will become less important in the future. Employee recognition programs, the opportunity for career advancement and exposure to training followed in order of impact.” (Cline 1997, 24)

The concept that employees may prefer interesting work over good wages is interesting, but the early studies were based on workers in manufacturing industries. It seems very likely that hospitality workers’ preferences would differ from those of manufacturing workers in important ways (Simons and Enz 1995) as it has been shown in the research done by Wiley in 1997.

When trying to motivate workers, managers often forget that the desire to do the job must come from within the employee and not from the supervisor. The manager can set the stage for motivation to happen, but cannot force motivation to occur. The level of effort and the direction of that effort are set by workers, based on their perceptions of the most rational way to satisfy their personal desires.

What managers can do is to take employee desires into account to create an environment where high effort, properly channelled, will give employees some measure of satisfaction. For many hospitality employees, this optimum motivational environment may involve some form of cash incentive and potential for advancement. For others, it will focus on security and good working conditions. In most cases, a positive, respectful work environment has the potential to facilitate employee retention and generally also to set the stage for excellent performance. (Simons and Enz 1995)

An interesting point of view by Siu, Tsang, and Wong (1997) explains that job factors that are considered by employees to have the greatest motivating power are usually those that are least present in the job.

The ever-changing nature of the hospitality industry has created and reinforced a turnover culture. Employees generally enter the industry with the belief that there is limited career development and promotional opportunity. (Iverson and Deery 1997)

Essentially, the human element in the hotel industry constitutes the basic determining factor for effective performance. Because of this reason, hotel management should increase employees’ interest in their work and develop such organizational structure and management policies as to create need-satisfying environment in which a wider range of employee needs than merely the simply hygiene needs could be satisfied. (Chitiris 1988)

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