Impact Of Employee Turnover On Hotel Staff Performance

The Classification of Employee Turnover

Discuss about the Impact of Employee Turnover on Staff Performance in Hotel Industry.

Employee turnover in a hotel refers to the ratio or proportion or percentage of employee who leave a hotel after a certain period of time, employees who are considered as members of hotel work force. Employee turnover can be classified into two classes like Voluntary turnover and Non-Voluntary turnover (Kangas et al., 2016)). Voluntary turnovers refers to the rate of resignation of an employee from the hotel in total like leaving the hotel at will, end of employee contract, leaving for attainment of retirement age. Again, Non-Voluntary retirement refers to transfer of an employee to another department within the same hotel like an employee being promoted or transferred for any reason or laid off (Kim, 2014).

Turnover rate has a major impact on hotel staff performances, as can be seen in many hotels, which are both positive and negative. A certain rate of turnover of 10% is usually considered to be good as it increases employee efficiency, better leadership skills and can finally improve staff productivity (Chughtai, Byrn & Flood, 2015). But an increased amount of turnover is harmful for staff performance. Impacts can be differentiated according to the two turnover divisions. Voluntary turnover results in low incentive rates of training staffs because of the losses due to turnover resulting in low training qualities. Moreover, higher turnover adversely affect employee morals. Leaving effects performance of stayers adversely which reflects in low productivity (Deery & Jago, 2015). A constant change of leaders will obviously affect employee performance in a negative way. Again turnover affects group performances due to the loss in hotel organization memory due to loss of the employee. Effects on Non-Voluntary turnover can be listed like decreased rate of group performance due to change of group leader or adjustment problems for the employee in a new position and group.

 A vast study can be made on this topic by considering few practical conditions of hotels and their turnovers and by keeping in mind past researches on this topic. There are numbers of literary evidences on this topic. This is one of the major problems in Hospitality Industry and a matter or interest for most of research personnel. A large review can be provided here. The dependent variable under this study will be hotel staff performances and the independent variable will be employee turnover. An independent variable can be controlled and its level can be changed in an experiment (Todorovi? et al., 2015.). A dependent variable is defined to be the one which is dependent on an independent variable and is measured in the course of an experiment. It can be said from the topic here that staff performance is dependent on employee turnover. Employee turnover rates can be changed here and staff performance will change with it. They are related through a cause effect relationship (Hayes & Preacher, 2014). With even a slight change in employee turnover rate, its effects can be seen on staff performance. This relation between the dependent and the independent variable can be described through Tuckman’s theory:

Impact of Turnover on Hotel Staff Performance

Turkmen’s theory has formed out of four broad divisions:

Forming: Forming will be defined as the effects of employee turnover as studied by literary works like demotivated staff, monitory loss, poor performance of HR department, Weak motivational activities and low work attachment.

Storming: The division will include staff struggling with the said factors. With lack of motivation,  staff performance level will go down and will result into low work attachment. The situation may further get worse by poor performance of the HR department and this obviously will lead to monitory loss by the firm and by individual employee as well.

Norming: The sort of work environment will generate dissatisfaction among the employees and they will further start losing motivation, focus and interest.

Performing:  The described situation will obviously lead to poor staff performance.

According to Malik, Butt & Choi (2015), Staff performance is interpreted as whether a staff performs assigned job duties or job responsibilities efficiently. It is assessed on the basis of some fixed time like quarterly or annually which varies with hotels. It is a judgmental factor for success of organization. Hotel industry is described as a man power based industry. It is of utmost importance to stay focused on staff performance in hotels since staff interacts directly with the guests here. Guest satisfaction is a major driving tool for hotel business and a crucial factor for any hotel. It is the staffs who are responsible for guest satisfaction. Hence staff or employee is a critical factor for hotel because of its work nature. Staff performance management is a procedure of a split or shared workforce setup that understands the needs and targets of the hotel in the layers of organization. Performance is all about linking company aim and objectives with the skill, competency requirement and willingness of staffs. Emphasis should be on performance improvement.

Staff performance and HR department.

Presbitero (2017), emphasis on the social exchange theory and studies the connection between HHR practices and employee efficiency. It points out that change in the HR practices effects employee performances. The performance connections are more strong regarding the points like reward management, employee engagement, training and development.

Abbas Al-Refaic studies the relationship between HRM practices, qualities, employee satisfaction, service, employee loyalty, customer satisfaction and customer loyalty.  Few of the concluding points of this study are:

1. There is a positive correlation between HRM practices and customer satisfaction and employee satisfaction and service quality.
2. There is positive correlation between customer satisfaction and staff satisfaction. With an increase in staff satisfaction, customer satisfaction will increase.
3. Service quality and customer satisfaction are positively correlated.
4. Customer satisfaction has a positive impact on customer loyalty which finally effects hotel performance.
5. Employee loyalty is positively related to customer loyalty. Customer loyalty will increase with staff loyalty.

Abbas Al-Refaic has suggested that management should concentrate more on the HRM practices. The study divide HRM practices into two broad divisions and says that all the practices are equally applicable in each and every department of a hotel.

Relationship between Staff Performance and HR Department Practices

The article examines role of line managers in the connection between HRM affairs and employee performance. The research is made on perceived behavior of line mangers and perceived HRM practices. The article suggests that there exists a relationship between line managers’ behaviors and employee Performances and the relationship exists through employee engagement factor. Employee engagement behavior is strongly related to employee performance. He study depicts the importance of line managers in employee performances (Alfes et al., 2013).

The article studies the relation between improving service quality and HRM practices. Service quality is associated with staff efficiency. Improved service quality means improved staff efficiency. The result shows that HRM practices have partial and direct effect on service quality. There are practices for this development which can be followed by the HR department for these individual of improvements (Worsfold, 1999).

Dhar (2015), studied the relation between HPHRP and service innovative behaviors.  Service Innovative Behavior can be regarded as an important need of the employee who are really efficient and performance driven. The researcher had provided an extensive model for this connected. The research predicts that there is a positive relationship between the two factors. The study also provides the role of climate for this kind of works. It says the commitment for organization is the driving factor for this kind of correlation and he also shown that climate works as catalyst in this kind of innovations.

Jayaveera (2015), has suggested that environmental conditions have a significant and strong impact on staff performances. Leaders in different working segment should put on efforts for improving working environments in both physical and psychological factors. Jayaveera has again pointed out that motivation is one of the most effective ways of improving environmental conditions. People perform better when they are motivated. Motivation has a significant effect on staff performance and workers who perceive poor working conditions are basically less motivated. Now staffs can be motivated in two major ways like intrinsically and extrinsically. Management should take initiative for employee motivation in various ways like by incentive pays, by acknowledgement of staff perspectives and by supporting and encouraging staff initiates. This study was conducted on overall employee of a hotel but not on the job titles of participating staffs. Jayaveera has recommended for future studies on relation between motivation and staff performance regarding different job titles.

KOSGEY (2014) has said in his study that facility management is related to staff management. Facility management means the management of hotel property and assets mainly physical assets. This has a major impact on staff performance. A proper working environment with assets arranged properly and a proper maintenance of hygiene is important for staff performance. Hygiene maintenance is sometimes more important for female employees.  

Various Researches on Employee Turnover and Staff Performance

Olayini (2014), studies effects of work stress and motivation on employees. According to him, work stress and motivation are highly related to staff performance and they are negative correlated. Staff won’t be able to work efficiently with more stress factors and low motivational effects. There can be various reasons for stress like enormous workloads, racial harassments, sexual harassments, working in shifts and staff utility. Any kind of personal stress can also keep staffs from performing. It is important that staff try to keep themselves away from stress of any external kinds. Management can also arrange for some kind of activities which will help employees in dealing with personal stress. Motivation always brings in effectiveness within organization. Motivated employees always look for better ways to perform a job. They have an orientation towards product and also are more productive. There can be different sources of motivations like security of jobs, very good salaries, growth opportunities and carrier development opportunities.

Karatepe (2014) has tested the parameter of work engagement that whether it works as a parameter or mediator for high performance practices in overall job performance and in an extra role in customer service. He has suggested that this parameter works fully effectively in high performance job processes. This kind of job processes  that is processed by frontline staffs , appraisals of trainings, empowerments’ of staffs and also staff rewards  always increase job engagement and performance. Work engagement have proved to be more correlated with customer extra roles. They also have a full correlation with final staff performance.

C Blayney (2013), has studied the relationship between demographic factors and staff performances. The demographic factors include education, age, gender leadership competencies. The relationship leadership competences and staff performances are especially high. The study here focuses on the behaviors of general managers at the tomes of extreme challenges. This has proved about the relationship between them and also on the three leadership competencies. Leadership also has significant effect statistically on RevPAR. This also carries the scope of researches in the aspects of transformational leadership which can lead to improved staff performance.

 Alfandi & Alkahsawkeh (2014), describe the impacts of incentives on staff performances. They have said that incentives plays a major role in enhancing staff performances. There are four major factors of incentives which are basically related to the performance factor and they are rewards, promotions, efficiency of reward system and monitory incentives. Reward ranks the first place in the impact and promotions ranked in the last place. But incentives should be based on the effectiveness of the employee so as to differentiate efficient employees and non-efficient one.  This will also encourage them to perform better. Therefore, incentives can be related to develop staff performance. Again, there should not be any delay in the incentive process as that can lessen the effects on incentives. Concrete incentive system should be supported in Primary Bonus Commission since they can solve most of the social and economic problems of the employees. But the performance evaluation should be the only reasons for staff incentives or punishments.

Castilla (2013), studies relationship between employee performance and personal contracts. There is a role of referral contacts on employee performance. This study says that the referral contacts are more productive in the beginning. Longitudinal analysis suggests the post hire social pressure among the referrals. This report also suggests that performance is not the only criteria of performance for the referrals. Their effects continue in having long term relationships with the firm. The presence of contacts in the workplace encourages attachments with the firms and with work. Again there is a role of social media in the whole process along with the factor that they help in maintaining contacts. There is a correlation between social dependence and employee performance. They can help in assessing certain employee parameters like job satisfaction, performance and employee turnover. The ability to maintain social contacts is the carrier building pillar for an employee.

Elnaga and Imran (2015), have studied the effect of training in maintaining staff performance and how does this can be improved. They have said that staff who receives periodical training are more efficient and able for better performances in the job front by increasing job quality. Therefore they are better able to achieve personal target and hence company target and gaining complete advantage for that. Training also helps in gaining competitive advantage in the job front both for the new jokiness and the experienced persons. Therefore it greatly helps them to achieve faster future positions in the organizations. Training can be defines as a form of investment for the firm that helped in achieving higher advantages in performances and competitive advantages.

The article studies impact of job satisfaction on employee performance. It’s a general idea that happy employees are productive employees. The article studies the said connection thorough the level of impact, factors for job satisfaction and parameters for improvement of job satisfaction of employees (Sharma & Sharma, 2015).

Widodo (2017), has suggested that there is a positive relationship between compensation, organizational culture and compensation through motivational process. Motivation is a basic driving force for staff performance. These few point can be incorporated in the motivational process to attain better results. There are positively correlated. But the study also states that organizational culture doesn’t impact any effect on motivation process.

Vimal Jose(2015) has provided an insight about the topic. According to him, Employee turnover is defines as substituting an employee with another one. This signifies parting between an organization and its employee in the form of terminations, retirements, resignations, deaths, integrity transfer.  This is measured in the form of percentage rate named as turnover rate. Hotels measures their turnover rate at the end of a pre determined time. It is referred as a disadvantage for any hotel and can affect staff performances in a negative way. It is not only important for a company to hire an employee but it is also important to retain them. Turnovers can be divided into two broad categories like voluntary turnover and involuntary turnover. Involuntary turnover refers to the termination of employee through organization‘s decision and not by employees own decision. These can be of various reasons like because of low job efficiency, non obedience with the job place policies, and large number of days of absenteeism. The name involuntary comes from the fact that it’s not about employee leaving the organization.  Layoffs can fall under the category of involuntary turnover though layoffs have completely different calculations and back grounds. Voluntary turnover in contrast to involuntary turnover referred to as an employee’s decision to leave an organization. There can be various reasons behind this like personal problems, relocating to a new city or some other area or acceptance of job offers from some other organizations. In this case, employee has to submit formal written resignation letters to the organizations and has to serve a provision period.

The article examines the reasons for turnover in hotel employees who are from generation Y’s.  The study shows that Generation Y remains in a search for exciting and challenging career options but at the same time, they search for long terms in their carrier. This sometimes doesn’t matches the hospitality carrier.(Brown, Thomas & Bosselman, 2015)

The article suggests that work culture creativity in an important reason for low turnovers. Chefs may fine creativity in their work process but this is really a challenge for workers in the rest of the designations in a hotel Job satisfaction and stress impact the effect of creativity as well which again effects turnover.(Tongchaiprasit & Ariyabuddhiphongs, 2016).

The study here focuses on occupational stress to be an important reason for employee turnover. It is said here that occupational stress and most importantly unfair treatment contributes towards employee’s intension of leaving a job. Hotel manager should keep this point in mind for a better understanding of situations (Hwang et al., 2014).

The article studies about the remedy for hotel turnover problem. It says that there are several reasons that attract low turnover rates like promotions, community fir, leadership types, work group behavior, pays. The article also says that community fit is an important reason for turnover. People are more comfortable to stay in a good quality of environment, a lifestyle that suits their own. They leave cites which doesn’t provide them with a comfortable environment.(Qiu et al., 2015).

The paper studies effects of talent management, work and daily life balance on retention of employees. It indicates that there is a positive relation between the said parameters. The study also gor connected with personal parameters like job satisfaction, alcohol abuse and other personal parameters as they are linked with work life balance.(Deery & Jago, 2015).

 The article states that motivation plays an important role in employee retention. Motivated employees are more performance driven and doesn’t generally with to resign. An organization should increase employee motivational factors to improve turnover rates.(Parttimaa  & Bäckström, 2018)

Caesens, Stinglhamber &  Marmier (2014),depicts a positive relationship between work engagement and employees. It says that employee with high work engagement has low turnover rates than employees with low turnover rate. Work engagement works as a positive factor. The article also examines whether there is any negative involvement of this factor and finally finds only about the positive factors.

LU & Gursoy (2013),  have said that burnout has a negative effect on turnover rates but the effects can vary between generations. There is obviously a connection between job burnout and job satisfaction and turnover intensions. With the thinking variety for generation differences, they can react in a different way. The article predicts that Millennial and Baby Boomers have medium reaction regarding this matter. Rest of them has significant effects.

Kim,Im & Hwang (2015), claims that there is a connection between stress and job attitudes and turnover rates. Psychological functions says in favor of this theory.  But the role is function of the connection between  turnover and role ambiguity is not cleared here. These things are not as well related to carrier options. The basic influencing factor is stress and job attitude.

Tongchaiprasit  & Ariyabuddhiphongsb (2016),  talks about chefs from hospitality industry. They has the creativity factor which keep them loyal with the job but work stress is a negative factor for them. It is predicted earlier that creativity effects job turnover rare but stress and motivation will play mediating factor. Putra, Cho &Liu (2015), studies the role of extrinsic and intrinsic motivations on employee engagement.  Author has claimed that there is a positive correlation between the factors. But more researches has to be conducted regarding this matter. Again, Memon, Salleh & Baharom (2016), has studied the connection between employee turnover and training satisfaction and on engagement of work.  The study shows that there is negative relationship between training and positive attitude. But training factor is related to work engagement and employee turnover rate.

Literature gap refers to the point in which there are scope for further study. The review has pointed out that employee turnover impacts Staff performance. There are number f factors which are responsible for staff performances and they are related to turnover problems. It has been said here that work engagement has an impact on employee turnover. But proper depictions are not being made on the role of intrinsic and extrinsic factors on work engagement and hence on employee turnover resulting in a literature gap.

Conclusion

It can be concluded from the above discussion that employee turnover has a strong impact on staff performances. There is more than a single effect of the turnover factor like demotivation, misbalance in the work environment and lack in proper leadership. There are various factors which can draw staff performances like motivational factors, HR performances, training sessions, rewards. Employee turnover e=affects each and every factor among them. With turnovers in training staffs, It becomes problematic to provide with proper training. Again, new trainers who have replaced the old ones may not be that efficient at least in the beginning. Employee turnover draws monitory loss. Other department suffers for it including the reward system. Hr department also faces lack of money for various improvement programmers’ as well as for the recruitment of new efficient staffs. Reward and recognition are considered as the motivational factors. So it clear from the discussion that the motivation system gets hampered with employee turnover. Staff performance is a pillar for success in this hotel industry and the management should immediately think and act on this part.

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