Employee Turnover at Gold Granule Hotel - Research Paper Example

High Employee Turnover Rate Name: Lecturer: Course name: Course code: Date: Executive Summary The Gold Granule Hotel, a five star hotel, is situated at the heart of Adelaide, Australia. It is one of the leading five-star hotels in the region with average customers of about 1200 per day. It offers quality facilities that meet the needs of the higher market segment. The customers visiting the hotel are high end business people, executives and international tourists. The facilities are conference, culinary, sporting, mountain hiking and entertainment. The hotel is concerned with the high turnover and is seeking measures to counter this trend. The profits are likely to decline if the customers feel that the hotel is underpaying or neglecting its employees. The general manger has been spending a lot of money in recruitment and training of employees. The hotel hopes that when employee satisfaction has been met, the profits and progress can easily be attained. Despite huge progress in shareholder satisfaction, hotel employees are feeling disenchanted and de-motivated. The hotel is keen to unravel reasons stemming from industry performance, and practices to explain why the turnover of new and existing employees in the last two months has been high. It also seeks measures to counter this trend. The study also obtained that lack of competitive reward program greatly resulted in a high employee turnover rates in the hotel since the reward package of the organization was lacking elements of totality of reward system which competitive. Finally, it can be inferred that the hotel’s working environment was not favorable to the majority of the employees and this accounted to high employee turnover. This is anticipated since; bars and discotheques are characteristically identified with the hotel workplace environments which they offer. Employee turnover cannot be left the human resource department alone. Instead, it should be seen as part of the overall business strategy. Human capital is a key factor of production which should be nurtured. This way, issues influencing employee turnover will be taken seriously by top management as action will be taken to reduce employee turnover. Table of Contents Executive Summary ii Introduction 1 Statement of the problem 1 Objectives 2 Research questions 2 Literature Review 2 Research Design 4 Population and Sampling 4 Data Collection and Instrumentation 4 Pilot Test 4 Data Analysis and Presentation 5 Summary of the Major Findings 5 Response Rate 5 Respondents Demographic Profile 5 Employee Retention Strategies 5 Work place Environment 6 Regression Analysis 6 Conclusion 7 Recommendations 7 Introduction The Gold Granule Hotel, a five star hotel, is situated at the heart of Adelaide, Australia. It is one of the leading five-star hotels in the region with average customers of about 1200 per day. It offers quality facilities that meet the needs of the higher market segment. The customers visiting the hotel are high end business people, executives and international tourists. The facilities are conference, culinary, sporting, mountain hiking and entertainment. It boasts of having made huge profits of 20 million AUD in the half year results of 2012 and is considered by many shareholders as a profitable hotel business. It has created a strong website presence and a call centre to meet new clients. It also has an extensive network of clientele comprising of existing customers who have been loyal to the hotel for years and has managed to create a trend of tourist visit from Asia, Middle East, US and Europe who visit during the summer season. The hotel has been able to satisfy the needs of the various stakeholders like customers, suppliers, government regulators and shareholders among others. However, the internal employees are discontented which the hotel leadership and motivation and are leaving in a huge numbers. The hotel is concerned with the high turnover and is seeking measures to counter this trend. The profits are likely to decline if the customers feel that the hotel is underpaying or neglecting its employees. The general manger has been spending a lot of money in recruitment and training of employees. The hotel hopes that when employee satisfaction has been met, the profits and progress can easily be attained. Statement of the problem Despite huge progress in shareholder satisfaction, hotel employees are feeling disenchanted and de-motivated. The hotel is keen to unravel reasons stemming from industry performance, and practices to explain why the turnover of new and existing employees in the last two months has been high. It also seeks measures to counter this trend. The cost of training, recruitment and damage control has been on the increase for the last two years which impacts on the company negatively. The eagled eyed government and ministry of labour will likely point an accusing finger on the hotel management if the issues affecting employees are not addressed in time. Objectives 1. To establish the reasons behind high employee turnover rate at the Gold Granule Hotel over the last two years 2. To investigate employee retention activity as a contributing factor to employee turnover in Gold Granule Hotel 3. To establish the influence of work place environment on employee turnover in Gold Granule Hotel 4. To assess ways to reduce high employee turnover rate at Gold Granule Hotel Research questions 1. What are the reasons behind high employee turnover rate at the Gold Granule Hotel over the last two years? 2. What employee retention actions are contributing high employee turnover in Gold Granule Hotel 3. Who influence does work place environment have on employee turnover in Gold Granule Hotel 4. Are there ways to reduce high employee turnover rate at Gold Granule Hotel Literature Review High turnover among staff has multiple reasons, differing across industries. A relatively higher percentage of staff working in restaurants, hotels and coffee shops and are travelers or students who, before moving on, are taking short-term positions in order to earn. At times a retail catering environment can have a higher staff turnover than the average industry figures. Poor training among staff is entirely de-motivating as one is asked to do a job without adequate training (Schein, 1998). While some people posses the ability to quickly pick up, many do not. This cycle happens over and over again; even the management had good intentions. Many mangers continue to undervalue the importance of training. Weak team leadership is to blame for collapse in organization command and direction. People who have been trained for specific jobs, ought to work as a team in order to boost complementary roles, and together deliver a solution or a process. For instance, accounting department or a team running a high end restaurant should work under the same principle. Lack strong leadership among teams leads to malfunction, disagreements and eventual relationship breakdown (Kreisman, 2002). Again, paying too little to employees when the company makes awesome profits is disenchanting. There should be a balance between the top payers, and the bottom payers. However, right down at the bottom, unscrupulous employers want to pay the lowest they have to making high staff turnover is irresistible (Mitchell, 2002). Some employers have unreasonable expectations. They believe that once the employee has been hired they can work and carry out every task even including those not mentioned in their job description (Cascio, 1991). They also expect employees to work longer hours before being given breaks, to get the job done. This usually happens without reward or positive feedback (Nesbitt et al, 1990). When a culture of high turnover had become a norm it becomes perpetual and no amount of interventions can help. An organization will likely learn to live with high turnover because it has become commonplace for them. New employees adopt this trend by learning that they can anticipate to carry on perhaps sooner than they imagined, thus becoming self-perpetuating. During financial uncertainly and high unemployment, staff turnover drops as employees are worried about their jobs and see a difficulty of getting another. However, this disguises the challenge of high turnover, and the time the economy picks up, these companies struggle during the period when huge proportion of their workforce move on simultaneously (Dibble, 1999). In contrast, some employers believe that salary and benefits are the major reasons that employees remain committed to their job and get satisfied. However, they feel that their employer sincerely cares about them (Bridges, 1991). This sense of concern and care needs to be demonstrated right from the top until the employee's immediate supervisor. Many organizations have a very caring and kind Chief executive, whose value greatly diminished when the employee experiences a strained relationship with a supervisor. In most cases, the weak link connecting supervisory levels goes unnoticed by top management and results in dissatisfaction so severe enough to fuel a high turnover rate (Noer, 1993). Dissatisfied employees may find it difficult to communicate their unhappiness to upper level management, since supervisors usually play the gate keeper roles. During recession, employees have less choices and opportunities to move on.  However, this is usually temporary considering that the economy recovers quickly and organizations with a history of high turnover will continue to struggle as a high proportion of their labour force decides to leave at the same time (Trice and Beyer, 1993). Research Methodology This chapter constitutes data collection, sampling, instrumentation research design, data analysis and interpretation. Research Design This research employed descriptive method as it aimed to describe the high employee turnover phenomena using variety set of independent cluster of variables. Descriptive research is applicable in sourcing information, relating to the present phenomenal status by describing what exists, in relation to conditions or variables in a situation (Mugenda and Mugenda, 1999). Population and Sampling The study was done in the Gold Granule Hotel, the service industry in Australia, targeting the larger population on which the findings were generalized. The study population was employees of Gold Granule hotel. A sample size of 240 was obtained using stratified random sampling. This was selected from the total 675 employee of the study population. Stratification was necessary since the variables under investigation connected to motivation, as it considers the different employee cadres. This is equivalent to 30% sample size. The sampling frame was the list sourced from the Resourcing department of Gold Granule Hotel Data Collection and Instrumentation Semi structured questionnaire comprised the primary data collection process. Besides, interviews were also administered. Secondary data was done by reviewing of the empirical and theoretical literatures obtained from books and conference papers, journals, internet e.t.c. Pilot Test A pilot study was carried out to test questionnaire reliability as an instrument. It entailed selecting 10 respondents from every stratum to be given questionnaires. Questionnaires gave valuable data as a result of evaluation and response identification using Kunder-Richardson 20 formulae. Data Analysis and Presentation Descriptive statistics method was used to analyze qualitative data where the results were scored by computing the means and percentages. Linear Regression, by the aid of SPSS software showed the relationship between research variables. Using open end questions, qualitative data analysis was used to analyze qualitative data gathered. Summary of the Major Findings Response Rate A response rate was 87% was recorded which was adequate as Mugenda and Mugenda, (2003) recommends at least 70% in descriptive studies, as a good response rate. Respondents Demographic Profile Many of the respondents (52%) fall between 30-40 years, 22% were within the age bracket of 18-29, and 16% were between 41 above. Education level showed (79%) being the majority, had a university education. 22% had at least college education. On the job experience, most of the respondents (42%) had working experience of 4-8 years, 21% 9-12 years, and 12% 13-20 years. 25% had a less than 2years working experience. Employee Retention Strategies High portion of the respondents (64%) showed the organization was devoid of strategies for effective employee retention while 36% were of the alternative opinion. The 65% were of the opinion that the management did not know retention strategies. This agrees with Ruth (2004) that managers with higher understanding on employee turnover causes, have potential of employing effective employee retention strategies so as to retain most skilled and competent employee. Furthermore, 79% of the respondents were of the opinion that strategies used do not minimize employee turnover. The Likert scale rating used was 4: Very Effective, 3: Effective, 2-Moderate and 1: Not Effective. About (53%) rated the employee retention strategy effectiveness as moderate, 18% not effective 15% Effective, and 14% as very effective. It can be inferred that most employee ratings were average. From the findings of Baker (2004), organizations lacking very effective employee retention strategies have the likelihood of high employee turnover rates that amounts to competent and skilled employee loss. The dismal standard deviation shows that there was inconsequential error during the analysis. The deviation results indicate that respondents provided similar answers as the resulting variation was closer to another. From the findings, it can lack effective employee retention strategies have constituted to high employee turnover rates in the hotel. Work place Environment A larger majority (78%) of the respondents had the feeling that their work environment was not favorable while 22% said it was conducive. About 82% conceded that the work environment resulted to employee turnover. The likert Scale was; 1- not at all 2-small extent 3-moderate extent 4 -great extent 5: very great extent. Majority of the respondents (65%) agreed that work place environment resulted in employee turnover to a very large extent, 15% to a large extent, 12% small extent 8% and moderate extent and not at all respectively. A mean of 1.23 showed that hotel work place environment was not favorable. Likewise, a mean of 1.92 indicated that work place environment amounted to high employee turnover rate as a mean of 4.12 showed work place environment contributing to employee turnover to a greater extent. A small variance and a small standard deviation indicate that results provided by the respondents were precise. Regression Analysis A regression equation was used to establish the relationship between the dependant variables and independent variable was derived X = a + bY1 + bY2 + bY3 + bY4 + e=t2 The corresponding values for b0, b1, b2, b3 and b4 are 0.542, 0.267, 0.082, 0.156 and 0.133 thus the equation X = 0.542+0.267+0.082+0 .156 +.133 This shows that there is a very strong relationship between, employee retention, employee turnover and work place environment. Similarly, a coefficient of .133 shows that favorable workplace environment assists in lowering employee turnover by 0.133. Conclusion From the findings, it can be inferred that employee retention strategy the greatest factor that highly constituted to high employee turnover rates in Gold Granule Hotel. The study also obtained that lack of competitive reward program greatly resulted in a high employee turnover rates in the hotel since the reward package of the organization was lacking elements of totality of reward system which competitive. Finally, it can be inferred that the hotel’s working environment was not favorable to the majority of the employees and this accounted to high employee turnover. This is anticipated since; bars and discotheques are characteristically identified with the hotel workplace environments which they offer. Recommendations Employee turnover cannot be left the human resource department alone. Instead, it should be seen as part of the overall business strategy. Human capital is a key factor of production which should be nurtured. This way, issues influencing employee turnover will be taken seriously by top management as action will be taken to reduce employee turnover. This study suggests that the general manager of Gold Granule Hotel investigates on the role played by the top management in reducing employee turnover. It is also recommended the management needs to be keen and proactive in handling employee issues. References Ambrose, D 1996. Healing the downsized organization. New York: Three Rivers Press. Bridges, W 1991. Managing transitions-Making the most of change. Cambridge, MA: Perseus Books. Cascio, W F 1991. Costing human resources: The financial impact of behavior in organizations. Boston: PWS-Kent Publishing. Dibble, S 1999. Keeping your valuable employees-Retention strategies for your organization’s most important resource. New York: John Wiley and Sons. Inc. Kreisman, B J 2002. Identification of the drivers of employee dissatisfaction and turnover. Unpublished Doctoral Dissertation. Austin, TX: University of Texas. Mitchell, L E 2002. Corporate Irresponsibility—America’s newest export. New Haven & London: Yale University Press. Nesbitt et al 1990. Ten new directions for the 1990’s-Megatrends 2000. New York: William Morrow and Company, Inc. Noer, D 1993. Healing the wounds-Overcoming the trauma of layoffs and revitalizing downsized organizations. San Francisco: Jossey-Bass. Schein, E 1998. Career dynamics: Matching individual and organizational needs. Massachusetts: Addison-Wesley. Trice, H M and Beyer, J M 1993. The cultures of work in organizations. New Jersey: Prentice Hall. Read More