1.1. introduction and statement of the problem 1.pdfwhy employees are departing, the number of...

Chapter 1 Introduction

A Study on the HRD Practices to Minimise Labour Turnover in Hotel Industry – Specific Focus on Kerala 1

1.1. Introduction and Statement of the Problem:

Hotel industry is the world’s largest industry that employees the most large

amount of human resources. The current trend in the industry is such that hotel

industry is growing in a rapid way along with the development in the world. From

the early decades till now there are large numbers of hotels those employees more

number of manpower. The specialty of the hotel industry is such that the

manpower cannot be substituted with mechanical or electronic devices. The role

of manpower in hotel industry is very significant. Recently manpower turnover is

the biggest issue in the hotel and catering industry. This causes the productivity

and performance of the hotels. Each hotel works in its own pattern, when a new

employee is appointed by the hotel it takes months of stress and strain to train the

staff and make him suitable and adaptable to the purpose and operation of the

hotel. As the employees start delivering his performance to the organisation the

sad part is that he or she is leaving the hotel and moving to another organisation.

The cost involved in training an employee and the effort taken by the other staffs

when he comes as a new comer is much more. When an employee leaves the

corresponding department the operational aspects of the department is changed

and the duty allocation and smoothness and flexibility in working of the

department are changed considerably. The managers have to make the changes in

duty roster and more effort has to be taken by the rest of the staff to adjust with

the job of the person who left the place. The normal questions arise in this scene is

that why this is happening? If we take many hotels there is no difference. The HR

department has to work hard to resolve this problem. In all the hotels the HR



department is working in a standardised pattern for employee recruitment training

and development but the problem of manpower turnover is not reduced.

The problem in the research topic is analyzed as the manpower turnover in

the hotel industry. This is the only industry in the worlds which has to rely on the

human beings for its functioning. If we take any department in the hotel from

gardening to cooking the role of manpower cannot be neglected or minimised. To

be precisely the mood and the personal feelings and problems in private life of an

employee has a considerable impact on the daily performance of the employee.

But recently for the last two decades the manpower turnover is very high in the

hotel industry. This causes pain in each department which loses its employees. If

we take the example of the kitchen, it takes normally six months to train a new

employee to learn and vitalise the proper cooking of a particular hotels menu card.

During this period of learning his productivity is much less. The rest of the staff

has to teach him, cover his jobs till he become experienced. When this person is

suitable and adaptable to the hotels kitchen the sad part is that he is leaving the

kitchen to join a new hotel. The study is made to find out the reasons for this

problem.

1.2. Conceptual Framework and Theoretical Background of the

Study

Employee turnover (J. William, et al. 2005) occurs when an employee

leaves an organisation and is replaced by someone else and there are a variety of

factors that lies behind the concept of employee turnover and the major issues are:

why employees are departing, the number of employees leaving and at what

frequency, and at what level within the organisation. Labour turnover explains

how long employees stay or tend to stay in the organisation. It is the rate of traffic

at which employees enters into the organisation by recruitment and the rate at

which employees leave the organisation. The labour turnover rate explains the

organisational health of the enterprise. Labour turnover (R. Jim 2012) refers to the

movement of employees in and out of a business, and the term is commonly used

to refer ‘wastage’ or number of employees leaving. High labour turnover causes



problems for business and it is a costly affair, which lowers productivity and staff

morale. Labour turnover (Balram 2005) is an important parameter which indicates

the overall health of an industry or an establishment in terms of wages, industrial

relations, working conditions and the other welfare facilities provided to the

workers. Employee turnover continues to be one of the most unappreciated and

undervalued issues facing business and there are several important assumptions

and conclusions about turnover and they are (Jack and Adele 2003) :

(i) All stakeholders involved in this issue underestimate the true cost of

employee turnover

(ii) Reasons for turnover are not properly identified by organisations

(iii) The solution to manage turnover mismatches with the actual causes of

turnover

(iv) The preventive measures used are less effective to reduce turnover.

(v) Process to measure the success of retention solutions and place a

monetary value on managing retention does not exist in most

organisations

Labour turnover is inevitable part of any business, but if turnover rate

increases that affects the quality of the service and productivity of the hotel. More

turnovers crunch the staff morale and increases stress among the staff. With more

intensity in turnover will tarnish the employee branding of the organisation.

Organisations have to adapt strategies and frame policies that will enable

employees stick to the organisation.

The labour turnover intentions take place due to various factors. These can

be push factors, pull factors, individual factors, unavoidable factors, and avoidable

factors.



Figure 1: Factors of Turnover Behaviour

The conceptual framework of labour turnover in the study is based on the

Price Causal Model of turnover. This model of voluntary turnover among

employees was developed by J. L. Price in 1977. According to Price employees

who leave an organisation at their own discretion are examples of voluntary

turnover (Price 1977). This model is also called as Price-Mueller Model. It took

five phases for Price to develop this model. The development of the preliminary

model was by Price and group of sociology graduate students in the University of

Iowa. The previous models of turnover were in the economist’s view, where

importance is given to salary as the major reason for turnover. But according to

Price, this was too narrow range of determinants of turnover. According to

economists the monetary models have more significance in explaining turnover.

But Price says that monetary models need to be supported by non monetary

determinants. Economic explanation (James L. 2004) ignored the process

whereby turnover was generated.



Figure 2: Preliminary Causal Model of Turnover

According to this model turnover from an organisation is likely to be low if

pay, primary group participation and communication were high. While

considering pay the employees must feel that the pay what they are getting is high.

When there is high centralization in the organisation then the turnover will be

high. The model is having two intervening variables: job satisfaction and

opportunity. When there is more job satisfaction the turnover will be low. And

when there is more availability of opportunities will in turn increase turnover.

Primary groups (Rajendra K. and Rachana 1997) are those groups which are

characterized by intimate face to face relations and shows close association and

cooperation and participation of primary groups leads to a fusion of individualities

in a common whole. The features of the members of this group are: they are

related to each other, there involves a sense of unity, sense of we-feeling, common

interests, ideals and values, similar behaviour, control of the group over the

actions of the members, members are affected by the group characteristics

(Rajendra K. and Rachana 1997), spend great deal of time together, engage in

wide range of activities, and demonstrate a concern for each other’s welfare

(Richard K. 2003) . According to this model association in primary groups will

reduce turnover. In the phase 2 of developing the model for turnover Price done a

pilot study on nurses in the general hospital. And a new model was developed

which is known as causal model of turnover. The diagrammatic representation of

the model is depicted below.



Figure 3: Causal Model of Turnover for Pilot Study

According to Price, five variable categories (Montague 1992) affect

turnover in organisation: (1) Pay; (2) Integration; (3) Instrumental

communication; (4) formal communication; and (5) centralization. In this new

model it was identified that importance to pay and the payment, integration,

instrumental communication, distributive justice, professionalism decreased



turnover, where as centralization, routinization, community participation, social

class, and work commitment increased turnover. These have two intervening

variables, satisfaction and opportunity. These two have same role in deciding

turnover just like the previous model. Pay and importance to pay has the similar

role as in the previous model which explains the role of pay in turnover.

Integration (Sociology-Guide 2011) is defined as a process of developing

a society in which all social groups share the socioeconomic and cultural life.

Integration is a mode of relation of the units of the system by virtue of which

people act collectively to avoid disrupting the system and promoting unity.

Integration (M. Stephen 2001) is defined as when ethnic minority groups remain

distinctive, but adapt and conform to the majority values and behaviour.

Integration (Burkart 1967) refers to a relationship among parts through which

people form a whole group so that the whole has its own distinct attributes, its

boundary, and is thus recognizable as a separate structural entity. People in a

workgroup maintain their distinctiveness but remain confined to the values and

beliefs of the workgroup. This generates group cohesiveness among the members

of the group. According to Price integration among the employees can reduce

labour turnover.

Instrumental communication (Montague 1992) is the transmission of

information directly related to role or task performance. Instrumental means

(George B. 2007) to add a personal touch. The purpose of instrumental

communication (Shuzo and Yamada 2011) is to change receiver’s cognition,

emotion, and/or action by communication and examples of instrumental

communication are providing knowledge to others, persuading others (Brant R.

and Adrianne W. 2006), and changing other’s action. According to Price model

instrumental communication positively influences the reduction of turnover. This

means that when there is existence of high degree of instrumental communication

in the organisation the rate at which employees leave the organisation can be

minimized. Centralization and routinization have a positive effect on inducing

turnover. When there is high degree of centralization in the organisation will

induce more probability of turnover. Distributive justice (Tsachi 2007) deals with

distributing benefits and burdens in society (people) in a fair manner on criteria



like equality, where attempt is made to decrease the gaps among the people in a

fair manner. The distributive justice (Alexander and Ruderman 1983) focuses on

the fairness of rewards and the fairness level at which pay package are offered to

the employees. Distributive justice is the equity and fairness perceived by the

employee when evaluating role descriptions, remuneration, and promotion in the

organisation. When there is no existence of distributive justice or lack of

distributive justice in an organisation will induce labour turnover. Professionalism

is the combination of all qualities that are connected with trained and skilled

people. According to Price the professionalism or existence of professional

behaviour in individuals can reduce labour turnover.

In the research the effort is made to see how the turnover intentions of an

employee can be minimised using human resource development practices. The

research tries to identify how the turnover behaviour of the employees are

minimized using the HRD practices and to see what are the reasons for labour

turnover in the hotel industry.

Table 1: Definition of factors in Causal Model (Maximillian 2008)

Factor Definition Environmental: Kinship Responsibility The existence of obligations to relatives residing in the community Opportunity The availability of alternate jobs in the environment Individual: Job Satisfaction The extent to which employees enjoy their role in the organisation Organisational Commitment The extent to which employee’s loyalty to the employer Search Behaviour The degree to which an employee is looking for another job Intent to stay The extent to which an employee plans to continue membership with his/her employer General Training The transferability of skills and knowledge among employees Job Investment The willingness to exert effort on the job Positive/negative affectively The respectively dispositional tendency to experience pleasant or unpleasant emotional states Structural Autonomy The degree to which an employee exercises power relative to his/her job Distributive Justice The extent to which rewards and punishments are related to job performance Job Stress The extent to which job duties cannot be fulfilled Resource Inadequacy Lack of means to perform job Role ambiguity Unclear job obligations Role conflict Inconsistent job obligations Workload The amount of effort required by a job Remuneration Money and its equivalents which employees receive for their services to the employer Promotional Chances The degree of potential vertical occupational mobility within an organisation Repetitiveness The extent to which job actions are repetitive Social support The extent of social support in job related problems Family Support

Assistance with job-related problems provided by relatives

Supervisor support Assistance with job related problems provided by the immediate supervisor Work group cohesion Assistance with job related problems provided by peers at work



Figure 4: Causal Price Model

The Price model has factors which are structural, individual and

organisational that can affect the turnover in the organisation. These factors effect

positively or negatively to the turnover intentions of an employee in an

organisation.

Reasons for Labour Turnover

A high level of labour turnover (Balram 2005)could be caused by many

factors like : inadequate wage levels leading to employees moving to competitors,

Social Support +

Professional Growth +

Pay +

Opportunity +/-

General Training -

Kinship Responsibility -/+

Met Expectation +

Job Stress , Routinization

Job hazards -

Job Motivation +

Positive/ Negative Affinity +/-

Autonomy +

Distributive Justice +

Job Satisfaction ‐

Organizational Commitment -

Search Behaviour -

Intent to Stay

Promotional Chance +



poor morale and low level of motivation within workforce, recruiting and seeking

the wrong employees in the first place, buoyant local labour market offering more

attractive opportunities to employees and poor human resource development

practices or lack of such practices which are good enough to hold the employees

to the organisation for a long time.

Depending on the reasons why an employee leaves an organisation, labor

turnover (J. William, et al. 2005) can be categorized into two categories viz.,

voluntary and involuntary. In the voluntary turnover, the employee leaves the

organisation of his own will. In involuntary turnover other causes, which are not

under the control of the employee takes place, which is initiated by the

organisation itself. Even if organisations win in the hiring battles (Max 2001),

retention of the employees is the most concern and to keep the employees

organisations need to demonstrate that they truly value their employees and for

this competitive salary, benefits, recognition programmes, strong communication,

training, flexible working, telecommuting and job sharing are required. Warning

signs or early indicators of disengagement typically include personal indicators

like (Jeff 2010):

• Marriage

• Birth of children

• Health difficulties

• Death of family member or spouse

• Caring for elderly parents

• The move to a dual-career household

As per the survey results, the following are the list of possible reasons why

employees leave organisations (Dave 2008):

• Difficulty balancing work/life issues

• Low job satisfaction



• Ineffective management

• Conflict with supervisors or co-workers

• Quit to take the job that will help advance career

• Non competitive compensation/benefits package

• Perceptions of unfair treatment

• Internal pay inequity

• Worried about job security

• Conflicts with organisation’s mission or values

• Childcare issues/ elder care issues

• Return to education

• Relocation to follow spouse/partner

• Health related issues

Some of the major reasons for high turnover in the hospitality industry are

(Mary 2001):

(1) Work is physical, long hours of work, and working conditions are not

always best

(2) Have to work in weekends and lack of holidays

(3) Not pretty pay scales

The major causes (T. Stephen 2002) of employee turnover in the hotel

industry fall into four categories: ‘pull-type’ causes, ’push type’ causes,

unavoidable causes, and situations in which the departure is initiated by the

organisation rather than the employees.

Pull factors (T. Stephen 2002) : Pull-type resignation takes place when

the main reason is the attraction towards the alternative employment even though

the employee is happy with the current employment. The major pull factors are:



higher rate of pay, more valued benefits package, more job security, better long

term career opportunities, a less pressurized environment of work (Philip, Michael

P. and Cary L. 2010), opportunity to work overseas, shorter distance to travel,

more convenient hours of work, desire to work with a colleague, desire to work

with particular management team, desire to work with a branded employer,

fashioning of CV etc.

Push Factors (T. Stephen 2002): In push factor resignations the

underlying reason for resignation is the feeling in the employee’s mind that

something is wrong with the existing employer. The individual become unhappy

with the current organisation and job and searches for new job or organisation to

work. The major push factors are: secure a better job, dislike of the prevailing

organisational culture, and straight forward personality clashes with colleague

(Singh and Rawat 2006), perception of unfairness, boredom of monotonous day to

day work, and searching for something different.

Unavoidable factors (T. Stephen 2002) (Jack J. and Lisa 2009): These

factors induce turnover due to reasons which are mainly outside the control of the

organisation. These factors are unconnected to work for any reasons. They can be:

retirement, illness, caring responsibilities for relatives, maternity, childcare

arrangement, relocation for joining the spouse or partner, break for travel, and

prospectus for better education.

Involuntary Factors (T. Stephen 2002): These are departures induced by

the organisation for terminating employee services to the organisation. These

include short-term layoffs, ending of short term contracts, and dismissals for

misbehavior. In this research study these factors are not taken into consideration.

The reasons for labour turnover in this study are basically categorized into

three: pull factors, push factors and unavoidable factors. The involuntary factors

are not considered in the study.



Table 2: Categorization of Reasons for Employee Turnover

PULL FACTORS: PUSH FACTORS:

• Opportunity for better promotion

• Opportunity for better pay

• Opportunity to satisfy more personal needs

• Opportunity for safer working conditions

• Opportunity for less job stress

• Opportunity for more flexible working conditions

• Opportunity for more shared responsibility

• Opportunity for more personal accountability

• Opportunity for creativity

• Opportunity for innovation

• Opportunity for more work life balance

• Opportunity for more team work

• Opportunity for more non financial rewards

• Opportunity for more communication

• Opportunity for better telecommunication facilities

• Opportunity by aggressive recruitment by other organisations

• Availability of employment opportunities

• Better Compensation

• More scope for development

• Better career advancement

• Opportunity for more training

• Better recruitment policy

• More incentives

• More career opportunities

• Moving abroad

• More financial aid or support

• Opportunity for better appreciation of work

• Opportunity for better recognition of work

• Opportunity for more independence at workplace

• Opportunity to escape from current people

• Opportunity for better working conditions

• Opportunity for better relationship with supervisor

• Opportunity for better relationship with management

• Opportunity for better relationship with co-workers

• Opportunity for better relationship with customers

• Opportunity for less boredom at work

• Opportunity for less monotonous work

• Opportunity for better job satisfaction

• Less dislike of work

• Opportunity for more flexible working hours

• Opportunity for better working hours

• More employment security

• More welfare measures

• More fairness at work place

• More motivation

• Better appropriate process

• Appropriate tools and equipments

• More support from managers

• More support from management

UNAVOIDABLE FACTORS:

• Prospectus for better Education

• Opportunity to stay with spouse or family

• Illness

• Death of close family members

• Disablement at work

• Opportunity for more holidays



Apart from this there are many factors that influence labour turnover in the

hotel industry and these include (Michael and Steven 2005):

• The nature of the industry itself-e.g. seasonal, limited career

opportunities, fragmented and large number of smaller units

• The nature of the individual units- location, size, staff/work ratios

• The nature of the individual managers- lack of formal management

training, acceptance of high labour turnover

• The high proportion of the workers from the secondary labour market

Role of HRD Practices to Reduce Labour Turnover

The major HRD outcomes (Krishnaveni 2008) include decreased employee

turnover and absenteeism and researchers feel that employee retention is the one

of the primary benefits derived out of the HRD efforts. The solution for the human

resource problems (Natwar, HVS website,articles: Indian hotel industry ...new

paradigms and shifts 2005) like attrition lies in the industry taking some important

steps, both in terms of building a productive and positive work culture, where

employees are actively encouraged to perform to their best capabilities, as well as

making the necessary changes in compensation practices. Hotel owners need to

share as much information as possible with management. Managers and team

leaders, on their part, need to spend time with their team members, to discuss

objectives, provide feedback, ask team members about their difficulties as well as

to talk about what’s happening in the hotel.

In human resource context (Soul 2012) , turnover or staff turnover or

labour turnover is the rate at which an employer gains and looses employees.

Lucrative pay packages and better career growth prospects offered by the retail

industry is drawing people from hotels in chunks to this sunrise industry (Raja and

Vishakha 2006). The hotel boom (Raja and Vishakha 2006) is also touching new

heights with Indian and global hospitality players are on an expansion spree and

the attrition rate of hospitality industry at present is around 30%. According to

Ashok Tiwari (T. Ashok 2005), human resource manager, The Kenilworth,

Kolkata "The main reason for high attrition levels is obviously the salary. Fresher



from hotel management schools are paid about Rs 5000 in the first year, Rs 6000

in the second year, after which they are taken on rolls. But the difference is huge,

when compared to the package given by other industries. The only way we can

tackle the problem is by providing them a better working environment, give them

responsibilities and opportunities and also by making them feel important.

Monetary aspects do define, but such personal issues also play an important role

in deciding comfort levels. We also compare the package provided by other hotels

and try to match them." According to Vivek Mudaliar, (Vyas,

Talkingpoint:Expresshospitality.com 2005) human resource manager, Taj Exotica

Goa "To counter the rising attrition levels, the only feasible option is the raise the

bar on salaries so they refrain from even thinking of going to some other

company. We are also applying a career progression option wherein an employee

can also go to other hotels in various destinations in the country and abroad,

within the group. With the group on a major expansion drive, we can provide

several options to our employees within the group. If an employee has been with a

hotel for some time, and is able to handle higher responsibility, we can work out a

way so that he gets a movement to a higher designation in a different hotel under

the Taj umbrella."

Raja Gopal Iyer , Corporate director of Uday Samudra Leisure Beach

resort, Kovalam (Vyas, Talkingpoint:Expresshospitality.com 2005) says that "The

management should understand that when compared to other industries, the hotel

industry is a 24/7 job where an employee ends up sacrificing a lot of personal time

and pleasure due to odd working hours, which is inevitable. However it is also

important for the management to come out with an innovative human resource

practice to compensate the staff for the same. There can be different types of

compensations - be it in cash, by means of comp-offs, compensation by means of

other incentives like gifts, sponsored holiday etc.

Team building exercise, excellent work atmosphere, clearly defined career

advancement plan for each employee, transparent management style are some

essentials to maintain employee loyalty towards the company. Management

should differentiate between outstanding performance and plain performance and

pay better package to the outstanding performer ignoring company scheduled



salary structure. There should be awareness created. There should be some

commitment towards the opportunity given to them."

Empirical studies demonstrate that organisations using effective

recruitment and selection practices gain competitive advantage in the market place

by reducing employee turnover and increase in productivity (Victor, et al. 2005).

Standard recruitment process and practices are HRD process that helps to reduce

employee turnover. In order to reduce turnover (Manash 2009) management has

to conduct and practice proper human resource development programmes and

practices. The HRD practice will help organisations to reduce labour turnover.

HRD practices (Cathy and Judy 2010) typically help in forming satisfied

employees and this helps to reduce employee turnover.

1.1. introduction and statement of the problem 1.pdfwhy employees are departing, the number of...

Documents