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FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT A Seminar Paper Submitted by Rajkumar Adhikari Roll No.: 19 MBA Second Semester Kantipur International College Submitted to Faculty of Management Purbanchal University Biratnagar, Nepal In partial fulfillment of the requirements for The degree of Master of Business Administration (MBA). Feb, 2015 Kathmandu

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Page 1: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN

HOSPITALITY INDUSTRY:

THE CASE OF LUMBINI TANDOORI RESTAURANT

A Seminar Paper

Submitted by

Rajkumar Adhikari

Roll No.: 19

MBA Second Semester

Kantipur International College

Submitted to

Faculty of Management

Purbanchal University

Biratnagar, Nepal

In partial fulfillment of the requirements for

The degree of Master of Business Administration (MBA).

Feb, 2015

Kathmandu

Page 2: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

DECLARATION

I, Rajkumar Adhikari declare that the contents of this Seminar paper represent my own

unaided work, and that the Seminar paper has not previously been submitted for academic

examination towards any qualification. Furthermore, it represents my own opinions and not

necessarily those of the Purbanchal University.

Signed __________________ Date _________________

Page 3: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

VIVA -VOCE SHEET

We have conducted the VIVA VOCE Examination of the seminar paper.

Submitted by:

Rajkumar Adhikari

Entitled

Factors Affecting Employee's Motivation in Hospitality Industry:

The Case of Lumbini Tandoori Restaurant

And found that the seminar paper to be original work of the student and

prepared according to the prescribed format. We recommend the seminar paper

to be accepted as partial fulfillment of the requirement for the Master of

Business Administration (MBA), faculty of management, Purbanchal

University, Nepal

VIVA VOCE COMMITTEE

Institutional Head Chairperson

Concerned Seminar Faculty Internal Expert

Appointee of the Dean External Expert

Page 4: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

ACKNOWLEDGEMENT

I express my gratitude to Purbanchal University for providing me the opportunity to conduct

a study on hospitality management .This study has been carried as a study based report for

the seminar series, Master of Business Administration (MBA), according to the course

offered by Purbanchal University. This study has been made with a view to analyze the

Factors Affecting Employee's Motivation in Hospitality Industry.

Doing this study, it made me able to understand and know different types of activities related

to Factors Affecting Employee's Motivation in Hospitality Industry. Firstly, I owe my deep

gratitude to our Academic Director, Mr. Narendra Kumar Shrestha for providing me valuable

guidelines, supervision and rightful comments, without which this report wouldn’t have

materialized in this form. I am also appreciative to the staffs of the Lumbini Tandoori

Restaurant for their valuable help in providing the necessary materials and information

required.

I would like to express my sincere thanks to our Facilitator Prof. Dr. Shyam Katwal for

providing me valuable information, guidelines and rightful comments in order to complete

this study. I would like to express my extreme gratitude towards my brother Vijay Adhikari,

Sister Kamala Adhikari for providing me constant support.

Any error in this report is my own responsibility and sincere suggestion of this paper is

highly appreciated.

Feb 9, 2015

Rajkumar Adhikari

Page 5: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

ABSTRACT

Today it is clear that businesses give importance to factors that increase employee’s

motivation. As the hospitality industry is mainly focus on hospitality and the hospitality

providers are employee of that organization, thus it is the major task for managers &

owners to motivate employee for the growth of their business. The purpose of this research

is to examine the factor which motivates employees in a hospitality industry. Also it’s

another aim is to measure whether employees, according to their demographic

characteristics, show differences in evaluating factors that affect motivation. The combined

approached (mix of qualitative and quantitative techniques) method is used for the purpose

of this project. Primary data of this research is obtained by using questionnaire technique

and secondary data from books, articles and from website. In this research, we argue that

motivating your employees is as critical for excellent hospitality as is training them.

Keywords: Motivation, hospitality industry, restaurant, employees.

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INTRODUCTION

Motivation

Today, to remain standing in competitive world, hospitality businesses need both to increase

their employee’s motivation and to be in effort of continuous development of their

businesses facilities provided for their customers (Aksu, 2000). Every employee has unique

needs and wants that must be addressed by the employer and the employer too has goals to

be achieved at the end of the day by the employee. Motivation is very important in any

organization inclusive the hospitality Industry. Motivation creates employees’ job

satisfaction and good interaction between employees customers that eventually attract a

repeat business (Condly & De Pietro, 2001). There are organizations that make serious

efforts and devise effective strategies to keep their employees motivated. Managers should

make paramount efforts to derive employees to perform at their best. By making the

provision of motivational factors managers and supervisors can make employees satisfied

which in turn increase the efficiency of employees. The core purpose of this research is to

explore the motivational factors for employees. For this purpose, hospitality industry is

chosen. Employee turnover in the Hospitality Industry costs restaurants and hotels billions

of rupee each year, with worker turnover rates as high as 95% for some properties (Samuels,

2013). In the United States of America it was observed that employees’ turnover cost the

industry a loss of 150 billion dollars per year. Research showed that if level of motivation is

improved, the turnover rate reduces by 53% (Barrows & Bosselman, 1999). A study of

motivation and performance among fast food employees by Candy and De Pietro (2001)

found out that turnover is less when employees feel good about their jobs; are supported by

their organizations and have value for their work. Those who feel that work conditions are

below standard and do not play fair are less motivated. The purpose of the study is to

identify factors affecting motivation of employees working at Lumbini Tandoori Restaurant

and assess the level of their motivation. The study has been carried out on the employees

working in the line position (operation level) who are directly involved in day-to-day food

making and selling operations at Lumbini Tandoori Restaurant. Employees involved in staff

management (strategic and tactical level) have not been included in the study.

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Theories of Motivation

1. Maslow’s Hierarchy of Needs

Abraham Maslow’s theory proposed that human beings had different levels of needs in a

particular order. He identified five levels of needs in order of hierarchy. The most basic

needs are the biological and physiological needs. At the top is the need for self-actualization

which Maslow defines as growth motivation and calls it the ‘Being Need’. Maslow identifies

the four different types of needs below the level of self-actualization as ‘Deficit Needs’. He

explained that if one had any of these four levels of unmet needs, one would feel the

deficiency but if the need was met, one would almost be unaware of it.

Diagram: Maslow’s Hierarchy of Needs

According to Maslow, peoples’ needs are insatiable and there can be unending demands.

Once needs in one level are met, people will demonstrate their desire for the next level of

needs. Maslow’s theory helps to understand different types of needs of people.

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2. Theory X and Theory Y

The Theory Y assumptions (Douglas McGregor, 1960) about people and their work created

Space for bringing in an environment where they can feel motivated to perform at their best

Employee motivation often depends on the style of the managers. The managers with theory

X assumptions are characterized by certain traits, e.g. authoritarian style and tight control.

They do not appear to promote development, and create a restraining culture. Employees

hardly get any motivation under such leadership. The managers with theory Y assumptions

practice a different style which is liberating, empowering and developmental. They believe

in achieving accountability among the employees by enabling them and giving them

responsibility. Employees feel more motivated while working with such managers.

Table: Theory X and Theory Y

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Why Motivate Employees?

A successful organization can generally trace its success to motivated employees. A look at

the synonyms for the word ‘motivated’ such as induce, move, provoke, prompt, and cause,

shows that without motivation at some level, nothing really gets started. However, motivating

people can be difficult; there are no magic formulas or programs to motivate individuals.

Motivation is also personal. While one employee may appreciate time off, the next may enjoy

new challenges. The basic rule is to discover what your employees want and create a way to

give it to them or encourage them to earn it. Following this principle should motivate your

employees and allow them to become engaged in the success of the campus and your

department

In order to gain an understanding and assess employees’ motivation, this study emphasizes

to explore results of a number of questions:

1. What are the reasons employees choose to work in Lumbini Tandoori Restaurant?

2. What are the most important factors that affect the willingness of the Lumbini

Tandoori Restaurant's employees to exert more effort in the job? And finally

3. To what extent the Lumbini Tandoori Restaurant's employees are motivated to

achieve the company's objective?

Justification of the study

This study examined the concept of employee motivation as a mean for delivering superior

service quality in the hospitality industry as well as other similar industries. This paper

provides a framework for managers to use to enhance their understanding of employee

motivation and its sources. A successful quest for service quality can be the difference

between success and failure for many service organizations. In today’s competitive

environment, customers are always looking for better service, more knowledgeable support,

faster response time, and lower prices. Service organization that allow their employee

productivity standards to deteriorate by not encouraging improvement in the volume and

quality of output, will see their customer base dissolve.

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LITERATURE SURVEY

According to some previous researches, it is seen that factors that affect the employees of

hotel industry in a negative way are, insufficient wage and job security, limited training

program, new opportunities’ not developing, business managers being deprived of manager

qualifications and high job transfer speed (Cheng & Brown, 1998; Wong et al., 1999; Zhang

& Wu, 2004). In addition to these factors it is known that employees have problems with

their working hours and social conditions (Karatepe & Uludağ, 2007). That’s why in hotel

businesses there are different researches made by researchers to determine what are the

factors that motivate the employees in a positive way and as a result of these researches too

many factors have been found (Mak & Sockel, 2001; Velo & Mitta, 2006). For example, in

the middle of 1990s Smith, Kendal and Hulin found a scale named ‘’Job Descriptive Index’’

in their researches and developed in later years. Hackmen and Oldham (1996) developed

‘’Job Characteristics Approach ‘that explain the reasons of factors that have effects on

employees job satisfaction. This approach includes dimensions of skill variety, task unity,

task importance, autonomy and feedback. These features are important in motivating

employees and providing employees job satisfaction. Taking this broad definition to the

context of supervision in the hospitality operation, motivation is what the supervisor does to

encourage and influence other people to take necessary action. Infract motivation is an

internally generated force or drive within the individual which provides an incentive for the

employee to act.

Page 11: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

METHODOLOGY

The study was carried out based on both primary and secondary data. Primary data was

collected from three different Lumbini Tandoori Restaurant located at Thapathali,

Kupandole, Bagbazaar station in Kathmandu during period of 7th

Feb 2015 to 11th Feb

2015. A structured questionnaire, mostly closed styled, was provided to 35 employees of

three restaurants to collect primary data. Out of them, only 29 sample respondents (82.86%)

out of them participated by filling the questionnaire and sending it back to me. However, 24

out of 29 (69% of 35 sample respondents) sample respondents participated actively in

survey activities by answering to all questions dully and rest of them answered partly and

was excluded their responses from the study. There are two type of the questionnaire; part

one consisted of demographic information of the sample respondents. The second part

comprised four questions in comprised four questions in relation to employee’s motivation.

Secondary data, on other hand, was used as well to describe different motivation theories

and factors. They were collected from different books, journal articles, website, published

dissertation papers of graduates etc. A combined approached (mix of qualitative and

quantitative techniques) was used to achieve the objective of the study. The qualitative

approach was used to explore sample respondent’s interpretations of event and the

quantitative approach to quantify their attitudes, beliefs, feelings, behaviors that seemed

immeasurable in qualitative techniques. 4-point Likert scale was used in all questions of the

questionnaire ranging from 1 to 4-point, where point-1 represents negative responses (such

as not important/ not motivated/ not de-motivated) of the sample respondents. On the other

hand, point-2, 3 and 4 represents gradual ranking of positive answers (such as least,

moderate and highly important/motivated/de-motivated respectively) of the sample

respondents. Primary data collected from field survey was tabulated using Microsoft office

Excel, and all data was recorded using numerical codes. Various statistical measures such as

frequency distribution were used in describing the variables. This section has been divided

into five phases. In the first phase, demographic information of the sample respondents and

reason to choose work at Lumbini Tandoori Restaurant has been described in second phase.

Factors affecting the motivation and de­motivation of the respondents have been discussed

in the third phase. In the final phase, the level of motivation of employees has been assessed

based on the data collected from the field survey

Page 12: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

FINDINGS AND EVALUATIONS

Demographic Information of the Sample Respondents

The culture of Nepal is a diversified and multi-cultural. The evidence of the multicultural is

observed in the job market where different people belonging to unlike cultured get

assembled that develops an exceptional multifarious working environment. According to

Thomas and Pekerti (2003) there is a moderate impact of national culture on the relationship

between job satisfaction and employees' exchange behaviors. The study shows, the male is

dominant (75%) over female. The field survey study shows that a large portion (41.67%) of

the employee's age lies between 21 to 30 years. An insignificant percent of lower or higher

aged employee is seen to work at Lumbini Tandoori Restaurant. The study found that 25%

of the employees are part time. In the case of work experience of employment, the

study shows that period of employment of the sample respondents is between 0 year to

maximum 20 years. The table illustrates that a substantial portion (50%) of employees has

been working between 0 to 5 years. There are three work stations in Lumbini Tandoori

Restaurant, such as kitchen (for cooking foods), middle (for packing foods),and front where

cashier receives order from and deliver to customers. There is a management team in each

shop that supervises, directs and guides the task of other sections and maintains liaison

with corporate head office. The number of workers deployed in each section depends on

the span of task related to each section. This study shows that (12.5%) of the respondents

work in the front section as a cashier followed by the middle section (50%) and (37.5%)

works in the kitchen.

Page 13: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

CONCLUSION

The study attempted to identify key factors and indicator that affect the employee's

motivation working at Lumbini Tandoori Restaurant and assess their motivation level.

Results suggest that there are eleven reasons choose to work at Lumbini Tandoori

Restaurant; however, financial benefits such as salary and other fringe benefits do not

receive as much of priority as nonfinancial benefits. On the other hand, the study identified

six broad categories of motivation factors such as (1) work itself and environment, (2)

supervisor relations, (3) company itself and matters, (4) recognition, (5) development and

growth and finally (6) pay and benefits. The research reveals that nonfinancial factors have a

significantly higher impact on the employee's motivation than the financial factors such as

pay and benefits which substantiate the result in relation to reasons choose to work at

Lumbini Tandoori Restaurant. This indicates that Lumbini Tandoori Restaurant needs to

focus on nonfinancial factors along with financial factors to ensure that its workforce is

effectively engaged and consequently motivated. Employees at Lumbini Tandoori

Restaurant are more motivated by factors relating to the work itself and the environment.

This means that Lumbini Tandoori Restaurant needs to create a good working environment

and employees receive recognition and feel valued. As the need for development and growth

is also identified as a motivating factor, Lumbini Tandoori Restaurant should provide

adequate training and development to ensure employees are motivated. The study also

indicates that there are identical sources of motivation and de-motivation which contrast

with the result of Herzberg two factor theory where motivation and de-motivation sources as

being different and independent. However, the extent of motivation provided by a factor is

not the same extent of de-motivation for that factor i.e. the same factors have an effect on

motivation and de-motivation of employees in different extent and manner. For example,

lower scale of salary results in high level of de-motivation but good wages of salary causes

motivation employees not as much as de-motivate them.

Page 14: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

REFERENCES

International Journal of Contemporary Hospitality Management, 20 (2):228-234. Chan, S.W

E., & Wong, S. C.K. (2006).

Motivations for ISO14001 in the hotel industry. Tourism Management, 27 (3): 481-492.

Cheng, A., & Brown, A. (1998).

HRM strategies and labor turnover in the hotel industry: a comparative study of Australia

and Singapore. International journal of human resource management, 9 (1):136-154. Chiang,

C.F., & Jang, S.C. (2008).

An expectancy theory model for hotel employee motivation. International Journal of

Hospitality Management, 27: 313-322. 1. Alderfer, Clayton P., (1969).

An Empirical Test of a New Theory of Human Needs;

Organizational Behaviour and Human Performance,vol.­4, no.­2, retrieved from: http://dx.d

oi.org/10.1016/0030­5073(69)90004­X, (Accessed on: 23/10/2012)2.Bokorney, J. (2007).

Salaries Still Rising, retrieved from:http://www.archive.evaluationenginering.com/archive/ar

ticles/0407/0407salaries.asp, (Accessed on 11/10/2011)3. Brewster, L. Carey, P. Dowling, P.

Grobler, P. Holland and S.Warnich (2003).

Contemporary Issues in Human ResourceManagement: Gaining a Competitive Advantage. 2

nd edition. CapeTown: Oxford University Press.4. Glanz, B. A., (2002).

Handle with CARE: motivating and retainingemployees, New York: McGraw­Hill5. Griffin.

R, (2008),

Management, Boston: Houghton Mifflin Company6. Habib, M.N., Mukhtar, S., Jamal, W. (

2010).

Factors Influencing theTeachers Intentions to Quite in Private Sector Higher Educational

Institutions of Pakistan.

Interdisciplinary Journal of ContemporaryResearch Business,

vol.­1, p.­12.7. Herzberg, Frederick (1959),

The Motivation to Work, New York:John Wiley and Sons

Page 15: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

Appendix A

EMPLOYEE MOTIVATION SURVEY

Instructions: Please Circle the Appropriate Answer.

Demographic questions:

1. Gender:

A. Male B. Female

2. Work Status:

A. Full Time B. Part Time

3. Position:

A. Supervisor/Management B. Maintenance C. Customer Service D. Clerical

4. Age:

A. 18-25 B. 26-40 C. 41-60 D. Over 60

5. Cultural Background:

A. Hindu B. Buddhist C. Christian D. Muslim E. Other

6. Years of Hospitality with Current Facility or Organization:

A. 0-5 B. 6-10 C. 11-20 D. 21-30 E. Over 30

Page 16: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

Appendix: B

Factors affecting Motivation of employee in Hospitality Industry.

1. Employees must be provided social facilities (housing, transportation etc.) at the

highest standards.

A. Very Important

B. Important

C. Indecision

D. Unimportant

E. Certainty Unimportant

2. Employees give importance to moral incentives (appreciation, respect, etc) as well as

physical

A. Very Important

B. Important

C. Indecision

D. Unimportant

E. Certainty Unimportant

3. Amount of payment effects the motivation positively

A. Very Important

B. Important

C. Indecision

D. Unimportant

E. Certainty Unimportant

4. Optimum time of work in businesses affects the motivation

A. Very Important

B. Important

C. Indecision

Page 17: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

D. Unimportant

E. Certainty Unimportant

5. Team work adds more to the motivation.

A. Very Important

B. Important

C. Indecision

D. Unimportant

E. Certainty Unimportant

6. Rewards motivate employees at a higher level

A. Very Important

B. Important

C. Indecision

D. Unimportant

E. Certainty Unimportant

7. Employees like to be given responsibility.

A. Very Important

B. Important

C. Indecision

D. Unimportant

E. Certainty Unimportant

Page 18: FACTORS AFFECTING EMPLOYEE'S MOTIVATION IN                                HOSPITALITY INDUSTRY: THE CASE OF LUMBINI TANDOORI RESTAURANT

Appendix: C

Demographic information Result

Table 1: Demographic Information table of the sample Respondents

Culture Frequency %

Cumulative

percentage Gender

Frequency

number of

respondent % Cumulative %

Hindu 10.00 41.67 41.67 Male 18.00 75.00 75.00

Buddhist 12.00 50.00 91.67 Female 6.00 25.00 100.00

Muslim 1.00 4.17 95.83 Total 24.00 100.00

Christian 1.00 4.17 100.00 Age Group

Other 24.00 4.00 52.00 15-20 6.00 25.00 25.00

Length of Employment in years 21-30 10.00 41.67 66.67

0-5 12.00 50.00 50.00 31-40 3.00 12.50 79.17

5 to 10 3.00 12.50 62.50 41-50 3.00 12.50 91.67

10 to 20 5.00 20.83 83.33 51 to above 2.00 8.33 100.00

Above 20 4.00 16.67 100.00 Total 24.00 100.00

Total 24.00 100.00 Work Place

Working Status Kitchen 9.00 37.50 37.50

Full Time 18.00 75.00 75.00 Middle 12.00 50.00 87.50

Part Time 6.00 25.00 100.00 Cashier 3.00 12.50 100.00

24.00 100.00 Total 24.00 100.00

S.N Statements

Very

important important Indecision Unimportant

Certainty

unimportant

f

%

f

%

f

%

f

%

f

%

1

Employees must be provided social facilities (housing, transportation etc.) at the highest

standards.

20

83.34% 2 8.34%

1

4.17%

1

4.17%

0

0%

2

Employees give importance to moral incentives (appreciation, respect, etc) as well as physical

14 58.34%

6 25%

2 8.34%

1 4.17%

1 4.17%

3 Amount of payment effects the motivation positively

19 79.17%

5 20.84%

0 0%

0 0%

0 0%

4 Optimum time of work in businesses affects the motivation

8 33.34%

10 41.67%

4 16.67%

1 4.17%

1 4.17%

5 Team work adds more to the motivation. 6 25%

8 33.34%

4 16.67%

3 12.5%

3 12.5%

6 Rewards motivate employees at a higher level 15 62.50%

5 20.84%

2 8.34%

2 8.34%

0 0%

7 Employees like to be given responsibility. 8 33.34%

8 33.34%

4 16.67

2 8.34%

2 8.34%