Introduction
“Strategic human resource management (SHRM) aligns an organization’s human resources function to its core business objectives” (Fombrun, Noel and Mary, 1999, p.23). The task of managing employees is not as daunting as it may sound, as long as an organization fully equips itself with the strategies, skills and knowledge to bring out the best of its employees. Despite the fact that proponents of human resource strategies have outlined their benefits to organizations for a long time now, they are not as widespread as may be expected. This has resulted in poor management of human resources, increased costs of hiring and the need to train new employees every too often.
Even if this is the case, organizations can draw motivation from those organizations that have perfected the art of getting the best human talent in the market, getting the best out of them and being able to retain them. A good example of such organizations is Google Inc. who have for a considerable amount of time now, been listed among the best employers. A successful implementation of appropriate human resource management strategies have helped many international organizations manage large number of employees, as well as integrating people with different cultural backgrounds to their business and using them to their advantage. It has also helped them save enormous amounts of money that would otherwise, go to recruiting and training new employees regularly.
As explained by Taylor (2002, p. 13), “strategic HR management involves more than just the administration of human resource programs or activities”. Effective human resource management involves applying these strategies to employees’ management. “Strategic human resource management should help an organization incorporate their plans into the mainstream of organizational strategy and management” (Stewart, 1995, p. 98). It is also supposed to help organizations think strategically as far as human resources are concerned.
Another significant benefit of SHRM is “designing performance incentives plans with the intention to continuously motivate employees and thus improve customer service in a dynamic environment” (Bratton and Gold, 2003, p. 34). Furthermore, SHRM is instrumental for businesses which take employee motivation seriously. SHRM programs give room for training and provision of skills in line with an organization’s activities. Those businesses which have been able to implement SHRM successfully are more likely to report improved business capability. Finally, SHRM aims at motivating, engaging employees, as well as helping organizations retain their talented employees.
Marriott International Inc
Marriott International, Inc was founded by Willard Marriott in 1927 but is now led and managed by Bill Marriott and other partners. The hotel has a worldwide presence and has franchises all over the world. It brand portfolio is mainly centered around hotels and lodgings. “The hotel today has over 3150 lodging properties spread across the United States and 68 other countries” (Marriott International Inc., 2011, p.1). Its longest serving hotel is Key Bridge Marriott in Virginia, which just celebrated 50years since it began its operations. “Its operations are divided into five segments namely timeshare, full service lodging, select-service lodging, extended-stay lodging and synthetic fuel” (Marriott International Inc., 2011, p.1).
The company has a business model which allows them to operate without having to purchase property. Its contract with the property owners allows the company to participate in the properties and have almost total control of every aspect of the construction. This way, it is able to have control over designs and the architectural aspect of the building which is a big emphasize in its hotels. In this arrangement, the property owners are expected to contribute money needed for expanding sales, doing marketing and improving reservation systems.
Even though the company’s profitability is not as high as that of some of its competitors, its stability makes the brand more attractive to property developers. The success of the company is very much dependent on three key strategies. The company has based its business strategy on building strong and healthy relationships with guests, having a selective expansion and effective management of employees.
Like other businesses in the industry, human resource management remains a significant challenge for it. SHRM plays a significant role in ensuring the business maintains a consistent quality of its products and remains profitable. The organization has 250 hotels in the world, and employs more than 146,000 permanent and casual employees in the world (Marriott International Inc., 2011). In 2008, Marriott International was ranked number 72 in the list of 100 best companies to work for (CNN Money, 2008). Its CEO, J.W. Marriott Jr visits all its hotels in the world to meet and interact with employees. The business is also among the most gender diversified employing 55% women and 45% men (CNN money, 2008).
Choice of hotel
The choice of Marriott International was justified by its size and the number of employees. The large number of employees puts it a situation where SHRM is so significant to the success of the business. The hotel is an international company, making it one of the businesses that have to deal with cultural diversity of employees. The hotel’s human resource management department has to deal with challenges that proved very relevant in this study.
Aims of the study
- Identify major reasons why the rate of staff turnover in the hotel industry is high
- To determine the impact of strategic human resource management on staff turnover in the hotel industry, using Marriott International Hotel as a case study
Objectives
- Review secondary literature about SHRM and the role it plays in the hotel industry
- Understand staff turnover trends in Marriott International
- Discuss the role of SHRM in the hotel industry
- Analyze how SHRM affects staff turnover trends
- Maker recommendations on how the hotel can minimize staff turnover rates
- Make recommendations for further research
Justification of the study
A survey conducted by Nobscot Corporation reveals that the accommodation and food services industry has the highest rates of voluntary employee turnover at 55.4%. It is closely followed by the Leisure and hospitality industry at 55.2%. These statistics reveal that the hotel business is suffering a great deal of loss due to a high rate of employees’ turnover. According to Naidu (2011, p. 2), “employee turnover in the hospitality industry is an issue big enough to make employees lose sleep over the tangible and intangible costs of employee turnover”. The graph below illustrates the trends of voluntary employee turnover in various industries. This paper seeks to understand the role of strategic human resource management in the trend. The study will be focused on the hospitality industry using the Marriott International Hotels as a case study. Data. Web.
Literature review
Background
A literature review will be used to understand the background of the problem, possible solutions, trends and solutions already in place in the industry. As part of the papers information collection methods, it will be used to understand what experts, authors and other researchers have to say about human resource management in the business world. The hotel is the fastest growing in the world currently, and its demands for human labor are high.
Several authors and research projects have been put forward as researchers try to understand the industry, how it has developed, its challenges and available opportunities. The literature review will cover HRM trends, effective HRM, the hospitality industry management and organizational behavior, HRM as a critical tool in a business, labor markets in different regions, the role of technology, as well as retention, incentives and challenges.
Staff turnover and retention
“In a human resource context, turnover or staff turnover or labor turnover is the rate at which an employer gains and losses employees” (Employment Policy Foundation, 2004, p. 2). It is used as a measure for an industry as well as individual businesses. A high rate of turnover means that the number of novice workers in a business is big. The cost of a high turnover since it means that its employees have a shorter tenure. Turnover can be classified into internal and external. Internal turnover involves employees leaving their positions for a new position in the same company. It is highly encouraged in business to increase morale and reduce monotony, but is very harmful to a business if it is not controlled. External turnover means employees leave the organization for another organization.
Employee retention is one of the most discussed topics today in business. For any business to be successful, they need to have a retention program which recognizes the importance of mutual respect between employees and employers, rewards employees appropriately, and motivates employees (Bratton and Gold, 2003). Many businesses understand the importance of putting such a program together but since it takes time and financial resources, many organizations would rather just leave it for another day. As a result they suffer huge costs of employing and training new employees who leave almost immediately and the cycle continues. Employee retention and increased performance of employees has a huge payoff which is often underestimated by many organizations. It increases productivity, improves employees’ morale, increases turnover as a result of reduced costs of recruitment and training, and trains a business to effectively address employee-related problems.
“In any organization, the human resource management retention strategy is expected to be able to maximize return on investment in the organization’s human capital” (Mehta, 2005, p.3). It is also supposed to ensure that the company has reduced financial risks by reducing the cost of new recruitment which can only be achieved by keeping their employees for long. As Sanders (2002) points out, many businesses today are facing major challenges in trying to retain their best employees. With all the money spend on training and upgrading activities, Sanders reinstates that it is imperative for businesses to constantly motivate their work force and keep the work environment as exciting as possible to retain them.
To retain employees, variable incentives are proving hard and costly to apply and therefore businesses need a strategy that will last (Mullins, 2001). In most hotels, there is obviously a problem with retention. The fact that the industry has competitive salary rates but employees still leave is a clear proof that employees need more than financial rewards and satisfaction to stay. As Farhad (2007, p.76) explains, “in any human resource management situation, solutions can be implemented to improve the situation”. Solutions put in place must put into consideration the reasons why employees would consider leaving. This further emphasizes the need to allow constant feedback from employees to allow them air their dissatisfaction before making a decision to leave.
Reasons for staff turnover
Undesirable working conditions
Work environment plays a significant role in job satisfaction. Work environment addresses various issues such availability of tools for employees to do their work, comfort, healthy relationships between employees, and problem solving techniques, among others. Employees’ level of effort includes the ease of completing their tasks. These include office design, availability and accessibility of bathrooms, and ease of accessing medical help when need arises among others. Companies that have been named as the best employees in the past such as Google Inc. are known for allowing employees to personalize their office settings, as long as they stay within the professional standards. Such settings allow employees to feel relaxed. Hygiene and medical care can also be used to measure the working conditions of a business.
Wrong assignment of tasks
Assignment of tasks and duties should be done in comparison to what the employee’s job description reads. When the work being performed by an employee is not appropriate to his/her position, employees may feel cheated or exploited. There is need for a business to constantly counter check an employee’s duties with those described in the employment contract (Czenter, 2002). Those who are doing more should be compensated, while those who are doing less should have their tasks changed to fit what they signed for.
Reward and compensation
Lack of reward and compensation is a leading cause of high employee turnover in a business. Today labor markets are constantly changing and so are employees’ expectations. If employees don’t feel adequately rewarded and compensated, there are constantly looking for better opportunities elsewhere. Reward management has become significant part of SHRM. Besides competitive salaries, employees now pay attention and value other forms of compensation and rewards, which could be monetary or non-monetary. They could come in the form of promotions, gifts, holiday packages, education fund for their children, sponsorship for further studies, free gym facilities and free meals, among others.
Role of job satisfaction and its influence on staff turnover
Job satisfaction in a business measures how content and happy employees are with their jobs (Philips & Adele, 2003). Job satisfaction and motivation are two different factors but they are directly linked. Job satisfaction can be measured through collection of data and holding forums with employees to discuss their level of satisfaction as well as air their complaints. Many at times, retention is considered a responsibility of the human resource department when the truth is employee retention is everyone’s responsibility and is totally dependent on satisfaction (McNamara, 2009). This means that the management must take time to understand their employees’ satisfaction levels by ensuring that everyone is heard.
Employees value opportunities which are a core value of satisfaction. The management should hold meetings with employees to routinely discuss their career paths and provide developing opportunities for those whose interests and skills allow. Marriott International Inc. should start working with employees and help them identify as well as achieve reasonable career objectives.
Another core element of satisfaction is recognition which involves praising employees even for the small steps. This includes group and individual recognition. It is not just enough for the housekeeping director to employ more housekeepers, it is his responsibility to go a step further, listen to their complaints and compliment them when they have done a good job. This gives employees a feeling of mutual recognition. A favorable working environment should be present if a business intends to raise their employees’ motivation.
Role of motivation in staff turnover
Motivation calls for use of incentives to achieve a higher output and keep employees interested in the company. The biggest factor to consider in motivation is mentorship. According to (John, 1999, p. 43), the argument behind motivation theory is that “a motivated work force will generate much more than a demotivated workforce”. Motivated employees are more likely to have a higher output and look for ways to improve their relationship with the company. Different incentives are used to motivate employees. Financial incentives are common among different businesses.
For a business to improve retention, motivation is deemed paramount. According to (Hoffmann, 2006) motivated staff will tend to be more pro-active and have a bigger sense of seeing things happen. They will give their best to their employer which enables a business grow and maintain high profitability and as a result, better performances. Motivated employees are also bound to be more open about their problems and concerns, and will air them out instead of looking for better opportunities in the labor markets.
There are a number of different views and theories explaining the relationship between motivation and employee retention.These theories do not all reach the same conclusions but offer an understanding of the different factors which motivate employees and keep them happy in the company.
Elton Mayo theory of motivation
One of the theories explaining employee motivation is that of Eltom Mayo. Mayo put forward the argument that workers need to feel needed in a business. “He argued that workers could be more motivated if their social needs were met” (Wahi, 2000, p.22). This theory brought in the concept of human relations and their importance in the work place. Mayo argues that managers ought to take a bigger interest in workers, treat them as humans and treat their opinions as worthwhile.
Just like in every other set up, Mayo argued that the work place needs interaction and workers enjoy it whether it is amongst themselves or among them and the management. To establish his argument, Mayo conducted an experiment which involved isolating two groups of women and monitoring their level of productivity by changing different factors. “He discovered that as long as they were allowed the same level of interaction, their level of productivity remained the same” (Zhao and Wong, 2009, p.112). The experiment further measured how interaction influences an employee’s decision to leave the company. He concluded that employees were best motivated by better communication, greater manager involvement and group or team work. Such employees further feel like part of a family and are more likely to stay for longer.
Maslow theory
The second theory of motivation is that of Maslow Abraham who along with Herzberg focused on the psychological needs of employees (Wahi, 2000). This theory put forward five levels of needs which have to be fulfilled at work to ensure satisfied and comfortable employees. “These needs are physiological needs, safety needs, social needs, self esteem needs and self actualization in that order of importance” (Cesyniene, 2008, p.58). An employer should therefore have different incentives and package them in such a way that they fulfill each of the needs. The incentives should also be custom made for different groups of people since different employees have different needs. Motivation strategies should further ensure excitement at the workplace to avoid boredom, routine and other reasons that leave employees looking for new jobs.
Employee management in Marriott International Inc.
Introduction
“Human resources management is the function in an organization charged with the responsibility of implementing policies and strategies related to management of individuals who comprise the work force of an organization” (Farhad, 2007, p. 112). In any organization, “the human resource management strategy is expected to maximize returns on investment in the organization’s human capital, and at the same time do so in a way that creates minimal financial risks” (Federal Human Resources Community, 1999, p.84). For a business efforts regarding HRM to pay returns, “the human resource department must align the supply of skilled and qualified individuals and capabilities of the workforce with the organization’s business plans to maximize returns and secure future success” (McNamara, 2009, p. p.3). Human resource functions have to be performed and implemented effectively and pragmatically.
In an attempt to understand the human resource concept, I conducted a research on the Marriott International Inc. The hotel’s human resource department is driven by integrity, accountability and commitment towards the employees’ welfare and commitment to the organizations success and growth. “It provides a stable work environment and equal opportunities for learning and growth for all its employees” (Marriott International Inc., 201, p.1). To improve effectiveness of the hotel, innovation and creativity are highly encouraged. The management also points out that, “employees provide the same concern, respect and attitude within the organization that they are expected to share externally with each of the Marriott’s customers” (Marriott International Inc., 2011, p.1).
Human resource structure
Like in many other organizations, Marriott International’s human resource department has a structure that fits the imperatives defined by the need for cost cutting and providing operational excellence at the same time. According to the Marriott International Inc., (2011) their structure is designed in such a way to help further develop of the potential of human capital inside the organization. The human resource management team at Marriott International focuses on enabling the power of the team’s co-operation, optimal processes and communication flow inside the team. Putting such requirements into consideration, the resulting human resource organizational structure is divided into different segments that allow easy management of information regarding human resources.
Structure of human resource offices
When discussing human resource management, the structure of the offices is many times left out. Employees’ ability to access information and reach the human resource managers is an equally important factor. In many organizations, the front office is responsible for being a single point of contact for the rest of the organization. According to Lundy and Alan (1996, p. 22), “this concept can be hard to implement as the employees in the front office have to be able to find their position in the department and be recognized as a helpful source of information by the managers”. It is also important to realize the importance of the back office as “it is responsible for ensuring full compliance of the HRM activities with the legal environment” (Schuler and Susan, 2008, p.77). On the centers of excellence, Armstrong (2000, p.44) points out that “A center of excellence keeps products, processes, policies and initiatives updated, developed and fully competitive with the external world”. Such an organizational structure allows the human resource department employees and the rest of the organization to smooth out co-operation among its employees and allows a clearer definition of roles and responsibilities among team members.
Hiring processes, job designs and diversity
Employees recruitment forms a very big part of Marriott International Inc. “In any organization, recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all the levels” (McNamara, 2009, p. 3). For the business to achieve an effective recruitment process, its human resource management strategies have to take into consideration the benefits and challenges of sourcing employees from within or outside the company.
Success comes when there is well-defined organizational structures, sound job designs, robust task and person specification, versatile selection processes, employment relations and human resource policies and rewards, all these bound together by a commitment for strong employer branding, employee engagement and on-board strategies (Gratton,1999, p.34).
In Marriott International Inc., internal recruitment is always given priority as it provides the most cost-effective source for recruits and gives employees a chance to diversify and grow (Marriott International Inc., 2011). Further growth is made possible by continuous training, development and other performance-enhancing activities to ensure constant potential of the existing pool of employees. Performance enhancing activities include activities such as performance appraisal, succession planning and development centers. “Such activities help review performance and assess employee development needs and promotional potential” (Glanz, 2002, p.55).
Retention, incentives and compensation
Even though Marriott International is a great employer, the management points out that they too are facing major challenges in trying to retain their best employees. The human resource market has become increasingly competitive. With all the money spend on training and upgrading activities, the management reinstates that it is imperative for them to constantly motivate their employees and keep the environment as exciting as possible to retain most of them. The organization tries to reduce costs and one way of doing that is ensuring that salaries do not increase dramatically and immediately. Incentive plans have therefore been laid down to retain high-performers and encourage achievement.
The company gives targets to each employee to allow a bigger opportunity for earning at performance incentives. The negative indicator category is aimed at keeping employees alert and on the right side of scores on both rules and performance. It includes, disciplinary incidents, unfinished assignments, lateness and other bad habits that employees should not engage in. “In recent times of a sluggish economy, compensation systems have gotten a new focus by only rewarding star performers more that the rest of the pack” (Phillips and Lisa, 2005, p.113). Incentive pay programs have become a popular human resource practice in many organizations. “Despite their popularity, very little research has been done to examine the dynamics and dilemmas associated with implementing these programs” (Office of Merit Systems Oversight and Effectiveness, 2000, p. 54). Benefits and compensations are taken very seriously in Marriott International Hotel and there is constant evaluation of benefit packages triggered by several key factors.
Legal issues and labor relations
“Understanding legal decisions and legislation is fundamental in any sound management of the human resources especially with the increasingly litigious society” (Griffeth and Peter, 200, p. 34). During the research, it was clear that the hotel takes and constantly updates itself on regulations and policies that govern human resource management. This includes a constant watch-out for any new regulations or changes in existing ones from the National Labor Relations Board and the U.S Department of Labor, as well as other regulating bodies in the different countries the business operates in.
Challenges
The roles of the human resource management are evolving with the changing, competitive and aggressive market environments. The department of human resource management is now playing a more strategic role in the success of any organization (McNamara, 2009). With the increasing competition, locally and globally, organizations have to become more adaptable, agile, resilient, and customer-focused to achieve success in such financial environments. Major challenges facing the hotel’s HRM department includes managing different employees’ cultural background, erosion of skill and managing a large number of employees in all its hotels. “The organization aims to use the diverse cultural backgrounds, religion, age, gender and lifestyles to respond to global opportunities more rapidly and creatively” (Marriott International Inc., 2011, p. 3).
Methodology
The research methodology applied in this paper included study of books, academic journals, online articles, past projects by different authors, government statistics and non-governmental organizations on the hotel industry. It also included a study of various works on human resource crisis management in the hotel industry, using Marriott International Inc. as a case study. Study of books and different articles reveals that the hotel industry is among those suffering the highest level of staff-turn over. To prevent such challenges, many hotels and other service industries have realized that the most important factors in human resource management today are employee loyalty and retention. As a result, a lot of attention is being focused on employee satisfaction.
It is also clear that many hotels are spending a lot of money to ensure satisfaction, safety and motivation of their employees. Communication has proved crucial in many organizations in an effort to have employees air out their dissatisfaction before making a decision to leave. Such information was collected from various reports by governmental and non-governmental organizations. These reports served very effective and relevant in trying to understand this paper’s concept. Recent and past books and research papers by different authors were also helpful in understanding human resource management. Views from fellow students were also collected to get their thoughts on the subject and how it affects them.
Data analysis, discussions and arguments were based from the findings of this study. The arguments review and classify findings from different statistics and the situation in the hotel industry, using Marriott International as a case study. Data analysis has also been used to present statistics and information collected from the outlined sources to get a professional understanding of the problem. The findings in this study have been used to structure an argument and conclusion that can be used as basis for further study in future. The methodology was designed to help review the hotel industry’s position and capability to manage human resources in a way that minimizes staff turnover and supports attraction and retention of the best talent in the market.
Research philosophy
There are different types of research philosophies, usually applied depending with what is expected as the end results. From the chosen research design and methods, positivism was most applicable in this study. To collect data, social surveys and comparative analysis was used. Official statistics were also used as part of the research methods. Since the goal of the study was to produce an objective understanding of the hospitality industry by following the principles of regular natural occurrences in the industry, having a positivism approach enable me as a researcher achieve this.
Research approach
In order to gather the relevant data for this study, inductive research approach was used. As Cunill (2011, p. 13) explains, “an inductive argument is one in which the premises are supposed to support the conclusion in such a way that if the premises is true, it is improbable that the conclusion would be false”. In this research, the conclusions made were based on the primary and secondary data collected throughout the project. The first step involved collecting information on the broad topic of human resource management. The broad literature was then narrowed down to staff turnover and retention as part of SHRM. To facilitate primary data collection, a proposal and letter were sent to Marriott International. These were aimed at getting approval to conduct the survey in the hotel.
Research methods
To gain an understanding of SHRM and provide insights to the issue of staff turnover, a quantitative research approach proved appropriate. The objective of data collection was to quantify information and derive results and discussions from a sample of the population of interest. The selected sample was then used to measure several views and opinions. This was done through structured techniques, which involved having questionnaires filled online. To uncover trends in the industry through the sample’s opinions and views, qualitative research techniques were applicable during analysis and discussions. The outcome was then used to recommend several courses of action for the industry and the Marriott International Hotel.
Data collection
Secondary data in this study was gathered from books, journals, online articles, past research projects on the same topic, government and non-governmental database. Primary data was collected through online questionnaires. Primary data was used to understand what employees, human resource managers and the executive management in the organizations had to say about the subject. It was also aimed at helping establish how far the multi-national organization has gone in appreciating the theory of motivation and retention. Secondary data was crucial in the process of understanding the scope of the topic and collecting views from different people and professionals.
Reliability, validity and generalizability
To accomplish the objectives of this study, several types of data were employed. Data collected was classified into exploratory, descriptive and confirmatory. By so doing, it was possible to confirm or falsify already established data in the research. The data was also classified into primary and secondary data. To ensure reliability, I ensured there were no vague questions presented to participants, assessment was less subjective, and a standard type of judgment was applied.
By explaining the survey to participants before the fill out the questions, it was easier to prepare their mindset and attitudes and ensure they give valid answers to the questions. The participants were also supposed to confirm that they were able to answer the questions before undertaking the study to ensure that their response was relevant. These measures were aimed at ensuring validity. The aim of studying past research projects on the subject was aimed at making logical generalizations to the industry and population in question.
Research design
To understand employees’ commitment and trust towards the company, a survey was conducted on 50 employees of the Marriott International Inc. The survey was conducted on 28 men and 22 women to ensure a gender balanced opinion. Five of the employees surveyed are at the senior management level, ten were managers at the branch levels, and twenty were employees in different departments, while the rest were regular employees such as customer care attendants and housekeepers, serving employees each day. Nine of the employees have been working with the hotel for more than ten years, thirty had been employees for more than five years, eight had been in the hotel for over a year and three had just joined the hotel a few months ago. Three quarter of the employees surveyed was above 35 years of age, while the remaining number was between 24 and 35 years. Such a distribution allowed the survey understands the relationship between an employee’s loyalty to the hotel and the number of the years they have been in the hotel.
The second part of the study involved 80 participants. Some people participated on both studies and filled two questionnaires. This survey involved two groups of people filling a questionnaire to identify the reasons why they had left or would consider leaving a hotel they were working for. The first group was comprised of 20 people who had worked in the hotel industry and had already left. The other 60 participants were existing employees of the Marriott International Hotel.
Once more, the population was distributed among different age groups, departments, responsibilities and the number of years the employee had worked in the hotel. 50% of the participants had more than 10 years experience in the hotel industry. 50% of the Marriott Hotel’s employees were working on a permanent basis. The rest were either on a contract basis or were working as casuals. 10 of them were at senior management level and were very resourceful in understanding the company’s human resource policies and strategies.
Appropriateness of the research design
The research design explained below ensures that people in different work positions and age are well represented. Having online questionnaires is a less costly way of collecting data and ensures a large population to sample from. Gender is well distributed in the study. By having participants in the management positions it was possible to have a clear understanding of what the hotel had already put in place to ensure staff turnover was reduced. With such an understanding, it was possible to evaluate what was not working for them and what needed to be added.
Data collection tool
To fully meet the objectives of this paper, primary data was collected through questionnaires. For this study, questionnaires were considered the most convenient and easy way to collect data from the large population that was involved. They were the most easy to design, and since they did not require a lot of time to fill, it was easy to have respondents to cooperate. Their disadvantages experienced in this study included the fact that they did not allow the research to examine complex issues. Since the target group in this research project was 80 people for both the studies, questionnaires were considered the most efficient way of gathering information and opinion from them. As Brace (2008, 112) explains, “using semi-structured questionnaires allows a broad scope of answers and sufficient latitude for further questioning on specific responses”. Questions were close-ended to ensure participants give brief answers and allow the study gather results in percentages.
Research limitations
- Lack of statistics on the rate of resignations in the hotel industry
- Language barriers since the hotel employ a large number of foreigners
- Time allocated to data collection was limited
- Getting approval from relevant departments to conduct the survey took longer than expected
- Some participants took too long to respond and some did not fill the questionnaires as required
Ethical issues and limitations
There were a number of ethical issues that arose during the research. One of the most fundamental principles that I followed in research is voluntarism participation. The principle requires that no participant should be coerced to participate in a research or give false information. A participant must also give consent before their identity is revealed if there is a need to do so, although for such a project, anonymity would be applied.
During a research project, ethics also demand that the process must not subject the respondents to any danger or harm, a factor I took very seriously. A researcher is supposed to apply the principle of anonymity to protect them from consequences of revealing the information they do. It is also the respondent’s right to be treated with respect and dignity during the study. These ethical issues are expected to be adhered to when the organization is conducting its research.
Limitations faced in the exercise included language barriers since the company employees an average number of foreigners. Lack of cooperation from some respondents also stood as a challenge and there were fears that they may not give accurate answers or take too long to respond. Conducting a research project is an expensive activity and finances posed as a challenge. These challenges were addressed by conducting research in the most language, which was English, and using translators. There were also comprehensive explanations about the scope of the research to respondents to ensure they understood the objectives and minimize resistance. I also ensured a proper costing and allocation of funds was done before the task commenced.
Results and discussions
Industry trends
As Naidu explains, “an organization is as good as its people, and nobody can deny the fact that manpower is the greatest asset of a company”. The author further points that the less human resource turn-over an organization has, the less expenses it incurs in establishing a strong work force. Cunill (2006, p. 33) further expounds on this point by arguing that that “high attrition rates incur major costs to the company including recruiting expenses, training expenses, unemployment insurance and guest service of a quality less than one has been striving for”.
Recording just how bad the problem is in the hospitality industry Naidu (2011, p.2) explains that “employee turnover in the hospitality industry is a whopping 50%, enough to make employees lose sleep over the tangible and intangible costs of employee turnover”. The most immediate effect of a high staff turnover level in the industry is inconsistent quality delivery. The customer service-dependent areas of a business are most affected when employees keep leaving and new ones coming in. Vacancies mean more work-load for remaining employees, a factor that many times harms the quality of the business’ service front. “It is no wonder that hospitality companies with low turn-over rates report higher customer satisfaction and ultimately higher profits” (Travel & Tourism Intelligence, 2001, p.2).
A survey conducted by International Civil Service Commission (ICSC) on more than 50 multinational organizations globally sought to understand reasons why employees joined their place of work, why the opted to stay and why they left. Reasons given for leaving by over 20,000 participants in the companies were summarized as follows;
Primary data
Issues identified in the study varied from management, work environment, job security, satisfaction to security, just to mention a few. The biggest reason why employees chose to leave or were considering leaving the hotel was excessive work. 17% of those who had already left the industry pointed out that as the main reason they had left. The same percentage of the Marriott’s employees interviewed also pointed out that they considered leaving because they felt over-worked. The high rate of staff turnover is a significant explanation as to why most hotel employees are over-worked. When people leave, the remaining few have to do their jobs.
The second reason why employees left was lack of sufficient recognition. 13% of the participants pointed out that they felt their work was not being appreciated. Those at the lowest level of the company such as cleaners pointed that the management treated their work as irrelevant, even though they played the biggest role in ensuring guests were comfortable. As researched by Czenter (2002), regular recognition and appreciation means more than financial rewards to some employees.
Lack of power to make decisions is a critical consideration for employees on whether they stay or leave. This was evident from the study since 13% of the participants pointed out lack of power to make decisions as a good reason for leaving. 89% of this group was made up of people at the junior level. Senior managers who participated in the survey didn’t think this was a big challenge to them. Their positions allowed them a chance to participate in most of the organization’s decisions.
Another significant reason why employees in the hotel industry leave, as evident by the results from the survey in Marriott international, is lack of growth opportunities. 13% of the participants pointed that they felt the organizations had very few senior opportunities to take care of all of them. They felt that they would not have a chance to grow to levels they desired to if they continued to stay. As a result, they are always on the look-out for an opportunity outside their won organization.
Ongoing changes causing instability made it impossible for 10% of the employees to stay. Changes came in terms of management, reshuffles, change of products and policies. Employees felt that it was hard for them to achieve consistency and perfect their skills in such a changing environment. Poor leadership also played a significant role in the hotel’s high rates of staff turnover. 10% of both those who had already left the industry and those working in Marriott International pointed out poor leadership as their reason for leaving or wanting to leave.
Another 5% were concerned about their security. Security in the hotel is a significant concern for employees. Several of its hotels have been attacked by terrorists, leading to the death of employees and customers. In the 9/11 attack, the hotel was indirectly destroyed as it was located in the target building. In 2003, the Marriott hotel in Mega Kunigan Indonesia was bombed. The attack led to death of 12 people and another 150 were injured. The year 2008 saw yet again a bombing of one of the hotel’s facilities. Islamabad Marriott’s bombing left 54 people dead and almost 300 injured. A year later, JW Marriott in Indonesia was bombed, adding seven people to the number of deaths in Marriott’s hotels bombing and another 50 people injured. These incidents have scared not only customers, but also employees who are constantly serving in the hotels. 10% of the employees pointed out that security was a reason why they didn’t want to stay in the hotel.
A small percentage of the employees considered the pay in the industry insufficient. 7% of Marriott International said they felt they were paid less than what they were worth. The company is among the highest paying hotels. According to (CNN Money, 2008) the hotel pays $56, 382 to sales managers and other common salaried jobs, and $22, 863 to house keepers and other common hourly paid jobs, a figure that is above the market rates. 10% of those who participated in the survey had other reasons why they left or wanted to leave. These factors include personal reasons, school, medical challenges, personal troubles and family commitments. A considerable number of this group pointed a sour relation with one or more employees in the hotel as a significant reason. Others left to establish their own businesses or had to relocate.
These results can be summarized as follows;
Data collected from those participants working with Marriott International revealed that Marriott International Hotel as an employer does not discriminate on the basis of race, sex, religion and other differences among people since it is illegal to do so according to the law (Marriot International Inc., 2011). Labor relations in the company are taken serious and this gives employees an opportunity to understand various issues that affect them as employees. Some of these issues include their union’s relationship with the management, whether to remain in a union or not, collective bargains, potential contribution of union representatives and the advantages and disadvantages of a represented work place.
The survey reveals that in Marriott International, labor relations have created a wide range of labor rights to employees including a right to strike, the right to bargain at a union and a right to protest or take action to achieve their desires. These results agree with Tavistock Institute of Human Relations (1999), who point out that even though the labor relations have at times been a source of conflict between the employees and employers, they have contributed greatly to ensuring that employees’ rights are respected and that employees can easily voice their grievances.
One of the questions that the participants were supposed to respond to was whether the company was doing enough to ensure the comfort of its employees. Five senior managers and ten managers at the branch level who participated in the survey agreed that the business was doing all they could but faced several challenges. According to one of the managers, the company’s focus is more on retention and talents development. The HRM department acts as a mentor, coach, counselor and succession planner to help motivate the organization’s members and build their loyalty. They pointed that major challenges facing the human resource department include ability to manage a diverse body of abilities and use them to bring innovative ideas, views and perspectives to their work without conflict.
According to this group of participants, another significant challenge facing the company’s human resource management is the easy erosion and irrelevance of skills. There are huge amounts of resources being spent on training and skill upgrading in a bid to ensure that its employees remain relevant not only to them but to the human resource market at large. This analysis agrees with (McNamara, 2009) who points out that “retention is one of the biggest challenges facing many human resource departments in most organizations”. Competition for the best skills and talent is on the rise and this creates a constant threat and fear by many organizations for loss of employees. As was established from the survey, training and retaining talent is a major focus for Marriott International Inc.
Regarding incentives and compensation, the research revealed that Marriott International uses positive rewards to motivate employees, and negative indicators to discourage under-performance and indiscipline. The company gives multiple targets to each employee to allow a bigger opportunity to the employees for earning at least some part of the performance incentives. This has worked well as a motivator and has also worked successfully as a retention tool. These results support one of the company’s strategies which is “to use incentives and rewards to identify high performers who then become eligible for the succession pipeline for key positions in the organization” (Marriott International Inc., 2011). In the hotel, such tools have been broken down into different categories. They have been divided into performance based targets, with each department setting its own specific performance related goals. According to the senior managers in the hotel, the category of individual targets is based on individual achievements and constitutes up to 20% and 80% for senior and junior level employees respectively.
A small part of the questionnaire was aimed at getting the views of the employees about their workplace. Employees’ feelings about their place of work can be summarized as follows:
Most employees agreed that core elements of job satisfaction are not necessarily based on financial factors. Compensation is an important element in their satisfaction and includes other things other than money. However, monetary compensation is equally important and the participants point out that an employer must ensure that they pay employees what they are worth, and do the best to stay within the market rates or higher than that. The survey revealed that 80% of the participants think that employees should be rewarded for performance and not for seniority. They argue that a percentage of their earnings should be based on successful completion of duties. Employees in the hotel point out that this is lacking in Marriott International, since all housekeepers are paid a flat rate on an hourly basis.
The results of the survey can be summarized in the figure below:
The second part of the study was aimed at understanding the level of employee loyalty to the business. To establish the level of employee’s commitment and trust towards the company, the survey conducted on 50 employees can be summarized as follows;
Issues arising
Every business can draw motivation from those organizations that have perfected the art of getting the best human talent in the market, getting the best out of them and being able to retain them. A good example of such organizations is Google Inc. which has for a considerable amount of time now, been listed among the best employers. A successful implementation of appropriate human resource management strategies have helped many international organizations manage large number of employees, as well as integrating people with different cultural backgrounds to their business and using them to their advantage. It has also helped them save enormous amounts of money that would otherwise, go to recruiting and training new employees regularly.
In any big and busy hotel such as Marriott International Inc., there are obviously problems facing employees and that is why they don’t stay despite the fact their salaries are at a level that is acceptable in the market. The fact that their rates are competitive but employees still leave is a clear proof that employees need more than financial rewards and satisfaction to stay. Through the research, I was able to identify a number of factors, which employees considered as major stressors. Incompetent managers were identified as a major occupational stressor. From the research, many employees pointed out that management is a key challenge for them. The pointed out that their seniors are too demanding and some completely incompetent to manage responsibilities. When employees don’t have faith in the management, it is hard for them to build an open relationship with them where they can easily air out their concerns. It is also hard for them to trust in a system led by someone who does not seem sure of what they are doing.
A big hotel such as Marriott should ensure that hiring is on the basis of qualifications and not on how applicants relate with the managers. Friendship and family must not in any way interact with how human resources are run. Some employees complained that managers tend to favor those who are friends with them during promotions and other employee related interests. As a result, disgusted and frustrated employees would rather leave than work under supervision of an incompetent person who seems favored by the boss.
Another stressor at the work place is managers who lack motivation. When the junior management is not motivated, it is hard for them to keep the rest of the team motivated. A good number of employees pointed out that working with managers who lack a drive is too challenging for them. It is the business’ responsibility to ensure only qualified managers are employed, and relevant training is constantly conducted to ensure consistency in leadership skills.
Work overload was identified as a big stressor in the hotel industry. Overworked employees as a challenge arise from the fact that the business is unable to retain its employees. Since there is always a shortage in some departments, some employees have to do more than they should to cover up for the shortage. Housekeeping is the most affected departments as employees come and leave each day. Overworking employees means they are unable to plan their schedule well and even when they do it is hard to keep up with it. It also means that employees may not have any time for recreational activities or skill building activities such as training.
Significant considerations from the study
“Human resources management is the function in an organization charged with the responsibility of implementing policies and strategies related to management of individuals who comprise the work force of an organization” (Farhad, 2007, 11). In any organization, “the human resource management strategy is expected to maximize returns on investment in the organization’s human capital, and at the same time do so in a way that creates minimal financial risks” (Federal Human Resources Community, 1999, p7). McNamara (2009, p. 2) further explains that “the supply of a skilled workforce must be aligned with the organization’s ongoing and future business plans to maximize return on investment and to secure future success”. Human resource functions have to be performed and implemented effectively and pragmatically. Measures such as legal procedures and ethics have to be taken into consideration to allow for implementations in a manner that retains the respect and support of the workforce.
One major significant benefit of SHRM is “designing performance incentives plans with the intention to continuously motivate employees and thus improve customer service in a dynamic environment” (Bratton and Gold, 2003, p. 13). Implementing appropriate SHRM techniques in a business enables a business build a productive and efficient team, and work with them for a long time to ensure consistency. Marriott International Inc. should seek the best SHRM techniques after a further review of its need and problems.
Uncomfortable conditions such as being overworked have featured in the research as the biggest reason why employees leave. The trend is a significant challenge for many businesses. The hospitality industry seems to be the worst affected as it registers more than 50% staff turnover. As a result of being unable to retain the best employees, the Marriott Hotel ends up with employees who portray several counterproductive behaviors. Lack of motivation also causes high levels of absenteeism. As a result other employees are forced to take up the responsibility of the absentees, making the problem even worse. Asking employees to do more than is their responsibilities regularly is a problem on its own especially when they are not given extra payment for it.
The human resource manager needs to act tough to ensure that such habits are not tolerated in the business. This can be done by ensuring the business has clearly formulated rules which every employee has to go through and understand when they join the business. Discipline can also be achieved by encouraging team work so that employees are considerate of each other and what they put each other through by being absent. Team work is best established through training and team building activities to encourage more open relationships amongst employees.
A business’ human resources are key in its success. Getting the best in the market is not enough and business now need to go a step further to retain them. This saves businesses a lot of money spent on recruitment and training new employees. It also allows businesses to achieve consistency in their products as well as maintain a good reputation in the market. Employee loyalty can only be achieved by putting in professional strategies that allow employees’ continuous satisfaction, strategies which may be costly and involving but which have a huge payoff at the end.
The business should also utilize other HRM strategies such as training. Training is aimed at preparing individuals to keep their skills updated and ready to undertake higher levels of work when chance arises. It also provides a possibility of performance change. Training helps the organization retain their pool of human resource and stay up-to-date with current and relevant skills in the market. In so doing, they are able to give upgraded services to their clients and maintain satisfied customers. It also helps them stay relevant and competitive in the constantly growing human resource market. Appraisal and evaluation of performance helps measure progress and development of skills and performance of employees.
Significance of the study
This study was conducted as my humble contribution to making human resource in the hotel industry better. Results are presented in a simple format to allow different stakeholders such as investors in the hotel industry, employees, suppliers, customers and other stakeholders understand issues affecting the industry. The results can be used significantly by employers in the industry to understand the needs of their employees. As competition in the industry grows, so do the labor markets become complex. In a constantly changing business environment, it is important for human resource managers to anticipate their employees’ needs and address them before they can cost the business.
Therefore, these results can be used by managers to formulate strategies that ensure employees needs and expectations are met comprehensively. There is need for human resource managers to understand the difference between employees’ demands and genuine needs to ensure that the business is not over-burdened. The study identifies the most significant employees’ needs in the industry, and how significant they are to then when making a career decision.
The results are also significant to employees, who need to play their role in developing trust between them and employers. It is also important for them to realize that by developing better negotiation skills, they enjoy a more consistent and reward career than when they move from employer to the other. Furthermore, investors can benefit from these results by realizing the need to support and fund plans intended at creating a healthier employee-employer relationship.
Conclusion
This paper sought to understand staff turnover trends in the hotel industry using Marriott International Inc. as a case study. The literature review was used to understand the background of the problem. With over 3150 lodging properties spread across more than 60 nations, Marriott International Inc. served as a significant case study. The decision was justified by the fact that the hotel employs over 146,000 employees, making it one of the organizations where strategic human resource management plays a critical role.
This paper was aimed at identifying major reasons why the rate of staff turnover in the hotel industry is high, as well as determining the impact of strategic human resource management on staff turnover in the hotel industry. Using Marriott hotel as a case study, the role of SHRM in the industry was explained. Retention trends in the hotel further made it possible to understand staff turnover trends in the hotel industry. By reviewing available literature, it was possible to understand the background of the study and issues that formed the basis of the study.
Understanding strategic human resource management was significant for carrying out this study. As explained by Taylor (2002, p. 8), “strategic HR management involves more than just the administration of human resource programs or activities”. Effective human resource management involves applying these strategies to employees’ management. It is also supposed to help organizations think strategically as far as human resources are concerned. Furthermore, SHRM is instrumental for businesses which take employee motivation seriously. SHRM programs give room for training and provision of skills in line with an organization’s activities. Those businesses which have been able to implement SHRM successfully are more likely to report improved business capability.
SHRM and theories and practices focused in it, have focused on understanding the different trends in HR management, putting very little focus on challenges that face HR is specific industries. Therefore, effective management of human resource is paramount in any organization. Maintaining a competitive advantage requires a highly competent and committed workforce. It is for these reasons that the hotel industry needs to act promptly and reduce the rate of staff turn-over in their industry. Mullins (2001) explains that there is high level of skill shortage in the industry and an unhealthy staff turnover rate.
From a survey conducted by Nobscot Corporation, it is evident that human resource managers in the industry have a heavy task. The survey which was used to study turnover rates in different industries revealed that the accommodation and food industry still has a 55.4% voluntary employee turnover rate. Issues arising from books, past research projects, online articles and other literature material include compensation, opportunities, technology, security and social factors such as family. As more and more organizations appreciate the role of strategic human resource management, it is evident that these issues must be incorporated in businesses, if they intend to perfect the art of managing human resources.
High staff turnover rates in the industry have further revealed the importance of addressing retention. As explained in the paper, for any business to be successful, they need to have a retention program which recognizes the importance of mutual respect between employees and employers, rewards employees appropriately, and motivates employees. Furthermore, it is important for business to realize that a high level of staff turnover not only affects a business’ profitability by increasing expenses, it also does affect the quality of its products. Since the hotel industry is considered as one of the most competitive sectors, consistency of the products is paramount.
Other reasons why businesses should ensure minimum staff turnover include the need to build employee loyalty, reduced interruptions in employees’ schedule and minimum cases of over-worked employees. Furthermore, it is import to note that the human resource market for both skilled and unskilled workers has become increasingly competitive. For professionals especially, they are constantly looking for better and more rewarding challenges, making it hard to replace the best employees if a business loses them.
From the study, it is evident that the level of job satisfaction is inversely proportional to rates of staff turnover in a business. Satisfied employees are bound to be more loyal to a business. They are also more likely to air their complaints and speak out when they have problems before they leave the business. If a business is able to create a feeling of mutual recognition among its employees, losing employees may be a solved concern. This is the same with motivation, which is considered as one of the most significant factors in keeping staff turnover at the lowest level.
To fully meet the objectives of this paper, questionnaire filled online were used to collect primary data, while secondary data was collected through books, journals, past research projects, government and non-governmental statistical records. A survey was conducted on employees in the hotel industry. 60 of the participants were still working in Marriott hotel, while other 20 had worked in the hotel industry before and left. Population distribution considered diversity to ensure that as many people as possible were represented.
The results reveal that human resource management in the hotel industry is a complex task, as evident from the number of issues arising, as well as reasons presented for leaving. Reasons vary from financial, economical and socio-economical concerns. It is evident that the hotel industry’s biggest concerns ought to be career growth and amount of work for their employees. This argument is supported by the study results which show that the biggest participants left or would consider leaving the industry due to being over-worked. Answering to what made them left their previous workplace or why they could consider leaving Marriott hotel, 17% answered excess work.
Lack of power to make decisions, minimal growth opportunities and lack of recognition also top the list of reasons given for leaving or wanting to leave. Surprisingly, salary was the second least mentioned reason for employees who had left or wanted to leave. Many businesses in the hotel industry seem to be paying more attention to financial rewards and leaving out more significant concerns. The organizational commitment chart further shows that working in a place where there is trust is significant for employees. The trust scale indicates the need for Marriott International Inc. to work on the relationship between employees and their team managers. Only 60% of the respondents felt that they would be willing to let their supervisors have control over the future in the company. Sadly, almost half wished they could keep an eye on their supervisor.
Issues and concerns raised in this survey reveal that for strategic human resource management to bear fruits in a business, more than good financial compensation is required. In conclusion, it is evident that more employees would rather work in a safe and trustworthy environment than have more money. However, the study was not aimed at studying the role of financial satisfaction at work and cannot give a well supported argument on the role of financial rewards to a business human resource management. The future, the paper recommends a more specialized study to understand the role of each of the issues mention in reducing staff turnover.
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Appendices
Questionnaire 1
- What are the most significant job stressors to you as a hotelier?
- Do you think the management in hotels does enough to ensure its employees are comfortable?
- According to you, are there any significant human resource managements strategies put in place?
- Do you have any complains about the pay? Explain
- What would you say about career growth opportunities available to you?
- What is the role of incentives, rewards and compensation at your place of work?
- Of how much value is monetary compensation to you? In your opinion, what should the level of compensation be based on?
- What are the roles and contributions of labor relations and unions in the hotel industry?
- What would be the biggest drive towards leaving your position or looking for another job?
Questionnaire 2
Employee organizational commitment
- Are you willing to put in a great deal of effort beyond that normally expected in order to help this organization’s success?
- Do you talk about this organization to your friends as a great organization to work for?
- Would you accept any type of job assignment in order to keep working for this organization?
- Are your values and the organization’s values very similar?
- Are you proud to tell others that you part of this organization?
- Does this organization really inspire the best in you in the way of job performance?
- Are you glad that you chose this organization to work for over others that you were considering at the time you joined?
- Do you really care about the fate of this organization?
- For you, is this the best of all possible organizations for which to work for?
Feelings about working in the hotel
- Do your responsibilities at work motivate you?
- Does the management in the hotel motivate you?
- How easy is it to report concerns and problems?
- Do you feel fairly compensated?
- Are you considering leaving the company?
- Would you recommend a job here to other job seekers?
- Are you proud to be here?
Trust scale
- If you had your way, would you let your superior have any influence over issues that are important to you?
- Would you be willing to let your superior have complete control over your future in this company?
- Do you wish you had a good way to keep an eye on your superior?
- Would you be comfortable giving your superior a task or problem which is critical to you, even if you could not monitor their actions?