Academic journal article Journal of Organizational Culture, Communications and Conflict

The Role of Employee Service Orientation in Turnover in the U.S. Hotel Industry

Academic journal article Journal of Organizational Culture, Communications and Conflict

The Role of Employee Service Orientation in Turnover in the U.S. Hotel Industry

Article excerpt

INTRODUCTION

Hotel employee turnover is a well-documented problem in the hospitality industry with reported turnover rates ranging from 31 percent (Deloitte, 2010) to 43 percent (Employee Turnover: The Challenge, 2013) to 58.8 percent (Hinkin, Holtom & Liu, 2012) in the U.S. Turnover in the hospitality industry is reported to be "nearly twice the average rate for all other sectors" (Deloitte, 2010, p. 35). To further complicate concerns over the high rate of turnover, the economic downturn has temporarily dampened this high turnover rate, but is expected to rapidly rise once the downturn improves (Deloitte, 2010; Davis, 2013). Depending upon the level of the employee's job responsibilities, turnover costs can range "between 100 and 200 percent of the total remuneration of that employee" (Deloitte, 2010, p. 36). In addition to financial costs is the loss of consistency of service that a long-term employee provides to customers, particularly returning customers who are very important to developing brand loyalty.

A high level of guest satisfaction is a key performance indicator which has been found to increase competitiveness and brand consistency in the hospitality industry. The staff needed to achieve and maintain service levels costs, on average, 45 percent of operating expenses and consumes 33 percent of revenues depending on hotel size, with larger hotels spending more (Deloitte, 2010). Thus, the turnover rate must be controlled in order to improve consistency of service, to improve and retain customer satisfaction, and to gain the economic benefits associated with increased competitiveness, which is driven in part by brand consistency and the resulting loyalty.

The literature, both practitioner and academic, cites many reasons for this high turnover rate in the hospitality industry. Low salaries are often cited as the most common reason to leave organizations in the hospitality industry (Deloitte, 2010; Davis, 2013). The majority of the reported reasons for leaving tend to be external to the employee rather than internal and are specific to the employee who is quitting. However, the issue may also be internal to the employee leaving due to the nature of the hospitality industry and the relation between maintaining a high level of customer service and the personality of the worker (Davis, 2013). An employee may be less likely to share details or may not even be fully aware of personal reasons for leaving as reported in exit interviews and surveys. Interestingly, Boardman (2013) includes among the reasons provided for turnover, are issues related to customer service including dealing with difficult customers. Certain personalities may be more ideally suited to becoming less stressed by these encounters and hence less likely to quit..

This study examines whether an individual factor related to the employee may contribute to high turnover in the hospitality industry. Determining whether internal reasons such as personality and motivation contribute to turnover is also important to mitigating this significant industry problem. This will help ensure that while organizations attempt to mitigate the external reasons to obtain the needed employee stability they also hire the employees most likely to remain after these external changes are incorporated. We believe that one of the important internal factors is an individual's service orientation both in retention as well as providing the necessary high level and consistent customer service and reducing involuntary turnover. This study is designed to determine a model of intent to turnover which includes the role of an employee's service orientation in addition to other factors such as job satisfaction and organizational commitment often identified as related to turnover intention universally. The results of this study will add to the important discussion on how to retain employees in the hospitality industry, particularly in hotels, and thus potentially lead to the reduction of the high industry turnover rate. …

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