CAUSES OF EMPLOYEE TURNOVER IN THE HOSPITALITY INDUSTRY:

“A CASE STUDY OF AFRICAN REGENT HOTEL”

CHAPTER ONE

1.0 Introduction

Employee turnover is the rotation of workers around the labor market, between firms, jobs and

occupations, and between the states of employment and unemployment (Abassi&Hollman,

2000). Staff turnover that can occur in any organization might be either voluntary or

involuntary.The study therefore looked at thecauses of employee turnover in the hospitality

industry, a case study of African Regent Hotel. Specifically, this chapter consists of the

background of the study, the main problem statement, objectives and significance of the study,

scope of the study, limitation and the organization of the study.

1.1 Background to the Study

A major human resource problem faced by many organisations is that of understanding and

managing labour (employee) turnover. Employee turnover is understood by human resources

professionals to be the rate at which an organization’s work force terminates employment and

requires replacement Kreitner (2003). Most organizations have been successful because of the

organisation’s ability to retain employees. Keeping staff rather than losing them, however, is not

achieved on a silver platter. Successful organisations in this area are the ones that are whose

managements have identified and put in place measures such as reward, training and

development and other forms of motivation so as to encourage the employees to work whole

heartedly and stay in the organization for a longer period of time. This helps to ensure

1
consistency in the output of work. Contrary to this, organizations which cannot identify the

effort of their employees and reward them as such end up in losing them to other organisation.

This goes a long way to affect the productivity, growth and increases the organization’s cost of

recruiting new staff; and training and developing the new staff to occupy such vacancies. High

turnover, therefore, naturally affects performance Kreitner (2003).

Staff turnover that can occur in any organization might be either voluntary or involuntary.

Voluntary turnover refers to termination initiated by employees while involuntary turnover is the

one in which employee has no choice in the termination as it might be due to long term sickness,

death, moving overseas, or employer-initiated termination. (Heneman, 1998).

The hospitality industry or business, an aspect of tourism, is a labour-intensive and quality-

driven service industry and the most vital ingredient is theemployee, who provides the service.

The quality of personnel determines the quality of the product served to the customer and

therefore the success of the organization. The World Economic Forum in its Competitiveness

Report (2006) sees good management of human resources as one of the key drivers for

competitiveness across the industry. However, it has been recognized that the hotel, catering and

tourism sector of the industry suffers from high levels of labour turnover. This provides a

constant challenge for employers, limits the ability to maintain a skilled workforce and results in

enhanced costs. Companies now recognise people as the only true source of long-term

sustainable competitive advantage and as the primary force that, if properly motivated and

directed, enhance quality, pioneer innovation, drive the proper utilisation of resources and

increase customer satisfaction. In brief, human capital plays an important and critical role in the

outcomes of a firm’s financial performance. When employees leave the organization, they take

with them their knowledge, skills and abilities that helped contribute to goals, profit and

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performance of the organization. Thomas J. Watson, founder of IBM (as quoted by Bohlander,

Snell and Sherman, 2001) says, one can get capital and erect buildings but it takes people to

build a business. Consequently, every organization has to ensure that sufficient numbers of the

appropriate calibre of human resource (people) are readily available to the organization in its

effort to achieve its desired goals.

The growth of tourism in developing countries has created an immediate demand for personnel

who are committed to the activities of the industry. However, it is noted that developing

countries have initially concentrated on providing the ‘hardware’ of the industry, such as

tourists’ attractions, hotels, transportation and communication (Cullen, 1998). The tourism

industry in Ghana is said to have moved from the sidelines to the centre stage of socio-economic

strategies and is emerging as a key component of what is known as non-traditional export sector

with potential for foreign exchange, employment and income generation (Akyeampong, 1996).

The concentration of the hospitality facilities in Accra the capital of Ghana is relatively due to

the concentration of major tourism resources and economic activities that goes on in the region.

However, the hospitality industry accommodates quiet a number of employees but unable to

retain most of them for a longer period of time.

1.2 Statement of the Problem

According to Armstrong (2011), argues that the prospect of getting higher pay elsewhere is one

of the most obvious contributions to turnover. This practice can be regularly observed at all

levels of the economic ladder, from executives and generously paid professionals in high-stress

positions to entry-level workers in relatively undemanding jobs.

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According to Grobler et al. (2006) a certain amount of turnover is expected, unavoidable and

considered beneficial to the organization. New employees may inject more energy into the firm

by introducing new ideas and methods and innovation, more effective ways of doing things.

Curtis and Wright (2001) opined that high turnover can damage quality and customer service

which provide the basis for competitive advantage, thereby inhibiting business growth. Also, it

has been observed that people who leave are those who are most talented as they are the ones

likely to get an opportunity elsewhere (Hinkin and Tracey, 2000). Turnover occurs for many

different reasons. Sometimes new job attracts employees and pull them to leave the old one. A

poor relationship with management of the organization can be an important reason for the

employees to leave their jobs. Employees move from one firm to another due to several reasons,

a low level of employee turnover is acceptable in any occupation, in that it offsets potential

stagnancy, eliminates low performers, and encourages innovation with the entry of new blood.

However, high levels of employee turnover lead to low performance and ineffectiveness in

organizations, and result in a huge number of costs and negative outcomes (Ingersoll & Smith,

2003).There is not much research work carried out. Practitioners agree that there is a growing

problem related to employee turnover and therefore this area merits serious research attention.

The study will investigate the cause of employee turnover at African Regent Hotel.

1.3 Research Objectives

The study will seek to assess the factors related to employee turnover at African Regent

Hotel,the main objectives of the study is to;

1. To identify the reasons for employee turnover in the organization

2. To identify the effect of employees turnover on organizations productivity

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 3. To examine measures put in place by organizations to reduce employee’s turnover.

4. Toidentify factorsthat influence employees’ decision to stay with the organisation?

1.4 Research Questions

1. What are the determinants of employee turnover in organizations?

2. What are the effects of employee turnover on organizations productivity?

3. What measures has been put in place by African Regent Hotel to curb employee’s turnover?

4. What are the factors that influence employees’ decision to stay with the organisation?

1.5 Significance of the Study

The aim of every organization is to outweigh its competitors in terms of rendering better service

to its customers to enable the company sustain in the market. The company cannot do without

having well motivated employees who can help the organization to achieve its aims and

objectives.

The outcome of the study will inform management of African Regent Hotel about employee

turnover and its effect on productivity and also help develop tangible strategies to keep their

employees.

1.6 Scope of the Study

The study covers African Regent Hotel, which is located in the greater Accra region of Ghana.

African Regent Hotel was selected because of the seize of staff (238) which consist of

permanent, casual and contract workers. Employee turnoveris relevant to the hotel staff and that

of management. The finding of the research will be applicable to other similar institutions. It is in

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view of this that the study seeks to investigate the determinants of employee turnover in the

hospitality industry at African Regent Hotel.

1.7 Limitations of the Study

The conduct of this study had certain inherent limitations. Due to the limitation of time and

other resources, it will be impossible to examine the concept on a much wider scope and involve

several respondents, which will be to generalize the finding of the study.

1.8 Organization of the Study

The study is be organized into five chapters. The first chapter covers the introduction which

includes background to the study, problem statement, objectives of the study, research questions

and significance of the study and scope of the study, limitation of the study and organization of

thestudy. The literature review be covered in the second chapter; whiles the third chapter spells

out the research methodology. The fourth chapter presents analysis of data and discussions.

Finally, Chapter five discusses summary, conclusions and recommendations.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Employee Turnover

Employee turnover is understood by human resources professionals to be the rate at which an

organization’s work force terminates employment and requires replacement Kreitner (2003).

Most organizations have been successful because of the organisation’s ability to retain

employees. Keeping staff rather than losing them, however, is not achieved on a silver platter.

Successful organisations in this area are the ones that are whose managements have identified

and put in place measures such as reward, training and development and other forms of

motivation so as to encourage the employees to work whole heartedly and stay in the

organization for a longer period of time. This helps to ensure consistency in the output of work.

Contrary to this, organizations which cannot identify the effort of their employees and reward

them as such end up in losing them to other organisation. This goes a long way to affect the

productivity, growth and increases the organisation’s cost of recruiting new staff; and training

and developing the new staff to occupy such vacancies. High turnover, therefore, naturally

affects performance Kreitner (2003).

According to McShane and Glinow (2000), since employees leaving voluntarily are those not

dismissed by the employer, they are probably the ones that an employer would like to retain

most. Involuntary turnover may occur for reasons which are independent of the affected

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employee(s) – that is, involuntary leavers are literally forced out by the organisations by one

means or another - such as the real or perceived need to cut costs, restructure or downsize.

Griffeth et al. (2000) noted that pay and pay-related variables have a modest effect on turnover.

The analysis also included studies that examined the relationship between pay, a person’s

performance and turnover. They concluded that when high performers are insufficiently

rewarded, they quit. If jobs provide adequate financial incentives the more likely employees

remain with organization and vice versa. There are also other factors which make employees quit

organizations and these are poor hiring practices, managerial style, lack of recognition, lack of

competitive compensation system in the organization and toxic workplace environment

Abassietal. (2000).

Furthermore, voluntary turnover is often categorised into two namely; functional and

dysfunctional (Mathis and Jackson, 2004). Functional turnover is where the employees’

departure becomes beneficial to the organisation, while the dysfunctional type is where the

organisation would like to retain the departing employee. Dysfunctional turnovers usually

involve high performers who are difficult to replace in the organisation.

However, Dess and Shaw (2001) contend that voluntary turnover is of interest because in most

cases, it represents the bulk of turnover within an organisation. Such instances of turnover also

represent a significant cost, both in terms of direct costs like replacement, recruitment and

selection, temporary staff, management time, and perhaps more significantly, in terms of indirect

costs such as morale, pressure on remaining staff, costs of learning, product/service quality,

organisational memory and the loss of social capital.

2.1 Causes of Employee Turnover

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There are a number of factors that contribute to employee turnover. We will explore some of

these factors in detail below.

The economy - In exit interviews one of the most common reasons given for leaving is the

availability of higher paying jobs. Some minimum wage workers report leaving one job for

another that pays only 50 cents an hour more. Obviously, in a better economy the availability of

alternative jobs plays a role in turnover, but this tends to be overstated in exit interviews.

The performance of the organization - An organization perceived to be in economic difficulty

will also raise the spectre of impending layoffs. Workers believe that it is rational to seek other

employment.

Environmental factors -According to Harbinson (1973), an employee’s decision to continue with

his or her present firm or to seek opportunities elsewhere depends on factors such as working

conditions, personal fulfilment, and travel requirements. Cole (2002) further states that the

reasons for leaving are multifold, but in general, the environment in which these organisations

perform forces them into these employee patterns. Mathis and Jackson (2004) see environmental

factors as uncontrollable factors which include job-hopping and alternative employment

opportunities. These factors are related to labour market school of thought (Morrel et al., 2004).

The characteristics of the job - Some jobs are intrinsically more attractive than others. A job's

attractiveness will be affected by many characteristics, including its repetitiveness, challenge,

danger, perceived importance, and capacity to elicit a sense of accomplishment. A job's status is

also important, as are many other factors.

Motivation has been found to occupy a highly significant position in attracting and retaining

employees. It reinforces the notion of exchange that is entailed in the work; in that the extent to

9
which the employee will continue to identify with the goals and objectives of an organization

and therefore continue to be part of the process of goal accomplishment depends highly on the

level of his or her motivation. Motivation tends to play a significant role in influencing a

worker's decision to stay or quit a particular employment. Rutherford (1990) argued that

motivation makes an organization more effective because motivated employees are always

looking for better ways to do a job, generally are more quality-oriented and are more productive,

so it is important for management to understand how organizations influence the motivation of

their individual employees.

Demographics - Empirical studies have demonstrated that turnover is associated in particular

situations with demographic and biographical characteristics of workers. But to use lifestyle

factors (e.g. smoking) or past employment history (e.g. many job changes) as an explicit basis

for screening applicants, it is important for legality and fairness to job applicants to verify such

data empirically.

The employees personal factorsIn addition to the factors listed above, there are also factors

specific to the individual that can influence turnover rates. These include both personal and trait-

based factors. Personal factors include things such as changes in family situation, a desire to

learn a new skill or trade, or an unsolicited job offer. In addition to these personal factors, there

are also trait-based or personality features that are associated with turnover. These traits are some

of the same characteristics that predict job performance and counterproductive behaviors such as

loafing, absenteeism, theft, substance abuse on the job, and sabotage of employer's equipment or

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production. These traits can be measured and used in employee screening to identify individuals

showing lower probability of turnover.

Unrealistic expectations - Another factor is the unrealistic expectations and general lack of

knowledge that many job applicants have about the job at the time that they receive an offer.

When these unrealistic expectations are not realized, the worker becomes disillusioned and

decides to quit.

The organizational culture - Much has been written about organizational culture. It is sufficient

to note here that the reward system, the strength of leadership, the ability of the organizations to

elicit a sense of commitment on the part of workers and its development of a sense of shared

goals, among other factors, will influence such indices of job satisfaction as turnover intentions

and turnover rate.

Alternative employment opportunity-Alternative employment opportunity is another

uncontrollable and labour market variable. Opportunity means availability of alternative jobs in

the environment. Employees would generally like to work in prosperous and flourishing

economies and as a result, employees usually move out of poor and deprived economies to seek

greener pastures in more developed ones. According to Price (2001), the larger alternative

employment opportunities exist in the environment, the more chances of awareness among the

employees, which lead them to evaluate cost and benefit analysis and have intentions to switch

jobs. Literature suggests that there is a positive relationship between alternative employment

opportunities and employee turnover intention (Heller, Clay & Perkins, 1992; Khatri et al.2001).

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A study carried out on 352 National Health Service (NHS) of England nurse quitters by Morrel

et al. (2004) found out what triggers the decision of National Health Service (NHS) nurses to

quit. Using both qualitative and quantitative methods, it was concluded that many National

Health Service (NHS) system nurses left their position because of alternative opportunities

elsewhere as well as a strong labour market for nurses within the system. In addition to the

alternative bargaining power and the strong labour market for nurses, the studies also indicated

that most nurses left their position because of job stress and dissatisfaction.

2.2 Effects of Employee Turnover

High turnover can be a serious obstacle to productivity, quality, and profitability at firms of all

sizes. For the smallest of companies, a high turnover rate can mean that simply having enough

staff to fulfill daily functions is a challenge, even beyond the issue of how well the work is done

when staff is available. Turnover is no less a problem for major companies, which often spend

millions of dollars a year on turnover-related costs (Griffeth, 2000). For service-oriented

professions, such as management consulting or account management, high employee turnover

can also lead to customer dissatisfaction and turnover, as clients feel little attachment to a

revolving contact. Customers are also likely to experience dips in the quality of service each time

their representative changes. The cost of turnover varies with the difficulty of the job to be

performed (Labov, 1997).

Employee turnover is expensive from the view of the organization. Voluntary quits which

represents an exodus of human capital investment from organizations and the subsequent

replacement process entails manifold costs to the organizations (Fair, 1992). These replacement

costs include for example, search of the external labour market for a possible substitute, selection

12
between competing substitutes, induction of the chosen substitute, and formal and informal

training of the substitute until he or she attains performance levels equivalent to the individual

who quit (John, 2000). Addition to these replacement costs, output would be affected to some

extend or output would be maintained at the cost of overtime payment.

The reason so much attention has been paid to the issue of turnover is because turnover has some

significant effects on organisations (DeMicco & Giridharan, 1987; Dyke & Strick, 1990; Cantrell

& Saranakhsh, 1991; Denvir & Mcmahon, 1992).Many researchers argue that high turnover rates

might have negative effects on the profitability of organizations if not managed properly

(Hogan, 1992; Wasmuth & Davis, 1993 and Barrows,1990). Hogan (1992) observed that nearly

twenty years ago the direct and indirect cost of a single line employee quitting was between $

1400 and $4000. Turnover has many hidden or invisible costs and these invisible costs is the

result of incoming employees, co-workers closely associated with incoming employees, co-

workers closely associated with departing employees and position being filled while vacant

(Philips, 1990). And all these affect the profitability of the organization. On the other hand

turnover affects customer service and satisfaction (Kemal et al., 2002).

Catherine (2002), argue that turnover include other costs, such as lost productivity, lost sales, and

management’s time ,and estimates the turnover costs of an hourly employee to be $3,000 to

$10,000 each. This clearly demonstrates that turnover affects the profitability of the organization

and if it’s not managed properly it would have a negative effect on the profit. Research estimates

indicate that hiring and training a replacement worker for a lost employee costs approximately 50

percent of the worker’s annual salary– but the costs do not stop there(Johnsonetet al., 2000).

Each time an employee leaves the firm, we presume that productivity drops due to the learning

13
curve involved in understanding the job and the organization. Furthermore, the loss of

intellectual capital adds to this cost, since not only do organizations lose the human capital and

relational capital of the departing employee, but also competitors are potentially gaining these

assets (Meaghan et al., 2002). Therefore, if employee turnover is not managed properly it would

affect the organization adversely in terms of personnel costs and in the long run it would affect

its liquidity position.

However, voluntary turnover incurs significant cost, both in terms of direct costs (replacement,

recruitment and selection, temporary staff ,management time), and also (and perhaps more

significantly) in terms of indirect costs (morale, pressure on remaining staff, costs of learning,

product/service quality, organizational memory) and the loss of social capital (Dess et al., 2001).

The U.S. Department of Labor estimates that it costs about 33 percent of a new recruit's salary to

replace a lost employee. In other words, it could cost $11,000 in direct training expenses and lost

productivity to replace an experienced employee making $33,000. Private industry estimates for

highly skilled jobs peg turnover losses at a much higher level, up to 150 percent of the position's

annual salary (Dess et al., 2001).

2.3 Employee Retention

Retention of staff in organizations needs special attention since the loss of such staff is expensive

in terms of cost of new recruitment, training and development of new joiners, cost of making

stop gap arrangements, and decreased employee morale (Ban et al., 2003; Lynn, 2003).

Researchers maintain that the most important goal of the contemporary human resource systems

is not to recruit the finest professionals, but to create congruence between people and

organizations so that they would stay and work with the organization (Lynn, 2003; Vigoda and

14
Cohen, 2003). Watson and Abzug (2005) refer to it as the process of creating ‘fit and

embeddedness’. Value and goal congruence positively affect employee performance, job

satisfaction, tenure, and career success. In the absence of such congruence, an employee cannot

reach the expected level of performance, and tends to accuse the organization of being politically

discriminative and inequitable. In order to avoid such a potentially destructive situation, there

has to be a continuous assessment of the interface between the employees and their work

environment, and the development of advanced Human Resource strategies for recruitment and

retention (Vigoda and Cohen, 2003).

2.4 Employee Retention Strategies

Retention involves managing in ways which encourage staff to remain in employment with the

organisation. The world of business is currently experiencing the effects of increased employee

turnover rates. Rather than being an isolated issue, employee turnover faces the world as a

whole. Lawler (1986) states that retention is as much a management issue as it has ever been.

One must not necessarily think that people are staying because they are happy at the company.

And not assume that people are leaving simply for money. Mullins (1995) suggested that an

organisation can theoretically influence turnover by various intervention processes that include

employee empowerment, training and orientation, involving employees and providing for staff

feedback.

2.4.1 Empower Employees

In a bid to empowering employees, decision-making needs to be extended right down to the

lowest levels of the organisation (Ledford &Mohrman, 1993).

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This can be achieved by giving employees information about organisation performance;

providing rewards based on action using that information, giving employees’ knowledge that

enables them to understand and effectively use this information, and finally allowing employees

the power to make the decisions that will actually influence organisational direction and

performance (Bowen & Lawler, 1992; Anthony, Perrewe & Kacmar, 1999). This needs to be

extended right down to the lowest levels of the organisation. Management act like coaches and

help employees solve problems. Superiors empowering subordinates by delegating

responsibilities to them leads to subordinates who are more satisfied with their leaders and

consider them to be fair and in turn perform up to the superior’s expectations (Keller &

Dansereau, 1995). Empowerment of employees could help to enhance the continuity of

employees in organisations where managers supervise more people than in a traditional hierarchy

and delegate more decisions to their subordinates (Malone, 1997).

2.4.2 Orient and Train Employees

The orientation and training process is a new hire’s first impression of the organisational

environment, and therefore a critical period. In fact, a study at Corning Glass found that new

employees who went through a positive orientation were 69% more likely to be with the

company three years later than those who did not.

A similar study at Texas Instruments concluded that employees, who were carefully oriented to

the company, and their jobs, reached full productivity two months sooner than those who were

not (Klienman, 2001). The most successful orientation programmes make new employees feel

welcome and a part of the team. They highlight the individual‘s role in the employer’s mission.

They assure new employees that adequate and patient training will be provided. Most

16
importantly, successful orientation programs show the new employee what he or she stands to

gain from employment with the company.

It is highlighted by Tyler (1998) that most new employee turnover occurs within the first few

weeks, and can be traced back to the way they were-or were not-oriented. Tyler (1998), further

highlights that; ‘the end of the first day is just as important as the beginning’. Thus, employees

should be made to feel that they are wanted back for a day two. To achieve this, the warm

reception should not end with the end of orientation, and experienced employees can be provided

as mentors for new hires to turn to as a resource. Wal-Mart conducted research on new hire

attitudes in 1999, aiming to reduce employee turnover by 50%. The critical link between

orientation and employee turnover was highlighted in this research. According to the Wal-Mart

Vice President Of People Services, the issue should be how well are new people being invited

into one’s home, how welcoming are they made to feel and how well are preparations being

made for the things they would be asked to do(as cited in Klienman, 2001).

2.4.3 Involve Employees

Encouraging employee involvement means creating programs and policies that harness

employee engagement as well as developing practices that include staff, solicit their thoughts,

provide them with feedback and help them have influence over their work and, to some extent,

the organisation. Job involvement describes an individual’s involvement with work and indicates

the extent to which an individual identifies psychologically with his or her job (Kanungo, 1982).

Employees who are more involved in their jobs are more satisfied with their jobs and more

committed to their organisation (Blau & Boal, 1987; Kanungo, 1982). Also, involvement would

17
influence job satisfaction and increase organisational commitment of the employees. (Tor and

Owen, 1997).

Guy (2003), found that high involvement work practices works because it allows employees to

make decisions that make a difference to the organisation. Decision-making by lower level

employees improves performance for various reasons. It allows employees to use tacit

knowledge that they have gained through shop floor experience; experience and knowledge that

may not necessarily be available to higher-level managers.

The freedom to make these decisions alone or associated with performance pay provides

motivation for greater effort (Guy, 2003). Involving employees in even the smallest decisions

can have tremendous results on a corporate level. When employees are given choices and input

into the very policies and procedures that they adhere to each day, it creates a sense of

importance. Employees begin to feel that they are critical to the success of the company. This

sense of contribution fosters employee loyalty and increases accountability.

According to Magner, Welker and Johnson (1996) state, employees feel comfortable to stay

longer, in positions where they are involved in some level of the decision-making process.

Provide opportunity for staff feedback. Employees have a strong need to be informed.

Organisations that give staff the means to provide feedback to each other, management and the

company are psychologically healthy (Magner et al., 1996). By offering staff a chance to provide

their opinions about work flow and volume, the company and management practices also tend to

be psychologically healthy. Organisations with strong communication systems enjoy lower

turnover of staff (Labov, 1997). Therefore, companies with open feedback channels have the

ability to incorporate employee comments, criticisms and desires for improvement into their

18
processes and systems. As a result, these companies become more competitive as staffs, who

may observe the need for important changes, are offered an opportunity to see their ideas put into

action.

2.4.4 Career Development and Progression

Maximize opportunities for individual employees to develop their skills and move on in their

careers. Where promotions are not feasible, look for sideways moves that vary experience and

make the work more interesting.

2.4.5 Make Line Managers Accountable

For staff turnover in their teams. Reward managers with a good record for keeping people by

including the subject in appraisals. Train line managers in people management and development

skills before appointing or promoting them. Offer re-training opportunities to existing managers

who have a high level of turnover in their team.

2.4.6 Theory of Motivation

Motivation theory is a concept often employed in addressing the problem of labour turnover. For

instance according to Mobley (1979), the factors that motivate people to stay on a job kind of

contribute effectively, to dissimulate the thoughts of quitting to that individual. Motivation has

been found to occupy a highly significant position in attracting and retaining employees. This

reinforces the notion of reciprocity or exchange that is entailed in the work, in that the extent to

which the employee will continue to identify with the goals and objectives of an organization

and therefore continue to be part of the process of goal accomplishment depends highly on the

level of his or her motivation. Motivation is the most important factors influential organizational

19
performance. Employee motivation is one of the policies of managers to increase effectual job

management amongst employees in organizations (Shadare et al., 2009).

According to Dubin (2002), “Motivation is the complex of forces starting and keeping a

person at work in an organization. Motivation is something that puts the person to action, and

continues him in the course of action already initiated”. Motivation refers to the way a person is

enthused at work to intensify his desire and willingness to use his energy for the

achievement of organization’s objectives. It is something that moves a person into action and

continues him in the course of action enthusiastically. Motivation is a complex phenomenon,

which is influenced by individual, cultural, ethnic and historical factors. Motivation can be

defined as “a series of energizing forces that originate both within and beyond an individual’s

self”. These forces determine the person’s behavior and therefore, influence his/her productivity

(Jackson, 1995).

According to De Cenzo et al (1996), people who are motivated use a greater effort to perform a

job than those who are not motivated. In other words this means that all thinkable factors of

physical or psychological aspects that we interact with, leads to a reaction within our self or of

the entire organization. The familiar notion that people leave managers, not organizations,

suggests that the organizations concerned, were subjected to failure for holding managers

responsible to understand their role in motivating people and to manage performance as

effectively as they can. The biggest challenge for HR managers is to push line managers to

manage and develop people.

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2.5 Costs of Turnover

Analysis of the costs associated with turnover yield surprisingly high estimates. The high cost of

losing key employees has long been recognized. However, it is important for organizations to

understand that general turnover rates in the workforce can also have a serious impact on an

organization's profitability, and even survival. There are a number of costs incurred as a result of

employee turnover. These costs are derived from a number of different sources, a few of which

are listed below (Labov, 1997).

In some cases costs associated with the communication of proprietary trade secrets, procedures,

and skills to competitive organizations. Costs of training, including supervisory and coworker

time spent in formal training, as well as the time that the worker in training must spend off the

job.

Lost productivity due to the time required for a new worker to get up to speed on the job and

Increased unemployment insurance costs. Lost productivity associated with the time that

coworkers must spend away from their work to help a new worker. Lost productivity associated

with the interim period before a replacement can be placed on the job. Costs associated with the

period prior to voluntary termination when workers tend to be less productive.

Recruitment of replacements, including administrative expenses, advertising, screening and

interviewing, and services associated with selection, such as security checks, processing of

references, and, possibly, psychological testing.

Public relations costs associated with having a large number of voluntary or involuntary

terminations in the community spreading gossip about the organization.

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2.6 Factors affecting Employee Retention

Unnecessary employee turnover costs an organization needless expense (Buck & Watson, 2002).

Replacements and training expenses have a direct impact on organizational costs, productivity

and performance, and as such, an increasing number of organizations are now recognizing

employee retention as a key strategic issue (Glen, 2006). The main purpose of retention is to

prevent the loss of competent employees from the organization as this could have adverse effect

on productivity and service delivery (Samuel & Chipunza, 2009).

Retention activities may be defined as a sum of all those activities aimed at increasing

organizational commitment of employees, giving them an overall ambitious and myriad of

opportunities where they can grow by outperforming others (Bogdanowicz & Bailey, 2002).

Given the development of new managerial approaches to retention, labor market dynamism, and

evolution in research methodology and technology, it is not surprising that turnover continues to

be a vibrant field of research despite more than 1500 academic studies addressing the topic.

From a managerial perspective, the attraction and retention of high-quality employees is more

important today than ever before. A number of trends (e.g., globalization, increase in knowledge

work, accelerating rate of technological advancement) make it vital that firms acquire and retain

human capital. While there are important differences across countries, analysis of the costs of

turnover as well as labor shortages in critical industries across the globe have emphasized the

importance of retaining key employees for organizational success (Hinkin & Tracey, 2000).

22
 CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

This chapter focuses on the various tools that have been adopted or employed in gathering data

for the research work. It encompasses the study location or area, research instruments adopted,

sample and sampling techniques as well as the sample size. This chapter looks at the methods

applied in gathering the data in order to obtain sufficient information both primary and secondary

sources will be used.

3.1 The Study Area

Considering the research topic, the researcher chose a case area that has a direct and practical

activities related to the objectives of the research and the subject matter as well. The research

setting chosen was the African Regent Hotel, Accra the capital city. The organization was

considered the ideal to qualify for the research setting as they fall within the hospitality industry.

3.2 Research Design

Quantitative approach was used to quantify incidences in order to describe current conditions

and to know the effect of employee turnover from the questionnaires. Inferences were made

from the quantitative output.

23
3.3 Population of the study

The research population included top management of the central administration, junior staffs,

Head of human resource, Accounts Department and other department in the hotel. The

population for this research was selected from staff of African Regent Hotel, the population of

the study was over 100. The reason for the selection of this target population was that, they

constitute the staff of the organization and will have fair knowledge on procurement practices

which help the case study and as such offer the research the opportunity to develop and

have an understanding of employee turnover.

3.4 Sample Size

The study used (sampling technique) to select respondents for the administration of questions. In

all a sample size of 60 respondents was employed for the study.

3.4 Sampling Technique

Stratified random sampling method was used in selecting the sample. The top management,

Human Resource section and other staff are treated as strata. Finally, simple random sampling to

pick actual respondents from each stratum.

3.5 Sources of Data

Primary Data: this is first-hand information collected for the purpose of a particular survey or

research being carried out. Structured questionnaire was employed in gathering this kind of data.

And also the application of secondary data was employed.

24
3.6 Research Instrument

The data collection instrument used was, questionnaire, which consisted of a list of items relating

to the demographic data of respondents and the research objectives of the study.

3.7 Data Analysis Procedure

Data collected will be analyzed quantitatively with the use of distribution tables and graphs to

ensure easy understanding of the analyses. This was be done by the use of Microsoft excel.

Frequency distribution tables and percentages were used to determine the proportion of

respondents choosing the various responses. This was for each group of items relating to the

research questions.

25
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0 Introduction

This chapter presents information on primary data collected from respondents on the topic causes

of employee turnover in the hospitality industry: “A case study of African Regent Hotel. The

data were processed and presented in tables, graphs and other statistical representations

using Microsoft excel . Interpretations given were on processed data collected from the

field .

4.1 Demographic Data of Respondents

4.1.1 Gender

Table 1

Gender Respondents Percentage %

Male 18 30

Female 42 70

Total 60 100

Source: Field Survey, 2018

The results of gender distribution of respondents are presented in table 4.1. The results show that

30% of respondents are male while 70% percent are females. This shows that there is a higher

female dominance in the organisation.

26
Figure 4.1 Gender

Gender

30

70

male female

Source: Field Survey, 2018

4.1.2 Age

Table 2

Age Respondents Percentage %

20-25 15 25

26-30 34 57

31-45 6 10

46and above 5 8

Total 60 100

Source: Field Survey, 2018

The results of age of respondents are presented in table2 above. The results show that 25% of

respondents are 20-25years, 26-30 represent 57% of respondents, 105 of respondents are 31-35

years and 8% of respondents are 46 and above years. This indicates that most workers in the

organisation are 26 – 30 years and are still their youthful age.

27
Figure 4.2 Age

Age

60

40

20
20-25
0
20-25 26-30 31-35 46 and above

Age

Source: Field Survey, 2018

4.1.3 Educational background

Table 3

Educational Respondents Percentage%

Degree 11 18.3

HND 8 13.3

JHS 20 33.3

SSCE/WASSCE 21 35

OTHERS 0 0

Total 60 100

Source: Field Survey, 2018

28
The results of educational background are presented in table 3 above. The results shows that 18.3

% of respondents are degree holders, 13.35 of respondents are HND holders, 33.3% of

respondents are JHS holders, while 35% of respondents are holders. This shows that most of the

workers at the organisation are SSCE/WASSCE levers. The results is captured in the diagram

below

Figure 4.3 Educational background

Educational background

35
30
25
20
15
10
5
Degree
0

Educational background

Source: Field Survey, 2018

29
4.1.4 Years of Working with the Organisation

Table 4

Years Respondents Percentage%

1-5 45 75

6-10 10 17

11year and above 5 8

Total 60 100

Source: Field Survey, 2018

The results of years of working with organisation are presented in the table above. The results

shows that 75% of respondents have worked for the organisaiton for 1-5 years, 17% of

respondents have worked for 6-10 years and 8% have worked for 11years and above. This

indicates that most of the workers have been with the organisaiton for 1-5 years.

Figure 4.4 Years of Working with the Organisation

Years of Working with the Organisation

8
17

75

01-May 06-Oct 11years and above

Source: Field Survey, 2018

30
4.2 Factors that influence employees’ decision to stay with the organisation

4.2.1 Limited Job Option

Table 5

Feedback Respondents Percentage %

Strongly disagree 10 17

Disagree 3 5

Neutral 7 12

Strongly Agree 15 25

Agree 25 41

Total 60 100

Source: Field Survey, 2018

The results of better job option are presented in the table above. This results show that 17% of

respondents strongly disagree to the issue, 5% of respondents disagree to the issue, 12% of

respondents were neutral to the issues, 25% of respondents strongly agree to the issue while 41%

of respondents agree to the issue. Majority of respondents confirms that limited job option

influence workers decision to stay.

31
4.2.2. Employees feel devalued and unrecognized in the organization

Table 6

Devalued Respondents Percentage %

Strongly disagree 28 46

Disagree 10 17

Neutral 8 13

Strongly Agree 4 7

Agree 10 17

Total 60 100

Source: Field Survey, 2018

The results of employees feel devalued and unrecognised in the organisation are presented in

table 6. The results show that 7% of respondents strongly agree to the issue, 13% of respondents

were neutral on the issue, 17% of respondents agree to devalued and being unrecognised by the

organisation, also 17% of respondents disagree to the issue of devalued and not recognised by

the organisation while majority of respondents representing 46% strongly disagree to the issue of

devalued and unrecognised the organisation. This implies that when most workers are valued and

recognised they will stay in the organisation.

32
4.2.3. Little growth and advancement opportunities in the organization

Table 7

Feedback Respondents Percentage %

Strongly disagree 10 17

Disagree 7 12

Neutral 3 5

Strongly Agree 14 23

Agree 26 43

Total 60 100

Source: Field Survey, 2018

Table 7 shows the results of little growth and advancement opportunity in the organisation. The

results show that 17% of respondents strongly disagree to the issue, 12% of respondents disagree

to the issue of little growth and advancement opportunity, 5% of respondents were neutral on the

issue, 23% of respondent strongly agree to the issue while 43% of respondents being majority

agree to the issue. This shows that little growth and advancement opportunity in the organisation

will influence workers to stay.

33
4.2.4 Workplace is not living as to expectations

Table 8

Expectations Respondents Percentage %

Strongly disagree 18 30

Disagree 12 20

Neutral 5 8.3

Strongly Agree 5 8.3

Agree 20 33.3

Total 60 100

Source: Field Survey, 2018

The table above shows that, 18 respondents representing 30% strongly disagree to the fact that

workplace is not living as to expectations, while 12 respondents representing 20% of respondents

disagree to the issue, 8.3% remain neutral on the issue and 5 respondents representing 8.3%

strongly agree to the issue. Most of the respondents, 20 with a percentage of 33.3% concluded

(agreed) that workplace is not living as to expectations. This implies that the issue of workplace

need to be addressed by organization to encourage workers to stay.

34
4.3 Measures put in place by organizations to reduce employee’s turnover

4.3.1 Employees are rewarded, recognized and appreciated after completion of a task

Table 9.

Rewarded Respondents Percentage %

Strongly disagree 13 21.7

Disagree 16 26.7

Neutral 10 17

Strongly Agree 6 10

Agree 15 25

Total 60 100

Source: Field Survey, 2018

The table above shows that 13 respondents representing 21.7 % of respondents strongly disagree

to reward, recognition and appreciation after completion of task, 26.7% of respondents disagree

to the issue, 17% of respondents were neutral on the issue, 6 respondents representing 10%

strongly agree to the issue of reward, recognition and appreciation after work whiles majority

agree to the issues. This indicates that there isn’t any exciting reward system for employees.

35
4.3.2 Employees have access to adequate advancement opportunities

Table 10.

Opportunities Respondents Percentage %

Strongly disagree 34 57

Disagree 13 21.7

Neutral 1 1.7

Strongly Agree 4 7

Agree 8 13

Total 60 100

Source: Field Survey, 2018

The results of employees have access to adequate advancement opportunities are presented in the

table above. The results show that 57% of respondents strongly disagree to the issue, 21.7% of

respondents disagree to access adequate advancement opportunities, 1 respondents representing

1.7% were neutral on the issue, 4 respondents representing 7% strongly agree to adequate

advancement opportunities in the organisation whiles 13% of respondents agree to adequate

advancement opportunities in the organisation. Majority of the workers confirms for a fact that

there no access to advancement opportunities in the organisation.

36
4.3.3 Employees receive fair and competitive salaries

Table 11.

Salaries Respondents Percentage %

Strongly disagree 5 8

Disagree 18 30

Neutral 12 20

Strongly Agree 9 15

Agree 16 27

Total 60 100

Source: Field Survey, 2018

The table above show the results of employee receive fair and competitive salaries. The results

show that 5 respondents representing 8% strongly agree to the issue, 18 respondents representing

30% disagree to the issue of fair and completive salaries, 12 respondents representing 20% were

neutral on the issue, 15% of respondents strongly agree to the issue of receiving fair and

competitive salaries and 27% of respondents agree to the issue of receiving fair and completive

salaries. Most respondents confirmed that they do not receive fair and completive salaries.

37
4.3.4 Both existing and new employees are given orientation programmes by management

Table 12.

Orientation Respondents Percentage %

Strongly disagree 21 35

Disagree 28 46.7

Neutral 2 3

Strongly Agree 3 5

Agree 6 10

Total 60 100

Source: Field Survey, 2018

The table above shows that 35% of respondents strongly disagree to employees given

orientation, 46.7% of respondents being most disagree to the issue, 3% of respondents were

neural, 3 respondents representing 5% strongly agree to the issue and 6 respondents representing

10% agree to both existing and new employees given orientation progrsmmes.

38
4.3.5. Employees are provided with the possible supplies and equipment to work with

Table 13.

Equipment Respondents Percentage %

Strongly disagree 12 20

Disagree 8 13

Neutral 4 7

Strongly Agree 16 26.7

Agree 20 33.3

Total 60 100

Source: Field Survey, 2018

From the table above, 20% of respondents strongly disagree to provision of equipment to work

with, 13% of respondents disagree to the issue, 7% of respondents were neutral on the issue of

provision of equipment, 26.7% of respondents strongly agree to provision of equipment to work

with while majority of respondents representing 33.3% agree to the issue. This implies that

workers are supplied with the equipment to work with.

4.4 Effect of employee’s turnover on organizations productivity

4.4.1 Employees moral are improved

Table 14.

Moral Respondents Percentage %

Yes 43 72

No 17 28

Total 60 100

Source: Field Survey, 2018

39
The above table indicates that 72% of respondents said yes to employees moral improved whiles

28% of respondents said no. this indicates that. Base on majority, workers moral are

improved.This can be done with the right system to check or manage employee turnover.

Figure 4.5. Employees moral are improved

MORAL

28%
Yes
No
72%

Source: Field Survey, 2018

4.4.2 Employees receive job satisfaction

Table 15.

Moral Respondents Percentage %

Yes 50 83

No 10 27

Total 60 100

Source: Field Survey, 2018

40
50 respondents representing 83% said yes to job satisfaction whiles minority representing 27%

said no to job satisfaction. This shows that job satisfaction can be realized in the organization.

4.4.3 Increases cost of managing employees

Table 16.

Cost Respondents Percentage %

Yes 39 65

No 21 35

Total 60 100

Source: Field Survey, 2018

From the table above, 39 respondents said yes representing 65% while 21 respondents

representing 35% said no to increase cost of managing employees. This indicates that, majority

of respondents confirms that the is increase in cost of managing employees to curb employee

turnover

4.4.4 Organization loses it best workers or employees

Table 17.

Cost Respondents Percentage %

Yes 48 80

No 12 20

Total 60 100

Source: Field Survey, 2018

From the table above, 48 respondents said yes representing 80% while 12 respondents

representing 20% said no to organization loses it best workers or employees. This indicates that,

41
majority of respondents confirms that the organization loses it best workers or employees in an

event of employee turnover. The diagram below shows the results of findings.

Figure 4.6 Organization loses it best workers or employees

cost

20

80

48 12

Source: Field Survey, 2018

42
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

The study investigated the causes of employee turnover in the hospitality industry: “A case study

of African Regent Hotel. The researcher was interested in discovering the reasons for employee

turnover in the organization, the effect of employee turnover on organizations productivity,

examine measures put in place by organizations to reduce employee’s turnover and identify

factors that influence employees’ decision to stay with the organization. This chapter presents a

summary of the entire study and also makes conclusions and recommendations for future

research.

5.1 Summary

The study therefore looked at the causes of employee turnover in the hospitality industry, a case

study of African Regent Hotel. Specifically, this chapter consists of the background of the study,

the main problem statement, objectives and significance of the study, scope of the study,

limitation and the organization of the study. The study also reviewed related literature such

definitions, causes of employee turnover, employee retention, cost of turnover and effects of

turnover. The study also employed both quantitative and qualitative methods as research design.

In all a sample size of 60 respondents was used for the study.

The study identified the following findings in relation to the objectives of the study:

43
5.1.1 Effect of employee’s turnover on organizations productivity

1. It was identified that majority of workers moral are improved in the organization.

2. The study discovered that employees in the organization received job satisfaction base on

the response of most workers.

3. Most respondents indicated that, managing employee turnover increases cost. This

implies that managing it comes it cost (budget).

4. Majority of respondents confirms that the organization loses it best workers or employees

in an event of employee turnover.

5.1.2 Factors that influence employees’ decision to stay with the organization

1. Majority of respondents confirms that limited job option influence workers decision to

stay.

2. Most respondents concluded that they are not devalued and hence decide to stay

3. It was identified that majority of respondents will to stay if there is little growth and

advancement opportunity in the organisation.

4. Most of the respondents, concluded that workplace is not living as to expectations. This

can influence them to move out of the orgsnisation.

5.1.3 Measures put in place by organizations to reduce employee’s turnover

1. This indicates that, there is no exciting reward system for employees which account for

the exit of employees.

44
 2. Most respondents confirmed that they do not receive fair and competitive salaries which

can lead to the decision to quit.

3. It was identified that most respondents confirmed to absence of orientation programmes

for both new and existing employees. This leads to employees not having the current

ways (methods) of discharging their duties hence influence the decision to quit.

5.2 Conclusion

The study concludes that, since employees in the organization receive job satisfaction and

managing employee turnover increases cost. The organization should effectively and efficiently

managed the funds allocated to avoid profligate spending in dealing with employee turnover.

With the issue of factors to influence employees to stay in the organization, the study concludes

that workplace, little growth and advancement opportunity and issue not appreciating (devalue)

service rendered by employees in the organization can call for employees to stay if properly

managed and will lead to their exit if failed.

The study concludes that since workers don’t not receive exciting reward, do not receive fair and

completive salaries and absence of orientation programmes for both new and existing employees

can lead to the exit of employees. The organisation must establish it available motivational or

reward systems since they are found to be sensitive in inflecting the decision of employees to

stay in an organisation.Provision of better working conditions, employing people with the right

skills and provision of training to equip employees with necessary skills will help deal with the

issue of employee turnover.

45
5.3 Recommendations

Based on the findings of the study, the following recommendations were made:

i. The study recommends that, the organization must establish sound and effective

retention strategies by providing better working conditions and providing

opportunities for training and development. This will help upgrade their (employee)

skills to match the new technologies and new ways of doing things.

ii. The recommends that, the organization must or introduce supervisor support to

enhance employees’ intention to stay on the job. This means that measures must be

put in place to help managers recognise that each supervisory relationship is

important, unique and entails different skills and approaches.

iii. The organization must introduce a system to identify what employees think about

their jobs, their attitudes towards their jobs, what verves them up in giving off their

best and what kinds of organizational practices discourage and eventually push them

out (motivates the to do their best). This system would help management to have

quick response to issues before it escalate.

iv. Finally, the researcher recommends that, the organization should involve its

employees in decision- making. This will get them very much committed to the

organizational goals, and also get to know the state of affairs of the hotel.

46
5.4 Suggestions for Further Research

This study focused on the determinants of employee turnover in the hospitality industry, a case

study of African Regent Hotel. The researcher recommends that a further study be undertaken

encompassing more organizations and more indicators that will help uncover the causes of

employee turnover in organizations in Ghanaian.

47
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 APPENDIX

UNIVERSITY COLLEGE OF MANAGEMENT STUDIES

DEPARTMENT OF HUMAN RESOURCE MANAGEMENT AND GENERAL STUDIES

I am, a student of University College of Management Studies, conducting a research on the

research questionnaire on causes of employee turnover in the hospitality industry: “A case study

of African Regent Hotel”. You have been identified as someone who can assist by responding to

the question intended for the research. I wish to assure you of extreme confidentiality of any

information you may provide and also that your responses are only for the purposes of this

research, thank you.

REQUIREMENT

Please tick (√) where appropriate.

SECTION A

1. Gender : a) Male [ ] b) Female [ ]

2. Age: a) 20 - 25 [ ] b) 26 – 30 [ ] c) 31 – 45 [ ] d) 46 and above [ ]

3. Educational background

a) Degree [ ] b) HND [ ] c) SSCE\WASSCE [ ] d) JHS [ ] e) Others [ ]

4. How many years have you been working?

a) 1-5year [ ] b) 6-10years[ ] c) 11years and above [ ]

52
SECTION B

Factors that influence employees’ decision to stay with the organisation?

Using the scale below, please tick agree or disagreement for the following question (5-9)

1= Strongly disagree (SD) 2 = Disagree (D) 3=Neutral (N) 4= Strongly (SA) Agree (A) 5

= Agree

SD D N SA A

5. Limited job option 1 2 3 4 5

6. Employees feel devalued and unrecognized in the organization 1 2 3 4 5

7. There are too little growth and advancement opportunities in the 1 2 3 4 5

organization

8.stress from overwork and work-life imbalance 1 2 3 4 5

9.workplace is not living as to expectations 1 2 3 4 5

SECTION C

Measures put in place by organizations to reduce employee’s turnover

Using the scale below, please tick agree or disagreement for the following question (10-14)

1= Strongly disagree (SD) 2 = Disagree 3=Neutral (N) 4= Strongly Agree (A) 5 =

Agree

53
 SD D N SA A

10.Employees are rewarded, recognized and appreciated after 1 2 3 4 5

completion of a task

11.Employees have access to adequate advancement opportunities 1 2 3 4 5

12.Employees receive fair and competitive salaries 1 2 3 4 5

13.Both existing and new employees are given orientation 1 2 3 4 5

programmes by management

14.Employees are provided with the possible supplies and 1 2 3 4 5

equipment to work with

SECTION D

Effect of employee’s turnover on organizations productivity

Using the scale below, please tick YES or NO for the following question (15-20)

1= ( YES) 2= (NO)

YES NO

15.Employees moral are improved 1 2

16.Employees are able to use new capabilities from training received 1 2

17. Increases cost of managing employees 1 2

18. Increase in productivity 1 2

19.Employees receive job satisfaction 1 2

20. Organization loses it best workers or employees 1 2

Thank you

54