Professional Documents
Culture Documents
2016, Vol. 5 7
Rochester Institute of Technology, RIT Croatia, Don Frana Bulića 6, 20000 Dubrovnik
1Corresponding author e-mail pxk3756@mail.rit.edu
2Corresponding author e-mail vanda.bazdan@croatia.rit.edu
3Corresponding author e-mail besim.agusaj@croatia.rit.edu
Keywords: Organizational climate, turnover intention, leadership, employee satisfaction, hospitality industry.
The aim of this study was to find out the organizational climate (OC) in hotels in Dubrovnik and how
it correlates to employees’ intention to leave the organization. Surveys administered to front-liners
and employees in non-managerial job positions in three, four and five star hotels, measured different
elements of OC, in terms of performance of their organization and their perceived importance. The
results indicate that the organizational climate in these hotels is best described as rule-oriented. The
employees reported the highest level of satisfaction with ‘Role Clarity’ in their company, and were
least satisfied with ‘Career Development.’ While the participants also perceive ‘Role Clarity’ as the
most important factor for the organization, which suggests that management is adequately addressing
the expectations of employees, ‘Career Development’ is one of the factors rated as least important,
which is arguably troubling in the industry that struggles with employee retention. Results further
show that ‘Training and Job-Socialization’ is neglected in hotels, though high importance is allotted
to training by hotel personnel, making this the area in need of immediate improvement. The absence
of appropriate training could be seen as one of the factors influencing the difference in rating of
companies’ performance by permanent, seasonal and co-op workers, with latter providing lower
ratings for performance of companies regarding ‘Role Clarity’ and ‘Commitment and Morale.’
perceptions of organizational members One must be able to reach the specific turnover is not only problematic because
who are exposed to the same goals in the specific time period in order of the productivity and the negative
organizational structure (Schneider, to satisfy the organizational standards impact it has on other employees, but
1990). Organizational climate is also and rules. Litwin and Stringer (1968) also because of the resources that are
defined as a perception of environment found that goal-oriented organizations wasted in the process of recruitment,
in the organization, how it is composed, and leaders encourage their employees selection and training. A typical
and its elements and dimensions. The to take personal responsibility for their organization spends $10,000 USD when
term organizational climate is derived specific job tasks and the results of managerial level turnover occurs, and
from organizational culture which is a these tasks. By doing so, employees set employees in lower positions such as
set of rules, values and beliefs that a high standards for themselves and for waiters or receptionists cost as much as
company has, and according to which the organization. $1,500 USD due to the training needed
the employees of the organization must in order for them to function according to
act (Asif, 2010; Cutler 2014). The culture Employee Turnover in Hospitality the companies’ rules and standards.
helps the employees by giving them Industry. Hospitality is one of the
guidelines on how to perform their job biggest industries in the world, it Organizational Climate and Job
correctly. The organization creates an employs large amounts of people and Satisfaction. Job satisfaction is a
atmosphere in which the employees contributes significantly to the feeling of satisfaction and dissatisfaction
work, and the way that they feel inside international gross domestic product in the workplace (Rahimic, 2013). It can
that atmosphere is considered to be the (Vasquez, 2013). Yet, it must be stated be defined as a positive attitude
organizational climate. Organizational that compared to other industries’ resulting in pleasure and passion about
climate is the way employees perceive employee turnover rates the highest the job or workplace. A study done in the
events, practices, and procedures, and occur in the hospitality industry (Tews, USA showed that out of most people,
learn about the kind of behaviors that Michel & Ellingson, 2013). In fact, the 80-85%, are satisfied with their job, at
are rewarded and respected. annual turnover rates for entry-level least on the primary level (Rothman,
employees in hotels and restaurants can 1997). This is true mostly because it is a
Categorization of Organizational easily exceed 50% (Hinkin & Tracey, part of human nature to rationalize
Climate. There are three basic types of 2000). things. Furthermore, every job has its
organizational climates: people-oriented, advantages and disadvantages, but it is
rule-oriented and goal-oriented Quality employees are the most essential to find the right balance
organizations (Manning & Davidson, important factor in the hospitality between the two. By rationalizing,
2004; McLaughlin, n.d.). According to industry (He, Lai, &Li 2011), as they people tend to eliminate the negatives
Hellriegel and Slocum (1974) the provide a critical competitive advantage by focusing on the positive aspects of
people-oriented organizational climate is to companies and can determine the the workplace. In other words, if the
the type of environment in which the difference between successful and feeling of satisfaction overwhelms the
satisfaction of the employee is the most unsuccessful companies. The company feeling of dissatisfaction, people will
important aspect, and where employees must make and maintain an overall find themselves satisfied with
experience favorable working organizational climate which will their job position, and vice versa. Job
conditions. In this climate category encourage workers to be more efficient satisfaction highly correlates with
leaders are working hard to satisfy their and achieve great results. Management rewards. There are two main types of
employees’ needs, such as fair is being pushed to make adjustments rewards, extrinsic and intrinsic rewards.
compensation, flexible working hours, and new plans to retain their employees Extrinsic rewards include conditions in
independence, involving them in the and lower their turnover rate. High the workplace and reward systems
decision making processes, etc. This turnover rate in a company can hurt their (Rothman, 1997). Extrinsic rewards are
kind of approach gives them a feeling of image and credibility, but this is also tangible rewards like salary, benefits,
belonging and builds their confidence problematic for the remaining security, and intangible rewards like
(Manning & Davidson, 2004). The rule- employees because it spreads negative working hours, schedule and the like.
oriented type of organizational climate is energy among them (Baneryee, 2014). There are also social benefits, and
based on tradition and a strong set of Another impact of employee turnover is relationships with co-workers that
rules that are valued and are not to be that turnover harms a company’s contribute as important factors of
changed. It is expected from the efficiency and can be costly (Joseph, extrinsic rewards. On the other hand,
employees to fit in and follow the 2013). High turnover rate has an effect intrinsic rewards are focused on job
procedures where rule-orientation refers on more than just the industry, it also content such as autonomy and self-
to a concern for adhering to rules and influences the local and global economy direction, challenges, decision-making
regulations. The existence of rigid rules since the hospitality industry, as we and the like. Dissatisfaction in the
and regulations are negatively related to mentioned earlier, is one of the biggest workplace is mostly connected with
innovation and are one of the employers, both locally and globally unrewarding job positions. Dissatisfying
characteristics related to big (Vazquez, 2013). Additionally, employee and psychologically unrewarding jobs
organizations (Nystrom, Ramamurthy & turnover impacts productivity, can lead to dissatisfaction in an
Wilson, 2002). This is a traditional, old effectiveness, and may alter a hotel’s employee’s personal life as well.
fashioned type of organizational climate cost structure and plan (Davidson,
and is not popular with the new 2010). Organizational climate and job
generation of employees (Manning & satisfaction are two different constructs
Davidson, 2004). The goal-oriented type Employee turnover is both expensive but they both influence employee
of climate sets an atmosphere in which it and troublesome as organizations are performance and the intention to leave
is expected from the employees to reach confronted with endless cycles of (Rahimic, 2013). It is very important to
the organizational goals. Goals can be recruitment, selection and training. have good communication, healthy
set on daily, weekly or monthly bases. According to Vazquez (2013), employee relationships and a well-functioning
environment in order for the company to climate are. The OCQ measures 13 changes have been implemented into
operate properly. The same principles different dimensions of organizational the original questionnaire. The
apply for employees to reach the peak climate. The first dimension is ‘Role questionnaire was translated to Croatian
of their productivity and to have them Clarity,’ and it is connected with job and some the questions were
actively participating in the company’s description and job responsibilities. The eliminated, or modified in order to fit the
goals and objectives. Organizational second dimension is ‘Respect,’ and it is context when translated into the
climate is a motivation strategy. There based on respect between colleagues Croatian language. Since the original
are too ways to motivate your within a department and between questionnaire measures organizational
employees, by assuring them with fair departments. The third dimension is climate, and not specifically turnover
financial compensation and by providing ‘Communication,’ and it is connected intention, additional questions were
them with a workplace that is taking care with the level of communication between implemented, e.g. ‘I plan to work here in
of all their needs and therefore departments, and the ability to express the future’.
motivating them to perform better your thoughts and the like. The fourth
(Milman, 2002). dimension is ‘Reward System,’ which is The questionnaire is based on 46
connected with salary and benefits. The questions of which four questions are
Factors like flexible working hours, staff fifth dimension is ‘Career Development,’ about gender, hotel category,
training, team building, awards, etc., are and it is based on the ability to progress department, and type of working
important to make them happy. Satisfied inside the company. The sixth dimension relationship, used to detect potential
employees are key to success is ‘Planning and Decision Making,’ and it differences in ratings in hotels in
(Hamington, 2010), explained by the is based on coordination, planning and different hotel categories, different hotel
simple narrative that organizational autonomy. The seventh dimension is departments, and by those of different
climate influences employee job ‘Innovation,’ and it is based on following employment type and gender. The other
satisfaction, and is therefore crucial for trends in technology and finding new 42 questions are answered two times
the success of a company. It influences ways to do things. The eight dimension and are rated on the scale from 1-7. In
the employee’s psychological processes is ‘Relationships,’ and it is connected the first part participants needed to
of communication, problem solving, with flexibility of management to satisfy assess how much the statement applies
education, productivity and encourages the needs of their employees. The ninth in their case, i.e. performance of the
innovation which results in job dimension is ‘Teamwork and Support,’ company, where 1 means ‘strongly
satisfaction. Because of this, companies and it is connected with workload and disagree’ and 7 means ‘completely
are starting to realize the importance of quality of teamwork. The tenth agree’. In the second part they need to
understanding organizational climate. dimension is ‘Conflict Management’ and rate how much they believe the item is
it is based on problem solving and important for the organization, generally
Consequently, it is crucial that managers avoiding conflict. The eleventh speaking, if 1 stood for ‘completely
are familiar with their employees and dimension is ‘Commitment and Morale,’ unimportant’, and 7 for ‘essential’.
that they know what their needs and and it is based on the atmosphere or
feelings are (Lam, Zhang, & Baum, morale at the workplace. The twelfth The 42 questions are divided into
2001). It must be emphasized that in dimension is ‘Training and Learning,’ thirteen different categories which are
hospitality one of the critical aspects of and it is connected with amount, and based on the different aspects of the
corporate success is that companies are quality, of training that the organization workplace which are connected to the
satisfying their customers’ needs by offers to its employees. The final organizational climate. The participants
fulfilling the needs of their employees; dimension in this instrument is were not provided with the category
therefore, organizational climate plays ‘Direction,’ and it is connected with information. Category and item list is
an important role in shaping employee company’s plans for the future, and its available in the results section of this
satisfaction. path (Furham & Goodstein, 1997). paper (see Table 1, Table 4 and Table
5).
Measuring the Organizational
Climate. A large number of measures of This survey was administrated to the
organizational climate exist. There is a Methods employees of three, four, and five star
fifty-item questionnaire covering nine hotels in the Dubrovnik area.
dimensions by Litwin and Stringer This study examined the organizational Specifically, the research focused on the
(1968), House & Rizzo’s (1972) climate and turnover intention in three, front-liners and employees not in
Organization Description Questionnaire, four and five star hotels in Dubrovnik. management positions. From 120
the Survey of Organizations (Taylor & Specifically, this study sought to distributed surveys, 28 were not filled
Bowers, 1972), Business Organization determine the overall level of out properly, 16 were returned blank,
Climate Index (Payne & Phesey, 1971), organizational climate in Dubrovnik and 76 were analyzed. There were 28
and many others including the OCQ hotels, detect potential differences in (37%) participants working in five star
instrument that we used in our research. stances of employees in hotels with hotels, 25 (33%) in three star hotels,
Organizational Climate Questionnaire different star ratings, or different and 23 (30%) in four star hotels. There
(OCQ) has a goal to deliver all the departments and detect the effect of were 41 (54%) women and 35 (46%)
dimensions of climate (Furham & gender and type of employment in the men participating in the survey.
Goodstein, 1997). One of the important organizational climate assessment.
aspects that OCQ has to cover is that it Additionally, the relationship between
has to ‘travel well,’ meaning that it can turnover intention and specific aspects
be applied across the geographical of organizational climate was examined. Results
areas and across different cultures. It
also asks the respondents to state how The survey model is based on Furnham Organizational climate assessment
important each of the elements of and Goodstein’s (1997) organizational for items. For the purpose of assessing
climate questionnaire (OCQ). Some the general organizational climate of the
sample, mean scores were calculated addressed immediately, i.e. those rated
for all of the items in the questionnaire. as low performance and of high
The items with the lowest ratings importance. Low performance recorded
reported in terms of organization for items ‘I think my boss is too tolerant
performance were regarded to of poor performances’, ‘I rarely have too
remaining in the company till retirement much to do over too little time’, ‘I can
(M=3.61, SD=2.17), rarely being work here till retirement’, ‘I can be part
overwhelmed with the amount of work in of decision making processes’, ‘There is
a short time frame (M=3.95, SD=1.80) an adequate system for career
and the assessment of whether development’, ‘Employees are
employees’ talents are fully utilized in adequately rewarded in the company’
their job position (M=3.99, SD=2.05). and ‘I am rarely put under undue work
Items with highest average ratings in pressure’, according to the matrix may
terms of performance were those be ignored as these were graded by
regarding role clarity, specifically, employees as being of low importance
respondents reported knowing their as well, hence changing these could not
responsibilities (M=5.82, SD=1.19), be expected to yield significant
having clear objectives and goals set for improvements. For the entire sample no
their job (M=5.66, SD=1.3), and knowing items were perceived as high in
exactly what is expected of them performance, yet low in importance for
(M=5.58, SD=.99). The items rated as the functioning of the organizations. This
least important for organizations were " suggests that there are no misguided
regarded to additional assignments and efforts in specific areas of organization.
work piling up (M=4.36, SD=1.78),
followed by the commitment of As for the items in the matrix that were
employees to remain with the company rated as high in performance and high in
(M=4.64, SD=1.90). The highest importance, these belong in the ‘Role
importance ratings regarded employees’ Clarity’ category, which suggests that in
awareness of what is expected from terms of role clarity generally speaking
them (M=6.53, SD=.70), followed by the the important issues are being
information needed to do one’s job addressed by hotels in the sample.
(M=6.49, SD=.90), and adequate
information sharing between Differences in assessment of items.
departments (M=6.46, SD=.76). Differences in assessment of items
regarding performance and importance
" were examined by the use of Kruskal-
Wallis test and Mann-Whitney test. Only
Results obtained in the described
significant differences are reported.
sample indicate that average scores for
agreement (personal report) of 5 or Hotel rating. Statistically significant
above can be considered high (third
differences between hotels of different
quartile), whereas scores of 4.3 and
star rating were discovered for three
bellow can be considered low (first items regarding performance.
quartile); and that average importance
scores of 6.3 and above can be
considered high, whereas importance
scores of 5.8 and bellow can be
considered low. With the high and low
scores determined, critical items were
entered into the matrix displayed bellow.
"
a significantly lower rating than five stars Organizational climate assessment suggests that in terms of the
hotels on the item ‘Conflicts between for categories. Mean scores were also organizational climate there is one
departments are minimal’, z =-14.46, p calculated for all of the categories of pressing issue for organizations to
=.05. items regarding organizational climate. address (low performance-high
Role clarity (M=6.44, SD=.67) and importance category), and it regards
Type of employment. Results of Communications (M=6.33, SD=.68) adequate training of employees. The
Kruskal-Wallis test determining whether were rated as most important for results are further troubling as they
there were differences in performance organizations, while, interestingly suggest that Career Development and
assessment by permanent employees, Teamwork and Support (M=5.22, SD=. Teamwork and Support are rightfully
seasonal or co-op workers indicated 78) received lowest ratings, followed by less attended to. The importance of Role
significant difference in ratings for five Career Development (M=5.51, SD=.76). Clarity and Communication and high
items: ‘My job has clear levels of performance for these
goals’ (χ2(2)=10.57, p=.01), ‘My categories, on the other hand, are to be
company has adequate future celebrated.
plans’ (χ2(2)=6.41, p=.04), ‘My
company satisfies the needs of
employees’ (χ2(2)=8.22, p=.02), ‘Morale
is high in most
departments’ (χ2(2)=8.13, p=.02), ‘My
personal morale is high’ (χ2(2)=7.18, p=.
03).
larger and a more representative sample intention to quit item can’t be used as a the assumption was that part-time
and should include the managerial staff conventional ‘intention to quit’ employees may wish to come back to
as well. Additionally, both full time and dimension; namely, as soon as an work in the future and therefore were
part-time employees were included in employment contract expires these kept in the sample throughout the
the survey even though the question employees are freed of their duties and analysis.
remains whether this is appropriate hence can’t truly consider the question
since with part-time employees the whether they want to stay or quit. Yet
References
Banerjee, P. (2014). A study of effective team building in relation to organizational culture and organizational climate in
universities in Delhi.Higher Education for the Future, 1(2), 211 -225.
Cutler, A. (2014). Leadership Psychology: How the Best Leaders Inspire Their People. London: Kogan Page Ltd.
Davidson, M. (2010). How much does labour turnover cost: A case study of Australian four-and five-star hotels?. International
Journal of Contemporary Hospitality Management, 22(4),451 – 466.
Farah, A. (2011). Estimating the impact of Denison's (1996): What is the difference between organizational culture and
organizational climate? A native's point of view on a decade of paradigm wars. Journal of Business Research, 5(64),
454-459.
Furnham, A., & Goodstein, L. (1997). The Organizational Climate questionnaire.Consulting, 2, 163-179.
He, Y., Li, W., & Lai, K.K. (2011) Service climate, employee commitment and customer satisfaction: evidence from the
hospitality industry in China. International Journal of Contemporary Hospitality Management, 23(5), 592-607.
Hellriegel, D., & Slocum, J.W. (1974). Organizational climate: Measures, research and contingencies. The Academy of
Management Journal, 17(2), 255-280.
Hinkin, T. T., & Tracey, J. B. (2000).The cost of turnover.Cornell Hotel and Restaurant Administration Quarterly, 41, 14-21.
House, R. & Rizzo, J. (1972). Toward a measure of organizational practices: Scale development and validation. Journal of
Applied Psychology, 56, 388-396.
Lam, T., Zhang, H., & Baum, T. (2001). An investigation of employees’ job satisfaction: the case of hotels in Hong
Kong. Tourism Management, 22(2),157-165.
Litwin, G. H., & Stringer, R. A. (1968).Motivation and organizational climate. Boston: Division of Research, Graduate School of
Business Administration, Harvard University.
Manning, M., Davidson, M., & Manning, R. (2004).Measuring tourism and hospitality employee workplace perceptions.
International Journal of Hospitality Management, 24(1), 75-90.
McLaughlin, J. (n.d.). Organizational climate: Definition, factors & impacts on culture. Retrieved September 29, 2015, from
http://study.com/academy/lesson/organizational-climate-definition-factors-impacts-on-culture.html
Milman, A. (2002). Hourly employee retention in the attraction industry: Research from small and medium-sized facilities in
Orlando, Florida.Journal of Leisure Property, 2(1), 40.
Nystrom, P. C., Ramamurthy, K., & Wilson, A. L. (2002). Organizational context, climate and innovativeness: Adoption of
imaging technology. Journal of Engineering and Technology Management, 19(3), 221-247.
Payne, R. &Phesey, D. (1971).C.G. Stern’s organizational climate index.Organizational Behavior and Human Performance, 18,
45-62.
PD, J. (2013). Employee job satisfaction in hotel industry: a study of selected star hotels of kerala&karnataka in
india. International Journal of Applied Services Marketing Perspectives, 2(3), 507-511.
Rahimic, Z. (2013). Influence of organizational climate on job satisfaction in Bosnia and Herzegovina companies. International
Business Research, 6(3), 129-139.
Rothman, R. (1997). People at work: The sources of fulfillment and discontent. In Working and sociological perspectives.Upper
Saddle River, NY: Pearson.
Taylor, J., & Bowers, D. (1972).Survey of organizations: A machine-scored standardized questionnaire instrument. Ann Arbor,
MI: University of Michigan.
Tews, M. J., Michel, J. W., & Ellingson, J. E. (2013).The impact of coworker support on employee turnover in the hospitality
industry. Group & Organization Management, 38(5), 630-653.
Vasquez, D. (2014). Employee turnover in the hospitality industry: A qualitative phenomenological study. (Order No. 3579490,
Argosy University/Sarasota). ProQuest Dissertations and Theses.