CHAPTER 1

THE PROBLEM

Introduction

Hospitality industry is the one of the most distinct industries today. This

service-oriented industry is one of the largest and employs thousands on the

different positions available. The hospitality industry comprises different sectors

and the restaurant or food service industry sector is the most challenging. In terms

in the quality of service, the restaurant industry is highly competitive as it has a

suggestive effect on the profitability and success of the restaurants. In the

Philippines, the restaurant industry is at its peak and food has always been part of

the Filipino culture. According to the 2011 Annual Survey of Philippine Business

and Industry on Hotels and Restaurants, the number of restaurants grew from

72,200 outlets in 2007 to 80,000 outlets in 2011, an increase of 11% and it is

anticipated that the number of restaurants will continue to grow by two to 5%

annually (USDA Foreign Agricultural Service, 2013)

 Massad, Heckman, and Crowstone (2004) recognized that the service

provided by employees help build a good relationship with customers and achieve

customer satisfaction. Delivering good quality at a constant pace guarantees a

competitive advantage, which leads to customer satisfaction. To achieve customer

satisfaction employees should deliver the service well and in order for the

employees to deliver that kind of service they should be appraised or there should

be employee performance recognition techniques implemented by the manager or

owner of the restaurant. Employee satisfaction is impacted by employees’

perceptions of their job and the organization for which they work (Eskildsen &

Nussler, 2000). Kotler, Bowen, and Makens (2001) stated that employees must

know how they are doing to perform effectively.

Restaurant owners and managers have implemented employee

performance recognition techniques to acknowledge employee performance

which can motivate employees to achieve more customer satisfaction. Some

owners and managers of restaurants are aware that they can never achieve

customer satisfaction if their employees are not satisfied

Hence, the aim of this study was to find out that how employees are

acknowledged in the restaurant industry and the impact of these employee

performance recognition techniques with customer satisfaction in restaurant

industry of Tacloban city.