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SCHOOL OF GRADUATE STUDIES CATHOLIC UNIVERSITY COLLEGE OF GHANA / /
PROGRAMME: MASTER OF SCIENCE IN BUSINESS ADMINISTRATION (HUMAN
RESOURCE OPTION) STUDENT NAME: STUDENT INDEX. NO.: TOPIC: A STUDY OF
COMPREHENSIVE ANALYSIS OF EMPLOYEE ATTRITION RATE IN HOSPITALITY
INDUSTRIES IN THE SUNYANI MUNICIPALITY. INTRODUCTION 1.1 Background of the
Study It is a simple well-known fact that every organization or business whether private
or public, profit making or no-profit making and local or international is set to achieve
specific goals and objectives with the help and effort of its human resource or
employees.
In the process of achieving the objectives of the organisation, management and owners
must see people or employees as a very crucial organizational resources and how this
resource can be effectively managed in the 21st Century business set up is a major task
that can make or break the organisation in the achievement of its goals since firms
critically and solely rely on the dedication and commitment of employees to effectively
and efficiently perform the various tasks which translate towards the realization of goals
or objectives of the firm.
The effects of organization’s human resource management (HRM) practices and policies
on the achievement of organizational goals is very enormous. Not only that but the
effects of organizations’ human resource practices on employee attrition intentions and
employee’s attitudes towards organisational performance is also a major challenge for
most organisations in the past and recent years.
There is no gain saying that employee attrition is a critical issue and pretty high in the
hospitality industry these days but it is a major problem which is highlight in all
organizations globally and has been a leading area of study for both human resource
professionals and the research community for years (Delaney & Huselid, 1996; Katou &
Budhwar, 2007; Petrescu & Simmons, 2008).
Mensah and Blankson, (2014) and Denisi & Griffin, (2005) describe Human resources as
the individuals who are employed in an institution to carry out various tasks in exchange
for wages, salaries or rewards. Human resource management (HRM) can be also defined
as a systematic concept that embodies the philosophy, policies, and practices that a firm
or company make use of to effectively harness the knowledge, skills, abilities, and other
characteristics of its employees towards the achievement of organizational goals and
objectives (Pynes, 2009).
Thus, the adoption of an effective and efficient human resource management approach
motivates employees to give their best through better working conditions, higher pay
structure, training and development that would culminate into employee becoming well
motivated through an adequate incentive system in order to maximize output is not just
absolutely necessary but a must for any organization seriously wants to stay competitive
and achieve objectives of the organisation.
Improve and better organisational human resource practices and policies not only
encourages employees to give off their best but also decreases internal turnover and at
the same time increase job satisfaction. According to Akyeampong, (2006) and
Ottenbacher et al., (2009), better human resource system translates into a more
motivated the employees and well-motivated staff are obviously a better human capital
or asset to an organization than a bunch of dissatisfied employees.
Employee turnover or attrition has been and is still rampant human resource and
management challenge in the hospitality industry globally and in particular Ghana.
Hence, Employee Attrition primarily speaks about how long employees stay in a
particular organization or firm. A high employee turnover is usually detrimental to a
firm's productivity, revenue generation and image when highly skilled workers leave
them.
The purpose of this study is to evaluate the effect of attrition rates in the hospitality
industry in Ghana using some selected hotels in the Sunyani Municipality in the bono
region as a case. The current study also aims to understand the literature pertaining to
attrition in the hospitality sector and how to reduce the incidence and rate of employee
turnover with its inherent negative repercussions.
Employee turnover is defined as “the ratio of the number of workers that had to be
replaced in a given time period to the average number of workers”. The Ghanaian
tourism and hospitality industry are now considered as one of the crucial drivers of
growth in the services sector in Ghana. Tourism and the hotel industry in the bono
region of Ghana have substantial future considering the diverse cultural, ethnic and
historic legacy, diversity in ecology, territories and places of natural exquisiteness.
Hospitality industry has a key potential to generate lot of employment and of course an
avenue to generate foreign exchange for the country. However, high employee turnover
is still a major challenge in the hotel industry in the country. Being in customer service
business, hospitality industry relies profoundly on its human resources to have a
competitive advantage edge over others.
The hospitality industry is labor-intensive and that where the problem lies. So, if this
industry fails to understand the reasons for attrition, it can no longer have that
competitive edge over its competitors. It is against this background that many scholars,
governments, and human resource professionals has joined the bandwagon for the
adoption of appropriate measures to curb the menace of high rate of employee attrition
in the hospitality industry across the country (Rogerson & Sims 2012) Globally and in
Africa including Ghana over the last few years, the hotel industry has witnessed
significant growth and boost from a robust global economic boom.
The discovery of oil and gas in commercial quantities has also been a major boost for
the hotel industry and increase in tourism for the nation. Moreover, the establishment of
business headquarters for multinational corporations seems to explain more of the rise
in the hotel and hospitality sector which is expected to hit a record-breaking figure of
almost $1.6 trillion in 2017 alone propelled by bookings in travel and tourism.
In addition, the hotel industry being one of the major sub-sectors of the hospitality
industry constituted over 30 per cent of the value of the global hospitality industry. The
hotel industry in Ghana has received much needed improvement after the liberalization
of the country’s economy and political governance in the 1980s which saw stable
democratic governance and steady economic growth and investor confidence (Mensah
and Blankson, 2014).
This according to Kuuder (2012), is in response to the issue of investor friendliness,
appreciable political stability, and recent oil discovery of the country which saw
International travellers to Ghana increased significantly between the year 2000 to 2009
from 399,000 to 802,779 respectively (Kuuder 2012). From the above discourse, it has
emerged that the hospitality industry and the hotel sector are very significant sector for
our national economy and are expected increase the total contribution by travel and
tourism sector to Ghana’s GDP will see a steady upward trend up to 2025.
This sector is one of the largest foreign exchange earners for Ghana. However, the issue
of employee turnover in the hotel industry is probably higher than in any other industry
(Mullins, 1998) which is troublesome and costly (Mullins, 1998).
It is clearly evident that the hotel industry in Ghana has two important challenges: one is
that the hotel industry has found it really hard to attract appropriate and highly skilled
employee and another challenge is the high employee turnover which ultimately brings
a lot of loses to this industry. Whenever a well-trained and well adapted employee
leaves the organization, it creates a vacuum. So, the organization loses key skills,
knowledge and business relationships.
Managers and human resource departments are greatly interested in reducing Attrition
in the hospitality industry in Ghana, in such a way that it will contribute to the maximum
effectiveness, growth, and progress of the sector. Retaining employees is a critical and
ongoing effort in the hospitality industry in Ghana. To help mitigate against these
difficulties and help the hospitality industry in Ghana to reap the benefits of a booming
economy, the research embarked on this academic journey in A study of comprehensive
analysis of employee attrition rate in hospitality industries Ghana using some selected
hotels in the Sunyani municipality as a case study. 1.2
Problem Statement Employee attrition or turnover is still considered as one of the most
challenging issues bedeviling the hospitality business in Ghana in recent times
(Altarawmneh & al-Kilani, 2010; Ghiselli, La Lopa, & Bai 2001). The issue employee
attrition in the hotel industry has been well studied in numerous countries, especially in
the advanced countries such as Turkey, Cyprus, UK, Australia, USA and some countries in
Asia (Pizam & Thornburg, 2000).
However, there is little or no empirical studies conducted in the context of developing
countries and emerging economies like Ghana. It is therefore necessary to find out if the
same challenges reported in the studies of employee attrition in the developed world
can be identified in sub-Saharan Africa specifically Ghana and to determine whether
proposed solutions can also be implemented to reduce the occurrence of employee
turnover in the hospitality industry.
The issue of employee attrition and the phenomenon of staff turnover is an old one and
a complex and multifaceted one which needs careful consideration due to the fact that
the causes of staff turnover differ in the context of research, the industry, management
structure and nature of the organizations (Griffeth, Hom, & Gaertner, 2000).
The argument that employee turnover is a major challenge for most organizations
cannot be doubted, however, several scholars and leading experts in the field of human
resource management and the hospitality industry posited that firms that are
committed in implementing effective HRM practices and policies can reduce the rate of
employee turnover and also minimize the damaging effects on productivity, revenue,
image and the employees themselves.
This view prompted a myriad of studies and researches to be conducted on the effect of
human resource management (HRM) practices on employee attrition and organizational
performance especially in the hospitality and hotel industry which has been a leading
area of research and study in the developed world for the last three decades (Chan &
Kuok, 2011; Chew & Chan, 2008; Collins, 2007; Huselid, 1995; Martin, 2011; Tokmak,
Turen, & Gokmen, 2012).
However, in developing countries only a few of these studies in employee attrition has
been conducted and albeit in the production and manufacturing industries (Appelbaum,
Bailey, Berg & Kalleberg, 2000). Although one of the surest strategies to gain
competitive advantage in the hospitality industry is through the effective utilization of
human resources.
A primary reason for this condition is that the services provided are seen as inseparable
from their provider (Nadiri & Tanova 2009). The success of this industry therefore
depends on the quality of employees and how effectively they are managed. Employee
turnover remains a vibrant field of further research even though more than 1500
academic researchers have been conducted already (Holtom, Mitchell, Lee, & Eberly,
2008). Yet there is still no universal agreement on the factors that explain why some
employees leave and some stay.
In the Ghanaian context little research has been conducted regarding the A study of
comprehensive analysis of employee attrition rate in hospitality industries and
performance. Attrition of hotel staff mostly affected developing countries and most
especially countries in the sub Saharan Africa, of which Ghana is not excluded and as the
turnover rate in hospitality industries is one of the highest of all industries, this area
needs additional attention.
Moreover, the various studies of the causes of employee attrition and its effects on the
manufacturing or production industries cannot be generalized to the service sector due
to the fact that there are too many differences in technologies, work processes,
interdependence among workers, and the role of customers between the service sector
and the other sectors of the economy (Batt, 2002).
Although the hotel sector is the largest in the hospitality and tourism industry
(Akyeampong, 2006; Ottenbacher et al., 2009). Hotels, a crucial component of the
hospitality sector are characterized by several activities that collectively exert a
significant impact on the national economy which have necessitated several studies
being conducted in Ghana on the Employee Attrition in the hospitality industry but, the
case-setting for all the studies excluded the Sunyani municipality which is the focus of
this study.
For instance, Mensah (2006) focused on some hotels in Greater Accra Region, whilst
Kuuder, et al., (2013) focused on the northern part of Ghana. As Dudwick et al., (2006),
pointed out in their studies, many important characteristics, beliefs, motivations,
perceptions of people and communities cannot be meaningfully understood or reduced
to numbers without particular reference to their local context.
This sole reason motivated the researcher to conduct a study of comprehensive analysis
of employee attrition rate in hospitality industries in the Sunyani municipality. 1.3
Research Objectives The main objective of the study will be to examine and analyze the
effect of human resource management practices on staff attrition of employees in the
selected hotels in the Sunyani Municipality.
In order to achieve the main objective of the study, the following specific objectives have
been outlined: The objectives of this research were: [Link] examine the causes of staff
attrition in the selected hotels in the Sunyani Municipality. [Link] find out which hotels has
the highest staff attrition in the selected hotels in the Sunyani Municipality. [Link] examine
the challenges of staff attrition on the performances and profitability of the selected
hotels in the Sunyani Municipality. [Link] determine how to reduce staff attrition in the
selected hotels in the Sunyani Municipality. 1.4
RESEARCH QUESTIONS The following research questions were used to guide the study.
1. What causes staff attrition in the selected hotels in the Sunyani Municipality? 2. What
effects does staff attrition has on performance and profitability of the selected hotels in
the Sunyani Municipality? 3.
How can management of hospitality industry reduce the incidence of staff attrition in
the selected hotels in the Sunyani Municipality? 1.5 Significance of the study In the First
place, the study will deepen the understanding of the relationships between staff
attrition and performance in the hospitality industry. The research intends to find out
the staff attrition on the performance of workers and management in the hospitality
industry.
Specifically, the study is focus on some selected hotels in the Sunyani Municipality in the
bono region. The study will assist top management and hotels to improve upon
motivational packages for employees in order to stay for longer times in the service to
contribute to the long-term success and increase productivity in the hotel business. It
will also help policy makers to fashion out policies that could reduce staff attrition.
The researcher will add to knowledge or existing literature on the turnover of workers in
the hospitality industry in Ghana. Copies could be made available to the selected hotels
in the Sunyani Municipality. Additionally, they can be used to develop practice or
training manual and materials for personnel of the selected hotels in the Sunyani
Municipality. 1.6
Scope of the study The study covered the subject matter in the Sunyani Municipality in
the bono region of Ghana. It specifically dealt with the hospitality and hotel facilities in
the Metropolis. Sunyani Municipality will be the geographic context of this study. This is
because it is among the municipalities in the regional capital with a heavy concentration
of hotels according to GSS, 2012 and the Ghana Tourism Board, (2009).
Another scope of this study is that it is focus only on hotel sector of the hospitality
industry and because this study concerns itself with hotels in Sunyani Municipality, it
cannot generalize its findings regionally or nationally. provides empirical evidence or
reference for similar studies. Again, this study limits its analysis to the selected hotels in
the Sunyani Municipality because of non-response. 1.7
Brief Methodology Research methodology basically deals with the procedures, methods
and techniques the researcher adopted in the research work. It is largely concerned with
what, why, where and how data will be collected and analysed. The study will employ the
explanatory research case study methodology with the use of descriptive approach to
suggest and explain how and why we could have a particular pattern, why and how
something is happening and following a particular trend or direction.
Again, both quantitative and qualitative research design will be used in analysing data.
The quantitative research emphasises on the collection and analyses of numerical data.
This concentrates on measuring the scale, range and frequency of phenomena. The
quantitative approach is usually detailed and structured and results can be easily
collated and presented statistically.
As human behaviour cannot be measured as phenomena in the natural sciences, it was
ideal to also employ the qualitative approach in addition to the quantitative. According
to Williams (2000) qualitative research helps to interpret the meanings provided by
respondents in a particular social context, rather than quantifying, explaining or
establishing a causal relationship.
Again, Miles and Huberman (1994) and Silverman (2010) all claims that qualitative
research methods are more interesting as compared to quantitative research designs.
Information and data required for this research was obtained from secondary and
primary sources. Secondary sources were used for reviewing of literature on the subject.
Primary sources in the form of questionnaires and interviews were used to gather data.
The questionnaire had both closed and open-ended questions.
Key informant interviews were held with such personnel as the selected hotels in the
Sunyani Municipality, the Regional and Metropolitan hotel and hospitality managers and
the human resource managers of the selected hotels in the Sunyani Municipality. They
were purposively selected by virtue of the fact they are occupying certain key positions
and therefore could provide the requisite information.
Simple Random Sampling Technique was used in selecting respondents to the
questionnaires. This technique was chosen because it afforded each employee equal
opportunity of being selected and it was also more convenient as compared to the other
methods. Data collected from respondents were summarized and tabulated and
presented in the form of tables and graphs. 1.8
Organization of the study This study is organized into five chapters. Chapter One
included the background of the study, research problem, research objectives and
questions as well as limitation of the study. Chapter Two contains the literature review.
Chapter Three includes the methodology and study area.
Chapter Four contains the data analysis, interpretation as well as discussion of key
findings of the study. Chapter Five finally looks at the summary, conclusions, and
recommendations based on the findings.
