EMPLOYEE TURNOVER IN THE

HOSPITALITY INDUSTRY
 by
Juna Beqiri
&
Klara Rrugeja
 
Submitted to
European University of Tirana
Faculty of Economy, Business and Development
 
In fulfilment of the requirements for the degree of
Professional Master in Business Management
 
Mentor: Prof. Dr. Drita Kruja
  
Tirana, July 2020
Table of Contents

01 Introduction
Theoretical Framework, Problem Statement, Research Scope

02 Methodology
Research Design, Research Instruments, Sampling, Data Collection &
Data Analysis

03 Results
Data Analysis

04
Conclusions and Recommendations
Introduction
Study Overview: The ‘Turnover’ phenomenon, also known as the rate at which employees
leave a company and are replaced by new employees.

The focus of this research: the Hospitality Industry, given that the turnover rate remains
the highest in this industry, but also because it turns out to be one of the most affected
industries from the COVID-19 crisis.

Most of the contemporary literature regarding employee turnover provides conceptual as

well as statistical evidence.
 Literature Review

1.1 COVID-19 virus and its socio-
economic effects
 
1.1.1. The spread of the COVID-19
virus as a "World Pandemic"
1.1.2. Impact of the COVID-19 virus
on the Tourism sector
Add Text
.
1.2 Employee Turnover 1.2.1 Factors Affecting 1.2.1.1. Employee Compensation
Employee Turnover
1.2.1.2. Engagement
1.2.1.3. Job Satisfaction
1.2.1.4. Work Environment

1.1.3. Impact of COVID-19 on the 1.2.1.5. Motivation

Hospitality Industry
1.2.1.6. Job Insecurity
 Problem Statement

30-73% Turnover rate in the Hospitality Industry in 2019 in the world

The high turnover rate of employees seems to have become a very worrying problem for the
hospitality industry, not only in our country but all over the world, due to the high cost that
accompanies the whole process, starting from the dismissal of employees until hiring of new staff.

The specific problem of the hospitality industry is that some of the managers of the hotels, human resources or
other departments have limited information about the relationship between compensation, engagement, job
satisfaction, motivation, work environment and job insecurity that consequently lead the high turnover of
hospitality industry employees.
 To study the relationship between employee turnover intention in the hospitality
industry and employee compensation, engagement, job satisfaction, motivation,
work environment and job insecurity.

As a result of the COVID-19 pandemic, Job Insecurity was included as another

independent variable, which has an impact on the intention of employees to leave
their jobs.

Thepurpose
The purposeofofstudy
study
Independent variables:

1. Employee compensation;
2. Work engagement;
3. Job satisfaction;
3. Motivation;
4. Work environment;
VARIABLES
5. Job insecurity;

Dependent Variable:
Turnover Intention.
H1: There is a statistically significant relationship between employee compensation and employee
turnover intention in hospitality industry.
H2: There is a statistically significant relationship between employee engagement and employee
turnover intention in hospitality industry.
H3: There is statistically significant relationship between employee job satisfaction and employee
turnover intention in hospitality industry.
HYPOTHESES
H4: There is a statistically significant relationship between employee motivation and employee
turnover intention in hospitality industry.
H5: There is a statistically significant relationship between the work environment and employee
turnover intention in hospitality industry.
H6: There is a statistically significant relationship between job insecurity and employee turnover
intention in hospitality industry.
 Gender

Engagement

H2
Compensation Job satisfaction
Job H1 Turnover Intention H3
experience H4 H6
Motivation Job insecurity
H5

Work environment

Department
To measure the six independent variables and the dependent variable, as well as to answer the
research questions, seven instruments were used, structured questionnaires, with close-ended answer
options, which were:
a) Compensation Scale (Mensah, 2014),
b) Utrecht Work Employee Engagement Scale (Schaufeli & Bakker, 2004),
c) Job Satisfaction Scale (Mensah, 2014),
d) Work Extrinsic and Intrinsic Motivation Scale (Tremblay et al., 2009), INSTRUMENTS
e) Work Environment Scale (Rossberg & Eiring, 2004),
f) Job Insecurity Scale (De Witte, 2000).

The instrument used to measure the dependent variable was:

g) The Turnover Intention Scale (Khan & Du, 2014).
The final questionnaire was pre-tested on 4 employees of the company.

The administration of the instruments was done in a five star hotel in the city of Tirana.
PRE-TEST OF QUESTIONNAIRES
The total number of employees in the hotel, at the time of the study, was 180 employees and 156 &
of them belonged to the six main operational departments, as follows: SAMPLING

1. Kitchen Department
2. Food & Beverage Department
3. Housekeeping Department
4. Front Office Department
5. Maintenance Department
6. SPA Department
Due to the decrease in the work volume as a result of the situation caused in the country because of
the COVID- pandemic, it was decided that the questionnaires should be administered to only 60%
of the operational employees.

The sampling method performed was Proportionate Stratified Random Sample.

SAMPLING
From the total list of 156 operational employees, 60% from each department were randomly
selected, realizing a total sample of 94 employees.
RESULTS
General Demographic Data
General Demographic Data
General Demographic Data
 For the results to be statistically significant, the KMO>0.5 and P<0.001.
In summary for each of the variables the values of KMO and Bartlett’s Test are as follows:
• For the Compensation Scale , KMO = 0,802 and P = 0.000
• For the Work Employee Engagement Scale, KMO = 0,743 and P = 0.000
Factor Analysis
• For the Job Satisfaction Scale , KMO = 0,718 and P = 0.000
KMO and Bartlett's • For the Work Motivation Scale , KMO = 0,711 and P 0.000
Test • For the Work Environment Scale , KMO = 0,590 and P = 0.000
• For the Job Insecurity Scale , KMO = 0,710 and P = 0.000
• For the Turnover Intention Scale , KMO = 0,620 and P = 0.000

These results indicate that Factor Analysis is appropriate to perform.

 
 The Total Variance Explained test determines to what extend the variance of the variables is explained by the
identified factors.
In Table 2. it is noted that for all questionnaires, the questions can be grouped into a single factor and that factor in all cases
explains over 40% of the variance of the questions, which is a good value.

Total Variance Explained

Factor Analysis Initial Eigenvalues

Extraction Sums of Squared
Loadings

Component
% of % of
Total Cumulative % Total Cumulative %
Total Variance Explained Variance Variance

Compensation Scale 2.860 57.200 57.200 2.860 57.200 57.200

Work Engagement Scale 3.326 55.441 55.441 3.326 55.441 55.441
Job Satisfaction Scale 2.518 50.367 50.367 2.518 50.367 50.367
Work Motivation Scale 2.655 44.251 44.251 2.655 44.251 44.251
Work Environment Scale 3.091 61.801 61.801 3.091 61.801 61.801
Job Insecurity Scale 2.561 64.018 64.018 2.561 64.018 64.018

Turnover Intention Scale 1.920 63.996 63.996 1.920 63.996 63.996

 The Component Matric Test determines the degree to which the question within each questionnaire are related to each other.

A high value of correlation indicates that the questions have similar features and are related to each other.

The analysis shows that the correlation between the questions within each questionnaire is relatively high and the values vary as follows:

• For the Compensation Scale, from 0,537 to 0,833

• For the Work Employee Engagement Scale, from 0,575 to 0,864
Factor Analysis • For the Job Satisfaction Scale, from 0,497 to 0,863
• For the Work Motivation Scale, from 0,545 to 0,830
Component Matrix • For the Work Environment Scale, from 0,614 to 0,816
• For the Job Insecurity Scale, from 0,644 to 0,873
• For the Turnover Intention Scale, from 0,676 to 0,865

These results show that the questions are well related to each other and that for each questionnaire can be grouped
into a single factor.
 The results of the interdepartmental analysis in general show that for the :
Compensation Scale,
Work Engagement Scale,
Job Satisfaction Scale,
Motivation Scale, and
Work Environment Scale,

The averages of the answers given from all the subgroups are above 3, so above average of the Likert Scale from 1-5.
Descriptive Analysis
On the other hand, for the Job Insecurity Scale and the Turnover Intention Scale, the answers given are below 3.

This means that, despite the insecure situation worldwide caused by the COVID-19 pandemic, the employees in
the surveyed company are generally satisfied with their working conditions and do not feel insecure about the
continuity of their job.
 From the descriptive analysis of the differences in the response Averages between women and men, resulted that
for the Motivation Scale, Work Environment Scale and Turnover Intention Scale, the differences were not
statistically significant (respectively p=0.306, p=0.448 and p=0.959).

Descriptive Analysis
Regarding the Turnover Intention Scale, resulted that the response averages for both groups were almost the
same (1.7) and this value is considered low.

These results show that there are no differences in the perception of these factors and the turnover
intention between both genders.
 • The results also show that despite how many time the employees were working in the current company, all of
them have a low (below average) turnover intention as well as a low level of job insecurity. Differences in their
response averages are not statistically significant.

This confirms the fact that the company under study in this research seems to offer security to all its employees,
regardless of the situation created in the country.
Descriptive Analysis
• It is also noted that, for almost all factors analysed, employees who have been working for more than 5 years in
the company have a higher average in the answers given.

This results show that they appreciate more the working conditions in the company, but on the other hand they
have a higher job insecurity and a higher intention to leave the company.
  

TURNOVER

Correlation
Coefficient -.367**
Compensation
Sig. (2-tailed) .000
N 94
Correlation
-.487**
Engagement Coefficient
Sig. (2-tailed) .000
N 94
Correlation Correlation
Coefficient
-.175
Motivation Sig. (2-tailed) .090
N 95
Spearman's rho
Correlation
Coefficient -.358**
Environment
Sig. (2-tailed) .000
N 95
Correlation
Coefficient .062
Insecurity
Sig. (2-tailed) .553
N 95
Correlation -.361**
Coefficient
Satisfaction
Sig. (2-tailed) .000
N 94
 Correlations
Kompen Angazhi Motivim Turnove Mjedis Pasiguri Kenaqesi
simi mi i r i a a
Correlation
1.000 .514** .054 -.367** .257* .001 .757**
Kompensim Coefficient
i Sig. (2-tailed) . .000 .607 .000 .012 .992 .000
N 94 94 94 94 94 94 94
Correlation
.514** 1.000 .297** -.487** .300** -.006 .659**
Coefficient
Angazhimi
Sig. (2-tailed) .000 . .004 .000 .003 .951 .000
N 94 94 94 94 94 94 94
Correlation
.054 .297** 1.000 -.175 .326** -.266** .225*
Coefficient
Motivimi
Multiple Correlation Sig. (2-tailed)
N
.607
94
.004
94
.
95
.090
95
.001
95
.009
95
.029
94

Analysis Spearman'
Turnover
Correlation
Coefficient
-.367** -.487** -.175 1.000 -.358** .062 -.361**

s rho Sig. (2-tailed) .000 .000 .090 . .000 .553 .000

N 94 94 95 95 95 95 94
Correlation
.257* .300** .326** -.358** 1.000 -.209* .433**
Coefficient
Mjedisi
Sig. (2-tailed) .012 .003 .001 .000 . .042 .000
N 94 94 95 95 95 95 94
Correlation
.001 -.006 -.266** .062 -.209* 1.000 -.048
Coefficient
Pasiguria
Sig. (2-tailed) .992 .951 .009 .553 .042 . .647
N 94 94 95 95 95 95 94
Correlation
.757** .659** .225* -.361** .433** -.048 1.000
Coefficient
Kenaqesia
Sig. (2-tailed) .000 .000 .029 .000 .000 .647 .
N 94 94 94 94 94 94 94
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
 The 5 independent variables (Compensation Scale, Work Engagement Scale, Job Satisfaction
Scale, Work Motivation Scale, Work Environment Scale, and Job Insecurity Scale) taken as a set,
are responsible for 39.8% of changes in the employee intention to leave their current job (Turnover
Intention).

Multiple Regression Analysis This is an acceptable value.

Model Summaryb
Model R R Square Adjusted R Std. Error of the Durbin-Watson
Square Estimate
1 .631a .398 .364 .71175 1.837
a. Predictors: (Constant), Mjedisi, Pasiguria, Kompensimi, Motivimi, Angazhimi
b. Dependent Variable: Turnover

Tabela 8. Përmbledhja e modelit

 Predictors (independent variables) are responsible for a statistically significant variance in the
dependent variable or more simply, the regression model is statistically significant, P<0.001,
R2=0.398.

Multiple Regression Analysis ANOVAa

Model Sum of Squares df Mean Square F Sig.
Regression 29.502 5 5.900 11.647 .000b
1 Residual 44.579 88 .507
Total 74.082 93
a. Dependent Variable: Turnover
b. Predictors: (Constant), Mjedisi, Pasiguria, Kompensimi, Motivimi, Angazhimi

Tabela 9. Testi ANOVA

 Only the Motivation Scale is not an important predictor of employee turnover intention (P=0,564), while the other four
independent variables (Compensation Scale, Work Engagement Scale, Work Environment Scale, and Job Insecurity
Scale) are significant predictors.

Coefficientsa
Model Unstandardized Coefficients Standardized t Sig.
Multiple Regression Analysis Coefficients
B Std. Error Beta
(Constant) 6.422 .728 8.821 .000
Kompensimi -.235 .097 -.234 -2.420 .018
Angazhimi -.410 .148 -.280 -2.781 .007
1
Motivimi -.100 .172 -.053 -.579 .564
Pasiguria .157 .067 .203 2.347 .021
Mjedisi -.361 .126 -.269 -2.859 .005
a. Dependent Variable: Turnover

Tabela 10. Koeficientët

 CONCLUSIONS
Based on the general Descriptive Analysis, it was concluded that:

Despite the insecure situation due to COVID-19, the employees of the company under study generally have a
positive perception of the work environment (above average) and a negative perception of leaving their job
n 1
c ul sio (below average), so they do not intent to leave current company.
Con
Based on the results of the Multiple Correlation Analysis, it was concluded that:
n 2
usi o
oncl The Job Satisfaction Scale was not a significant predictor of the Turnover Intention.
C
n 3
c ul sio From the Multiple Regression Analysis it was found that:
Con In 5 Independent Variables (Compensation Scale, Work Engagement Scale, Job Satisfaction Scale,
4 Work Motivation Scale, Work Environment Scale, and Job Insecurity Scale) taken as a set, are
n
c ul sio responsible for 39.8% of changes in the employee intention to leave their current job (Turnover
Con Intention).

Based on the analysis of the impact that predictors have on the dependent variable, it
was noted that:

The Motivation Scale alone is not an important predictor of employee intent to leave the job, while
the other four independent variables are important predictors.
Recommendations
1. Creating specific programs to get to know the company employees more closely
as well as to reduce turnover among hotel employees.

2. Conducting future qualitative studies regarding the employee turnover issue in the
hospitality industry, in order to understand better the personal experiences of each
employee.

3. Develop incentive policies for employee participation in company decision

making by their managers.
Thank you!