Impact of Employee Attrition on Consumer Satisfaction in Hospitality Industry

This research paper analyzes the impact of employee attrition on consumer satisfaction in the hospitality industry, with a focus on X Hotel in Sydney. The paper also provides effective strategies for employee retention in the organization.

Running head: INDEPENDENT RESEARCH CRITICAL ANALYSIS
Independent research critical analysis
Name of the Student
Name of the University
Author note

1INDEPENDENT RESEARCH CRITICAL ANALYSIS
Table of Contents
1. Background and Introduction.....................................................................................................2
1.1. Background Context.............................................................................................................2
1.2. Research Problem, Research Purpose, Aims & Objectives..................................................2
1.3. The significance of the Research..........................................................................................3
1.4. The scope of Report..............................................................................................................3
2. Literature Review........................................................................................................................3
Causes of Employee turnover in Hospitality Industry.................................................................3
Job satisfaction of employees in the Hospitality industry...........................................................5
Employee retention methods in the Hospitality industry............................................................6
3. Methodology................................................................................................................................7
4. Discussion:...............................................................................................................................9
Findings and Analysis:................................................................................................................9
Analysis.....................................................................................................................................14
5. Recommendation and Implementation...................................................................................17
6. Conclusion..............................................................................................................................20

2INDEPENDENT RESEARCH CRITICAL ANALYSIS
1. Background and Introduction
1.1. Background Context
With the enhancement of globalization and international competition, it has become highly
crucial for the organizations to recruit, retain, as well as manage resources in order to increase
the competitive advantages of the organization. Among the various resources available in the
hospitality industry, human resource can be considered as the most valuable one that requires
special attention. The X hotel is a multicultural hotel situated at Sydney, Australia. The
mentioned hotel has gained a good reputation in both local and global hospitality industry due to
its high quality of services offered to the consumers. However, in the past 1 year, the
organization had experienced high employee turnover. The turnover rate of the X hotel got
increased from 12 percent to 47.5 percent within a time span of 6 months. As a result of this
massive turnover, the quality of service of the hotel had deteriorated and this, in turn, had
reduced the consumer base of the hotel.
1.2. Research Problem, Research Purpose, Aims & Objectives
The excessive employee turnover of the X Hotel has imposed a highly negative impact on the
quality of service provided by the hotel staff of the organization to the consumers. As a result of
this, the number of loyal consumers of the organization has got reduced. The purpose of the
research is to find out the impact of employee attrition on the consumer satisfaction of Hotel X.
The objectives of the research are as follows:
To find out the reason behind excessive employee attrition in the organization

3INDEPENDENT RESEARCH CRITICAL ANALYSIS
To find out the degree to which employee turnover has imposed an impact on the employee
satisfaction of X hotel.
To find out effective strategies by with the management of X hotel will be able to reduce the
employee turnover rate.
1.3. The significance of the Research
Considering the fact that consumer satisfaction is the chief concern of the hospitality industry,
this research will help the organizations associated with the global hospitality industry to
understand the potential reason of employee turnover and how employee turnover can impose an
impact on the satisfaction of consumers.
1.4. Scope of Report
In this research, a literature review has been carried out for secondary data collection. The
literature review is followed by the methodology of the research. Art from that, the research
paper also contains discussion on the findings of the research. Finally, a recommendation has
been provided in this research paper so that X Hotel can minimize its turnover rate and regain its
lost consumer loyalty.
2. Literature Review
Causes of Employee turnover in Hospitality Industry
According to AlBattat & Som, (2013), low remunerations, lack of appropriate training and
performance appraisal are three chief reasons behind employee attrition in the Australian Hotel
industry. Employees are found to exhibit lack of commitment towards the organization where the
remuneration rate is low. The author has opined that commitment of employees to an

4INDEPENDENT RESEARCH CRITICAL ANALYSIS
organization can be ensured by implementing a suitable HR System that can help the
organization to improve its labour relation as well as the quality of services. () argued that,
discrimination on the basis of age, sex, gender and sexual orientation can be considered as
another major reason for employee attrition in the hospitality industry. In a good number of
Hotels in Australia, there prevails a difference between male and female staff voices in the
organization. The number of male employees in the Hospitality industry is much more compared
to the number of female employees. As a result of this, sexual discriminations in the workplace
are frequent in the mentioned industry. Discrimination in the workplace often leads to conflicts
which in turn results in employee turnover. According to Bharwani & Butt, (2012), the
difference in job types is a major determinant of employee retention in the mentioned industry.
Front office employees are found to be more intrinsically motivated compared to the back office
employees. The need for achievement and the need for affiliation is found to be higher in the
from office employees. Hence, the turnover rate of front office employees is found to be less
compared to that of the back office employees.
AlBattat & Som, (2013) argued that excessive work stress is directly proportional to labour
turnover in the hospitality industry. Researchers have asserted that there are direct and indirect
costs of work stress which could lead to the crucial problems of labor, employers, and the
community. Some of the chief reasons behind work stress are role ambiguity, lack of power and
conflict within the organization. However, Zopiatis, Constanti & Theocharous, (2014) argued
that role ambiguity and lack of leadership skills in the leaders are two major reasons behind
employee turnover. The term role ambiguity can be defined as the lack of knowledge of the
employees about their own job role and requirements. In cases where employees lack knowledge
about their own job roles, it gets difficult for them to pursue the job and gain job satisfaction. In

5INDEPENDENT RESEARCH CRITICAL ANALYSIS
such cases, employee turnover is an unavoidable phenomenon. Lack of leadership skills among
the managers often leads to favoritism as well as conflict among the employees. In cases where
employees are dominated by the leaders and lack the power to communicate and execute their
duties keeping accordance to their own understanding, job satisfaction of the employees are
hampered. Moreover, overly dominating leadership and partiality in the workplace also result in
deterioration of the workplace environment. The demotivating workplace environment is a major
reason for employee attrition in the hospitality industry.
Job satisfaction of employees in the Hospitality industry
Job satisfaction can be considered as a major factor that determines the stability of an employee
in an organization. When it comes to the hotel industry, research suggests that job satisfaction is
higher among part-time employees compared to that of the full-time employees (Bharwani &
Butt, 2012). Part-time employees are referred to those employees whose working time comprised
of fewer hours per day, week, month or year than the full-time employees. The author argues that
considering the fact a good number of employees in the hotel industry belongs to the age
arranges of 18 to 25 years, part-time contracts permit the employees to invest more time on their
education and thus ensures job satisfaction.
However, Ghosh et al., (2013) argued that permanent contracts have a positive impact on the job
satisfaction of the employees. Unlike a temporary contract, permanent contract offers job
stability and permits the employees to plan their personal as well as professional life in order to
ensure a secure future. Moreover, employees with permanent contracts are found to develop
emotional attachment with their workplace which in turn has reduces the chance of employee
attrition in the organization. 62.3 percent of employees working in the Canadian Hospitality
industry prefers fulltime job over part-time jobs.

6INDEPENDENT RESEARCH CRITICAL ANALYSIS
Mehta, Kurbetti & Dhankhar, (2014) stated that job satisfaction among the employees is directly
proportional to the degree of family dependence and the amount of remuneration provided to the
employees. The amount of wages received by an individual determines his social status and
source of recognition and security to a great extent. More is the number of wages received by an
employee more will be his job satisfaction and commitment towards the organization. High
remuneration not only enhances the lifestyle of the employees but also provides him or her with
freedom and means to acquire other values and services. When it comes to the length of service
of an employee there are two opposing opinions among the researchers associated with Job
satisfaction. According to a group of researchers, Job satisfaction is inversely proportional to the
length of service (Sengupta & Dev, 2013). This is because pursuing a similar kind of job for a
prolonged period of time can make the service monotonous and boring to the employees and this
in turn often erode a worker's interest and hence decrease job satisfaction. On the contrary,
Employees with less length of service are found to be highly enthusiastic about their job profile
and hence are more satisfied with their job role. However, according to another group of
researchers, prolonged service makes the employees more committed to the organization
(Zopiatis, Constanti & Theocharous, 2014). With prolonged service, the job role of the employee
gets clearer and thus the efficiency of the employee also gets increased. The enhanced amount of
efficiency leads to performance appraisal and thus enhance the job satisfaction of the employees.
According to a survey conducted in an Australian Hotel, 74.3 percent of the employees are found
to prefer providing service to the organization where they have been working for more than 10
years (Wu et al., 2013).

7INDEPENDENT RESEARCH CRITICAL ANALYSIS
Employee retention methods in the Hospitality industry
With the enhancement in global competition, employee retention is still a serious issue in the
Hospitality and food service sector. According to the Bureau of Labor Statistics, the sector has
an annual turnover rate of 73.8%, with over 6% of staff leaving every month (Liang, 2012). One
of the best ways to retain employees in the hospitality industry includes incentivizing long-term
benefits for the employees. For instance, according to a survey, 75 percent of the employees
determine to continue in their current institution depending upon whether retirement benefits are
provided to them or not (Jang & George, 2012). Hence it can be understood that retirement
benefits are crucial drivers of recruitment and employee retention. Several hotels, restaurants as
well as other sectors of the hospitality industry have implemented retirement benefit schedules in
order to retain employees and secure their financial future.
Another cost-effective way of retaining employees in the organization is by creating a work-
friendly environment in the workplace. The survey states that employees perform 20% better and
are 87% less likely to leave than employees who are disengaged. Not only that, organizations
with high employee engagement enjoyed a rise in revenue by 2.5 percent compared to
organizations with lower employee engagement.
3. Methodology
The research paper is conducted to analyze the impact of employee attrition on consumer
satisfaction at the X Hotel located in Sydney and to develop effective strategies for employee
retention. The researcher had used a qualitative approach to conduct the research. Both primary,
as well as secondary data collection method, is used for collecting the data for the research paper.
The chief reason behind selecting the qualitative approach over quantitative approach for this

8INDEPENDENT RESEARCH CRITICAL ANALYSIS
research paper was that qualitative approach had helped the researcher to look deeper into the
research issue by creating openness and encouraging the interviewee to expand their responses.
Not only that, unlike quantitative analysis, qualitative data analysis method has provided the
researcher with the opportunity of collecting both primary as well as secondary data. While the
primary data collection strategy had helped the researcher to gather in-depth knowledge of the
research issue, the secondary research strategy had helped the researcher to evaluate the
authenticity of the research paper. The primary data collection strategy involved conducting an
open-ended interview with the hospitality supervisor of the X Company. The interview was
conducted for 30 minutes and 19 open-ended questions were asked to the interviewee.
For secondary data collection, a literature review of 10 journals associated with the research
topic had been conducted. The research question of this research paper is to evaluate the impact
of employee attrition on consumer satisfaction in the hotel X. The purpose of the research paper
was to develop effective strategies for minimizing employee retention in the mentioned
organization. The objective of the research was as follows:
1. To find out the reason behind excessive employee attrition in the organization
2. To find out the degree to which employee turnover has imposed an impact on the
employee satisfaction of X hotel.
3. To find out effective strategies by with the management of X hotel will be able to reduce
the employee turnover rate.
The literature review was conducted on the basis of the objective of the research paper. The three
major topics of the literature review were causes of Employee turnover in Hospitality Industry,

9INDEPENDENT RESEARCH CRITICAL ANALYSIS
Job satisfaction of employees in the Hospitality industry and Employee retention methods in the
Hospitality industry.
The research paper was developed within a time span of 15 days. In the first week, primary data
was collected by interviewing the interviewee and the data gathered from the interview was
analysed. The second week was spent for gathering relevant literature for conducting the
literature review and analysing the data gathered from the literature review. In the third week, the
data collected from interviewing Mr. Y the hospitality supervisor of the X Hotel is compared to
the data collected from the literature review to determine the authenticity of the primary data
collection. In the fourth week, the analysed data were evaluated and effective recommendations
for the Hotel X to deal with excessive attrition was suggested.
Considering the fact that both primary and secondary data for the research had been collected
from authentic sources, the research can be considered as highly credible, dependable and
confirmable. The 10 articles used as the source of secondary data collection are peer-reviewed
scholarly articles. For analysing the data that has been collected, the research has been coded by
using the ‘bubble method’ of coding. Considering the fact the research is confined within a
specific institution, the methodology of this research can be replicated by other researchers who
want to conduct research with respect to a different situation and a different hospitality related
issue.
In order to avoid any ethical issue, the research has been conducted by providing adequate
information about the context of the research to the interviewee. Apart from that, confidentiality,
anonymity and privacy of the interview had been maintained throughout the research period

10INDEPENDENT RESEARCH CRITICAL ANALYSIS
4. Discussion:
Findings and Analysis:
The major findings obtained from the literature review are as follows:
1. The chief causes of employee turnover in the Hospitality industry are low remuneration,
lack of extrinsic as well as the intrinsic motivation of the employees, excessive work
stress and inappropriate training session. More than 75 percent of employee turnover
occurs due to lack of proper remuneration structure in the Australian hospitality industry.
This rewarding system includes both monetary and non monitory rewarding strategies.
2. Organizations that have successfully retained their employees are found to follow
monitory rewarding strategies like performance appraisal and retirement incentives.
Successful non-monitory rewarding strategies include work from home, office party and
justified the number of leaves.
3. Another major reason for employee turnover includes discrimination in the workplace on
the basis of age, gender and sexual orientation. Male employees are greater in number in
the hospitality industry compared to that of the female employees.
4. Front office employees are found to be more intrinsically motivated compared to the back
office employees.
5. Job satisfaction of the employees is found to be directly proportional to the remuneration
rate and family dependence of the employees. Higher the remuneration higher will be the
job satisfaction of the employees. Moreover, employees who have higher family
dependence are found to be more satisfied with their job profile.

11INDEPENDENT RESEARCH CRITICAL ANALYSIS
6. Employees who work on a full-time basis are found to be more satisfied with their job
profile compared to employees who work on a part-time basis. 62.3 percent of employees
working in the Canadian Hospitality industry prefers fulltime job over part-time jobs.
7. Length of service period is found to be directly proportional to the job satisfaction of the
employees. 74.3 percent of employees prefer working in an organization where they have
been working for more than 10 years (Ghosh et al., 2013).
8. One of the best measures to retain employees in an organization is creating a work-
friendly environment in the workplace. The survey states that employees perform 20%
better and are 87% less likely to leave than employees who are disengaged. Not only that,
organizations with high employee engagement enjoyed a rise in revenue of 2.5 percent
compared to organizations with lower employee engagement (Mehta, Kurbetti &
Dhankhar, 2014).
The chief findings of the primary data analysis are as follows:
1. Major challenges faced by the HR department of the X Hotel during the staff selection
and recruitment procedure are the poor quality of the candidates in terms of
communication skills and experience, lack of applicant for posts like Casino Hosts, Game
dealers and Cruise Ship attendant and the unwillingness of candidates to get relocated.
2. Chief criterions that are looked for during recruitment of a new employee in the X
organization are a commitment for the job, are Interpersonal skills, problem-solving
skills, flexibility and whether the candidate is organized or not.
3. According to Mr. Y the hospitability supervisor of the company, negative effects of
employee turnover includes deterioration of the workplace environment and employee

12INDEPENDENT RESEARCH CRITICAL ANALYSIS
loyalty, deterioration of the quality of service and product offered to the consumers
resulting in consumer dissatisfaction.
4. Major causes of turnover in the X hotel are lack of appropriate remuneration structure,
conflict in the workplace due to lack of leadership skills in the managers, an increased
amount of work pressure due to excessive employee attrition and lack of cultural
competency, appropriate training session and payroll within the organization.
5. Benefits of employee retention according to Mr. Y are a decrement in the cost of an
organization, increment in the annual revenue and reputation of an organization.
6. Employee performance in the Hotel industry can enhance by training programs like
‘Guest service Gold' and ‘Supervisory skill builders'. Extra leave opportunities and
reward system also enhance employee motivation and performance.
7. Unlike volunteer turnover, non-volunteer turnover enhances the quality of services and
improves the workplace environment of the organization.
8. Excessive employee turnover is directly proportional to the consumer satisfaction in hotel
X. This is because employee turnover deteriorates the quality of services offered to the
consumers which in turn reduce the consumer base of the mentioned organization.
9. In order to satisfy consumers, job satisfaction of the employees is highly crucial.

13INDEPENDENT RESEARCH CRITICAL ANALYSIS
Lack of motivation,
Remuneration and job
satisfaction
Inappropriate Recruitment
Discrimination in workplace,
excessive stress
Employee Attrition
Low quality of service and
products provided to the
consumers
Consumer Dissatisfaction

14INDEPENDENT RESEARCH CRITICAL ANALYSIS
Figure 1: Bubble Analysis
Source (Created by Author)
Analysis
From the finding of the research paper, it can be clearly understood that employee turnover has
the potential to impose a negative impact on the satisfaction of the consumers. Findings from
Both primary as well as secondary data implies that the rate of employee turnover is directly
proportional to the consumer satisfaction. In the following paragraphs, the findings of the
research will be analysed and compared to other kinds of literature in order to ensure the
authenticity and credibility if the research paper.
According to findings of this research paper, recruitment of inappropriate employees can be
considered as one of the major reasons behind employee turnover in the hospitality industry.
This is obvious since poor quality of staffs deteriorates the productivity of an organization.
Especially when it comes to the hospitality industry, communication and listening skills, good
social perceptiveness, cultural competence, and experience in the field are highly crucial to
enhance the quality and consumer base of the organization. As a result of this a majority of
candidate suffers from failures in the entry-level position. Unavailability of skilled candidates
results in recruitment of the wrong individual for a certain job role. This in turn, results in job-
dissatisfaction among the employees. Job dissatisfaction eventually results in employee turnover.

15INDEPENDENT RESEARCH CRITICAL ANALYSIS
Figure 2: Comparison of employee turnover rate in different industries
Source (Rothfelder, Ottenbacher & Harrington, 2012)
According to Lee & Ok, (2012), lack of pre-employment assessment can be considered as a
major challenge faced by the hospitality industry. Majority of the organization associated with
the hospitality industry fails to access psychological factors like the degree of commitment and
morale of the employees during the time of recruitment. Low morale has the potential to impose
a huge impact on the service standards which can tarnish the reputation of the hotel, restaurant
and bar and eventually results in erosion of the business. The causes of low morale can vary by
business, but some of the top offenders were lack of training, unskilled colleagues, understaffing,
stress, and few rewards. Therefore, in order to recruit loyal employees the HR department of
organizations should implement effective strategies that can access the psychology of the
interviewee during the time of interview. Instead of hiring candidates with high educational

16INDEPENDENT RESEARCH CRITICAL ANALYSIS
qualification, the HR managers of organizations should recruit employees through sources like
referrals, the hiring of elderly individuals, minorities, and handicap employees in order to reduce
the employee turnover rate. It has been found that employees with lower financial background
and elderly or handicap employees have a greater commitment towards the organization
compared to young and highly educated employees. Lack of job opportunity and financial
support of the former one can be considered as two of the major reason behind their loyalty.
Apart from inappropriate recruitment, the finding states that several other factors are
responsible for employee turnover in the hospitality industry. From the literature review t has
been found that the five chief reasons behind employee attrition in the hospitality industry are
inappropriate remuneration structure, excessive work stress, discrimination in the workplace,
lack of workplace friendly environment and inappropriate training provided to the employees.
This factor clearly matches with the reason behind employee attrition in hotel X as being stated
by Mr.Y. Considering the fact that training is a crucial factor in the hospitality industry since it
involves dealing directly with the consumers and satisfying them with the services, lack of
proper training affects the skill development of the employees. Lack of skills in the employees
directly influences their job satisfaction. Employees are unable to understand their job and hence
fail to develop the capabilities to reach their goal. Thus dissatisfaction in the job role results in
employee attrition. Inappropriate provision of training also results in poor productivity of the
organization. When employees are unsure and lack confidence in their job, it is obvious that their
productivity will be reduced. This in turn, not only reduces the annual revenue of the company
but also impose the high impact on the reputation of the company. According to a survey,
unskilled employees are more likely to suffer from injury in the workplace due to lack of
knowledge and skills (Rothfelder, Ottenbacher & Harrington, 2012). Considering the fact that

17INDEPENDENT RESEARCH CRITICAL ANALYSIS
several organizations in the hospitality industry skip the training session in order to save time
and cost, the absence of proper training session can not only affect the profit of the organization
but can also give birth to legal issues resulting from fatal accidents n the workplace.
Figure 3: Voluntary turnover rate in 2015-16
Source (Lub et al., 2012)
High work stress and unhealthy work environment are two major reasons behind employee
attrition in the hospitality industry. According to Karatepe, (2013), employee stress is a
significant issue in the hospitality industry, and it is costly for employers and employees alike.
The two most common stressors in the hospitality industry include interpersonal tensions and
technological overloads in the workplace. When it comes to working stress, managers of hotels
and restaurants are found to be more likely the victim of stressor compared to ground level

18INDEPENDENT RESEARCH CRITICAL ANALYSIS
employees. Excessive workload, apart from imposing a highly negative impact on the work-life
balance of the employees also results in physical health issues. High work pressure among the
employee leads to deterioration of the workplace environment. According to Ryu et al., (2012)
high-stress level often give rise to work-family conflict issues. If not managed properly, WFC
can produce many detrimental consequences, including decreased employee performance, job
dissatisfaction, lateness, absenteeism, and high turnover. When it comes to the impact of
employee attrition on consumer satisfaction, data collected from both literature review and from
the interview conducted with the Hotel manager of Hotel X, it has been found that employee
attrition results in deterioration of the quality of work which in turn results In consumer
dissatisfaction. The hospitality industry is highly dependent on the satisfaction of its consumers.
Considering the fact that the mentioned industry is highly congested, the power of consumers in
the hospitality industry is high. The low switching cost of the mentioned industry has further
enhanced the power of the consumers. Considering the fact that almost similar quality and
facilities are provided by the hotels of the hospitality industry of Australia, the consumer can
switch from accepting the service of the hotel to another in case of slightest of dissatisfaction.
Due to this a high completion prevails among the hotels, restaurants and Bars associated with the
Australian Hospitality industry. Excessive employee turnover negatively affects consumer
service. Turnover of an experienced employee not only lowers the quality of services of an
organization but also reduces the competitive advantage of the company. Moreover, in industries
with a high level of competition, experienced employees when get recruited in a rival
organization enhances the competitive advantage of that organization. Apart from deterioration
of the quality of service of Hotel X, employee attrition had enhanced the pressure of work of the
current employees of the organization. Considering the fact that the number of employees in the

19INDEPENDENT RESEARCH CRITICAL ANALYSIS
mentioned organization has got reduced due to excessive employee attrition, a single employee is
compelled to provide the service of 2 or 3 employees. According to researchers, excessive work
stress deteriorates the quality of service of the employees (Torres & Kline, 2013). Excessive
workloads reduce the work-life balance of the employees which in turn reduces their
commitment to the job. This deterioration I the service provided in the mentioned hotels has left
the consumer unsatisfied and has reduced the consumer base of the organization.
5. Recommendation and Implementation
In order to deal with excessive employee attrition, Hotel X should implement the retention
strategies discussed in the following paragraph:
1. It is highly crucial for the HR department of hotel X to recruit an efficient and loyal
candidate to deal with the excessive employee turnover. As being suggested by Lub et
al., (2012), the company should recruit candidates who have higher family dependence
and lacks a huge amount of job opportunity. For instance the companies can recruit
elderly individuals, candidates from the minority community, and handicap candidates in
order to reduce the employee turnover rate. Beside that the HR department of the X hotel
should implement effective recruitment strategies like conducting a seriate of interviews
where open-ended questions are asked to the candidates in order to understand their
degree of commitment and expectations from the job.
2. Secondly, the institution needs to provide quality training programs in order to enhance
the working skills of the employees. Instead of providing on the job training to the
employees, a proper training session of at least 2 months should be provided to the newly
employed staffs. This is because, unskilled or fresher employees are likely to undergo

20INDEPENDENT RESEARCH CRITICAL ANALYSIS
errors while dealing with the consumers for the first time. This in turn, can impose a
negative impact on the consumer satisfaction of the consumers. Provision of a separate
training session has the potential to prevent consumer dissatisfaction. A part from
proving separate training session to the new employees, the HR manager of X hotel
should regularly conduct a performance review of each and every employee. Employees
with major issues should be provided on the job training. One of the most effective
training programs that can be implemented by the organization to enhance
communication and interpersonal skills of the employees is the Guest Service gold
training program., the target of which is to create a service-oriented line level employees
who know how to engage with their guests and provide the best customer experience
possible. Secondly, we have implemented the ‘Supervisory Skill Builders' training
program where managers at all levels will be familiarized with chief subjects like time
management, communication, leadership, competence and staffing. This will enable the
manager to manage their fellow employees in an effective way and prevent employee
attrition (Torres & Kline, 2013).
3. Apart from providing training for skill development of the employees, the HR
management of X Hotel should educate the employees about the importance of diverse
workplace and implement ice breaking programs to enhance the bonding between the
employees (Karatepe, 2013). Both formal as well as informal communication between
the employees should be encouraged. Enhanced bonding between the employees will
improve the workplace environment which in turn will help the management to retain its
employees.

21INDEPENDENT RESEARCH CRITICAL ANALYSIS
4. Remuneration rate is one of the major reason behind employee attrition in the X Hotel,
the management should restructure and enhance its remuneration rates in order to deal
retain experienced employees and attract skilled employees during the recruitment
procedure. In spite of the fact that enhancing its remuneration will initially enhance the
cost of the Organization, this strategy will provide the company with a competitive
advantage in the near future. A part from enhancing the salary of the employees, the HR
manager should implement several monitory as well as a non-monitory reward system in
order to motivate the employees both extrinsically an intrinsically (Torres & Kline,
2013). While monitory motivation can include implementation of a strong incentive
strategy for employees who works over the shift, non-monitory motivation may comprise
of the office party, work from home facilities and others.
5. Considering the fact that discrimination in the workplace is a major reason behind
excessive employee attrition in the mentioned organization, the HR department should
remodel and implement strict workplace policies and procedures to eradicate the issue.
All the rules associated with antidiscrimination policies should be clearly written and
established. An employee handbook should be created where all the benefit that should
be provided to the employees along with the rules and regulation will be jotted down. In
case of any types of discrimination with respect to race, gender, sexual orientation and
age, immediate legal action should be taken by the management of the Hotel. This type of
acts will not only ensure the safety of the employees in the workplace but will also
enhance the reputation of the organization in the Australian Hospitality industry.

22INDEPENDENT RESEARCH CRITICAL ANALYSIS
6. Conclusion
From the above discussion, it can be concluded that employee attrition can impose a highly
negative impact on the consumer satisfaction of a company. In the research paper, several
reasons behind employee retention in the hospitality industry in general and in the X Hotel
specifically have been discussed. It has been found that the chief reasons for employee attrition
are low remuneration rate, high discrimination in the workplace, lack of adequate training
programs and excessive overload of work. Lack of leadership skill of the managers is another
major reason behind employee attrition in the X hotel. In order to deal with the issue, several
recommendations have been provided to the management of the X Hotel so that they can cope up
with the excessive amount of employee attrition.

23INDEPENDENT RESEARCH CRITICAL ANALYSIS
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Appendix
In order to collect data, an open-ended interview session has been conducted with Mr Y, the
hospitality supervisor of the X Hotel, which is a highly reputed hotel in Sydney.
The transcript of the interview is as follows:
Can you elaborate some challenges during the staff selection?
The most crucial challenge I faced in recruiting candidates for posts like Concierge, hotel
receptionist, or Front desk associate is the poor quality of candidates. By poor quality, I mean
lack of communication skills and experience. For instance, to be an efficient Hotel Receptionist,
high educational qualification is not required. Instead, you need to have active listening skills,
good social perceptiveness to enhance the satisfaction of the consumers. In spite of having
commendable educational qualifications, the majority of candidates lacks these skills. Moreover,
when it comes to job profiles like Casino Hosts, Game dealers and Cruise Ship attendant, the
number of applicants are way less. On the contrary, for job posts like Front-of-House Managers,
Guest Services Associate, Guest Relations Manager and Hotel clerk, a huge number of
applications are received. This dissymmetry of application makes it difficult for us to select
efficient candidates within a stipulated time zone. Apart from that, other issues faced by us
during staff selection includes is acceptance of job letter and subsequent withdrawal, failure to
appear in the interview and unwillingness of candidates to get relocated.
What criteria do you look at when hiring a new employee?
Recently, our organization has evidenced a major employee turnover for certain reasons. Hence,
Apart from educational qualification, one of the major qualities we look for in candidates is the

27INDEPENDENT RESEARCH CRITICAL ANALYSIS
degree of his or her commitment towards the organization. The past job experiences of the
employee and the number of jobs they have left before joining our institution help us to judge the
commitment level of the employees. Apart from that, other criteria we look for while recruiting
staffs for our organizations are Interpersonal skills, problem-solving skills, flexibility and
whether the candidate is organized or not. While interpersonal skill is needed to ensure that the
candidate as an employee will be able to provide spectacular customer service and interact with
customers on a regular basis, having an efficient problem-solving skill will ensure that the
candidate will be able to develop innovative, creative and practical solutions for any issues.
Other two major criterions we have during recruitment that the candidates must be culturally
competent and is capable to work efficiently as a team.
How do you take employee turnover inside your organization?
Our organization has suffered from excessive employee turnover in the year 2017 due to several
reasons. This massive employee turnover, in turn, has imposed a highly negative impact on the
yearly revenue of our company. However, currently, the HR department has managed to control
the turnover by implementing several effective strategies.
In your view how does turnover affect the organization?
The recent employee turnover has imposed highly negative impact of the financial performance
of our organization. High turnover rate results in deterioration of employee loyalty which in turn
enhances the turnover rates. In cases of voluntary resignation, we found employee turnover to be
highly expensive. When you are investing a commendable amount of money for training an
employee and enhancing his or her skills, the resignation of that employee results in considerable
amount of financial loss for the company. Moreover, when it comes to highly skilled,

28INDEPENDENT RESEARCH CRITICAL ANALYSIS
experienced, and resourceful employees, the loss gets multiplied by several numbers of times.
This is because these employees not only enhance the productivity of the competitor companies
but also their absence also imposing a negative impact on the consumer satisfaction. Due to
resent employee attrition, productivity and quality of service provided to the consumers by our
organization has deteriorated to a great extent. Less number of employees has resulted in
excessive pressure on each which in turn has imposed negative force on their performances and
as a result resulted in consumer dissatisfaction.
What are the causes of a turnover inside the organization?
Several factors have contributed to the recent turnover of our organization. The most crucial
reason for employee retention is the remuneration structure of our institute. Due to the current
recession, the remuneration structure of the X industry has not been modified over the past 5
years. This opportunity is taken by our competitors. We have lost a good number of our silled
employees due to lower remuneration rate than our competitors. Moreover a good number of
employees has reported their dislike for their immediate supervisions as the chief reason for
leaving the job. As the supervisor of Hotel X, I think there is definitely some issues with our
managerial skills. Another major reason for excessive employee turnover in our organization is
the increased amount of work pressure due to the considerably less number of employees. The
third reason that I have encountered is the lack of cultural competence among the employees.
Considering the fact that Hotel X is a multinational organization, employees from different
cultural backgrounds work here. During my supervision, I have encountered several cultures
related conflicts which have eventually resulted in attrition of employee. Another issue detected
by me is that a good number of employees lack a clear idea of their job roles. I think lack of
adequate training and induction are the two chef reasons behind this.

29INDEPENDENT RESEARCH CRITICAL ANALYSIS
Did turnover staff get adequate training and payroll? What kind of training did they
receive?
Well, I think the HR management of the X hotel has failed to provide an adequate amount of
training and appraisal to the employees and this is definitely one of the major reason behind the
excessive employee attrition of the X hotel. We do provide an on job training session for each
and every employee or the first 6 months after recruitment. During the training session,
employees are provided training and education to communicate effectively with the consumers
as well as their peers who are from the different cultural background. However, the excessive
employee turnover has left the quality as well as the effectiveness of the training provided to the
employees under question. Moreover, considering the fact that a good number of experienced
and skilled employees have left the organization due to lack of enough employee appraisals, I
think our HR management team has failed to provide adequate training and payroll to the
employees.
Can you elaborate on the benefit of employee retention?
Employee retention is highly beneficial as it results in enhancement of the annual revenue on the
organization. The most immediate benefit of employee retention is cost saving of the
organization. Considering the fact that our recruitment procedure involves a huge amount of
expense due to the usage of recruitment agencies and conducting multistage interviews,
employee retention will greatly reduce the expense of recruiting more number of employees.
Secondly, retaining experienced employee will help the organization to enhance the quality of
service of the X hotel which in turn will enhance the employee satisfaction and employee loyalty
of the organization. Thirdly, low staff turnover rate will also impose a positive impact on the

30INDEPENDENT RESEARCH CRITICAL ANALYSIS
workplace environment of our organization. Positivity in the workplace and proper work-life
balance of the employees will enhance their productivity and quality of service. This, in turn,
will enhance the satisfaction of the consumers resulting in enhancement in the consumer loyalty
of an organization.
Does extra opportunity and training help to increase the employee performance? How?
Obviously. One of our competitor organization has successfully decreased the rate of employee
turnover by 34 per cent this year by implementing effective training programs like ‘Guest service
Gold' and ‘Supervisory skill builders’. While the former training program has helped the
management to enhance the communication and quality of services provided by the employees to
the consumers, the latter train program has helped the organization to enhance the leadership
capability of the managers. Both the training session has helped to cope up with the excessive
employee attrition. Apart from that, the opportunities that have been provided to the employees
have also reduced attrition. While the incentive program has enhanced extrinsically motivated
the employees and a good number of employees are working over the shift, programs like office
parties have also enhanced the motivation of the employees.
Does your organization have performance goal that includes employee engagement,
retention, and turnover?
Well, the performance goal of the X Hotel includes enhancing the annual revenue of the
company by offering the consumers a superior quality of service.
What method for reducing turnover you company applied?

31INDEPENDENT RESEARCH CRITICAL ANALYSIS
I believe that training is one of the best ways of improving the performance of the employees. In
our organization, we are currently remodeling our training structure to cope up with the high
employee turnover rate. We have implemented a training session named Guest Service gold, the
target of which is to create a service-oriented line level employees who know how to engage
with their guests and provide the best customer experience possible. Secondly, we have
implemented the ‘Supervisory Skill Builders' training program where managers at all levels will
be familiarized with chief subjects like time management, communication, leadership,
competence and staffing. This will enable the manager to manage their fellow employees in an
effective way and prevent employee attrition.
Besides the training program, several extra opportunities like both monitory as well as non-
monitory reward systems have been implemented in order to keep the employees of our
organization motivated. While monitory rewards include incentives, non-monitory rewards
comprise of extra leave and office practices organized in the expanse of the organization. In
order to ensure that our employees are leading a healthy work-life balance, we have implemented
facilities like 2 "work from home" and early leaves per month.
Which were the most effective and less effective? Why?
Well, if you ask me I will say that each and every initiative taken by the management has
contributed to the reduction of employee attrition. However, according to the HR manager, the
most effective training program that has the highest contribution to employee retention is the
‘Supervisory skill builders'. A majority of employee attrition in our organization had taken place
due to the adverse relationship between the employees and their immediate supervisors. Even
employees, who are highly valuable for the company refused to stay back due to conflict with

32INDEPENDENT RESEARCH CRITICAL ANALYSIS
their supervisor. While analyzing the situation we understood that a good number of team leaders
are culturally incompetent and supports favouritism. Hence, with the provision of the training,
we enhance the cultural competency skills of our supervisors.
In my opinion, the least effective measure taken is the ‘work from home' initiative. Considering
the fact that in the hospitality industry, the majority of the job profiles involves the physical
presence of the employees for providing service to the consumers, only the back office
employees are able to avail the work from home facility. I am afraid of the fact that thus,
asymmetric distribution of facilities within the employees may give birth to the conflict in near
future.
Did your organization have retention strategies such as staff review, coaching, and specific
training?
Initially, our organization lacks retention strategies and the only facilities that were provided to
the employees were the OJT training session. However, after the huge amount of employee
attrition, the management of the X Hotel has implemented several retention strategies as
discussed above.
Does turnover affect the overall service Quality? How?
Obviously. Employee turnover has the potential to affect the overall quality of the products as
well as services offered by X Hotel to its consumers. In X Hotel, the employee attrition has
created a cycle which had resulted in a constant decrement of the revenue of the organization.
Excessive employee attrition had deteriorated the work environment and employee loyalty which
in turn had imposed negative impact n the performance of the employees. For instance, the
sudden resignation of one of the most popular chefs of the X hotel had reduced the quality of

33INDEPENDENT RESEARCH CRITICAL ANALYSIS
food offered to the consumers. On the other hand resignation of leaders has the potential to
impose an even bigger impact on the employees. Not only has that lack of guidance and a high
burden of work also resulted in the drop in service quality of the employees.
What kind of result does organization have from non-voluntary turnover?
Well, unlike voluntary turnover, non-voluntary turnover has not imposed a negative impact on
the organization. For instance, two of the employees of our organization has been terminated
under the Zero Tolerance policy since they had exhibited inappropriate behaviour with their
supervisors. In spite of the fact that at that termination of the two employees had enhanced the
discipline of the team, termination of employees in excessive level may affect the final
performance of the employees.
Do you think that well trained and experienced staff is the success in customer satisfaction?
How?
I strongly believed that skill, experience an proper training provision for the employees are
directly proportional to the satisfaction of the consumers. A novice employee can turn into a
highly efficient one if proper training is provided to him. On another hand, an experienced
employee had known each and every technique that can be implemented to satisfy the consumer.
How turnover of staff leads to customer dissatisfaction?
According to me, staff turnover affects the satisfaction of the consumer in two different ways.
Firstly, high staff turnover affects the morale of the employees adversely and deteriorates the
workplace environment. This, in turn, results in job dissatisfaction and employees lose the
motivation to give their best performance. This deterioration of quality results in consumer

34INDEPENDENT RESEARCH CRITICAL ANALYSIS
dissatisfaction. Secondly, excessive turnover enhances the burden of work on each of the
existing employees. This not only disturbs their work-life balance but also reduces their quality
of service to the consumers resulting in consumer dissatisfaction.
Why do you think that to increase customer satisfaction employee need to be satisfied?
Well, you can't expect the employees to give their best performance if they themselves are not
satisfied with their job profile. If employees are satisfied with their work-life balance salary and
workplace environment, their loyalty towards the institution will increase. In order to stick to the
Organization, they will provide their best performance.
What kind of relationship exists between turnover and customer satisfaction?
As I said earlier, employee turnover rate is inversely proportional to the satisfaction of the
consumers. More is the number of employees in an institution, more will be productivity, and
more will be the satisfaction of the consumers.
What kind of program does organization need to reduce turnover in coming days?
In spite of the fact that our organization has implemented a series of initiatives to reduce the
turnover rate, more things are left to be done in order to minimize the turnover rates of the
employees. For instance, the HR manager of the X Organization should implement a routine
review of the training in order to access the effectiveness of the training session and diagnose
any loopholes if there.