Industry Research Report: Employee Turnover at Plaza Premium Lounge

This industry research report examines the employee turnover issue faced by Plaza Premium Lounge. The research establishes objectives, research questions, and hypotheses based on the identified problem and a review of existing literature. The literature review facilitates the development of a conceptual framework. A single research design with a positivist approach is used for quantitative data analysis and hypothesis testing. The findings indicate that the organization struggles with employee turnover, with the majority of employees in the Sydney location expressing dissatisfaction with their working environment and compensation. Furthermore, the management's acknowledgment of employee efforts is lacking. The report delves into factors affecting turnover, the impact on organizational performance, and potential mitigation strategies, offering valuable insights into workforce management within the hospitality sector.

Running head: INDUSTRY RESEARCH REPORT
Industry Research Report
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Executive Summary
This research had examined the turnover issue faced by the industry partner Plaza Premium
Lounge. The research had developed objectives, research questions and hypotheses based on
the problem identified and analysis of the past literature. The critical analysis of the past
literature had facilitated in developing a conceptual framework. The research had used a
single research design where positivist view has been used to perform quantitative analysis of
data and test the hypotheses. The findings suggest that the organisation had issues with
employee turnover and the majority of the employees working in the Plaza premium lounge
in Sydney are not at all satisfied with working environment and the compensation package.
Moreover, the management had also been reluctant in acknowledging their efforts.

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Table of Contents
Chapter 1: Introduction..............................................................................................................4
1.0 Introduction......................................................................................................................4
1.1 Background of the study..................................................................................................4
1.2 Rationale..........................................................................................................................5
1.3 Research objective...........................................................................................................5
1.4 Research question.............................................................................................................5
1.5 Research hypothesis.........................................................................................................5
1.5 Summary..........................................................................................................................6
Chapter 2: Literature review......................................................................................................7
2.0 Introduction......................................................................................................................7
2.1 Employee turnover...........................................................................................................7
2.2 Organisational performance.............................................................................................9
2.3 Impact of employee turnover on organisational performance.......................................10
2.3.1 Financial performance.................................................................................................10
2.3.2 Productivity and efficiency.........................................................................................11
2.3.3 Customer satisfaction and quality attributes...............................................................11
2.3.4 Product development and innovation..........................................................................12
2.4 Conceptual framework...................................................................................................12
2.5 Literature gap.................................................................................................................13
2.6 Summary........................................................................................................................13
Chapter 3: Research methodology...........................................................................................14
3.0 Introduction....................................................................................................................14
3.1 Research Philosophy......................................................................................................14
3.2 Research Approach........................................................................................................14
3.3 Research Design.............................................................................................................14
3.4 Data Collection and Analysis.........................................................................................15

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3.5 Sampling technique........................................................................................................15
3.6 Reliability and Validity..................................................................................................15
3.7 Ethical consideration......................................................................................................16
Chapter 4: Findings and Analysis............................................................................................17
4.0 Introduction....................................................................................................................17
4.1 Reliability and Validity test...........................................................................................17
4.2 Frequency Table.............................................................................................................18
4.2.1 Satisfaction..............................................................................................................20
4.2.2 Rate of staff turnover..............................................................................................21
4.2.3 Work-life balance....................................................................................................22
4.2.4 Wastefulness of resources.......................................................................................23
4.2.5 Costs........................................................................................................................24
4.2.6 Organisational performance....................................................................................26
4.2.7 Mitigation techniques..............................................................................................27
4.3 Correlation Analysis.......................................................................................................29
4.4 Regression Analysis.......................................................................................................31
4.5 Summary........................................................................................................................35
Chapter 5: Conclusion..............................................................................................................36
5.0 Conclusion......................................................................................................................36
5.1 Recommendation............................................................................................................36
References................................................................................................................................38
Appendix..................................................................................................................................41

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Topic: Examination of the factors affecting the turnover rate and its impact on organizational
performance- “A case study of Plaza premium Group”
Chapter 1: Introduction
1.0 Introduction
This report examines the issues faced by Plaza Premium Group in effectively
managing their workforce, improving retention rate and reduce the turnover rate. Hospitality
industry has had the highest employee turnover among all other sectors due to the stressful
work environment and inadequate compensation package. The chosen organization is no
different and I have been able to gather effective information on the issue as I have been
working in the organization since 2017 as a food and Beverage attendant. The research aims
to highlight critical issues that have been left unnoticed in the past.
1.1 Background of the study
There has significant increase in staff turnover in the past three years and survey
conducted on the employees working in the Australian industry has shown that one in every
seven employees or 1.8 million workers in Australia are expected to search for jobs in the
coming year (Pash 2018). The survey also showed that more than 60% of the employers in
Australia have seen significant increase in staff turnover with an average turnover at 15%
(Pash 2018). Moreover, managers suggest that even though all the companies have policies
to mitigate and avoid turnover within their organization, it is expected to go up within the
next year. The evaluation of the wellness and appreciation programs have shown that only
50% of the organization have implemented such policies (Pash 2018). On the other hand,
more than half of the firms does not offer any training and development opportunities to their
employees and the salaries of the workforce are not reviewed on daily basis. Staff turnover
causes significant setback for companies through loss of revenue, morale and productivity.
Therefore, it is essential for organisations to secure a stable pipeline of talented and skilled
employees by developing effective employee retention policies. This highlights the need for
developing effective staff engagement policies on retention and acquisition of highly skilled
employees.
The situation is no different in case of the industry partner, Plaza Premium Group.
The company has been providing best value added services in an airport. It includes shower
rooms, massages, food and beverages and other services. The company operates in the global
market in 35 international airports and employed more than 3500 employees. However, the

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research has addressed the issues faced by lounge in Sydney Airport which has seen a
significant in turnover of staffs.
1.2 Rationale
This research has chosen the particular topic as the industry has been facing issues in
retaining their existing employees. The lounge witnessed departure of 25 of their staffs in the
fiscal year of 2018 which amounts to atleast two staffs every month. This is quite for even the
employees working in the hospitality industry. However, employees working in lounges
consist of casual, part time and full time employees and if all these employees are taken into
consideration, the results are relatively skewed. The focus needs to be on the full time
employees and converting the part-time and causal employees into full time employees. This
is possible by developing effective employee engagement policies addressing the current
needs of the workforce. Therefore, the purpose of the research is to increase awareness of the
management of Plaza Premium lounge in Sydney Airport so that they can be take remedial
measures to reduce turnover rate within the organization.
1.3 Research objective
The objective of the current industry report are as follows:
 To examine the factors affecting the staff turnover in Plaza Premium Group
 To investigate the impact of high turnover rate on the organizational performance in
Plaza Premium Group
 To provide suitable recommendations to improve the retention rate of workforce in
Plaza Premium Group
1.4 Research question
What are the different factors affecting the staff turnover in Plaza Premium Group?
How does Plaza Premium Group impacted due to high turnover rate?
1.5 Research hypothesis
H01: There is no impact of high employee turnover on the productivity of Plaza Premium
Group
H11: There is significant negative impact of employee turnover on the productivity of Plaza
Premium Group

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H02: There is no impact of high employee turnover on the financial Performance of Plaza
Premium Group
H12: There is significant negative impact of employee turnover on the Financial Performance
of Plaza Premium Group
H03: There is no impact of high employee turnover on the quality attributes and customer
satisfaction of Plaza Premium Group
H13: There is significant negative impact of employee turnover on the quality attributes and
customer satisfaction of Plaza Premium Group
H04: There is no impact of high employee turnover on the product development and
innovation of Plaza Premium Group
H14: There is significant negative impact of employee turnover on product development and
innovation of Plaza Premium Group
1.5 Summary
This chapter has clearly described the research problem in detail to highlight the key
reason for choosing the current research topic. The exploration of the research topic has
highlighted staff turnover has risen in the past three years in the Australian companies. The
report has developed research questions based on the overarching problems along with the
hypothesis to be addressed. The reason for choosing the topic has also been provided in
detail which has highlighted the purpose of performing the study. The next chapter has
developed literature based on the objectives and the research by evaluating the past studies on
employee turnover in the hospitality industry. The research has chosen specific theories that
has facilitated in developing frameworks for addressing the research.

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Chapter 2: Literature review
2.0 Introduction
This chapter has examined the past literature on employee turnover to underpin its
impacts on organisational performance. It has also depicted the critical factors affecting staff
turnover. Employee turnover has been analysed and evaluated more rigorously since the
1970s and the relationship between the parameters have been evaluated in the past studies.
Employee turnover is one of the key issue faced by the organisations and with increase in
scarcity of skilled employees in the global market, effective management of workforce is one
of the major concerns of the organisations (Kim 2014). The research has tried to develop a
multifaceted understanding of the elements, concerns and relationship among the variables.
Even though it is one of the most explored topics of research, firms have been reluctant about
their choices in policies which hampered them in terms of service quality and performance.
This is because of the constant in change in nature of the working environment due to the
widespread implementation of globalisation. This has made the employee turnover to be one
of the most dynamic in managing human resources.
2.1 Employee turnover
Abbas et al. (2014) states that employee turnover can be defined as the proportion of
employees or staffs leaving an organisation within a certain time period. This data is
expressed in terms of percentage of employees leaving the organisation in comparison to the
total workforce. Irefin and Mechanic (2014) considers turnover of staffs as the rate of
substitution of workers within a given period of time for the organisations. Staff turnover can
be involuntary or voluntary. Voluntary turnover consist of employees leaving jobs on their
own, employees retiring or leaving due to natural causes like death. On the contrary,
involuntary turnover refers to situations where employees are laid off or transferred.
Kang, Gatlingand Kim (2015) performed a research and found out that job
satisfaction is the central element of influencing the turnover within the organisation. As
stated by Peretz, Levi and Fried (2015), job satisfaction is the state of fulfilment where the
expectation of the employees are met. This is an effect from the cognitive results due to work
benefits and nature of the job. By referring to the research conducted by Bakotić (2016), job
satisfaction has been considered as a key factors in reducing turnover intention of employees.
On the contrary, Karatepe and Vatankhah (2014) states that jobs satisfaction is a tool for
predicting the expected turnover rate of the business entities. In this light of context, the

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factors affecting the satisfaction of the employees are also affecting the turnover intention of
the employees. Abbas et al. (2014) opined that low compensation is one of the major factor
having a negative impact on staff turnover and leads to high turnover intention among the
employees. On the contrary, Farooqui and Nagendra (2014) suggested that adequate
compensation is not sufficient to the keep the employees satisfied and there are other factors
that have significant impact on turnover intention. Peretz, Levi and Fried (2015) argued that it
is essential for the organisations to consider compensation as a significant factor contributing
to the retention rate of the employees.
Numerous studies have pointed out that work-life imbalance as a critical component
affecting the high turnover of staffs in firms. On the contrary, the increase in economic
pressure has resulted in higher work output demand from the employees which comprises the
personal of the staffs. Deery and Jago (2015) pointed out that employees are more likely to
leave a company due to the excessive workload, stress and lack of work-life balance resulting
in an endless vicious cycle of turnover. Various authors have provided similar arguments
which showed that poor work-life balance is a result of the increase in workload among the
staffs and this results in significant increase in staff turnover.
Irefin and Mechanic (2014) has pointed out another key factor that has significant
adverse impact on the staff turnover is team work within the company. The increase in staff
turnover results in the gap with the organisation which has to be filled in by their
counterparts. This affects the work efficiency of the employees and causes dissatisfaction
among the consumers. Moreover, cohesion between the new staffs and experienced is
difficult to achieve with frequent departure of employees. Poor staff selection criteria is a
moderating factor in this scenario as skill level and quality of the new staffs is directly
proportional to the organisation. Kang, Gatling and Kim (2015) evaluated the impact of poor
job-conformity within organisations have shown increase in chance of staff turnover for these
newly recruited employees due to their inability to handle stress effectively. Farooqui and
Nagendra (2014) also added that poor staff training is a major cause of staff dissatisfaction
among the employees which results increase in staff turnover intention. Pohler and Schmidt
(2016) added that employee growth has been considered as the major factor in motivating and
providing satisfaction to the employees. Lack of growth opportunities may increase the
turnover rate within the organisations.

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Mathieu et al. (2016) provided a different dimension where effective leadership and
management has been identified as a critical factor in promoting retention of employees.
Even though, staff management has been considered as a complex process, leadership and
management has been confirmed as a variable having significant impact on the satisfaction
level of the employees which in turn affects the turnover intention of the employees. Various
authors have taken several factors into account as the most critical element in managing
turnover within organisations.
2.2 Organisational performance
It has been difficult for define performance within organisations due to the multi-
dimensional nature of the concept and it is difficult to define organisational performance
from a single perspective. According to Bakotić (2016), performance is a multi-faceted
concept and a single measurement tool cannot be used to measure performance. Nonetheless,
various researchers have provided their own definition of this multi-faceted concept. Pohler
and Schmidt (2016) states that organisational performance can be defined as the actual
outcome with a firm evaluated against the goals. Abbas et al. (2014) stated that organisational
performance can be represented as the completeness of achieving the organisational goals.
Therefore, it is essential to emphasize on financial returns, shareholder returns and product
markets which sums up the overall outcome in any organisation.
Peretz, Levi and Fried (2015) states that assessment of organisational performance is
necessary as it depicts the value generated and added to the organisations due to the
employee performance. The organisational has a central role in impacting and achieving the
strategic outcomes in organisations. As stated by Karatepe and Vatankhah (2014), workforce
are the most important from of inputs in organisational processes as they control the overall
efficiency of the outputs based on competencies. Human capital is the fundamental form of
input and can be considered as the most important factor that determines the nature of the
output. Deery and Jago (2015) argued that without the effective support from technology and
other resources, it is difficult for the workforce to develop meaningful output but the
effectiveness of human resources is only way of guaranteeing that inputs are being
transformed into effective outputs. The performance reference model is an effective way of
understanding the role of human resource management in developing effective performance
within the firm.

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Farooqui and Nagendra (2014) states that quality of the inputs determine the nature of
outputs which are characterized by activities and processes within the firm. Therefore,
management innovation, quality attributes, productivity and financial efficiency determines
the nature of innovation with the company. Outputs can be considered as the services,
facilities or products that emanate from the activities of the business entities where outcome
consists of the direct benefits derived from the output. As per the performance reference
model, achievements of business results and missions mark the outcomes, it also includes the
customer results. In order to analyse the nature of outcomes from the consumer results,
timeliness of service, quality of service, responsiveness and customer satisfaction needs to be
pointed out. Even though the model uses holistic approach in determining the core
organisational performance activities, Abbas et al. (2014) states that model lacks provision
of the factors outside the core activities.
2.3 Impact of employee turnover on organisational performance
Kim, Song and Lee (2016) states that staff turnover can have positive impact on the
organisational performance but in majority of the cases, the impact is negative in nature in
most cases. This is due to the fact that loss of skilled and experience workforce as it hampers
the organisational processes and the overall output. Wong, Wong and Wong (2015)
highlighted four way elements which are heavily impacted due to the increase in staff
turnover and comprises of factors such as financial performance, customer satisfaction,
innovation, quality attributes and productivity and efficiency.
2.3.1 Financial performance
As stated by Peretz, Levi and Fried (2015), the key goal of any organisation is
achieving the optimal financial performance. Mathieu et al. (2016) conducted an empirical
study and found lout that high staff turnover has significant negative impact on the financial
performance of an organisation. According to Kim, Song and Lee (2016), replacing existing
employment needs with new employees results in increase in cost by three times when
compared to value generated or contributed by the employee within that particular year. This
is because of the fact the companies have to provide compensation to the employees leaving
the organisation and train the new employees. However, the effectiveness and competency of
the new employees determine the magnitude of loss incurred but majority of the
organisations have reported negative financial performance due to high staff turnover.

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High staff turnover leads to recruitment of inexperienced staff members which results
in losses and low profits due to less efficiency and high cost due to increase in cost of training
for the employees. Irefin and Mechanic (2014) states that staff turnover is not healthy for
organisations as inexperienced employees increases the expenses and inefficiencies within an
organisation. On the other hand, high staff turnover leads to burn out which influences the
effectiveness of the business entity. This reduces the financial performance of the company.
2.3.2 Productivity and efficiency
Wong, Wong and Wong (2015) defines productivity as the rate of product per unit of
time. According to Selden and Sowa (2015), experienced employees taken less time in
generating the optimal products or services in less amount of time when compared to the
inexperienced employees. This implies that productivity of the organisation is highly affected
due to the recruitment of large number of inexperienced employees. Bakotić (2016) argued
that competence and employee skills are the key determinant of productivity irrespective of
their length of stay within a firm. Farooqui and Nagendra (2014) study conducted in Middle
East suggested inexperienced employees having lower tenure have faced difficult in fulfilling
their product goals than the other counterparts. Therefore, it can be argued that high staff
turnover negatively impacts the productivity of the business entities.
It is possible to link the concept of efficiency to the productivity and it can be defined
as the ratio of used energy and output produced. It has pointed earlier than employees having
high experience have higher productivity rate when compared with the colleagues with low
experience. Bakotić (2016) also stated that new recruits are unable to make optimal use of
resources which results in excessive wastage. Therefore, based on the above facts, it can be
argued that high turnover has negative impact on the efficiency and productivity which
affects the overall performance.
2.3.3 Customer satisfaction and quality attributes
Kim, Song and Lee (2016) opined that customer satisfaction of any firm is dependent
on the quality attributes of the services and the products. Quality can be non-tangible and
tangible, it is critical for organisations to keep experienced and talent employees. This
facilitates in upholding the quality standards and provide added value to the consumers to
maintain service and product quality. Kang, Gatlingand Kim (2015) proposed that employees
with high experience in the service cue are expected to provide better performance than the
inexperienced employees. This means that high turnover impacts the quality level within the