Research Project: Employee Turnover in Hong Kong Hospitality Industry

This dissertation investigates the high employee turnover rate in Hong Kong's hospitality industry. It examines the problem statement, which highlights the impact of rapid industry growth and employee mobility. The research includes an introduction outlining the background, aims, objectives, and research questions, followed by a literature review exploring factors affecting employee turnover, such as employee satisfaction, training and development, and organizational commitment. The methodology chapter details the research philosophy, approach, design, data collection methods, and ethical considerations. The findings and analysis chapter presents both quantitative and qualitative data, including reliability analysis, demographic questions, and correlation. The conclusion summarizes the research findings, provides recommendations, and suggests future research directions. The study aims to identify key factors contributing to employee turnover and propose strategies for improvement within the hospitality sector.

Running head: DISSERTATION
DISSERTATION
Name of the Student
Name of the University
Author Note

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Executive Summary
The given dissertation is based on finding the reasons why high turnover in the hospitality
industry of the Hong Kong. The study has made use of both qualitative as well as quantitative
data to carry out the examination of the same. The first chapter of the paper is the Introduction
chapter which lays down the background of the study and sets the format of the paper. This is
followed by the Review of Literature which examines the various reasons why the employees
tend to leave the firm in search for a better opportunity. The third chapter is based on the
Research Methodology which seeks to identify the research framework which has been adopted
for the research. The analysis of the data has clearly shown that employee turnover highly affects
the operation of the organization. It has shown that low coordination rate, image of the business,
satisfaction level of customers, occupancy rate, motivation level, performance level, uniformity
of service, profit margin and productivity rate are key issues faced by the organizations. The
Pearson’s correlation between the variables shows that there is moderately positive relationship
between the variables and the all variables are significant as the value of two tailed significance
is less than 0.05. This means that if employee turnover affects all these factors simultaneously.
Thus, it can be concluded from the research that employee turnover affects the overall operations
of the organizations. The research has provided suitable recommendations based on the issues
identified. In future, research could be conducted in diverse macro environment to check the
reliability of the research.

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Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1 Overview................................................................................................................................5
1.2 Problem statement.................................................................................................................6
1.3 The hospitality industry of Hong Kong.................................................................................7
1.4 Research aim..........................................................................................................................7
1.5 Research objectives...............................................................................................................8
1.6 Research questions.................................................................................................................8
1.7 Research Rationale................................................................................................................8
1.8 Structure of the paper.............................................................................................................9
Chapter 2: Literature Review.........................................................................................................10
2.1 Introduction: Employee turnover.............................................................................................10
2.2 Factors affecting employee turnover.......................................................................................11
2.2.1 Employee Satisfaction.........................................................................................................11
2.2.2 Training and development....................................................................................................13
2.2.3 Organizational citizenship behavior.....................................................................................14
2.2.4 Positive and negative career related features........................................................................15
2.2.5 External personal events, external professional events and internal work events on
employee turnover.........................................................................................................................16
2.2.6 Rude experience and attitude toward customers influencing employee turnover................17

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2.2.7 Organizational commitment and career satisfaction.............................................................18
2.3 Impact of employee turnover on the hospitality industry........................................................19
2.4. Conceptual Framework...........................................................................................................20
Chapter 3: Research Methodology................................................................................................21
3.1 Research philosophy............................................................................................................21
3.2 Research Approach..............................................................................................................22
3.3 Research design...................................................................................................................23
3.4 Data collection.....................................................................................................................25
3.5 Research methods................................................................................................................26
3.6 Sampling and Questionnaire design....................................................................................26
3.7 Ethical considerations..........................................................................................................27
3.8 Research Limitations...........................................................................................................28
Chapter 4: Findings and Analysis..................................................................................................30
4.1 Quantitative questionnaire.......................................................................................................30
4.1.1 Reliability Analysis..............................................................................................................30
4.1.2 Demographic questions........................................................................................................32
4.1.3 Questions on Employee turnover and its impact on hospitality...........................................37
4.1.4 Descriptive Statistics............................................................................................................48
4.1.5 Correlation............................................................................................................................49
4.2 Qualitative Questionnaire........................................................................................................54

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Chapter 5: Conclusion...................................................................................................................57
5.1 Conclusion...............................................................................................................................57
5.2 Recommendations....................................................................................................................59
5.3 Future scope of the research....................................................................................................61
5.4 Research limitation..................................................................................................................61

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Chapter 1: Introduction
1.1 Overview
The hospitality industry is greatly characterized by the high employee turnover. According to
Han, Bonn and Cho (2016), the employee turnover can be defined as the surrogate indicator of
the actual employee turnover which takes place in a firm. The hotel industry is largely facing the
issue related to the employee turnover and the changing face of employee relationships.
According to Reina et al. (2018), a series of negative themes and stressful work environment can
be a common part of the industry. Hence, it can be understood that it is due to this reason that,
the organizations are finding it difficult to manage the different needs of the employees as they
are faced by various issues like unstable work timing, low wages, low working status and high
employee turnover. Although the concept of high turnover tends to impact the overall
performance of all the industries, however, the case is more serious when the service quality is in
consideration. Reina et al. (2018) believes that it is important to take into consideration the
employee attitudes as well as emotions into consideration as it impacts the positive attitude as
well as the emotion of the employees and hence, causes them to leave the organization.
Additionally, the higher employee turnover has a great role to play in maintaining the financial
stability of the firms as well and help in maintaining the overall image of the firm as well. Hence,
where the image and financial position have a greater role to play in the hospitality industry, the
problem of employee turnover has more consequences.
Various evidences in relation to the size of the company and the evidences have been found
which state that, there needs to exist different measures to assess the problem in various different
organizations. In general, the labor turnover is calculated by making use of separation rates
inclusive of layoffs, exits as well as emissions. Many authors like Han, Bonn and Cho (2016)

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have stated that the employee turnover has many forms namely the functional or the
dysfunctional form as well as the involuntary and voluntary forms. However, whatever the case
might be, the financial consequences of the labor flow in every industry can be understood to be
similar in nature. For this reason, the paper is aimed at finding out the consequences of the high
employee turnover rate on the organizational operations. Various problems like the increased
recruitment and training costs of the new employees, reduction in the employee productivity and
sales along with the increased financial burdens on the employees have been identified.
Additionally, the primary aim of the paper can be stated to be figuring out the main factors which
lead to a higher employee turnover rate at the hospitality industry in Hong Kong.
1.2 Problem statement
The problem statement of the given dissertation can be stated to be that the rapid growth of
the industry which is being characterized by the higher employee turnover rate and its impact can
be felt throughout the organization where the rate of turnover is comparatively higher than the
other industries as present. Although, there does exist certain formulas which can easily measure
the labor mobility, it becomes comparatively difficult for the hotel staff to manage the different
members as the employees keep shifting from one position to another and hence, have a lower
expectation related to jo security. However, there do exist certain positive effects of this
mobility, like the freshness and the new style of operations along with new ideas.
With this, although the firm benefits in the long run, in the short run, the costs of the firm
increase and it is better for the hotel to ensure that they are able to retain their employees in the
long run so as to see to it that, they are able to successfully monitor the different factors which
exist and influence the employee turnover rate. The different companies need to see to it that
they are able to measure the turnover rate of the firm on a regular basis and implement certain

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policies, so as to keep the workforce at a conversion level and maintain its affordability. As the
consequences of the high labor losses are quite high, all the hotels need to come up ways in
which the level of labor mobility can be reduced. These measures can be providing job security
to the staff, providing them with adequate training, coming up with programs with high level
employment goals and others. For this reason, through this dissertation the different factors
influencing the employee turnover rate will be understood and an analysis into the same will be
made.
1.3 The hospitality industry of Hong Kong
The hospitality industry of Hong Kong has been experiencing a great growth with a strong
occupancy rate and hence, with respect to this, it is expected that the hotels are experiencing a
strong average room rates growth. The arrivals to Hong Kong have grown at a fast rate and with
respect to this, this trend is expected to grow. As the number of additional to the hospitality
industry have been comparatively very low, the demand for every hotel has grown considerably.
At present there exists approximately 80000 hotel guest rooms which experience constant
customer intake and hence, the employee pressure in the industry has increased considerably
(Han, Bonn and Cho 2016).
1.4 Research aim
The primary aim of the given research is to investigate into the primary factors relating to the
higher employee turnover rate of the hospitality industry situated in Hong Kong. As discussed
earlier, the hospitality industry has been faced by a large number of issues related to employee
turnover and hence, discussion of this, will assist in figuring out and overcoming the problem.
1) Approach the literature review related to the research
2) Access the respondent to the research
3) Develop a strategy and design for data collection and analysis

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4) To process the ethical issues of the research
1.5 Research objectives
The main research objectives of the paper can be stated to be as follows:
 To find out the factors of employee turnover in the Industry
 To understand how these problems have been affecting the industry.
 Analyzing the different factors related to the turnover
 To recommend certain ways in which the problem can be overcome.
Certain secondary objectives of the research can be stated to be as follows:
 Approach the literature review related to the research
 Access the respondent to the research
 Develop a strategy and design for data collection and analysis
 To process the ethical issues of the research
1.6 Research questions
The different research questions which have been identified for the purpose of the study
can be stated to be as follows:
I. What impact has training and development on employee retention in hospitality industry?
II. Which factors influence employee satisfaction? (such as wages and working hours)
III. What is the perception of employees of their work place?
1.7 Research Rationale
The primary reason why this research question is being carried out can be largely contributed
to the fact that the hospitality industry as present in Hong Kong has been faced by a large

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number of problems related to the high working hours, unstable work environment, additional
demands and other related aspects. Hence, it is important to figure out the different factors which
influence the employment aspects of these individuals in order to gain an insight into the overall
working of the hospitality industry as present (Han, Bonn and Cho 2016). The paper will be
carrying out an in depth research for various topics as present like Organization factors, career
satisfaction, job satisfaction and related factors like organizational environment which will go a
long way in ensuring that, various measures to improve the overall scenario can be provided to
the organizations in the hospitality industry situated in the Hong Kong. Lastly, the different
measures of labor turnover can also be largely understood using this system.
1.8 Structure of the paper
The paper will follow a structured format whereby the first chapter will be an Introduction
chapter which will lay down the background of the research and set out the different research
objectives as well as the questions which will be forming the overall background of the research.
This was followed by a brief overview of the overall hospitality industry in Hong Kong and the
different problems which were being faced by the overall industry scenario. Lastly, the research
rationale and problem statement will be presented. The second chapter of the dissertation will lay
down the Review of Literature chapter which will conduct a deep research into the domain of
hospitality industry, employee turnover, and organization environment and related about rate
measures. The third chapter is based on the Research Methodology of the paper which will
describe the research approach, design and overall research methods which will be adopted for
the purpose of the achievement of objectives. The fourth chapter will be based on the findings
and analysis which will explore the different analysis and present it in the form of the findings.

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The last chapter will be based on the Conclusion and Recommendation chapter which will
analyze the overall study from an overall perspective.

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Chapter 2: Literature Review
2.1 Introduction: Employee turnover
The employee turnover can be rightfully defined as the percentage of workers who tend
to leave an organization and get replaced by new employees. The employee turnover can be
understood to be a measure of calculation which will help the different firms to understand the
reason why the employees are leaving the firms and how can this ratio be improved upon on
their overall basis. According to Knies et al. (2015), there exists different types of turnovers and
hence, it is very often considered to be important for the different organizations to understand the
primary reason behind the employee turnover. The first type of employee turnover is the
involuntary employee turnover, where the employee termination can be largely contributed to the
poor job performance of the organization, the violation of the workplace policies, the
absenteeism which tends to exist in the workplace. This also comes under the category of
termination, firing as well as discharge. The particular type of turnover is understood to be
involuntary in nature because it does not depend on the employee decision to leave the particular
organization. Another type of employee turnover can be understood to be the voluntary
termination. In this kind of a voluntary employee turnover which takes place, the employees tend
to leave the firm on their own due to different decision making aspects like the acceptance with
another company, relocation to a new area of dealing or other personal commitments (Humburg
and Van der Velden 2015). In this, the employee provides a resignation before leaving the firm
and generally serves the notice period as well. Another kind of employee turnover which exists
is the desirable and the undesirable turnover. In this type of a turnover it can be largely
understood that, these turnovers take place, when the performance of the employees is very poor
in nature and hence, if they leave the firm, it can be considered that it brings a good outcome for