Imperial Hotel Staff Turnover: Causes, Consequences, and Solutions

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Introduction to Management
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Table of Contents
Introduction......................................................................................................................................3
Analysis of the problem...................................................................................................................4
Conclusion.......................................................................................................................................8
Bibliography....................................................................................................................................9
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Introduction
There are different kinds of issues, which are faced by a business during its operations. For
example, poor customer services, poor financial management, high staff turnover and monitoring
performance are the fundamental problems that a business faces. One of the biggest issues that
the hotel industry faces is high staff turnover. This is especially the most common issue that
hotels operating in UK face because temporary employment of students or foreign nationals from
the EU (European Union) who want to work only for short spans in London along with low pay
provided to them. High staff turnover is one of the major issues faced by the Imperial Hotel as
well and almost 80% of the hotel’s staff will be leaving the company within this year itself.
The Imperial Hotel is one of the oldest hotels of London and has been operating for the past 100
years (Imperial Hotels, 2018). It was refurnished 8 years ago and is now in the need of some
redecoration as well as restoration. However, the staff turnover in the business is quite high and
the interviews of the employees who are leaving the company, shows that poor perception of its
work culture, aggressive management and supervisory styles, unsociable work hours, lack of
regular and proper training and poor pay levels in contrast to other industries are causes of the
problem. Poor promotion or bonus opportunities, high cost of travelling to central London
(where the company is located), difficulties of availing transport while going to home at night
and talent staff leaving the hotel for working at rival hotel businesses are also the causes of the
problem. In this study, the problem will be discussed in detail through management theories and
proposals for resolving the problem that has aroused in the Imperial Hotel.
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Analysis of the problem
Staff turnover is a common problem that every hotel business across the globe faces. Since the
temporary nature of work has been increasing in UK and the payment made to staff by the hotels
in the country are comparatively quite low, staff turnover is a common problem that every hotel
business faces in UK (Sharma and Gursoy, 2018). Similar to all other hotels operating in the UK,
the Imperial Hotel also faces high staff turnover. However, the turnover that the hotel is facing is
extremely high, as it can be seen that almost 80% of the staff working in the hotel are going to
leave it before the end of this year itself. According to Mohsin et al. (2015), staff turnover, also
called employee turnover, can be referred to as the percentage or number of employees, who are
leaving the organisation and require being replaced by newer ones. A high staff turnover can be
resulting into low staff morale and because of low staff morale in the workplace; the new staff
are not immune as well (Kang et al., 2015). The new staff hired by the company can be suffering
from low morale, thereby leading to them leave the business as well.
In UK, the hotel sector is usually high because of the nature of employment that it provides to
workers. The employment that the hotel sector of UK provides is usually temporary in nature.
This is only because students as well as the foreign nationals from the European Union always
prefer working for short periods in businesses operating in London. This leads to low pay of
employees and they are paid just with the average living wage rate of the nation. In the Imperial
Hotel, one of the basic reasons due to which the staff turnover is high is the temporary nature of
employment provided and the low payment made to employees. The turnover is especially high
in case of the front line staff of the hotel. However, in order to determine the specific reasons
behind the high staff turnover in the hotel, the Imperial Hotel had conducted several exit
interviews, which has helped it in finding out the following issues -
 The perception of the employees of Imperial Hotel about the work culture of the hotel is
extremely poor and this has been mainly due to the aggressive management and
supervisory styles
 The unsociable hours of work and the lack of regular and proper training and
development
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 The poor level of pay in contrast to working for other industries such as the food retail
industry
 Little opportunities for bonuses or promotion in the hotel
 High cost of employees to travel to the hotel since it is located in central London
 Poor availability of transport while going to home at night
 Competitor hotel companies paying better salaries, offering better working conditions as
well as benefits
From the evaluation of the operations of the Imperial Hotel, it can be found that the staff
turnover of the hotel is putting direct pressure on its staffing budget and its current staff costs are
presently running at about 35% of its sales, which is quite high for this kind of a hotel. The staff
costs have also increased since employing new staff every now and then has led to the increasing
costs of training and induction while the quality of the services provided to the guests have
depleted. The regular guests of the hotel are now making their stay at another hotel. Thus, it can
be evaluated that the staff turnover is having an effect on the entire organisation. This problem of
Imperial Hotel can be related to several management theories. According to Saeed et al. (2015),
the leadership and management styles adopted in a company has a direct influence over the
performance and retention of employees in it. In case of the Imperial Hotel, it can be seen that
the supervisory and management styles that Imperial Hotel’s management uses for leading and
managing employees are often aggressive in nature, thereby being one of the main causes of high
turnover.
The aggressiveness in the management styles used in Imperial Hotel help in evaluating that the
managers and supervisors of the hotel used the bureaucratic management style instead of the
democratic style. According to Sturdy et al. (2016), the bureaucratic management theory
comprises of two elements - the structuring of the organisation into a hierarchy and governing of
an organization with clear defined rational-legal rules for decision-making. This form of
management led to the increasing aggressiveness of supervisors and managers at Imperial Hotel
on the subordinate employees. Another management theory, which can be linked to the present
problem of Imperial Hotel, is Maslow’s needs hierarchy theory. According to the needs
hierarchy theory proposed by Abraham Maslow, it can be determined that one of the basic needs
of an employee is safety needs and physiological needs (Stoyanov, 2017). However, the
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employees working in Imperial Hotel had none of these needs fulfilled. Firstly, the wages
provided by the hotel to its employees were comparatively quite poor but were enough for
meeting their physiological needs.
However, due to the high costs of transportation to central London and the poor availability of
transport during the night leading to the reliance of employees on cabs instead of public transport
led to the increase in their costs but their wages remained the same. This led to the lack of the
Imperial Hotel to ensure that the physiological needs of the employees were met. At the same
time, the safety needs of Imperial Hotel’s employees were not met since most of the jobs offered
by it are temporary in nature and there is no job security. It can also be seen from the case of the
Imperial Hotel that the job satisfaction and commitment of employees working in the hotel were
poor, which had led to poor work performance, attendance issues and sometimes stress as well.
This led to putting excessive pressure on other colleagues for picking up the slack, thereby
leading to routine system issues along with a turnover in the organizational culture. Other
consequences include issues of managerial succession and operational bureaucracy.
The lack of job satisfaction and commitment of employee is the result of poor motivation and
performance appraisals in the company. According to Varma (2017), in order to ensure that
employees are satisfied with their jobs and are committed towards the organisation, it is
necessary for the company to continually motivate them and one of the main factors of
motivating staff is pay packages, bonuses, regular training, performance appraisals and
promotion of talented employees. In this context, Armstrong and Taylor (2014) added that the
use of hard and soft HR practices can also be helpful for ensuring retention of employees and
improvement in their performances. However, in case of the Imperial Hotel, all these factors are
missing. The motivation among employees is extremely poor. The managerial succession in
Imperial Hotel would not have aroused in case if the hotel was able to take steps with which staff
could be attracted and retained in its key supervisory positions. The lack of encouraging talented
staff and pressure of filling the slack has led to the decreasing pool promotable employees and
managers.
However, in order to improve the current situation and overcome the problem of high staff
turnover, different steps are needed to be taken by the Imperial Hotel and various strategies need
being formulated for this. The initial suggestions provided by Peter Farnsworth such as attraction
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and retention of staff to chief supervisory positions, offering bonuses and pay packages through a
robust reward strategy, benchmarking pay scales against rival hotels, offering regular
performance appraisals and training for encouraging promotion of talented staff and use of hard
and soft HR practices will be extremely beneficial. However, limiting to these strategies will not
be enough to reduce staff turnover in the hotel. According to Foster (2014), the foremost
ingredient of effective staff retention is allowing them in participating in decision-making
through the application of democratic management style. Thus, the use of this management style
is recommended to Imperial Hotel. In addition to the development of a robust reward strategy, it
is recommended that the hotel must be ensuring the security of jobs offered to its employees. The
hotel should introduce the strategy of hiring employees with a condition that six months will be
the probation period for them, after which, if their performance is up to the level, they will be
turned into permanent employees from the temporary ones.
Similarly, motivational theories, such as the Vroom’s expectancy theory, Maslow’s needs
hierarchy theory, Herzberg’s two-factor theory and others must be adopted. This will help the
hotel in ensuring that employees are motivated, their job satisfaction is improved and they
develop their loyalty for the hotel.
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Conclusion
Hence, from all the discussions made in this report and their findings, it can be determined one
of the biggest issues that Imperial Hotel is presently facing is its staff turnover. It has become
almost impossible for the organisation to sustain its employees and it has been found that poor
perception of its work culture, unsociable work hours and poor pay levels in contrast to other
industries are causes of the problem. Furthermore, the lack of proper and regular training for
employees and the aggressiveness of the managers and supervisors also contribute towards the
problem. Poor promotion or bonus, high cost of travelling, difficulties of availing transport while
going to home at night and the higher wages and better conditions provided by other hotel
companies also contribute to the problem of the Imperial Hotel.
However, the proposals that Peter Farnsworth has provided for the resolving the problem along
with the ones that have been discussed in the report are going to beneficial for the Imperial Hotel
to overcome these problems. In addition to the five suggestions that have been provided by Peter,
Imperial Hotel is recommended on ensuring that each of its managers and supervisions adopt the
democratic style of management and job security is ensured. It is also recommended that
motivational theories such as the Maslow’s needs hierarchy theory be used for motivating staff.
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Bibliography
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Foster, E.C., 2014. Human resource management. In Software Engineering (pp. 253-269).
Apress, Berkeley, CA.
Imperial Hotels., 2018. Imperial London Hotels - Great Value Central London Hotel Rooms
From £55 Per Night | Imperial Hotels. [online] Available at:
https://www.imperialhotels.co.uk/en/ [Accessed 10 Dec. 2018].
Kang, H.J., Gatling, A. and Kim, J., 2015. The impact of supervisory support on organizational
commitment, career satisfaction, and turnover intention for hospitality frontline
employees. Journal of Human Resources in Hospitality & Tourism, 14(1), pp.68-89.
Mohsin, A., Lengler, J. and Aguzzoli, R., 2015. Staff turnover in hotels: Exploring the quadratic
and linear relationships. Tourism Management, 51, pp.35-48.
Saeed, T., Almas, S., Anis-ul-Haq, M. and Niazi, G.S.K., 2014. Leadership styles: relationship
with conflict management styles. International Journal of Conflict Management, 25(3), pp.214-
225.
Sharma, B. and Gursoy, D., 2018, June. HRM Practices in Hospitality and Tourism Industry: A
Review of the Literature. In 8th ADVANCES IN HOSPITALITY AND TOURISM MARKETING
AND MANAGEMENT (AHTMM) CONFERENCE (p. 28).
Stoyanov, S., 2017. A theory of human motivation. Macat Library.
Sturdy, A., Wright, C. and Wylie, N., 2016. Managers as consultants: The hybridity and tensions
of neo-bureaucratic management. Organization, 23(2), pp.184-205.
Varma, C., 2017. Importance of Employee Motivation & Job Satisfaction For Organizational
Performance.
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