Impact of Job Satisfaction on Hotel Profitability in Australia

This report investigates the impact of employee job satisfaction on the annual profit margin within the hotel industry in Australia. The research begins with an introduction outlining the background, justification, problem statement, aims, and objectives. A critical literature review explores the hospitality and hotel industry, job satisfaction, and hotel financial performance indicators. The methodology section details the research variables, philosophy, approach, and design, along with data collection methods (surveys and secondary data analysis) and data analysis techniques (SPSS for correlation analysis). The study aims to identify the relationship between employee satisfaction and financial performance, specifically annual profit margins. Findings and discussion from the secondary data analysis are presented, leading to conclusions, recommendations, and limitations of the study. The report emphasizes the importance of employee satisfaction and retention for enhancing the financial success of hotels, highlighting factors like pay, organizational climate, and management initiatives. The study utilizes both quantitative and qualitative data to examine the correlation between employee satisfaction and annual profit margins in the Australian hotel industry, offering valuable insights for improving business performance and employee retention strategies. The report suggests a need for effective HR strategies to mitigate employee turnover and improve the overall profitability of hotels. The study is contributed by a student to be published on the website Desklib, a platform providing AI based study tools.

Running head: JOB SATISFACTION AND ORGANIZATIONAL PERFORMANCE
JOB SATISFACTION AND ORGANIZATIONAL PERFORMANCE
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Table of Contents
Introduction......................................................................................................................................2
Background information and justification...................................................................................2
Problem statement.......................................................................................................................3
Aim of the research......................................................................................................................3
Objectives....................................................................................................................................3
Critical literature review..................................................................................................................4
Hospitality and hotel industry......................................................................................................4
Literature review about job satisfaction......................................................................................4
Hotels performance in terms of financial indicators....................................................................5
The relation between job satisfaction and annual revenue of hotels...........................................6
Research methodology.....................................................................................................................6
Research variables.......................................................................................................................6
Research philosophy, approach and design.................................................................................7
Data collection methods..............................................................................................................7
Data analysis methods.................................................................................................................8
Findings and discussion from the secondary data analysis.............................................................9
Conclusion.....................................................................................................................................11
Recommendations..........................................................................................................................11
Limitations.....................................................................................................................................12
References......................................................................................................................................13
Appendix........................................................................................................................................16

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Topic: Employee job satisfaction impact on annual profit margin in the hotel industry of
Australia
Introduction
Background information and justification
The organizational operational performance is based on the effective functioning of the
employees in accordance with the needs of the venture. According to Sharma (2019), the
financial performance of an organization is reflected from the satisfaction of the employees and
their collaborative functioning towards meeting the organizational common objectives. In this
connection, the research will assess the manner in which job satisfaction among the employees
supports the hospitality industry in Australia to improve their financial performance. Job
satisfaction is specifically reliant on the nature of the operations, the management initiatives and
policies. It has been noted that the hotel industry in Australia has grown exponentially with a
market size of AU$13 billion and the involvement of 1696 businesses (SHARMA & Gursoy,
2018).
The major variables that would be considered in the research are the annual turnover of
the hospitality industry in Australia and the rate of employee satisfaction in the different
processes. However, it has been noticed that certain flaws in the industry has resulted to lack of
retention capabilities of the organization in the different markets. Therefore, the research will
aim at identifying the success factors of the hospitality industry while measuring it in terms of
annual turnover and the rate of retention of the employees.

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Problem statement
The increased rate of job turnovers in the hotel industry has brought about significant
changes in the organizational operations. It has been observed that around 1.88 million
employees of the hospitality industry resigned from their respective job positions in the year
2018 (Hammer & Avgar, 2017). The impact of employee turnovers in the organizations are
huge. The key aspects of change in the organizational operations are based on the effective
functioning of the systems in accordance with the needs of the venture. Lee, Kim and Park
(2017) stated that the job satisfaction among the employees are specifically reliant on factors like
pay scale, organizational climate, managerial factors and rewards for the initiatives.
The minimization of employee satisfaction in the hospitality industry and turnover
affected the capability of the sector in improving their performance while operating as per the
changing needs of the clients. The retention of the skilled and experienced employees supports
an organization in improving their operational performance while adhering to the market
demand. However, the increased staff turnover in the Australian hospitality industry affected the
capability of the same in increasing the effectiveness of the business operations in accordance
with the demand of the customers.
Aim of the research
The aim of undertaking the research is to identify the impact of job satisfaction among
the employees on the annual profit margin in the hotel industry of Australia
Objectives
The research objectives will be:

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 To identify the situations in the hospitality industry of Australia and financial
performance of the same
 To assess the factors that contribute to the job satisfaction among the employees
 To examine the correlation between job satisfaction among the employees and the
financial performance of the hotel industry in Australia
 To suggest recommended course of activities for the hospitality industry in Australia for
improving their rate of employee retention and maximizing the annual profit margin
Critical literature review
Hospitality and hotel industry
The hospitality industry specifically comprises of hotels and restaurants that focus on
providing a range of services in accordance to the requirements of the clients. Therefore, most of
the hotels take the initiative of implementing a customer- oriented service model. The
improvements in the services are reliant on the skill and experience of the staff members and
their commitment towards meeting the organizational goals. However, the growing trend of staff
turnovers in the sector might be one of the major threats that might incapacitate the businesses to
facilitate expansions. Sainaghi et al. (2018) observed that there is a diminishing trend in the hotel
performance based on a daily basis and occupancy. Therefore, the increasing rate of staff
turnover might be considered as the major contributor to the diminishing rate of the financial
performance of the industry.
Literature review about job satisfaction
Job satisfaction is one of the primary contributors to organizational performance over the
years. The multi-faceted factors of job satisfaction is related to the pay scale, HR policies and
procedures, organizational cultural, management approach and specifically rewards for the

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different initiatives. Park, Song and Lee (2017) stated that job satisfaction influence commitment
among the employees while operating in the different markets. The major modifications in the
organizational performance is reliant on the commitment of the employees towards achieving the
common objectives of the venture. Bangwal, Tiwari and Chamola (2017) opined that the
increase in the job satisfaction among the employees supports an organization in increasing the
operational efficiency of the same. The organizational operational efficacy is based on the
commitment and collaboration among the employees.
However, the policies and the management approach might be restricting factors that
might affect the capabilities of an organization in improving performance. Pyman et al. (2017)
reflected that HR service propositions are again an important point of concern that influence the
rate of employee commitment. The increasing rate of staff turnovers, affected the competency of
the organizations in forging continuous improvement in the quality of the services as per the
concerns of the venture. However, inefficient strategizing on staff retention affected the
capability of the organizations in empowering their financial status.
Hotels performance in terms of financial indicators
The primary financial indicators for the hospitality industry are the ADR (Average Daily
Rate), Occupancy and net income or annual margin. Otoo and Mishra (2018) stated that the
assessment of the financial performance of an organization, in the hospitality industry, is
determined through the occupancy and the income made by the same in an average daily basis.
However, a trend of reduced earnings were noticed through the ADR which might be attributed
to the increased rate of turnover in the industry. Therefore, the lack of efficient HR strategies
affected the capability of the hospitality sector in improving job satisfaction while minimizing
the rate of turnovers, affecting their business performance.

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The relation between job satisfaction and annual revenue of hotels
Job satisfaction and employee retention are the major factors that affect an organization’s
financial performance. The HR legislation, management approach, compensation, rewards and
the like are the sub factors that critically examines the success of a venture. Kandampully, Zhang
and Jaakkola (2018) stated that job satisfaction among the employees results to higher
commitment of the same towards meeting the common objectives of their venture. Moreover,
Akter, Ali and Chang (2019) opined that the improved workplace environment and
remuneration policies supports an organization in increasing job satisfaction among the
employees. The increased commitment of the employees towards the organization and the
improvement in staff retention supports a venture in inducing continuous innovation in the
service procedures and the business model for their sustenance. In this connection, Salehzadeh et
al.(2017) stated that the innovations that are made by the hotels supported the same in improving
their market share while aligning the services to the market demand. However, Ariza-Montes et
al., (2018) argued that the hospitality sector is facing significant challenges in retaining the
experienced and professional talents in their operational units, which incapacitated the same in
increasing activities of continuous improvements. Therefore, the retention of the skilled and
experienced workforce, through improved management structure and HR service propositions,
would allow the hospitality industry in forging improvements in financial performance.
Research methodology
Research variables
The variables for the study are employee job satisfaction and annual profit margin in the
hotel industry of Australia. Employee job satisfaction might be considered to be independent

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variable for the study, whereas annual profit margin in the hotel industry of Australia is the
dependent variable for the research.
Research philosophy, approach and design
The research will be initiated through the application of positivism philosophy.
Application of the positivism philosophy in the research study would enable in identifying the
natural phenomenon related to the expectations of the employees and the manner in which it
leads to staff turnover. Again, the research will be conducted through the application of the
deductive approach where data will be driven from different relevant and existing sources.
Finally, an explanatory research design will be applied for the study as it would support in
identifying the causal relationship between the variables. The assessment of the cause and effect
relation between the two variables of the current study would support in addressing the study in
accordance with the pre-framed questions.
Data collection methods
The data for the research will be collected through the utilization of quantitative data
collection. The quantitative data will be collected through conduction of surveys among the
employees while identifying the major concerns that are being faced by the same while operating
in the hospitality sectors in Australia. A sample size of 100 employees would be conveniently
selected from 5 different hotels in Australia for conducting the survey. A survey questionnaire
would be created, consisting of 12 close ended questions. The questions will focus on identifying
the major concerns that are being encountered by the employees. Alshehhi, Nobanee and Khare
(2018) opined that the employees play a pivotal role in empowering the value propositions.
Therefore, the satisfaction of the employees is essential for increasing efficiency of the business
performance in terms of net margins. Therefore, the survey would take the initiative of

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identifying the underlying issues that are being faced by the employees while operating in their
respective job roles in the hospitality sector of Australia. Boxall and Winterton (2018) stated
that identification of the major concerns that are being encountered by the employees would
enable the organizations in identifying the different measures that might be considered by the
venture for keeping the workforce motivated and satisfied. Therefore, the survey would
investigate on the issues that are being faced by the employees while operating as per the needs
of growth in the hospitality industry of Australia.
A secondary assessment of the annual report of the companies would be undertaken with
the purpose of identifying the market position of the 5 companies with the rising rate of
employee turnover. The assessment of the annual reports and other corporate documents would
allow in improving the insight on the different provisions and policies of the organization.
Moreover, the analysis of the annual reports of the organization would support in recognizing the
manner in which the increasing rate of staff turnover is affecting the annual margins of the
businesses.
Data analysis methods
The data from the quantitative surveys would be analyzed through the SPSS. Data will be
collected in excel and will be placed in the SPSS software for running a correlation analysis. The
correlation analysis will support in identifying the relation between the variables, employee
satisfaction and financial performance of the organization. Boxall and Winterton (2018) opined
that the assessment of correlation between the different variables allow in recognizing the impact
and causal relationship between the same. Therefore, correlation analysis in this relation would
improve the quality of the study while examining the causal relation between the variables.
Moreover, the research will also take the initiative of determining the P value. If the P value is

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lower than 0.05 then the alternative hypothesis will be considered (P value < 0.05). The
determination of the P value would contribute to the significance of the outcomes. The data will
be presented in the form of descriptive statistics. The analysis will be reflected through the
calculation of mean, median and mode. Therefore, the data collection and analysis would allow
in improving the quality of the study through assessment of the variables and their elation
between the same.
Findings and discussion from the secondary data analysis
The growing concern of employee turnover in the hospitality industry of Australia has
reflected the diminishing annual marginal earnings. It has been observed through a survey report
that the hospitality industry in Australia employs around 6.9% of the total population in the
different operational departments (Úbeda-García et al., 2017). Moreover, it has also been
observed that the industry provides with more than AU$75 million annually on community
organizations (Mun & Jang, 2018). The increased rate of employee turnover in the hospitality
industry of Australia might be accredited to the poor HR planning measures which resulted to
absence of job satisfaction among the employees. It has been observed that the rate of occupancy
in the Australian hospitality industry is 74.4% while the ADR growth rate minimized to 1.3%
which suggests a diminishing financial performance of the sector (Gaile et al., 2019)
The industry revenue of the hospitality sector rose by 3.4% between five years starting
from 2018 (Bangwal, Tiwari & Chamola, 2017).The poor pay scales and hectic schedules are
found to be one of the major contributing factors to the job turnovers. In the survey, more than
87% of the respondents, employees, stated that the absence of work- life balance have greatly
affected their physical and mental wellbeing, forcing the same to resign from their respective
posts (Sharma, 2019). The overburdening workload and the long shift hours are the major

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concern that are being faced by the employees, affecting their level of satisfaction and resulting
to turnovers in the scenario of the hospitality sector in Australia.
Moreover, it has been noted that more than 56% of the workforce looks for job change
from the hospitality industry due to the lower remuneration and lack of suitable incentive
schemes (Pyman et al., 2017). Absence of sufficient rewards and recognition programs along
with adequate remuneration affected the capability of the hospitality sector in improving the
experience of the employees while operating in their respective job positions. On the other hand,
it has been observed that the absence of staff retention in the hospitality sectors of Australia
reduced their earnings, especially for the lodges.
The increased earnings of a hospitality business is reliant on the quality of the services
that are being provided by the same. It has been noticed that the industry in Australia spends
around AU$70 million for training and developing the skills of the employees with the purpose
of improving the service quality while increasing the satisfaction of the employees through
motivation and empowerment (Otoo & Mishra, 2018). However, the growing concern towards
work- life balance, overburdening workload and lower remuneration has affected the rate of
satisfaction among the employees while undertaking the expected operations. The increased
dissatisfaction among the employees resulted to turnover in the organizations of the hospitality
industry at Australia.
The increased turnovers maximized the employment costs along with the operational
expenses while curtailing the annual marginal earnings of the same. Again, the lack of
collaboration between the employees and the management restricted the capability of the
organizations in empowering their innovativeness, resulting to loss of competitive vantage point.
Úbeda-García et al., (2017) stated that the satisfaction of the employees in the different

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processes that are planned by the businesses empowers their commitment towards meeting the
common goals of the venture. Therefore, from the secondary analysis it might be stated that the
hospitality industry of Australia is facing serious issues in improving their annual earnings due to
the lack of employee retention.
Conclusion
Therefore, from the above assessment it might be stated that the increased dissatisfaction
among the employees of the organizations in the hospitality sector in Australia restricted the
annual earnings of the same. The research enumerated the different challenges that are
encountered by the organization in the hospitality industry due to the lack of adequate HR
policies. It has been observed that the absence of work- life balance and lower remuneration in
the sectors resulted to dissatisfaction among the employees. The research also enumerated a list
of recommended activities for the organizations in the hospitality industry for keeping the
workforce satisfied while improving their capability of redeeming the profitability.
Recommendations
The recommended activities that might be considered by the organizations in the
hospitality industry of Australia are:
 Conduction of internal surveys: The internal employee surveys would allow the
organizations in gaining cognition on the major concerns that are being encountered by
the same for improving their rate of satisfaction.
 Reviewing the HR policies in comparison with the legislative requirements: The review
of the HR policies and provision sin the organizations in accordance with the legal and
legislative requirements would allow the organization in improving the process structure.