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HUMAN RESOURCES MANAGEMENT PRACTICES AND EMPLOYEE RETENTIONIN SELECTED HOSPITALITY INDUSTRY IN IKEJA, LAGOS STATE
Hospitality industry is functional service sector where optimal human resources management is required for successful delivery of good and service, where productivity and retention are determine factors of overall success of an organization. Human resources is the most valuable asset of any organization, the success or failure of any organization to a large extent depends on how effective they were able to manage their human resources, theirneeds andworking conditions must be satisfied if anorganization must achieve its aims and objectives. Human resource management practices deployed in this study are training and development, remuneration, promotion and staff engagement.
The researcher used both the primary and secondary data in the course of the study. Asurvey research design was adopted. The population of the study comprised all hotels rating with five, four and three star hotels in Ikeja, Lagos State. Six hotels were selected using stratified random sampling,with 726 employees. Pilot study was carried out in one of the hotel to ascertain the reliability and validity of the questionnaire. The sample size of the study was 256 employees derived using the Yaro Yamani formula for the determination of sample size. A total number of 256 questionnaires were distributed and 206 returned. Structured interview were conducted with three of the hotels managerineach ofthehotels’ category. The researcher used simple percentage and regression analysis as statistical tool for the analysis.
Findings revealed that the variables of human resource management practices used in this study,Staff training and development, remuneration, promotion and employee engagement are significant correlated with employee retention. It shows that providing adequate training and development, remuneration, promotion and engagement for employees lead to increase in retention rate an organization and reduce staff turnover.
The study concluded that adoption of human resource management practices enhances employees’ retain ability of organizations.There is need for proper coordination, control and implementation in order to achieve organization objective and at the same time reduce employee turnover which has caused great havoc in the industry.
Keywords: Hospitality, Hotel, Retention, Staff Turnover, Employee Turnover
1.1 Background to the Study
The hospitality industry is a functional service sector where standard human resource management is needed to enhance professionalism and efficiency in the delivery of good and service. According to Joint Hospitality Industry Congress in Lashley (2000) hospitality is defined as the provision of food, drink, and accommodation away from home. It is an interactive process that exists among customer and host which can eventually be companies or organization. The hospitality industry is among the sustainable income generating sources for economic development. Hence, this has generated interest in educational sector because of its impact on the country gross domestic product. The hospitality industry is seen as a major sector for many countries in the development of their socio-economic growth and some countries impact their economic fate within a desirable period by engaging in hospitality oriented businesses (Uddin, Das; and Rahman, 2008). The hospitality industry is central and essential to the general welfare of many countries in the world, revenue from hospitality industry is one of the main sources of foreign exchange in some regions like Fiji, the Caribbean, and Hong Kong. It contributes to the growth of an economy by creating jobs opportunities and funding a large percentage of a country's Gross Domestic Product. It enhances the level of national income by earning foreign currencies through the goods and services supplied to foreign visitors thus improving the balance of payment (Baker, 2006).
Hospitality management includes management of hotels, travel agencies, restaurants and some institutions which are anchored on the hospitality industry. Services of the hospitality industry are usually patronized by tourists; when people eat in restaurants, lounge in hotels, go out to watch movies or engaged in similar activities. Tourism is one of the vehicles that drives Hospitality Industry while hospitality industry provides services for tourists such as transportation, accommodation needs in resorts, hotels restaurants, pubs and bars, food and beverage, recreation and leisure. The strategic importance of hospitality industry to tourism was confirmed by the United Nations World Tourism Organization (UNWTO) that 70% and 75% of international tourists' spending goes to hospitality services on an annual basis (Akpabio, 2007). The World Travel and Tourism Council (WTTC) attests that hospitality employment in both developed and developing countries worldwide accounted for over 230 million or 8.7 per cent jobs (WTTC, 2006).
In the midst of an economy meltdown in Nigeria, the hospitality industry contributed 2.75 billion in 2007. 3.10 billion in 2008, 3.44 billion in 2009, 245.7 billion in 2010. 268.41 billion in 2011, 310.96 billion in 2012. 540.63 billion in 2013, 639.71 billion in 2014, and 654.22 billion into the economy according to the National Bureau of Statistics. Worland and Wilson (1988) described the hospitality industry as an establishment that includes but not limited to services in hotels, restaurants, licensed clubs and motels. Therefore this dissertation will consider hotel industry as one of the hospitality industry since it has been identified as one of the fundamental drivers of the growth and development of tourist sector in Nigeria.
Lagos has about 1329 hotels of different categories. In the last three years, many hotels have been established in Lagos such as ibis Ikeja, Intercontinental, Best Western Starfire and African Sun GRA. The survey carried out by Lagos state bureau of statistic revealed that N82, 630,620,896.52 representing 0.68% of State GDP are generated by hotel and restaurant sector (CBN, 2012). The primary importance of the hotel industry is reflected in the temporary accommodation offered. Nevertheless, extended conferencing facilities such as event halls, seminar rooms and accommodation provided to business and leisure traveler are the core values of the hotel industry. There is an expansion of existing hotels with infrastructural development such as car park, swimming pools and more new buildings with larger guest rooms, therefore, adding quality services and products as an advantage for guests apart from basic need and shelter. Food and beverages services are also a source of revenue from the guests (Oshindeyi & Babarinde, 2010).
Human Resources is the valuable assets of any organizational success. Unlike a machine, people are responsible for financial management, maintenance of equipment and coordination of other assets in an organization. Damaged control in HRM involves heavy financial provision than others. In a hotel industry employee play an important role in the service delivery, from arrival to the moment of a guest checked into the hotel to the last moment a guest check out from the hotel. Therefore hotel employees are the most essential assets, their personal needs and working conditions must be highly motivated if an organization must realize its goals and objectives. The business of hospitality is people oriented, hospitality industry must exercise great effort to attract qualifies and competent human resources so as to achieve the organization objectives through optimum performance.(Alan & Compton, 2011). The hotel industry requires a committed labour force, therefore, effective human resource policies, and guidelines must be developed for competitive success (Alleyne et al. 2006).
Engaging professionals is important for any organization, but their retention and productivity are determined factors for the overall success of an organization. Retention benefits contribute to an employee’s loyalty and commitment, and employers who offer these benefits show respect for the employee’s role at work and at home. Offering these benefits can contribute to a facilitative climate of support, which gives employees greater control over their work responsibilities and career goals. When employees know that their organization supports them, they reciprocate with greater effort (Galinsky & Stein, 1990).). Research has shown that employees who are satisfied with their benefit program are three times more likely to be content with their job and to feel loyalty toward their employer than their peers are (IOMA, 2003).
In other to have a successful operation of the hotel industry in Lagos, It is essential that the main focus in the contemporary hotel industry should be on human resources management practices. It is imperative to investigate and determine the usage of human resource management practices by hotel industry in Lagos. Therefore this study will examine some human resource management practices in aspect of training and development, staff engagement, remuneration and promotion; possible ways to retain the best and competent employee to reduce staff turnover in the organization.
1.2 Statement of the Problem
The human resources practices are form of policies designed to attracts, develops, motivates and retains competent employees to ensure the effective implementation and the survival of the organization. It is one form of resources derived from the organization that can assist organizational members to achieve their work goals, reduce their job demands and stimulate their personal growth, learning and development. For hotel industry to achieve its target goals depends on how effective the industry are able to implement these practices.
The hotel industry in Nigeria from 2012 to 2015 has witnessed considerable growth, especially in Lagos, an economic nerves of Nigeria; because of the ever increasing programs invested in the city and unrestrained inflow of visitors from within and outside Nigeria for various reasons ranging from business, academics, and pleasure. Due to increase demand for the shelter and also the hosting of several major international events like Commonwealth, African games, Carnivals had consequently encouraged the springing up of new hotels and restaurants with quality services render to meet international standard. Ikeja area of Lagos state is a commercial town with shopping malls, pharmacies, government residential area, industrial estates as well as location of Murtala Mohammed international Airport, all these sustain the thriving of hotels market.
Tourist sectors expenditure pattern for Lagos from 2012-2015 consistently showed that 37 percent of tourist expenditure was spent on accommodation which has spawned the development of hotels in Lagos. In spite of the contribution of this sector to economic development, the hotels often witness high turnover rate; a report submitted by International Labor Organization (2012) on labour turnover in the World tourism and hospitality industry in year 2015 shows the quitting rate of an employee of food and accommodation sector of hospitality industry ranging from 4.1- 4.6 percent about 3, 413,000 while it is assumed that the daily growth in the hospitality industry accounts for staff movement.
It has been debated that the level which workers are comfortable with their responsibility and willingness to remain in an organization is a function of organization remuneration packages and incentives (IJABE, 2012). The inability of HRM of hospitality business to attract, engage and retain suitable employees with the right knowledge, skills, and attitude to steer the day to day operation are becoming challenging issues in the industry, the implication is that it reduces the quality of service that might equally influence the preference of customers as to where to patronize while at the same time often led to a loss of experienced hands to other sectors.
In Nigeria, efforts to get turnover rate in the industry proved relatively difficult however a sample of hotels visited revealed turnover rate from 2007 to 2017, 10 percent in five, 29 percent in four star and 28 percent in three star hotels motivated this study to examine human resources management practices and employee retention and reasons for staff turnover in selected hospitality Industry in Ikeja, Lagos State.
1.3 Objective of the Study
The main objective of this study is to examine the human resources management practices and employee retention in selected hotel industry in Ikeja, Lagos State. The specific objectives are to:
- identify the effect of staff engagement on employee retention,
- evaluate the effect of remuneration on staff retention in selected hospitality industry ;
- access the impact of staff training on employees’ retention in selected hospitality industry and
- examine the influence of staff promotion on employees’ retention in selected
1.4 Research Questions
1. What is the effect of staff engagementon employee retention in selected hospitality
2. How has the remuneration policy affect employee retention in selected hospitality
3. In what ways has staff training impact on employee retention in selected hospitality
4. How has staff promotion influence staff retention in selected hospitality industry?
H01There is no significant effect on staff engagement and employee retention in selected
H02 There is no significant effect on remuneration policy and employee retention in
selected hospitality industry.
H03 There is no significant impact on staff training and employee retention in selected
H04 There is no significant influence on staff promotion and employee retention in
selected hospitality industry
1.6 Significance of the Study
The success of every organization depends on the effective human resource practices adopted by the organization. The organization cannot function well without adequate human resource practices put in place. To examine those factors that delineate the performance of hospitality staffs which at the same time contribute to staff turnover, employee satisfaction, and growth of hospitality industry. This study is unique as is coming at a time when there is a decline in human resources management practices in most of the hospitality industry in Lagos. Based on study that investigated the relationship between the use of 12 HRM practices and organizational performance Seonghee et al. (2006).
The result revealed that organization that employed HRM practices are subject to turnover reduction rates for the non-administrative employee. The study is set out to examine human resources management practices as it enhances productivity and job satisfaction of employees. It is expected that the study would identify areas where inadequate and inappropriate HRM practices are employed and provide a solution to optimum performance. The study would also provide scientific and empirical information that would create a robust relationship and understanding between employee and employers in the hospitality industry. The result would be helpful to top management in the development of HR practices as to ensure the sustainability of retention of the employee. It would also add to the body of knowledge in respect of hospitality industry and the effect on company's turnover. It would as the same time serve as a guide to the practitioner in the hospitality industry.
1.7 Scope of the Study
Studying human resources practices in the hospitality industry in a single research effort may be unwieldy, for this reason, the researcher has decided to examine hotel sector as one of the hospitality industry in Ikeja, Lagos State. Ikeja been capital city and habitant of business center and many hotels, also because of its closest vicinity to the airports. This study will consider only 5, 4 and 3 star hotels within Ikeja area of Lagos for the period of 2007 to 2016. It will further concentrate on a variable item such as employment practices, remuneration policies, promotion, staff engagement and identifying challenges with the administration of these policies on employee's retention.
1.8 Operational Definition of Terms
Hospitality: Hospitality by the Joint Hospitality Industry Congress is defined as ‘The provision of food and drink, accommodation away from home' Lashley (2000)
Hotel: A commercial establishment providing lodging, meals and other guest services
Recruitment: Recruitment refers to the process of attracting, screening and selecting qualified people for a position within an organization.
Retention: A process in which the employees are encouraged to remain with the organization for the maximum period or until the completion of the project.
Staff turnover: as the ratio of the number of organizational members who have left during the period being considered divided by the average number of people in that organization during the period. (Glebbeek & Bax, 2004), (Price, 1977)
Employee turnover: is described as employees who have left, are leaving and will leave an institution for various reasons (Grobler, Warrnich, Elbert & Hatfield 2006, p. 125). A similar definition is provided by (Morrell, Loan-Clarke and Wilkinson 2001) who state that turnover means voluntary cessation of membership of an organization by an employee of that organization
Five star- these are hotels that have luxury settings, flawless guest service, offer only the highest level of accommodations and services.
Four star- these are hotels that have superior property and a variety of amenities, mostly large, formal hotels with smart reception areas, front desk service, and bellhop service.
Three star- these are hotels that have high service additional amenities, typically offer more spacious accommodations that include well-appointed rooms and decorated lobbies
Two star- these are hotels that meet a basic need, typically smaller hotels managed by the proprietor. The hotel is often 2 - 4 stories high and usually has a more personal atmosphere. It′s usually located near affordable attractions, major intersections and convenient to public transportation.
One star- these are hotels that meet basic budget needs, usually, denotes independent and name brand hotel chains with a reputation for offering consistent quality amenities. The hotel is usually small to medium-sized and conveniently located to moderately priced attractions. (WTO & I H & R A, 2004, p. 74).