A Case Study Of Serena Hotel Faisalabad Pakistan Management Essay
The study was aimed to identify factors reducing employee turnover and to explore the impact of retention strategies on workforce at Serena Hotel, Faisalabad, Pakistan. The research was based on case study method; a survey was conducted through self administered questionnaire (30), face-to-face interviews (6) with key personnel and observations were recorded. A total of 36 respondents were selected within the population size of 285. Out of many factors and strategies examined work place environment and training and development were found more effective in employee retention at Serena Faisalabad. Weaknesses were identified in the area of compensation. For higher control over retention, management must work over monetary rewards and career progression. Overall, current practices at Serena if benchmarked by other would result in decreased turnover.
Keywords- Retention, Strategies, Serena Faisalabad, Turnover…
Type- Research Paper
Introduction
Serena Faisalabad (FSH) is the only four star hotel located 2km away from Clock Tower, surrounded by lush green gardens in Faisalabad. It was inaugurated by Prince Karim Aga Khan and Zia-ul-Haq (former president of Pakistan) in 1987. Serena Faisalabad is one among 33 chain-of-hotels spread internationally. It has a repute of an attractive employer in market place of Faisalabad, with a turnover rate less than 1.5% (Serena HR Department, 2010). While American, Irish, Australian, Greek, Niagara, Cyprus and Indian hotel industry is experiencing high levels of staff turnover (AHLA, 2007; O,Leary & Deegan, 2005; Davidson, Timo, & Wang, 2010; Chand, Katou, 2007; Willie, et al., 2008; Chalkiti, &Sigala; 2009; Zopiatis, & Constanti, 2007) . Employees are retained at Serena for longer period of time. This proposed an empirical research on factor causing retention at Serena FSH.
The term retention can be defined as “…a systematic effort to create and foster an environment that encourages employees to remain employed by having policies and practices in place that address their diverse needs” (Workforce Planning for Wisconsin State Government, 2005). Retention is the key concern of most leading organizations especially in service industry. “They are aware that competitiveness is devised from talent and it follows that recruitment and retention are not just human resource issues but an important part of business strategy” (Thornton, 2008). Johanson, Martenson, & Skoog added “technology based competitiveness is transient, the sustainable advantage lies in managing intangible resources (2001).”
The importance of issue, lead us to find factors effecting retention and strategies reducing turnover at Serena FSH. As turnover increases, negative effects on work place efficiency, productivity, and cost of hiring and developing new employees can be seen (Deery & Shaw, 1997; Lashley & Chaplain, 1999). Smartly devised strategies can help Serena Faisalabad in talent management i.e. “attracting, developing, retaining, and utilizing people with required skills and aptitude to meet current and future business needs (Lockwood, 2006, p.2)”as cited in (Hausknecth, Rodda, & Howard, 2008) .
Reviewing past literature reveals, a study on factors causing employees turnover is much focused (Rappaport, Bancroft, & Okum, 2003) as cited in (Hausknecth, Rodda, & Howard, 2008, p.4). Previously examined facts proposed a research through case-study method to meet following objectives:
To study the factors reducing turnover and enhancing retention.
To examine the role of HR department regarding strategy formulation and implementation.
To suggest intervention regarding improvements in retention strategies at Serena Faisalabad.
Literature Review:
The exploration of literature regarding retention yielded several dimension of work by researchers. According to Walker and Miler retention is a term given to keeping employees jumping from ship (2010). Retention is relative concept so it must be studied along with quitting process (Maertz & Campion, 1998). Traditionally factors propping up turnover are job satisfaction (Holdsworth & Cartwright, 2003), organizational commitment or psychological contract, career expectations, work life balance, deskilling, lack of training and development (Tutuncu & Kozak, 2007; Carbery et al., 2003; Davidson et al., 2010) peer and supervisor relationship (Graen, Dansereau, & Minami, 1972) cultural context (Sheridan, 1992), rewards (Hansen, Smith, & Hansen, 2002), seasonality of business, and nature of jobs (i.e. part time, casual, or seasonal) (Hartman, & Yrle, 1996; Deery, & Shaw, 1997; Ladkin, & Juwaheer, 2000; McCabe & Savery, 2007; Willie, Jayawardena, & Laver, 2008). Control over these factors can save this “labor intensive hospitality industry” (Birder, 2002; Brien 2004; Chalkiti, & Sigala, 2009) from bearing high cost of turnover (Davidson et al., 2010).
Lashley and Chaplain, claims “labor turnover is not only a significant tangible dollar cost but also intangible cost, with loss of skills, inefficiency and replacement cost” (1999). Additionally it has severe outcomes related to good will and repute of organization as potential employer. Knox and Walsh (2005) suggest in a research conducted on hotel industry of UK that hotel size is a factor that reduces turnover because of adoption of HRM practices (Lockyer, & Scholarios, 2004). In cultural context of Faisalabad, human resource is often considered as cost instead of asset. Staff must be treated as human with feelings, aspirations, and self-esteem, their dignity may not be invaded and they must not be considered as cost or burden instead of asset (Lucas & Deery, 2004; Abeysekera, 2006). As a Theory of Human Capital given by Becker in 1964 proposes that individual’s skills, experience and knowledge bring economic value to the organization. This serious problem of turnover is underestimated many a times. Increased turnover results in: increased cost, stress, disenchantment with industry, loss of business and productivity, and wastage of trained and experienced employees (O’Leary & Deegan, 2005; Davidson, et al., 2009). Five dimensions according to Porter and Steers (1973) can let employees stay for longer period of time in the organization that are extrinsic rewards, advancement opportunities, constituent attachments, seniority related perks, and non-work influences as cited in target employee retention (Hausknecth, et al., 2008). A study also showed that turnover in UK is less than America and approximately non-existent in hotel industry of Singapore because of un-employment (Holtom, Mitchell, Lee, & Eberley, 2008). This reminds of the work done by March and Simon (1958) Theory of organizational equilibrium; describing two important factors one is job satisfaction and other is availability of opportunities in market. Employees with higher satisfaction and lack of alternatives are less mobile. Employee retention is also influenced by psychological, behavioral, and demographic factors (Hausknecht, 2008).
From the point of view of (Deery & Shaw, 1997; Kaak, et al., 1998; Susskind et al., 2000) turnover problem should be dealt with care, strategies concentrating human resources must be formed and implemented with full spirit by HR department and management of the organization. Areas like career progression, team support (socialization), comfortable environment, communication and etc. if administered properly can enhance employee retention and can save tangible and intangible cost of organization (Davidson, et al., 2010; Chalkiti, & Sigala, 2009). Proactive approach of employer regarding retention cultivates employee satisfaction, enhanced goodwill and germinates trust that ultimately leads to productivity (Willie, et al., 2008; Earle 2003).
Hypotheses:
H1: Retention is high due to advancement opportunities, constituent attachment, extrinsic rewards, flexible work, job satisfaction, location and work-life balance at Serena hotel Faisalabad.
H2: Goodwill, employee empowerment, shared values, and Nature/ History of organization, contribute to retention in positive way.
Research Framework:
Age
Gender
Marital Status
Religion
Back ground
Salary
Experience
Education
Level
Good Will
Location of org.
History of org.
Empowerment
Job satisfaction
Shared Values
Control and monitoring
Retention
Training and Development
Rewards and recognition
Teamwork (constituent attachment)
Work-Life Balance
Independent Variables
Dependent Variable
Socio-Economic Variables Intervening /Moderating Variables
Methodology:
Present study was conducted on the only luxury hotel (Serena Faisalabad; four-star) of city Faisalabad (population: 8 million) also known as Manchester of Pakistan. The city is popular because of its textile, hosiery, soap, and pharmaceutical industry. It is considered as a business hub for national and international trade. The hotel was established in 1987 with a futuristic approach. It’s a part of hotels chain located in Islamabad, Quetta, Swat, Gilgit, Hunza and Shigar Fort.
Case study method was applied to find out the factors playing vital role in retention along with HR strategies at Serena Faisalabad. This is because no prior research on hotels of Faisalabad is available and little is known about causes, outcomes and strategies used by HR department to retain employees. A similar research was conducted by Chalkiti and Sigala on Greek tourism industry (2010). Workforce size at Serena is 285 (permanent staff) and varies to 300 to 350 because of casual and contractual staff. A group of 36 was carefully selected through convenience sampling for true representation. Convenience sampling refers to collection of data from people or units easily available (Zikhmund, 1996). This sampling technique is used to gather data quickly and economically and is best for exploratory research (Gu, & Siu, 2008). Out of 36 respondents; quantitative data related to the objectives of study was collected through 30 self administered questionnaires (designed on the base of researchers’ observations and literature review: from the study of (Herzberg, 1959; Potter and Steer, 1973; March and Simon, 1958)), measuring effect of 12 socio-economic, 4 intervening, and 4 independent variables on retention. 1-5 Likert scale was used to rate 26 questions, with 1 = Strongly Disagree and 5 = Strongly Agree. Response rate was 100% as all questionnaires were properly filled and was returned on time. Simple statistics was applied; frequency and percentage of 10 socio-economic factors (Table: 1) were calculated. Mean and standard deviation for rest of 26 questions were found (Table: 2 & 3). Cross table, multivariate analysis and chi-square test was applied to check relationship and significance of independent variables with retention by processing data through SPSS (Table 5).
For deeper insight along with validity and reliability, a semi-structured interview based on the findings of questionnaire was conducted. The average time for interview was 19 min. and 5 sec., maximum time 27 min. and minimum time 15 min. it was conducted with 6 key personnel, ranging in experience; minimum 3 years and maximum 22 years. 5 men and a lady were interviewed in their respective offices. Respondents were Head of Department: 2, Officer: 1, Assistant manager: 1, Supervisor: 2. Data was audio-taped, responses towards interview were positive. All questions were answered along with explanations and logics Table: 6 shows the findings of these interviews.
Analysis, Findings and Results:
Results through Questionnaire:
Univariate analysis presented in Table 1 gives an insight of demographical characteristics of sample. Out of 30; 60% respondents were below 30 and rest of 40% are above in age. The ratio represents presences of younger work force in Pakistan’s hotel industry. While in American hotel industry according to department of labor (2005) the availability of young work force will be less by 2014. Gender diversity at Faisalabad Serena is 1:3 that is 66.7% male and 33.3% females. The sample represents married to unmarried percentage of 40 and 60 % respectively. 33% people belong to rural area and others are from urban area. Highly salaried (above 45000) employees are only 20% and rests of 80% are below the range. This finding is similar to other researchers’ findings in different regions, i.e. hospitality industry has a minimum wage rate as compared to other industries (Hosmer, 2009; Kelly, & George, 2001). Maximum percentage fall in the category 1-5 years experience than 6 and above, one reason for this is the age of respondents as most of them are below 30. Level of education at Serena Faisalabad is high 53% of employees have master degrees, 33 did bachelor and 6.7 HSSC and SSC. The respondents are currently working at different levels in the organization as shown in Table 1. Their response towards different attributes of retention was positive, Table 2, 3 and 4 are affirming the statement. Some factors with no significance were identified; these are the areas where HR department and management of Serena have to put their focus.
Table 1:
Distribution of the respondents according to their socio-economic characteristics
Age
Frequency
Percentage
Below 30
18
60.0
30 or above
12
40.0
Total
30
100.0
Gender
Male
20
66.7
Female
10
33.3
Total
30
100.0
Marital status
Married
12
40.0
Unmarried
18
60.0
Total
30
100.0
Background
Rural
10
33.3
Urban
20
66.7
Total
30
100.0
Salary
15000-45000
24
80.0
45000 and above
6
20.0
Total
30
100.0
Experience
1-5 years
17
56.7
6-10 years
5
16.7
Above
8
26.7
Total
30
100.0
Education
SSC
2
6.7
HSSC
2
6.7
Bachelors
10
33.3
Masters
16
53.3
Total
30
100.0
Level
Supervisor
12
40.0
Manager
16
53.3
Non-Manager
2
6.7
Total
30
100.0
These variables were studied because they play a major role in retention of employees. As young people are more mobile and switch careers frequently than mature workers that are less transient (Wille, Jayawardena, & Laver, 2008).
Table 2: Distribution of the respondents according to their opinion about the following statements
Scale: 1 = Strongly disagree, 2 = Disagree, 3 = Neither agree nor disagree, 4 = Agree, 5 = strongly agree
N = 30
Sr. No.
Statements
5
4
3
2
1
1
Do the employees have the right to make decision regarding job related activities?
33.3
60.0
6.7
2
Does management have faith in employees regarding decision making at different level in organization?
20.0
60.0
20.0
3
Do the employees consider the company as a good place for career growth and development?
60.0
40.0
4
Is the company an attractive employer in the market place for talented person?
46.7
53.3
5
Company policies promote dynamic and diverse workforce
53.3
46.7
6
People from different background get a chance of employment and socialization in the company?
43.3
40.0
10.0
6.7
7
Company has an image of equal employment opportunity employer?
40.0
43.3
16.7
8
Do the employees have clear understanding of mission, vision and culture of organization?
20.0
70.0
3.3
6.7
9
Is succession planning (who is the next to get promoted for a particular seat) evident in the organization?
6.7
66.7
26.7
10
Support to all employees regarding work and difficulties from supervisors, coworker and management are a key element of work environment?
40.0
60.0
11
Does promotions of good performers in the organization is often?
36.7
56.7
6.7
12
Do all the employees get equal chances of training and development?
40.0
43.3
10.0
6.7
13
Trainings are conducted and imposed by management on all employees currently working at Serena?
43.3
43.3
6.7
6.7
14
Instead of in-house trainings employees also get a chance to go out for development purpose?
30.0
43.3
6.7
20.0
15
Trainings are attached with certain rewards that are given to high performer
10.0
40.0
33.3
16.7
16
Highly trained employees get perks and increments compensations and benefits
6.7
46.7
30.0
16.7
17
Flexible working hours and environment is provided to all for retention and high satisfaction?
16.7
63.3
16.7
3.3
18
Employees are retained in the organization through different policies and procedure for maximum benefits?
23.3
70.0
6.7
19
Restructuring of jobs, layoffs, or resignations increases work load on other employees?
6.7
80.0
6.7
6.7
20
Job burnout is reported by different people at different level in the organization?
3.3
43.3
30.0
16.7
6.7
21
Hiring new staff at low cost is preferred over retaining old staff at high cost at some or all the level of organization?
20.0
10.0
30.0
30.0
10.0
22
Due to inflation and poor economic conditions cost of living has been increased in Pakistan, does this resulted in increments at all level?
6.7
53.3
13.3
23.3
3.3
23
Does employee quit from the organization solely because of pay, wages or salary?
20.0
33.3
30.0
16.7
24
Due to active role of HR department regarding retention and development, employee tenure is prolonged?
6.7
66.7
26.7
25
Work life balance is easy to attain while working on current position
6.7
36.7
43.3
13.3
26
Convenience in approaching location of organization is also a reason for considering it as good employer?
13.3
66.7
13.3
6.7
The Table 2 measures 26 questions related to retention. It provided the overlook of participant responses to different variables included in research for retention. Average of each option selected is given in the Table 2. On the basis of Table 2 another Table 3 was constructed that represents the mean and standard deviation of these statements. In this Table question 1 and 2 deals with empowerment, 3 and 4 is about good will of Serena, 5, 6 and 7 measure Socialization and diversity among work force. Question 8 is about shared values and understanding of company’s mission and vision. 9 and 11 tells us about promotions. Question 10 is of constituent attachment. 12, 13 and 14 represents training and development. 15 and 16 deals with rewards and recognition. 19 20 and 25 narrates job satisfaction and work life balance. 21, 22, and 23 reports the relationship of salary and retention. 18 and 24 illuminate the role HR department at Serena. While 26 is about location of Serena (easy approach or reach). The mean of these statements ranges from 1.40 minimum to 3.00 maximum and standard deviation lies from 0.50 to 1.29. This data shows least variation among the responses of participants; this also refers to the validity of data.
Table 3: Mean and Std. Dev. of the following statements
Scale: 1 = Strongly disagree, 2 = Disagree, 3 = Neither agree nor disagree, 4 = Agree, 5 = strongly agree
N = 30
Statements
Mean
SD
Do the employees have the right to make decision regarding job related activities?
1.73
.58
Does management have faith in employees regarding decision making at different level in organization?
2.00
.64
Do the employees consider the company as a good place for career growth and development?
1.40
.50
Is the company an attractive employer in the market place for talented person?
1.53
.51
Company policies promote dynamic and diverse workforce
1.47
.51
People from different background get a chance of employment and socialization in the company?
1.80
.89
Company has an image of equal employment opportunity employer?
1.77
.73
Do the employees have clear understanding of mission, vision and culture of organization?
1.97
.72
Is succession planning (who is the next to get promoted for a particular seat) evident in the organization?
2.20
.55
Support to all employees regarding work and difficulties from supervisors, coworker and management are a key element of work environment?
1.60
.50
Does promotions of good performers in the organization is often?
1.77
.77
Do all the employees get equal chances of training and development?
1.83
.87
Trainings are conducted and imposed by management on all working in organization?
1.77
.86
Instead of in-house trainings employees also get a chance to go out for development purpose?
2.17
1.09
Trainings are attached with certain rewards that are given to high performer
2.57
.90
Highly trained employees get perks and increments compensations and benefits
2.57
.86
Flexible working hours and environment is provided to all for retention and high satisfaction?
2.07
.69
Employees are retained in the organization through different policies and procedure for maximum benefits?
1.83
.53
Restructuring of jobs, layoffs, or resignations increases work load on other employees?
2.13
.63
Job burnout is reported by different people at different level in the organization?
2.80
1.00
Hiring new staff at low cost is preferred over retaining old staff at high cost at some or all the level of organization?
3.00
1.29
Due to inflation and poor economic conditions cost of living has been increased in Pakistan, does this resulted in increments at all level?
2.63
1.03
Does employee quit from the organization solely because pay, wages or salary?
2.43
1.01
Due to active role of HR department regarding retention and development, employee tenure is prolonged?
2.20
.55
Work life balance is easy to attain while working on current position
2.63
.81
Convenience in approaching location of organization is also a reason for considering it as good employer?
2.13
.73
The multivariate analysis shows in table 5 reports high level of retention at Serena. Training and development, work life balance and job satisfaction are the cause of prolonged tenure of employees at Serena FSH. The only non significant variable among all was reward or salaries. A reason for dissatisfaction regarding salaries may be high cost of living in Pakistan.
Table 5: Multivariate Analysis- Coefficient alpha
Model
Unstandardized Coefficients
Standardized Coefficients
t
B
Std. Error
Beta
B
1
(Constant)
.583
1.093
.533
Retention
2.667
.374
.788
7.139
Training and development
.177
.072
.250
2.474
Reward or Salaries
-.022
.080
-.025
-.271
Work life balance
.340
.126
.230
2.696
Job satisfaction
-.045
.119
-.033
-.382
Dependent Variable: Retention
Table 6: Chi-square test
Variables
Chi-square value
D.F.
P-value
Gamma value
Association between work life balance and retention
10.63
4
.03*
.770
Association between training and retention
15.67
4
.00**
.727
Association between reward &recognition and retention
4.31
4
.36NS
-.388
Association between constituent attachment, culture and retention
9.27
4
.05*
.256
* = Significant
** = Highly significant
NS = Non-Significant
The chi-square (10.63) shows a significant association between work-life balance and retention. The gamma value shows a positive relationship between the variables. Its mean higher work life balance, higher will be retention. Similar to the findings of (Cho, Woods, Soocheong, & Mehmet, 2006; McCabebe, & Savery, 2007; Wildes, 2007)
The chi-square (15.67) shows a highly significant association between training and development and retention. The gamma value shows a strong positive relationship between the variables.
It was found a non-significant association (P = .36) between rewards or salary and retention. While the gamma value shows a negative relationship between the variables. It refers to the findings of Chalkiti and Sigala on staff turnover in Greek tourism industry (2010).
The chi-square (9.27) shows a highly significant association between constituent attachment, culture and retention. The gamma value shows a positive relationship between the variables.
Findings through interviews:
The selected six people for interview were asked about their reasons for staying at Serena FSH and role of HR department. People at Serena are satisfied with the performance of HR department and its current practices. They reported that HR worked out for the betterment of entire workforce, its playing a proactive role concerning all areas (e.g. recruitment, selection, negotiation, cafeteria offerings, performance appraisals etc.).
Searching out for the purpose of this study (that is factors causing retention) we found high performers were highly respected by the management and retained within Serena for years. They love to work for Serena and are enjoying their current jobs and are much satisfied. Because of the fact, absenteeism yield is low. The top of list causes reported by associates at different level were prestige offered to them, learning environment (in-house and external trainings), promotions and growth, empowerment and sense of ownership, facilities (like laundry, percentage off, free medical, tea, lunch and etc.), chances of socialization and recreational activities, international brand name (Serena) and good will, team work and cooperation, ease of communication, Retirement plans (employee old age benefits i.e. provident fund, pension and insurances), easy accessibility, flexibility in work, lack of alternatives and lastly the rightsizing of workforce. The reasons they stated are articulated in the table given below:
Table 7 Definition and Descriptions of Factors Causing Retention
Sr. No.
Terminology
Definition
Frequency
parentage
1
Job Satisfaction
“a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience”
5
83%
2
Learning environment
An organization with a philosophy of continuous improvement serves the definition of learning environment
6
100%
3
Advancement opportunities
To potential for rapid advancement for higher level or position.
4
66.67%
4
Rightsizing
“Ensure the organization has the right employees with the right skills in the right place at the right time”
6
100%
5
Empowerment
Transmission of organizational power to individual through systematic process
5
83.34%
6
Lack of alternatives
Beliefs about the unavailability of jobs outside the organization
4
66.6%
7
Goodwill
Perception of organization as reputable and well regarded institute
6
100%
8
Location
“The proximity of workplace relative to one’s home”
4
66.7%
9
Socialization (constituent attachments)
Association between supervisor, co-workers and other members involved in operations inside and outside of organization.
6
100%
10
Flexibility
Scheduling of working hours at office.
4
66.67%
11
Retirement Plans
Benefits offered to employees on their retirement
6
100%
12
Communication
Sharing of ideas and thoughts with supervisors, peers and subordinate.
5
83.34%
13
Prestige
Respect offered to the employees in spite of their role in hierarchy
6
100%
14
Facilities
Benefits and services offered to associate other than pay
6
100%
[Citation for the contents in table: (Daft, 2009); (Price & Muller, 1981); (Steers, 1977); (Mello, 2007); (Beach, 1996); (Anthony, Kacmar, & Perrewe, 2002); (Daft, & Mercic, 2009); (March, & Simon, 1958)]
Other than above stated factors these were also found, they are having a negative relationship with retention or we can say these are factors causing turnover: structural constraints, stagnancy, low pay and lack of opportunities within the city.
Suggestion and recommendations:
Hotel industry contribute to economy, as it is providing services to number of customers and employing thousands of employees. Retention at hotels is very important otherwise turnover will affect remaining employees in form of dissatisfaction and emotional instability (Cho et al. 2006). The current studies revealed the factors causing retention at Serena Faisalabad and provide a guide line to other for control over turnover. Implementing retention in hotels requires; active role of HR department to develop career progression programs, and knowledge retention strategies (Chalkiti, & Sigala, 2010), commitment from management in order to instill employees for behavioral shift, and cultural improvements through motivation and appreciations. This will leads to enhanced service quality, customer satisfaction, retention of knowledge and enrich cultural values, organizational productivity in terms of profits and performance. At the moment Serena hotel has maintained issues of employee retention and is heading towards growth with positive attitude.
Future Research:
Findings were gathered from a small sample, a replica study with large sample size should seek validity.
A comparison of Pakistani and international hotel industry could be made to identify the gap and recommendations for improvements.
A study of factors other than these could be conducted: indicating the effect of other forces and strategies on retention.
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