An Assessment of the Effect of Employee Turnover Rate on the Productivity of Classified Hotels

An Assessment of the Effect of Employee Turnover Rate on the Productivity of Classified Hotels in Nairobi County

By Njoroge Priscilla Wambui (HPM-2-0203-13) & John Kahuthu Gitau

Employee turnover is generally recognized as a costly phenomenon, and hotel organizations consequently have initiated various turnover-reduction programs. Despite many studies, however, it remains difficult to assess exactly what effect turnover has on operating profits. Turn-over is expensive in the long-run and siphons large sums of money from hotels to cover costs for advertising and marketing for the vacated positions, recruitment and selection, training and orientation or induction. As noticed, turnover could eat deep into the profitability of the organization and threaten the sustainability of any organization. Thus, the aim of this study is to determine employee turnover levels in classified levels with an eye to examining the impact it has on the hotel organization’s productivity. In addition, the study examines the factors that lead to employee turnover and lays down possible strategies to curbing this global menace hotels. Utilizing descriptive survey design, simple random sampling technique and unstructured self-administered questionnaires, the study targeted both management and non-management personnel where a total of 14 human resource and 158 non-management employees participated in the study. Data analysis comprises of descriptive statistics including means, standard deviations, frequencies and percentages. The study findings reveal that majority of respondents (48%) had been in the current organization for a period less than 3 years. Mean analyses revealed that employee turnover greatly reduces profit and delays customer deliverables. In a whole, results show that employee turnover impact negatively on the total factor of productivity growth. Further, the findings reveal that low salary and compensation are the major causes of employee turnover given the fact that the industry jobs are characterized by long-working hours. In the light of these findings, the study recommends that management should ensure that employees are paid and compensated reasonably, and there should be an improved working condition for the employees such as flexibility in selection of shifts and balancing of work and personal life for the employees.