How to Reduce Employee Turnover with Motivation Essay

Nowadays, a word is very popular in white collars. It is â€Å"luo ci† in Chinese, which means people leaving their current work without a new job. With the development of society and the improvement of the level of people’s life, the phenomenon of â€Å"luo ci† become more and more common. As we know, the employee turnover of hospitality industry is quite higher than other industries. In 2004, Wildes warned that hospitality would face a significant work force deficit of quality managers in the near future. Not only is there a shrinking labor pool due to other industries attracting our potential managers (i. e. retail, banking, and healthcare) (American Express, 2006), but turnover continues to be a significant problem. High turnover not only causes the hotels lose their good employees and makes the level of service declined, but also increases the costs and expenses of recruitment and training. So, those hotels should take some measures to reduce employee turnover. Through some information, there are four main reasons: salary and welfare, personal development, sense of achievement, and interpersonal relationship. Clark and Estes (2002) suggest that employee turnover may not be purely a function of remuneration but rather of employee motivation. From this sentence, we know employee motivation plays a very important role in hospitality industry and it is an effective way to solve the problem of brain drain. The methods of employee motivation can be divided into two parts: substance incentive and spiritual incentive. According to the reasons of leaving, the management should pay more attention on their employees’ needs and motivate them from material and spiritual. Substance incentive means motivating and encouraging employee by some material, such as salary, welfare, bonus, or penalty. It is the main mode of motivation. Besides, it is the most common motivation mode. A study from a salary survey by Hewitt Associates showed that the human resource department in the hotel groups offering at least one plan of pay to performance rise from 51 per cent in 1991 to 77 per cent in 2003 (Jeffrey Pfeffer, 2007). Except carrying out the necessary substance incentive, the spiritual incentive is especially important, because it is a key factor to improve employees’ career happiness. According to different needs do some different spiritual incentive, such as, empowerment, make a future career development program for employees, making some effective communication and so on. In onclusion, with the improvement of living standard, more and more people begin to pay more attention on their internal happiness and pursuit. Taking substance incentive purely cannot meet the demands of the employees. Therefore, substance incentive and spiritual incentive are equally important and complement each other, are indispensable. And the proper motivation not only can retai n the best employee, but also can improve the productivity. 2. The current situation of personnel in hospitality industry The current situation of personnel in hospitality industry is structural shortage and non-normal loss. And as a labor-intensive enterprise, the turnover of the hospitality industry should be no more than 15%. But a survey from China Tourism Association suggests that the employee turnover in hospitality industry in nearly 5 years are 25. 64%, 23. 92%, 24. 2%, 22. 56%, 23. 41%, and the average turnover rate is as high as 23. 95%(Zheng Lu, 2009). With the widely and increasingly fierce competition, the employee turnover rate always remains high and personnel training and supply of the hotel cannot keep up with the speed of development of hospitality industry. In China, we have learned the foreign hotel management for more than twenty years. And large numbers of hotel managers and service personnel have grown up. Except part of high-quality employees are hired by some foreign companies, there is a good deal of personnel retaining our domestic hotels. Therefore, the problem is whether those good employees can be retained or not. 3. The reasons of brain drain Through researching some information, there are four main reasons that causing people leaving their jobs. They are salary and welfare, personal development, sense of achievement, and interpersonal relationship. 3. Salary and welfare A survey (Zheng Lu, 2009) suggests that in all influence which leads to employees leaving their job voluntarily, the most important influence is relative wages. In recent years, with the rapid development of hospitality industry, the number of hotels is increasing gradually, which lead to the benefit of hotel is not as good as before. Besides, for the price rise, the employees’ salary that most of hotels offer just can supply for their daily living expenses. But the income level in some foreign high-grade hotels is much higher than others. And, lots of employees measure their own value by their salaries. So, after they find another job that can provide a better salary, they maybe choose job-hopping. Thereby, this phenomenon makes the speed of employee turnover up. 3. 2 Personal development People who are committed to their work always have their own purpose. Some people want to get high wages and treatment, while, some people pursue high positions, in order to realize their own value. The fact states that thinking about from personal career development space and view of vision, some employees choose change their job, enter a new work environment, even though the salary of new job is less than before. Although their salary is less than before, they firmly believe that their abilities can get more development and their future is much brighter. However, on the contrary, some people give up their management positions and jump to a condition superior hotel. Their purpose is getting much more high-quality trainings and practices and they expect to gain more wide development space. 3. 3 Sense of achievement A lot of hotels think that the higher education, the stronger ability. Therefore, those hotels always focus on those employees who have high education, and give them higher position and more training, often send them to study and investigate. And those hostellers think that only they can bring benefits for the hotels, while ignore the importance of primary-level organizations. Thus, sometimes, the primary-level employees think their abilities cannot be confirmed and their jobs cannot meet their sense of achievement. Finally, in order to find a leader who can accept their abilities and get sense of achievement, they choose quit their job, and change another one. 3. 4 Interpersonal relationship As we know, the most things working in hotel is dealing with people. Some hotels, especially some state-owned hotels always exist some complex and tensional interpersonal relationship. In state-owned hotels, the employees compete with each other; the awareness of teamwork is weak and only pay attention to personal performance. The employees working in the hotel, especially the front-line service employees, their great workload always make them mental and physical exhaustion. Sometimes, a few of customs purposely make difficulties for them, even insult employees’ personality. It makes employees feel that they cannot get the proper care and respect. Therefore, due to cannot stand the depressive work environment, some employees quit their job and to look for a better work environment. 4. Incentive is an effective way to solve the brain drain As we all know, the high employee turnover will cause the management cost of training and recruitment increasing, and the quality of management and service decreasing. For this reason, how to steady the staff, minimize the employee turnover and then realize the steady development of hotel is a difficult problem to many hotel managers. From some researches, I find that employee motivation is an effective way to solve the brain drain. According to a survey conducted by The Ohio State University (Wilson, 2005), the top ten factors that affect employee motivation included: â€Å"interesting work, good wages, full appreciation of work done, job security, good working conditions, promotions and growth in the organization, feeling of being in on things, personal loyalty to employees, tactful discipline and sympathetic help with personal problems. † And in a word, it should be undertaken from two parts: substance incentive and spiritual incentive. 1 To establish a substance incentive system combining compensation and performance According to Festinger (Turner, 2006), â€Å"rewards would affect the attitude of individuals toward their work and their understanding of why they are working. † Establishing a reasonable and effective substance incentive is one of the most important factors that whether company can retain employees. Practice has proved that substance incentive is an important way that can stimulate employee aggressive and improve employee performance effectively in the hospitality industry. Therefore, how to properly hold substance incentive is very important. First, the company should choose the best employees who performed well through the fair and reasonable employee performance evaluation, and do some financial incentive to them, for example, increasing their salary as a reward. It can make employee feel sense of achievement and realize their own value. Motivating employees by using performance-contingent rewards is a long-established management practice. Pay-for-performance is used to promote two ends. First, it is expected that these systems will motivate employees to increase their effort and thereby their performance. Second, these compensation plans are often introduced to better align the efforts of employees with organizational goals and objectives the belief that performance will lead to reward (instrumentality) (Turner, 2006). However, it is worth to think about the demands of employees. According to their needs give different rewards, rather than simply showering them with undesired gifts. Spending money at a problem is often thought of as a quick fix rather than a long-term solution. Therefore, some people begin to seek cheaper alternatives to replace spending money, and to achieve the same aims, such as do some spiritual incentive. 4. 2 Do some flexible spiritual incentive In addition to make some material incentive to employees, spiritual incentive is very important for employees in hospitality industry. In some situations, too much material incentive will bring some distorting effects, because high bonus will lead to the information or messages blocked with each other. It will directly reflect various aspects of the normal work. In the book Concepts and Skill Building (Certo, 2004) says that,â€Å"Motivating employees requires employers to study the employee’s monetary, physical and psychological needs, because individuals are motivated by a number of items namely intrinsic and extrinsic rewards. † Therefore, only use material incentive is not perfect, and spiritual incentive is necessary to a company. It can roughly be divided into the following kinds. 4. 2. 1 Empowering employees can help them take more responsibility. Employee empowerment is defined as a strategy and philosophy that enables employees to make decisions on their jobs. Employee empowerment can not only help employees serve customers at the level of the organization, but also help employees take more sense of responsibility. Empowering employee enables employee to have more right to do their job, that is, they do their job with their own brains rather than carry out managers’ order mechanically. Employee empowerment means the managers trust their employees’ abilities of judgment and dealing with problems. This trust is an honor and appreciates to employees. And it can make employees love their jobs and do not willing to leave their jobs. And there are four most important principles to reinforce employee empowerment, accomplishment, and contribution. 1) Share Leader Vision. It can help people feel that they are part of something bigger than themselves and their personal job. Do this by making sure they know and have access to the organization’s overall mission, vision, and strategy plans. 2) Share Goals and Direction. Sharing the most important goals and direction to your group can motivate people responsible for accomplishing the mission. 3) Trust Your Employees. Trust people can do the right thing, make the right decision. It can make your employees get more confidence and passion. 4) Provide Frequent Feedback. Make frequent feedback so that people know what and how they are doing. Sometimes, the purpose of feedback is reward and recognition (â€Å"Employee Empowerment. † n. d. ). 4. 2. 2 Make a future career development program for employees Nowadays, some people leaving their job just because they cannot see the future in their work. In hospitality industry, the average age of employees is generally young, so most of them always have lots of expectations to their future career. They always want to undertake some challenging jobs, so that achieve their own goals and personal development. While, the most important point to do this is training. Due to the requirements of recruitment in hospitality industry are less than other industry, when some people come into the hotel, they still have none knowledge on the hospitality industry. So, on the one hand, the career development program can help employees have a thorough knowledge of the development of hospitality industry and the demands to the personnel. On the other hand, it can help employees establish their own goals, take advantages of their ability, realize their own value, improve the job satisfaction and sense of belonging and responsibility. From the perspective of hospitality industry, an effective training can help employee improve their professional skills and their mood in their work, so that improve customer satisfaction and hotels market competitive power. From the personal development, an effective program can help people understand their own positioning in their hotels, and establish a practical goal for themselves. In a word, the program is an effective way to help employer find employees’ interest, advantages, and some potential ability and help employees exactly know themselves and improve themselves by proper methods. In order to be successful in today’s challenging economic environment hospitality organizations must demonstrate a commitment to helping their employees learn and develop new skills. This is essential if organizations hope to increase retention and create career growth by promoting from within Lee & Bruvold, 2008). Moreover, employee development programs often signal the degree of investment the organization is willing to make in an employee. From the employees’ perspective, this investment indicates how much the organization supports its employees (Wayne, Shore, & Liden, 2007), genuinely cares about the long-term professional growth of its employees, and values the employees’ contributions. So a good employee development program is very important to the employee turnover. A review of the recent hospitality literature further reveals that employee organizational commitment significantly influences employees’ turnover intentions (Johanson & Cho, 2007) indicating that the more committed or attached an employee is to an organization, the less likely that employee is to leave. And it states that the program has the potential to enhance an employee’s commitment to the organization, so, the program could also reduce turnover in the hospitality industry. 4. 2. 3 Making some effective open communication Open communication is extremely important and considered a top priority by the majority of employees (Honore, 2009). Most of employees often feel their managers and supervisor lack of open communication. This phenomenon causes the employees lack of care from their company and their managers cannot understand their needs, in turn, causing brain drain. Therefore, the managers and supervisors must often talk and listen to their employees. And the simplest way to make an open communication is giving employees the opportunity to ask question. And then obtain an answer to the questions and provide the answers in an honest and timely manner. It will help them avoid some further doubt and misunderstandings with each other. An open communication can create a relaxed and happy working environment for employees. It will reduce the working pressure of employees. In addition, open communication makes managers and employees more understanding with each other and is a good opportunity to enhance relationship between each other and clear the air. An effective communication should be clear, consistent, and correct. It is vital to understanding employee needs and make employee willing to work harder to get better performance. Communication should be accurate, prompt, and well organized, and managers should listen to employees carefully, help employees with the problems, and care for employees. An open communication can make employees feel respect from their managers. If employees receive their managers’ care and respect, they will return more care and efforts to their company. And it can reduce the rate of employee turnover effectively. 5. Conclusion Times change; society change; people’s minds change. More and more people begin to pay more attention t their internal happiness and pursuit, rather than just limited to their salary, position, and other material factors. So companies must conform to the requirement of the times, understand staff needs, and meet their needs from different aspects. In order to retain the employees, companies must make material incentive and spiritual incentive together. The motivational effect of material incentive and spiritual incentive is different. If companies want to motivate their employee effectively, they must take proper measures according to the specific situations. Employee motivation is very crucial to reduce the rate of employee turnover and retain the employees. According to the reasons of people leaving, the hotels mainly make some substance incentive to their employees. But it is not enough to meet employees’ needs, the spiritual incentive is also important for employee to meet their desires and decrease the high employee turnover. There are three main methods to make a spiritual incentive. They are empowerment, open communication, and making employee career development program. Besides, praise and respect the employees are very important. It can make employees become more loyal to their company and maximum the satisfaction of employees. The more satisfied employees feel about their jobs, the less likely they are to leave, which further reduces organizational turnover (Costen, 2010). 6. Summary The hospitality industry is, in every sense of the word, big business. U. S. restaurant industry sales are expected to reach a record $537 billion in 2007, employing 12. 8 million individuals, adding two million new career and employment opportunities in the next decade (NRA, 2007). However, the rate of employee turnover in hospitality industry is very high. Therefore, reduce the rate and retain employees is a pressing concern. The key to keeping employees in hospitality industry is rewarding employees for what they do every day and having an employee-friendly environment where people can feel comfortable bringing their concerns to the manager. Therefore, both substance and spiritual incentives are necessary management methods to motivate employees in the hospitality industry. Substance incentive can provide material demand to employee, while spiritual incentive provides spiritual demand to employee. Most hotel managers always like pay more attention to pay for performance and ignore the role of spiritual incentive, which leads to a high turnover rate and high cost of human source department. However, according to the increasingly higher demands of both employee and customer, non-financial incentive to motivate employee is more and more important. In the hospitality industry, the most common methods of spiritual incentive are empowerment, making future career development program, open communication and praise and respect etc. Their functions are meeting employee’s satisfaction which is defined as a sense of recognition, achievement, responsibility, improvement and promotion, interesting work, and awareness for future development. Through different methods can meet employees’ different needs, it can make employees prefer their job, rather than quit their job. Employee motivation can not only keep the best employee for hotels, but also save cost of training and recruiting. It will improve the competitive power for hotels and make their business better and better.