Effects of Reward Management Practices on Employee Retention in the Hotel Industry in Kenya

Abstract

The hotels in Kenya fall short of the industries turnover average and still leads in employee turnover. In the year 2011, labor turnover was at 68% in five star rated hotels. Today, the industry is confronted with the continuously evolving challenge of demand for retention of appropriate talent. Consequently, this has impacted negatively on hotel business sustainability due to high costs of training new employees, replacement and separation for the departing employees as well as affecting customer satisfaction. The purpose of this study was to examine the effect of reward management practices on employee retention in the hotel industry in Kenya. The objectives of the study were to establish the effect of career development, remuneration, job promotion and employee recognition on employee retention in the hotels in Kenya. This study used descriptive survey research design. The target population of this study comprised of two hundred and thirteen hotels registered under Kenya Association of Hotelkeepers and Caterers in Kenya. A representative sample of one hundred and thirty seven hotels was selected from each region using stratified random sampling. A pilot test was conducted to test the reliability and validity of the data collection instruments. Data was collected by use of a questionnaire and was analyzed using descriptive and inferential statistics. The study established that there was a positive and significant relationship between career development and employee retention in the hotel industry. In addition, the study found that job promotion had positive and significant influence employee retention in the hotel industry in Kenya. Further, the study established that remuneration influences employee retention in the hotel industry in Kenya both positively and significantly. The study revealed that there was a positive and significant relationship between employee recognition and employee retention in the hotel industry. The study also found that hotel rating moderates the effect of reward management practices on employee retention in the hotel industry in Kenya. The study recommended that human resource managers in the hotel industry should develop Career Development Programs indicating various types of career developments in the organizations and who is eligible for them. In addition, the managements of the hotel industry should review their remuneration structure to consider the current high cost of living. Further, the study recommended that the hotel industry should develop a policy indicating who and when a person should be promoted, this will help to deal with issues of discrimination in job promotions as indicated in the study. Job promotions should not be an increase in roles and responsibilities only, but should be accompanied by an increase in salary and allowances. Lastly, the study recommended that the management of hotels should enhance employee recognition through a monthly or yearly recognition program and should be communicated to all staff.