Table of contents:

1. Introduction……………………………………………………………………….… 3
2. Reasons of high staff turnover in the organisation……………………………….…. 3
3. Suggestions by Peter Farnsworth…………………………………………………… 4
3.1 Attract and retain staff to key supervisory positions………………………………. 4
3.2 Offer pay packages and bonuses that encourage staying with the company through a
robust reward strategy………………………………………………………………. 4
3.3 Benchmark pay scales against the competitor hotels………………………………. 5
3.4 Offer regular training and performance appraisals and encourage the promotion of
talented staff…………………………………………………………………………. 6
3.5 Manage the staff more effectively and supportively through ‘hard and soft’ HR
practices……………………………………………………………………………… 6
4. Conclusion and Recommendations…………………………………………………. 7
5. References…………………………………………………………………………… 8

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 1. Introduction
The well-known international 4 star hotel ‘The Imperial Hotel’ face several serious problems
in managing the hotel which has a negative effect on the costs and reputation of the hotel. For
a good performance and for the problem to be sorted a new general manager Peter
Farnsworth was appointed. This report will deal with problem number 2: High staff turnover
with 80% of the staff leaving within the year.
Everyone who owns a business in hospitality must know that employee turnover in this
sphere is higher compared with other fields.
Employee turnover is a percentage of employees with an action of leaving the company or
the organization they are working in for another job and in result the company must hire new
employees which leads to spending more money on that (Tracey and Hinkin, 2008)
The hospitality organisations have a high rate of turnover. In 2016 the turnover in the
hospitality industry was 70 percent while the medium turnover rate in private sector jobs was
only 46 percent. Any organisation with a high rate of turnover must be prepared to face big
risks in their performances on a long term (Tracey and Hinkin, 2008).
In this report we must determine the causes that leads to this high employee turnover of 80 %
and to reflect on Peter Farnsworth suggestions on how to deal with this problem in Imperial
Hotel. The report must also outline a few recommendations to examine for new managers that
will help them to reduce the high turnover.
2. Reasons of high staff turnover in the organisation
As I mentioned before, the highest employee turnover rates in an industry is found to be in
hospitality industry. This has been associated to the low skill requirement when entering this
positions in this industry (Taylor and Finley, 2010). This problem comes out from the
recruitment and maintenance of a competent and motivated atmosphere within the company.
The deficiency of opportunities and challenges, unhappiness with the job activity or the
disagreement with the management are the main indicators of high turnover.
A common problem in hospitality industry is employee stress. Excess of work as well as
shortage of technologies and personal tension at work are the principal causes of stress and in
result the employee are more willing to leave the job (O’Neill and Davis, 2011). Emotional
problems of staff at the work place may lead to leaving, because for example is the
receptionist or other member of staff that have to face with the customer, have some problems
or personal emotional distress is expecting to hide all this emotion and to smile while
showing care emotions to the customers. Psycology experts ascertained that being yourself
and getting satisfactions at your workplace results a higher work production among staff
(Seymour and Sandiford, 2005). The need to create mutual support at a workplace is the key
to make sure that the environment is pleasant and members of staff are willing to support
each other in hard times. In addition, hospitality industry is labelled as a temporary

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employment, which is related with negative outcomes like stress, work conflicts and limited
control over working schedule (McNamara, Bohle, and Quinlan, 2011).
If the working environment is pleasant the employees are more likely to stay at their job than
to quit. A good part of employees that thought of leaving their job are taking their working
place not a good place. A low stress level and a good environment indicated a good profit in a
company as well as feeling to be a valuable employee by management and not felling
intimidating, but this we cannot say about Imperial Hotel.

Development and training influence the job and company dedication which in return affect
staff retention. A company that deliver a good training decreases staff turnover and makes the
quality standards and profits go up (Poulston, 2008). Because of high turnover the hotel must
employ new staff very often and this increase the training costs as well because of that there
is a negative impact over customers, low work quality makes them choosing other hotels and
that way the number of guests reduces.
Moreover, the salaries are very low in hospitality industry compared with other organisations.
This is also a cause why everyone is leaving. And in such conditions the companies attract
students with low economic demands.

From employee`s point of view, the most important relationship in a company is the relation
between managers and staffs. According to Taylor (2002) this relationship in the first place
influences how satisfied and pleasant are the employees with their workplace and work
environment, the experience every day they gain and how likely are they to get a promotion.
The trust in your manager and a good understand it between this two increase the chances of
employees to remain at their job, while a weak relationship increases the probability of
leaving the job (Paille, Grima and Bernardeau, 2013)

A lack of career development opportunities also plays a role. Career fulfilment is the result of
and employee success in his/her career but this is guaranteed by the career development. A
good performance of employees is higher when they know that the chances of career
promotions are high in their company (Das and Baruahm, 2013). Also, the organisational
support for career promotion has been cited to the decrease in voluntary quitting because
there is the possibility of being promoted within the company.

3. Suggestions by Peter Farnsworth

3.1 Attract and retain staff to key supervisory positions

According to Prince (2005) to maintain a competitive profit in an organisation the talented

employees are required but the employees are expecting career development, chance to grow
in their career ladder. This plan conclude promotion plans, internal growth and precise career
previews when hiring. Peter Farnsworth’s suggestion of attracting and promote staff to key
supervisory positions are a good motivation form because once people are motivated they
will work harder and this will increase profit and they can feel valuable and an essential part
of the organisation.

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 3.2 Offer pay packages and bonuses that encourage staying with the company
through a robust reward strategy

Herzberg's hygiene-motivation theory (1959) is a good answer to this suggestion. The theory
proposes that most factors which contribute to job satisfaction are motivators (achievement,
recognition, the satisfaction of the work itself, responsibility and opportunities for
advancement and growth) and most factors which contribute to job dissatisfaction are
hygiene elements (company policy, general management, the individual relationship with
their manager and working conditions)
To get Imperial Hotel`s employees to have a good connection with the company, the
managers must make them feel respected and valuable by rewarding them. Hence, the reward
will make the employees to remain at their jobs because that will make them feel motivated
and needed which determine a job satisfaction and the decrease of leaving the company.

A lot of people don`t just work for the love of their job but also for a good salary that will
remunerate them for their hard work. These rewarding packages have to be created and
distributed productively by Imperial Hotel`s HR workers that specialize in benefits and
compensation.

3.3 Benchmark pay scales against the competitor hotels

Pay benchmarking can be understood as following five stages, summarised in the figure
below:

Define purpose and objectives

Identify resources
Evaluate Clarify role of job evaluation in your process

Define relevant metric

Select approach and process for benchmarking
Classify

Undertake gap analysis

Select relevant benchmark companies and organisations
Compare Identify suitable data sources and collect data

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 Adjust pay to eliminate significant differences from
market rate
Adjust Produce total rewards statements

Implement monitoring processes to ensure

reflection of changing market rates
Monitor Monitor success of project

At some point, Imperial Hotel’s employees might decide that moving up and going to work
for competitors will be the right idea because they can`t give you the same opportunities for
developing your career that other can or maybe the competitor`s salary is higher than what
you are making at the moment.
Benchmarking provides companies a sound understanding of the salary and employment
trends, helping them make informed and effective pay decisions including hiring, promotions,
salary adjustments, and staff remuneration budget planning (Invernizzi and Locatelli, 2017).
That’s why the Imperial Hotel should decide to match the market normally paying an average
salary for a similar job that is equal to the relative labour market.

3.4 Offer regular training and performance appraisals and encourage the
promotion of talented staff

The companies that offer a good training to employees, turnover rates are generally lower.
The training is needed for the employees to manage their knowledge, skills and comportment
which are very important in training and they have to apply them day by day. For Imperial
Hotel’s staff having a strong and successful training strategy will help to develop the brand
and to attract clients.
A performance evaluation is a way through which an employee`s performance is evaluated.
So, hotel`s management must create a competitive spirit at work and when the best team
member is promoted, the others are motivated to do better than them, and this will help to
create a healthy competitive spirit. This type of spirit is welcome in a company because it
creates good work production.
3.5 Manage the staff more effectively and supportively through ‘hard and soft’ HR
practices
For a company to have success a very important function is doing efficient HR. The basic
functions are the hard HR and the advanced functions are soft HR (Legge, 1997). Sometimes,
depends on situation, HR will need to use both methods.
Equal opportunities is a mainly used expression and it gives us the idea that in a company,
everyone must have the same chance to apply for a job or to be chosen for a post, to be

5
trained or promoted. Giving equal opportunity and treating employers without prejudgement
is very important for a good organisational objective.
According to Nickson (2013), all the employees must be treated by HR in a conscious way
that will make them become enthusiastic about the work they are making, this way they will
deliver the best of them and will be loyal to the company as long as they feel well treated at
the work environments. Nothing is so promising as the feeling of knowing that your
management is supporting you in what you do. Mainly this is what is keeping the employee
at work and what motivates them to remain a continue working for the hotel. A good
cooperation and support will increase applicants for this job in the company due to an
advantageous workplace.

4. Conclusion and Recommendations

The report above showed us the main factors that leaded to high employee turnover with 80%
of staff leaving during the year in the Imperial Hotel. One of the most obvious factor is the
lack of motivation, also there is no motivational program and activities in their workplace.
The supervisors don`t value their employees, they don`t recompense their work with benefits
to increase employee morale and they don`t motivate them in getting all the objectives and in
getting an efficient work. They don`t have training programs to improve employee’s skills
and because of that a lot of people started searching a better place to work. This made
employee retention rates get low.
Another important factor was a low remuneration. A lot of employee’s don`t receive the
salaries that they deserve compared with their efforts given to the company, owing to this fact
they felt over exhausted and unappreciated. And last but not the least, their schedule was
unfavourable, the employees didn’t have time for their social life, many of them worked
many hours in a row which made impossible for them to interact with their friends or family.
Because of this and many more factors employees felt demoralized to continue working in
these companies. In result of this, the problems experienced by employees must be addressed
as soon as possible and solved in a very short time so the employee turnover rate to decrease.

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6. References

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Journal of Business and Management 14 (2): pp 8-16 (Online) Available from:
http://iosrjournals.org/iosr-jbm/papers/Vol14-issue2/B01420816.pdf

o Herzberg, Frederick; Mausner, Bernard; Snyderman, Barbara B. (1959). The

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o Invernizzi, Diletta Colette; Locatelli, Giorgio; Brookes, Naomi J. (2017). "How

benchmarking can support the selection, planning and delivery of nuclear
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o Legge, K. (1995). Human Resource Management: Rhetorics and

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o McNamara, M., Bohle, P. and Quinlan, M., (2011) ‘Precarious Employment, Working
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o Nickson, D. 2013, Human Resource Management for the Hospitality and Tourism
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o O’Neill, W. and Davis, K. (2011) “Work Stress and Well-being in the Hotel Industry”.
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o Paille, P. Grima, F. and Bernardeau, D., (2013) ‘When Subordinates Feel Supported
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o Poulston, J. (2008) ‘Hospitality Workplace Problems and Poor Training: A Close

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o Prince, B.J. (2005). “Career-focused employee transfer processes”. Career

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o Taylor, S. (2002) ‘The Employee Retention Handbook. London: Charted Institute of

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o Tracey, J. B. and Hinkin, T. R. (2008). “Contextual factors and cost profiles associated
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