Words by: Nik Izzul Islam Bin Azhan Fadzil
The Malaysian government has implemented numerous promotion plans to help the
tourism industry to enhance its contribution to the country's economic
development. It has implemented a few campaigns, such as, “Cuti-Cuti Malaysia”
(Vacation in Malaysia) and “Visit Malaysia Year 2007” to
fully realise the potential of the tourism industry. These strategies
are implemented as the government understands that the tourism industry has an
extraordinary potential of positively impacting the nation’s economy since
Malaysia is gifted by an abundance of marvellous natural sights.
In
order to achieve excellence in the tourism industry, one of the biggest
components, which is the hotel industry, should be accorded due consideration.
The hotel industry plays a very important role. Looking at the growth and
development of the hotel industry in Malaysia, and in order to maintain the
consistency of its growth, the availability of appropriate human resource with
the right skills and knowledge is the biggest focus among hoteliers. The need for close interaction and effective communication
is of paramount importance in the hotel industry for this aspect generally
determines the satisfaction of the guests. Moreover, in a highly competitive environment
in which the hotel industry is operating nowadays, hotel managers realise that
hiring and retaining high performing employees is the key success factor to ensure
the demands of high-quality service. Thus, employees with the right skills and
knowledge, is the most important asset in the hotel businesses.
Several studies with their related
statistical evidence, indicate that the employee’s commitment is still a major
concern for the hotel industry. Based on annual surveys by the Malaysian
Employers Federation, the annual staff turnover rate in the tourism sector in
Malaysia is around 75% annually. This issue represents a negative image of the industry
- regardless of the reasons of the employee leaving, whether it is due to the
employer or the employee. Many studies
have been conducted to identify and understand the factors that lead to a high
employee’s turnover rate in the hotel industry. Previous
studies have stated that there are several reasons that lead to a high employee
turnover in the hotel industry. Issues cited are such as, the challenging
working environment, less work-life balance and unfair rewards attained are associated
with the high turnover rate among hotel employees. Long working hours and all-season
work may be a reason why hotel employees think that the rewards that they
receive is not equitable to the efforts that they put in. Thus, employees tend
to leave the job or even the industry itself.
The main reason behind this issue is
that there are insufficient rewards to encourage employee’s commitment in this
industry. Additionally, from the employee’s view, leaving the hotel or the
industry itself is dependent on the feeling of being appreciated by the rewards
they receive. Delving into the statistical information provided from previous
studies and the government agency, the assumption of this study is that
“Extrinsic Reward” is the biggest influencer towards an employee’s commitment. In
this study, three variables of extrinsic rewards have been considered, which is,
the basic salary, additional pay, and merit pay. The finding shows a positive
relationship between extrinsic rewards and employee’s commitment.
Based
on the findings, there are a few important aspects, from
the theoretical and practical perspectives, as the effect of extrinsic
rewards towards operational employee’s commitment at the four (4) and five (5)
star hotels was discovered. The elements of the extrinsic rewards that have
been tested are, the basic salary, additional pay, and merit pay and these show
a significance relationship towards employee’s satisfaction and commitment. As
from the practical perspective, the organisation or top management can refer to
this study on the importance of extrinsic rewards. They may consider extrinsic
rewards as a strategy to retain their employees and reduce turnover. Thus, the hotel
industry in Malaysia can have a positive growth as the level of employees’
commitment increases.
