Discussion of Theoretical Framework

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Table of Contents

Introduction
Theories of motivation and reward satisfaction
A comprehensive model and measure of compensation satisfaction
Relating reward satisfaction to turnover intentions
The Effect of Financial Rewards Satisfaction on Employee Turnover Intentions
The Effect of Material Rewards Satisfaction on Employee Turnover Intentions
The Effect of Psychological Rewards Satisfaction on Employee Turnover Intentions
Research model
Conclusion
References

Introduction

Theoretical framework

Employee turnover intention in hotel industry

Employee turnover intention in the hospitality industry is unique, critical and of major concern. Min and Park (2020) define employee turnover intention as the thinking or awareness of employees on the issue of leaving the job. It forms a critical foundation that results in actual voluntary turnover. Employee turnover intention in the hotel business is influenced by different factors. Su (2014) states that the main factors include the fringe benefits, wage rate, mentoring process, and trust among the co-workers. The hotel industry is characterized by a very high rate of employee turnover that ranges between 200 to 300 percent every year (Emiroğlu et al. 2015; Abdullah, 2021).).

Accordingly, the phenomenon has attracted wide attention majorly because of the costs involved, both direct and indirect. The direct costs arising from the expenses the organization has to incur in recruiting and training new staff members (Kelbiso et al., 2017). On the other hand, indirect costs refer to the decrease in the level of productivity, organizational commitment, and job satisfaction.

Human resources are a major component of the operations in the hotel business. Firms in the sector compete mainly on the quality of the services provided to the clients; it forms the basis for survival and competitiveness. Su (2014) states that a high rate of employee turnover intention will negatively affect the organization’s productivity. The mood of the employees is critical when it comes to handling on clients at the establishment. Therefore, the employee turnover is regarded as a negative factor in hospitality with a major impact on the quality of service provided (Siew, 2017). Once the customers note a reduced quality of service, they may prefer other facilities. The current facility suffering from poor quality of service will ultimately note a loss of customers that will lead to a fall in the reputation and profitability of the hotel.

Reward types

Rewards are the most means of providing incentives to employees who are considered a strong basis upon which an organization can build competitiveness. They have the power to elicit and encourage improved performance in the workforce. According to De Gieter and Hofmans (2015), there are three main types of rewards, namely; financial rewards, material rewards, and psychological rewards. Financial rewards are monetary while material rewards are tangible and non-monetary, but they have an attached monetary value (Haggalla and Jayatilake, 2017). Furthermore, financial rewards can either be fixed, such as salaries, overtime payments and other fringe benefits, or variable based on the performance of the organization, group, or an individual employee (Chiang and Birtch, 2012).

Examples of variable rewards include the organization providing training and personal development opportunities, alternate work arrangements, and talent recognition. Organizations have shown preference for material rewards resulting in their increase and intensified use. In the present day, each one organization is keen on managing costs to remain competitive, hence financial rewards have come to be less lucrative.

Another category constitutes psychological rewards that are internal to the individual. They are less tangible, greatly personal, and characterize a personal perception and feeling towards the job and its worth. De Gieter and Hofmans (2015), indicate that psychological rewards do not imply a monetary cost for the organisation; instead, they have positively evaluated outcomes of the exchange relationship between an employee and his/her supervisor, colleagues or clients According to Malik et al. (2020), psychological rewards characterized by motivational elements such as independence, feedback, and skill variety. They also constitute employee involvement in decision making and the clearness of the roles (Wafula et al., 2017). Some variations of psychological rewards include compliments from a colleague, recognition from supervisor, meaningful work, healthy relationships, competency, self-development, and choice.

Theories of motivation and reward satisfaction

Vroom’s Expectancy Theory (1964)

Vroom looks at motivation from the behavioural viewpoint, hence the development of the expectancy theory. The theory was fashioned in 1964 through a paradigm that perceives motivation as a function of an allure of the effect of behaviour.

Also referred to as the path-goal-theory, Vroom’s proposition points out that rewards are a factor of particular individual conduct (Nair & Subash, 2019). Therefore, if a person is inclined to act in a particular way, there ought to be a connected reward structure based on the individual’s values that the reward targets to inspire. Vroom stresses the pre-eminence of factors such as motivation, effort, and performance in inspiration (Vroom, 1964). Accordingly, he emphasizes that for an individual to feel inspired, the three elements; motivation, effort, and performance ought to be connected. Vroom’s theory is further reinforced by three key elements; expectancy, instrumentality, and valence.

Firstly, expectancy is based on the prospect that a particular goal will be realized. It lays great emphasis on the effort required to stimulate in an increase in reward. Secondly, instrumentality is based on the outcome that will be realized once a person delivers. For one receive a valued outcome, there needs to be a corresponding expectation on performance. Lastly, Vroom (1964) indicates that valence is the value or attachment an individual places on the result of their performance.

Adams’s Equity Theory (1965)

Adams has also contributed to the paradigm of motivation by introducing the Equity Theory of Job motivation. The theory looks at motivation from a broader sense away from an individual perspective. Adams (1963) states that motivation encompasses the plight of other people, such as friends and colleagues in the same job. Accordingly, a person’s contemporary working environment can only be adjudicated as fair or prejudicial based on some reference point, for example other people’s wages, salaries, or other benefits.

In addition Adams (1963) states that equity can be realized once there is a balance between one individual weighed against the comparison target. A disturbance on the perceived balance, either positive or negative, would result in inequity. Once people feel they have been treated in a fair way, they become motivated. If not, they become exposed to feeling discontented or demoralised. In general, Adam (1963) indicates that the process of comparison is predisposed to yield two probable results, equity or inequity.

Lawler’s Discrepancy Theory (1971)

The discrepancy theory proposes a different paradigm to motivation that entails comparing an individual’s measure of evaluation of the level of satisfaction to a perceived state. Through such a comparative process, it is possible to ascertain a discrepancy between an approved anchor and a personal consideration of feat along the same aspect. The anchor is founded on different elements, such as social pressure, personal expectations, established employment goals, free markets, threshold requirements, or some existing prejudice. According to Lawler (1971), job satisfaction is centred on if the employee recognises that their job delivers the level that they value. Also called the value-percept theory, it proposes that people look at job satisfaction in regard to particular angles of the job. The perception may be connected to promotion, pay, managers, colleagues, or the job itself.

The aspect on pay satisfaction involves the employees’ frame of mind about their pay. Promotion satisfaction relates to the employees’ emotional state regarding the organization’s promotion policies and the way they are implemented (DeConinck and Stilwell, 2004). Supervision satisfaction embodies the employees’ feelings and a general and qualified assessment regarding their boss. Colleague satisfaction characterizes the employees’ frame of mind and professional/relational assessment regarding their fellow workers (Usha & Rohini, 2018). On the job satisfaction is the embodiment of the employees’ feelings about the design and the attributes of their actual work responsibilities.

A comprehensive model and measure of compensation satisfaction

Human Resource Management (HRM) to a great extent involves rewarding employees. Rewards, and in particular their satisfaction, have often been the channel through which organizations spur and promote appropriate employee conduct and attitudes, such as commitment, and good performance, and depress unfavourable behaviours, such as absenteeism, and employee turnover (De Gieter and Hofmans, 2015; Alzalabani, 2017). The proposition is founded on the pivotal motivation theories, including the Vroom’s Expectancy Theory (1964), Adams’s Equity Theory (1965), and Lawler’s Discrepancy Theory (1971).

However, for the rewarding process to be effective, the organization has to rethink their reward structure and move towards a ‘total reward management’ approach. This involves seeing a reward as any cherished result an employee obtains from the employer in exchange for their performance (Kim, 2017; Alshammari et al. 2016). Total reward management not only involves providing the suitable financial rewards but also stresses the need to complement them with supplementary types of rewards, namely; material rewards and psychological rewards. Zheng et al. (2021) state that reward management is based on the premise that rewards influence employee conducts and attitudes, albeit not in a straight way. The influences are inclined more on the value that employees attach to the rewards as well as the satisfaction obtained from the rewards.

Relating reward satisfaction to turnover intentions

Organizations own massive assets and resources all of which cannot match up to the pre-eminence of employees as the core assets of any organization. DeCenzo et al. (2016) state that majority of the well-to-do-off organizations have got a dependable workforce across their different business categories. Most of these organizations perceive rewards as a channel of motivating particular conduct among the employees. Rewards are specially intended to motivate employees to perform effectively and efficiently towards achieving organizational goals (Sari, 2019). Therefore, employers can make use of the rewards as a tool to manage employee turnover intentions (Alferaih, 2017; Alqusayer, 2016).

Based on the agency theory, the desire to manage turnover intentions can be managed through objective the different types of rewards. Employees can use them to direct employee behaviours and align employee–employer interests. According to Allam and Shaik (2019), organizations can control and bring into line preferred conduct with precedence on strategic performance. They can realize the power through carefully recognising and understanding the performance effects of the organization’s total reward structure.

Different rewards come with varying motivational material that employers can use to complete different performance objectives, including managing the employee turnover intentions. In fact, according to Bonhak et al. (2020), sentimental commitment and job satisfaction are inclined to lessen employee turnover intention. Even as rewards are used to inspire or encourage certain behaviours in the workforce that are considered helpful to the organization, they can as well be instrumental in inhibiting conduct considered damaging to the organization, such as turnover intentions (Malik et al., 2019; Al-shaibah and Habtoor, 2015). The rationale is best supported under Vroom’s expectancy theory.

The Effect of Financial Rewards Satisfaction on Employee Turnover Intentions

Logically, the economic exchange implies that remunerations derived from financial rewards are the foundational drivers of performance. Employees are motivated to work hard since they identify a clear and valuable economic exchange for their work to the organization. In return, the employees expect to receive a financial reward. Therefore, the employment relationship is transactional and pigeonholed by short-term monetary exchanges (Belete, 2018; Williams et al., 2006). Individual employees act greedily to get the most out of the value of the exchange with their organization. Research has established that the more employees feel dissatisfied with their financial rewards, the higher the risk for them to leave the organisation (Williams et al. 2008; Devece et al. 2016; Zheng, 2021).

The risk of turnover intention is particularly high among young employees having the lowest work tenure. De Gieter and Hofmans (2015) state that these youths’ level of satisfaction is solely based on the financial rewards which form the ultimate predictor of turnover intention. In general, this category of employees tends to be less satisfied with their financial rewards. Therefore, they characterize stronger turnover intentions and they attach less value to the need to cultivate healthier interpersonal relations.

The Effect of Material Rewards Satisfaction on Employee Turnover Intentions

The influence of material rewards is mainly founded on the social exchange viewpoint. Once the employees feel a sense that the organization they are working for shows the will to accommodate their needs through arrangements involving alternative work or that an organization is disposed to invest in them may be through training and development, there is a very high likelihood that they will post improved performance on the job (Gabriel and Nwaeke, 2015; Yousef, 2017).

The positive feelings among the employees may stimulate them to act favourably even on other formal duties that can benefit their organization in different ways. Some benefits could include responding with prosocial and extra-role citizenship conduct (Weiwei, 2017). Therefore, material rewards characterize a relational connection with the organization. They are further characterized by long-standing and socio-emotional components of an employment exchange. Seman and Suhaimi (2017), state that material rewards are predisposed to have a wider latitude and longer-term application in terms of performance. However, notes that satisfaction with material rewards has a limited influence among the employees in terms of reducing the employees’ turnover intentions.

The Effect of Psychological Rewards Satisfaction on Employee Turnover Intentions

Human resource practices have the power to influence the employees’ supposed psychological contract fulfilment and their organizational commitment. Furthermore, human resource management practices have a positive correlation to psychological contract fulfilment and organizational commitment (Zopiatis et al., 2017; Urbancová and Šnýdrová, 2017). Therefore, some employees’ turnover intentions can solely be influenced by their satisfaction with psychological rewards. The category of employees whose turnover intentions can be managed through psychological rewards entails those with a lower level of education, especially a secondary school degree.

De Gieter and Hofmans (2015) acknowledge that these employees cannot be successfully influenced by satisfying their financial and material rewards. The reason could be because they are psychologically aware that they have rather restricted financial and material reward options (Seman and Suhaimi, 2017). Therefore, organizations ought to advise the supervisors to offer these employees psychological rewards, such as, giving compliments, and regular recognition, to contain their turnover intentions.

Research model

The purpose of the study is to describe the connection between employee turnover intentions with the organization’s reward structure. The research study adopts a mixed method approach in collecting data for analysis. A mixed approach in collecting data will ensure that sufficient information and data is collected to accurately report on the appropriate reward structure to help reduce employee turnover intentions. The methods include the use of online surveys, research questionnaires, and content analysis (Richardson, 2019). Empirical data will be acquired through observations, collection of expert views, and semi-structured interviews.

Quantitative and qualitative data from various studies will help in developing a high-quality research questionnaire. The online questionnaires will be prepared to enable the researcher to compile data regarding the different reward options in reducing turnover intentions. Data collected from the sources will be prepared by picking the relevant information according to the answers provided. The data will be analysed by comparing the results from various studies on the topic (Richardson, 2019). Qualitative data from the various studies will be analysed based on textual analysis. Content analysis will help to give meaning to the quantitative findings. Content analysis involves categorizing the information from a research into various contexts.

Conclusion

In general, employee turnover intentions are a common aspect of consideration in the hospitality sector. The industry employs many people who need to be attended to carefully to manage turnover intentions, which if realized will lead to major costs for the organization. The employees form the backbone for competitiveness and maintenance of a proper quality of service (Ahsan, 2017). The turnover intentions can be managed through motivation or by the organizations establishing a good reward management structure.

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