Effects of organizational characteristics on employee turnover among star-rated hotels in Nairobi County, Kenya

Abstract

Employee turnover continues to be a challenge in the hospitality industry, with many hotels incurring significant investment costs in personnel recruitment and training only to lose them through exits. Nonetheless, employee turnover in the hospitality industry is high, with hotels in Nairobi, Kenya recording the highest turnover of over 72 percent against the optimal threshold of 30 percent as stipulated by Harris et al (2001). Although studies on the determinants of employee turnover exist, the results of these studies are inconclusive. Furthermore, despite the fact that organizational characteristics are a significant predictor of organizational outcomes such as employee turnover, there is a dearth of information on organizational characteristics such as managerial characteristics, organizational culture, and organization structure and how they affect employee turnover. As a result, this study investigated the effect of organizational characteristics on employee turnover in Nairobi County's star-rated hotels. The study sought to determine the effect of managerial characteristics on employee turnover, as well as the effect of organizational culture on employee turnover and the effect of organizational structure on employee turnover among Nairobi County's star-rated hotels. Based on Contingency theory, this study used a quantitative research approach with a correlational design to analyze data collected via self-administered questionnaires. The study sample consisted of 212 top and middle level managers drawn from a population of 486 using a multi-stage sampling method. Multiple regression analysis in SPSS was used to test the ensuing null research hypotheses. Findings showed that managerial characteristics, organizational culture and organizational structure had a combined significant effect on employee turnover (F [3, 178] = 195.249, p < .001, R2 = .767), explaining for 76.7% of the variance in employee turnover. Managerial characteristics (β = .205, t = 2.643, p = .009) and organization culture (β = .767, t = 8.660, p < .001) were found to be significant predictors of employee turnover. Organizational structure (β = .035, t = .373, p = .710) was however found not to be a significant predictor of employee turnover. The positive effect of managerial characteristics in overall and organization culture on employee turnover imply that hoteliers should pay attention to these two organization characteristics in efforts to tame the rising employee turnover among star-rated hotels in Nairobi County. The study findings add to the existing body of knowledge by specifically linking the three organization characteristic components to employee turnover in the hospitality industry.