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Aarti J answered on
Apr 27 2020
Customer Loyalty directives and employee turnover intention
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RUNNING HEAD: Customer Loyalty directives and employee turnover intention 1
Customer Loyalty directives and employee turnover intention
Background
According to the United States Department of Labor Bureau of Labor Statistics (2012), the overall employee turnover rate in 2011 was 36.7%, indicating that more than one in three employees left their employment. The turnover rate rose to 61.6% in 2011 for the Leisure and Hospitality sector (United States Department of Labor Bureau of Labor Statistics, 2012). The estimated cost of employee turnover is between 25% and 200% of an employee’s annual compensation (Bliss, 2012). Hospitality industry employee turnover in the United States costs an estimated $5 trillion annually (Kim & Jogaratnam, 2010). Employee turnover is a substantial cost factor to the hospitality industry (Karatepe & Karatepe, 2010). Employee turnover is a threat to customer loyalty because of diminished customer relationships that result from inexperienced service providers (Câter & Câter, 2009). The problem of high employee turnover in the hospitality industry is a critical leadership challenge.
Low employee turnover is a positive influence on profitability (Mendes & Stander, 2011). Silos of research exist regarding drivers of customer loyalty (Akbar, Som, Wadood & Alzaidiyeen, 2010) and of employee retention in the hospitality industry Authors demonstrated strong inverse affiliation between customer satisfaction and employee turnover rate. Research is necessary to identify additional contributing factors to employee turnover costs. In quantitative research of the relationship between employee satisfaction, employee engagement, and business outcomes, Harter, Schmidt, and Hayes (2002) recommended qualitative research for the exploration of employee perceptions of management practices.
Significance of the study
Leaders recognize the importance of managing customer relationships that are a factor in customer loyalty (Chan & Wan, 2012). Hospitality industry leaders employ customer loyalty directives to promote positive economic benefit to their organizations (Câter & Câter, 2009). Leaders expend human, financial, and technological resources to reduce employee turnover in the hospitality industry (Kim & Jogaratnam, 2010).
Organizational leaders should discern which leadership directives simultaneously have a result of an increase in customer loyalty and a reduction in employee turnover; there will be dual benefit in these instances. The study data included insights that certain leadership directives result in the improvement of customer loyalty and the increase of employee turnover. Leaders could consider abandoning those directives in favor of developing other directives that could derive dual benefit. The purpose of the study was the examination of the role of leadership customer loyalty directives on employee turnover intention in large hotels in the United States. Leaders of other industries and service providers who experience problematic employee turnover may benefit from applying
oadly the study results. Based on study conclusions, leaders may be able to concentrate their efforts toward simultaneously improving customer loyalty and reducing employee turnover through improved training management and hiring practices, and involving employees in customer loyalty program design.
Scope of the proposed research
The research scope includes the parameters of the research study. The purpose of the study is the capture the perceptions, reactions, and experiences of employees subject to compliance with customer loyalty directives, and the determination of whether such compliance has a role in employee turnover intention. The research method is an interpretive qualitative phenomenological study that includes data collection from participants in full service hotels with 150 or more rooms in the continental United States. Through recruitment of participants from hotels with 150 or more rooms, the probability of onsite management teams and complexity in employee-customer encounters increases. The study participants included frontline employees cu
ently employed by the local hotels. Data collection was achieved through one-to-one, in-person, semi-structured interviews with 18 participants for the exploration of their lived experiences in complying with customer loyalty directives. Individuals were invited to participate voluntarily in the research study.
Problem statement and objectives
The focus of the study was the central research question:
How do the lived experiences of frontline hotel employees' compliance with customer loyalty directives influence turnover intention?
Leaders in successful organizations often desire to increase customer loyalty and reduce employee turnover which are antecedents of sustainability (Maier, 2009), organizational success (Norman, 2010),...