UNIVERsm MALAYSIA SABAH
BORANG PENGESAHAN STATUS TESIS
lUOUL FAKTOR MOTIVASI YANG MEMPENGARUHI KESETIAAN PEKERlA 01 INOUSTRI HOTEL KOTA KINABALU
IlAZAH MASTER OF HUMAN CAPITAL MANAGEMENT (MHCM) SESI PENGAlIAN 2009 - 2010
saya, TOH PEl SUNG mengaku membenarkan tesis sarjana ini disimpan di Perpustakaan Universiti Malaysia Sabah dengan syarat - syarat kegunaan berikut:
1. Tesis adalah hak milik Universiti Malaysia Sabah. 2. Perpustakaan Universiti Malaysia Sabah dibenarkan membuat salinan untuk
tujuan pengajian sahaja. 3. Perpustakaan dibenarkan membuat salinan tesis ini sebagai bahan
pertukaran Institusi Pengajian Tlnggi. 4. TIDAK TERHAD.
~. Penulis: Toh Pei Sung Alamat: No 2, Lorong Raja Udang
3B, Kingfisher Park, 88400 Kota Kinabalu, Sabah.
Penyelia: Dr. Awangku Hassanal Bahar Pengiran Bagul
Tarikh: 28 Julai 2010
Disahkan oleh,
Catatan: Tesis dimaksudkan SEBAGAI TESIS Ijazah Doktor Falsafah dan Sarjana secara penyelidikan atau Disertasi bagi pengajian secara kerja kursus dan penyelidikan atau laporan Projek Sarjana Muda (LPSM)
MOTIVATIONAL FACTORS THAT INFLUENCE THE LOYALTY OF EMPLOYEES IN THE HOTEL
INDUSTRY IN KOTA KINABALU
TOH PEl SUNG
PERPUSTAKAAN UNNERSITI MAlAYSIA SARAH
THESIS SUBMITTED IN FULFILLMENT FOR THE DEGREE MASTER OF HUMAN CAPITAL
MANAGEMENT (MHCM)
SCHOOL OF BUSINESS AND ECONOMICS UNIVERSITY MALAYSIA SABAH
2010
DECLARATION
I hereby declare that the material in this thesis is my own except for quotations, excerpt, equations, summaries and references, which have been duly acknowledged.
28 July 2010
ii
~. Toh Pei Sung
PE2008 - 8418C
NAME
MATRIC NO
TITLE
DEGREE
VIVA DATE
CERTIFICATION
TOH PEl SUNG
PE2008 - 8418C
MOTIVATIONAL FACTORS THAT INFLUENCE THE LOYALTY OF EMPLOYEES IN THE HOTEL INDUSTRY IN KOTA KINABALU
MASTER OF HUMAN CAPITAL MANAGEMENT (MHCM)
28lUNE 2010
DECLARED BY
1. SUPERVISOR Dr. Awangku Hassanal Bahar Pengiran Bagul
iii
ACKNOWLEDGEMENT
I would like to express my deepest and sincere gratitude to my supervisor, Pengiran
Dr. Awangku Hassanal Bahar Pengiran Bagul who has been so good and being a
reliable supervisor to me. He has dedicated his valued time to supervise me in order
to produce this paper, with his professional advice. He believed in my work and
never stop support me in my work.
Towards the most important person in my life, both of my parents, I would
like to take this opportunity to extend my gratitude for always support my decision
and never leave me behind alone. Without their support, it was impossible for me to
pursue and finish my master degree. In addition, a sincere thank you to all my
friends for helping me in their own way until this research is finish. Their support
had led to the completion of this dissertation.
Rnally, thank you to all people who gave me support and advice in doing my
dissertation paper.
iv
ABSTRACT
MOnvATlONAL FACTORS THAT INFLUENCE THE LOYALTY OF EMPLOYEES IN THE HOTEL INDUSTRY IN KOTA KINABALU
The tourism industry has gained prominence in Malaysia and with the global nature of the industry, transformation in issues including human resource constantly evolving for the better. This study analyzes the employment loyalty by examining intrinsic motivation factors in the star rated hotel industry in Kota Kinabalu. Issues such as high labor turnover and hard to retain the hotel employees due to the nature of work in the hotel industry give added insights to this issue. Loyalty is regarded as attitudinal that employees who are satisfied with their job are more likely to engage in a relationship with their employer. Thus, employees who are satisfied with their job are being motivated by intrinsic motivation such as advancement, recognition, responsibility, career growth, and the work itself. In addition, gender has no moderating effect on the relationship between loyalty and intrinsic motivation. The methodology for this study is using quantitative approach. The findings of this study which responsibility and work itself are identified as the two most important factors to motivate hotel employees. The study recommends that the hotel management should understand their employees' needs in order to motivate employees to ensure a higher degree of commitment.
v
ABSTRAK
lndustri pelancongan telah menjadi terkenal di Malaysia dan isu - isu transformasi termasuk sumber manusia telah berkembang menjadi lebih baik dengan sifat global industry ini. Kajian ini adalah untuk manganalisis kesetiaan terhadap pekerjaan dengan mengukur faktor motivasi intrinsik di industri hotel bertaraf bintang di Kota Kinabalu. lsu - isu seperti kos tenaga buruh yang tinggi dan sifat pekerjaan hotel industry ini yang menyebabkan kesukaran untuk mempertahankan pekerja hotel telah menambahkan lagi perce psi terhadap isu. Kesetiaan dikenalpasti sebagai sikap pekerja yang berpuas hati dengan pekerjaan mereka di mana lebih cenderung untuk ter/ibat dalam hubungan dengan majikan mereka. Oleh itu, pekerja yang sentiasa berpuas hati dengan pekerjaan mereka kerana dimotivasikan dengan kemajuan, pengiktirafan, tanggungjawab, pertumbuhan kerjaya dan pekerjaan itu sendiri. Selain itu, jantina tidak mempengaruhi ke atas hubungan antara kesetiaan dan motivasi intrinsik. Metodologi kajian ini adalah menggunakan pendekatan kuantitatif. Tanggungjawab dan pekerjaan itu sendiri telah dikenalpasti dalam hasil kajian ini sebagai dua faktor yang paling penting untuk memotivasi pekerja hotel. Kajian ini memberi cadangan bahawa pengurusan hotel harus memahami keperluan pekerja mereka bagi memotivasi pekerja supaya untuk memastikan tahap komitmen yang lebih tinggi.
vi
TABLE OF CONTENTS
PAGE
TITLE
DECLARATlON ii
CERTlFICATlON iii
ACKNOWLEDGEMENT iv
ABSTRACT v
ABSTRAK vi
TABLE OF CONTENTS vii-x
UST OF TABLES xi
UST OF FIGURES xii
UST OF APPENDIX xiii
CHAPTER 1: INTRODUCTlON
1.1 Overview 1-3
1.2 Problem Statement 4-5
1.3 Research Question 6
1.4 Objectives 6
1.5 Scope of Study 6
1.6 Significance of the Study 7
1.7 Definition of Terms Used 8
1.7.1 Loyalty 8
1.7.2 Motivation 8
1.7.3 Advancement 8
1.7.4 Recognition 8
1.7.5 Responsibility 8
1.7.6 Career Growth 8
1.7.7 Work Itself 9
1.7.8 Demographic 9
1.8 Organization of Dissertation 9
1.9 Summary 10
vii
CHAPTER 2: LITERATURE REVIEWS
2.1 Introduction 11
2.2 Loyalty 11-14
2.3 Motivation 14-15
2.3.1 Herzberg's Motivation - Hygiene Theory 16-18
2.3.2 Advancement 19
2.3.3 Recognition 19-21
2.3.4 Responsibility 21-22
2.3.5 Career Growth 22
2.3.6 Work Itself 22-23
2.4 The Relationship between Loyalty and Motivation 24-25
2.5 Demographic 26
2.5.1 Gender 26
2.6 Summary of the Main Literature Reviews 27-30
2.7 Summary 31
CHAPTER 3: METHODOLOGY
3.1 Introduction 32-33
3.2 Research Framework 34
3.2.1 Dependent Variable: Loyalty 35
3.2.2 Independent Variable: Intrinsic Motivation 35-36
3.2.3 Moderating Variable 36
3.3 Hypotheses 37-38
3.4 Research Design 38-40
3.5 Sampling Design 40
3.5.1 Sampling Size 41-42
3.6 Instrument and Measurement 43-44
3.7 Data Collection Method 44
3.8 Data Analysis 45
3.8.1 Hypotheses Analysis Method 45
3.9 Summary 46
viii
CHAPTER 4: RESULTS
4.1 Introduction
4.2 Respondents Profile
4.3 Reliability Analysis
4.4 Descriptive Data
4.5 Hypotheses Testing
4.6 Summary of Rndings
CHAPTER 5: DISCUSSION AND CONCLUSION
5.1 Introduction
S.2 Recapitulation of Study
5.3 Discussion and Implications
5.3.1 Advancement and Loyalty
5.3.2 Recognition and Loyalty
5.3.3
5.3.4
5.3.5
Responsibility and Loyalty
Career Growth and Loyalty
Work Itself and Loyalty
5.3.6 Gender on the relationship between Intrinsic Motivators and Loyalty
5.4 Umitation of the Study
5.5 Suggestion for the Future Research
5.6 Conclusion
BIBUOGRAPHY
Appendix A
Appendix B
AppendixC
Appendix D
AppendixE
Appendix F
AppendixG
ix
47
47-48
49
50-51
52-57
57-58
59
59
60
60-61
61
62-63
63
64
65
65
66
67-68
69-76
77
78-83
84-85
86-87
88-89
90-91
92-93
Appendix H 94-95
Appendix I 96-97
Appendixl 98 Appendix K 99
Appendix L 100-105
Appendix M 106-110
x
LIST OF TABLES
PAGE
Table 2.1: Summary of Literature Reviews 27-30
Table 3.1: Sample Size for a Given Population Size 39
Table 3.2: The Total Population of Operational Employees in Star Rated 41 Hotel Industry, Kota Kinabalu
Table 3.3: Total Number of Hotel Participants 42
Table 3.4: A Likert 5 Scale Response 43
Table 3.5: Statistical Analysis Method 45
Table 4.1: Profile of Respondents 48
Table 4.2: Reliability Analysis for loyalty and Advancement, 49 Recognition, Responsibility, Career Growth and Work Itself
Table 4.3: Descriptive for Independent and Dependent Variables 50
Table 4.4: Multiple Regression Analysis of Intrinsic Motivator and 52 Loyalty
Table 4.5: Hierarchical Regression Analysis on Gender 56
Table 4.6 Summary of Findings 57
xi
Figure 3.1:
Figure 4.1:
LIST OF FIGURES
The Framework of the Motivation Factors that Influence the Loyalty of Employees in Hotel Industry in Kota Kinabalu
The Percentage of Respondent Rate for Gender
xii
PAGE
34
48
LIST OF APPENDIX
PAGE
APPENDIX A Cover Letter 77
APPENDIX B Survey Questionnaire 78-83
APPENDIX C Frequencies - Profile of Respondents 84-85
APPENDIX D Reliability - Loyalty 86-87
APPENDIX E Reliability - Advancement 88-89
APPENDIX F Reliability - Recognition 90-91
APPENDIX G Reliability - Responsibility 92-93
APPENDIX H Reliability - Career Growth 94-95
APPENDIX I Reliability - Work Itself 96-97
APPENDIX J Correlations 98
APPENDIX K Descriptive Analysis 99
APPENDIX L Multiple Regression - Intrinsic Motivators 100-105 (Advancement, Recognition, Responsibility, Career Growth and Work Itself) and Loyalty
APPENDIX M Hierarchical Regression 106-110
xiii
CHAPTER 1
INTRODUCTION
1.1 Overview
Tourism is defined as activities of person travelling to and staying in places that
outside from their location for business, vacation and other purposes not related to
an activity from and within the place visited which not more than one year
consecutive year (Page, 2009). In addition, tourism is also an industry providing
services to travelers, from transportation to accommodation to entertainment and
additional services such as currency exchange (Lomine and Edmunds, 2007).
Therefore, it is one of the most dynamic sectors of the world economy.
According to World Travel and Tourism Council, 2000; cited by ILO, 2001
which stated that worldwide employment in tourism is estimated at 192.2 million
jobs that will grow to 251.6 million jobs in 2010. In other words, tourism is offering
new employment opportunities that focused on service industries which include
transportation services, hospitality services such as accommodations including
hotels and resorts, and entertainment such as amusement parks, shopping malls
and others which may assist in developing and modernizing the economy.
Hotel regarded as travel related organization which serves as
interrelationship in accommodation sectors that has become a dominant industry
within the travel industry. On the other hand, the travel industry defined as the
combination of organizations in both public and private which involved in the
development, production, and marketing of products and services in order to serve
the needs of travelers (Choy, Gee, & Makens, 1997). Besides that, direct providers,
support services or developmental organizations are the businesses and
organization that categorized as components of the travel industry. In other words,
hotel would be direct provider of services to travelers, support services for the
operations of the hotel that may include local suppliers of basic products and
developmental organizations which include government agencies that have approval
power over whether a hotel will be built (Choy, Gee, & Makens, 1997).
The industry employs a large quantity of young and female employees and
has a large number of part time and seasonal workers. This is supported by Evans,
campbell, & Stonehouse, (2003) which characterize the industry as a large quantity
of female employees, a large quantity of young employees, a large number of part
time and seasonal workers, increasing of labour turnover rates, difficulty in
recruiting workers, low intensity of training and less paid. In other words, these are
the characteristic of hotel industry which contribute to the problems and resulting in
different perceptions for individual employees.
Furthermore, the hotel industry has been known as a potential prospect for
the growth of the service industry in Malaysia. However, the growth is slow down by
the high labor turnover rates in the hotel industry. According to Simms et aI., 1988;
Riley et al., 2000; cited by Riley, ladkin, & Szivas, 2002, there is strong proof that
hotels tend to operate weak internal labor markets. Many organizations in the hotel
industry face the problems in retaining employees since they are unable to identify
the factors which contribute to employee loyalty. In addition, employee turnover is
high and it is more focus on people oriented which requires large amounts of
human effort to produce the services. Therefore, the hotel industry is characterized
by poor job security, poor salary, over time and less opportunities for promotion
(Byrne, 1986; Knight, 1971; cited by Siu, Tsang & Wong, 1999) due the nature of
work in the hotel industry.
In addition, according to Sarabahksh et aI., 1989; Hsieh et aI., 2004; Cited
by Simon & Annie, 2009 which addressed that long working hour, shift: duties and
serving demand from customers in hotels has become a phenomenon in the
hospitality industry. It shows that hotel employees have less flexibility to have
power over their time and duty roster. It is understandable that a hotel job is
operated 24 hour day and is highly labor intensive. Everyone is assigned to come
for a duty at a certain time slot per day. Employees are allocated into the roster for
maintaining the service although they are in holiday. According to Simon and Annie,
(2009), hotel employees have limited flexibility on setting their own working
schedule.
2
As mentioned in literature, hospitality services can be concluded that it share
a number of common characteristics which are labor intensive nature, high labor
turnover, low job security, low pay, shift duties, and low flexibility working hours.
In line with aforementioned, it had shows the nature of the hotel industry of being
people-oriented and often deal with high labor turnover which need the cooperation
of all parties involved to reduce the problems. The nature of the hotel industry as
mentioned above become the barriers of attracting potential employees to work
longer within the industry. Due to this reason, it is important to understand what
will motivate employees to remain for loyal within the hotel industry. Human
motivation is a very complex subject and many theories such as Maslow's (1954)
needs hierarchy, Douglas McGregor's (1960) theory x and theory y and Frederick
Herzberg's (1959) motivation and hygiene theory have been developed with respect
to its use in the work environment.
In this researCh, it is interesting to study about the motivation factors that
influence the loyalty of employees in the hotel industry. It is because there are
issues arise that labor turnover is high in the hotel industry. Besides that, it is hard
to retain employees due to the nature of work in the hotel industry. Apart from that,
it is important to do the research which attempted to fill the gap by researching to
understand and examine the motivational factors which would actually make hotel
employees engage with their employer.
3
1.2 Problem Statement
The problem statement in this study is "What are the motivation factors that
influence hotel employees to be loyalty?" The research issues which mentioned in
below have creates the statement of problems in this study.
Employees are an important asset as being utilized in workplace in order to
achieve organizational goals. Most managers consider employees to be costs and
treat them as liability despite the frequently statement is that "employees are our
greatest assets" (Bassi and McMurray, 2004). That is, treating employees as assets
can produce positive returns in the long term. However, the critical issue in hotel
industry is concerning with the hoteliers' ability to retain employees (Susskind et aI.,
2000, Hinkin and Tracey, 2000). Retaining employees can reduce the cost of hiring
and training for new employees (Bedeian et aI., 1992). Thus, it is fact that the issue
of loyalty has increased attention in tourism and hospitality research in recent years
(Shoemaker and Lewis, 1999; Oppermann, 1999; Shoemaker and Bowen, 1998;
cited by Weber, 2001). Therefore, loyalty of employee plays an important role in
providing the successful business in the hotel industry. In addition, highly
motivated staff and loyalty of employees are contributing to the success of the hotel
which not only due to its unique location according to speech by Y.A.B. Chief
Minister, Datuk Seri Musa Haji Aman at 25th anniversary celebrations of Hyatt
Regency Kinabalu. Apart from this, there is a need for further study to find out the
factors which would actually make employees stay in Hotel.
On the other hand, labor turnover rate is estimated between 60% and 300%
annually in the hotel industry of worldwide (Foley, 1996; cited by Ady Milman, 2003).
Turnover can decrease customer service levels and lower company profits (Hom et
aI., 1988; Reichheld, 1993; cited by Valentine, 2000) and linked to rising employee
recruitment and training costs, job satisfaction, low levels of employee morale and
customers' perceptions of service quality (Gray et aI., 2000).
4
Furthermore, there has been little research on understanding the loyalty of
employee related to motivation factors. There are researchers have attempted to
uncover key reasons why those in the hospitality industry leave their works and
have offered suggestion to combat such turnover-related issues (Hogan, 1992;
Woods and Macaulay, 1989; Dermody et aI., 2004; Pearson & Stalcup, 2001; cited
by Seonghee, Johanson & Guchait, 2009). However, there are lacks of research to
focus on motivation factors that influence the loyalty of employees in the hospitality
industry such as hotel.
Lastly, the demographic differences may determine employees' perceptions
of the motivational factors to stay loyalty in organization. It is because how
employees feel about their work environments may vary due to employee
characteristics, and these differences may determine their perceptions of the
motivational factors to commit with their employer (Vecera and Franek, 2008; cited
by Chang & Kelly, 2009). Other researchers also found out the differences according
to demographic characteristic towards the loyalty of employees (Chang & Kelly,
2009). That is, different background of demographic can influence employees'
perceptions of the motivational factors to stay loyalty in hotel.
5
1.3 Research Question
The research question is important to be used as a framework of study or guideline
in order to accomplish the task significantly and adequately. To complete the task,
there are few questions used to identify and examine. The following questions
should be answered in this research study.
a. What are the significant relationship between intrinsic motivation and
loyalty?
b. What are the moderating effect of demographic gender on the
relationship between intrinsic motivation and loyalty?
1.4 Objectives
The aim of this study is to study employment loyalty by examining motivation
factors in hotel industry. The specific objectives of this study are as follows:
a. To identify the Significant relationship between intrinsic motivation and
loyalty.
b. To understand the moderating effect of gender on the relationship
between intrinsic motivation and loyalty.
1.5 Scope of Study
The scope of study in this research paper was carried out among operational
employees that consist of Housekeeping servers, Food & Beverage Services servers,
and Front Office servers in star rated hotel Kota Kinabalu, Sabah. The research site
that has been chosen is in Kota Kinabalu area. It is because it is a centre of major
tourist destination and a popular international gateway to East Malaysia (Angie,
2007). In this research, simple random sampling will be used as sampling technique
approach to gather the data information. Apart from this, employees have an equal
and known chance of being selected (Sekaran, 2003). The total population of
operational employees in star rated hotel industry, Kota Kinabalu is 1,671. The
sample size of this study is 310 operational employees (Sekaran, 2003). The
questionnaires will be distributed to the respondents in order to accomplish the task
significantly.
6
1.6 Significance of the Study
This study helped the management would find that monetary rewards not only can
make the employees to work loyalty within hotel industry because it is only
temporary rewards that considered by employees as entitlements and it does not
motivate employees to achieve or feel a sense of loyalty to the organization within
industry. In fact, extrinsic motivators such as monetary rewards do not create
commitment to a set of values or to learning. There are others factors that can
motivate employees in order to retain and attract them to work loyalty within the
industry which is intrinsic motivators that identified by Herzberg's view.
Besides that, this study may help the management in hotel industry, Kota
Kinabalu to understand the environments of employees needs. It is important to
understanding of employees' expectations of their work environments in order to
retain employees as human capital. Employees are an important asset as being
utilized in workplace in order to achieve organizational goals. Therefore, a better
understanding of employees needs can improve their human capital management
practices to be more effective and effiCient.
Furthermore, this study also may helped the management to develop their
training programmes, benefit packages, performance appraisal and work system
more effective and efficiency. They can aim at developing loyal employees because
this leads to a more lengthy tenure. Loyalty of employees plays important roles in
providing successful business within hotel industry which can reduce the turnover of
labor and can produce positive returns in long term periods.
Finally, the results and findings in the study can be used as a reference for
further investigation about the factors that influencing the loyalty of employees in
the hospitality industry. Therefore, researcher can do an extensive review based this
results and findings for the future research. It is because this study suggests the
Significance factors that highly motivate them which influence employees to be
loyalty.
7
1.7 Definition of Terms Used
Key terms used in this study have specific definition in general context for better
understanding as mentioned below:
1.7.1 Loyalty
Loyalty is defined by an attitudinal measurement of feelings in engagement with
their employer and willing to put higher efforts.
1.7.2 Motivation
Motivation is defined by individual's preferences which associate with intrinsic
motivator such as advancement, recognition, responsibility, career growth and work
itself.
1.7.3 Advancement
Advancement can be defined as self advancement and positive advancement with
expected or unexpected that provided by employer in the organization.
1.7.4 Recognition
Recognition can be defined as positive appreciation from employers, supervisors,
peers, and subordinates.
1.7.5 Responsibility
Responsibility can be defined as opportunities of freedom to make decisions that
acknowledged by employer.
1.7.6 career Growth
Career growth can be defined as opportunities to learn new skills and knowledge
that provided by employer in the organization.
8
1.7.7 Work itself
Work itself can be defined as the degree of tasks and assignments which is
interesting and sense of self accomplishment.
1.7.8 Demographic
Demographic is referring to individual characteristic of employees which determine
employees' perception of motivational factors to stay loyalty in hotel.
1.8 Organization of Dissertation
These sections organized into five [5] chapters. Chapter 1 discussed the overview of
the study, problem statement, objectives of the study, research question, scope of
the study, significance of the study, definition of terms used and organization of the
dissertation.
Chapter 2 which is literature reviews consists of introduction, loyalty of
employee, motivation theory about Herzberg's Theory and followed by motivational
factors such as advancement, recognition, responsibility, career growth and work
itself. Next is the relationship between loyalty and motivation. Then, it is followed by
demographic and lastly is summary.
Chapter 3 outlines the research methodology and framework that used in
collecting and analyzing the data. It is divided into few sections which consists of
introduction, research framework, hypotheses, research deSign, sampling deSign,
instrument, data collection method, data analysis method and lastly is summary.
Chapter 4 focused on analyses the results of the study. It is consists of
introduction, profile of respondents, reliability analysis, descriptive data, testing of
hypotheses and lastly is summary of the findings.
Chapter 5 is mainly on discussion and conclusion based on the finding of this
study. A brief introduction followed by recapitulation of study, contribution of study,
limitation of the study, suggestion for future research and a final conclusion.
9
1.9 Summary
In summary, chapter one is discussing about overview of the study which related to
the tourism and hotel indusby. It is followed by the problem statement which the
issues arise in the hotel indusby. Then, it is comes out with objectives of the study
which is based the problem statement. Next, research question also have been
outlined to guide the study. Scope of the study and Significance of the study also
have been discussed in this chapter. Furthermore, definition of terms used is also
diSCUssed which about the key terms of the study and organization of the
dissertation is discussed which about outline of the chapter and lastly, summary of
the chapter also been discussed.
10
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