Hospitality industry turnarounds: An examination of service climate and employee identification in the hotel industry
The hospitality industry is renowned for high rates of business failure. Increasing competition, globalisation, technology, social change and internal weaknesses are some of the many reasons that hospitality businesses fail or perform significantly below expectations. Many businesses therefore attempt to turn around performance. Because declining performance can have wide-ranging impacts not only on businesses directly in the hospitality industry, but also upon those communities where local economies rely on tourism and hospitality industry businesses, the idea of turning around declining businesses is an important concept to understand, research and study. However, there has been limited published focus on turnarounds in the hospitality industry in general, and in the hotel industry specifically. Hotels are service businesses, and, like most service organisations, rely heavily on line-level staff. This thesis utilises the linkage research model, which proposes a conceptual chain connecting employees to customers and therefore organisational performance. Surprisingly, the linkage research model has received minimal research focus in the study of hospitality businesses. The aim of this thesis is to gain understanding about turnarounds in the hotel industry, and to examine employeecustomer linkages during hotel industry turnaround attempts. While there are many factors involved in hotel turnarounds, the radical changes that accompany a turnaround can have a direct effect on employees. This effect is important because employee behaviour is known to be a function of the salience that situations create for a person at a particular time. Employee perceptions of change have been said to affect beliefs and assumptions and therefore affect attitudes and behaviours in the workplace. Social identity theory proposes that an individuals concept of self is built on personal identity based on unique personal characteristics, with social identity derived from membership of salient social groups. Under given conditions, social identity becomes more salient than personal identity which leads to attitudes and behaviours that are reflected by group memberships. This thesis proposes a conceptual model that incorporates service climate and employee identification as vital considerations for turnaround success in the hospitality industry. Of particular interest to this thesis are the distinct characteristics of turnarounds in the hotel industry; the way in which service climate dimensions predict employee perceptions; how these relationships change over time; and the role of employee identification in predicting employee perceptions. The project involved two studies designed to examine the following overarching research questions 1. Does turnaround from decline in the hotel industry differ from that of other industries? 2. What are the roles of service climate and employee identification in predicting employee perceptions of customer satisfaction and change during hotel industry turnaround attempts? The research design involved a multi-method investigation. In Study 1, 14 respondents who represented various perspectives of hotel industry turnarounds were interviewed. The interviews used a convergent interviewing process whereby key themes identified in each round of interviews were explored in later rounds of interviews. Five key themes (theme clusters) emerged from the interviews. Within these key themes, the importance of people-related issues emerged as significant characteristics of hotel industry turnarounds. In Study 2, a survey of employees was conducted in four hotels that were undertaking a turnaround attempt. Responses were collected from 323 staff. Hierarchical multiple regression analyses were used to investigate the relationships between the variables cross-sectionally to ascertain the relationships between variables; and longitudinally to ascertain whether certain variables at early visits could predict outcomes at later visits. Analyses of variance were used to examine whether there were differences in the variables by either hotel and/or visit. Findings demonstrated the significant role of customer-contact aspects of service climate in predicting customer satisfaction and change perceptions. Employee identification at the company level was found to predict employee perceptions of customer satisfaction. The addition of department level identification contributed to the prediction of change perceptions. Although limited by a small sample, the longitudinal study suggested that employee perceptions of customer satisfaction and of customer-contact aspects of service climate were significant predictors of customer satisfaction perceptions four months later. Implications include the application of the linkage research model as a useful, yet rarely applied framework for study and practice in the hospitality industry. In addition, hospitality industry research has yet to incorporate social identity theory in understanding group identification and how it can affect employee attitudes and service behaviours. The use of these theoretical frameworks would be useful in the study of hospitality industry businesses, and as diagnostic tools during change.
Year of publication: |
2006-01-01
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Authors: | Solnet, David |
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