Effective Rewards System in Tourism and

Hospitality SectorGHZP 4033(Group B)

Chua Hui Ling220 616

Lecturer: Prof. Madya Dr. Nurhazani Bt Mohd Shariff

Introduction• Reward is broad construct that can be anything that

employee value that employer is willing to offer in exchange for their contribution.

• Reward system normally implemented to influence individual behavior and motivating employee in work.

• It provides job satisfaction and increase firm’s effectiveness.

• Objectives :I. Attract and retain suitable employees

II. Maintain or improve employees performanceIII. Comply with employment legislation

Issues of Rewards System in Tourism and Hospitality Sector

• Unattractive working atmosphere (eg. Low pay, long working hours, low job opportunities and development) lead to employee dissatisfaction and high level of turnover.

• Most of the organizations only focus on financial rewards and ignore non-financial rewards and this will decreases the employee job satisfaction.

• Tourism and hospitality managers need to seek effective reward system to satisfied their employee especially frontline employees to improve their job performance.

Financial Rewards

Wage & SalaryBonus

Commission

Non-Financial Rewards

RecognitionCareer Advancement

Personal Growth

Total Rewards System• Many researchers have found tourism/hospitality employee’s

satisfaction is affected by both financial and non-financial rewards.

• To motivate the tourism/hospitality employee effectively, Total Rewards System is suitable to be implemented.

• Total Rewards System is an integrated reward system which encompasses not only compensation and benefits but also personal growth opportunities and a motivating work environment.

The notion of the total rewards system provides a useful starting point to consider some fundamental

issues and concerns in understanding reward practices in the tourism and hospitality industry

(Nickson, 2007).

Four Phases in Implementing Total Reward System

• Nowadays, it is difficult to offer high salary and many benefits due to high competitive environment in tourism and hospitality industry.

• Total Rewards System has look beyond monetary rewards and evaluate the value of non-financial rewards as alternative rewards that cost less but still can motivate employees especially in low season.

Assessment

Evaluation Design

Execution

Theoretical Model

Employee Satisfactio

n

Compensation

Benefits

Personal Growth & Professional Development

Organization Culture & Working

Environment

Increases Performance Level & Offer Good Service

Quality to Guests or Tourists.

1. Compensation•Pay provided for services rendered.(time, effort, skill)

•fixed and variable pay based on performance levels

2. Benefits•Health protection

•Insurance

•Retirement plans(Retirement funds in terms of monthly allowance)

3. Personal Growth and Professional Development

•Work-life initiatives- wellness program, on-site childcare and gym facility

• Performance Management- job appraisals, recognition, awards

•Career Growth- training, skills/professional development opportunities

4. Culture & Environment

•Good policies and practices(Tipping Practices)

•Safe and healthy work environment

•Congenial co-workers(Good teamwork)

(By :Nielson, 2007)

Achievable

Sensible

Timely

Objective

Useful

5 FACTORS OF EFFECTIVE REWARD SYSTEM

Conclusion• Total rewards system is an effective reward system which focused on

both financial and non-financial rewards.

• Financial rewards is significant in tourism and hospitality industries due to boring and little creativity working atmosphere.

• According to Bustaman et al.(2014), frontline employees also perceived non-financial rewards such as recognition is important to increase their job satisfaction and willing to provide better service to guest.

• This shows tourism/hospitality employee nowadays require beyond monetary rewards for their effort, they seek for other return which is meaningful to them.

• Total rewards system is an effective well-balanced reward system between financial and non-financial rewards where organization not only satisfy employee’s needs, but also achieve higher performance, improve resource efficiency and enhance service quality in tourism and hospitality sector.

References• Bustamam, F. L., Teng, S. S., & Abdullah, F. Z. (2014).

Reward management and job satisfaction among frontline employees in hotel industry in Malaysia. Procedia-Social and Behavioral Sciences, 144, 392-402.

• Arokiasamy, A.R.A. (2013). A Study on Employee Satisfaction Perspectives in the Hotel Industry in Malaysia. International Journal of Management and Strategy, 6(4).

• Heneman, R.L. (2007). Implementing Total Rewards Strategies.

• Nielson, C. (2007). Coaching Organization For Break Through Performance. The Nielson Report, 7(1).