International Journal of Research in Business Studies and Management

Volume 5, Issue 11, 2018, PP 01-09

ISSN 2394-5923 (Print) & ISSN 2394-5931 (Online)

Factors Influencing Employee Performance in Hotel-A

Comparative Study of Government and Privately Owned Hotels
in Eritrea
Fitsum Ghebregiorgis, Ph.D
Department of Business Management and Marketing College of Business and Economics
*Corresponding Author: Fitsum Ghebregiorgis, Department of Business Management and Marketing
College of Business and Economics. e-mail: [email protected]).

ABSTRACT
The main objective of this study is to investigate the main factors affecting the performance of employees in
the hotel industry in Eritrea. A survey was conducted in the city of Asmara on a sample of 150 employees
from 4 private and government owned hotels. The survey research design was employed using a self-
administered questionnaire as the data collection instrument. Five factors, namely motivation, leadership,
employee-employer relationship, training, and working conditions consisting of 18-items which might
influence performance have been developed. The items measuring the constructs were adapted from the
extant literature. Data was analyzed using regression and correlation test. The results have shown that there
is a positive and significant relationship between motivation, training, working conditions and employee
performance. The results also reveal that training as a factor influencing performance is more prevalent in
privately-owned hotels than government hotels. However, leadership and employee-employer relationship
emerged to have no significant relationship.
Keywords: Employee performance, hotel businesses, leadership, motivation, working conditions

INTRODUCTION good employee performances and productivity

growth are important to stabilize the economy;
The way of handling an employees and making
to improve the better living standards, to grow
them to perform at their excellence is a critical
up the higher wages, and to increase the
factor because employees are treasure, power, available goods for consumption.
and backbone of an organization’s success.
Most of organizations are fully aware of the In any organization employees are the real
importance of the employee performance. assets because the achievement or failure of any
Increasingly, employee performance or to find organization relies on its employee as well. The
out the ways through which high level of significance of employee in hotel industry is of
employee’s performance can be achieved is paramount importance as the hotel industry is
becoming one of the decisive factors for any naturally manpower (labour) concentrated.
organization success. Manpower performance Employee performance is more significant in
can be increased by putting efforts to factors this industry as employees are having direct
that enhance the employee’s motivational level, contact with the customer and also it is
creativity, and job satisfaction and comfort employee of the hotel industry that pleases its
working place environment, etc. Every customers (SHIK, 2017). The motivation of the
employee has a unique collection of values and employees is a major issue in hotel industry as it
beliefs usually based on national and cultural directly corresponds to employee turnover and
norms (Al-Malallah and Regondola, 2014). overall quality of service of the concerned hotels
These unique values and beliefs play an (Chen, 2013). The overall profitability of the
important role in their performance. hotels depends on the service quality provided
by the hotels to the customers. Hence, the prime
Employee performance is essential for any
concern of the hotels is to motivate the
organization, because an organization’s
employees so as to facilitate such an endeavor
successfulness is dependent on creativity,
of the hoteliers. According to Zhang (2016), the
innovation, satisfaction and commitment shown performance of the employees plays an
by its employees (Ramlall, 2008). Furthermore, important role in determining the profitability of

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
Owned Hotels in Eritrea

the hotels as employees are one of the most vital employee performance. The specific objective
assets of the hotels. This is because the of this study is to answer the following
hospitality industry is manpower-intensive questions: What are the factors that influence
industry for which the hotels needs to emphasize the performance of employees in hotel
on the performance of the employees and should businesses?
take appropriate measures for enhancing their
performances. Further, the performance of the
BACKGROUND AND HYPOTHESES
employees is crucial in the hotel industry as the The service industry, especially hotel
guests have direct interaction with the management becomes highly competitive and
employees and thus it is the employees of the people demand quality service on time. To
hotels that are responsible for satisfying the provide service at the best hospitality standard is
guests. the vision of all the service providers to attain
their mission. Top management focuses on
Employee performance is one of the most
building a strong culture by actively
important bases for the institution’s foundation
participating in delivering the quality services
so the investigation of the factor that would
by engaging the workforce and develops the
affect it is off a great deal purpose. Organization
performance is entirely based on employees’ long lasting relationship with the customers
performance, that is, if the employees’ in the (Maung and Walsh, 2018).
organization have a better performance, overall A study by Khuong et al. (2016) illustrated that
the organization are in a higher performance and the factors of career development, team spirit,
vice versa. Several studies have shown a relationship at work, compensation and benefit,
relationship between employees’ performance and working environment directly and indirectly
and performance of the organization (for affected employee performance through job
example, see Collis and Montgomery, 1995; satisfaction. The causal relationships between
Mwita, 2000; Abbas and Yaqoob, 2009). To this the factors of career development, team spirit,
end, this study attempts to identify factors relationship at work, compensation and benefit,
affecting the performance of employees in hotel working environment and job stress and job
industry in Eritrea. satisfaction and employee performance are
tested and confirmed.
Kuada (2015) shows that there is need to study
organizational performance in East Africa since The motivation of the employees is a major
the only research available is for large issue in hotel industry as it directly corresponds
multinational corporations and not the to employee turnover and overall quality of
hospitality industry. In the African continent, service of the concerned hotels (Chen, 2013).
the hospitality industry is deemed as one which The overall profitability of the hotels depends
has employees that are lowly paid and thus their on the services quality provided by the hotels to
motivation towards getting a specific task done the customers. In addition, Suharno et al.,
is an issue. To the best of our knowledge, ours is (2017), argued that it has been statistically
the first study to identify the factors influencing proven that motivation individually or partially
employee performance in hotel industry. Since has positive and significant effect on employee
this report is the first of its kind for Eritrea, it performance – if motivation is high, thus
provides new knowledge regarding employee performance in carrying out the obligations and
performance in Eritrea. duties will also be high, and vice versa.
Employee performance is considered as the According to Suharno et al., (2017), leadership
product of many factors that could normally style individually or partially has positive and
have impact on the working behavior of significant effect on employee performance—if
employees such as motivation, leadership, leadership is strong in directing and leading
employee–employer relations, training, conflict, employees, thus performance in carrying out the
work condition, compensation, employee obligations and duties will also be good. In fact,
participation, and so on. However, in this study Biswas (2012) cited that leadership not directly
specifically five factors that affect performance will affect employee performance, rather
are considered. Thus, the main objective of this leadership will positively affect job
study is to investigate motivation, leadership, satisfaction and eventually job satisfaction
employee-employer relationship, training, and will significantly influence employee
working conditions variables affecting performance.

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
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Chen (2013) stated that, by improving the they have good working environment. The
relationship with other employees, it is possible ability for employees to share knowledge with
to improve the overall performance and achieve one another depends on how the environment
the organizational goal collaboratively. In order utilize. This helps organization to improve
to build relationship within the organizations, effectiveness in terms of profit, level of
the managers need to arrange counseling and competitiveness and so on (Akinyele, 2010).
assistance where the employees can share their
Therefore, based on the above reviews and
views. Thus, the relationship motivates the
discussions we propose the following
employees to work cooperatively in a team and
hypotheses:
improve overall performance. Generally,
climate factors, interaction between employees, Hypothesis 1
relationships between employer and employees H0: There is no significant relationship between
and individual perception towards employee job motivation and employee performance.
description will influence the degree of
employee perform their jobs. It is because H1: There is a significant relationship between
employee will have more confidence if they motivation and employee performance.
have adequate information to support the tasks Hypothesis 2
(Chei et al., 2014).
H0: There is no significant relationship between
Hanzaee and Mirvaisi (2013) mentioned that the leadership and employee performance.
value and quality of the hotel services are
defined by the customers, the employees that are H1: There is a significant relationship between
responsible for providing the guest experience leadership and employee performance.
should not only be trained but also motivated to Hypothesis 3
meet the service quality and value expectations
of the guests. The human resources managers as H0: There is no significant relationship between
well the hoteliers have a crucial role for training employee—employer relationship and employee
the hotel staff and also motivating them for performance.
delivering exceptional service experiences to the H1: There is a significant relationship between
customers. Employee growth means to expand employee—employer relationship and employee
the abilities of an individual employee and performance.
organization as a whole and research has shown
that there is a direct link among employee Hypothesis 4
growth and employee performance (Imran and H0: There is no significant relationship between
Tanveer, 2015). training and employee performance.
Research has shown that non-financial rewards H1: There is a significant relationship between
and incentives such as recognitions, respect at training and employee performance.
the workplace, good working atmosphere, etc.
can increase the employee involvement and Hypothesis 5
motivation in the hotel employees to provide H0: There is no significant relationship between
better or quality services (Kim and Lee, 2013). working conditions and employee performance.
Chiang and Hsieh (2012) stated that the
psychological researches that provided various H1: There is a significant relationship between
theories and studies of employee motivation working conditions and employee performance.
explain well the importance of non-financial METHODOLOGY
incentives in motivating the employees.
Bornstein (2007) also indicated that in Sample and Procedures
organizations where employees are exposed to This study investigates the factors influencing
stressful working conditions, productivity are the performance of employees in hotel business
negatively influenced and that there is a in Eritrea. In conducting this study, primary and
negative impact on the delivery of service and if secondary data have been used. This study is
working conditions are good, productivity mainly quantitative in nature. Primary data were
increase and there is a positive impact on the collected from individual employees using
delivery of service. Employees and work survey questionnaire. Due to its capacity to
environment is interrelated. Employees will cover large population efficiently and easiness
work harder and improve performance once to conduct mainly through questionnaire, survey

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
Owned Hotels in Eritrea

strategy is an optimal choice for such kind of analysis.

study (Saunders et al., 2009). A close-ended,
In this study, regression analysis was used to
structured self-administered questionnaire was
test the hypotheses.
distributed to employees in selected hotels
located in Asmara. A total of 150 employees The various influencing factors (motivation,
from both private and government owned hotels leadership, employee-employer relationship,
have been included in this study based on training, and working conditions) were
simple random sampling. regressed as independent variables against the
dependent variable of ‘performance’.
This sample size is adequate for analyzing
whether the performance of the employees is A set of Likert-type scales was used to measure
driven by the factors such as motivation, pertinent constructs. Each of ‘motivation,’
leadership, employee-employer relationship, ‘leadership,’ ‘employer-employee relationship,’
training, and working conditions. ‘training,’ and ‘working conditions’ category
was answered using a five-point scale, where 1=
Secondary data have been extracted from
strongly disagree and 5= strongly agree. Thus, a
various sources such as academic journals,
total of five (5) variables consisting of eighteen
books, other internet sources...etc.
(18) items have been employed to measure the
Dependent Variables factors affecting the performance of employees.
A reliability test was run to determine the extent
In this study, the dependent variable is
to which a construct of performance of
employee performance.
employees was being measured.
Independent Variables
To measure the reliability of the gathered data,
Five factors, namely motivation, leadership, Cronbach’s alpha was used. An alpha
employee-employer relationship, training, and coefficient of 0.70 or higher indicates that the
working conditions which might influence collected data is reliable as it has a relatively
performance have been included as independent high internal consistency and can be generalized
variables in the regression model. to reflect opinions of all respondents in the
The collected data has been analyzed using target population (Zinbarg, 2005).
SPSS version 20. Both descriptive and Table 1 shows Cronbach’s alpha of all
inferential statistics were used to determine the indicators. Cronbach’s alpha results in the
relationship between the independent component column were computed using the
anddependent variables through regression results of all indicators.
Table 1. Cronbach’s alpha test results
Item Component Cronbach alpha overall
0.814
Motivation 0.787
Leadership 0.698
Employee-employer relationship 0.594
Training 0.729
Working conditions 0.916

As can be seen from table 1, the test results DISCUSSIONS OF RESULTS

show that Cronbach’s alpha result of all
performance indicators was 0.814. The frequency distribution of the respondents’
background is given in Table 2. Of the total
This implies that data collected using all the respondents, 52 (34.7%) are male, while 98
performance indicator values were reliable since (65.3%) are females indicating that the majority
the Cronbach’s alpha value was above 0.70. of employees in the hotel industry are females.
The alpha for the ‘employee-employer Regarding the respondents educational level, 70
relationship’ is relatively low. (46.7%) were having college and above
education level, 66 (44%) high school, 7 (4.7%)
However, generally the survey as a whole was middle school, 6 (4%) junior and 1 (0.7%) with
consistently measuring performance of no formal education. The largest group being
employees towards an underlying construct. college and above is the contribution of the

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
Owned Hotels in Eritrea

formal education, that is, Hotel and Tourism marital status is the same in that 50% are single,
Management at a college level in Eritrea. In while 50% are also married.
addition, coincidentally the proportion of
Table 2. Summary indicators of respondents
Variable Frequency Percent
Gender
Male 52 34.7
Female 98 65.3
Education
No formal education 1 0.7
Elementary 6 4
Middle school 7 4.7
High school 66 44
College and above 70 46.7
Marital status
Single 75 50
Married 75 50

Regarding age, the mean age (years) of the individual employee’s work experience ranges
respondents was almost 34 years (with the from 6 months to 70 years, respectively. The
youngest age being 21 years old while the oldest average work experience of employees in the
85 years old). As far as work experience is sampled hotels is 7 years. Table 3 below
concerned, the minimum and maximum provides the result.
Table 3. Respondents’ age and work experience
Age and work experience
Minimum Maximum Mean
Age 21 85 33.51
Work experience 0.5 70 7.13

Descriptive statistics were used to describe the possibly influence employee performance has
basic features of the data in the study. They been presented in Table 4. The mean indicates
provide simple summaries of the sample and to what extent the respondents agree or disagree
measures. Thus, to measure the independent with the different statements. The higher the
variables, using an eighteen item questionnaire mean, the more likelihood the respondents agree
related to the variables (‘motivation,’ with the statement; while the lower the mean,
‘leadership,’ ‘employee-employer relationship,’ indicated the respondents disagree with the
‘training,’ and ‘working conditions’), which statement.
Table 4. Means and standard deviations of variables
Item Mean Std. Deviation
Motivation 2.81 0.723
Leadership 2.62 0.843
Employee-employer relationship 2.71 0.795
Training 2.33 1.260
Working conditions 2.67 0.867
Overall 2.63 0.898

As can be seen from table 4, respondents believe 2.67; sd. = 0.867). Besides, although training
that the five variables presented affect their scores relatively low means (mean = 2.33; sd. =
performance if they are provided by their 1.260), which is less than the average of 2.50 in
respective hotels in comparison to the required a scale of five (5), generally, respondents agree
standards—motivation (mean = 2.81; sd. = that the five variables affect their performances
0.723); leadership (mean = 2.62; sd. = 0.843); while working at hotels.
employer-employee relationship (mean = 2.71;
After observing the results using descriptive
sd. = 0.795); and working conditions (mean =
statistics, we also conducted further bivariate

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
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Pearson correlations for all the research Although it indicates that there is a relationship
variables used in the regression equations. As among the independent variables, there are no
Table 5 shows, all of the variables (p  .01 2- collinearity problems as checked in the
tailed values) are related to ‘performance.’ regression models.
Table 5. Correlations for all variables
1 2 3 4 5 6
Performance 1
Motivation .568** 1
Leadership .512** .525** 1
Employer–employee relationship .370** .402** .553** 1
Training .499** .349** .412** .318** 1
Working condition .638** .546** .547** .426** .495** 1
Notes: **. Correlation is significant at the 0.01 level (2-tailed).
The aim of this study was to determine the Where
factors influencing employee performance.
Y= the performance of employees.
Thus, in order to test the stated hypotheses, a
linear relationship was estimated between X1….X5= are the explanatory or independent
independent and dependent variables through a variables;
regression model. A regression analysis was β0…. β5= are coefficients of the independent
used to establish the influence of the variables;
independent variables (motivation, leadership,
employee-employer relationship, training, and e =is the error term.
working conditions) on dependent variable The multiple linear regression analysis for
(performance). The regression model for motivation, leadership, employee-employer
employee performance can be expressed with relationship, training, working conditions and
the following equation: performance is as follows.
Y = β 0+ β 1 X 1 + β2 X 2 + β 3 X 3 + β 4 X 4 + β
5 X 5+ e (1)
Model summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .719a .517 .500 .484
ANOVA
Model Sum of Squares df Mean Square F Sig.
Regression 36.079 5 7.216 30.820 .000b
Residual 33.714 144 .234
Total 69.793 149
Coefficients
Model Unstandardized Coefficients
B Std. Error t Sig.
(Constant) -.152 .180 -.842 .401
Motivation .241 .070 3.460 .001*
Leadership .091 .065 1.411 .160
Employee-employer -.002 .061 -.034 .973
relationship
Training .105 .037 2.853 .005*
Working conditions .271 .062 4.355 .000*

The significance value of 0.000 and F-values motivation, training, working conditions and
and R2 values for all the variables shows that the employee performance. Based on the findings,
model is significant enough to measure the the model entailed that motivation was having
relationship between variables. Furthermore, a significant relationship (0.001 ≤ 0.05) with
positive relationship was found between performance; training scored a significance

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
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value of 0.005 (less than 0.05); and working performance in government and privately owned
conditions also scored a significance value of hotels. Regression analysis was used to test how
0.000 (less than 0.05) leading to the acceptance motivation, leadership, employee-employer
of each alternative hypothesis of significant relationships, training, and working conditions
relationship between motivation, training, variables significantly affect performance of
working conditions and employee performance. employees. Table 6 shows the results of our
However, the relationship of ‘leadership’, and regression across the two hotels. As can be seen
‘employee-employer relationship’ with from Table 6, the significance value of less than
employee performance was insignificant. 0.05 and F-values and R2 values for all the
Hence, each null hypothesis of no significant variables shows that the model is significant
relationship for leadership and employee- enough to measure the relationship between
employer relationship was accepted and the variables. The regression outcome shows that
alternative hypotheses that there is a significant motivation and working conditions were
relationship were rejected. Thus, it seems positively and significantly related to
plausible to conclude that hypothesis 2 performance (sig. value = .045, p  .05) and
(leadership) and hypothesis 3 (employee- (sig. value = .025, p  .05), respectively in
employer relationship) as factors influencing government hotels, while in private hotels
employee performance are rejected. motivation (sig. value = .000, p  .05), training
The model for the above regression analysis is (sig. value = .000, p  .05), and working
as follows: conditions (sig. value = .000, p  .05) were
positively and significantly related to
Performance = -.152 + 0.241(motivation) + performance. The results are more or less
0.091(leadership) - 0.002 (employer-employee similar. Nonetheless, the only notable difference
relationship) +0.105 (training) + 0.271(working is that training is more prevalent in private
conditions) hotels thus affecting employee performance.
Moreover, two models were estimated in this
study in order to compare the factors influencing
Table 6. Regression results for government and private hotels
Variable Model 1 (Government hotels) Model 2 (Private hotels)
R2 change  R2 change 
Motivation .371 .214 .819 .383
Leadership .115 .066
Employee-employer relationship .010 -.101
Training .057 .152
Working condition .260 .293
N 150 150
F- value 11.099 39.818
Note:  p  .05.
Generally, with the test results above, it has conditions to establish if a relationship exists
been found that in both cases, that is, in the first with employee performance in the hotel
model where government and private hotels industry. The study found out that there is a
analyzed together; and in the second model positive and significant relationship between
(Table 6) where both hotels are analyzed motivation, training, working conditions and
individually, ‘leadership’ and ‘employee- performance, while leadership and employee-
employer relationships’ are not factors employer relationship emerged to have no
influencing employee performance. significant relationship. On the other hand, in
the second model, the study revealed that there
CONCLUSIONS AND IMPLICATIONS is a positive relationship between motivation,
The objective of this study is to identify the working conditions and employee performance
factors that influence employee performance in in the government hotels. Similarly, the
the hotel industry in Eritrea. The study relationship established by this study between
employed two models using five variables— motivation, training, working conditions and
namely motivation, leadership, employee- employee performance was strong in the private
employer relationship, training, and working hotels. Nonetheless, a considerable difference

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Factors Influencing Employee Performance in Hotel-A Comparative Study of Government and Privately
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was found that training influences performance employers; visibility of management in all
only in private hotels. This may indicate that activities; and management’s prompt
private hotels provide area specific training for cooperative interdisciplinary relationship with
enhancing employee skills and knowledge employees to increase their performance.
thereby increasing performance. However, this didn’t hold true in the Eritrean
case. This finding contradicts the finding of
The empirical results of the analyses in this
Chen (2013), Chei et al. (2014), Kim and Lee
study suggest that the impact of motivation,
(2013), and Chiang and Hsieh (2012) who
training, and working conditions on employee
reported that employee-employer relationships
performance is significant. These could be owed
or relationship among the employees increase
to the fact that employees are satisfied with their
their performance.
current salary, rewarded for the quality of their
efforts, received recognition and appreciation The work reported in this paper examines the
from their supervisor, got incentive and bonus relationship between motivation, leadership,
and promotion as well, and that the tips and training, employee-employer relationships,
encouragement given by customers is so working conditions and employee performance.
considerable that influencing employees’ The findings of the present study offer important
performance. In addition, the training provided academic implications. While it makes
to employees on their new jobs in giving them important contributions to our understanding of
direction or to the current employees to enhance employee performance in a developing country,
their skill and knowledge is enabling them to this study is clearly only a first step and
perform well. Finally, availability of adequate additional research is needed on this issue in
facilities, arrangement of working hours, and the other geographical settings to better understand
general working environment affects employee the generalisability of these findings. Future
performance. Generally, our results support the research would benefit from including a large
findings reported in other studies (see Chen, survey to study how the factors included in this
2013; Chei et al., 2014; Suharno et al., 2017; study also affect hotel performance such as
Imran and Tanveer, 2015; Kim and Lee, 2013; profits or productivity or output per labour.
Chiang and Hsieh, 2012; Bornstein, 2007).
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Citation: Fitsum Ghebregiorgis." Factors Influencing Employee Performance in Hotel-A Comparative

Study of Government and Privately Owned Hotels in Eritrea" International Journal of Research in Business
Studies and Management, vol 5, no. 11, 2018, pp. 1-9.
Copyright: © 2018 Fitsum Ghebregiorgis. This is an open-access article distributed under the terms of the
Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in
any medium, provided the original author and source are credited.

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