1 Should I stay or should I go?
A retention management research of the Amsterdam restaurant industry.
Master Thesis in Sociology: Comparative Organisation and Labour Studies Name: Els Vellenga
Student number: 10784578
First thesis supervisor: J.P. Bruggeman Second thesis supervisor: R.J.A.M. Hulst Date: 30-06-2016
2 Preface
This thesis is the final written work of my Master in Sociology: Comparative Organisation and Labour Studies. The topic of this thesis focuses on retention management in the middle segment restaurant industry of Amsterdam.
The motivation to write a report dedicated to retention management has derived from personal interest, working experience and the absence of acknowledgement for the hospitality industry as a professional industry. During the time that I have been employed as a waitress, I have always been fascinated by the high employee turnover within the this industry. In addition, I have noticed that few managers invest time in retention management. It also appeared as if management does not feel the need to understand the specific reasons why employees decided to quit their jobs.
I would like to take this opportunity to thank all the restaurants, managers and employees for their participation. The seven organisations helped me tremendously by participating in interviews and during the process of finding enough participants. This was especially necessary in my search for student employees that have decided to quit one of the organisations.
Furthermore I would like to thank everyone at the UvA who has contributed, and supported me during the process of my thesis. I would especially like to thank my supervisor Jeroen Bruggeman who provided me with useful insights and critique. I would also like to thank my second supervisor René Hulst, who has always been excited about my topic and helped me when I was in need of advice.
Last but not least I would like to take this moment to thank my father and stepmother. These two wonderful people have always motivated me to study and stimulated me to pursue a master at the University of Amsterdam after I finished my bachelor.
30-06-2016, Amsterdam Els Vellenga
3 Summary
The thesis ‘Should I stay or should I go – a retention management research of the Amsterdam restaurant industry ” is written by Els Vellenga, as a final research paper for her master in Sociology with the specialization Comparative Organisation and Labour Studies.
The hospitality industry is an important contributor to the economy of the Netherlands. In 2015, the total revenue was EUR 4.3 billon. The restaurant industry is responsible for half of this revenue, working in this industry is an important source of income for students, especially the middle segment restaurants industry. The most popular reasons to work for a middle segment restaurant are: relationships with co-workers, relationships with regular guests, atmosphere and off the job benefits. But the hospitality industry, including the restaurant industry, has to deal with high employee turnover of approximately 25%. As a result restaurant managers have to spent a large amount of their time recruiting new employees. But it seems as if it is difficult to find suitable employees, which as a result has a negative effect on the amount of experienced employees that work in these organisations. The absence of experienced employees in this field decreases the sense of professionality and effectiveness of many restaurants
Therefore it is important for restaurant managers, and owners to understand under what circumstances student employees decide to leave an organisation, but more importantly why students decide to stay employed, and what factors stimulate this. The latter refers to retention management.
The research question of this thesis is: “What do restaurant managers and employers in
Amsterdam do in order to retain their student employees?”
The focus of this thesis is on student employees who work for the service departments of restaurants, because this target group is the most problematic for employee turnover. Most students work in middle segment restaurants, this thesis therefore focuses on this segment of the restaurant industry. People with other positions within the restaurant industry have not been discussed for this thesis and are outside the scope of this thesis.
This research has studied employee retention by further analysing employee turnover through models of voluntary employee turnover and job embeddedness. The model of voluntary employee turnover provided this research with insights into the drivers behind employee
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turnover, whereas the model of job embeddedness describes the factors binding a student employee to a restaurant. After the application of these two models the second part of this study highlights motivational underpinnings for successful job embeddedness and explores work motivation, psychological contracts and commitment, with the help of Social Exchange Theory which explains behavioural exchanges in these relationships.
The research method of this thesis was a qualitative cross-sectional analysis and includes seven cases. At the start of this research it was expected that higher employee turnover would be characterized by larger-sized restaurants with more than 30 service employee, while it was expected that restaurants with lower employee turnover are characterized as smaller restaurants with about 15 service employees. The data were collected from the end of March to the beginning of May 2016. The interview candidates of this thesis are hiring managers, student employees and ex-student employees. Three organisational perspectives were included because this provides the research with a well-balanced view of several causes that might influence employee turnover in the case organisations.
The analysis of the model of voluntary employee turnover has demonstrated that most student employees leave the restaurant industry through decision path 1 or 4. This means that student employees leave a restaurant after they have finished their education, or because of dissatisfaction. The results on employee turnover present that there is a lack of professionality in this industry, which demotivates students to be employed. It is recommended that restaurants introduce exit meetings in order to monitor why dissatisfied student employees leave, insights in these reasons may help management in the process of creating solutions for the outflow of their employees.
Furthermore this research has shown that the students prefer to receive more training and education regardless of whether the organisation is currently dealing with high or low employee turnover. Therefore it is advised that organisations offer more training and education to student employees, since this will reduce job stress and increase employee satisfaction. Specific
suggestions include: barista training, more practically orientated wine tastings, food tastings and customer service or upselling training.
An overall result of this thesis is that job embeddedness is highest for student employees when they perceive positive social exchanges in all of the four dyad relationships and this research has shown that this is not yet happening in all of the case organisations. The results of this research therefore suggest that restaurants should improve the relationships between
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employees and the organisation and employee and management, since these relationships were presented as the weakest social exchange relationships. This includes the notion that both employees, management and the organisation should be more clear about their expectations to one another. This can be done by improving communication and clearly communicating organisational goals to the students.
Additionally it is advised that organisations invest more time in recruitment of employees through referral, since this research has presented that this selection method results in the most suitable employees.
Finally it was remarkable to notice that many of the respondents of this research perceive people who pursue lower vocational hospitality education as less capable to successfully
participate in their organisations and therefore explain their absence in the industry, whereas respondents highly value higher hospitality educated employees, but state that the level of these jobs is not challenging enough for them. However the respondents did state that they prefer to work with students who pursue higher hospitality education, since these respondents are
characterized as problem solving, insightful and as structured employees. Therefore, it is advised to hire one or two students who pursue higher hospitality education as supervisor or assistant manager, since this may contribute to the professionality of the restaurants.
6 Table of content Chapter 1 Introduction 9 1.1 Introduction 9 1.2 Background 10 1.3 Thesis outline 11
Chapter 2 The Dutch labour market 13
2.1 Introduction 13
2.2 Labour market forecast 15
2.3 Labour market trends 15
2.4 Labour market: hospitality industry 17
Chapter 3 The restaurant industry 18
3.1 Introduction 18
3.2 Departments and functions 18
3.4 Recruitment of staff 20
3.5 Unions 21
Chapter 4 Retention management 23
4.1 The model of voluntary employee turnover and the model of job 23 embeddedness
4.1.1The model of voluntary employee turnover 24
4.1.2 Conclusion 26
4.1.3 The model of job embeddedness 26
4.1.4 Conclusion 28
4.2 Work motivation 28
4.2.1 Work motivation 28
4.2.2 Social exchange theory (SET) 29
4.2.3 SET in relation to work motivation 30
4.2.4 Conclusion 32
4.3. Psychological ‘contracts’ 32
4.3.1 Psychological ‘contracts’ 32
4.3.2 Psychological ‘contracts’ in relation to SET 33
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4.4 Organisational commitment 34
4.4.1. Organisational commitment 34
4.4.2. HRM practices 35
4.4.3 Conclusion 37
Chapter 5 Research design and methodology 38
5.1 Methodology 38
5.2 Interviews 39
5.3 Research population and sample 40
5.4 Trustworthiness, validity and replicability 40
5.5 Relevance 41
Chapter 6 Research results and analysis 42
6.1 Description of the respondents 42
6.2 The results 42
1. Types of contracts 43
2. Motivation 43
3. Commitment 44
4. Training, education and professionality 49
5. Evaluations 51
6. Recruitment 52
7. Education level 53
8. Psychological ‘contract’s 54
9. Employee turnover 55
10. The voluntary employee turnover model 57
11. The job embeddedness model 58
Chapter 7: Discussion and conclusions 59
7.1 Discussion 59 7.2 Conclusions 64 7.3 Reflection 66 7.4 Future research 67 7.5 Recommendations 68 Literature
8 Appendices Appendix 1 – Extra interview results
Appendix 2 - Interview question hiring managers Appendix 3 - Interview questions employee Appendix 4 - Interview questions (ex) employee
9 Chapter 1 introduction
1.1 Introduction
The restaurant industry plays a crucial role in the overall economy of the Netherlands. In 2015, the total revenue of the hospitality industry was EUR 4.3 billion (Rabobank, 2015). The
restaurant industry is responsible for half of this revenue. According to the Centraal Bureau voor
de Statistiek (CBS),1 the restaurant industry will continue to grow in 2016 (CBS, 2015).
Competition within this industry is large, especially in Amsterdam. The city has 1325 restaurants, which represents almost 11% of the total restaurant supply of the Netherlands (I Amsterdam, 2016). Research shows that restaurants with low employee turnover have a competitive
advantage over restaurants that do not, and the level of service determines whether a guest returns (Matilla, 2001; Han & Kisang, 2009). A restaurant’s service level is higher if it retains its
employees.
Employee turnover has always been high in the hospitality industry. Current average employee turnover within this industry is approximately 25% (van de Grift, Dijkstra, de Mooij, & van den Berg, 2014). This high turnover rate was initially attributed to the state of the economy, since there was less money spent within the hospitality industry; however, this rate of employee turnover is now mainly explained by the working conditions within the hospitality industry (Misset Horeca, 2015; CBS, 2015).There has not been a collective working agreement in the hospitality industry since April 2014. Employees in this industry have to individually stand up for their rights and working conditions (FNV Horeca, 2014). Another reasons that stimulates the outflow of employees can be attributed to job opportunities in different business sectors (Misset Horeca, 2015).
The current state of professionalism and the high employee turnover within this industry have recently been researched by the Stichting Vakbekwaamheid Horeca (SVH) and Foodstep. Their findings suggest that people need to become more committed to organisations in
hospitality, as this can boost the success and efficiency of the entire hospitality industry. Unions and spokespersons within the industry are worried about the lack of commitment to the industry. Provided that finding the right people to work within this industry has been proven to be crucial for the success of these organisations (FNV Horecabond, 2016). Most of the employees who participated in this research rate their own professionality as very good, but they are unsatisfied
1
The CBS is a Dutch organization that is responsible for the collection and registration of statistical facts that concerns the Netherlands.
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with their training and promotion opportunities. In contrast, guests who visit hospitality industry sites complain about the level of professionality. These results show that the hospitality industry is in need of performance awareness. It also needs to be aware of what motivates and binds people within this industry (Misset Horeca, 2015).
Finding employees who are the perfect fit for the hospitality industry can make a difference. Guests are more committed when employees feel strongly connected to an
organisation, which results in customer loyalty. With this in mind, the researchers concluded that it is very difficult to recruit suitable employees for jobs in the field and that once they are found it is difficult to make them commit and remain employed at an organisation. Employers mostly depend on people who are searching for temporary work commitments within this industry, most of whom are students.
1.2 Background
Retention management and employee turnover are continuing concerns within the hospitality industry. Retention management aims to find employees who have the right characteristics and competencies for the job. The focus is on keeping employee turnover low. This means that retention management constantly evaluates both the organisation and its people in order to make sure that employees remain committed. Students are the most common group to be employed in this industry, but these employees are often not committed to their jobs. Working in the
hospitality field involves physical labour and irregular hours, which may include long workdays, few breaks, and night shifts (Hekman, 1983; UWV, 2013; FNV Horecabond, 2016).
Remuneration is based on a minimum wage and extra compensation for working late or on the weekend is usually not applicable. Hospitality business employers can avoid additional
compensation costs for night and weekend shifts, as it is common for restaurants to be open beyond regular office hours. This may lead to a situation in which employees feel exploited, especially if they already do not feel committed.
Work motivation and commitment to an organisation are both influenced by the social interactions that employees have with the organisation, management, guests and their own co-workers. However, some of the social exchanges may be negative if one party does not live up to the expectations of another party. This mismatch of expectations between employers and
employees can be explained by the concept of psychological contracts. A psychological contract is an unconscious agreement between an employee and an employer that is based on expectations
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and obligations. This contract is not established in a written form, but it exists in the minds of both parties that participate in social exchanges. Expectations are subjective and based on personal interpretations of what employees, supervisors, and co-workers should do in their positions. This psychological contract can be broken if one of the participating parties does not live up to the expectations of another party. For example, an employee may expect an employer to ensure there are enough well-educated staff to fill the schedule. An employee may become frustrated if this is not the case, which may result in a decrease in commitment or motivation and could eventually influence that employee’s decision to leave that restaurant (Coyle-Shapiro & Kessler, 2000).
In summary, it is a restaurant’s task to retain valuable employees once the right individuals are found (Gomez-Meija, Balkin, & Cardy, 2004). How can an organisation bind employees if they are seeking for temporarily employment? Gomez-Meija et al. (2004) argue that there are two general factors that influence a person’s intention to stay at or leave an
organisation: (1) monetary and (2) non-monetary awards. The actual decision-making process that employees follow is explained in depth by Mitchel and Thomas (1994); a more detailed discussion of their research can be found in chapter four of this thesis.
1.3 Thesis outline
Within this thesis, organisation, firm, company and business are all used to refer to hospitality-related organisations. Different versions of “organisation” are merely utilized to improve the document’s readability.
This thesis addresses both the hospitality and restaurant industries. The hospitality industry is the comprehensive name for the entire industry, which consists of hotels, restaurants, catering, pensions, cafes, snack bars, and lunchrooms. The core activities of the hospitality
industry are to offer a place to stay and to prepare food, snacks, and drinks for guests who want to consume them directly (CBS, 2016). The restaurant industry purely concerns the preparation of food and drinks for the direct consumption of their guests (CBS, 2016).
The overall goal of this thesis is to investigate what binds student employees to the hospitality industry and why these employees decide to leave or stay at such an organisation. The bottlenecks, causes, and consequences of organisations with high and low employee turnover rates are evaluated. This specific target group is chosen because high employee turnover in the restaurant industry is mostly influenced by students. This often occurs in the middle segment
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restaurant industry. The focus of this thesis is on the service department of restaurants. People with other positions within the restaurant industry, such as in management or in the kitchen, are probably less likely to leave an organisation, but these positions are not discussed and are outside the scope of this thesis.
The focus on middle segment restaurants is due to this segment’s high dependency on student employees. This target group is generally not loyal to an organisation and will leave the sector when they get a job offer in a different industry (Bedrijsschap Horeca en Catering, 2013; UWV, 2013). This research investigates whether employers can make student employees in the restaurant industry commit and thus increase retention. The analysis of employee turnover, work motivation, psychological ‘contracts’, organisational commitment and Human Resource
Management (HRM) practices is used to analyse the data of this thesis. The final section of this thesis includes advice for the middle segment restaurant industry based on the successes and failures that are identified through interviews. This advice will enable employers to train and convert part-time employees into qualified, committed staff who wish to be part of their organisation for a few years. This thesis investigates this by analysing the micro relationships between student employees, management, the organisation, guests, and co-workers.
The overall research question of this thesis is “What do restaurant managers and employers in
Amsterdam do in order to retain their student employees?”
The following sub-questions are used in order to answer the main research question:
1. What changes have occurred in the labour market that concern the hospitality industry, and what are the consequences?
2. How do managers or owners explain employee turnover in their restaurant?
3. How does management deal with retention management within the restaurant industry? 4. How do service team employees experience managerial and organisational attempts to keep them employed at the restaurants (based on the opinions of currently employed students and unemployed students)?
13 Chapter 2 The Dutch labour market 2.1 Introduction
This chapter presents details concerning the Dutch labour market and briefly introduces general differences between this market and the hospitality industry’s labour market. The first part of this chapter includes a description of the Dutch population and labour force. The following sections discusses the labour market’s forecasts and trends. The last part of this chapter presents
information on the entire hospitality industry. Chapter three presents detailed information on the restaurant industry.
The total population of the Netherlands on 1 January 2015 was 16.9 million (CBS, 2016). According to the data, 23% of these individuals are younger than 20, 24% are between 20 and 40, 35% are between 40 and 65, and 18% are above 65. The Netherlands had 16 million citizens in 2001, so the Dutch population has been growing at a great pace (CBS, 2016). However, this population growth was not evenly distributed across the country. Most of the population growth was in cities that were already dealing with population density. For example, the population of Amsterdam, the capital of the Netherlands, has increased by 100,000 since 2001. Other cities with significant population expansions include Utrecht, The Hague, and Almere.
Figure 2.1 Age distribution in the Netherlands, based on the country’s total population; age distribution in the hospitality industry, based on the people it employs.2 Source: CBS (CBS, 2016).
Figure 2.1 demonstrates that the age distribution in the hospitality industry labour market differs greatly from the age distribution in the general Dutch labour market. Prior research shows that most employees in the hospitality industry are students who work part-time (UWV, 2013). This figure confirms these suspicions, since the average age within the hospitality industry is relatively
2
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low; figure 2.1 illustrates that more than 75% of its employees are below 40.
People start to leave the hospitality industry after the age of 30. The smallest
representation of people who are employed in this industry can be found in the age category of 60 years and older, which accounts for 3% of the industry’s total employees. There is thus relatively no ageing within this industry. These numbers are in line with the data the CBS gathered when it asked people to judge how long they would want to work in the hospitality industry based on the industry’s physical nature (Bedrijfschap Horeca en Catering, 2013).
Figure 2.2 An overview of the Dutch labour force (CBS, 2016).
Participants in the Dutch labour force consist of people who fall between the ages of 15 and 65 (CBS, 2016). The CBS (2016) differentiates between people who are employed and those who are unemployed. It once defined people who worked at least 12 hours per week as employed and people who worked less than 12 hours per week as unemployed (CBS, 2014); however, the CBS decided to drop this definition and has instead been following the guidelines of the International Labour Organization (ILO) since 2015. All people who want to work or who work more than one hour a week are now included in the labour force, which means that all student jobs and other small jobs are now included. For people who fall under the new labour force definition, about two thirds were participating actively at the labour market. Overall, the net result is that 7.2 million people are considered to be employed (CBS, 2016). The Netherlands counted 680,000 unemployed individuals in December 2015, which brings the country’s total labour force to 7.9 million. 7.893.000 7.213.000 680.000 3.058.000 0 1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 7.000.000 8.000.000 9.000.000 Labour force (12-hours a month) Active labour force (12-hours a month) Unemployed active abour force (12-hours a month) Non-active labour force (12-hours a month)
15 TO 65 YEARS
15 2.2 Labour market forecast
Economic development is crucial for the labour market, and after two years of economic downsizing the Dutch economy is again seeing growth (UWV, 2015). Economic output can be summarized into four categories of spending: (1) consumer spending, (2) government spending, (3) investments in organisations, and (4) revenue from export. These four categories all show positive contributions to economic growth in 2015 and 2016. The Uitvoeringsinstituut
werknemersverzekeringen3 (UWV), 2015) thus expects that economic recovery will continue this year.
This growth has a positive effect on the development of the Netherlands’ labour market and economy, based on forecasts by the Centraal Planbureau4 (CPB). The expectation is that economic growth will increase from 1.7% in 2015 to 1.8% in 2016. The realisation of economic growth is explained by the availability of jobs and high labour productivity, which means that there will be more jobs available for people who are employed in the hospitality industry. The demand for labour will increase as a consequence of the economy’s expected growth. The UWV (2015) expects that the number of full-time jobs will grow by approximately 0.8% annually.
The total number of full- and part-time jobs in the Dutch labour market grew by 38,000 (+0.5%) in 2015 and will increase by 54,000 (+0.7%) in 2016 (UWV, 2015). This is a good sign for the economy, as during the 2008-2014 period, approximately 300,000 (-4%) jobs disappeared from the labour market as a result of the economic crisis.
2.3 Labour market trends
Every labour market has to deal with trends, but employers that know how to spot and work with these trends can benefit from them. The following paragraphs briefly discuss four trends that are currently affecting the Dutch labour market.
Labour force growth (15-74 years)
The rate of people who are actively participating in the labour force is growing in accordance with economic improvements and job opportunities. In general, the Dutch population is experiencing growth and people are deciding to continue working after the age of 65 (CBS, 2014). The average life expectancy of people is also improving. As a result of these phenomena, the CBS (2016) decided to expand its definition of the labour force to international standards, and
3
The UWV is a Dutch organisation that is responsible for unemployment subsidies and employment insurances. 4
CPB is Dutch organisation executes scientific research for which politicians and policymakers may use to make decisions about laws and policies.
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the labour force growth definition now includes people between the ages of 15 and 74. However, as most people who work in hospitality leave the sector before they turn 65, this trend will have little impact on the hospitality industry.
Increased demand for labour
The labour supply depends on the rewards for labour and the number of jobs that are available (UWV, 2015). Wage is influenced by the interaction between supply and demand. The number of available jobs grew in 2015 and will continue to grow in 2016, which will encourage people to participate in the labour market since this improve their chances of finding a job. Even though the demand for labour is showing an increase for 2015-2016, labour supply still slightly exceeds demand (UWV, 2015).
Social developments
The dominant social trend focuses on women in the labour market, The largest increase in women’s participation in the labour market was from 1998 to 2013 (CBS, 2014); the first decrease occurred at the end of 2013, although the rate stabilized in 2014. This indicates that the outflow of people leaving the labour market does not exceed the inflow to the market. The CBS (2014) estimates that for every 100 men who work, only 82 women work. This indicates that women’s labour participation rate is still much lower than men’s.
Immigration and birth
The Netherlands is becoming more international orientated, since more residents have parents that were born in another country. It is also common that residents were born in another country and then immigrate to the Netherlands at a later stage in their life. The CBS (2014) expects that this trend will continue for the upcoming decades. On the contrary Dutch women conceive too little children on average, in order to keep the total population in balance. The decrease in the birth of children has been going on for decades and is estimated at 1.7 children per women (CBS, 2016). The Netherlands is in need of 2.1 children per women in order to replace the previous ageing population.
Immigrants aged between 15-74 are important for the labour market, especially for the hospitality industry and the CBS (2015) expects a yearly growth of 50 thousand labour
immigrants a year. The hospitality industry has more non-native than native people employed in its industry. Especially non-western foreigners are more often active in the hospitality industry.
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This business industry is the most important industry for Chinese people (Huijnk, Gijsberts, & Dagevos, 2014). The actual amount of labour immigrants depends on economic developments, labour market situation and wage levels.
2.4 The hospitality industry labour market
This section presents differences between the hospitality industry labour market and the general labour market of the Netherlands. As mentioned in the previous section, more than half of the people who enter the hospitality industry are not older than 30 (Bedrijfschap Horeca en Catering, 2013). The youngest group that participates in the hospitality industry labour market consists of young adults (+/- 16 years) who have part-time jobs or are pursuing vocational studies (or both). However, the Dienst Uitvoering Onderwijs (DUO)5 revealed that the number of students who decide to pursue hospitality industry vocational studies has been decreasing since 2011. This drop is not specifically bound to this educational field (Kenwerk, 2014), as all sectors of vocational education have encountered student decreases.
Furthermore, the hospitality industry depends on changes in the economy (UWV, 2015). Visiting hospitality industry organisations is not a primary need; it is a luxury good that is substituted when economic prosperity drops. Employers within this industry can easily adjust to economic changes, seeing as they give their employees flexible contracts. This means that most employees work based on zero-hour contracts or contracts that guarantee few hours. In relation to the division between men and women in this industry, the inflow of female workers is commonly slightly larger. Overall, the hospitality sector’s labour force is 53.6% female and 46.4% male (ABF research, 2014). In contrast, the restaurant industry’s labour force is 46% female and 54% male.
Chapter 3 The Restaurant Industry 3.1 Introduction
The hospitality industry is known as a physical industry (UWV, 2013), and jobs in this sector by nature include carrying products and walking during long shifts. The Dutch hospitality industry
5
The DUO is a Dutch government organisation that is responsible for the finance and information of education for students and schools or universities.
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included 45,300 companies with 360,000 employees as of 2015. Of these companies,
approximately 12,000 are restaurants.6 Furthermore, 1,325 of these restaurants are located in Amsterdam, which represents almost 11% of the country’s total restaurant supply (I Amsterdam, 2016). The diversity amongst these restaurants is growing due to the opening of internationally orientated restaurants that offer diverse cuisines, such as Japanese, Vietnamese, and Mexican (Delta Lloyd, 2013). The Dutch restaurant industry currently has more internationally orientated restaurants (58%) than Dutch or French7 restaurants (42%). The largest share of the former are Chinese or Indonesian (15%), followed by Italian (10%). Japanese and other forms of Asian cuisines are the fastest growing category within the restaurant industry (Delta Lloyd, 2013). There was an increase of 7% in revenue in 2015 as a result of the industry’s continuous growth (CBS, 2015).
Ten percent of Dutch people go out for dinner on a weekly basis (Delta Lloyd, 2013; Rabobank, 2015). Spending varies significantly between different types of restaurants. The average cost of a meal in a Dutch or French restaurant is five times more than at internationally oriented restaurants, with the exception of Japanese restaurants (Rabobank, 2015). People who live in the Dutch Randstad8 visit restaurants more often than people who live in the suburbs (Delta Lloyd, 2013). Restaurants are not bound to general winter or summer seasons. Terrace capacity is the greatest influencer in deciding a restaurant’s seasonality in the middle segment restaurant industry.
3.2 Departments and functions
A restaurant has several departments that tie it together, including its service, kitchen, and
dishwashing teams. The following section explains the most important departments and describes the possible functions within them. However, the focus of this thesis is on lower-level service positions due to the nature of the target group (namely students).
A restaurant’s service department includes all of the people who contribute to the
perceived quality of service; levels of politeness, trustworthiness, and individualised attention all play a role (Voss, Parasuraman & Grewal, 1998). These factors are important because they lead
6
The bedrijfschaps and Horeca en catering centre was a knowledge centre that performed research for the hospitality industry. The CBS adds up all the numbers of both restaurants and snack bars, no distinction is made. The overall number of restaurant in the Netherlands is based on an estimation of the numbers from the bedrijfschap en Horeca, because these are the most precise numbers.
7
Delta lloyds sector report frames both Dutch and French restaurants as national restaurants in the Netherlands 8
The Randstad is collective name for the conurbation of the four biggest cities of the Netherlands: Amsterdam, Rotterdam, The Hague and Utrecht.
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to guest satisfaction, customer loyalty, repeated visits, and word-of-mouth promotions (Voss, Parasuraman, & Grewal, 1998).
The service department of a restaurant includes several positions: (1) managers, (2) assistant managers, (3) waiters/waitresses, (4) hostesses, and (5) bartenders. These positions are not applicable to all restaurants. The number of positions increases when the size of a restaurant is larger. The managers are responsible for revenues and daily operations; as such they are concerned with the level of service, recruitment, and managing their employees. The assistant managers or shift leaders assist the managers and take over if a manager is absent. The waiters and waitresses are responsible for guest satisfaction and accurately delivering drinks and food. The hostesses are responsible for seating all guests, reservations, and placing guests at the right tables. The bartenders are responsible for preparing drinks and, depending on the restaurant, other barista or cocktail tasks.
The kitchen consists of employees who are responsible for preparing food. The usual division in the kitchen includes full-time cooks and students who are pursuing lower vocational studies that entail gaining practical kitchen experience. There are several positions within a kitchen: (1) chef, (2) sous chef, and (3) cook. The chef is responsible for the daily operations of the kitchen, hiring the kitchen staff, and the menu. The sous chef assists the chef and takes over his or her role when the chef is absent. The cooks have different responsibilities depending on the complexity of the kitchen. A common division of tasks consists of: (1) mise en place (which entails cutting fish, meat, and vegetables; preparing sauces; and marinating food products), (2) preparing starters (which is frequently referred to as the ‘cold’ side), (3) preparing main courses (which is typically referred to as the ‘hot’ side), and (4) pâtissier (i.e. desserts). Job tasks may vary if a restaurant offers a wider set of products, such as special pizza or pasta preparations.
A restaurant’s cleaning department consists of dishwashers and restaurant cleaners. It often includes two or three employees throughout one shift, depending on the size of a restaurant. Their responsibilities include washing all of the dishes and kitchen equipment as well as usually cleaning the kitchen after each restaurant shift. Most restaurants have two cleaning shifts: one that lasts the duration of the restaurant shift and one that starts once the restaurant closes. The latter shift also cleans the restaurant’s floors, refrigerators, toilets, and so forth.
3.3 Staff recruitment
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Arbeidsovereenkomst (CAO)9 acknowledges differences based on an employee’s age and type of employment contract. It defines two types of employees: professional employees (who are older than 22) and young employees (who are 17 or younger) (CA0, 2013). There are also temporary (seasonal) employees, interns, and students who are pursuing supervised occupational studies. However, as the CAO has not been renewed since 1 April 2014, the hospitality industry is now dealing with a rather complex situation in terms of work agreements. More information on the influence of the work conditions is discussed in the next section.
The Bedrijfschap Horeca en Catering10 used to divide employees based on whether they had pursued education related to hospitality. It also has subcategories that differentiate between full- and time employees. Most of the people who work in the hospitality industry are part-time, and about half of the industry’s employees are still studying (ABF research, 2014). While 10% of the graduates from higher education hospitality programmes stay employed in the hospitality industry, 45% of the graduates of vocational hospitality programmes remain working in the sector.
The hospitality industry offers several forms of education for both vocational and higher levels (Kenwerk, 2014). From 2013 to 2015, there was a 1% decrease in the inflow of students at the vocational level; however, there was simultaneously a small increase in the number of
applications to vocational hospitality studies. There are two types of study tracks that students can follow at the vocational level. One track allows them to work and learn at the same time; in this option, students have to find a company that can supervise them during their studies. The other track is more theoretical and mostly involves the student being at school. Most students prefer the track in which they can combine working with learning. About half of the students who graduated from hospitality education programmes at the vocational level in 2011-2012 are
currently still employed in the hospitality industry (Kenwerk, 2014)
The number of student applications for pursuing higher education in the hospitality industry has increased since 2011, but with fluctuations (ABF research, 2014). Studies in tourism and leisure management have also revealed an increased inflow of students. About 20% of the students who graduated in 2011-2012 plan to stay employed in the hospitality industry (ABF
9 The Cao is the collective name for the collective Dutch working agreements. Almost every business sector
has a personal CAO for its sector that entitles its employees to specific legislation.
10 The bedrijfschap Horeca and catering centre was a knowledge centre that performed research for the
21 research, 2014).
Most of the interns in the hospitality industry follow profession accompanying vocational studies. Others usually start without an education, which means their professionalism needs to be boosted through training and on-the-job education (Kenwerk, 2014). Most of the negotiations around training and education were discussed during the creation of the CAO, but there has been no new CAO since 2014 (FNV Horeca, 2014). On average, an employer spends about EUR 435 per employee on training and education. This is different for the restaurant industry in which an employee receives training and education that costs approximately EUR 70 (Bedrijfschap Horeca en Catering, 2013).
3.4 Labour unions and contractual agreements
Union density dropped from 25% to 20% during the 2000-2011 period (Leonards, 2015), and the CBS expects that it will continue to decrease (CBS, 2012). At 7%, union density in the hospitality industry is lower than in any other industry (Leonards, 2015). It is notable that most unions do not have young members. The majority of the people who work in the hospitality industry do not think about joining a union because they do not feel the need to consult with unions (Bedrijfschap en horeca, 2013). In total, 60% of the union members were above 45 in 2011 (Leonards, 2015). This is noteworthy because while most people leave the hospitality industry after the age of 30, the industry is represented by people over 45.
The hospitality industry had always had a binding CAO, even though few people were members of a union (Bedrijfschap Horeca en Catering, 2013). The last CAO was revised on 1 April 2014 (FNV Horeca, 2014). Today there is no longer a binding CAO for the hospitality industry. This does not imply that the previous CAO is not partially binding for some employees (especially for those who signed their first contracts before 2014) or that new contracts do not refer to the industry’s previous CAO. However, it does mean that parts of the CAO agreements are no longer valid since the law overrules certain contractual agreements when there is no binding CAO.
Rules and regulations within the CAO of the hospitality industry have always been rather limited, due to the fact that working in this sector means working when other people are not. Employers in this industry are not obligated to pay more for employees who work nights or weekends; extra compensation is only applicable if specified within an employee’s contract. In general, contractual agreements have worsened in the absence of an active CAO.
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Vacation days are accumulated per working hour. Employees in the restaurant industry are entitled to EUR 0.096 per hour; in the absence of the CAO, however, they are only entitled to EUR 0.077 per hour if they no longer fall under the jurisdiction of the hospitality industry’s last CAO.
Sick leave used to entitle an employee to one ‘waiting’ day, which means that an employer could subtract the first day of illness from an employee’s salary. Two “waiting” days may be subtracted now if an employee has a contract that does not reflect the old CAO.
Furthermore, employees only receive 70% of their salary from their third sick day onwards; when the CAO was active, employees received 95% of their salary during their first year of illness.
23 Chapter 4 Retention management
Introduction
This chapter focuses on the central question of what Amsterdam restaurants do in order to retain their student employees by further analysing employee turnover through models of voluntary employee turnover and job embeddedness. Retention management evaluates causes and possible motivators that influence the possible intention of an employee to leave an organisation (Gomez-Meija et al., 2004). It is important for an organisation to keep employees in order to minimize the loss of expertise and knowledge (Gomez-Meija et al., 2004). Employee turnover includes the analysis of in-and outflow of employees (Mitchell & Lee, 1994). The analysis of employee turnover is important for retention management, because it provides insights into the reasons why people decide to leave or stay with an organisation.
The first part of this chapter presents Mitchell and Lee’s model of voluntary employee turnover(1994) and their job embeddedness model (2001), providing this research with insights into the drivers behind employee turnover. The voluntary employee turnover model shows under what circumstances student employees leave an organisation. The job embeddedness model describes the factors binding a student employee to a restaurant. The aim of the job
embeddedness model is especially interesting for this thesis since this model focuses on retention management.
The second part highlights motivational underpinnings for successful job embeddedness and explores work motivation, psychological contracts and commitment, with the help of Social Exchange Theory which explains behaviour in social relations and focuses on the behavioural exchanges in these relationships (Cropanzo & Mitchell, 2005; Homans, 1958)
4.1 The models of Voluntary Employee Turnover and Job Embeddedness Introduction
The first part of this chapter gives a short description of previous research on employee turnover and the reasons why Mitchell and Lee (1994) created the model of voluntary employee turnover. Followed by a description of the model. It is important for this research to understand why
students leave an organisation, since this provides Amsterdam restaurants with structured insights on intentions and reasons for leaving. For the total picture of retention management it is
important to understand why employees leave an organisation. The second part of this section presents Mitchel & Lee’s (2001) model of job embeddedness. This model shows what is
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necessary to retain student employees by explaining what factors stimulate retention.
4.1.1 The model of voluntary employee turnover Introduction
Until the 90’s researchers believed that employee turnover could be explained based on two factors: employee satisfaction and job alternatives (Lee & Maurer, 1997). The general belief was that if someone was satisfied with his or her job they would not leave an organisation. Whereas people who were dissatisfied would leave an organisation and search for alternatives. But this organisational view of people’s intentions to leave an organisation neglected the influence of impulsive actions. Since the 90, the world has changed considerably with, for instance, the introduction of social media. Nowadays, an individual may get a job opportunity through social media without applying for the job itself. In this case, the employee may have been relatively satisfied, but will go elsewhere anyway. This kind of impulsive behaviour is important to include in this research, since this may influence an employee’s decision to leave an organisation that does not include job dissatisfaction or looking for job alternatives.
Nowadays researchers acknowledge the importance of individual, organisational and environmental factors in employee turnover research. Therefore many researchers state that the model of voluntary employee turnover is one of the most insightful models to use for employee turnover, since this model includes these factors (Maertz and Campion, 1998; Hom and Griffeth, 1995). So this model is used in this research to analyse why satisfied and dissatisfied student employees leave a restaurant in Amsterdam.
The model of voluntary employee turnover
The authors of this model have done in-depth research into the considerations and behaviour that influence employees’ decision to leave their job. The result of their research is summarized in “the unfolding model of voluntary turnover”. The most important asset of this model is the inclusion of “shocks”. A shock is an event - positive or negative - that triggers behaviour or decisions of an employee to stay or leave an organisation. A shock can be expected or unexpected. The first kind of shock describes someone that gets a promotion, this is usually expected, and the latter form of a shock could for example be pregnancy, this is usually unexpected. A shock is either internal (a conflict with a manager) or external (the birth of children).
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This model includes four decision paths that people undergo. The following section gives a brief description of the four decision paths of the ‘model of voluntary turnover’ and how they can be applied to the restaurant industry (Mitchell & Lee, 1994). These four paths provide a model of the most common reactions of people to shocks and their behaviour in the workplace. The first three paths include a person’s reaction to a ‘shock’. The last decision path is initiated without a “shock”.
Decision path 1: Following a plan
This path is initiated by an employee that quits his job once a “shock” occurs. A shock in this decision path could be an individual who has completed his or her studies. Someone e.g. knows in advance that he will quit his restaurant job when he gets an offer in a different business sector. Or a student employee will quit his job in a restaurant after he finished his education, since he no longer needs a part-time job with flexible hours. This path does not include looking for
alternative jobs, nor job dissatisfaction when leaving an organisation.
Decision path 2: Leaving without a job alternative
This decision paths addresses the “fit” of the job and is also activated by a “shock”. The occurrence of the “shock” in this path is usually associated with negative feelings. A student employee in the restaurant industry might get pregnant, and will feel that the job is no longer a fit. Or a student employee might be confronted with sexual harassment on the job. This will result in a conflict with the employees’ personal values, trajectory and strategic images of the
organisations fit. This decision paths triggers leaving an organisation without consulting
alternatives.
Decision path 3: Leaving due to a better job alternative
This decision path is relatively difficult. A student employee is relatively satisfied with his or her job, but an employee may have found a job elsewhere, or has received a job offer. The person then has to evaluate the benefits of the new job. If the current organisation maximizes the person’s expected return, the decision will be to stay. An employee will leave the current organisation if this is not the case. Factors that influence this decision include: work, salary,
commute, sacrifices when leaving the organisation, and labour market developments.
Decision path 4: Leaving due to job dissatisfaction
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There are two options within this path. Decision path 4a frames people that are dissatisfied and
leave their job without looking for an alternative. This path is similar to decision path 2, but
excludes a shock. Path 4b also describes continuing feelings of dissatisfaction, but the employee that decides to leave has invested time in the search of job alternatives.
4.1.2 Conclusion
Mitchell and Lee’s (1994) model of voluntary employee turnover provides organisations with insights into the outflow of their student employees. Four decision paths of employee outflow have been discussed in order to understand under what circumstances a student employee might leave a restaurant. It is expected that decision path 2 and decision path 3 will have a lower frequency of occurring, since students seem to fit well with the restaurant industry and it is less likely for a student to receive a better offer in the same business industry. Some restaurants might offer a little extra salary, but it is expected that students are more likely to receive a raise at the job where they have already shown their competencies. Students who are confronted with sexual harassment will obviously leave the organisation, but it is expected that such events do not occur very often in the restaurant industry. Research has presented that sexual harassment is less likely to occur in organisations in which employees pursue similar positions in an organisation, for example students who work in service (Ministerie van Sociale Zaken en Werkgelegenheid, 2015).
Therefore it is expected that most of the student outflow will be explained by decision path 1 and 4, since most students who follow higher education usually cannot get a job in their field of education until they have completed their studies and because the working conditions in the restaurant industry may be rather dissatisfying.
The next section briefly discusses the occurrence of the model of job embeddedness as a contribution to the total picture of employee turnover, and presents the factors that will stimulate student employees to remain employed with a restaurant.
4.1.3 The model of job embeddedness
Mitchell and Lee (1999) created the job embeddedness model a few years after they introduced the model of voluntary employee turnover. In contrast to the voluntary employee turnover model, this model focuses on why people decide to stay instead of why they leave. This construct contributes to the total picture of employee turnover.
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The core idea of job embeddedness presents the power of connections, and networks which are inter-related with several factors. These forms of connections can be weak or strong depending on a person’s attachments. The concept Job embeddedness is best explained as a construct that provides researchers with the opportunity to analyse the amount of attachments to an organisation and the community, and thus as a result shows the state of embeddedness in a network. The likelihood of a person staying with an organisation, increases when the personal connection with the organisation and community is greater. There are three factors that describe the degree of job embeddedness: (1) fit, (2) links and (3) sacrifices. The analysis of these three factors is viewed from both organisational and environmental perspectives. The following sections give a brief overview of these three factors.
1 Fit
Fit is defined as an employee’s ‘perceived compatibility or comfort level’ with the organisation and its environment. Important aspects of this factor include an employee’s career goals, personal values & job knowledge. The amount of job knowledge lowers job stress for student employees. Fit with the environment encompasses political climate, facilities and weather. The better the fit with an organisation, the more embedded an employee is. Most students are expected to fit well into the environment. Most students have a small work commute since Amsterdam offers so many restaurant jobs.
2 Links
Links are the number of connections a person has with the surrounding community and at the workplace. Links between employees and the workplace may include relations with co-workers, managers, guests or the organisation itself. Community links consist of personal relationships between family, friends (non-work), and the actual physical workplace. The more links a student has to a restaurant, the more embedded the student will be.
3 Sacrifice
The last dimension includes the perceived costs someone may encounter if a student leaves the organisation. This can be both material or psychological benefits that may be terminated. This would imply that a student working in a restaurant has a higher probability of staying if he feels satisfied with his or her colleagues, thinks that the goals of the organisation fit to his or her beliefs and the loss of off work benefits may increase the perceived sacrifices. The higher the sacrifices a student has to make, the more embedded the employee is to a restaurant.
28 4.1.4 Conclusion
The second model of Mitchel and Lee (2001) provides this thesis with insights into retention management, because it explains what factors will make a student employee attached to an organisation. However this model does not explain how job embeddedness may be improved. The second part of this chapter will present literature that aims to describe how an organisation can improve a student employees sense of job embeddedness.
4.2 Work motivation, psychological ‘contracts’ and organisational commitment 4.2.1 Work motivation
Introduction
The second part of this chapter presents literature that aims to describe how an organisation can improve student employees sense of job embeddedness. The first part of literature that provides insights into this is work motivation. Work motivation is defined as a social process of interaction between people and their work environment (Pinder, 2008). This means that an individual’s motivation to work depends on the relations with people from work and how the environment stimulates an individual. These relations appear due to positive social exchanges (Blau, 1964). The analysis of social exchange relationships is useful for work motivation, because it enables organisations to evaluate relationships between for example management and employees, employees and the organisation, and employees and co-workers (Eisenberger, Huntington, Hutchison & Sowa, 1986; Cropanza & Mitchell; Omilion-Hodges, Ptacek, Zerilli, 2015). The amount of positively perceived social exchanges between management, organisations, guests and co-workers will influence employee satisfaction and the student employees perceived job
embeddedness.
4.2.1 Work motivation
Work motivation has been studied very little for the hospitality industry so far (Tepeci & Bartlet., 2002). There are several theories and definitions that describe work motivation, most of them address human behaviour and the way people act in certain situations. This thesis follows a definition of work motivation written by Pinder (1998): “A set of energetic forces that originate
both within as well as beyond an individual’s being, to initiate work-related behaviour and to determine its form, direction, intensity and duration.” (P.11)
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their work environment. This means that an individual’s motivation to work depends on the social exchanges with people from work and how the environment stimulates an individual through organisational support or leadership, for example.
Social exchanges influence work motivation and this contributes to this research by evaluating work relationships between an employee and the organisation, an employee and management, an employee and guests, or an employee and a co-worker. Positive social exchanges in an organisation contribute to the student employee’s sense of embeddedness. Therefore the following section will briefly explain social exchange theory and the types of work relationships that are of interest for this research and its effect on work motivation.
4.2.2 Social exchange theory (SET)
Social exchange theory (SET) is used in multiple disciplines for example sociology (Blau,1964) and in psychology (Homans, 1958). SET explains behaviour in social relations and focuses on the behavioural exchanges in these relationships (Cropanzo & Mitchell, 2005; Homans, 1958). This thesis focuses on four two-person relationships. The dyad relationships between (1) an employee and the guests, (2) an employee and management, (3) an employee and the organisation and (4) an employee and co-workers. According to SET an individual will respond to certain behaviours of another individual and will then evaluate whether the rewards exceed the costs of the exchange (Homans, 1958). In addition, Homans (1958) argues that each individual tries to maximize its own rewards for an exchange. He defines the outcome as profit. This is the result of the rewards an employee receives minus the costs. While Blau (1964) describes social exchange as a situation in which a person does something for another individual, which leaves the receiver with an unknown obligation to return the favour at a later point. An important addition of Blau (1964) to SET is that he argued that an individual will only participate in a social exchange if it increases his or her power or status.
Blau’s definition of social exchange is useful for the analysis of student employees who
work in a restaurant waiting tables, for example. An employee hopes to be rewarded with compliments or tips when he or she is serving a table.
However, a student employee is never sure his or her social exchanges will be
reciprocated. Blau (1964) argues that social exchanges are based on trust. Molm, Takahasi and Peterson (2000) have found similar results. These researchers have investigated the effect of uncertainty in the process of creating trust and commitment for reciprocal and negotiated
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relationships. Negotiated relationships are outside the scope of this thesis, but reciprocal relations consists of a trade in which individuals separately contribute to the exchange, and these
exchanges are non-negotiated (Emerson, 1972; Leví-Straus, 1969). This means that one party does something that benefits the other party, without uncertainty of reciprocity. Most social exchange relations are without negotiations (Molm et al., 2000). Findings of Molm et al. (2000) research argue that trust sharply increases if reciprocity is uncertain, but that the other party fulfils his duty of reciprocating regardless. In addition, Molm et al. (2000) state that the social exchanges between two people may increase in terms of size and frequency as the relationship prolongs. This is best explained by the fact that both parties in the beginning do not know if the exchanges that they offer will be reciprocated (Molm, 2003). So when an opposing party receives reciprocity this will result in more value than the actual extent of reciprocity. Trust and
motivation between two parties will increase if for example an employee is working an extra shift to help management, and if he or she at another point in time an may have a day off, leave a bit earlier or gets some sort of extra unexpected compensation.
4.2.3 SET in relation to work motivation
SET useful for the analysis of the micro relationships that are analysed in this thesis, since there are many social exchange relationships within an organisation. (Cropanzano & Mitchell, 2005). Literature provides this thesis with insights on the evaluation of relationships between
management and employees, between employees and the organisation, but also between an employee and his co-workers.
In literature researchers speak of perceived organisational support (POS) when research discusses the relationship between an individual and an organisation. POS includes the
employees perceived appreciation of the organisation in which the organisation shows interest in the well-being of the employee. The influence of SET on POS is that a student employee values rewards from an organisation more when he or she believes that they are given voluntarily. These rewards may include promotion or salary. Consequently high perceived POS will increase the students motivation to be employed at an organisation (Eisenberger et al., 1986). On the other hand, the literature of leader membership exchange (LMX ) describes the relationship between management and student employees (Cropanzano & Mitchell, 2005). This theory suggests that the development of a relationship between management and a student employee may result in social exchanges outside the employee’s contract. LMX exchanges are best explained by arguing
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that when either the student employee or manager does something beneficial that is not required, the other will feel obligated to return the favour. The same applies to the employee and a co-worker exchange (CWX) relationship (Omilion-Hodges, 2015).
So an effective way to stimulate work motivation is through positive social exchanges (Ross & Boles, 1994; Cranny, Smith & Stone, 2006). An employee will feel appreciated, encounter less job stress and perceive the work environment as positive. The perceived sense of identity of an employee may contribute to positive social exchanges. Akerlof and Kranton (2005) argue that the identity of student employees is an important predictor of employee satisfaction, and state that this is more important than monetary rewards. Organisations that work with “strict” supervision spend more time on compensating their employees, because they have to compensate for the loss of identity of its employees (Akerlof & Kranton, 2005). Therefore the researchers argue that it is worth considering using “loose” supervision in restaurants. Implementing “loose” supervision will increase work group feeling and is stimulated by social exchanges. Loose supervision means less rules and control over its employees. Young (1996) makes a similar statement. This researcher argues that it is more important for student employees to be able to identify themselves with the choices that they make than receiving monetary rewards. This will contribute to perceived sense of positive social exchanges by creating a positive work
environment for the students.
The above mentioned shows how a supportive working environment and good leadership improves employees’ motivation both in as well as outside the workplace (Leigh, Lucas, & Woodman, 1998). In addition, Schneider and Bowen (1985) found that a positive work
environment may reduce levels of role conflict. Role conflict arises when an employee is unsure about the expectations of his or her job (Miles & Perreault, 1976). This may lead to job stress. Job stress is especially common among service employees, and can influence the performance of a student employee (Schuler, 1977). Another thing student employees have to deal with are boundary roles. These boundary roles result in conflicting or ambiguous feelings in how they should carry out their job. The perceived role ambiguity will lower once a guest visits more often, or if management demonstrates clear working methods of service. This will in turn improve the exchange relationship between employees and guests (Hyun Jeong, Pimton & Woo Gon, 2009). Previous research has empirically tested the relationship between employee satisfaction and guest satisfaction for hospitality businesses and found positive correlations (Hartline & Ferrel, 1996).
32 4.2.4 Conclusion
The influence of SET on the literature of POS, LMX and CWX is useful for the explanation of work motivation in the restaurant industry, since positive perceptions of POS, LMX and CWX exchanges lead to employee satisfaction, which in turn will lower the chance that an employee will leave an organisation (Ross, Boles, 1994). The more positive exchanges an employee encounters in an organisation, the more likely an employee will be motivated to work for a specific organisation.
However, few theory has been written yet about the social exchange relationship between customers and employees, but the above mentioned exchanges relationships are easily applicable to this dyad relationship. Thus for this thesis it is expected that when management, an
organisation, a co-worker or a guest frequently does something that is not required, that this will make the employee feel appreciated. Many positive social relations will increase the number of links an individual has to an organisation and which improve the sense of job embeddedness. 4.3. Psychological ‘contracts’
Introduction
Social exchange relationships at the work place may also lead to some difficulties, due to expectations one employee might have towards another party. These difficulties are best
described by the concept of psychological ‘contract’. The perception of a psychological ‘contract’ explains the trustworthiness of a social exchange relationship between employees, management, the organisations and co-workers. It is important for all involved parties to be aware of the different expectations one party has to another, since lack of awareness may lead to negative social exchanges, resulting in a decrease of work motivation. This may have a negative effect on the student employees’ job embeddedness and satisfaction. For this reason this section will briefly introduce what the definition of psychological contracts encompasses and in what difficulties these ‘contracts’ this may result.
4.3.1 Psychological ‘contracts’
A psychological ‘contract’ describes a relationship between an employee and an employer based on expectations and obligations (Shapiro, Kessler, & Kessler, 2000). But the concept
psychological ‘contract’ can easily be applied to all four two person dyadic relationships that are discussed in this thesis, since they all concern two person relationships in which two parties have expectations and obligations to one another. . The psychological ‘contract’ is not part of a legal
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work contract, but is enclosed in social exchanges between individuals or organisations. This thesis will follow a definition of the psychological ‘contract’s as defined by Schein (1965): “The notion of a psychological ‘contract’ implies that the individual has a variety of expectations
of the organisation and that the organisation has a variety of expectations of him. (p.11)
4.3.2 Psychological ‘contracts’ in relation to SET
The first approach to the psychological ‘contract’ in research was merely focused on the employee perspective. The acknowledgement of employers and organisational perspective has been added later on. The employer’s perspective is more complex than the employee’s
perspective, because an organisation consists of multiple supervisors or managers that might participate through different psychological ‘contracts’ (Morrison and Robinson, 1997). This makes the analysis of organisational psychological ‘contracts’ complex, since the psychological ‘contract’ is based on several personal perceptions and no psychological ‘contract’ is the same (Lucero and Allen, 1994; Morrison and Robinson, 1997). The perception of a positive
psychological ‘contract’ influences social exchange relationships between student employees, management, the organisation, with co-workers and the guests. Positively perceived
psychological ‘contracts’ may increase student employee satisfaction and job embeddedness, because both parties know how to reciprocate according to the expectations of the other party. A psychological ‘contract’ will be perceived as broken if another party fails to reciprocate
according to the expectations of the students. This will influence the likelihood that a student employee will participate in another exchange.
4.3.3 Conclusion
It is important to include psychological ‘contracts’ into the analysis of student employee retention in restaurants, since all employees may have different expectations from management,
organisations or co-workers and vice versa. The social exchanges in relation to the psychological ‘contracts’ can be better understood if all parties are made aware of the expectations one party has from another party. This may improve work motivation and an individual’s perceived fit to an organisation, which in turn stimulates the student employees sense of embeddedness.
