Management of turnover: how management
control can help to cope with seasonal
influences in recreation firms
byW.F. Bleckman1 June 2015
Supervisor B. van der Kolk MSc
University of Groningen Faculty of Economics and Business
MSc Business Administration
Specialization Organizational and Management Control
Word count: 11.755 Keywords
Seasonality, seasonal employment, employee turnover, performance, management control, tourism, recreation, hospitality, leisure
Abstract
Recreational firms have to deal with high turnover rates mostly because they are seasonal dependent. Most of the research on turnover is done in large organizations with highly educated employees. Therefore, this research focusses on smaller organizations with lower educated employees. The research design is a field study which enables a representative view of the different perceptions of directors of recreational firms about the effects of seasonality on turnover and the effect of turnover on performance. Twelve semi-structured interviews were conducted with directors of recreational firms in the north of the Netherlands. This paper tries to uncover how management control can help to cope with the effects of employee turnover on performance in the leisure industry. The findings suggest that a mix of the four types of control of Merchant and Van der Stede (2012) are used in the visited recreational firms. The most used control type is action control. In all the cases, there is constant monitoring of the variable team by the fixed team and the owner-director. Alongside of the action type of control, also the control types; result control, personnel control and cultural control were found.
Preface
I chose this topic because I was advised by my supervisor to study something in which I was personally interested and something that would be beneficial for my future career. Therefore, I chose a topic concerning management control in the leisure industry. This is because on the first of January 2014, my sister, my brother and me took over a holiday park in the south-west of Friesland in the Netherlands. After my master’s programme I will move there to run this company together with my brother and sister. During the research conducted for this paper I learned a lot while studying other recreation firms and gathered useful insights in the management control tools that other directors use. I would like to show my gratitude towards the respondents who were willing to grant me a few hours of their time. Also I want to thank my supervisor, Berend van der Kolk, for steering me in the right direction during this research process.
By finishing this thesis, my days as a student in Groningen are over. I look back at seven fantastic years in Groningen. It was a period in which I developed my social and intellectual capabilities and I look forward to using my capabilities in my future career. Wouter Frank Bleckman
Table of content
1
Introduction ... 4
2 Literature review ... 5
2.1 Seasonality ... 6
2.1.1 Positive effects of seasonality ... 6
2.1.2 Negative effects of seasonality ... 6
2.2 Relationship seasonality and turnover ... 7
2.3 Additional causes for turnover ... 7
2.4 Relation turnover and performance ... 8
2.5 How to cope with seasonality and turnover ... 9
2.5.1 How to cope with seasonality ... 9
2.5.2 Management control systems ... 9
3
Methodology ... 12
3.1 Research design ... 12
3.2 Data collection ... 13
3.3 Data analysis ... 14
4
Findings ... 14
4.1 Seasonality and its effects ... 14
4.1.1 Perceptions of seasonality ... 14
4.1.2 Positive effects of seasonality ... 16
4.1.3 Negative effects of seasonality ... 17
4.2 Turnover and its effects ... 18
4.2.1 Positive effects ... 18
4.2.2 Negative effects ... 18
4.3 How to cope with seasonality ... 19
4.3.1 Result controls ... 19
4.3.2 Action controls ... 20
4.3.3 Personnel controls ... 22
4.3.4 Cultural controls ... 23
4.3.5 Additional ways to deal with seasonality ... 25
5
Discussion & Conclusion ... 25
5.1 Findings ... 25
5.2 Theoretical and managerial implications based on the findings ... 27
5.3 Research limitations & future research ... 27
References ... 28
1 Introduction
The leisure sector has to deal with relatively high employee turnover rates compared to other sectors (Bureau of Labour Statistics, 2014). Iverson & Deery (1997) characterise the leisure industry in terms of: “high turnover rates, a part-time and casual workforce, an absence of an internal labour market – i.e. low job security, promotional opportunity and career development, plus low wages and low skills levels.” They conclude that the leisure industry has created and reinforced a “turnover culture”.
The literature provides for abundant research that uses turnover as the dependent variable, this literature mostly describes antecedents for turnover rates. This is helpful in situations where a company seeks to minimize the turnover but sometimes turnover is just inevitable. Take for example seasonal dependent firms that have a highly fluctuating need for manpower. A recreational firm for example has a lot of seasonal dependent work. This is why recreational firms have a lot of temporary and part-time employees, which complies with the characteristics of a turnover culture (Iverson & Deery, 1997).
Average occupancy levels in the Netherlands through the year. Upper: Combined (middle & lower) Middle: Accommodation occupancy Lower: Camping occupancy
Figure 1: Occupancy levels (Deguelle & Driessen, 2015)
In such a case, it would not be very helpful to only understand all the antecedents of turnover but it would also be interesting to understand the consequences of turnover and in particular how to cope with these consequences.
lower customer service. The tourism sector is very labour intensive and the performance of employees is a significant determinant of the sustainability of firms in the tourism sector (Zopiatis et al., 2014). Although there is high turnover in recreational firms, managers will still expect their employees to do a good job. Management controls might be able to help managers to help new employees to understand what is expected of them, to motivate them to work hard, to monitor and evaluate if they are doing a good job, and if not, steer them in the right direction (Merchant & Van der Stede, 2012). This leads to the following research question:
How can management control help to cope with the effect of employee turnover on performance in the leisure industry?
To answer this research question a field study is conducted. Twelve semi-structured interviews were held with directors of recreational firms, which provides a representative view of the different perceptions of directors of recreational firms about the effects of seasonality on turnover, the effect of turnover on performance and the management controls which are useful to help cope with these effects.
Outline of the paper
This paper is organized as following: Chapter 2 will provide an introduction of the relevant concepts and a detailed analysis of the recent literature regarding this topic. In chapter 3, the methodology will be presented and the findings of the interviews are presented in chapter 4. The discussion and conclusion of the findings are presented in chapter 5 together with recommendations for future research and the limitations of this paper.
2 Literature review
2.1 Seasonality
In this paper, the definition of Jolliffe & Farnsworth (2003) is used. They describe seasonality of the tourism industry as the cyclical variations in tourism demand. Pegg et al. (2012) argue that seasonality is inextricably linked to the tourism industry. Higham & Hinch (2002) also argue that seasonality is “one of the most prominent features of tourism” but they state that this feature, however, is very little understood.
It is generally accepted that seasonality can roughly be divided in two groups of factors, natural and institutional factors (Higham & Hinch 2002; Becken, 2013; Shields & Shelleman 2013). Natural seasonality refers to cyclical variations in demand caused by natural phenomena such as temperature, the weather, daylight and wind. Institutional seasonality refers to cyclical variations in demand caused by social norms and practices of society. Examples of institutional seasonality factors are industrial and school holidays and economic, religious and cultural considerations (Higham & Hinch, 2002). Seasonality is thus not just related to the seasons of the year as they are found in nature (Becken, 2013; Shields & Shelleman, 2013).
2.1.1 Positive effects of seasonality
Some stakeholders might see seasonality as beneficial. Due to the over usage during the high season, the low-season could be vital for renovations. “As a result, the end of the season provides a definite light at the end of the tunnel for individuals and communities alike” (Pegg et al., 2012). Ainsworth and Purss (2009) argue that by some employees seasonality is seen as a positive aspect because some employees pursue certain lifestyles that only can be pursued because of their seasonal work. For example people who like to make long travels will be able to do travel in the off-season and earn their salaries for the largest part in the high season.
2.1.2 Negative effects of seasonality
Seasonality causes fluctuations in demand and this causes an ongoing problem for recruitment and retention. Seasonal work is seen as a trivial form of job opportunity because of the few job and career opportunities and the lack of job security (Pegg et al., 2012). Ainsworth and Purss (2009) argue that, at the beginning of the season, recruiting is difficult and time consuming.
2.2 Relationship seasonality and turnover
Turnover is necessarily large when the demand is not evenly distributed over the year. When a company has to deal with high and low seasons, many employees have to go after the ‘peak’ because there simply is no work for them. If the peak is nearing, employees have to be re-hired or new employees have to be recruited. High turnover rates are therefore inevitable in the seasonal industry (Douglas, 1918).
2.3 Additional causes for turnover
There is abundant literature available about the antecedents and causes of turnover. In this paragraph the most dominant and relevant ones are presented.
Job content or job satisfaction is a significant variable when explaining turnover in organizations. When a job is challenging, comprehensive and diverse, an employee will have less turnover intentions. Job content is also partially mediated by commitment, when an employee scores higher on job content, commitment will increase and this will decrease the turnover intention of the employee (Blomme et al., 2010 [1]; Humphrey et al., 2007). Commitment is found in many studies to be a variable that negatively relates with turnover intentions (Michaels & Spector, 1982; Tett & Meyer, 1993).
Age is also assumed to be related to turnover and commitment. Age seems to be a significant variable when explaining turnover in organizations. The younger the employee, the more likely they are to leave the organization. This is partially mediated by commitment. The younger employees are, the less committed they are to an organization and thus the more likely they are to leave (Blomme et al., 2010 [1]).
Researchers have found that the social characteristics of a job are critical. The relationships between workers are probably the most important determinants of the perception of the meaningfulness of a job (Chang et al., 2013). Humphrey et al. (2007) found that the social characteristics of the work design, interdependence, feedback from others and social support are related to the intention to leave the organization. Interdependence is the extent to which a job is interrelated with other people’s jobs. This has also been described as “dealing with others” (Humphrey et al., 2007). Feedback from others is the extent to which employees receive feedback from other employees. This particularly focuses on the personal interaction between employees and managers. Social support means the possibility to get advice and assistance from managers or other employees (Humphrey et al., 2007).
That is, it is a normative belief held by employees that turnover behaviour is quite appropriate.” They also argue that a turnover culture can be especially harmful for organizations that have objectives like quality and service. Iverson & Deery (1997) their findings suggest that the hospitality industry has created a turnover culture in which employees enter with the idea that there are limited career and promotional opportunities. Work-family conflict is associated with lower job-satisfaction, higher rates of absenteeism and employee turnover. Stressors that are related to work-family conflicts are unpredictable working schedules, non-traditional working hours, work in the evening and nights and little control over working hours (Blomme et al., 2010 [2]). These factors seem to be present in the seasonal industry.
The firm size has a negative influence on turnover. The larger the firm is, the less likely people are to leave the organization (Anderson et al., 1994).
2.4 Relation turnover and performance
High employee turnover has several consequences that influence the performance of the firm. Hausknecht and Trevor (2011) summarize the consequences of collective turnover. First, they state that collective turnover can lead to undesirable outcomes because it entails the loss of firm specific human capital because people who leave the organization take implicit knowledge and skills with them. Second, there is a loss of social capital. Value that is embedded in the social relationships between employees is lost and is not easily rebuild. Turnover saddles remaining member with newcomer socialization and training due to the fact that new employees cannot possess all the knowledge and skills needed for their new job. This corresponds with the human capital and social capital perspective (Hancock et al., 2013). Corresponding with the cost perspective (Hancock et al., 2013), turnover also causes an increase in recruitment and selection costs. All the costs that are related to employees leaving and hiring are generally seen as turnover costs (Glebbeek & Bax, 2002). Costs of turnover consist of recruiting costs, selection costs, hiring costs, training costs, severance pay, unemployment insurance, etc. (Anderson et al., 1994; Hinkin & Tracey, 2000; McCole, 2013).
advantage over its competitors (McCole, 2013). However, the efforts a company puts into the retention of employees can be costly. Therefore, a balance should be found between the retention costs and the turnover costs (Abelson & Baysinger, 1984).
Turnover is not just a negative phenomenon. There are also certain benefits that are perceived by organizations. Poor performance employees might leave by themselves, innovation might improve and there might be a reduction of stagnation (Dess & Shaw, 2001). A certain amount of turnover might thus be beneficial for an organization. Glebbeek and Bax (2002) mentioned a few benefits of turnover, namely; leave of expensive employees, leave of less productive employees, termination of bad matches, innovation, adjustment to market conditions, and the price of quality. Glebbeek and Bax (2002) state that the relationship between turnover and performance is “(...) bell-shaped: a turnover level too low has a negative effect and likewise does a level too high.”.
2.5 How to cope with seasonality and turnover
2.5.1 How to cope with seasonality
There are several methods to cope with seasonality. Baum and Hagen (1999) state that the use of events and festivals as a strategy to combat seasonality is probably the most common. It combats seasonality in the sense that events and festivals can use the facilities that are not used to full potential in the ‘shoulder seasons’. Other commonly used methods to deal with seasonality are product diversification and market diversification (Baum & Hagen, 1999; Hudson & Cross, 2007). Different market segments might want to use the facilities on different times and occasions, targeting different markets can cause a better use of the available capacity. Families with children are for example bound to school holidays; elderly people on the other hand might be more willing to go on a holiday around the school holidays. Also, product diversification can cause better use of capacity. For example, in the summer a holiday park might provide swimming and sailing events but in the winter maybe ice-skating is possible.
2.5.2 Management control systems
Although there is high turnover in recreational firms, managers will still expect their employees to pursue the organizational objectives. Management controls might be able to help managers to help new employees to understand what is expected of them, to motivate them to work hard, to monitor and evaluate if they are doing a good job, and if not, steer them in the right direction (Merchant & Van der Stede, 2012).
purchase agents, they can be evaluated on the amount of purchases they do and how high the purchase prices are. However, this is only possible when prices are believed to contain all the necessary information. A bureaucracy is a more subjective form of control. The information that is necessary for this type of control are rules. Rules differ from prices in the way that they do not represent all the information necessary but just a part of it. “In order to use a rule (e.g., a budget or cost standard), a manager must observe some actual performance, assign some value to it, and then compare that assigned value to the rule in order to determine whether the actual performance was satisfactory or not.” (Ouchi, 1979). This asks for a lot of time and effort from the managers because they need to do a lot of auditing and surveillance. The third type of control, the clan, relies more on the internal commitment of the employees. When a manager can trust his employees and knows that they are trying to accomplish the right objectives, he can cut the costs of auditing and surveillance. However, a control system is never a pure market, a pure bureaucracy or a pure clan. In reality, organizations will contain some of the features of each of these types (Ouchi, 1979).
Besides these three types of control systems, Ouchi (1979) describes two dimensions that influence the way an organization can control its employees. Namely, the ability to measure outputs and the knowledge of the transformation process. When there is imperfect knowledge of the transformation process but a high ability to measure outputs, output measurement can be used. On the other hand, when there is perfect knowledge of the transformation process and a low ability to measure outputs, behaviour management can be used. In the case that there is perfect knowledge of the transformation process and a high ability to measure the outputs, both methods are useful. However, when there is imperfect knowledge of the transformation process and a low ability to measure the outputs, clan control might be the only solution. A summary is given in table 1.
Table 1
Conditions Determining the Measurement of Behavior and of Output Ouchi 1979
Knowledge of The Transformation Process
Perfect Behavior or Output Measurement Imperfect Output Measurement Ability to Measure outputs High Low Behavior Measurement
Ritual and Ceremony, “Clan” control
capabilities and characteristics that fit the job or it can just hire anyone and use managerial systems to instruct, monitor and evaluate them.
It is obvious that putting effort in selecting and screening employees becomes more costly when turnover rates are high. So, if an organization does not put a lot of effort and funds into selection and screening but just hires ‘anyone’ and forces these people to comply with organizational goals through bureaucratic systems, turnover costs are manageable. So, according to Ouchi (1979), a bureaucratic method of control is better able to withstand high turnover rates because it does not matter which individual is monitored.
Merchant and Van der Stede (2012) divide control systems, which focus on the ways in how a company gets their employees to do what they expect them to do, in four different forms of control. The first is result control. In a result control system employees are evaluated on the specific results that the employee accomplishes. The employee is free in the way he accomplishes this result. It is necessary that the results are measurable. This corresponds to the type ‘output control’ from Ouchi (1979). This type of control is useful, according to Ouchi (1979), in situations when there is imperfect knowledge of the transformation process and high measurability of the outputs.
With the second type of control, action control, the prescription or prohibition of certain actions is a central feature. This form of control can refrain people to behave in a certain way. Another form of action control is action accountability. This requires definitions of what is and what is not acceptable, the communication of these definitions, observation of behaviour and the rewarding or punishment of the actions of employees. This corresponds to the bureaucratic behavioural controls of Ouchi (1979), this is a control method which is particularly useful in a situation where there is perfect knowledge of the transformation process but low measurability of outputs. This bureaucratic method might be useful in a high turnover environment.
Ouchi (1979) states that when there is perfect knowledge of the transformation process and high measurability of the outputs, a combination of behaviour and output control is possible.
The fourth type of control consists of cultural control systems that are designed on mutual monitoring between employees, corresponding to the clan controls of Ouchi (1979). Cultural controls can substitute for the other formal (bureaucratic) types of controls. The stronger the culture, the less need for manuals and detailed procedures and rules. Building a strong culture might be difficult when turnover rates are high due to the fact that norms and values are not easily embedded. However, Merchant and Van der Stede (2012) argue that building a strong culture may decrease turnover rates because this increases their loyalty. It also appears that “it pays to be nice”. Research shows that when attitudes of employees improve, customer satisfaction will also rise (Merchant & Van der Stede, 2012).
Merchant and Van der Stede (2012) add another dimension to their four types of controls, namely the tightness of the controls. They state that the tighter the control, the more likely the employee will behave in the way they are required to. Vice versa, the looser the control, the less likely employees will behave in the way they are supposed to. In a tight control system, controls are congruent with the organizational goals, the measurements and requirements are complete and the measurement and surveillance are done frequently.
To summarize, due to the fact that most of the research on turnover is done in large organizations with highly educated employees, this paper investigates to what extent the effects of turnover found in the literature are comparable to the effects of turnover experienced by small recreational firms in the Netherlands. Second, this paper focuses on the management control systems that these firms can use to deal with a high turnover environment. The four types of control of Merchant and Van der Stede (2012) will be used to structure the findings.
3 Methodology
This chapter describes the methodology that is used in this research. First, the research design is presented, second the methodology for the data collection is discussed and the last part describes the methodology for the data analysis. This methodology is partly based on the guidelines of Eisenhardt (1989).
3.1 Research design
Key to this study are the perceptions and efforts of managers of recreational firms that have to cope with seasonal influences. The setting of this research is the leisure and hospitality industry that in the Netherlands is expected to be highly dependent on seasonal influences and probably has to cope with high turnover rates. The industry is more and more relying on the weather. Nowadays people decide later whether they will go on a holiday or not and are waiting for last minutes and discount deals on the internet. The results of this study will be valuable for managers of recreation firms, particularly in the Netherlands. It will also provide a basis for future research on the influences of seasonality on recreation firms.
Table 2 describes the twelve organizations where the interviews are conducted, the amount of maximum employees in the high season are an estimation, because this changes every year dependent on how busy it is.
Table 2
Overview of visited sites and amount of employees Respondent Firm Type of organization Employees all
year round
Max. employees high season
A. It Wiid Holiday park 18* 35
B. De Kleine Wolf Holiday park 10 80
C. De Holle Poarte Holiday park 8 30
D. De Meerpaal** Restaurant & Supermarket 0 20
E. De Kluft Holiday park 8 38
F. Meerwijck Holiday park 6 21
G. De Koeksebelt Holiday park 5 25
H. De Twirre Sailing school 1 20
I. Bergumermeer Holiday park 8 40
J. De Berenkuil Holiday park 6 40
K. Cnossen Holiday park 8 50
L. De Kuilart Holiday park 22 100
* Including part-time cleaning employees ** Tenant at It Wiid
3.2 Data collection
whether the exact same words are used every time, but it depends on the fact that every respondent interprets the meaning of the concepts the same (Barriball & While, 1994). An interview guide was used that has been made on the basis of the theory used in this paper. Open ended questions were used which enabled the interviewee too elaborate and explain their answers. During the research process, small adjustments have been made to the interview guide because some questions were not entirely understood in the beginning; the final version of the interview guide is added to the appendices (Appendix A). Probing was used to establish the details and underlying reasoning of the answers of the respondents. The interviews were taped and transcribed and the interviews lasted between 45 and 60 minutes. Mostly after the interview the respondents gave a guided tour that increased the image formation of the organizations and their facilities which were visited.
The interview had three sections. The first was concerned with general open questions about the organization to introduce the company. The second part, consisted open-ended questions, concentrated on the perception of directors of the impact of seasonality. The third part of the interview focused on the employee turnover of the organization and the management controls which are used to mitigate or cope with the turnover effects.
3.3 Data analysis
Every interview was recorded and transcribed afterwards. Other remarks and comments were added at the end of the transcript. A coding tool, ATLAS.ti, was used to categorize the answers of the respondents and to extract the basic concepts out of the transcriptions.
4 Findings
This chapter describes the findings of the interviews and makes a comparison to the literature. First the perceptions about seasonality and its effects are described. Second the effects of turnover are presented. Finally the management controls that directors of recreational firms use to control their employees in this high turnover environment will be discussed.
4.1 Seasonality and its effects
4.1.1 Perceptions of seasonality
Director B.: “People appear to be just waiting for the weather forecasts before they will make a booking.”
According to most of the respondents this effect is increasing because of the internet and the online booking features. One of the directors explained that this phenomenon arises because of the fact that many holiday parks allow people to choose their spot on a map on the website. On this map, people can see which and how many camping pitches or rentable objects are still available. When people see that almost all spots are still available, they might decide to wait a little longer, and wait for the weather forecast or for the availability to decrease. One of the visited research sites experienced some extreme dependence on the weather. This organization was located on the side of a river called “De Vecht” and there was a possibility when there was a very wet season the organisation would be partly flooded.
Director G.: “Camping De Koeksebelt, during low water we are located besides De Vecht and during high water we are located inside De Vecht.”
Another important cause of seasonality is the dependency on school holidays. all organizations experience their peaks during school holidays, particular Ascension and Pentecost are very hectic periods due to the fact that everyone arrives and leaves at the same time. Around these school holidays all the organizations experience lower demand for their product. Most of the organizations are open from the first of April till the end of September or October, only a few organizations are open all year round. But in that case most facilities and services, such as pools, restaurants, rentals and animation teams are not provided.
and only eighty seasonal pitches argued that he did not want that many regular (seasonal and year round) guests, because they spend less in the restaurant and supermarket. Also the revenues per pitch are higher for a touristic pitch in comparison to a seasonal or year round pitch, however the revenues of a touristic pitch are highly dependent on the weather.
Most of the visited research sites do not have bungalows, apartments and hotel rooms. All of these parks are closing for the winter. However there were a few parks who do have these accommodations available for rent, these parks did not close during winter. Of course, revenues are lower in this period compared to the summer. But with these accommodations there is more work during low season periods and therefore it is easier to retain employees.
Also the kind of facilities that a park has to offer has an impact on the seasonal dependence. Half of the respondents have an indoor swimming pool, which makes them less dependent on sunshine and higher temperatures. One of the holiday parks is planning to build an indoor playground, costs estimated to be a million euros, just to be less dependent on the weather.
4.1.2 Positive effects of seasonality
One of the respondents explained that this peak in the high season is not that bad, otherwise, when this peak would not occur, the costs to open up all the facilities would be higher per guest. He argues that when this peak would flatten, so when the amount of guests would stay the same but they would spread more evenly over the season, the facilities and services which are offered have to be open for a longer period. Which means that more costs have to be made to serve the same amount of guests.
Most of the respondents pointed at the fact that seasonality enabled them to work on larger projects, plans and the yearly maintenance. When there are guests present, this is not possible because of the disturbance it comes with.
Another positive effect is that it is more easy to let employees go when they do not fit the organization because most of them do not have permanent contracts.
Director E.: “(…) a positive point of seasonality is that you can slow down a little in the winter period. When I used to be a baker I was running on my toes all year round, that is not the case anymore.“
Another advantage of seasonality appears to be that during these peaks, the products can be sold at higher prices. Because demand is high, prices can increase.
Director J.: “We like seasonality, maybe it sounds a little weird, because you can make a lot of money in a short period of time.”
4.1.3 Negative effects of seasonality
When asked for the negative aspects of seasonality most respondents just refer to the fact that there is nobody there during low seasons and no money comes in during these periods.
Besides the fluctuation in demand, many respondents express some kind of tiredness, because every year, again and again, they need to rebuild and prepare for the stressful peak.
Director A.: “You are always working towards this peak, and when the peak is over, everything collapses. Every time you need to search, select and hire new employees and rebuild.”
Director E.: “Every year at the first of April, it just feels like I have to start all over again.”
An effect mentioned by most of the respondents is that professionalism and continuity is hard to achieve because they just cannot offer people a job all year round. These turnover rates are believed to influence the performance of the organization.
Director G.: “(…) we just do not have all year round work for certain functions. And in particular for the restaurant that is very troublesome.”
season, all the facilities that an organization offers during this period; swimming pools, restaurants, cafeterias, supermarkets, bakeries, animation teams, and rental shops need to be manned. Also accommodations and sanitary buildings need to be cleaned more often, so more cleaners are needed. So the more facilities and services an organization offers, the larger the part of the total employees that are contracted on seasonal basis. Some seasonal employees stay five months and some only stay a month. Most of the seasonal employees are students which return for three to four seasons. Turnover appears to be almost absent in the fixed team, but a high turnover is the reality in the variable team. One of the main reasons to leave, is that they finished their school, most seasonal employees are students and work only in the school holidays. When they get older and finish their school, their seasonal job then just does not fit their life anymore. Another reason regarding the perception of the directors, is that people prefer a more permanent job all year round. When the season is over most employees will apply for other jobs.
Tenant of Beach Pavilion Meerwijck (F.): “When they are offered an all year round job as cashier at the HEMA, they will leave.”
4.2 Turnover and its effects
4.2.1 Positive effects
In the previous section, it became clear that most companies do not have to cope with a high turnover in their fixed team. Directors seem to be happy with this because there is a lot of firm specific knowledge embedded in these employees. Therefore directors want to minimize turnover in this group. Employees who work longer at the organization appear to be more productive and provide better customer service.
Director B.: “Speed and experience comes with the years.”
In the variable team there is significantly more turnover. This high turnover in the variable team has some positive effects. One very clear positive effect of turnover of these organizations is that these students are a lot cheaper than older employees, so simply costs can be lower per employee. Another benefit is that new people have new energy and new ideas.
4.2.2 Negative effects
Director F.: “The one thing I perceive as difficult to break through is the intimate atmosphere, sometimes too intimate. It is hard to tighten the rules then.”
The high turnover in the variable team has also some negative effects. The fact that there are every season new people, who need to learn everything from scratch, is regarding one of the directors (Director I.) probably “the weakness of the industry”. He states that it takes approximately a whole season to become a good quality employee, and when they are finally ready to work alone, without supervision, they leave for school.
Most directors acknowledge the fact that a new employee needs a lot of attention and investment in time and energy to reach a satisfactory level. Some directors refer to themselves as ‘schoolteachers’, because year after year, they need to instruct employees with the same rules and procedures.
Not all of the directors perceive the fact that new people come in every season as a negative phenomenon because of the presence of the fixed team members, who train and supervise the newcomers.
4.3 How to cope with seasonality
The following section describes all kinds of ways directors use to cope with their seasonal dependency. First the management controls that the directors use in their recreational firms are described. In the end some additional ways to deal with seasonality are briefly summarized.
4.3.1 Result controls
For the more ad hoc jobs that need to be done, a third of the directors work with an IT application which helps them to distribute tasks over there employees. An example of such a format is added in the appendices (Appendix B). These are online to-do lists, which every employee can see on their mobile phones and in which they can check off tasks when completed. When tasks are completed the director will get a message from the system.
Director J.: “I got often annoyed by the fact, that I had to say things twice. Now with this application that is over.”
into the system and everyone is always up-to-date on which tasks have been completed and which work still needs to be done. A disadvantage of this system is that people tend to pick the fun jobs which causes the less fun jobs to be postponed. This thus still needs some monitoring and supervision to make sure all the jobs are done in time. One of the directors partly solved this partly by assigning high and low priority to certain jobs within the to-do list.
Another form of result control, a clean check, is seen in almost half of the holiday parks. Clean checks are small cards where the cleaning employees can write their name on. An example is added in the appendices (Appendix C). After cleaning an accommodation, the cleaner has to leave the card with the date and his name on it behind. When the visiting guest is not happy with the condition of the accommodation, he can return with the card to the reception and ask for an additional cleaning. This form of control has several effects. First the cleaner gets motivated by the fact that the guest will know his name so he will be more eager to perform well. Second, when the result is not of a satisfactory level, the guest returns with the card which makes it easier to confront the cleaner with his performance.
4.3.2 Action controls
Approximately half of the respondents have handbooks where the responsibilities and job descriptions of the employees are written down in detail. Some of the directors perceive the handbooks as very helpful to get the new employees started. On the other hand, some of the directors do not see the benefits of the handbooks because they might not be used and are forgotten after some time. It appears that the use of handbooks is particularly useful in the beginning and also when an employee does not perform well, the director has a written document to underpin and strengthen his criticism.
Director E.: “When you got it [rules and procedures] in writing, it is more easy to direct your employees.”
Acontrol method that was found in all of the research sites was the constant monitoring and supervision of the employees. All off the directors were also the owners of the company, work full-time and are always present at the company. So there is always some supervision and monitoring done by the director.
The monitoring of the variable team is mostly done by the fixed team. In most of the cases, the seasonal employees are most of the time accompanied by a fixed team member, so there is constant monitoring and supervision of the seasonal employees. This is important because of the lack of work experience most of the seasonal workers have. A disadvantage of this system is that it is largely dependent on the effort and performance of the fixed team members. It is therefore still important that the owner-director does some monitoring and supervision by himself. One of the directors explained that the more you check and monitor the work of your employees, the better they understand how they are expected to behave.
Director A.: “It doesn’t matter what you expect, it matters what you inspect.” The monitoring of hours registration is in most cases again done by a fixed team member who has to sign the time tables of the seasonal workers. Three organizations go around the dependency on the honesty and accuracy of fixed team members and use a clocking system where employees need to scan their fingerprint when they start their work and scan it again when they finish. This makes sure that every hour work is paid for and not a minute more.
Another control used in several companies is the checklist, not all checklists are similar but the intention stays the same. These checklists were used at several levels in the company. These lists contain all kinds of small actions in a particular order that have to be executed. Sometimes the tasks on the checklist refer to handbooks for more specific details. These checklists have a certain guiding effect so that employees know what to do and make sure they do not forget anything. Most of organizations want the employee to write their name on it so they can confront them when certain tasks are not completed, these checklists make it easier to hold people accountable for certain actions which may have been or may not been executed.
Director J.: “At first we didn’t have these checklists. When we asked employees if everything was done and we got an confirming answer but the French fries were still in the drawers for example, this became very frustrating. Now, with these lists, they know exactly what is expected of them.”
everything is about the guests, and in the fall everything needs again to be made ready for winter. Besides that there are always ad hoc decisions and jobs to be done which could not have been foreseen. In the companies that do use the checklists they solve this by having different checklists for high and low season periods, and concerning the ad hoc decisions and jobs, these are handled alongside of the checklists. In the appendices some examples of these checklists are provided (Appendix D & E).
4.3.3 Personnel controls
When selecting employees, directors do try to select people who probably will stay the longest. However this is very difficult because people can leave whenever they want. One of the selection criteria is age, because most of the seasonal workers are students they will probably not return when they finished their school. So directors try to get employees with an age around the year of 16 which are most likely to the have the most time remaining to go to school, also directors believe that when they enter the organization early the chance that they will flow into the fixed team is higher. Most directors would like to select students who study HAVO/VWO or higher because these students learn faster. However, it is very dependent of the location of the company if it is capable to attract higher educated employees, because it mostly depends on the distance to schools and universities.
The selection of animation team members is mostly done by hiring from pay roll companies. Animation teams are present in almost every organization that was visited. These entertainment teams have the task to entertain the guests their children. The activities they do vary from drawing and colouring to playing football and theatre. Due to the fact that this requires a specific type of employee, most directors hire their animation team members from a pay roll organization which specializes in this kind of job. These employees have gone through extensive training and screening so quality is guaranteed. In the exceptional case that an employee is not conform standards, directors can ask for a replacement. The reason that most of the respondents use this construction is because they do not have the time to control and supervise the animation team all day, also there are no members of the fixed team present in these animation teams who can provide the supervision and guidance.
Another form of personnel control that was found is training. Training of employees is mostly done on-the-job, so learning by doing. Employees learn from the other employees what is expected of them. Role modelling and storytelling by the fixed team is seen as an effective tool to explain and show to new employees how they are expected to behave. However the effect of this is logically dependent on how well the fixed team is performing.
Some of the directors believe it is useful to do something extra besides this learning on-the-job. They point at the fact that every organization is obliged to pay wages to a social fund which is established to provide “free” training and education to employees. One of these trainings focusses specifically on the hospitality of employees, which is very important for the success of a recreational firm. The perception of these directors is that besides it increases the quality of the employees, that because of these trainings employees tend to feel appreciated and cared for which makes them probably stay a year or two longer than without the training.
4.3.4 Cultural controls
In every organization there is attention for the organizational culture. All directors believe that the atmosphere is of high importance for the retention of employees. All of them try to show appreciation and strengthen the team spirit through efforts that vary from compliments to staff events, such as going to concerts, musicals and dinners together. Some of the directors emphasise the importance of themselves working together with the employees, thus not only top-down control but also working as a team. Directors believe that building a strong culture will increase the effort people are willing to deliver.
Director: “Running a recreational business is all about teamwork.”
Table 3 Overview of findings
Firm Result control Action Control Personnel control Cultural controls
It Wiid Clean check
To-do app
Monitoring by fixed team Monitoring by owner Handbooks
Checklists
Payroll
Role modelling Staff events
De Kleine Wolf Monitoring by fixed team
Monitoring by owner
Payroll Role modelling Training social fund
Staff events
De Holle Poarte Monitoring by fixed team
Monitoring by owner
Payroll Role modelling
De Meerpaal Monitoring by owner Role modelling Staff events
De Kluft
Monitoring by fixed team Monitoring by owner Handbooks
Payroll Role modelling Training social fund
Staff events
Meerwijck To-do app Monitoring by fixed team
Monitoring by owner Payroll
De Koeksebelt Monitoring by fixed team
Monitoring by owner Payroll Staff events
De Twirre Monitoring by owner Role modelling Staff events
Bergumermeer Clean check
Checklists
Monitoring by fixed team Monitoring by owner Handbooks
Checklists
Payroll
Role modelling Staff events
De Berenkuil Clean check
To-do app
Monitoring by fixed team Handbooks
Checklists
Role modelling Staff events
Cnossen
Monitoring by fixed team Monitoring by owner Handbooks
Checklists
Role modelling
Training social fund Staff events
De Kuilart Clean check
To-do app
Monitoring by fixed team Monitoring by owner Handbooks
Checklists
Payroll
4.3.5 Additional ways to deal with seasonality
This paragraph summarizes several other ways how managers cope with seasonality, these are not particular relevant to the management control aspects and the research question and thus are briefly mentioned.
The presence of events in the neighbourhood are very welcome to recreational firms. One of the respondents explains that during a four days cycle event in September, he is fully booked. Now for ten years in a row. Another director organised every year a spring fair, with all kinds of festivities, so that people would come take a look and even might book a spot for the summer. Most of the respondents focus more on the bigger groups in the lower season. Because their restaurant facilities are not used, they are available for schools, parties, weddings and business meetings. Outsourcing of facilities is another common phenomenon. For example, not all of the directors have the time nor the energy to run a restaurant and a holiday park. Half of the respondents have rented their restaurant to a tenant, which releases them of a lot of pressure during high season. The restaurant facility seems to need high amounts of attention and supervision, mostly because a lot of employees are needed and turnover is high in this facility which makes it hard to reach a high quality.
Director F.: “The restaurant has always been the tumbling block, for us as well for my parents-in-law. We started the day cleaning toilets at seven o’clock in the morning, and we ended with doing the dishes late in the evening.”
5 Discussion & Conclusion
5.1 Findings
By conducting a field study, this study attempts to provide a representative view of the perceptions of directors of recreational firms regarding the effects of seasonality on turnover and the effect of turnover on performance. The main focus of the research is to uncover management control practices or tools that are used by the management to cope with the effects of turnover. Every respondent experienced some negative effects as a result of the turnover and uses all kinds of controls to cope with these effects. It appears that to manage the effects of the high employee turnover in recreational firms, a mix of all the four types of controls of Merchant & Van der Stede (2012) can be used. Those control types are; result control, action control, personnel control and cultural control.
role-modelling they get an understanding of what is expected of them. There is some disagreement amongst the directors on the usefulness of other types of action control like the use of written rules, job descriptions, procedures and checklists. Some of the directors think that it is very helpful, others think it is not possible to formalize the rules or that they will not be obeyed. The variation in the perception of the usefulness of the formal rules and procedures looks to be rooted in the personal preferences of the owner-director of the company. It seems that some directors see the constant monitoring of the employees as a sufficient control method and they therefore do not see the need for a more formalized form of control. Size might also be of influence. When an organization gets bigger and has more facilities to run, for example restaurants, swimming pools and animation programs, the variable team will also increase in numbers. Then it might get more difficult to rely only on the direct monitoring of the variable team members and therefore other types of controls might be useful to.
In almost half of the organizations there were some controls that can be labelled as result controls. These controls were clean checks and to-do applications. It seemed that these controls were used to decrease the dependency on the monitoring of the employees. So these controls might not be sufficient to control the variable team but they might be a useful addition to the control mix.
Personnel controls were merely found in the form of training and the selection of pre-trained animation team members. However, with respect to the other functions the organizations did not have extensive selection and training methods. Almost every new employee has no experience what so ever and learns on the job.
Cultural controls, are not seen as a very useful method in a high turnover environment. However, due to the presence of a fixed team with almost no turnover, a strong culture can be build and in this case it might therefore be a useful control method. Every respondent puts some effort into the teambuilding of the whole group. A strong culture and good working atmosphere are believed to keep employees coming back for as long as possible. However, most of the students that are working on a seasonal basis will still leave when they finish school.
firms are able to use both types of controls. For example, when there had been imperfect knowledge of the transformation process, behaviour management would not have been possible. When there was a low ability to measure outputs, the measurement of outputs logically would not be feasible.
Overall, there is thus a strong focus on the action type of control. However, it can be useful to use a mix of control methods to help cope with the effects of turnover in the recreational industry. In all of the organizations a mix of several controls was found. This complies with the study of Malmi and Brown (2008) who argue that management controls never operate in isolation.
5.2 Theoretical and managerial implications based on the findings
Managers of a seasonal dependent recreation firm should be aware of the effects of seasonality and turnover. Most of the effects can be dealt with through the use of action controls and more specifically with extensive monitoring of the variable team. In addition to the action controls, in some cases result and personnel controls might also help. Besides these types of controls, cultural controls seem to be also beneficial in recreational firms. Although the literature states that cultural control is not very useful in high turnover environments, it might be of use in the recreational industry in combination with result, action and personnel controls. A reason why this cultural control can be of use in recreation firms might be that however there is high turnover, there is a small fixed team with almost no turnover. So, there is a possibility to create a strong culture within this fixed team that has to monitor and work together with the variable team.5.3 Research limitations & future research
researchers should be aware of the network between respondents and the biases this can create.
The generalizability of this paper can be questioned because of the few interviews that were done. Also, all research is done in family owned companies which are led directly by their owner. Their ownership of the company may influence the way in which directors lead there company. Future research might focus more on how managers control recreational firms. Research at holiday-park chains, such as a Landal or Molecaten, could bring to light different views and perceptions.
Another opportunity for future research is the change that the new legislation will cause in seasonal dependent businesses. From the first of July the employees are more protected by the law, which includes severance pays and obtaining an indefinite contract after two consecutive contracts with less than six months between them.
Another weakness was the fixed time period in which the research took place. Therefore, there was no time to investigate the perceptions and experiences of employees. This would have provided insights in the ways the management controls affect employees. Future research should also add the perceptions and views of employees on the matter because they can have completely different reasons or objectives than directors or mangers believe.
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Appendices
Appendix A – Interview guide
Algemeen:- Zou u een korte introductie van uw bedrijf willen geven? o Wat is uw functie?
o Hoe lang bent u in deze functie? o Faciliteiten
o Doelgroep Seizoen afhankelijkheid:
- Hoe ervaren jullie seizoen afhankelijkheid? - Wat zijn de nadelen van seizoen afhankelijkheid?
o Voorbeelden?
- Wat zijn de voordelen van seizoen afhankelijkheid? o Voorbeelden?
- Hoe gaan jullie om met seizoen afhankelijkheid? o Voorbeelden?
Personeelsverloop:
- Hoeveel werknemers hebben jullie?
- Hoe lang blijven werknemers gemiddeld in jullie organisatie werkzaam? - Verschil in verloop tussen vaste ploeg en seizoen ploeg?
- Wat zijn redenen waarom mensen vertrekken?
- Wat voor effect heeft personeelsverloop op uw organisatie? o Negatieve effecten?
Voorbeelden, kosten, kennis, socialisatie, tijd, etc.? o Positieve effecten?
Voorbeelden, nieuwe energie, nieuwe kijk, etc.? Proberen jullie het personeelsverloop te verlagen in jullie organisatie?
o Hoe?
o Wat voor procedures/controle mechanismes gebruiken jullie? Voorbeelden,
Denk aan job design, interactief, bottom-up, selectie en training?
o Wat is hier het effect van? Voorbeelden?
Hoe gaan jullie om met de gevolgen van (hoog) personeelsverloop? o Voorbeelden?
o Wat voor procedures/controle mechanismes gebruiken jullie? Waarom?
Voorbeelden? (Result, Action, Personnel, Cultural, Tightness?)
Denk aan controle, evaluatie, sancties, selectie, training? Positieve effecten?
Negatieve effecten? Afsluiting:
