About the Author(s)


Mzukisi Cwibi Email symbol
Department of Tourism, Hospitality and Sport Management, Faculty of Business and Public Administration Sciences, Walter Sisulu University, East London, South Africa

Siyabonga Mxunyelwa symbol
Department of Tourism, Hospitality and Sport Management, Faculty of Business and Public Administration Sciences, Walter Sisulu University, East London, South Africa

Citation


Cwibi, M., & Mxunyelwa, S. (2024). Employee motivation and the impact of the pandemic on the hospitality industry. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 22(0), a2586. https://doi.org/10.4102/sajhrm.v22i0.2586

Original Research

Employee motivation and the impact of the pandemic on the hospitality industry

Mzukisi Cwibi, Siyabonga Mxunyelwa

Received: 18 Mar. 2024; Accepted: 20 May 2024; Published: 16 Aug. 2024

Copyright: © 2024. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Orientation: The coronavirus pandemic, known as the coronavirus disease 2019 (COVID-19) pandemic, has not just caused a serious health threat; it has also altered how we think about and handle various facets of our daily lives, careers and the global economy.

Research purpose: This study sought to ascertain the COVID-19 pandemic’s effect and influence on employee motivation and the reward programmes provided by Cape Town hotels.

Motivation for the study: The COVID-19 pandemic particularly hard hit the hospitality and tourism sectors, with hotels and restaurants being forced to close for a while before reopening at reduced capacity.

Research approach/design and method: An exploratory qualitative research approach was followed, which allowed for open-ended questions for semi-structured interviews to collect data from managers (n = 14). The data were analysed using Creswell’s six-step approach.

Main findings: The findings indicate that the COVID-19 pandemic had an unfavourable financial impact on hotels, causing permanent or temporary closure, retrenchments, layoffs, salary cuts and reduced shifts.

Practical/managerial implications: The study supports the development and upkeep of equitable employee reward programmes for hotel owners, managers and human resource specialists.

Contribution/value-add: This study’s findings provide insights into the rewards that motivate employees and assist hotels in strengthening their reward system strategies, specifically during a pandemic such as COVID-19.

Keywords: employee rewards; motivation; employee performance; COVID-19 Pandemic; hospitality industry.

Introduction

Across the global spectrum, the pandemic brought on by the novel coronavirus, known as the coronavirus disease 2019 (COVID-19) pandemic, appears to have made people, especially employees, more vulnerable to the financial stress they experience at work. Given its perceived effects on employee reward systems, the epidemic has disastrously affected hotels across South Africa. The hospitality and tourism industries were particularly heavily hit, forcing hotels and restaurants to close and operate at a reduced capacity when reopening (Ali & Anwar, 2021). The COVID-19 pandemic adversely affected hotels in South Africa, which also impacted rewards programmes. There were many layoffs and no annual award ceremonies or staff social gatherings. Circumstances forced management and staff to examine their current planning and reward systems.

Management provides reward systems to influence or steer motivation in a particular direction and positively impact desired performance (Ali & Anwar, 2021). This study sought to ascertain the COVID-19 pandemic’s effect and influence on employee motivation and the reward programmes provided by Cape Town hotels. Following the detrimental effects of COVID-19, the South African hotel industry was severely affected by the nation’s economic circumstances in 2020 (Cwibi, 2023). The hotel industry had financial difficulties because of a decline in tourism. Managers were thus forced to reduce employee benefits to lessen the financial strain. Employees were compelled to work without being compensated because of the prospect of retrenchment (Cwibi, 2022). This specific incident resulted in unhappiness at work, which impacted employee motivation. A reward system is crucial for employee motivation (Nkouangas, 2023). It is impossible to ignore the costs of not providing hotel staff with the right rewards, even during a pandemic such as the COVID-19 pandemic (Daniel, 2019), as it could negatively affect staff performance, directly affecting guests’ experience of the hotel.

Motivation of employees in the hotel sector

In order to properly understand motivation in hotels, it is necessary to historicise the theory behind it (Alghazo & Al-Anazi, 2016). The most well-known motivation theorists are Douglas Hall, Maslow, Hertzberg, Vroom and Alderfer (Obiekwe, 2016). Maslow’s hierarchy of needs is recognised as the most widely used theory of motivation (Suyono & Mudjanarko, 2017). According to this theory, humans have five levels of needs that must be satisfied: physiological, safety, belonging, self-esteem and self-actualisation (Alghazo & Al-Anazi, 2016, p. 3). This theory is applied in much research related to the hotel sector, such as that by Putra et al. (2017), Holston-Okae and Mushi (2018), Sabri et al. (2019) and Ahmad (2021). Prior to Maslow’s theory, researchers often concentrated on pinpointing elements such as biology, success or strength to describe what drives, guides and maintains human conduct (Suyono & Mudjanarko, 2017). Nonetheless, because of its simplicity, Maslow’s theory has become highly popular among managers (Rao et al., 2019). Its management implications are clear: to inspire workers to pursue their higher-level needs, managers must provide work settings that satisfy their lower-level needs (Rao et al., 2019). Maslow’s theory was pertinent to this study as it addresses human needs and the intrinsic and extrinsic desire to satisfy them. Hotel management can meet these demands by offering a competitive wage, incentives, perks, secure employment and a safe working environment.

Apart from using Maslow’s theory to address employee motivation and performance, the best way to evaluate hotel employees’ performance is to look at their demeanour, observance, dispositions and amicability (Du Plessis et al., 2015). Pakurár et al. (2019) state that high customer satisfaction levels directly result from employees performing well, improving the possibility that guests will use the hotel’s services and return in the future (Du Plessis et al., 2015). While motivating staff can be challenging, Sabri et al. (2019) notice that it is always important to remember that doing so is essential to the hotel’s success. According to Du Plessis et al. (2015), hotels typically only pay the minimum salary stipulated by government laws, impacting employee motivation and job performance in the hotel and hospitality industries. The challenge is that this minimum salary might not meet an employee’s fundamental necessities. The second problem with many hotel companies, particularly small- to medium-sized ones, is that they restrict the age at which they hire new employees. Those whose age groups are not given preference at their specific hotels feel left out or unfairly treated, leading to tensions (Josten & Schalk, 2010).

Sabiri et al. (2019) investigated the components of employee motivation in the hospitality industry. Their study used a case study approach to apply the qualitative method to understand the factors that drive employees in the hospitality sector. The study revealed eight crucial components for maintaining workers’ motivation: commitment, a healthy work environment, recognition, relationships with coworkers, job satisfaction, salary, employer relationships and career development.

The influence of reward systems and employee motivation in hotels

The hospitality industry has long employed reward programmes, and this sector has been the subject of numerous studies. However, relatively little research has been carried out on how reward systems might improve motivation and performance, despite policymakers, scholars and practitioners’ interest in hotel and hospitality reward programmes. There is inadequate research on the subject underpinning this study. Numerous research studies have addressed the question of how rewards affect employee motivation, as well as employee recruitment and retention. Even though those studies have looked at this issue in great detail, it has been found that the majority of them were performed and researched in sectors other than hospitality or hotel industry, such as banking, health, retail, mining, education and technology (Nkouangas, 2023). For this reason, there are insufficient data available for human resource professionals and other interested parties to examine the hotel industry’s reward programmes (Nkouangas, 2023). As a result, it is imperative to look at how reward systems motivate employees and other aspects of employment to resolve employee reward discord.

An organisation’s reward system is crucial when monitoring employee performance. In the past 25 years, additional components have been developed to give employers a more comprehensive range of rewards to inspire employees. Employers understand that a reward system will benefit both sides when directly and indirectly tied to the organisation’s vision and objective (Noorazem et al., 2021). Latham (2012) found that maintaining employee motivation is a crucial component of companies’ human resources and management. According to Noorazem et al. (2021), reward systems play a significant role in an organisation’s ability to motivate and retain employees and help them reach high-performance levels. Thus, organisations must create incentives such as reward schemes to meet their workforce’s needs and inspire people to work. A reward system can take different forms, such as extrinsic and intrinsic rewards (Karayanni & Nelken, 2022). Therefore, an organisation must have a critical understanding of the reward schemes that might spur an individual to deliver quality work.

Employee motivation is greatly aided by intrinsic rewards, which are typically qualitative (intangible) in nature (Karayanni & Nelken, 2022). This non-tangible form of emotional incentives for workers includes demanding tasks, a sense of accomplishment, acknowledgement, flexibility in the workplace, involvement in decision-making, authority and attractive positions in the hierarchy. These factors may have varying degrees of influence on individuals (Chantal et al., 2022). These intrinsic rewards are the rewards that meet a person’s psychological demands. When one is engaged in work that they are passionate about, they work more efficiently and with increased enthusiasm (Alimawi & Laili Muda, 2022).

Apart from intrinsic rewards, there are extrinsic rewards, which are visible and tangible rewards given to a person or employee in recognition of their efforts (Alqudah et al., 2023). Extrinsic rewards are defined as rewards that have a monetary component, such as money, retirement benefits, health insurance plans, wages, salaries and bonuses (Victor & Hoole, 2017). Employees value extrinsic benefits because they are essential to their social, familial and personal lives (Alimawi & Laili Muda, 2022). This type of compensation meets most employees’ physical demands, making it necessary for their continued employment (Chantal et al., 2022). Research indicates that higher-level employees prioritise intrinsic benefits, while lower-level employees focus more on extrinsic rewards. Therefore, managers need to combine these two reward categories so that employees stay motivated and engaged (Riaz et al., 2018).

The impact of COVID-19 on Cape Town hotels and employee rewards

It is argued that the tourism industry is highly susceptible to disruption from hazardous events, including localised phenomena such as earthquakes, bushfires, volcanic eruptions, tsunamis and floods, as well as global phenomena such as disease pandemics (Lenggogeni et al., 2022). The COVID-19 pandemic represents an extraordinary shock event that has posed the biggest challenge to the tourism and hospitality industry since the 2008 global financial crisis. According to Zenker and Kock (2020), the COVID-19 pandemic is unprecedented in its scope, combining a natural hazard, a socio-political crisis and an economic crisis. The World Health Organization (WHO) proclaimed coronavirus disease 2019 (COVID-19) to be a global pandemic in December 2019 after additional virus cases were discovered (Davahli et al., 2020). As occurred everywhere in the world in 2020, the epidemic destroyed South Africa’s hotel and tourism sectors (Rogan & Skinner, 2020). The effects on travel and hospitality were quickly felt after the South African President declared a national state of disaster on 15 March 2020, followed by a 3-week statewide lockdown period that was eventually extended until 30 April 2020 (Rogerson & Rogerson, 2020).

The severe lockdown laws and regulations in South Africa impacted the tourist and hospitality sectors as they were not recognised as essential services (Rogan & Skinner, 2020). Small tourism businesses worldwide went from usually solid businesses to ones in financial trouble, with some undergoing layoffs and others negotiating salary reductions (Joubert, 2020). Most companies had to temporarily close their doors because of the initial impact on the country’s urban accommodation services (Anderson, 2020). Hotels in South Africa were negatively impacted by COVID-19 (Rogerson & Rogerson, 2021), which also impacted the existing rewards programmes.

The COVID-19 pandemic created additional difficulties for the hospitality sector and the academic community (Gursoy & Chi, 2020). The pandemic posed numerous obstacles for this study. A study by Alonso et al. (2020) found that the economic repercussions of the pandemic had the most significant effects on the hospitality industry, followed by an atmosphere of uncertainty and the interruption of business operations brought on by fear, quarantine regulations and solitude. Several businesses in the hotel industry experienced significant business losses because of the limitations they had to enact, effectively closing them down (Alonso et al., 2020). During the outbreak in India, the hotel sector endured significant job losses, salary cutbacks and compelled paid leave that was either permanent or indefinite (Kaushal & Srivastava, 2021).

Research methodology

Research approach

This study used a qualitative approach as it has been demonstrated to be an effective method for gaining a thorough grasp of existing knowledge in a field (Irene et al., 2020). Creswell and Creswell (2017) describe qualitative research as responsive to the perspectives and experiences of the participants. Bernard (2017) characterises qualitative research as a collection of procedures used to gather, examine and evaluate non-numerical data to address research problems in the field of knowledge. As a qualitative approach allows the researcher to answer questions concerning experience, meaning from the participant’s perspective, it was decided that this approach was suitable for this study. This study used an interpretivist and subjectivist paradigm to investigate the participants’ perspectives and experiences of the phenomenon under investigation.

Target population

The study population consisted of 14 managers who worked in hotel administrative units. These managers included those in human resources, marketing, front office, reservations and accounts. These managers had sufficient firsthand knowledge of the topic being studied.

Sampling

Sampling is a technique used to choose a specific section or portion of the population for a study (Kabir, 2016). For this study, the non-probability method, in conjunction with convenience sampling, was used where purposive sampling was applied. Purposive sampling was utilised to choose participants who held senior management positions in the administrative units (such as reservations, marketing, human resources and accounting) at selected five-star hotels in Cape Town’s central business district (CBD). These individuals were chosen based on several crucial or distinctive qualities, such as their qualifications, the importance of understanding critical details pertaining to incentive schemes and rewards, and their accountability for management and leadership. Furthermore, convenience sampling was used concerning the managers’ availability and willingness to participate in the interviews.

Sample size

A sample is a small proportion of the population selected for observation and analysis (Creswell, 2021). Although opinions on the precise size of a suitable sample are divided, Maree (2016) states that sample size is a crucial factor to consider when sampling. A target sample of six five-star hotels was set for the study; however, only four five-star hotels in the Cape Town CBD were willing to participate because of the COVID-19 outbreak and the temporary shutdown of hotels.

Data collection method

The data used in this study were gathered through semi-structured interviews. Semi-structured interviews are frequently utilised in qualitative research (DeJonckheere & Vaughn, 2019). Through open-ended questions, semi-structured interviews facilitate a process where participants are encouraged to delve into their personal experiences and where new ideas can be generated during the interview (DeJonckheere & Vaughn, 2019). Semi-structured interviews proved an efficient method of collecting data in the study, as they gave the participating managers enough latitude to consider the posed topics and offer more pertinent details (Kabir, 2016).

Data analyses

The purpose of data analysis is to organise, structure and extract meaning from the gathered data (Kabir, 2016, p. 277). Creswell’s (2013) six steps were used to guide the data analysis of the interviews in the study. Using these six steps as a guide, the researcher reviewed the interview audio recordings and transcribed them into a Microsoft Word document. The data were then carefully reviewed and the researcher considered how to present it comprehensibly and coherently. Once the text had been gathered and sentences grouped into several categories, the data were coded and arranged into smaller sections. The groups were then classified using terminology taken directly from the participants to provide an accurate portrayal. After that, the researcher coded the data and entered the codes into Microsoft Excel, describing the categories to allow for analysis. Next, the themes that surfaced during the coding process were integrated into narrative sections to construct a coherent explanation of the conclusions drawn from the participants’ perspectives. Lastly, the data were clarified and interpreted to give it meaning.

Data recording and storage

Data were collected through audio recordings and note-taking to preserve accurate interview reports. While there is not a single set of prescriptive criteria for transcription, Braun and Clarke (2006) state that a rigorous and complete transcript is the minimum required. The data and transcripts recorded during this study have been password-protected and will be preserved for future research.

Ethical considerations

Ethical clearance was obtained from the Cape Peninsula University of Technology Ethics Committee in the Faculty of Business and Management Sciences (ethical clearance ref. no. FOBREC639).

Results

This section presents the study’s findings regarding management perceptions of employee reward systems on employee motivation and the impact of the COVID-19 pandemic on employee rewards.

Reward systems’ impact on employee motivation

The participating managers were asked how much an employee reward system impacts employee motivation, and most agreed that incentive programmes motivate staff to perform beyond their expectations. Table 1 lists identifiers of the research participants and Table 2 lists the benefits that reward systems provide for five-star hotels.

TABLE 1: Participant identifiers.
TABLE 2: Codes for the impact of rewards on employee motivation.

A participant said:

‘The reward system has played a very big role in motivating employees. It keeps them going. It also makes the environment more pleasant. Makes them go [the] extra mile.’ (Participant 11)

A recurring thought was also mentioned by a participant, who concurred that one of the main factors in employee motivation was the reward system, as it increased the degree of employee dedication and determination:

‘It has played a huge role in a sense. It motivates people to push. Everybody likes money. It does encourage people to work better. It makes the person feel good.’ (Participant 14)

Another sub-theme emerged regarding how the reward system enhanced worker behaviour, career advancement and job performance. Every participant concurred that their current rewards performed these tasks successfully:

‘I am 100% yes … rewards improve your circumstances; rewards drive employees hard enough to get to a certain level of recognition … So it is a very positive cycle.’ (Participant 4)

Another participant articulated another recurrent motif as follows:

‘Indeed, it does inspire our employees to work more productively and enhances their job performance; it also establishes a positive behaviour habit. Thus, it undoubtedly enhanced their performance at work.’ (Participant 7)

The study participants were also asked if they thought the existing system of rewards affected employee conduct, trust or attitude in any way and most expressed great enthusiasm and positivism towards it. A participant stated:

‘Yes, giving employees something to strive for nearly always creates a great vibe that improves productivity, makes employees happier, and encourages them to work for themselves.’ (Participant 7)

A question concerning the potential consequences of not offering awards was then posed to the participating managers, who all agreed that a lack of incentives would be detrimental to hotels and staff. The following was stated:

‘Demoted employees lack interest to grow with the company.’ (Participant 2)

The COVID-19 pandemic’s effects on employee motivation and reward programmes

The managers interviewed for the study further indicated that the hotel sector and employee rewards schemes have been adversely affected by the COVID-19 epidemic, as financial benefits like salary and bonuses were withheld or postponed. Another participant opined:

‘It had an impact on the finances; we failed to fulfil the goal, we let go of a large number of staff, and there were neither bonuses nor layoffs.’ (Participant 5)

Hotel staff outings, staff awards, training, development programmes and celebratory events were among the non-monetary incentives cut back on or discontinued. This impact was described as:

‘The hotels were shut down. Because there was no money coming in, we had to decrease our salaries by 30% across the board and scale back on our training and development because we could not afford it. Thus, it has had a significant impact in that we had to make cuts for everything that was financially related.’ (Participant 6)

The managers interviewed also said there were limited shifts for employees, retrenchments, compensation reductions and layoffs. It was said that:

‘In order to reduce expenses, we gave out more non-monetary awards during COVID-19 than monetary ones. The majority of our staff had temporary layoffs, compensation reductions, and retrenchments due to the hotel’s poor performance.’ (Participant 4)

Discussion

The function of an employee rewards programme is to motivate employees to increase performance and accomplish organisational goals. According to this study, reward programmes positively influence employee performance at hotels in the Cape Town CBD. The managers interviewed for the study agreed that rewards are essential for increasing production and enhancing employee efficiency. Employees are encouraged to perform better and meet the organisation’s goals and objectives when they receive rewards. The study also found that rewards and recognition schemes raise staff morale and motivate workers, establishing a link between output, performance and motivation.

The results of this study support Vroom et al.’s (2015) expectation theory, which holds that workers are more likely to be motivated to perform when there is a clear connection between their work and their compensation. The research findings highlight that financial rewards are significant to employees. The findings show that monetary benefits, more precisely, cash, are the most coveted rewards, supporting the claims by Victor and Hoole (2021) that financial rewards are unique in that they can meet the various demands of different people. Money is significant because it is necessary for hotel employees to survive and feel secure. The results imply that the hospitality industry’s minimum wage rate may cause employees’ preference for monetary rewards, as hotel staff are only paid what is mandated by labour laws (Du Plessis et al., 2015).

The COVID-19 pandemic has been shown to have had a catastrophic impact on the hotel industry overall (Gursoy & Chi, 2020), adversely affecting employee reward programmes (Korn Ferry Digital, 2020). A decrease in hotel revenue was found to impact both intrinsic and extrinsic rewards negatively. This is comparable to a study by Korn Ferry Digital (2020) on how COVID-19 affected monetary benefits such as salaries, which found that most organisations experienced salary freezes or only minimal increases. The study also found that several non-monetary rewards had changed, including the cessation of staff gatherings for award ceremonies and Christmas end-of-year events. In addition, managers stated that the pandemic negatively affected the work environment because five-star hotels were compelled to lower staffing levels or work fewer shifts or hours. This indicates that the hospitality industry has suffered greatly economically because of the COVID-19 pandemic, particularly in South Africa. However, the hospitality sector has improved how it conducts business and its reward packages since the COVID-19 pandemic (Nyathela et al., 2021).

Practical implications

The study’s findings support the development and upkeep of equitable employee reward programmes for hotel owners, managers and human resource specialists. The findings will assist hotels in improving their present incentive programmes to attract prospective employees and retain the existing staff members. The findings of this study can support current and future research on rewards programmes used at five-star hotels, research institutions and governmental organisations. They also add to the body of knowledge in hospitality research. Hotels are advised to develop creative intrinsic rewards to improve and sustain organisational effectiveness.

Recommendations

The study established that extrinsic rewards are the most effective in motivating employees. As a result, the study advises managers to establish fair and efficient internal and external compensation systems because workers are an organisation’s most valuable asset. This is to guarantee that workers place equal value on non-cash incentives as they do on cash incentives. The study also recommends that the management of hotels in Cape Town redesign their intrinsic reward system policy to ensure intrinsic rewards continue to be a potent tool for enticing and retaining talent during a pandemic. The study recommends the development of a reward system’s framework that must be used with the hotels to ensure that these meet employees’ needs. Additionally, the study suggests that because the hotel industry is always affected by natural hazards, as happened with the COVID-19 pandemic, it needs government support to incentivise employees during these times.

Conclusion

As managers are the ones who implement rewards, and employees report directly to them, it is crucial to gauge how they view employee compensation systems. Extrinsic incentives are effective for employee retention and job performance. According to hotel managers, employees in the hospitality sector favour extrinsic rewards the most. Furthermore, it was discovered that the COVID-19 pandemic had a detrimental impact on the hotel sector and resulted in several modifications to the reward schemes, such as eliminating staff events, annual awards ceremonies and extrinsic rewards. The study sought to establish the influence of reward systems within the hotels in line with the study objective and the retention strategy within the hotel industry. However, these rewards were limited during the COVID-19 pandemic owing to the scarcity of resources that managers could use to incentivise employees. Therefore, the study sheds light on the possible alternatives of employee rewards other than extrinsic rewards.

Acknowledgements

The authors would like to thank the management of selected five-star hotels in Cape Town for granting permission to collect data in their hotels.

Competing interests

The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.

Authors’ contributions

M.C. prepared the article, while S.M. supervised the research, co-wrote the article and prepared it for submission.

Funding information

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Data availability

The data that support the findings of this study are available on request from the corresponding author, M.C.

Disclaimer

The views and opinions expressed in this article are those of the authors and are the product of professional research. It does not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this article’s results, findings and content.

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