Retention Factors of Tipped Hourly Employees in the Casual

Retention Factors of Tipped HourlyEmployees in the Casual DiningRestaurant Segment: Exploratory

Research in Central FloridaRobin DiPietroAdy Milman

ABSTRACT. Hourly employee retention has been a major area ofconcern for casual dining restaurant operators. The current exploratoryresearch employed a self-administered questionnaire asking 96 tippedcasual dining restaurant hourly employees from 12 different restaurants inthe Central Florida region of the United States to rate the importance of 21employment characteristics of their job and their actual experience withthese employment characteristics. The findings revealed that the mostimportant employment characteristics were: flexible working hours,consistent working hours, and nice people to work with. These findingsdiffered from a similar previous study done in 2004 with quick service res-taurant employees who rated nice people to work with, humane approachto employees, and hourly wages as the most important employment charac-teristics. The current study showed statistically significant differences betweenthe level of importance and actual experience attached to 18 of the 21

Robin DiPietro, PhD, is Assistant Professor in Hospitality, Restaurant andTourism Management, Department of Nutrition and Health Sciences, College ofEducation and Human Sciences, University of Nebraska.

Ady Milman, PhD, is Professor at the Rosen College of Hospitality Management,University of Central Florida.

Address correspondence to: Robin DiPietro, Hospitality, Restaurant andTourism Management, Department of Nutrition and Health Sciences, College ofEducation and Human Sciences, University of Nebraska, 202G Ruth LevertonHall, University of Nebraska, Lincoln, NE 68583 (E-mail: [email protected]).International Journal of Hospitality & Tourism Administration, Vol. 9(3) 2008

Available online at http://ijhta.haworthpress.com© 2008 by The Haworth Press. All rights reserved.

244 doi:10.1080/15256480802096019

Brandi Jackson

Brandi Jackson

Robin DiPietro and Ady Milinan 245

employment characteristics, which could explain some potential areas ofmisperception between hourly employees and managers in the industry.These variations can consequently help to explain the high turnover andlow retention of employees in the tipped positions in the casual diningrestaurant industry. Implications for management are discussed.

KEYWORDS. Retention factors, hourly employees, casual diningrestaurants, employee turnover

INTRODUCTION

The hospitality industry has traditionally been plagued by extremelyhigh rates of employment turnover, especially among hourly employees(Pizam & Thornburg, 2000). One of the challenges for managers in thefoodservice industry is to reduce turnover rates and improve the retentionof their hourly employees. Retention in the hospitality industry relates tokeeping productive employees within the company (Tesone, 2004).

The restaurant industry's tumover rate was 113% for 2002 (Berta, 2004).This is the combined rate for all segments of the restaurant industry fromquick service to fine dining. Tumover rates tend to decrease in the varioussegments of the restaurant industry as the check averages rise. The quick ser-vice segment has the lowest check average per guest and had the highest tum-over rate in 2002 (138%), while fine dining, which has the highest averageguest check, exhibited the lowest amount of turnover in the industry (82%).Casual dining restaurants fall between these two segments in check averagesand tumover rates, and in 2002 the tumover rate was 110% (Berta, 2004).

The restaurant industry is a fast growing segment of the United States'economy. The National Restaurant Association predicts that 2006 will see$511 billion in sales, over $1.4 billion a day. The industry will alsoemploy over 12.5 million workers in 2006, making it the largest privatesector employer in the U.S. (National Restaurant Association, 2006). Inthe past few years, a large amount of sales growth took place in all full-service restaurants, especially the casual dining segment.

The current study reviews past research regarding factors that contributeto the high tumover rate in the restaurant industry as well as factors that helpin retaining employees. The current research focuses on the casual diningsegment of the restaurant industry. With very little previous research doneon retention factors in casual dining, there is a gap in the literature regardingwhat keeps employees working in this specific restaurant segment.

Brandi Jackson

246 International Journal of Hospitality & Tourism Administration

The purpose of this exploratory study is to measure the most importantfactors in retention for tipped hourly employees in the casual diningrestaurant segment. This study employs a quantitative survey instrumentconducted with a convenience sample of casual dining restaurants in theCentral Florida area. Hourly employees that participated in the studyworked in a tipped position or front of the house position in these restaurants.

This study will help provide answers to the fundamental question of whyemployees stay and what would cause them to voluntarily leave a casual din-ing restaurant location. Increasing retention will effectively reduce turnovercosts and create a higher level of guest service and employee satisfaction(Pizam & Thomburg, 2000). The results will also provide guidelines to restau-rant managers and owners as to what could increase retention rates and whatcauses tipped casual dining hourly employee workers to look for new jobs.

LITERATURE REVIEW

Casual Dining

The current study focuses on retention factors specifically in the casualdining segment of the restaurant industry. It is important to understandwhat the casual dining segment is and how it evolved into the mass industrythat it is today. This restaurant segment is categorized as moderate-upscale dining that focuses on themes in menu, service and décor. Casualdining restaurants are high energy and active workplaces that require aknowledgeable staff, especially when new menu items and products areintroduced on a regular basis (MuUer, 2001; Müller & Woods, 1994). Theguest check average in 2004 for these restaurants averaged between $15and $25 (National Restaurant Association, 2005).

The popularity of the casual dining restaurant came about in the U.S.during the 198O's. According to Müller (2001), the U.S. restaurant industryhas evolved through various phases of the restaurant business. The firstphase of demand was in the 1920's for full service family restaurants suchas Howard Johnson's and the independent restaurant. The second phase,which started in the 196O's, was through the introduction and growth ofthe fast food restaurant industry. Efficiency and timeliness became theprimary driving factors in this restaurant segment.

Casual dining became popular in the third phase of the restaurant evolutionas there was a shift in consumer demand during the 1980s. Consumers contin-ually demanded more choices and variety, and they became more educated in

Robin DiPietro and Ady Milman 247

the choices they were making. Thus, in the last two decades of thecentury, there was an evolution of the American dining experience with theintroduction and growth of a variety of casual themed restaurants, where res-taurant patrons could choose a different cuisine and atmosphere (Müller,2001). Some examples are Ruby Tuesday's (neighborhood bar themed res-taurant started in 1972), Olive Garden (Italian themed restaurant started in1982) and Red Lobster (seafood themed restaurant started in 1968).

Casual dining restaurants typically have two broad types of hourlyemployees: back of the house or non-tipped employees, and front of thehouse or tipped employees.

Cost of Turnover

Extensive turnover in many segments of the hospitality industry is quitecommon and has been an accepted parameter of the industry (Prewitt, 2000).Industry leaders in hospitality accept the "turnover culture" as an unchange-able factor, a norm accepted by both employees and management. Not only isthis "turnover culture" economically harmful to a company but it also pre-vents the building of a unified work environment (Iverson & Deery, 1997).

Iverson and Deery's (1997) study of Australian hotel employees foundthat the turnover culture is actually a reoccurring loop. If an organizationhas an accepted turnover culture, employees perceive the position astemporary. Therefore, employees leave because they feel it is the norm,thus feeding into the turnover culture for the next generation of employeeswho will continue the cycle. One way to challenge this tumover phenomenonis to create a positive permanent company culture, with a deliberate effortaimed at endorsing values of long term commitment. Well developedtraining programs reinforced by management performance appraisals aresuggested ways of achieving this goal (Iverson & Deery, 1997).

One critical reason for slowing down the turnover culture and encour-aging employee retention is that the cost of tumover has been proven tobe very expensive for many industries, including hospitality enterprises.For example, turnover related costs for a restaurant may include advertis-ing, recruiting, orientation, training, loss of profits due to a decrease inproductivity, as well as extra food waste and equipment breakage (Loret,1995). In a 1999 study of the hotel and lodging industry, a turnover modeldetermined the cost of tumover for one employee to be anywhere fromapproximately $5,000 to $12,000 (Hinkin & Tracey, 2000). While turn-over costs are estimated to be less in the restaurant industry, studiesconducted in 2003 by the National Restaurant Association have priced the


average cost of turnover for the restaurant industry anywhere from $ 1,800to $6,500 per hourly employee (Wiesberg, 2004).

Furthermore, a study conducted in 2001 of the top 100 restaurant com-panies in the U.S. found that the restaurant industry loses an estimated$4 billion annually in turnover expenses for hourly employees, with anadditional $454 million in management turnover costs (Spector, 2003).

The major challenge facing hospitality employers is identifying whatfactors could reduce turnover and thereby increase retention in the industry.Once these factors are identified, managers can address the issues andpotentially reduce the amount of money spent on turnover.

Retention Factors in Hospitality

While retaining employees has proven to be a challenge for the hospitalityindustry as a whole, there have been some research efforts to find themost important factors in increasing hourly employee retention in severalspecific segments of the industry. A study of hourly employees in theattraction industry found several factors that erhployees felt were importantwhen deciding whether to stay with their current employer. The study,conducted with hourly employees of small and medium attractionfacilities in the Central Florida area, found that the most important reten-tion factors were linked to "intrinsic fulfillment and working conditions,and were not necessarily associated with monetary rewards" (Milman,2001). Other factors that predicted retention were: consistent workinghours, clear job responsibilities, performance reviews, retirement plans,available day care, and convenient travel to work (Milman, 2001).

Similarly, Milman and Ricci (2004) conducted research on retention amonghotel hourly employees in small and medium-sized hotels in the Southeastemregion of the United States. Again, intrinsic ñilfillment, not monetary rewardswere found to be the important motivating factors in employee retention. Self-fulfillment, working conditions, and a clear sense of job responsibilitiesappeared as the most significant predictors of employment retention.

DiPietro and Milman (2004) used a similar approach to measure factorsof employee retention in the quick service segment of the restaurant indus-try, which typically has a younger workforce than other segments of the res-taurant industry. In the quick service restaurant industry study (DiPietro &Milman, 2004), there were importance-performance gaps found betweenwhat employees expected a workplace to provide and what was actuallyexperienced by those employees on the job. The largest gaps occurredbetween the expectations and experience received in performance reviews.


consistent working hours, hourly wage, and humane treatment of employ-ees. Organizations' commitment to consistent working hours was animportant factor found in all three of the past employee retention studies(DiPietro & Milman, 2004; Milman, 2001; Ricci & Milman, 2002).

PURPOSE OF THE STUDY

The purpose of this exploratory research was to determine what factorstipped hourly employees in casual dining restaurants consider importantin their place of employment. Identifying these factors might help toencourage employee retention and industry leaders will be more informedregarding the key factors that may impact hourly employee retention.Despite the fact that some turnover is not necessarily bad in the restaurantindustry, as there is some involuntary turnover that can be perceived asgood for an organization if the employee is underperforming or is a detrimentto the success of an organization (Pizam & Thornburg, 2000), minimizingturnover is important to an organization's success.

Because this study is exploratory in nature regarding tipped employees,which are a group that has not been researched to a great extent as of yet regard-ing tumover and retention, the research questions guiding this research are:

1. What factors attracted the current study's tipped casual diningrestaurant hourly employees to their current jobs?

2. What importance-performance gaps exist in the respondents' workingin the casual dining restaurant industry that could impact employeesatisfaction on the job?

3. What factors would attract the current study's tipped hourlyemployees to find employment at another location?

4. What factors predict retention in the current study's tipped casualdining restaurant hourly employees?

METHODOLOGY

The current study sampled employees of casual dining restaurants inthe Central Florida area. Hourly employees who had worked for aminimum of one month at the participating casual dining restaurants wereeligible for participation in this study. The sample included positions suchas server, cook, bartender, dishwasher, and host. Because of the explor-atory nature of the study, the sampling method was a convenience sample


of twelve casual dining restaurants in the Central Florida area. Twentyrestaurants were identified based on past work with the researchers thatmet the criteria of being a casual dining restaurant in the Central Floridaarea. Twelve of those restaurants agreed to participate in the current study.Each of the restaurants had been in operation for more than 3 years in thesame location. The restaurants each had between 50-80 full and part timeemployees working there at the time of the study. Each restaurant wasgiven 30 surveys that were to be distributed randomly by the restaurantmanager to hourly employees. The surveys were then collected in an enve-lope placed outside of the managers' office without any identification onthem. The completed surveys were then mailed to the researchers.

A total of 360 surveys were distributed to twelve casual dining restau-rants in the Central Florida region located in the three county areas ofOrange, Seminóle, and Osceola counties. The total population in this areahas approximately 1.6 million residents (U.S. Census Bureau, 2003). Therewere a total of 120 surveys returned with 24 surveys completed by back ofthe house employees. These back of the house surveys were not used forthe current study and analysis due to the small number of responses and theanticipated differences between the front of the house employees and backof the house employees. A total of 96 surveys from front of the house,tipped hourly employees were returned (26.67%). Ninety two of the sur-veys had complete data to yield a response rate of 25.56%. Those whocompleted the useable surveys represented hourly employees that workedin tipped positions (servers, hostesses, delivery and take out) from ten dif-ferent casual dining chain restaurants and two independently owned casualdining restaurants. The chain restaurants had a total of 70 surveys returnedout of 300 distributed to the chain restaurants, and the independent restau-rants returned 13 out of 60 surveys, with an additional 13 surveys withoutdata on whether they were chain or independent restaurants.

The research instrument used in the study was a self-administeredquestionnaire completed by the employees. It was a modified version ofthe questionnaire used in previous studies of employee retention in thehotel, attraction, and quick service restaurant industries (DiPietro &Milman, 2004; Milman, 2001; Ricci & Milman, 2002). The theoreticalbackground for the instrument development was based on the importance-performance theory originally developed by Martilla and James (1977),where importance and performance of products or services are measuredand compared on a set of selected attributes.

The instrument measured the following variables: respondent's current jobresponsibilities, respondent's previous employment experience, respondent's


evaluation of current employment experience (9 variables), perceived levelof importance of employment characteristics (21 variables), perceivedactual experience regarding employment characteristics (21 variables),employment traits that would make employee move to another company(13 variables), and demographic characteristics (6 variables).

In order to reduce the data and to help with the validity of the surveyinstrument, two factor analyses were done individually with perceivedactual experience with employment characteristics (21 variables) and6 factors were found to explain 64.47% of the variance (Table 1), and

TABLE 1. Factor analysis of perceived actual experienceson the current job

Perceived Actual Experience JobCharacteristics

FACTOR 1A: "Development"Ongoing TrainingIntroductory TrainingAdvancement OpportunitiesClear information on job tasks and

responsibilitiesHumane (caring) approach to employeesFACTOR 2A: "Internal Company Issues"Company PoliciesCrew UniformsPerformance ReviewsFACTOR 3A: "Benefits"Health Benefits for my familyHealth Benefits for meRetirement PlanEmployee MealsFACTOR 4A: "Work Experience"Nice People to Work WithFun and Challenging JobFlexible Working HoursFACTOR 5A: "Extrinsic Issues"Hourly WageConvenient Travel to WorkFACTOR 6A: "Other"OtherRetirement PlanTotal variance explained

MeanScore

3.3213.5303.0853.735

3.554

3.8003.4633.073

2.5062.9382.3333.573

4.0373.5064.037

3.1633.763

3.182 •2.333

SD

.059

.172

.220

.951

.039

.095

.167

.359

.358

.353

.265

.277

.030

.976

.999

.227

.255

.471

.265

FactorLoading

.848

.767

.598

.545

.496

.818

.786

.615

.881

.841

.542

.464

.816

.628

.564

.797

.498

.791

.471

EigenValue

4.787

2.233

1.497

1.307

1.298

1.009

VarianceExplained %

26.596

12.403

8.318

7.262

7.209

5.607

64.472


TABLE 2. Factor analysis of items that would attract respondent tochange jobs

Attribute To Cause Employee toChange Employers

FACTOR IB: "Better Organization"Better Company PoliciesMore Humane (caring) Approach toEmployeesImproved Consistency in Working HoursImproved Communication to EmployeesFlexible Working HoursImproved Chance of PromotionLarger Organization With MoreResourcesBetter Retirement PlanBetter Health BenefitsNicer People to Work WithDifferent Management StylesEasier Travel to WorkF/lCTOn2ß; "Pay-Better PayTotal variance explained

MeanScore

3.8003.867

3.6563.8334.0564.0343.367

3.3713.7613.7333.4673.562

4.633

SD

1.1241.073

1.2731.0301.1551.1021.336

1.4491.2721.2521.2011.348

.661

FactorLoading

.836

.801

.793

.789

.727

.716

.708

.690

.669

.665

.628

.593

.700

Eigen VarianceValue Explained%

6.500 50.00

1.271 9.775

59.775

employment traits that would make employee move to another company(13 variables) and two factors were found to explain 59.78% of thevariance (Table 2). Before that was done, internal consistency wasassessed using reliability statistics. The alpha for the 21 variables of per-ceived actual experience was .836, and the alpha for the employmenttraits was .912. This shows that the internal consistency of the scales wasvery strong.

In addition, there were three dependent variables on the survey that allrelated to hourly employee retention. These factors were: (1) the respondents'level of satisfaction with their current job, (2) their likelihood to refer afriend or family member to their current place of employment, and (3)their likelihood to remain at their current workplace. It was hypothesizedthat the three measures would be related to each other. Pearson correlationwas .602 for these variables. Because of the high intercorrelations betweenthe variables, it was decided to combine the variables by performing a fac-tor analysis. A factor analysis was done that found one factor that emergedthat explained 55.88% of the variance (Table 3). This factor has beencalled "Retention".


TABLE 3. Factor analysis of dependent variables

Dependent Variables

FACTOR 1: "Retention"Lil<eiihood to Refer a Friend or Famiiy

Member to Current JobJob SatisfactionLikelihood to Remain in Current Job for

the Next Six MonthsTotal variance explained

MeanScore

3.775

3.7863.951

SD

1.089

.8221.196

FactorLoading

.825

.745

.664

Eigenvalue

1.676

VarianceExplained%

55.876

55.876

RESULTS

Demographic Characteristics of the Respondents

The sample of tipped casual dining hourly employees primarily con-sists of female respondents (64.4%), compared to males (35.6%). Themedian age group of respondents was 19-25 years of age, representing60.0% of the respondents. The next largest age group were those in the26-30 years group (20.0%). Other age groups were much smaller: 18 orunder (4.4%), 31-35 (5.6%), 3 6 ^ 0 (4.4%), 41-50 (5.6%) (Table 4).

The educational level of the respondents indicated that most respondentshad "some college" (47.7%). Most of the respondents were single (73.3%)and had no dependents (68.5%) living in their household. (Table 4)

Current Job Tenure and Responsibilities

The respondents at the casual dining restaurants worked a median of 30hours per week. The median length of employment at the restaurant theyworked for was 1-2 years. Those who had worked for 6-12 months and1-2 years each represented 22.8% of respondents. Other categories of jobtenure at the restaurant were less than 3 months (7.6%), 3-6 months(8.7%), 2-A years (18.5%), 4-6 years (8.7%), and over 6 years (10.9%).With less than half (38.1%) of the respondents having worked over twoyears at their current place of employment, it appears that employeeretention may be an issue of concern in the current sample of respondents.

A preponderance (95.7%) of the respondents reported that they spentthe majority of their shifts at work in the tipped positions at the "front ofthe house". This area of the restaurant includes but is not limited to the

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positions of servers, hosts, and bartenders. The take out or deliverypositions in the casual restaurants represented only 4.3% of the surveyrespondents.

Job Characteristics of Hourly Casual Dining Employees

Respondents were asked how they learned of their current job. Themost frequently identified source was "referral by another employee whoworks here" (39.1 %), followed by "just dropped by looking for a job"(35.9%). "Members of the community" was identified by 6.5% of therespondents and "newspaper/magazine ads" had 8.7% of the respondents.School/university recruitment and restaurant marquee sign had a 2.2%response each, and a general internet job search and community job fairsboth had the same frequency of responses (1.1 %). The "other" choice(8.7%) included: "transferring from another location" and "knowing aformer employee of the establishment". It is interesting to mention that nohourly employees had indicated that they found their current employmentthrough the restaurant run web site (Table 5).

Respondents were asked to identify all characteristics that attracted themto their current place of employment from a set of eleven characteristics.The results showed that the majority of respondents identified a "flexibleschedule" as the most influential factor that attracted them to their currentjob (56.5%). The second most influential factor was interaction withpeople (44.6%) which was closely followed by pay level (42.4%). Other

TABLE 5. Sources that helped respondents learn abouttheir current job

How Did You Learn About Your Current Job? %

Referral by another employee who works there 39.1 %Just dropped by looking for a job 35.9%Newspaper/magazine ads 8.7%Other 8.7%Through other members of my community 6.5%School/university recruitment 2.2%Restaurant marquee sign 2.2%Internet general job search 1.1%Community job fair 1.1%Web site of this restaurant/brand 0.0%

Note: Percentages add up to more than 100% due to multiple responses.N = 92.


characteristics which attracted respondents to their current job included:reputation of the individual restaurant they wanted to work for (31.5%),reputation of the restaurant brand (30.4%), ease of the connmute/location(30.4%), having friends or family members working at the restaurant(25.0%), employee working environment (22.8%), job duties (18.5%),employee benefits (13.0%), and other reasons (4.3%). The "other"comments made by respondents included "a chance for advancement","the best option for a new job", and "wanting to work in and help developa new restaurant" (Table 6).

Evaluation of Current Employment Experience

Respondents were asked to rate each of 21 employment characteristicson its perceived importance and on the perceived actual experience therespondents had at their current place of employment. The respondentswere asked to use a 1 to 5 Likert scale, where a rating of " 1 " indicated"unimportant" and a "5" rating indicated "very important". In the secondcolumn, denoting perceived actual experience, the " 1 " rating indicated a"poor" experience and the "5" acknowledged an "excellent" experience.

The results displayed in Table 7 show that the most important hourlyemployee characteristics were perceived to be: flexible working hours

TABLE 6. Characteristics that attracted the respondentto their current job

Employment Characteristic That Attracted You To %Your Job

Fiexibie schedule 56.5%Interaction with people 44.6%Pay level 42.4%Reputation of this individual restaurant 31.5%Ease of commute/location 30.4%Reputation of this restaurant brand 30.4%Friends or family members work at the restaurant 25.0%Employee working environment 22.8%Job duties 18.5%Employee benefits 13.0%Other 4.3%

Note: Percentages add up to more than 100% due to multipleresponses.N = 92.

Robin DiPietro and Ady Milman

TABLE 7. Comparison between level of importance and actualexperience of hourly employees' employment characteristics

in the casual dining restaurant segment

257

Employment Characteristic

1. Flexible working hours2. Consistent working hours3. Nice people to work with4. Humane approach to

employees5. Introductory training6. Clear information on job7. Other8. Fun and chaiienging job9. Ongoing training

10. Employee meals11. Convenient travel to work12. Advancement

opportunities13. Performance reviews14. Paid vacation15. Company policies16. Health benefits for me17. Hourly wage18. Crew uniforms19. Direct Deposit of

paycheck20. Health benefits for family21. Retirement plan

Level of Importance

Mean

4.5374.4384.4204.410

4.3984.3254.2734.2594.1484.0864.0633.976

3.9763.9013.8883.8133.7383.6593.413

3.3543.099

StandardDeviation

.740

.869

.835

.898

.923

.8711.009.787.950.971

1.0111.111

1.1001.2901.0311.3031.3101.1681.411

1.4941.420

Actual

Mean

4.0373.6504.0373.554

3.5303.7353.1823.5063.3213.5733.7633.085

3.0732.8643.8002.9383.1633.4633.600

2.5062.333

Experience

StandardDeviation

.9991.0321.0301.039

1.172.951

1.471.976

1.0591.2771.2551.220

1.3591.5871.0951.3531.2271.1671.472

1.3581.265

T-Test

TValue

5.0746.5493.5547.512

6.1025.0212.2926.2186.141

-1.2242.1885.861

5.3194.164

.7765.5213.7891.8892.188

4.4874.187

Sig.

.000

.000

.001

.000

.000

.000

.045

.000

.000

.224

.032

.000

.000

.000

.440

.000

.000

.062

.032

.000

.000

Df

81798182

8282108080797980

81817979798179

7880

Note: Level of Importance: 1 to 5 scale: " 1 " = Unimportant, "3" = Somewhat Important,"5" = Very Important.Actual Experience: 1 to 5 scale: " 1 " = Poor, "3" = Good, "5" = Excellent.N = 92.

(mean = 4.537), consistent working hours (mean = 4.438), nice people towork with (mean = 4.420), humane approach to employees (mean =4.410), and introductory training (mean = 4.398). Least important hourlyemployee characteristics were perceived to be: health benefits for familymembers (mean = 3.354), direct deposit of paycheck (mean = 3.413),crew uniforms (mean = 3.659), hourly wage (mean = 3.738), and healthbenefits for me (mean = 3.813).


Paired sample t-tests were employed to determine whether therewere any significant differences between employees' perceptions ofthe level of importance of their job characteristics and their actualexperience on the job. Each of the 21 employment characteristicsshowed significant difference (p < .05) between the perceived level ofimportance and perceived actual experience on the job (Martilla &James, 1977) with the exception of three characteristics, crewuniforms (p = .062), employee meals (p = .224), and company policies(p = .440). We can conclude that statistically significant performancegaps existed between what respondents perceived as important in theiremployment characteristics and what they were actually experiencingon the job.

Job Retention Indicators

Three dependent variables were included in the research instrument tomeasure employees' level of retention: level of satisfaction with their cur-rent job, likelihood to refer a friend or family member to their currentplace of employment, and their likelihood to remain with their current jobfor the next six months. All three variables used a 1 to 5 point Likertscale. The Likert scale for the variable "level of satisfaction with theircurrent job was 1 = "very dissatisfied" and 5 = "very satisfied". TheLikert scale for the variables of "likelihood to refer a friend or familymember to their current place of employment", and "likelihood to remainwith their current job for the next 6 months used 1 = "very unlikely" and5 = "very likely".

The findings revealed that the majority of the respondents were"satisfied" with their current job (56.0%). Other hourly employees were:"very satisfied" (15.5%), "neither dissatisfied nor satisfied" (21.4%),"dissatisfied" (6.0%), and "very dissatisfied" (1.2%).

Responses to the survey item "likelihood to refer a friend or familymember to your current employer" were distributed more evenly through-out the scale. The results for this variable were as follows: very likely(31.5%), likely (30.3%), somewhat likely (25.8%), unlikely (9.0%), andvery unlikely (3.4%).

Responses to the question "how likely are you to remain with your cur-rent employer for the next six months" the answers were: very likely(46.3%), likely (24.4%), somewhat likely (13.4%), unlikely (9.8%), andvery unlikely (6.1%).


Employment Characteristics That May Cause Turnover

The questionnaire asked the respondents to indicate what employmentcharacteristics may attract the respondents to move to another company.Respondents were asked to rate these characteristics on a 1-5 point Likertscale ("1" = no value, "5" = very high value). The results revealed thatbetter pay (mean = 4.633) was the most powerful motivator that wouldattract employees to seek another place of employment. Other variablesincluded: flexible working hours (mean = 4.056), improved chance ofpromotion (mean = 4.034), and more humane approach to employees(mean=3.867). Those characteristics which were least likely to attractemployees to a new work place were: a larger organization with moreresources (mean = 3.367), better retirement plan (mean = 3.371), differentmanagement style (mean = 3.467), and easier travel to work (mean = 3.562)(Table 8).

The DiPietro and Milman (2004) study done with QSR restaurantemployees (n = 233) showed that the most significant characteristics thatwould cause employees to look for another job were: better pay (mean = 4.62),flexible working hours (mean = 4.22), improved chance of promotion

TABLE 8. Job characteristics that would attract hourlyemployees in casual dining restaurants to move to another

company

Valued Characteristic

Better payFiexible wori<ing hoursimproved chance of promotionMore humane approachImproved employee communicationsBetter company poiiciesBetter health benefitsNicer peopie to work withImproved working hours consistencyEasier travei to workDifferent management styleBetter retirement pianLarger organization with more resources

Mean

4.6334.0564.0343.8673.8333.8003.7613.7333.6563.5623.4673.3713.367

StandardDeviation

0.6611.1551.1021.0731.0301.1241.2721.2521.2731.3481.2011.4491.336

Note: Value of Characteristic: 1 = No value, 2 = Low value, 3 = Some value,4 = High vaiue, 5 = Very high vaiue.N = 92.


(mean = 4.06), improved working hours consistency (mean = 4.02), andmore humane approach to employees (mean = 4.00). These findings arevery consistent between the studies which could be attributed to the factthat the demographics between the two restaurant segments are similar.These factors can be explained by the traditionally lower wages paid inthe industry and the lack of consistent hours upon which the hourlyemployee relies in order to pay their bills.

Predictors of Retention of Hourly Casual Dining Employees

A stepwise multiple regression was conducted to identify what factorswould help to predict retention in the casual dining restaurant industry.The dependent variable that was used in the stepwise multiple regressionwas the factor of "Retention". The independent variables consisted of thefollowing 15 factors: Factor lA "Development", Factor 2A "InternalCompany Issues", Factor 3A "Beneftts", Factor 4A "Work Environment",Factor 5A "Extrinsic Issues", Factor 6A "Other", Factor IB "BetterOrganization", Factor 2B "Pay", and various demographic variables(6 variables). These variables were chosen due to their potential ability topredict retention in the casual dining restaurant organizations. The per-ceptions of employees regarding what they are actually experiencing atwork and what factors would attract them to go to another company towork would potentially be predictors related to the act of remaining attheir current employer or the factor of "retention".

Before the stepwise multiple regression analysis was performed, thepossibility of multicolinearity was checked. The highest intercorrelationsamong the independent variables of perceived actual experience at workwere .641 "crew uniforms" and "company policies", and .646 "healthbenefits for me" and "health benefits for my family". The highestintercorrelations among the independent variables of job characteristicsthat would attract a respondent to another job were .705 "better companypolicies" and "more humane (caring) approach to employees, and .718"improved communications" and "better company policies". These inter-correlations were worth noting, but were not strong enough to cause mul-ticollinearity problems in the multiple regression (Field, 2000). Theresults of the stepwise multiple regression indicated that the followingtwo variables significantly predicted respondents' retention with theircurrent employer, and the variance explained by the regression was27.1% (Table 9). More specifically, respondents who were more likely tostay in their current job or be retained by the organization:


TABLE 9. Regression of hourly employees' "retention" factorwith their current ennployment on a variety of employment

factors and Demographic characteristics

Factor 4A- "Work Environment"Factor IA- "Development"

Note: R2 = 0.271.

StandardizedCoefficients

0.4270.297

T

4.7173.282

SIg.

.000

.001

Rechange

.182

.088

• Factor 4A "Work Environment"- had a strong work environmentthat included nice people to work with, a fun and challenging job,which had flexible working hours.

• Factor 1A "Development"- had a workplace that had good developmentopportunities that included ongoing training, introductory training,advancement opportunities, clear information on job tasks, and had ahumane (caring) approach to employees.

Therefore, ensuring that individual employees had a positive workenvironment that encourages development in their people on the job,whether through the type of work that they do or in the value that theyplace on the people in the work environment, predicted the biggest part ofretention in the current sample.

DISCUSSION AND IMPLICATIONS FOR PRACTITIONERS

The current study assessed the characteristics that initially attractedcasual dining restaurant hourly employees to their jobs and identifiedwhat sources they used to find their current job. This is important becauseit can guide the recruiting practices of casual dining restaurant managersand organizations. The study found that a referral by another employeewho worked there and just "dropping by" looking for a job were primarymeans by which tipped hourly employees in the casual dining restaurantsstudied found their current job. Newspaper recruiting and school/universityrecruiting had a much smaller impact on the successful means of recruit-ing with the current respondents, but were more substantial than what wasfound in the quick service restaurant study (DiPietro & Milman, 2004).

262 I liter nütitmal .Journal of ¡luspitalily & Tourism .{timiiiistralion

This CdukI be due to !he sligliUy older awrage age of ihc hourly employéein Ihe casual dining restaurant industry.

In respou>e lo îhe tirst research questioii. tipjK-d eitiplovees ii\ thecurreni study were ailracted to tlielr Cürreul j(¡bs piiniarfiy because oí theflexible schedule olTered by (he org;mi/ation. The inleraction vviih peopleand ihe pay level uere the next large^t rea.son given ior ix'Ing .Htiacied toa certain orgaiu/ation. Beiiig atlracied io the restaurant beeatise ot iheirreputation was the reason lor .íl.5'í ot ihe resptnidents (alií)\vinü lor mul-tiple responses), and ihese responses may he due to the potential ftir goodlips when employees get flexible schedules around Ehe times thai ihey canwork and ihe reptitaiion of the organi/ation. '["his repulalion e.in help cre-a(e a larger sales volume and thus create nuire tips lor hotirly employees.

For practitioners of the casual dining restaurant industry, these resultsshow that empUiyees currently emplov a dilTerenl labor philosophs whenseeking out their ¡obs. Fm¡>lo)ee .searches on the intenieî. in newsjiapeisand al job fairs were not a predominant method of jol> seareh by the cur-rent group of respondents. It wonid be nioic impoiianl as a recruitingmethod to ensure that current employees are happy in iheir job so Iheycould refer frieniis or relati\es to ihe organi/alson. 'Ihis reterral proeesscould be a relatively inexpensive, bul eííeelive \\d\ io leeruit employees.

i ay level appears as one of ihe factors thai inilially atlracts employees,but it is nor a factor ihat predicts retentn)n of hourl> eniployees in iheeasual dining indiisir\. as in most restaurants the pay ie\els ol emplo)eesare similar. This Unding is different ihan what was lound in the researehon quick serviee resiauranls. where pay did nol atlraei employees initially,bui was tound to be a predielor of retenlion (DiPietro & Milman, 2004).This could be due to the dilTerenl way that hourly employees are paid intipped positions m casual dining versus quick service. The laek tii einpha-.sis on pay level as a method of rclcnîion in the casual dining sector mayhave been infUienceil hy the large amouni of îipped employees working inthe industry. In this study, the sample included only empk>\ees whoworked in the front of the house in iheir restaurants, where most employ-ees are paid al least in part ihrough the tips of guests.

Previous research on em|>loycc retoiition m the hotel, iheme park, andquick serviee intiustries ail identified consistency ol' working hiiurs as apredicior oí retenlion (UiPieiro & Miiman, 2004; Milman, 2001 ). in thecurrent sludy, ihe primary predictors o\' relention related to the overallw'íírk environment as well as the opporuiiiily ior development in Iheir cur-rent iob. These faetors may be predictors m part due to the olderemployee that is working m lipped positions in casual restauraiiK \ersus

liiihin Dil'ietro and Ady Mihuati 26.Í

ihc yi)uni!or ai!c of ihc lypical employee in quick service, li ÜIMI may bedue 1(! Ihc I'aci ihai in a lipped position, ihc heller \ ou are ai díüiig >ourjoh, (he more lips you inaKc. thus increasinL' pay rale, The dveiall worke m ironiiieiit is a prcdicior to lelcnlioii and îhis may .t!>o he reialed to lhelact that it an organization has a iiood en\ ironmeiU their customer countsmil) he hiuh and ihns nicreasing îhe poteniial tor more iip.s for tlic tVoni t)ilhe house cnip lo \ees .

The secontl research question reuaiding lhe comparison ol' hourlyemplo \ees" percc|itions ut" actual experience on Ihe \ob \eisiis iheirperception of (he importance of 21 einployineiil charaeleristics indicaledihat onl} three characteristics did not show a significant differencebetween level of iinporîance and actual experience in the perception oflhe respondenis ( en ipkne e nu-als, conijiany ¡lolicies. and crew uniforms).ConsequentI) . decision makers in the casual dininj: intiustry should reaii/ethai (actors such as consi.stenl working hours, nice people io woA with.intiOelucEoi) training, clear mlo!*maiii.in on lhe job. a humane a|iproach loemployees, and ficxihie working hours arc employmeni characterisiicsihal cmplovcL's aiirihiiied higher lex eis of iiiiporlance to than then'perceived on-the-job experiences reflected. Clearly, casual dining rest^iu-rant managers antl practilioncrs need to idcnlily which ¡actors ,ire IDOSIimportan! lo their cniplo>ees, and allempt lo close the>e gaps m theiremployee expectations and experiences, antl hy sit doing possibly aim toincrease letention m ihis industr) .

In analy/ ing research []iiestion ihree. the daîa showcci that heiler pay.flexible working hours, and n n p n n e d chance of promotion woukl ailiacllhe cnnvnl respondents u¡ another organization. These factors all cuuldrelaie io cMrinsic \ar iahles ol how to improve lhe t)verall pay le \ei oí ihecmjiloyee. By increasing the fiexibilii} of hours, the e m p l o u ' e max beable to get to work shifts ihal are more conducive io higher lips. In mostorganizations, tipped e m p l o \ e e s tend to be paid a minimum pay rate withlhe tips supplementing their income. If an orgaiii/alion paid a higherhourly pay rate lor tipju-tt emjiloyees, ihis would allow the emplo \ ee s iomake more money. A pitimotion m an organiz.ation \\oLild also tend tomeivase the pay ol the employee. This finding is consistent witii other'suidie.s in lhe hospitality industry regardmg eni[)io\ee r-eiention. Tinswoiikl be impt>i1ant for' casual ilining restatirants to know when ihe\' areseeking out poteniial crîiployees from other i>rganiz¿itions.

In resptmding io research question number four, the stepwise multipleregression g a \ e iiHeresiing feedhack lo practitioners regarding whatmiglil ¡iretiiet leteniion in ihc respondents, l implovees who were mure


likely to remain with an organization placed a high value on the workenvironment within which they work and the development that theyreceive from their organization Including introductory training and ongo-ing training. With the current respondents, the data shows that the workenvironment is the biggest predictor in whether an employee stays withtheir current employer or not.

Leaders in the casual dining restaurant industry need to consider a vari-ety of factors when attempting to increase hourly employee retention. Themultiple regression seems to have a theme that the dependent variable ispredicted by the employees having a positive feeling about their workenvironment and that there is a positive atmosphere in the organizationthat allows the employee to have the opportunity for development andgrowth with the organization.

Limitations

There are some limitations to the current study that need to be notedhere. The study used a convenience sample of 12 restaurants and 96respondents in the Central Florida area. Since this is a tourist destination,the impact of this factor could change the reliability of the data since notall casual dining restaurants operate in a primarily tourist based economy.This also means that the findings cannot be generalized to the casualdining restaurant industry. The findings of the study are very limitedbecause of the nature of the sample. The nature of exploratory researchprecludes any generalizations regarding the casual dining restaurantindustry and tipped employees be made from the research results.

Another limitation is that the survey used in this study was changedfrom a previous instrument to reflect some of the unique characteristics ofthe casual dining restaurant. The current study is exploratory in natureand as such, the instrument in its current form has not been used before.This causes the survey to not be able to be compared directly to previoususes of a similar instrument.

CONCLUSIONS AND AREAS FOR FUTURE RESEARCH

The current study revealed some important findings for restaurant opera-tors and practitioners. The most common source of locating hourly employ-ees in the current study was through the referral of an employee who alreadyworked for the restaurant. Respondents were most attracted to their current


job by a flexible schedule, pay level, and interaction with people. Thesefindings can be used in order to explore the industry in further studies.

Better pay was listed as a factor in employees choosing their currentemployment and also the factor most likely to attract employees to a newjob. Pay level was one of the factors found to be a predictor of retention.However, fiexibie working hours, improved chance of promotion, and amore humane approach to employees were also factors rated as importantin attracting hourly employees to a new place of employment.

Future research studies should be conducted on a larger scale in orderto allow for more generalization of the findings. Also research should bedone regarding the differences between tipped employees and non-tippedemployees in the casual dining restaurant industry to determine if humanresource practices need to be adjusted to a certain segment of the hourlyemployees in the restaurant. Future research could also compare thetipped employees in chain restaurants versus independent restaurants inorder to determine if there are differences there. Future research shouldalso include more of the specific demographics of the employees sur-veyed and information about the various casual dining restaurantsincluded in the study, for example size of restaurant, type of food served,ticket average of restaurant, in order to more clearly assess those charac-teristics with the retention information. Another area that should belooked at in future research is the implication of tip credit on organiza-tions. The perception of employees regarding the issue of tip credit andhow this is handled by the organization is an issue that can have greatimplications for the restaurant industry in general.

As discussed earlier, increasing retention in the casual dining restau-rant segment will save money for restaurants by enhancing the recruitingpractices of organizations and possibly reducing overall turnover. It iscritical for casual dining leaders to identify those factors which are impor-tant to their hourly employees and find ways to deliver those aspects ofemployment effectively in order to decrease tumover costs and improvetheir employee retention rates.

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DiPietro, R. B. & Milman, A. (2004). Hourly employee retention factors in the quick servicerestaurant industty. International Journal of Hospitality and Tourism Administration,5(4), 31-53.


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RECEIVED: July 31, 2006REVISIONS RECEIVED: October 16, 2006

SECOND REVISIONS RECEIVED: December 15, 2006ACCEPTED: Eebruary 2, 2007

Documents

Retention Factors of Tipped Hourly Employees in the Casual