Thomas Cook and His Theory about Travel and Tourism Industry of the UK - Term Paper Example

Introduction: Employees play a major role in every business. In the recent times, the level of staff turnover in the travel and tourism industry has been very high. The travel and tourism industry is one of the world’s biggest industries and is one of the most fragmented industries. One of the major fragments of this industry includes the transport sector. This paper aims at discussion one of the major issues that has been faced by the travel and tourism industry, i.e. employee turnover. The company that has been chosen here for the study is Thomas Cook. The main aim of this study is to highlight the main reasons for the staff turnover and to recommend strategies to reduce the staff turnover within the organization. Before moving into the company and details of the employee turnover, it is essential to get a brief overview of the overall travel and tourism industry of UK. This will then be followed by brief overview of Thomas Cook and its employees and the major causes for the staff turnover. Overview of Travel and Tourism Industry UK: The UK travel and tourism industry is one of the largest across the world. The country has continuous inbound traffic from across the world. The country has been recognized to have ‘league position’ in terms of the international tourist entering the country as well as the earnings that the country gains from the tourist (Visit Britain - Trends, 2010). The graph below provides a clear view of the country’s overall overseas visits. The graph clearly shows that the visiting of the country has lowered by 11% when compared to April 2009 (National Statistics, 2010). However the decrease in terms of the corresponding period to the earlier year has been a decrease of 4% (Visit Britain, 2010). Figure 1: Overseas Visits to the UK –Total Visits (Visit Britain, 2010) The above graph provides a clear view of the international inbound travel. This graph has been provided to give a brief overview of the country’s overall travel and tourism market (Visit Britain - Trends, 2010). The next section will provide a detailed overview of Thomas Cook and the issues being faced within the company, pertaining to the employees and the turnover rate. Thomas Cook & Its Employees: Thomas Cook is recognized to be one of the world’s best and most well known names in the field of travel. The company was started in 1841 and catered to one – day rail excursions. The company has grown from this and has grown to be the most renowned company across the UK. The company deals with a wide range of services currently and these include flights, hotels, holiday packages, cruises and a number of city breaks. Thomas Cook has a wide number of employees and the company provides job opportunities to employees across the world in different positions like cabin crew and pilots, overseas customer service representatives and various levels of opportunities for office based vacancies dealing with sales, customer service, administration, business development and other positions (Thomas Cook, 2010). Thomas Cook earns an annual turnover of £96,741,000.00 as of 2009 and the company’s overall turnover per employee is £338,255.24 (Work Smart, 2009). The company had as many as 538 employees working for them as of 2007, however as of 2009, this has reduced to 286 employees (Work Smart, 2009). The graph below provides a clear view of the trends in the number of employees of the company. Figure 2: Trend - Number of Employees (Work Smart, 2009) It is clear from the above figure that the company has seen a decline in the number of employees and the employee turnover has been very high (Work Smart, 2009). The underlying reasons for this issue have been discussed in the next section. A major focus has been paid to the customer service employees as major issues and concerns have been put forth from this team. Major Causes for Staff Turnover: Considering the customer service representatives of the company, it has been noted that a major issues have been found to be faced by the staff of the customer service departments. The first and foremost aspect in the Corporate World is that nobody works for charity. Customer service employees are no exceptions (D'Annunzio-Green, Maxwell, & Watson, 2002). Pay packages do attract graduates and students to apply for customer service jobs. But it does not ensure that all the employees put in all the effort, and work enthusiastically. It is the manager’s responsibility to motivate the team members to perform their level best. “Students rate job satisfaction more highly than money” (Reade, 2003). But job satisfaction does not play a role when an individual applies for a customer service job, because of the common misconception that customer service jobs are boring and monotonous, and there is nothing interesting to learn. The main factors that affect an individual for taking up jobs include, a) Pay Package and incentives, b) Social Status – White Collar Job, and c) Flexible timings. It is the manager’s responsibility to arrange an interactive training session so that the employee gains interest in the business processes during the early stages of training, and has to realize that each and every call will be different (Taylor, 2007). The main areas that have been presented to be the major problem causing areas for the company include, the basic and most essential element, i.e. employee motivation. It has been noted in a report by Laliberté, who explains, ‘Managers who examine these issues are on the right track to solving their staffing problems. We are learning that the factors motivating people to change jobs are (1) a better salary, (2) more interesting working conditions and (3) opportunities for personal development. In a study published by Cornell University, most respondents said their primary motivator is “the opportunity for personal and career growth and the chance to make a contribution to the organization”’ (Laliberté, 2006). The other issues that most customer service employees’ face is the lack of clearly set goals and any form of motivation or encouragement to work towards a clear goal. There is clearly lack of strong relationships between the employers and employees. Also, the major staff turnover has been due to the lacking communication within the employees and the management. However it can be safely said that the main reason for this high staff turnover has been due to the lack of the management to keep in track the employee performance and to be supportive of the employees at Thomas Cook (Smith, 2010). The company has not shown any initiatives to ensure that the employee needs are met and there is more focus only on the customers. It is essential to note that the revenues that a company earns are mainly due to the employees and hence it is important for the employers to ensure that the needs of the employees are met and are taken care of. The main reason for the high staff turnover in the case of Thomas Cook is clearly due to the lack of good motivation for the employees and lacking management skills by the leaders (Chally Group, 2010). Recommendations: Based on the above discussion, it is recommended that Thomas Cook follow a few remedial measures which will allow the company to recover from the high levels of attrition within the company. Although these form the first few steps when an employee joins the company, these have a major impact on the overall performance of the employee and the overall satisfaction of the employees to a great extent (D'Annunzio-Green, Maxwell, & Watson, 2002). Happy employees will tend to stay longer at their job and thereby lead to lower employee attrition. As seen in the figure below it is clear that employee satisfaction forms the base of every business and the success (Chenet, 2001). Figure 3: Employee Loyalty to Employee Retention (Chenet, 2001) The recommendations include the following aspects: a) Ice Breaking Sessions: Thomas Cook requires ensuring that when an individual enters the company, the employees find warm and friendly interpersonal relationships. The manager can arrange a meeting, normally known as the ‘Ice Breaking Session’ (Horne & Arthur, 1987). According to Maslow’s Affiliation Needs, the introduction of the new employees to the work force will help the comfort level to improve for the employees and will help build stronger teams (Slocum & Hellriegel, 2006, p. 396). b) Relationships: Another important aspect that the employers at Thomas Cook need to account for is the development of strong and well sustained relationships with the employees. Ritchie and Martin (1999) explain that manager at Thomas Cook can create a healthy social sphere by arranging team outings or weekend trips frequently. Doing so helps create a sense of belongingness among all the team members and form the base for long-term friendships. c) Incentives: Managers and employers at Thomas Cook need to concentrate on the employees and the incentives. Following the equity theory will prove to be very helpful and effective in this case. This theory was developed by John Stacy Adams in 1962, argued that individuals are motivated to act differently in situations where it is felt as unfair or inequitable (Bass & Avolio, 1993). In short the theory aims at understanding the satisfaction based on social comparisons. Based on this Adam has proposed a way calculate the inequality. He suggested that a comparison of one employee’s rewards and contributions are made with that of other employees. The rewards for group efforts can be increased by equally distributing the rewards to all members within the team (Schein, 2004). Incorporating the equality system within teams will allow every employee to work towards improving the efforts of all employees, by rewarding the employees who treat others equitably than inequitably, and punish employees who do not do so (Slocum & Hellriegel, 2006). A very important point to be noted here is that, the employees create the company’s wealth and the company shares it with the employees. d) Clear Goals and Targets: One of the major issues that employees face is that there is an unambiguous articulation of what needs to be done (Robbins & Judge, 2008). Latham explains, that using the Goal setting theory will prove to be very effective as, “Goal-Setting Theory asserts that people with specific hard goals (often called ‘stretch goals’) perform better than those with vague goals such as ‘do your best’ or specific easy goals” (Latham, 2004). One important factor that is needed to be brought into the Thomas Cook environment is the introduction of motivational behavior from the managers and the need for participative, charismatic and democratic leaders rather than authoritative leaders. Managers can in very simple ways help improve the satisfaction of the employees by encouraging them when the employee achieves the target in a short period. A few words of enthusiasm and a reminder about the rewards act as major encouragement for the employees. Likewise, if an employee is struggling to achieve the target for the day, a few comforting words and motivation can help the employee and can have a major impact on the overall confidence level and trust level of the employees. This will help improve the level of motivation and also morale and thereby will lead to better performance. Conclusions: Blindly manifesting processes and practices based on different theories will not prove to be very helpful in retaining employees within an organization. The personal attitude and the level of motivation that the managers provide to the employees have a major impact on the organizational context and will also help the employees stay loyal to the company. A happy and motivational work place will have a direct impact on the employees and their performance and the loyalty of the employees to the organization. Hence Thomas Cook can use this to learn the issues that the employees are facing and to develop processes and procedures to work not only towards the customer needs but also towards the needs of the employees as well. References Bass, B. M., & Avolio, B. J. (1993). Improving Organizational Effectiveness through Transformational Leadership. Sage Publications. Chally Group. (2010). Causes of -- and Solutions to -- Undesirable Employee Turnover. Retrieved July 10, 2010, from Chally Group: http://www.chally.com/turnover/index.html Chenet, D. P. (2001). Knowing Yours Customers and Employees: The journey from Loyalty to Retention. Retrieved July 12, 2010, from Deep Insight: www.esqh.net/old.esqh.net/natcon20/Speake-6.ppt D'Annunzio-Green, N., Maxwell, G. A., & Watson, S. (2002). Human resource management: international perspectives in hospitality and tourism. Bedford: Thomson Learning 2005. Erwin, D. (2009). Changing organizational performance: examining the change process. 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Retrieved July 12, 2010, from The Headlines for April: http://www.visitbritain.org/Images/_Monthly%20IPS%20Memo%20with%20charts_tcm139-167922.pdf Work Smart. (2009, September 30). Thoman Cook Scheduled Tour Operations Limited. Retrieved July 12, 2010, from http://www.worksmart.org.uk/company/company.php?id=00960252#Company_details Read More