Impact of Job Characteristics and Social-demographic Factors on Employee Pay and Retention: An Empirical Study at Five-Star Hotels in Nairobi, Kenya

Globally, the high employee turnover rates experienced in the hospitality industry are often due to the unfavourable nature of the jobs, which are characterised by long working hours, low wages, and limited opportunities for career advancement, which are worsened by socio-demographic factors that moderate the individual reaction to the situation. As a result of this, the study examined how job characteristics and socio-demographic factors influence employee pay and retention in five-star hotels in Nairobi County, Kenya. Adopting a cross-sectional design as the research design, information was gathered from 112 employees of eight (8) registered five-star hotels using a structured questionnaire. The study was descriptively analysed and inferentially evaluated utilising General Linear Modelling (GLM) Univariate ANOVA. Findings disclosed a significant predictive model for employee pay, with job and socio-demographic factors accounting for up to 70.0% changes in the pay. Within the model, educational level was noted as the significant driver of pay differentials (ηp2​=.220, F=12.707, P=.000), which was followed by the job position held (ηp2​=.155, F=8.253, P=.001) as well as department (ηp2​=.151, F=3.210, P=.010). However, the characteristics established explanatory power that moderates employee retention, accounting for up to 32.4% of the changes. For retention, department was noted as the key driver (ηp2​=.213, F=4.722, P=.001), accompanied by average working hours (ηp2​=.075, F=3.518,P=.034). In comparison, the outcomes affirmed that pay is significantly higher for employees with higher educational qualifications, alongside those who are supervisors, hence aligning with the position of the Human Capital Theory (HCT). Also, the risk of retention is significantly connected to the operational departments, specifically, Food and Beverage Service, and long working hours. The study emphasized that the retention of employees is chiefly driven by the operational context in question, with department and the average working hours as the key factors to labour stability, whereas human capital attributes proved insignificant. The study recommends that the management should actively reinforce human resource policies linking pay and human capital development. As such, the management ought to constantly encourage and financially pay higher educational achievement and professional experience for all employees to maintain the meritocratic foundation of the pay system.