Performance Appraisal and Employee Retention in Tanzania’s Hotel Industry: Mediating Effect of Selected HR Practices
Abstract
This study examines the challenges associated with retaining non-managerial hotel employees in Northern Tanzania. Guided by Social Exchange Theory, the study investigates the influence of key human resources management practices (HRMP), including Performance appraisal (PA), recruitment and selection (RS), training and development (TD), and compensation and reward (CR) on employee retention (ER). Quantitative data were collected from 365 hotel employees through random sampling, and the hypothesized structural relationships between HRMP dimensions and ER were assessed using partial least squares analysis. The findings indicate that PA alone is insufficient to enhance ER. Furthermore, RS and CR significantly mediate the relationship between PA and ER. Whereas TD does not demonstrate a significant mediating effect. To strengthen the RS and CR mediation effects, align RS criteria with PA evaluation metrics, and ensure that PA ratings clearly determine fair and equitable CR to eliminate bias, build trust, and increase ER. TD fails to mediate the PA-ER relationship when employees feel the new skills learned cannot be applied for career progression within the current Organization.
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