Compensation plan for the hotel sector in Malaysia

Abstract

The hotel industry faced difficulties in attracting and retaining employees due to poor compensation. To develop an attractive compensation plan, this study investigates the elements of compensation plans for nonmanagerial employees in luxury hotels in Malaysia. Data were collected using qualitative semi-structured interviews supplemented by a short survey. The findings indicate that compensation plans differ based on their compensation structure, hotel location, and whether there is a collective agreement between the employer and employee's union. COVID-19 pandemic posed greater challenge to unionized hotels. The trade-offs between elements of compensation plan are discussed, a model of compensation plan for the hotel industry is developed, and recommendations for design of a compensation plan are provided.