Fringe benefits and organisational commitment: the case of Langkawi hotels

Abstract

Purpose – This paper aims to examine the relationship between fringe benefits (FB) provided to hotel managerial employees as part of their compensation and managers’ organisational commitment (OC).

Design/methodology/approach – This empirical study collected quantitative data from 104 managers from three-, four- and five-star hotels in Langkawi Island, Malaysia. Data collected included types of FBs received and three components of OC – affective commitment (AC), normative commitment (NC) and continuous commitment (CC).

Findings – Significant relationships were found between types of FBs and component of OC. Relocation allowances, sports and social facilities, birthday celebrations and free laundry services have a greater correlation with AC compared to other types of FB. Most types of FBs have stronger correlation with AC compared to NC and CC.

Research limitations/implications – The findings of this study are limited to hotels in Langkawi Island, Malaysia and to three-, four- and five-star hotels.

Practical implications – Practitioners can use the information provided in this study to develop effective and competitive FB packages.

Social implications – It is of utmost importance to ensure the well-being of all employees (managers and non-managers) in the provision of FB packages.

Originality/value – Managers’ FBs are an important component of their salary, but there have been few studies of the effectiveness of FBs on hotel performance. This paper provides empirical evidence for the positive effect of FB on OC.