The Level of Wage and Labor Productivity in Hotel Industry: An Analysis

Abstract

Wage a phenomenon that happen today is high wage and high competitiveness. Wage theory that was developed by Rees (1973) and Katz (1980) explain that wage cannot only be seen only as a production cost but also as a part of an effort to increase the labor prosperity and motivation. This theory is a wage efficiency theory, which stated that company's revenue can increase despite paying wage above the market wage equilibrium. Even though here the two experts had calculated the problem of labor's quality but they have not reach empirical testing by developing certain model. Therefore, the researchers saw this gap as an opportunity to unravel the phenomena happening to labor and make an effort to develop an empirical model to see the influence of wage to productivity and variable that can measure the quality of labor and other variables that affect wage and productivity simultaneously. The factors used are the difference in individual characteristic, human capital, and quality of work life. The approach of this research is constructivism approach through quantitative analysis technique with simultaneous equation system. Analysis unit in this research is labor in hospitality industry. Estimation results of research shows that education, training, experience, work hour and productivity have significant positive influence to wage, while age and work status is not significant. Quality of work life, and wage have significant positive influence to productivity, while education, experience, age and work status have no significant influence. Important finding from research that training has significant influence to productivity but negatively. Overall, findings of this research show that positive effect of training to productivity will be bigger in organization that willing to invest in work environment that support the labor.

Supporting factors for labor productivity in Indonesia

“…This means that any increase in wages for workers will result in an enhancement in labor productivity. These results are generally consistent with previous studies, as found by Katovich & Maia (2018), Fatma et al (2017), andBester &Pull (2003). Wages correlate with labor productivity.…”

The Effects of Wages and Welfare Facilities on Employee Productivity: Mediating Role of Employee Work Motivation

“…In addition, a study could test the role of employee work motivation as mediation in the impact of wages on productivity. Wages are a financial return received by employees as part of employment relationships (Fatma et al, 2017). Maslow's motivational theory mostly expounds that one's motivation for his needs is stratified and hierarchical.…”

Drivers of Growth and Catch-up in the Tourism Sector of Industrialized Economies

“…Regarding worker characteristics, Blake, Sinclair, and Soria (2006) find in a UK-based study that human capital and innovation are the most significant drivers of productivity in the tourism sector, with changes in physical capital and the competitive environment having observable but lesser effects. Education is found to be a determinant of labor productivity in a study of hotels in Spain (Marchante and Ortega 2011), while Fatma et al (2016) find in a study of hotels in Indonesia that training has a positive effect on labor productivity if accompanied by corresponding increases in wages. Similar findings about the effect of education and training are made by Úbeda-García et al (2013), Hong (2008), andParrilla, Font, andNadal (2007).…”