ASSESSMENT OF THE COMPENSATION SYSTEM OF SELECTED FOUR AND FIVE STAR HOTELS IN ADDIS ABABA, ETHIOPIA

Abstract

The number of international and brand hotels radically increased in Addis Ababa and there is a need to have an organized human resource management system. The main objective of this research is to assess the compensation system in selected four and five star hotels in Addis Ababa. To accomplish this objective questionnaire, interview and observation used mainly to collect data and analysed using statistical tools such as frequency, percentage and mode values. The major finding of the study indicates that hotels in Addis Ababa provide financial and non-financial compensation that are more or less similar. However, they do not have an organized compensation policy and guideline. Further, the study revealed that employees prefer financial compensation over non-financial one. In this respect, service charge appears to be the most preferred financial compensation type. Training and medical insurance comes in the second and third place, which are aspects of non-financial compensation. Based on the finding, the researcher recommended that hotels in Addis Ababa should have an organized compensation policy. In addition, the Ethiopian labour law should provide clear guideline about service charge and it should provide more specific provision that reflect the nature of hospitality industry.