Impact of Sustainable Employee Practices on Organizational Performance of Hotel Businesses in Tamil Nadu: A Structural and Empirical Investigation

Abstract

This research investigates the impact of sustainable practices for employees on the organizational performance (OP) of the hotel industry, with employee satisfaction (ES) and retention (ER) as key mediating variables. Using the Social Exchange Theory (SET) and the Ability-Motivation-Opportunity (AMO) framework, a conceptual framework is developed and validated. The study collected data from 325 employees in three-, four-, and five-star hotels in the state of Tamil Nadu, India. A cross-sectional study design and Structural Equation Modelling (SEM) analysis were used to validate the hypotheses. The findings indicate that sustainable employee practices have a positive and significant impact on ES and ER. Moreover, ES and ER have a positive and significant impact on OP, with ER being more influential. The findings from the mediation analysis indicate that sustainable employee practices have a positive and significant indirect impact on OP through ES and ER. The findings of this study have important implications for hotel managers, who should treat sustainable employee practices as investments rather than expenses. This research makes a significant contribution to the existing knowledge base on sustainability in hospitality organizations by highlighting socially sustainable employee practices and providing empirical evidence in an emerging economy.