International Journal of Academic Research in Accounting, Finance and Management Sciences Vol. 6, No.3, July 2016, pp. 1–9 E-ISSN: 2225-8329, P-ISSN: 2308-0337 © 2016 HRMARS www.hrmars.com Determinants of Employee Engagement in Hotel Industry in Malaysia. A Theoretical Model Siti Subaryani Binti ZAINOL 1 Suhaili binti Mohd HUSSIN 2 Maisarah Syazwani binti OTHMAN 3 1,2,3, Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Perak Campus, 31900, Kampar, Perak D.R., Malaysia, 1 E-mail: subaryani@utar.edu.my, 2 E-mail: suhaili@utar.edu.my, 3 E-mail: maisarah@utar.edu.my Abstract The purpose of this paper is to examine the factors that influence the employee engagement in hotel industry in Malaysia. Four independent variables have been identified as the factors that are going to be tested in this research which are training and development, internal communication, rewards, and leadership. Effective and good employee engagement programs contribute to increase commitments, motivation, morale and innovation. Therefore, the ultimate improvements on performance and profitability of an organization and it can help all the organization to build their employee engagement among employees. This study was targeted to employees who currently work at hotel industry in Malaysia as this industry has been recognized as a potential prospect in the growth of the service industry in Malaysia. Theory of Social Exchange Theory (SET) has been chosen as underlined theory in this research. Key words Employee engagement, training and development, internal communication, reward, leadership, Malaysia DOI: 10.6007/IJARAFMS/v6-i3/2146 URL: http://dx.doi.org/10.6007/IJARAFMS/v6-i3/2146 1. Introduction Employee engagement is defined as the positive attitude held by employees or their commitment and involvement level towards the organization and its value (Sharmila, 2013). According to Karatepe and Olugbade (2009), engaged employees are more likely to remain with its current organization. Besides, a high level of employee engagement enables hotel employers to attract new talent in the labor market (Basbous, 2011; Wildermuth and Pauken., 2008; Gruman and Saks, 2011; Kong, 2012; Wheeler, 2012). Research done by Awang, Ishak, Radzi and Taha (2008), one of the most popular industries in Malaysia is hotel industry and it comprises different hotel ratings. Hotel ratings are often used to categorize each hotel’s rating according to their quality, cleanliness, and services provided (Rhee and Yang, 2015). Based on the statistics from Tourism Malaysia (2008), there is increasing numbers of tourists’ arrival and newly opened hotels which offering more rooms in Malaysia (refer table 1). Hence, the hotel industry in Malaysia grows rapidly consistent with its tourism industry. According to Abdullah, Abdul Karim, Abdul Patah, Zahari, Nair and Jusoff (2009), they mentioned potential prospect in the growth of the service industry in Malaysia was hotel industry. Yet, there were high turnover rates of employees who worked in the hotel industry because the growth of hotel industry is being impeded. Supported by Armstrong (2009), he mentioned that effective and good employee engagement programs contribute increasing of commitments, motivation, morale and innovation with the ultimate improvement on performance and profitability of an organization. This research will focus on determining the key factors that affect employee engagement in hotel industry. Table 1.Tourist arrivals, supply of hotels and supply of room Year Tourists Arrival Hotels Rooms 2010 24, 577, 196 2367 168, 497 2011 24, 714, 324 2707 193, 340 2012 25, 032, 708 2724 195, 445 2013 25, 715, 460 3094 209, 527 2014 27, 437, 315 4072 262, 021 Source: Tourism Malaysia