Incentive Alignment, Cooperative Behaviour and Hotel Performance: A Survey of The Kenyan Hospitality Industry.

Abstract

The ultimate challenge is the equitable distribution of rewards and risks resulting from supply chain collaboration. In traditional practice, the method by which risk and reward are shared is the transfer price. This would work quite well in transactional relationships. Incentive alignment is a key collaborative supply chain practice. However whether incentive alignment would result in improved performance in the context of the hospitality industry has not been empirically determined. This study sought to find out the role of incentive alignment on hotel performance when the relationship was mediated by cooperative behaviour. A survey design was employed where proportionate stratified sampling was used to select 50 out of 57 town hotels. Data was collected through the use of questionnaires as well interview guides to the procurement\supply chain departments of these hotels. Logarithmic transformations were used in conjunction with multiple regression analysis to determine the relationship between incentive alignment, cooperative behaviour and hotel performance. The study concludes that incentive alignment plays a significant role in stimulating hotel performance in the Kenyan hospitality industry. Cooperative behaviour (trust and attitude) was found not to have a significant influence on hotel performance when it mediated the relationship. Therefore, incentive alignment on its own significantly improves operational performance.