Shangri La Case Study - Essay Example

However, he should make sure that the firm will get predictable benefits from the wage increase in the long run. Bridl must consider that Shangri-La has certain competitive advantages over its rivalries in the Chinese market. Unlike the new entrants, Shangri-La has already gained customer loyalty and reputation in the Chinese hospitality industry. The new entrants have to overcome a lot of barriers to ensure their position in the market, and their survival is uncertain. If Shangri-La initiates a sudden and huge increase in wage in response to the competitors’ employee-poaching, it will affect the firm in several ways.

For instance, if the new competitors do not thrive in the market and retire instead, Shangri-La may not be able to bring wages back to lower levels. Also, since Shangri-La involves a vast chain of hotels and resorts across China, the firm cannot afford huge wage increase. In the same way, increasing or decreasing staffing levels are also not advisable for a few reasons. As the case indicates, since Chinese employees are not good at exercising decision making authority, reducing staffing levels will affect their productivity. . As Rizwan et al (2011) point out, enhancing employee participation can greatly influence employee behaviour and thereby the overall performance of the company.

Obviously, wage increase itself cannot guarantee employee retention. Therefore, Bridl can propose an ‘employment bond’ which the employee will sign agreeing to work for the company for a certain length of time in exchange for employment related training the company offers him. Another strategy is that like its rivals, Shangri-La can also give priority to experienced hands from other firms during its recruitment processes. It is advisable for Shangri-La to promote outstanding performers to a ‘trainer’ level so that they will feel that they are the integral part of the organisation.

Job commitment and satisfaction are the key factors contributing to the overall organisational productivity (Lumley et al. 2011). The level of participation required to produce the feeling of ownership may vary from industry to industry. When an employee gets the feeling of ownership, s/he would be very cautious in his work and try to minimise material wastage and thereby costs (ibid). As mentioned above, wage increase should take place gradually along with other motivational strategies. The firm should also focus on intrinsic rewards to satisfy non-money motive employees.

In addition to promotion, tactics like higher level training, tours, family get together etc can be applied. It is important consider the feedback of the tenured employees before implementing changes. Since Chinese employees are accustomed to traditional working environment, they may be resistant to change. Therefore, Bridl has to ensure that objectives are effectively communicated until the employees