Conflict between the Management and the Employees of Riverside Hotel - Case Study Example

Download file to see previous pages However, on off-peak days if the hotel receives only 20 guests, the employees will not be performing work on the value level required. This means that the fixed cost incurred through paying wages is a loss for the hotel. The reduced meal cost for the employees also reduces the profit margin. As such, an opportunity cost presents itself in the form of making the cost of wages variable. This means using the size of the reservation to determine the number of customers who will available and create a roster that will see a rotation of extra employees staying at home on days with low volumes of business.
 The source of conflict between the management and the employees of Riverside Hotel is the costs the employees incur as a result of their taking dinner at the hotel on the late shift (Jiambalvo Case study 1). The hotel’s labor agreements allow the employees to have free meals during their shifts, provided the meal did not exceed $12. This means that any cost in addition to the $12 would be deducted from their wages. The conflict arose when those taking the late shift found that they had been deducted $10 from their wages for every meal. This meant that the meal cost $22 (Jiambalvo Case study 1). To the employees, the management is just ripping them off because they know the price of the supplies and according to them it should not cost them such a figure for one meal. For example, a prime rib dinner includes supplies of a $7 piece of meat and a $1 salad. This adds up to $8 hence the basis for the employee arguments that the meal should not cost even $12.
 However, the argument of the employees is both right and wrong. It is right because charging them $22 for a meal that they have helped to put together from $8 supplies does not augur well with any business management practice. ...Download file to see next pagesRead More