The Portman Ritz-Carlton, Shanghai
The main advantage for the Portman Ritz-Carlton in Shanghai (Ritz) is the way it manages and leverages its human resources. The quality of their employees and their employees’ satisfaction contributes significantly to its success. The Ritz’s motto, employee promise, credo, and basics, shown in appendix A, set the stage for their success. They ensure that everyone is on the same page at the Ritz. All know what is expected of the employees by the Ritz and what the employees expect of the Ritz. The result is employee satisfaction that leads to customer satisfaction that leads to improved financial performance. The Ritz strongly believes that should employee satisfaction decrease, the other factors would decrease as well.[i] Human resources add significant value to the Ritz. Prior to Ritz-Carlton taking over the Portman hotel, they were a normal five star hotel with satisfaction of guests and employees ranging from 70 to 80 percent and unspectacular finances. However, after Mark DeCocinis, the hotel manager, and Ritz-Carlton took over management of the hotel in early 1998 and implemented human resource management practices, employee and guest satisfaction increased dramatically and finances improved.[ii] Due to the attitude towards service in China, the Ritz’s human resources are rare. Fortunately for the Ritz, they have a low turn over rate and have a pool of prospects waiting to be hired. Turnover at the Ritz was 18% in 2002, which is low in the hotel industry and lower than average in Asia, which was 24%.[iii] While vendors in service industries in China may struggle for service-oriented employees, the Ritz has employees lined up to get in. Their employees and future employees are a rare resource in China.[iv] Truly satisfied employees are also difficult to replicate. Although the Ritz does pay more than its competitors, the employee satisfaction comes from much more.[v] Ritz’s human resource management...
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