HaiDiLao ’ s Success

1. HaiDiLao’s Success Group 4 陈苾璇 苏婉媛 梁倩 梁舒婷 苏玉和 陈冠鹏

2. Content • Key to success • Theories behind their practice (leadership, employee motivation and HRM ) • What can other companies learn

3. Key to success ( About the employees) • Attractive benefit • Reasonable promotion channel • Attention to the employees’ psychological capital • Trust and support on the employees • Favorable organization environment • The employees’ development

4. Key to success • Attractive benefit Compared with the first line staff in other catering industry，although the salary of the employees in Hai Dilao isn’t so high, superior benefit are provided for them, e.g. They live in suites or a three-bedroom house instead of a basement. Couples can have their own suites. In addition to comfortable accommodation, HAI DI LAO is kindly enough to care for employees’ families. Employees leveled at shopkeepers or above can get subsidies valued at 300yuan/m for their parents and 12000yuan/y for their children’s education from the company. • Reasonable promotion channel Except Chief Financial Officer and Purchase Director , others start their jobs as a waiter or waitress. Hai Dilao has set up a special system of employee promotion. Someone can have his internship for a higher position and take up an official post if he has behaved himself for a period in his post. Also , Haidilao attaches more importance to the employee motivation.

5. Key to success • Pay attention to the employees’ psychological capital (psychological capital is kind of positive attitude which is beneficial to individual effective performance. ) • Trust, rely on and support the employees unconditionally by authorizing them and offering abundant resources. • Produce a favorable organization environment under which people help each other, compete fairly, share knowledge. • Develop the employees’ working toughness by the administrative mechanism of training, mistaking, showing-how and motivating.

6. Key to success (About the customers) • Point setting • New dishes creation • Service innovation • Process standardization (management concentration)

7. Key to success • Point setting Haidilao knows the customers’ consuming psychology and habits well, so it set its main point at service level, the second point at food quality, and the benefit position is enjoying food happily. • New dishes creation (food concentration) Haidilao makes yuanyangwuzha soup (鸳鸯无渣锅底 ) and tihuasanxian soup (蹄花三鲜锅底 ) originally ,which have become a kind of complementary to traditional Si-chuan style hot pot. In addition, it also makes a series of special food ,which are all popular.

8. Key to success • Service innovation (warm-hearted service) Hai Di Lao identifies its target market and makes customer segmentation to some extent according to their different preferences and customs. As for taste, it designs distinctive soups ,even makes into one-to-one marketing. To different customers, Haidilao offers different products according to the prices. As for service needs, Haidilao designs many kinds of service to the young ladies who are sensitive to time and distinctive service. It offer s telephone service and online booking. As for the surroundings, some customers like noise, while others prefer to quite place. Haidilao offers general hall and boxes, if the latter do not want boxes, the employees will arrange a table that is relatively quiet. To sum up, Haidilao makes customer segmentation to some extent according to their different preferences and customs, and designs different service for them to meet their individual needs.

9. Key to success Process standardization (management concentration) • Service process

10. Delivery Process With the help of the delivery centers, each shop only needs to inform them of the orders, and then the plan ministry will send out the delivery mission. Using the inner logistics, items needed will be delivered to the shop in no time. What’s more, HAI DI LAO is still working on strengthen the backstage food delivery process so as to reach a point where no backup cook is needed there in each shop.

11. Theories behind their practice • Leadership • Employee motivation • HRM

12. Leadership • Leadership of Hai Dilao is a democratic style. The grass-roots staff has the privilege to give a discount, change the dishes and even spare a bill for a meal, and it only takes them an oral report afterwards. In HAI DI LAO, those admirable details are actually coming from the staff’s suggestions. Once the suggestion is accepted, it will be named after the proposer. From this example, it’s clear that the subordinates in HAI DI LAO have the rights and free to express their idea and opinions, but whether their ideas can be adopted depend on the managers. This kind of leadership may take longer time and more efforts but is generally welcomed by employees, and the decisions made in this way are more likely to be carried out.

13. Employee motivation • Compensation programs This programs aim at satisfy employees’need (such as recognition, security, living conditions and so on)，which is based on theories like The Hawthorne Studies (which propose that besides money, special attention from the management also increases productivity ), Maslow’s Hierarchy of Human Needs (which emphasize a high level of human need, such as safety need, esteem need and so on)，Herzberg’s Two-factor Theory（which agrees that both hygienic factors and motivating factors share an important part in high productivity）Adams’ Equity Theory (which suggests that compensation should be equitable , or in proportion to each employee’s contribution.

14. Employee motivation • Participative management (employee involvement programs) Employee participation can be introduced into management at every level, but it is most common at the bottom and middle levels. This kind of management is applied to HAI DI LAO at the bottom level, that is, the service level. According to McGregor’s Theory X and Theory Y, we can easily identify that HAI DI LAO managers belong to Theory Y managers. It can be proved by examples: Employees at any level have the right to sigh their names in financial sheets and to offer free meals to the customers. That’s no doubt that such measures give the employees a sense of being a host and therefore they are more willing to do a better job.

15. Human Resource Management • Recruitment Except that the CFO and chief purchase officers are recruited from outside the company, unlike other companies, HAI DI LAO encouraged its employees to introduce their relatives to work there. • Training & developing The kind of promotion, which not simply focus on the length of service or certificate of the employees but also the devotion of them, build a solid base of human resource. • Performance appraisal & compensation Hai Dilao agrees on their enterprise culture, namely, “better your life with your hands” and applies it to the field of human resource management. According to the CEO Zhang Yong，the payment level of HAI DI LAO is 10% higher than that of its fellow companies. But it’s not the only factor that gives the employees a sense of belonging, the other important factor is the good compensation as we’ve mentioned above.

16. What can other companies learn(Conclusion) • Create a useful way to attract employees and make them stay, like providing good benefit for them, and motivate them properly. • Be kind to the employees and take a democratic leadership to help both employees and the company develop. • Attract customers in a faithful manner, take their needs into consideration. • Promote service and make a comfortable consuming environment for the consumers. Ensure the product’s safety.

17. Thank you